Early Look

Wednesday, March 3, 2021

Futures	Up/Down	%	Last
Dow	195.00	0.62%	31,553
S&P 500	20.25	0.53%	3,888
Nasdaq	82.50	0.63%	13,138

 

 

Stock futures are pointing higher, rebounding following Tuesday more than 1% decline for the Nasdaq Composite and Russell 2000 index as markets look to news on the stimulus package, private jobs data (ADP) and keeps a watchful eye on Treasury yields. The U.S. Senate is expected to take up President Biden’s $1.9 trillion coronavirus relief package on Wednesday, with fellow Democrats seeking to advance key priorities and boot some pieces such as the minimum wage increase in order to get closer to approval. ADP Private employment data is at 8:15 with an estimate of 177K jobs being added expected, coming ahead of the nonfarm payroll report this Friday. In vaccine news, Texas and Mississippi lifted their COVID restrictions and mask mandates late yesterday, despite the CDC warnings. U.S. stocks ended lower on Tuesday with technology shares the biggest drag on the market. The yield on the benchmark 10-year Treasury notes has stabilized around 1.44% after hitting a one-year high last week above 1.6%. In Asian markets, The Nikkei Index gained 150 points to 29,559, the Shanghai Index gained 68 points to 3,576 and the Hang Seng Index advanced 784 points to 29,880. In Europe, the German DAX is up around 130 points to 14,170, while the FTSE 100 is higher by 60 points to 6,675. FTSE 100 rises ahead of UK finance minister Rishi Sunak’s budget speech, due to begin at around 1230 GMT. Eurozone IHS Markit’s final February Composite Purchasing Managers’ Index (PMI) rose to 48.8 from January’s 47.8, above a flash reading of 48.1 but firmly below the 50-mark.

Market Closing Prices Yesterday

·     The S&P 500 Index slipped -31.53 points, or 0.81%, to 3,870.29

·     The Dow Jones Industrial Average fell -143.99 points, or 0.46%, to 31,391.52

·     The Nasdaq Composite sunk -230.04 points, or 1.69%, to 13,358.79

·     The Russell 2000 Index declined -43.81 points, or 1.93% to 2,231.51

 

Events Calendar for Today

·     7:00 AM ET         MBA Mortgage Applications Data

·     8:15 AM EST      ADP Private Payroll Report for Feb…est. 177K

·     9:45 AM EST      Markit Composite Final PMI…prior 58.8

·     9:45 AM EST      Markit Services PMI, Final…prior 58.9

·     10:00 AM EST    ISM Non-Manufacturing PMI for February…est. 58.7

·     10:30 AM ET      Weekly DOE Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: CECE, CLMT, DY, EYE, OPTN, PASG, PDCO, TAST, WEN

·     Earnings After the Close: AEO, AMPE, BBSI, BF/B, BXC, CFMS, GMRE, HDSN, HRTG, LINC, MRVL, OKTA, RRGB, SD, SNOW, SPLK, TVPG, VRM, WMC, WTI

 

Other Key Events:

·     BMO Capital Global Metals & Mining Conference (virtual), 3/1-3/5

·     Cowen Annual Healthcare Conference (virtual), 3/1-3/4

·     Credit Suisse 26^th Annual Energy Summit (virtual), 3/1-3/3

·     Credit Suisse Global Healthcare Conference (in London), 3/2-3/4

·     Jefferies Paper & Packaging Summit (virtual)

·     Morgan Stanley Energy & Power Conference (virtual), 3/1-3/3

·     Morgan Stanley TMT Conference (virtual), 3/1-3/3

·     Raymond James Institutional Investors Conference (virtual), 3/1-3/3

 

 

Macro	Up/Down	Last
Nymex	1.12	60.87
Brent	1.20	63.90
Gold	-13.85	1,724.50
EUR/USD	-0.0011	1.208
JPY/USD	0.27	106.96
10-Year Note	+0.028	1.443%

 

 

