Morning Preview: January 05, 2021

Early Look

Tuesday, January 5, 2021

Futures

Up/Down

%

Last

Dow

40.00

0.13%

30,144

S&P 500

4.25

0.12%

3,696

Nasdaq

15.50

0.12%

12,700

 

 

Stock futures with an early rebound, bouncing after posting sharp declines to start the year ahead of a busy week that includes a Senate race in Georgia and monthly nonfarm payroll data to conclude the week. Stocks tumbled on the first day of the New Year, as the S&P 500 and Dow Jones each pulled back from intraday highs as rising coronavirus cases and the fate of the Senate in Washington weighed on sentiment. Nearly all eleven S&P sectors finished lower, led by declines in REITs, Utilities and Industrials, while the tech heavy Nasdaq Composite dropped around 1.5%. Concern heading into Tuesday’s Georgia senate runoff elections that will determine whether Democrats will hold all three branches, making it easier to pass legislation, kept investors on edge. Gold outperformed, rising nearly 3% to two-month highs while Bitcoin pulled back from weekend highs of around $34,000. In Asian markets, The Nikkei Index fell -99 points to 27,158, the Shanghai Index rose 25 points to 3,528 and the Hang Seng Index gained 177 points to 27,649. In Europe, the German DAX is down around -20 points to 13,700, while the FTSE 100 is up about 20 points to 6,595. UK Prime Minister Boris Johnson on Monday ordered England into a new national lockdown to contain a surge in COVID-19 cases. Positive sentiment overall remains for investors given Covid vaccines are being distributed, earnings outlooks are improving, while fiscal and monetary support also remain supportive.

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -55.42 points, or 1.48%, to 3,700.65

·     The Dow Jones Industrial Average fell -382.59 points, or 1.25%, to 30,223.89

·     The Nasdaq Composite slumped -189.93 points, or 1.47%, to 12,698.45

·     The Russell 2000 Index declined -28.94 points, or 1.47% to 1,945.91

 

Events Calendar for Today

·     7:45 AM ET         ICSC Weekly Retail Sales

·     8:55 AM ET         Johnson/Redbook Weekly Sales

·     10:00 AM EST    ISM Manufacturing PMI, for December

·     4:30 PM ET         API Weekly Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: none

·     Earnings After the Close: SGH

 

Other Key Events:

·     Citigroup 2021 Global Technology, Media, Telco Virtual Conference, 1/4-1/7

·     Citigroup Transports MidCap Conference (virtual), 1/5-1/6

·     China’s Caixin Services PMI for December

·     Goldman Sachs Annual Healthcare CEO’s Unscripted Conference (virtual)

·     Mizuho Virtual Refining Conference (1-day)

 

 

Macro

Up/Down

Last

Nymex

0.63

48.25

Brent

0.64

51.73

Gold

+4.80

1,947.75

EUR/USD

0.0034

1.2282

JPY/USD

-0.31

102.82

10-Year Note

+0.016

0.93%

 

 

World News

·     British Prime Minister Boris Johnson on Monday ordered England into a new national lockdown to contain a surge in COVID-19 cases that threatens to overwhelm parts of the health system before a vaccine program reaches a critical mass. Johnson said a new, more contagious variant of the coronavirus first identified in the United Kingdom and now present in many other countries was spreading at great speed – Reuters

·     U.S. states, cities, schools and other issuers sold $451.2 billion of municipal bonds last year, the highest amount on records that date back to 1980, according to Refinitiv data. California was the top issuer with $7.47 billion of bonds, followed by New York City with $6.6 billion

 

Sector News Breakdown

Energy

·     Apache Corp. (APA) said its board of directors has authorized the creation of APA Corp., a new holding company. APA Corp. will replace Apache Corp. as the public company trading on the Nasdaq stock exchange, under the same symbol.

·     Saudi foreign minister Faisal bin Farhan AL-saud discussed, by phone with his Kuwaiti counterpart Ahmad Nasser Al-Mohammad Al-Sabah, relations between the two countries and common regional and international issues, state news agency SPA said – Reuters

·     ION Geophysical (IO) said its Gemini extended frequency source technology was commercially deployed for the first time, by an unnamed oil supermajor.

