Early Look

Tuesday, January 11, 2022

Futures	Up/Down	%	Last
Dow	90.00	0.25%	36,042
S&P 500	17.25	0.37%	4,679
Nasdaq	83.50	0.53%	15,691

 

 

U.S. equity futures are pushing higher following the strongest late-session rally for tech stocks in nearly two years, as investors continue to deal with inflation concerns amid rising Treasury yields, as well as a worrying surge in global Covid infections, and the start of earnings season later this week. Later today, Federal Reserve Chairman Jerome Powell is set to appear before the Senate Banking Committee, while December inflation data in the form of CPI is looming tomorrow. Monday saw a massive rally off the lows, as main indexes ended mixed, recovering after tumbling earlier in the session on expectations of a sooner-than-expected rate hike that pushed U.S. Treasury yields to fresh two-year highs. The Nasdaq Composite finished positive on the day after having fallen over -2.7% in the morning, putting it below its rising 200-day moving average for the first time in 434 trading days. At the session low, the Nasdaq was down nearly 10% from its Nov. 19 record close. But large cap tech staged an impressive reversal off the low. The U.S. 10-Year Treasury yield ended the day unchanged after hitting a fresh two-year high at 1.8080% earlier. In Asian markets, The Nikkei Index fell -256 points to 28,222, the Shanghai Index dropped -0.73% to 3,567, and the Hang Seng Index was down slightly at 23,739. In Europe, the German DAX is up 1.2% to 15,955. while the FTSE 100 gains +0.6% to trade just under 7,500.

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -6.74 points, or 0.14%, to 4,670.29

·     The Dow Jones Industrial Average fell -162.79 points, or 0.45%, to 36,068.87

·     The Nasdaq Composite gained 6.93 points, or 0.05%, to 14,942.83

·     The Russell 2000 Index declined -8.66 points, or 0.40% to 2,171

 

Events Calendar for Today

·     6:00 AM ET        NFIB Small Business Optimism for Dec

·     7:45 AM ET        ICSC Weekly Retail Sales

·     8:55 AM ET        Johnson/Redbook Weekly Sales

·     4:30 PM ET        API Weekly Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: ACI, PCYO, SNX

·     Earnings After the Close: None

 

Other Key Events:

·     ICR Conference 2022, 1/10-1/12, in Orlando, FL

·     Jefferies 2022 Software Bus Tour (virtual), 1/10-1/14

·     JPMorgan 40^th Annual Healthcare Conference (virtual), 1/10-1/13

·     Needham 24^th Annual Growth Conference (virtual), 1/10-1/14

·     UBS Greater China Conference (virtual), 1/11-1/14

·     China PPI, CPI for December

 

 

Macro	Up/Down	Last
Nymex	1.19	79.42
Brent	1.19	82.06
Gold	4.75	1,806.45
EUR/USD	0.0007	1.133
JPY/USD	0.21	115.41
10-Year Note	-0.025	1.755%

 

 

World News

·     ECB’s Lane said inflation will fall this year, will be below ECB’s 2% target in 2023/24; don’t see behavior that’d suggest inflation will remain above the ECB target in the medium term

·     Fed pre-released text of Chair Powell’s Senate Testimony: Today the economy is expanding at its fastest pace in many years, and the labor market is strong, we know that high inflation exacts a toll … we are strongly committed to achieving our statutory goals of maximum employment and price stability, we will use our tools to support the economy and a strong labor market and to prevent higher inflation from becoming entrenched

 

Sector News Breakdown

Consumer

·     Abercrombie & Fitch Co (ANF) said for fiscal 2021 company expects net sales up in range of 19% to 20% compared to 2020 vs est. +21.15%, sees FY CAPEX $90-95Mm; sees Q4 sales up 4%-6% above prior outlook of up 3% to 5% to 2019

·     Big Lots (BIG) said it sees 4q EPS $1.80-$1.95, down from prior $2.05-$2.20; Through end of fiscal December, company’s performance was at upper end of its expectations; since early Jan, has seen softening of traffic & sales trends which it believes driven by rapid spread of Omicron

·     FREYR Battery (FREY) said it signed a Head of Terms agreement for pursuing a JV with the ambition to establish an LFP cathode plant in the Nordic region.