Sector News Breakdown

Consumer Discretionary

·     Nordstrom (JWN) Q4 EPS 21c vs. est. 14c; Q4 revenue $3.65 vs. est. $3.6B; continued sequential sales improvement across Nordstrom and Nordstrom rack; Q4 digital sales of approximately $2 bln; taking actions to significantly reduce inventory levels in q1 2021 and be fully repositioned in Q2; FY21 revs expected to grow more than 25%, with digital representing about 50% of sales

·     RealReal (REAL) announces $250M convertible senior notes offering

·     Ross Stores (ROST) 4Q EPS $0.67 vs. est. $1.00 on sales $4.2B vs. est. $4.27B; guides 1Q EPS $0.74-0.86 vs. est. $0.89, sees 1Q comps -1% to -5%; says FY21 expect to add about 60 new locations

·     Urban Outfitters (URBN) Q4 adj EPS 30c vs. est. 29c; Q4 sales $1.09B vs. est. $1.09B; Q4 gross margin 26.6% vs. 28.5% YoY; inventory $389.6 million, -4.9% YoY; Urban Outfitters inc qtrly comparable retail segment net sales increased 6% at Free People and decreased 6% at Urban Outfitters

 

Consumer Staples:

·     B&G Foods (BGS) Q4 adj EPS 35c vs. est. 44c; Q4 revenue $510.2M below est. $531.12M; unable to provide 2021 guidance at this time; sees FY21 revenue roughly $2.05B-$2.1B vs. est. $2.03B

·     Darling Ingredients (DAR) Q4 adj EPS 45c vs. est. 41c; Q4 sales $1.0B vs. est. $905.2M; Q4 adjusted Ebitda $214.5M, -44% YoY

·     Grocery Outlet (GO) Q4 adj EPS 24c vs. est. 23c; Q4 revenue $806.82M vs. est. $784.1M; Q4 comp store sales increased by 7.9% on a 13-week basis over a 5.1% increase in the same period last year; anticipates that comparable sales for q1 2021 will decline in negative high-single digits

 

Energy, Industrials and Materials

·     The American Petroleum Institute (API) reported U.S. crude supplies rose by nearly 7.4 million barrels in the latest week, showed gasoline stockpiles fell by 9.9 million barrels, while distillate inventories also declined by about 9.1 million barrels. Crude stocks at the Cushing, Okla., storage hub, meanwhile, edged up by 732,000 barrels for the week

·     FedEx Corp. (FDX) said it will invest $2 billion in its commitment to be carbon neutral by 2040. As part of the plan, the package delivery giant said it entire fleet of pickup and delivery (PUD) fleet will be electric vehicles by 2040; said half of its FedEx Express PUD purchases will be EVs by 2025, rising to 100% by 2030.

·     Alcoa (AA) upgraded to Buy from Sell at Goldman Sachs

·     Magnolia Oil & Gas (MGY) 17M share Spot Secondary priced at $10.50

·     Dycom (DY) Q4 EPS loss (7c) vs. est. 4c; Q4 revenue $750.67M vs. est. $737.6M; had cash and equivalents of $11.8M at end of Jan; sees Q1 revenue in-line to modestly lower than Q4 and sees Q1 adjusted EBITDA as a percentage of contract revenues to range from in-line to modestly higher than Q4; announces $150M share buyback

·     Sterling Construction (STRL) 4Q EPS $0.20 vs. est. $0.24 on revs $347.2Mm vs. est. $340.15Mm; sees FY revs $1.46-1.49B vs. est. $1.46B; sees FY EBITDA $134-144Mm vs. est. $136.8Mm

 

Financials

·     KeyCorp (KEY) downgraded to Neutral from Overweight at Piper Sandler, and First Financial Bancorp (FFBC) also downgraded

 

Healthcare

·     KemPharm (KMPH) shares rose over 90%; said the FDA has approved the new drug application, or NDA, for Azstarys, a once-daily product for the treatment of attention deficit hyperactivity disorder, or ADHD, in patients age six years and older.

·     Oscar Health (OSCR) 31M share IPO priced at $39, above the high end of $36-$38 expected range

·     Morphic (MORF) 3.5M share Secondary priced at $70.00

·     Orchid Island Capital (ORC) 8M share Spot Secondary priced at $5.55

·     Amgen (AMGN) announced that its immuno-oncology therapy Blincyto has significantly prolonged event-free survival compared with consolidation chemotherapy in pediatric patients with high-risk first-relapse B-cell precursor acute lymphoblastic leukemia (B-ALL).