·     Precision (PDS) increased its long-term debt reduction target from $700M to $800M for the years 2018 through 2022, requiring $250M of debt reduction over the next two years to achieve our revised target

 

Financials

·     SVB Financial (SIVB) agrees to acquire Boston Private Financial Holdings (BPFH) for about $900M of stock and cash. BPFH holders will get 0.0228 shares of SVIB common stock and $2.10 of cash for each BPFH share they own, valued at about $10.94 each, or ~29% premium to closing price end of December https://bit.ly/2JJK0Db

·     Life Storage (LSI) said its Board of Directors has approved a 3.7% year-over-year increase in the Company’s quarterly common stock dividend; Board has also approved a three-for-two stock split of the Company’s common stock, which will be made in the form of a 50% stock dividend

 

Healthcare

·     Atyr Pharma (LIFE) announces positive topline results from phase 2 clinical trial of atyr1923 in covid-19 patients with severe respiratory complications; said study met primary safety endpoint in moderate to severe hospitalized covid-19 patients

·     Moderna (MRNA) said that Israel’s Ministry of Health has given authorization to import the company’s COVID-19 vaccine in Israel

·     Zosano Pharma Corporation (ZSAN) announced that on December 30, 2020 the company requested a Type A meeting with the U.S. FDA in order to receive FDA input on the requirements for the resubmission of the Qtrypta 505 New Drug Application following the Complete Response Letter (CRL) received on October 20, 2020

·     Abbvie Inc (ABBV) and Bristol Myers Squibb (BMY) were among the drugmakers that raised U.S. list prices on more than 500 drugs to kick off 2021, according to an analysis by health care research firm, as per Reuters. Nearly all the increases were below 10%, and the median hike was 4.8%, down slightly from last year

·     ViewRay (VRAY) 10.31M share secondary priced at $4.85 per share

 

Industrials & Materials

·     Lockheed Martin (LMT) was awarded $4.9B from the DoD for the production of three geosynchronous Next Generation Overhead Persistent Infrared satellites for the U.S. Space Force

·     Elbit Systems (ESLT) said that following a competitive process, and as part of an agreement between the Israeli Ministry of Defense and the Hellenic Ministry of National Defense, the Company was selected to establish and operate the International Flight Training Center of the Hellenic Air Force. The Hellenic Government approved the establishment and operation of the Flight Training Center by the IMOD and Elbit Systems for an amount of approximately $1.68B for a period of approximately 20 years

·     International Paper (IP) has entered into an agreement to sell its 90.38% ownership interest in Olmuksan International Paper to Mondi Group for approximately EUR 66M

 

Technology

·     China Telecom Corp Ltd (CHA), China Mobile Ltd (CHL) and China Unicom (CHU) shares rise after the NYSE reversed its decision to delist the three stocks, citing further regulatory guidance. The NYSE originally said it would delist the securities following the U.S. government’s move in November to block investment in 31 firms it says are owned or controlled by China’s military

·     Bilibili (BILI) plans to raise over $2 bln through a secondary listing in Hong Kong, CNBC reported, saying the company will likely file with regulatory authorities for its proposed offering by end of the current week or early next week

·     Nielsen (NLSN) announced a multi-year renewal agreement with Tegna (TGNA). Under the terms of the agreement, Nielsen will provide local television ratings service for 34 Tegna local markets with all existing services renewed for these markets

·     Netflix (NFLX) announced that it broke its viewership records both for December and for the holiday week of Dec. 25-31st (due in large part to the release of the full season 3 release of Cobra Kai, with many family’s binge watching over the break, as well as Bridgerton)

·     Jamf (JAMF) announced that it is now running on more than 20 million Apple devices around the world

·     Breaker, a popular podcast app, said it would be acquired by Twitter Inc (TWTR) and shut down its app and website next week. Breaker said on its blog here that people can now transfer their subscriptions to other podcast listening apps like those offered by Apple Inc and Spotify (no financial terms were disclosed)

·     Hon Hai Precision reports a December revenue of NT$713.78B, up by 4.76% MoM and 32.3% YoY

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Market commentary provided by Catena Media Financials US, LLC, a firm separate from and not affiliated with Regal Securities. Regal Securities has not participated in the creation of the content, and does not explicitly or implicitly endorse the content.