Early Look

Friday, December 10, 2021

Futures	Up/Down	%	Last
Dow	117.00	0.33%	35,777
S&P 500	20.25	0.43%	4,680
Nasdaq	69.50	0.43%	16,221

 

 

After a late day sell-off left U.S. stocks at their session lows on Thursday (Nasdaq down -1.7%, S&P -0.7%), U.S. equity futures edge higher Friday, ahead of fresh inflation data that could influence the Federal Reserve’s timeline for reducing stimulus measures. U.S. stocks still appear on pace for a solid weekly gain, but things could get dicey after the monthly CPI report at 8:30, where economists are expecting a headline inflation rate of 6.7% YoY, a tally that would accelerate firmly past the October reading of 6.2% and mark the fastest rate of inflation since the early 1980s. Recent comments by Fed Chairman Powell indicate a faster pace of bond purchase tapering from the central bank next week, as well as earlier-than-expected rate hikes later this summer – which can only get quicker with a “hotter than expected” reading this morning. In Asian markets, The Nikkei Index fell -1% to 28,437, the Shanghai Index slipped a few points to 3,666 and the Hang Seng Index dropped over 250 points or 1% to slip under 24,000. In Europe, the German DAX is up 25 points to 15,665, while the FTSE 100 is flat at 7,323.

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -33.76 points, or 0.72%, to 4,667.45

·     The Dow Jones Industrial Average slipped -0.06 points, or 0.00%, to 35,754.69

·     The Nasdaq Composite tumbled -269.62 points, or 1.71%, to 15,517.37

·     The Russell 2000 Index declined -51.50 points, or 2.27% to 2,220.21

 

Events Calendar for Today

·     8:30 AM ET          Consumer Price Index (CPI) MoM for November…est. +0.7%

·     8:30 AM ET          Consumer Price Index (CPI) YoY for November…est. +6.8%

·     8:30 AM ET          CPI core Ex Food & Energy MoM for November…est. +0.5%

·     8:30 AM ET          CPI core Ex: Food & Energy YoY for November…est. +4.9%

·     10:00 AM ET       University of Michigan Sentiment, Dec-P…est. 67.1

·     1:00 PM EST       Baker Hughes Weekly rig count data

·     2:00 PM ET          Federal Budget for November…est. (-$195.0B)

 

Earnings Calendar:

·     Earnings Before the Open: ASO, JOUT

 

Other Key Events:

·     European Society for Medical Oncology (ESMO) Immuno-Oncology Congress, 12/8-12/11

·     Morgan Stanley 2021 East Coast Biotech Bus Trip (virtual), 12/6-12/10

·     San Antonio Breast Cancer Symposium in San Antoni, 12/7-12/10

 

 

Macro	Up/Down	Last
Nymex	0.78	71.72
Brent	0.65	75.07
Gold	-3.50	1,771.80
EUR/USD	-0.0026	1.1266
JPY/USD	0.32	113.76
10-Year Note	+0.026	1.513%

 

 

World News

·     UK Oct GDP missed: 0.9% 3m/3m vs 1.0% consensus, 4.6% y/y vs 4.9% consensus, 0.1% m/m vs 0.4% consensus; UK Oct Trade Bal smaller deficit: -£13.9b vs -£14.05b consensus; UK Oct Industrial O/P missed: -0.6% m/m vs 0.1% consensus, 1.4% y/y vs 2.2% consensus

·     Japanese Nov PPI higher: 0.6% m/m vs 0.3% cons; 9.0% y/y vs 8.5% consensus, Japan wholesale prices hit a record high in Nov with a ninth straight month of gains

 

Sector News Breakdown

Consumer

·     AMC Entertainment (AMC) chairman, president, and CEO Adam Aron disclosed the sale of 312,500 common shares on December 7 at $30.867 per share for $9.65M; EVP & CFO, Sean Goodman disclosed sale of 18,316 common shares on Dec. 07 at $30.862.

