Early Look

Wednesday, March 31, 2021

Futures	Up/Down	%	Last
Dow	-38.00	0.12%	32,887
S&P 500	3.25	0.09%	3,951
Nasdaq	82.50	0.64%	12,960

 

 

U.S. futures are looking mixed as markets await President Joe Biden to unveil his plans for an overhaul of infrastructure and manufacturing later today in Pittsburgh, yet another piece of stimulus into the economy…but cost remains a big issue for lawmakers, with tax increases seen as a way to fund it. As reported by the Washington Post late yesterday, Biden’s plan will include approximately $650 billion to rebuild the United States’ infrastructure, such as its roads, bridges, highways and ports, the people said. The plan will also include in the range of $400 billion toward care for the elderly and the disabled, $300 billion for housing infrastructure and $300 billion to revive U.S. manufacturing. White House press secretary Jen Psaki has said the proposal will be paid for in new tax hikes, particularly on corporations, seeking to reverse much of President Donald Trump’s 2017 tax law, the people said. The plan will also include approximately $400 billion in clean-energy credits on top of the $2.25 trillion in new spending. Axios reported yesterday that the plan would be funded by 1) raising the corporate rate from 21% to 28%, 2) impose a global minimum tax on profits from foreign subsidiaries, 3) tax capital gains as regular income for the wealthy and tax unrealized capital gains at death, and 4) return the top individual rate for those making more than $400,000 to the pre-Trump rate of 39.6%. Details will officially be released later today. In Asian markets, The Nikkei Index dropped -253 points to 29,178, the Shanghai Index slipped -14 points to 3,441 and the Hang Seng Index declined about -200 points to 28,378. In Europe, the German DAX is flat just above the 15,000 level, while the FTSE 100 is down about -20 points to 6,750. In data overnight, China PMI came in better than expected as China Mar Manufacturing PMI higher: 51.9 vs 51 consensus and China Non Mfg PMI higher: 56.3 vs 51.4 previous. U.S. stocks fell on Tuesday as major technology shares came under pressure again after the 10-year Treasury yield touched its highest level since January 2020 above 1.77%). ADP will report its measure of private sector employment before the bell, with economists predicting a rise of 550K in March payrolls.

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -12.54 points, or 0.32%, to 3,958.55

·     The Dow Jones Industrial Average fell -104.41 points, or 0.31%, to 33,066.96

·     The Nasdaq Composite dipped -14.25 points, or 0.11%, to 13,045.39

·     The Russell 2000 Index advanced 37.11 points, or 1.72% to 2,195.80

 

Events Calendar for Today

·     7:00 AM ET         MBA Mortgage Applications Data

·     8:15 AM EST      ADP Employment Jobs data for March…est. 550K

·     9:45 AM EST      Chicago PMI for March…est. 60.7

·     10:00 AM EST    Pending Home Sales MoM for February…est. (-2.6%)

·     10:30 AM ET      Weekly DOE Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: APYX, AYI, CONN, DGLY, MICT, UNF

·     Earnings After the Close: FUV, GES, IDEX, NCNO, PLAY, RMTI, SPWH, VRNT, XSPA

 

Other Key Events:

·     China Caixin Manufacturing PMI for March

·     JPM NAPA Valley Biotech Forum (virtual), 3/29-3/31

 

 

Macro	Up/Down	Last
Nymex	-0.25	60.30
Brent	-0.29	63.85
Gold	2.80	1,688.00
EUR/USD	0.0012	1.1729
JPY/USD	0.31	110.67
10-Year Note	+0.002	1.728%

 

 

Sector News Breakdown

Consumer

·     Alaska Air (ALK) confirmed it will buy an additional 23 Boeing (BA) 737 MAX 9 jets for delivery in 2023-24, with further options to purchase 15 aircraft with deliveries as late as 2026 in an order worth $2.96B at list prices

·     Chewy.com (CHWY) Q4 revenue $2.04B vs. est. $1.96B; sees 2022 net sales $8.85B-$8.95B vs. est. $8.85B; sees Q1 net sales $2.11B-$2.13B vs .est. $2.05B; Q2 adj Ebitda $60.8M (up $66.8M YoY); Q4 GM’s of 27.1% rose 300 bps YoY; said increased customer base by 43% YoY as delivered our first full year of positive adjusted EBITDA

·     Lululemon (LULU) Q4 adj EPS $2.58 vs. est. $2.49; Q4 revs $1.73B vs. est. $1.66B; ; ended 2020 with $1.2B in cash and equivalents; sees Q1 EPS 81c-85c on revs $1.1B-$1.3B vs. est. 82c and $999.5M; Q4 inventories at end of 2020 increased by 25% to $647.2M; qtrly total comparable sales increased 21%, or increased 20% on a constant dollar basis

