Early Look

Thursday, July 8, 2021

Stocks slide around the globe, as the S&P 500 and Nasdaq Composite tumble following fresh all-time highs on Wednesday. A delayed reaction? Stocks were little changed late afternoon following the release of the FOMC Minutes from its prior meeting, where Fed officials saw a tightening of monetary policy potentially happening sooner than expected as the economy recovers from the pandemic, but no move to taper asset purchases seems imminent. At the same time, worries about the economic recovery continue to weigh as the Covid-19 delta variant has spread rapidly in countries with lagging vaccination rates, as the WHO urged caution on worldwide reopenings. In Asian markets, The Nikkei Index dropped -248 points to 28,118, the Shanghai Index slid -28 points to 3,525 and the Hang Seng Index tumbled 2.9% or 800 points to settle at 27,153. In Europe, markets are broadly lower as the German DAX drops over 270 points to 15,420, while the FTSE 100 slides around 2% to hold just above the 7,000 level. European equities are deep in the red with most indexes printing fresh lows for the week. Eurostoxx 50 drops as much as 1.9%, while all Stoxx 600 sectors are in the red, with miners, retail and banks performing the worst.

Market Closing Prices Yesterday

·     The S&P 500 Index gained 14.59 points, or 0.34%, to 4,358.13

·     The Dow Jones Industrial Average rose 104.42 points, or 0.30%, to 34,681.79

·     The Nasdaq Composite edged higher 1.42 points, or 0.01%, to 14,665.06

·     The Russell 2000 Index declined -21.66 points, or 0.95% to 2,252.85

Events Calendar for Today

·     8:30 AM ET         Weekly Jobless Claims…est. 350K

·     8:30 AM EST      Continuing Claims…est. 3.335M

·     10:30 AM ET      Weekly EIA Natural Gas Inventory Data

·     11:00 AM ET      Weekly DOE Inventory Data

·     3:00 PM ET         Consumer Credit for May…est. $18.4B

Earnings Calendar:

·     Earnings Before the Open: HELE

·     Earnings After the Close: ACCD, DCT, KSHB, LEVI, PSMT

Other Key Events:

·     China Producer Price Index and Consumer Price Index for June

Sector News Breakdown

Consumer

·     GAN (GAN) rises after saying sees Q2 revs between $34-$35M, beating the consensus of $23.98M; positive Adj. EBITDA to be $3-$7M as higher than expected revenue more than offset strategic investments in talent and technology

·     Overstock (OSTK) initiated with a Buy and $150 tgt at Needham

·     WD-40 (WDFC) Q3 EPS $1.52 vs. est. $1.15; Q3 sales rose 39% to $136.4M vs. est. $108.33M; sees FY sales $475m-$490m vs. rest. $461.85M; do not expect to see sales growth of current magnitude over long-term

·     Tesla (TSLA) introduced a new, lower-priced version of the Model Y to the China market; the Standard Range Model Y starts at 276,000 yuan ($42,600) after government subsidies and incentives; Tesla began taking orders for the vehicle on Thursday.

·     Didi (DIDI) shares on track for a 4th straight decline after IPO last week, extending the losses suffered as Asian stocks listed in New York also drop following a day of declines for tech companies in Hong Kong.

·     Stellantis (STLA) slips after saying adjusted operating income margins in 1H are expected to exceed previously communicated FY margin guidance range of 5.5% to 7.5%; said expects negative industrial free cash flows in 1H

Energy, Industrials and Materials

·     American Petroleum Institute (API) showed a draw of 7.98M barrels of oil for the latest week; gasoline inventories showed a draw of 2.74M barrels, distillate inventories show a build of 1.09M barrels and Cushing inventories show a build of 152K barrels.

·     Freeport McMoRan (FCX) downgraded to Underweight from Equal Weight at Barclays

·     Rio Tinto (RIO) and South Korean steelmaker POSCO agreed to jointly develop technologies to transition to a low-carbon emission steel value chain.

·     Maxar Technologies (MAXR) contracts for WorldView Legion satellite constellation capacity through an expanded agreement with a key international defense and intelligence customer (multi-year, $35M contract)

·     Sonoco (SON) updates $115 million project horizon progress; announces intentions to close 70,000 tons/year of capacity at Hartsville mill complex; investment to convert Hartsville, S.C., corrugated medium machine to urb scheduled to be completed in q2 of 2022

·     The Federal Aviation Administration issued an emergency directive requiring main rotor inspections for ~400 Textron (TXT) Bell helicopters after Canadian and U.S. investigators discovered a possible flaw while probing a fatal crash last week.

Financials

·     Cryptocurrency-exposed stocks like RIOT, MARA, MSTR, looking sharply lower in premarket trading with Bitcoin sinking back below $33,000 per token, down over 5%, with Ethereum down over 7% to slip below $2,200

·     Charles Schwab (SCHW) downgraded to Neutral from Conviction Buy at Goldman Sachs

·     Pzena Investment Management Inc. (PZN) preliminary total AUM as of June 30, 2021 was $53.1 bln

Healthcare

·     Amgen (AMGN) said the U.S. FDA has accepted a Biologics License Application (BLA) and granted Priority Review for Tezepelumab in the treatment of asthma; Tezepelumab is being developed by Amgen in collaboration with AstraZeneca (AZN)

·     Ideaya Biosciences (IDYA) 4.64M share Secondary priced at $17.25

·     SeaSpine Holdings (SPNE) said the U.S. FDA has granted a 510k clearance for the company’s 7D Percutaneous Spine Module for minimally invasive surgery

Technology, Media & Telecom

·     Alphabet Inc’s (GOOGL) slides as thirty-seven U.S. states and district attorneys general sued Google on Wednesday, alleging the search giant bought off competitors; also alleged that the co was using restrictive contracts to unlawfully maintain a monopoly for its app store on Android phones

·     Tessco Technologies (TESS) shares jump over 30% after the company said Wednesday evening it expects 2022 1Q total revenue of $105M, 9% higher than a year earlier