·     American Outdoor Brands, Inc. (AOUT) shares fell -18%; Q2 adj EPS $0.58 vs. est. $0.76; Q2 revs $70.8m vs. est. $82.23M; Q2 gross margins 46.7%; announces $15M share repurchase program; sees FY22 adjusted EPS view $2.02-$2.21 vs. est. $2.27; sees FY22 revenue $280M-$285M, below consensus $294.12M

·     Chewy Inc. (CHWY) shares fell -7%; Q3 loss (-$0.08) vs. est. loss (-$0.04); Q3 sales rose 24.1% to $2.21B vs. est. $2.21B; posts Q3 loss of -$32.2M; Q3 gross margin of 26.4% expanded 90 bps YoY; net margin of (1.5%) improved 30 bps YoY; Q3 adjusted EBITDA rose 9.9% YoY to $6.0M; sees Q4 net sales $2.4B-$2.44B vs. est. $2.44B; sees year sales $8.9B-$8.94B vs. prior view $8.9B-$9B

·     Costco (COST) 1Q EPS $2.98 vs est. $2.64 on revs $49.4B vs est. $49.6B; U.S. comparable sales excluding fuel, currencies +9.9%, vs. estimate +8.23%; total company comparable sales excluding fuel, in constant currency +9.8% vs. +17.1% y/y, vs. estimate +8.63%; Q1 membership fees $946 million, +9.9% y/y, vs. estimate $920.1 million

·     Johnson Outdoors (JOUT) Q4 EPS $0.68 vs. est. $0.65; Q4 revenue $166.3M vs. est. $164.23M; cost of goods sold rose 7.6% to knock gross margin down to 41.1% from 44.7%

·     Leslie’s Inc. (LESL) shares rose 6%; Q4 adj EPS $0.85 vs. est. $0.25; Q4 sales rose 20.7% to $1.343B; sees year EPS $0.94-$1.00 vs. est. $0.90; sees year revs $1.47B-$1.5B vs. est. $1.42B; announces $300M share repurchase program

·     Lululemon (LULU) 3Q adj EPS $1.62 vs est. $1.41 on revs $1.5B vs est. $1.44B; guides 4Q revs $2.125-2.165B vs est. $2.166B, sees 4Q adj EPS $3.25-3.32 vs est. $3.30; guides FY adj EPS $7.69-7.76 vs est. $7.51; lowers projected ’21 mirror revenue to $125M-$130M

·     Mesa Air Group (MESA) 4Q EPS ($0.21) vs est. $0.12 on revs $130.8Mm vs est. $150.6Mm

·     National Beverage (FIZZ) Q2 EPS $0.42 vs. est. $0.50; Q2 revs $283.2M vs. est. $288.32M

·     Utz Brands, Inc. (UTZ) approved an annual dividend increase from $0.20 to $0.216 per share

·     Vail Resorts (MTN) 1Q EPS ($3.44) vs est. ($3.62), Q1 revs $175.6M vs. est. $192.43M; resort reported EBITDA ($108.4Mm); reaffirmed FY guide of $785-835Mm resort reported EBITDA vs est. $815.7Mm

·     Zumiez (ZUMZ) approved buyback of up to $150M stock

 

Energy, Industrials, Materials & Transports

·     C.H. Robinson Worldwide, Inc. (CHRW) raises quarterly cash dividend to $0.55 from $0.51; announced share repurchase authorization by an additional 20 million shares of common stock

·     CF Industries (CF) raises FY21 adjusted EBITDA view to $2.65B-$2.85B from prior view of $2.2B-$2.4B from its November 4, 2021, conference call which reflects continued strong global nitrogen market conditions that have supported higher-than-expected realized pricing for products

·     Copa Holdings (CPA) reports revenue passenger miles fell 17.3% to 1.407B in November 2021 when compared to 2019 levels; load factor was 84.5%, down 100 bps vs. same period in 2019.

·     Tecnoglass (TGLS) boosted the lower end of its FY21 revenue outlook to $490M to $495M from $485M to $495M (consensus $491.69M) and raised Adjusted EBITDA guidance to $147M to $150M from $140M to $145M; also noted that it believes the recent report issued by a short seller contains inaccurate statements, groundless claims, character attacks, and speculation with the intent of misleading investors and driving down the value of the Company’s shares

·     Waste Management (WM) authorizes $1.5B stock buyback, raises quarterly dividend 13%

 

Financials

·     AllianceBernstein L.P. (AB) preliminary assets under management decreased to $759 billion during November 2021 from $765 billion at the end of October. Firmwide net inflows were outweighed by market depreciation, resulting in a 1% decrease.

