Early Look

Wednesday, March 17, 2021

Futures	Up/Down	%	Last
Dow	41.00	0.13%	32,765
S&P 500	0.25	0.01%	3,953
Nasdaq	-27.50	0.21%	13,114

 

 

After finishing the day mixed on Tuesday, as the Dow Jones Industrial Average snapped its 7-day win streak, U.S. futures are looking little changed to mixed early ahead of today’s highlight in the FOMC Rate decision meeting at 2:00 PM. Rates are expected to hold steady at around 0% and investors await commentary from Fed Chairman Powell on the economic outlook, stimulus, and inflation. Bond yields have pushed higher recently on rising inflation expectations and have sparked a rotation to value stocks from high-growth equities, particularly technology shares. Stocks fell on Tuesday, following a session in which the broader market notched new record highs, as traders digested a weaker than expected report on U.S. retail sales and looked ahead to the Federal Reserve policy meeting. The Nasdaq erased earlier gains to trade lower Tuesday afternoon. The Dow fell by more than 100 points, giving back some recent gains. A day earlier, both the Dow and S&P 500 reached new highs, bolstered by the signing of a new $1.9 trillion stimulus bill that’s poised to spur consumer spending and ignite economic growth. But all eyes on the Fed today which is widely expected to confirm a bias for more easy policy. In Asian markets, The Nikkei Index dipped -6 points to 29,914, the Shanghai Index was down only 1 points to 3,445 and the Hang Seng Index inched higher 6 points to 29,034. In Europe, the German DAX is up about 10 points to 14,570, while the FTSE 100 fell -25 points to 6,779.

Market Closing Prices Yesterday

·     The S&P 500 Index slipped -6.23 points, or 0.16%, to 3,962.71

·     The Dow Jones Industrial Average fell -127.51 points, or 0.39%, to 32,825.95

·     The Nasdaq Composite rose 11.86 points, or 0.09%, to 13,471.57

·     The Russell 2000 Index declined -40.65 points, or 1.72% to 2,319.52

 

Events Calendar for Today

·     7:00 AM ET         MBA Mortgage Applications Data

·     8:30 AM EST      Housing Starts MoM for February

·     8:30 AM EST      Building Permits MoM for February

·     10:30 AM ET      Weekly DOE Inventory Data

·     2:00 PM EST       FOMC Meeting

 

Earnings Calendar:

·     Earnings Before the Open: CTAS, LE, SUMR

·     Earnings After the Close: AOUT, FIVE, MLHR, PD, RIDE, SMTC, WSM

 

Other Key Events:

·     Citigroup Communications Services Conference (virtual), 3/16-3/19

·     JPMorgan Industrials Conference (virtual), 3/15-3/17

·     Oppenheimer Healthcare Conference (virtual), 3/16-3/18

·     Roth Capital Virtual Conference, 3/15-3/17

·     Stephens Building Materials Virtual Trip, 3/17-3/19

·     UBS Energy Conference (virtual), 3/16-3/18

 

 

Macro	Up/Down	Last
Nymex	-0.45	64.35
Brent	-0.64	67.75
Gold	4.30	1,735.70
EUR/USD	0.0012	1.1915
JPY/USD	0.04	109.04
10-Year Note	+0.018	1.641%

 

 

Sector News Breakdown

Consumer

·     Caleres Inc. (CAL) Q4 adj EPS $0.03 and sales fell (-18.3%) to $571M vs. est. loss ($0.01) and $557.5M; Famous Footwear comp sales -1.8% vs. +5.10% YoY; adj gross margin 39.9% vs. 40.1% YoY; Q4 inventory down (215) YoY to $488.0M; not providing year guidance

·     Lennar Corp. (LEN) Q1 adj EPS $2.04 vs. est. $1.71; Q4 revenue $5.3B vs. est. $5.12B; qtrly deliveries of 12,314 homes, up 19%; qtrly new orders of 15,570 homes, up 26%; new orders dollar value of $6.5 bln, up 31%; revenues from home sales increased 18% in q1 of 2021 to $4.9 bln from $4.1 bln in q1 of 2020; qtrly backlog of 22,077 homes, up 25%; gross margin on home sales were $1.2 bln, or 25.0%, in q1 of 2021, compared to $849.0 mln, or 20.5%, in q1 of 2020

·     Aspen Group (ASPU) 3Q adj EPS $ ($0.09) vs. est. ($0.04) on revs $16.6Mm vs. est. $16.6Mm; guides 4Q revs +31-33% ($18.4-18.7Mm) vs. est. $19.06Mm

·     McDonald’s (MCD) upgraded to Buy from Hold at Deutsche Bank

·     Sun Country Airlines (SNCY) 9.091M share IPO priced at $24.00

 

Energy, Industrials and Materials

·     Energy stocks fell sharply yesterday as the quarter’s best performing sector has given up ~4% this week, trimming its Q1 gain to nearly 35%. Crude oil prices posted their third straight decline, as traders bet that U.S. crude supplies gained for a fourth week in a row following last month’s Texas deep freeze and worries over risks to the global demand recovery set in after countries including Germany and France stopped AstraZeneca COVID-19 vaccinations.

·     The American Petroleum Institute (API) showed a weekly draw of 1.05M barrels of oil for the latest week; gasoline inventories showed a draw of 926K barrels, distillate inventories show a build of 904K barrels and Cushing inventories show a draw of 246K barrels.