·     PVH Corp. (PVH) Q4 EPS loss (81c) vs. est. loss (84c) or Q4 non-GAAP EPS loss (38c) vs. est. loss (31c); Q4 revs $2.09B vs. est. $2.12B; expects 2021 revenue and earnings will continue to be impacted negatively by pandemic, particularly in Q1; expects its international businesses to exceed 2019 pre-pandemic revenue levels in first half of year

·     Conn’s (CONN) Q4 non-GAAP EPS 91c vs. est. 23c; Q4 revenue $367.79M vs. est. $328.69M; Q4 comp sales fell (-10.1%)

·     Coursera (COUR) 15.73M share IPO priced at $33.00

 

Energy, Industrials & Materials

·     Cleveland-Cliffs (CLF) Q4 EPS 14c on revs $2.26B; says full-year 2021 capital expenditures are expected to stay in the range of $600 million to $650 million

·     Hess Corp. (HES) upgraded to buy from neutral and raise tgt to $94 from $76 at Mizuho

·     ZTO Express (ZTO) increases share repurchase program to $1B

·     MIND Technology (MIND) announces that its Seamap unit has entered into a master supply agreement with PGS for the provision of an unspecified quantity of source controllers and related services over an indefinite delivery period.

·     U.S. Silica Holdings, Inc. (SLCA) said its Industrial and Specialty Products segment will increase prices for its noncontracted diatomaceous earth, perlite, cellulose, silica and clay products used primarily in filtration, paints, coatings, elastomers, chemicals, glass, building products and other applications.

·     Morgan Stanley cuts Total (TOT) to Equal Weight, BP Plc (BP) cut to Underweight and Eni SpA (E) double-upgraded to Overweight from Underweight at Morgan Stanley

 

Financials

·     Marathon Digital Holdings, Inc. (MARA) said it will be launching the first Bitcoin mining pool based in North America that is fully compliant with U.S. regulations, including anti-money laundering and the Office of Foreign Asset Control’s standards.

·     UDR (UDR) announces offering of 7M shares of common stock

·     Square (SQ) upgraded to Outperform from Market Perform at Keefe Bruyette

 

Healthcare

·     Cannabis stocks could be active (ACB, CGC, CRON, APHA, TLRY, CURLF, CRLBF) after the New York State Senate and Assembly Tuesday evening approved a bill that would legalize marijuana for recreational use; the Senate vote was 40-23 and the Assembly vote was 100-49.

·     Achilles Therapeutics (ACHL) 9.75M share IPO priced at $18.00

·     AstraZeneca (AZN) was awarded a $204.88M modification to contract for a minimum of 100,000 doses of AZD7442, a combination antibody product intended to prevent or treat clinical effects of SARS-CoV-2.

·     Humanigen (HGEN) 5M share Secondary priced at $18.50

·     Amgen (AMGN) to acquire Rodeo Therapeutics Corporation; preclinical program targeting 15-pgdh has potential use in a broad range of therapeutic applications including inflammatory disease indications

·     Arcadia Biosciences (RKDA) Q4 EPS 90c and Q4 revenue $7.1M

·     Equillium (EQ) announces favorable data from phase 1b equalize study in systemic lupus erythematosus patients; itolizumab administered subcutaneously was safe and well tolerated in patients with systemic lupus erythematosus

·     Hydrofarm Holdings Group Inc.’s (HYFM) Q4 EPS loss (43c) vs. est. loss (34c); Q4 sales rose more than 60% to $87.4M vs. est. $77.1M; said they now expect organic net sales to increase 20% to 25% this year

·     ProQR Therapeutics (PRQR) 13.85M share Spot Secondary priced at $6.50

·     Exelixis (EXEL) announced its partner Ipsen (IPSEY) received approval from the European Commission for Cabometyx in combination with Opdivo as a first-line treatment for advanced renal cell carcinoma, or RCC

·     Phreesia (PHR) Q4 EPS loss (18c) vs. est. loss (10c); Q4 revenue $41.8M vs. est. $39.35M.; said Q4 avg number of provider clients was 1,808 in the quarter, up 13% YoY and avg rev per provider client was $17,858, up 7% YoY; guides FY22 revenue $178M-$186M vs. est. $180.48M

·     Surface Oncology (SURF) announces that the U.S. FDA has granted Orphan Drug Designation for one of the company’s lead therapeutic candidates, SRF617, for the treatment of patients with pancreatic cancer

 

Technology, Media & Telecom

·     BlackBerry (BB) Q4 adjusted EPS 3c vs. est. 3c; Q4 adj revenue $215M vs. est. $245.11M; Q4 non-GAAP gross margin 73%, GAAP gross margin 72%, net cash generated from operating activities was $51M; software and services non-GAAP revenue for the fourth quarter was $165M; announces potential sale of part of patent portfolio

·     IZEA Worldwide (IZEA) Q4 GAAP EPS of -$0.02 in-line with ests on revenue of $6.4M, beating by $1.4M