·     Bottomline Technologies (EPAY) is working with Deutsche Bank to explore a sale and consider options, Bloomberg reported; according to people with knowledge of the matter, Bottomline has attracted interest from private equity firms. https://bloom.bg/3ELrcL1

·     Franklin Resources (BEN) reported preliminary month-end assets under management of $1,546.8 billion at November 30, 2021, compared to $1,561.7 billion at October 31, 2021.

·     Invesco Ltd. (IVZ) preliminary month-end assets under management (AUM) of $1,572.5 billion, a decrease of 1.3% versus previous month-end. The firm achieved net long-term inflows of $6.0 billion this month. Non-management fee earning net inflows were $1.5 billion and money market net outflows were $7.5 billion

·     Lazard (LAZ) reports preliminary AUM approximately $267.4B as of November 30; the month’s AUM included market depreciation of $5.8B, foreign exchange depreciation of $3.4B and net outflows of $3.1B

·     Virtus Investment Partners, Inc. (VRTS) preliminary assets under management (AUM) as of November 30, 2021 of $184.5 billion. In addition, the company provided services to $3.7 billion of other fee-earning assets that are not included in assets under management.

 

Healthcare

·     Context Therapeutics (CNTX) shares rise after saying its experimental drug, ONA-XR, significantly increased the suppression of tumor cells in a window-of-opportunity trial in patients with a type of breast cancer; study, conducted by Spanish cancer research group SOLTI, enrolled 10 patients

·     Halozyme (HALO) announces $750M share buyback

·     Sonendo, Inc. (SONX) 3Q EPS ($10.33) vs est. ($0.65) on revs $7.9Mm vs est. $7.8Mm; guides FY revs $32.-32.5Mm vs est. $32.3Mm

·     BeiGene (BGNE) announces results from the RATIONALE 309 trial of tislelizumab versus placebo in combination with chemotherapy as a first-line treatment for patients with recurrent or metastatic nasopharyngeal cancer

 

Technology, Media & Telecom

·     Broadcom (AVGO) Q4 adj EPS $7.81 vs. est. $7.74; Q4 revs $7.41B vs. est. $7.36B; announces $10B share repurchase program; sees Q1 revenue $7.6B vs. est. $7.25B; said Q1 adjusted EBITDA guidance of approximately 61.5% of projected revenue

·     Oracle (ORCL) 2q adj rev $10.36B vs. est. $10.21B; Q2 adj EPS $1.21 vs. est. $1.11; increased the authorization for share repurchases by $10B; sees Q3 EPS $1.19-$1.23 vs est. $1.16; sees Q3 rev +6%-8% & consensus $10.56B; sees currency headwind of 3% for rev and 5c for EPS

·     Everbridge (EVBG) shares fall -30% after announced that David Meredith has notified the board of his intention to resign from his role as CEO of the company and as a member of the Board of the company; reiterated its financial guidance for Q4 and 2021 (shares downgraded by several analysts following the announcement)

·     Getty Images agreed to return to public markets through a merger with a blank-check firm backed by CC Capital and Neuberger Berman, in a deal valued at about $4.8 billion including debt. The deal with CC Neuberger Principal Holdings II (PRPB) will provide the company with proceeds of up to $1.2 billion, including funds from the special purpose acquisition company’s (SPAC) trust

·     Comtech Telecommunications Corp. (CMTL) 1Q adj EPS ($0.15) vs est. ($0.14) on revs $116.8Mm vs est. $115.5Mm; confirms guide FY net sales $580-600Mm vs est. $584.3Mm

·     Alphabet (GOOGL) Google executives tell employees they won’t raise pay companywide to match inflation

·     ChipMOS (IMOS) reports November revenue of $80.8M (-2.3% M/M; +9.0% Y/Y); revenue increased 21% in the first eleven months of 2021 compared to 2020.

·     Taiwan Semiconductor Manufacturing Co.’s (TSM) November revenue was up 18.7% Y/Y to NT$148.27B or about $5.35B; sales were up 10.2% compared to October 2021.