Morning Preview: March 25, 2021

Early Look

Thursday, March 25, 2021









S&P 500










Stock futures are looking modestly higher, with technology and small cap stocks attempting to rebound after their recent slide ahead of an important morning of economic data with jobless claims, GDP and inflation data all expected around 8:30 AM. Treasury yields are steady around 1.61%, down after hitting 1.754% last week, a 14-month high on inflation fears. Oil prices in the U.S. declined Thursday following a rally sparked by a container ship blocking the Suez Canal and creating a bottleneck that could slow the delivery of more than 13 million barrels of crude through one of the world’s busiest waterways. Stocks finished near the lows on Wednesday as the tech heavy Nasdaq tumbled over 2% with selling accelerating out of mega-caps, momentum (such as EV stocks) and Reddit/meme stocks, with FAANG names all falling on the day. Industrials and energy stocks held up well, explaining the modest loss for the Dow Jones Industrial Average while an average 5-year note auction led to bid in Treasuries, pushing rates lower ahead of the 7-year auction tomorrow (recall the last 7-year auction led to a huge spike in yields on weak demand). The SmallCap Russell 2000 underperformed again, also falling more than 2% and is now down three sessions in a row after tumbling 6.7% last week and falling below its 50-day moving average yesterday. Today marks a busy morning of economic data with GDP data (estimates for 4.1% growth) and jobless claims as well as core inflation reading (PCE). In Asian markets, The Nikkei Index gained 324 points to 28,729, the Shanghai Index slipped -3 points to 3,363 and the Hang Seng Index dipped -18 points to 27,891. In Europe, the German DAX is down around -20 points to 14,590, while the FTSE 100 is down around -15 points to dip under 6,700.

Events Calendar for Today

·     8:30 AM EST      Gross Domestic Product (GDP) Q4-F…est. 4.1%

·     8:30 AM EST      GDP Price Deflator, Q4-F…est. 2.0%

·     8:30 AM EST      Consumer Spending, Q4-F…est.

·     8:30 AM EST      Core PCE Prices Final, Q4…est. 1.4%

·     8:30 AM ET         Weekly Jobless Claims…est. 730K

·     8:30 AM EST      Continuing Claims…est. 4.043M

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

·     11:00 AM EST    Kansas City Fed Manufacturing for March…prior 26


Earnings Calendar:

·     Earnings Before the Open: A, LOT, BKYI, DRI, EFOI, MOV, PFIN, REX, SYBX



Other Key Events:

·     Goldman Sachs Digital Evolution of Global Gaming Conference (virtual)

·     NAREIT REITwise 2021 Conference (virtual), 3/23-3/25

·     Sidoti Virtual Investor Conference, 3/24-3/25

·     Truist Utilities, Midstream Energy Summit (virtual)


Market Closing Prices Yesterday

·     The S&P 500 Index slumped -21.38 points, or 0.55%, to 3,889.14

·     The Dow Jones Industrial Average dipped -3.09 points, or 0.01%, to 32,420.06

·     The Nasdaq Composite dropped -265.81 points, or 2.01%, to 12,961.89

·     The Russell 2000 Index declined -51.42 points, or 2.35% to 2,134.27





















10-Year Note





Sector News Breakdown


·     KB Homes (KBH) Q1 EPS $1.02 vs. est. $0.91; Q1 revenue $1.14B vs. est. $1.2B; Q1 inventories increased 6% to $4.12 bln as of Feb. 28, 2021; qtr-end ending backlog grew 59% to 9,238 homes, driving a 74% increase in ending backlog value to $3.69 bln; Q1 net orders for qtr grew 23% to 4,292 with net order value increasing by $486.4 mln, or 35%, to $1.87 bln; raises FY21 housing revenue view to $5.7B-$6.1B from $5.55B-$6B and also raises FY21 average selling price view to $405,00-$415,000 from $400,000-$410,000

·     RH Corp. (RH) Q4 adj EPS $5.07 vs. rest. $4.76; Q4 revs rose 22% to $812.14M vs. est. $797.7M; forecast q1 rev growth of at least 50% & adj operating margin in 20% range; 2021 should result in rev growth of 15% to 20% with adj operating margin expanding 100 to 200 bps

·     Shoe Carnival (SCVL) 4Q EPS $0.52 vs. est. $0.51, same-store sales +6.4%, says to resume share repurchase in FY21, will not be providing guidance at this time

·     GrowGeneration (GRWG) sees Q1 revenue $86M-$88M vs. est. $76.5M; sees Q1 adjusted EBITDA $9M-$9.5M; raises FY21 revenue view to $415M-$430M from $335M-$350M and ups FY21 adjusted EBITDA view to $48M-$51M from $38M-$40M


Energy, Industrials and Materials

·      Celanese (CE) increases 2021 financial outlook as sees FY21 EPS $11.00-$11.50 vs. est. $10.13; says expects a strong finish to Q1 with adj EPES around $3.00 vs. est. $2.71; said expect momentum to continue across the middle of 2021 as we meet elevated demand for our Acetyl Chain and Engineered Materials products