·     Arena Pharmaceuticals (ARNA) announces topline results from the randomized, double-blind, placebo-controlled Phase 2b CAPTIVATE clinical trial evaluating three doses of olorinab in participants with abdominal pain due to Irritable Bowel Syndrome (IBS).

·     Pulmonx (LUNG) Q4 EPS loss (27c) vs. est. loss (28c); Q4 revenue $9.83M vs. est. $8.81M; expects revenue for FY 2021 to range from $46 mln to $50 mln, which represents about 41% to 53% growth over co’s FY 2020 revenue

·     Rigel Pharmaceuticals (RIGL) Q4 EPS loss (11c), in-line with ests and Q4 revenue $18.5M vs. est. $18.1M; as of December 31, 2020, Rigel had cash, cash equivalents and short-term investments of $57.3 M, compared to $98.1M as of December 31, 2019

 

Leisure, Media & Telecom

·     Airbnb (ABNB) files to sell $2B in convertible senior notes due 2026

·     FuboTV (FUBO) Q4 EPS loss ($2.47) vs. est. loss (73c); Q4 revenue $105.1M vs. est. $93.94M; guides Q1 revenue $101M-$103M vs. est. $99.36M; ended 2020 with 547,880 paid subscribers, including 92,800 net subscriber additions in Q4; raises FY21 revenue view to $460M-$470M from $415M-$435M and sees total year-end subscribers of 760,000-770,000, up 39-41% YoY

·     Lyft Enterprises (LYFT) said in February, average daily rideshare rides increased 4% on the prior month. Excluding the week ending February 21, when severe winter storms hit much of the United States, average rides were up 5.4% on the month. Rideshare ride volume during the week ending February 28 hit a new record for 2021 and was Lyft’s best week since the pandemic hit last March. Continues to expect Q1 average rides to beat the number in Q4 and for Q1 to show three consecutive months of rideshare growth.

 

Technology

·     Ambarella (AMBA) 4Q adj EPS $0.14 vs. est. $0.08 on revs $62.1Mm vs. est. $58.1Mm; guides 1Q revs $67-70Mm vs. est. $56.4Mm, sees 1Q adj gr mgn 59.5-61.5%, sees 1Q adj op exp $34-36Mm

·     Box Inc. (BOX) 4Q adj EPS $0.22 vs. est. $0.17 on revs $198.9Mm vs. est. $196.5Mm; guides 1Q adj EPS $0.16-0.17 vs. est. $0.16, sees 1Q revs $200-201Mm vs. est. $199Mm; guides FY adj EPS $0.76-0.81 vs. est. $0.76, sees FY revs $840-848Mm vs. est. $839.8Mm

·     CMC Materials (CCMP) raises dividend to 46c and increase existing share repurchase program to $150M

·     Fiverr (FVRR) announces $700M ordinary shares offering

·     HP Enterprises (HPE) 1Q adj EPS $0.52 vs. est. $0.41 on revs $6.8B vs. est. $6.7B; guides 2Q adj EPS $0.38-0.44 vs. est. $0.38; guides FY adj EPS $1.70-1.88 vs. est. $1.68

·     Marchex (MCHX) 4Q adj EPS ($0.06) vs. est. ($0.09) on revs $12.7Mm vs. est. $13.4Mm; not providing guidance

·     Samsung Electronics Co Ltd (SSNLF) is considering two sites in Arizona and another one in New York in addition to Austin, Texas, for a new $17 billion chip plant, according to documents filed with Texas state officials – Reuters

·     Stratasys (SSYS) says intends to offer up to $200 mln of its ordinary shares in an underwritten public offering

·     Veeva Systems (VEEV) 4Q adj EPS $0.78 vs. est. $0.68 on revs $396.8Mm vs. est. $380.2Mm; guides 1Q adj EPS $0.77-0.78 vs. est. $0.74, sees 1Q revs $408-410Mm vs. est. $399.9Mm; guides FY revs $1.755-1.765B vs. est. $1.718B