Early Look

Monday, December 27, 2021

Stocks are modestly higher to start the week, looking to extend their rally after yet another record close on Thursday. However, travel names are lower in pre-market trading after Covid caused several flights to be canceled over the weekend and cases were detected on board of several cruise ships. Energy names are also being hit before today’s open as rising cases and cancellations could trigger demand fears. Rising cases have pushed authorities in some Chinese cities to toughen restrictions on their current lockdowns. In Asian markets, the Nikkei 225 lost 106 points to 28,676, the Shanghai was slightly lower to 3,616, and the Hang Seng was green to 23,223. In Europe, the German DAX is up 14 points to 15,770, the FTSE 100 is nearly flat at 7,372.

Market Closing Prices Yesterday

·     The S&P 500 Index rose 29.16 points, or 0.62%, to 4,725.79.

·     The Dow Jones Industrial Average climbed 196.67 points, or 0.55%, to 35,950.56.

·     The Nasdaq Composite jumped 131.48 points, or 0.85%, to 15,653.37.

·     The Russell 2000 Index advanced 19.67 points, or 0.89% to 2,241.58.

Events Calendar for Today

·     10:30 AM EST     Dallas Fed manufacturing index

World News

·     Xian, the capital city of China’s Shaanxi province, issued curbs on travel on their fifth day of lockdowns, now only allowing vehicles on the road for virus control or people’s livelihoods.

·     French authorities are convening for a Covid meeting today after hitting a record 94,124 cases on Friday.

·     Japan’s November retail sales rose +1.9% YoY vs. est. +1.7% and better than October’s +0.9%.

Sector News Breakdown

Consumer

·     Victoria’s Secret (VSCO) had its price target lowered to $54 from $69 at Morgan Stanley who kept its Equal-Weight rating

·     Barron’s said canned cocktails are booming and highlighted Anheuser Busch (BUD), Diageo (DEO), Brown-Forman (BF/B), and Pernod Ricard (PRNDY) as companies profiting from the trend

Energy, Industrials & Materials

·      U.S. commercial airlines (AAL, DAL, UAL, etc) canceled nearly 700 flights on Christmas Eve, almost 1000 flights on Christmas Day, and more than 1,300 flights yesterday amidst rising Covid cases.

·     O-I Glass (OI) announced a subsidiary has entered into a definitive agreement to sell Cristar TableTop for ~$95M, and the company reaffirmed its Q4 adj EPS guidance for 30c-35c

Financials

·      Mastercard (MA) reported holiday sales (Nov. 1 – Dec. 24) rose 8.5% from last year

Healthcare

·     Pfizer (PFE) received emergency use authorization from South Korea for Paxlovid, its Covid antiviral pill.

·     United Therapeutics (UTHR) resubmitted its new drug application for Tyvaso DPI, which targets the treatment of pulmonary arterial hypertension and pulmonary hypertension, to the FDA after the agency said in October that only a single deficiency prevented approval

·     Cigna (CI) reaffirmed its full-year guidance for adj operating EPS of at least $20.35

Technology, Media & Telecom

·     Starboard has taken a stake of about 6.5%, or nearly $800M, in GoDaddy (GDDY) and plans to push it to boost its performance

·     Chicken Soup for the Soul Entertainment (CSSE) filed for a common stock offering of up to $100M