·     Limoneira (LMNR) 4Q adj EPS ($0.28) vs est. ($0.26) on revs $33.5Mm vs est. $26.6Mm; sees fresh lemon volumes 4.5M-5M cartons for FY22

·     Rivian (RIVN) says it produced more than 1,000 vehicles in 2021; said its chief operating officer retired from company in December; had warned it would fall a few hundred short of 1,200-vehicle goal

·     Wynn Resorts (WYNN) downgraded to Neutral from Buy at Citigroup

·     Duluth Holdings Inc (DLTH) says reaffirms fiscal 2021 outlook; says net sales of $224.3 mln for nine-week period from November 1, 2021, through January 2, 2022; Direct net sales decreased 5.4% to $145.3 million compared to $153.5 million in the 2020 Holiday Period

 

Energy, Industrials and Materials

·     Alcoa (AA) downgraded to Hold from Buy at Deutsche Bank

·     Steel producers US Steel (X), Steel Dynamics (STLD), Cleveland Cliffs (CLF), Nucor (NUE) Ternium (TX) all downgraded at Wolfe Research

 

Financials

·     CME Group (CME) records its international average daily volume of 5.5M contracts in 2021 (+4% Y/Y); reflecting all trading done outside the U.S., was driven largely by growth in interest rate products, up 19%.

·     Cohen & Steers, Inc. (CNS) preliminary assets under management of $106.6 billion as of December 31, 2021, an increase of $6.4 billion from assets under management at November 30, 2021. The increase was due to net inflows of $1.5 billion and market appreciation of $6.1 billion

·     Netstreit (NTST) 8M share Spot Secondary priced at $22.25

 

Healthcare

·     Accolade Inc. (ACCD) Q3 revs rose 117% to $83.5M vs. est. $75.89M; sees Q4 revs $90M-$93M and FY revs up 25%; sees FY22 adjusted EBITDA in a range of 11% to 12%, of revenue

·     CVS Health Corp (CVS) raised its full year 2021 GAAP diluted earnings per share guidance range to $5.87 to $5.92 from $5.50 to $5.61; raised its full year 2021 adjusted EPS guidance range to $8.33 to $8.38 from at least $8.00

·     Danaher (DHR) said Q4 core revenue growth is expected to be above the company’s previously announced guidance, according to a release; saw better-than-expected results across all three reporting segments led by Life Sciences and Diagnostics

·     Illumina (ILMN) Q4 preliminary revenue of ~$1.19B (vs. est. $1.10B); for FY22, non-GAAP EPS is estimated to be in the range of $4.00-$4.20 (vs. est. $4.02)

·     Inari Medical (NARI) guides 4Q revs $82.8Mm vs est. $73.2Mm

·     Medtronic (MDT) gets approval from Japan’s Ministry of Health, Labor and Welfare for the sale and reimbursement of the Micra AV Transcatheter Pacing System

·     PerkinElmer (PKI) raises FY21 revenue view to $5B from $4.9B vs. est. $4.92B, with approximately $2.9B coming from its Diagnostics segment and approximately $2.1B coming from its Discovery and Analytical Solutions segment.

·     Private insurers will have to cover the cost of over-the-counter Covid-19 tests starting Saturday under a Biden administration plan that aims to make it more affordable for people to screen for infections and limit the spread of the Omicron variant. The policy means that millions of people with private health insurance can expect insurers to reimburse them for up to eight tests a month per covered individual, or that they will be able to purchase them at no cost through their insurance.

 

Technology, Media & Telecom

·     Micron (MU) said Zinser departing as CFO to join Intel (INTC); INTC shares advanced overnight

·     IBM Corp (IBM) downgraded to Sell from Neutral at UBS and cut tgt to $124 from $136 saying near-term risk to Q4 operating estimates and an elevated valuation leaves the shares vulnerable

·     AMD (AMD) upgraded to Overweight from Sector Weight at KeyBanc