Early Look

Tuesday, December 21, 2021

Seeing an all-out rebound for risk assets as global stock markets jump along with a bounce in oil prices as well as crypto with Bitcoin up over 3% approaching the $49,000 level after dipping below $45,000 the day prior. The bounce in U.S. futures follows the worst three-day performance since September for the S&P as investors cope with ongoing uncertainty over the impact of the Omicron surge and lingering interest rate concerns as well as light volumes ahead of the Christmas holiday. In a televised address later today, President Biden will outline plans that include mobilizing military medical personnel to support hospitals around the country, the opening of several Federally-run testing sites, and the purchase of 500 million testing kits that will be available online starting for families to order as of next month. Tech stocks bounce behind better earnings results from Micron (MU), while retailers get a positive earnings result from footwear and apparel giant Nike (NKE). U.S. stocks saw sharp declines on Monday as investors worried about a deluge in COVID-19 cases potentially undercutting the economic rebound, as well as a critical blow to President Joe Biden’s domestic investment bill. However, reports indicate both sides are trying to iron out details of Biden’s BBB near $2 trillion plan. In Asian markets, The Nikkei Index jumps over 2% to 28,517, the Shanghai Index gains +0.88% to 3,625, and the Hang Seng Index climbed 1% to 22,971. In Europe, the German DAX is higher by 180 points, or 1.19% to 15,420, while the FTSE 100 advances around 1% to 7,265.

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -52.62 points, or 1.14%, to 4,568.02

·     The Dow Jones Industrial Average fell -433.28 points, or 1.23%, to 34,932.16

·     The Nasdaq Composite declined -188.74 points, or 1.24%, to 14,980.94

·     The Russell 2000 Index declined -34.06 points, or 1.57% to 2,139.87

Events Calendar for Today

·     7:45 AM ET         ICSC Weekly Retail Sales

·     8:30 AM ET         Current Account for Q3

·     8:55 AM ET         Johnson/Redbook Weekly Sales

·     4:30 PM ET         API Weekly Inventory Data

Earnings Calendar:

·     Earnings Before the Open: APOG, EPAC, FDS, GIS, RAD

·     Earnings After the Close: CAMP, AIR, PIK

Sector News Breakdown

Consumer

·     Nike Corp. (NKE) Q2 EPS $0.83 vs. est. $0.63; Q2 revs rose 1% to $11.36B vs. est. $11.26B; digital sales increased 12%, or 11% on a currency-neutral basis; Q2 gross margin increased 280 basis points to 45.95 vs. est. 44.2% (and up from 43.1% YoY); NIKE Direct sales were $4.7 billion, up 9% on a reported basis and up 8% on a currency-neutral basis; North America revenue rose 12% YoY to $4.48B, while Greater China revs fall -20% YoY to $1.84B vs. est. $2.1B

·     Calavo Growers (CVGW) Q4 EPS loss (-$0.08) vs. est. loss (-$0.11); Q4 revs $273.4M vs. est. $263.38M; Fresh segment revenue increased 26% YoY to $149.8M, and Renaissance Food Group (RFG) and Foods segments revenues increased 7% and 6% YoY, respectively; says while demand for products is strong, industry-wide inflationary pressures on raw materials, freight & labor costs are uncertain

Energy, Industrials and Materials

·     Apogee Enterprises (APOG) Q3 adj EPS $0.63 vs. est. $0.53; Q3 revs $334.2M vs. est. $314.6M; guides FY EPS $2.25-$2.40 vs. prior view $2.20-$2.40 and vs. est. $2.22; said expects to record a pre-tax gain of approximately $19M in the Q4, related to the previously announced sale of its Architectural Glass facility in Statesboro, Georgia

·     Renewable stocks (RUN, ENPH, SEDG) and EV makers (FSR, TSLA, RIVN) rise in premarket trading, set to rebound from the previous session’s losses, amid hopes that talks will revive President Joe Biden’s economic package

·     United Rentals (URI) downgraded to Neutral from Outperform at Baird

·     Precision Drilling (PDS) and Patterson-UTI (PTEN) both upgraded to Overweight from Neutral at Piper Sandler

·     TimkenSteel (TMST) announces $50M share repurchase program and capital expenditure budget for 2022; approved capital expenditure budget for 2022 in amount of $40M

Healthcare

·     Acadia Pharma (ACAD) to resubmit its sNDA in Q1; plans to resubmit sNDA for Pimavanserin narrowing the proposed indication from dementia-related psychosis to Alzheimer’s disease psychosis

·     Aldeyra Therapeutics (ALDX) announces top-line results from the phase 3 tranquility trial in dry eye disease; said tranquility primary endpoint of ocular redness not met

·     Alnylam Pharmaceuticals (ALNY) announced that the company has initiated a global Phase 2 study to evaluate the safety and efficacy of lumasiran, an RNAi therapeutic targeting hydroxyacid oxidase 1 – the gene encoding glycolate oxidase – in patients with recurrent kidney stone disease and elevated urinary oxalate levels

·     CytomX Therapeutics (CTMX) announces preliminary results for ongoing phase 2 expansion study of cx-2029, a first-in-class antibody-drug conjugate candidate targeting transferrin receptor, CD71; adverse event profile consistent with phase 1 observations

·     DBV Technologies (DBVT) falls -17%; provides update on investigational Viaskin™ Peanut; co says believes the most efficient way to progress the regulatory pathway for Viaskin Peanut is to conduct a new, Phase 3 placebo-controlled efficacy trial similar to PEPITES; formally notified the EMA of its decision to withdraw the MAA for Viaskin Peanut

·     Aquestive (AQST) slips -29%; after saying it was informed by the FDA that it is not ready to take a decision on whether or not to approve co’s anti-seizure medicine, Libervant, by the target date of December 23

·     Sanofi SA (SNY) to acquire privately held Amunix Pharmaceuticals Inc for an upfront payment of about $1 billion, and said that it will also pay Amunix up to $225 million based on certain future development milestones.

·     GlaxoSmithKline PLC (GSK) said that its Apretude drug, which reduces the risk of HIV acquisition, has been approved by the U.S. FDA; said that Apretude was developed by ViiV Healthcare, the specialist HIV company majority owned by GSK

Technology, Media & Telecom

·     Micron (MU) Q1 EPS $2.16 vs. est. $2.11; Q1 revs $7.69B vs. est. $7.67B; sees Q2 EPS $1.85-$2.05 vs. est. $1.86; sees Q2 revenue $7.5B plus minus $200M above est. $7.27B; sees CY21 industry DRAM bit demand growth in low 20% range

·     Braze (BRZE) Q3 revs rose 62.6% to $64M vs. est. $56.4M; Q3 GAAP EPS loss (-$0.42) vs. est. loss (-$0.61); sees FY22 revenue $232.5M-$233.5M

·     Alibaba Group (BABA) downgraded to neutral from overweight at Atlantic Securities and cuts tgt to $140 from $185 as remains cautious on improvement of Taobao/Tmall, BABA’s business segment, in near term and adds it is key to co’s sustained stock outperformance