·     HB Fuller (FUL) Q1 adj EPS 66c vs. est. 48c; Q1 revenue $726M vs. est. $681M; raises its full year guidance on stronger outlook for revenue and Ebitda growth; anticipates high-single digit to low double-digit revenue growth, and adjusted Ebitda in range of $455 mln to $475 mln for fiscal 2021

·     MEG Energy (MEG) 4Q EPS ($0.13) vs. est. ($0.04) on revs $108.7Mm vs. est. $86.5Mm; guides FY21 revs about +20% vs. est. +21%, sees FY adj EBITDA $61-67Mm vs. est. $61.7Mm

·     Diversey (DSEY) 46.2M share IPO priced at $15.00



·     AllianceBernstein (AB) downgraded to Neutral from Buy at Citi

·     The SEC has opened an inquiry into the blank check acquisition frenzy on Wall Street and is seeking information on how underwriters are managing the risks involved, Reuters reported. The SEC in recent days sent letters to Wall Street banks seeking information on their dealings in special purpose acquisition companies, or SPACs

·     Banco Santander SA’s U.K. unit has reached an agreement with a union to reorganize its property estate and close some major offices, the latest move by a company to adapt to changes caused by the coronavirus pandemic and move toward more working from home. The bank also plans to close 111 of its 563 branches, taking the number of branches to 452

·     Concentrix (CNXC) 1Q adj EPS $2.29 vs. est. $2.11 on revs $1.353B vs. est. $1.299B; guides 2Q revs $1.33-1.38B vs. est. $1.23B

·     Trean Insurance Group (TIG) Q4 adj EPS 22c vs. est. 16c; Q4 gross written premiums increased 37.4% to $134.5 mln



·     AstraZeneca (AZN) said its COVID-19 vaccine was 76% effective at preventing symptomatic illness and completely stopped severe or critical forms of the disease, citing a new analysis of up-to-date results for its major U.S. trial. U.S. health officials earlier in the week publicly rebuked the drugmaker for using “outdated information” when calculating that the vaccine was 79% effective. AstraZeneca had also said on Monday an interim analysis of data showed that the shot, developed with Oxford University, was 100% effective against severe or critical forms

·     Rite Aid (RAD) shares fell -20%; sees FY21 revenue approx. $24.0B, consensus $24.07B; lowers FY21 adj EBITDA view to $425M-$435B from $490M-$520M; said Q4 results significantly impacted by weak cough, cold, and flu season, continued effects related to covid-19 pandemic

·     Neurocrine Biosciences (NBIX) is replacing O-I Glass (OI) in the S&P MidCap 400 index while OI is moving down to the S&P SmallCap 600 index to take the place of HMS Holdings (HMSY), which is set to be acquired by Veritas Capital.

·     Synlogic (SYBX) announces synb8802 will advance to phase 1b proof of concept study after proof of mechanism demonstrated in dietary hyperoxaluria; says 28.6% urinary oxalate lowering demonstrated in dietary hyperoxaluria in healthy volunteers

·     TELA Bio (TELA) 4Q EPS ($0.54) vs. est. ($0.49) on revs $5.7Mm vs. est. $5.8Mm; guides FY revs $27-30Mm vs. est. $33.1Mm

·     Lava Therapeutics (LVTX) 6.7M share IPO priced $15.00

·     Evofem (EVFM) 17.143M share Spot Secondary priced at $1.75

·     Olink (OLK) 17.657M share IPO priced at $20.00


Technology, Media & Telecom

·     Coherent Inc (COHR) agreed to a $7 bln buyout offer from II-VI Inc (IIVI), ending weeks of competing bids and scrapping a merger deal it signed with Lumentum Holdings Inc (LITE) weeks ago; COHR holders will receive $220 in cash and 0.91 II-VI shares, compared with LITE’s raised offer on Tuesday of $230 in cash and 0.6724 shares of Lumentum stock

·     Momo (MOMO) Q4 EPS 58c vs. est. 42c; Q4 revenue $581.64M vs. est. $563.03M; monthly active users (MAUs) on Momo application were 113.8M in December 2020, compared to 114.5M in December 2019

·     Cinedigm (CIDM) rises 30%; said in a regulator filing last night that it will be developing non-fungible token products

·     Certara (CERT) 10M share Secondary priced at $25.00

·     Vizio (VZIO) 15.12M share IPO priced at $21.00

·     Cognizant (CTSH) expands its expertise in autonomous, connected and electric vehicles with acquisition of ESG Mobility.

·     Cricut (CRCT) 15.315M share IPO priced at $20.00

·     SEMrush Holdings (SEMR) 10M share IPO priced at $14.00

·     QAD Inc. (QADA) Q4 revenue $83M vs. est. $78.1M; sees Q1 sub revs $36.5M and maintenance revs $26M; for year sees sub revs $160M and maintenance revs $102M

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Market commentary provided by Hammerstone Markets, Inc, 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.