·     Array Technologies (ARRY) files to sell 31.05M shares of common stock for holders

·     Mistras Group (MG) 4Q EPS $0.01 vs. est. ($0.02) on revs $160.8Mm vs. est. $146.5Mm; guides 1Q revs lower sequentially and yr/yr but will see yr/yr gains starting 2Q; guides FY revs higher yr/yr

·     Alcoa (AA) upgraded to Buy from Hold at Deutsche Bank

·     Colfax (CFX) 14M share Secondary priced at $46.00

·     Par Pacific (PARR) 5M share Secondary priced at $16.00

·     Renewable Energy (REGI) 5M share Spot Secondary priced at $67.00

 

Financials

·     LPL Financial (LPLA) reports total advisory and brokerage assets served at the end of February of ~$925B rose 2.0% vs. the end of January 2021; inflow of $5.9B of total net new assets for February represents a 7.9% annualized growth rate; includes total net new advisory assets of $6.0B, or a 15.4% annualized growth rate.

·     Performant Financial (PFMT) 4Q adj EPS $0.08 on revs $40Mm, expects to continue to report positive EBITDA for FY, not providing a more detailed outlook for 2021

 

Healthcare

·     Calithera Bioscience (CALA) cash, cash equivalents and investments totaled $115.2 mln at December 31, 2020; believes cash, cash equivalents, investments at dec 31, 2020 will be enough to meet its current operating plan through 2022

·     Infinity Pharmaceuticals (INFI) Q4 EPS loss (68c) vs. est. loss (16c); expects to end 2021 with a year-end-cash, cash equivalents and available for sale securities balance ranging from $70M to $80M; sees FY21 net loss of ($50M) to ($40M)

·     Organogenesis (ORGO) 4Q EPS $0.16 vs. est. $0.14 on revs $106.8Mm vs. est. $93.1Mm; guides FY revs $390-405Mm vs. est. $358.6Mm

·     SharpSpring (SHSP) 4Q adj EPS ($0.09) vs. est. ($0.13) on revs $7.7Mm (up 25%) vs. est. $7.6Mm; guides FY revs $34-36Mm vs. est. $34.2Mm

·     Rubius Therapeutics (RUBY) 6.9M share Secondary priced at $29.00

·     Sage Therapeutics (SAGE) announces continued positive zuranolone data for both 30 mg and 50 mg doses in open-label SHORELINE Study in patients with MDD; in the now completed 30 mg zuranolone cohort, approximately 70% of participants with positive response to an initial 2-week treatment required at most one additional zuranolone treatment during the 12-month study. After the initial 2-week zuranolone treatment, more than 70% of patients who received 30 mg and 80% of patients who received 50 mg achieved positive response at Day 15

 

Technology, Media & Telecom

·     Coupa Software (COUP) shares rose 5%; Q4 adj EPS 17c vs. est. loss (11c); Q4 revenue $164M vs. est. $145.66M; sees Q1 adj EPS loss (21c)-(18c) vs. est. loss (1c) and Q1 revenue $151.5M-$152.5M vs. est. $148.82M; sees year revs $675M-$678M

·     CrowdStrike (CRWD) shares rose 4%; Q4 EPS 13c vs. est. 8c; Q4 revenue $264.9M vs. est. $250.44M; Q4 performance included record net new ARR of $143 million, 70% net new subscription customer growth YoY, and 77% YoY subscription revenue growth; sees Q1 EPS 55c-6c vs. est. 3c and sees Q1 revs $287.8M-$292.1M vs. est. $267.85M

·     Eastman Kodak (KODK) reports FY results as FY net loss was $541M and revenue fell -16.9% YoY to $1.02B; said increased its cash balance in Q3 and Q4 by $16 million and ended the year at $196 million in cash

·     OLO (OLO) 18M share IPO priced at $25.00

·     Smartsheet (SMAR) 4Q ad EPS ($0.04) vs. est. ($0.13) on revs $109.9Mm vs. est. $102.7Mm; guides 1Q adj EPS loss $0.14-0.15 vs. est. ($0.12), sees 1Q revs $111-112Mm, sees 1Q calculated billings $118-119Mm; guides FY adj EPS loss $0.36-0.44 vs. est. ($0.42), sees FY revs $500-505Mm vs. est. $488.8Mm, sees FY calculated billings $580-585Mm

·     Micron Technology, Inc. (MU) with updates to the company’s portfolio strategy to further strengthen its focus on memory and storage innovations for the data center. Micron will increase investment in new memory products that leverage the Compute Express Link, the recently introduced industry standard interface that enables flexible connection between computer, memory and storage

·     Lumentum Holdings (LITE) has presented a revised offer to acquire Coherent (COHR), now up to $6.9B, about $220/ shares in cash and 0.6100 shares of Lumentum common stock for each Coherent share they own; on March 12, Coherent had selected II-VI’s (IIVI) revised bid over Lumentum. LITE to finance the cash portion of the transaction through a combination of cash on hand from the combined company’s balance sheet, $3.25B in new debt financing from a fully committed Term Loan B and the $1B equity investment from Silver Lake

·     Jowell Global (JWEL) 3.714M share IPO priced at $7.00