Morning Preview: November 29, 2021

Early Look
Monday, November 29, 2021
Futures |
Up/Down |
% |
Last |
Dow |
239.00 |
0.69% |
35,097 |
S&P 500 |
40.00 |
0.87% |
4,635 |
Nasdaq |
160.50 |
1.00% |
16,211 |
U.S. futures are looking at a solid bounce back after Friday’s bloodbath, as investors consider the potential effects of the Omicron variant of the COVID-19 virus. Over the weekend, two South African health experts, including the doctor who first warned about Omicron, said the variant is showing mild symptoms so far. Meanwhile, the WHO said it will take time to assess how dangerous it is. Also, Moderna (MRNA) said if Omicron eludes current vaccines, a new vaccine tailored for the variant could be ready as soon as early next year (lifting shares). Investors will hope the commentary can boost stock markets that saw the Dow Jones Industrial Average tumble over -900 points for its biggest one-day percentage drop since Oct 28, 2020, while the S&P 500 and Russell 2000 closed with their biggest one-day percentage decline since February and the Nasdaq posted its biggest one-day percentage fall since late September sept 28 after the newly found coronavirus variant, named Omicron and classified as a “variant of concern” by the World Health Organization (WHO), sparked a selloff and triggered stricter travel restrictions across the globe. For the week, the S&P 500 fell 2.2%, the Dow lost 1.97%, and the Nasdaq shed 3.52%. The 10-year Treasury yield ended Friday’s session at 1.48%, the lowest since Nov. 10th. Oil prices surged and bond yields bumped higher. In Asian markets, The Nikkei Index fell -467 points (1.63%) to 28,283, the Shanghai Index was little changed at 3,562, and the Hang Seng Index declined -228 points or nearly 1% to 23,852. In Europe, the German DAX is higher by 125 points, or 0.8% to 15,380, while the FTSE 100 jumps over 80 points or 1.2% to 7,125.
Market Closing Prices Yesterday
· The S&P 500 Index dropped -106.84 points, or 2.27%, to 4,594.62
· The Dow Jones Industrial Average fell -905.04 points, or 2.53%, to 34,899.34
· The Nasdaq Composite plunged -353.57 points, or 2.23%, to 15,491.66
· The Russell 2000 Index declined -85.52 points, or 3.67% to 2,245.94
Events Calendar for Today
· 10:00 AM ET Pending Home Sales for October
· 10:30 AM ET Dallas Fed Manufacturing for November
Earnings Calendar:
· Earnings Before the Open: none
· Earnings After the Close: GBDC, NVGS, SNEX
Other Key Events:
· Cowen 4th Annual Cannabis Virtual Conference (virtual), 11/29-12/1
· Credit Suisse 25th Annual Technology, Media & Telecom Conference, 11/29-12/2, in Arizona
· KeyBanc Enterprise Tech Leadership Series & Mosaic Summit (virtual), 11/29-12/1
· Mizuho Annual U.S. Utility Summit 2021 (virtual), 11/29-11/30
· Piper 33rd Annual Healthcare Conference (virtual), 11/29-12/2
· China NBS Manufacturing PMI for November
Macro |
Up/Down |
Last |
Nymex |
3.38 |
71.53 |
Brent |
3.29 |
76.01 |
Gold |
-7.80 |
1,794.75 |
EUR/USD |
-0.0027 |
1.1292 |
JPY/USD |
0.16 |
113.47 |
10-Year Note |
+0.053 |
1.538% |
Sector News Breakdown
Consumer
· Retailers: Online and brick-and-mortar retailers rang up $8.9B in sales on Friday, down from the record of about $9B spent during Black Friday 2020, according to data from Adobe Analytics (marks the first time ever that growth reversed from the prior year)
· The National Retail Federation (NRF) found that 61% of consumers started purchasing holiday gifts before Thanksgiving, and 28% of their holiday shopping was done by early November
· Nio (NIO), Xpeng (XPEV) and Li Auto (LI) positively mentioned in Barron’s saying the Chinese EV players will grow sales, on a combined basis, roughly 160% in 2021, leaving them trading at some 6.5 times next year’s estimated sales
· Gentherm (THRM) mentioned positively in Barron’s saying the small-cap auto supplier, which has 60% of the global market for heated and air-conditioned seats, is towering over its next competitor at 10%, and notes the supply chain should ease up in the second half of 2022, giving Gentherm a sales lift
· Church & Dwight Co., Inc. (CHD) signed a definitive agreement to acquire the TheraBreath® brand for $580 million in cash, as the deal is expected to close in the fourth quarter.
· Nissan Motor Co (NSANY) announced it will spend 2 trillion yen ($17.59 billion) over five years to accelerate vehicle electrification to catch up with competitors in one of the fastest growth areas for car makers.
Energy, Industrials & Materials
· Activist Ancora Holdings Inc. is said to be targeting Berry Global (BERY) and is pushing the packaging manufacturer to explore strategic alternatives and consider other changes, according to a report this weekend in the WSJ; Ancora believes Berry, which has a market cap of about $9B, may be worth a $100 per share in a sale https://on.wsj.com/3IbVN6O
· Chevron (CVX) resumed production at the 5.2M metric tons/year Gorgon LNG Train 1 plant offshore Western Australia after completing repairs of piping associated with the dehydration unit, S&P Global Platts reports.
· Vale (VALE) was indicted by Brazil’s Federal police for environmental crimes related to the 2019 tailings dam break in Brumadinho in 2019 that killed 270 people and spread mining waste in the area, Bloomberg reported
· Greif (GEF) downgraded to Equal Weight from Overweight at Wells Fargo
· UPS (UPS), Canadian Pacific (CP) and Saia (SAIA) all downgraded to Hold from Buy at Deutsche Bank in the transportation sector
Healthcare
· Moderna (MRNA) shares rise 9%; the company’s Chief Medical Officer Paul Burton said sees a possibility that the new coronavirus variant may elude current vaccines and believes the drugmaker can have a reformulated one by early 2022, Bloomberg reported
· Merck (MRK) downgraded to Neutral from Buy with a price target of $85, down from $105 at Citigroup
· Pfizer (PFE) is suing a former employee for allegedly stealing more than 12,000 files that held information about its Covid-19 vaccine and two cancer drugs. According to the lawsuit, Chun Xiao (Sherry) Li was planning to join Xencor, a small biotech developing antibodies targeted at cancer. Pfizer is selling or is developing similar treatments – STAT News
· Applied DNA Sciences (APDN) soars over 50% after announcing its COVID-19 diagnostic strategy in response to the emergence of Omicron (B.1.1.529) variant of COVID-19.
Technology, Media & Telecom
· Shopify (SHOP) announced a record-setting Black Friday with sales of nearly $2.9 billion from the start, which represents a 21% increase over Black Friday in 2020 when sales by Shopify merchants surged 75% over 2019 driven by COVID-19 lockdowns
· IBM Corp. (IBM) positively mentioned in Barron’s saying investors have understandably forsaken the company but it may be time to start paying attention to it again, as IBM is repairing its reputation with a new CEO who is making serious and lasting changes
· Weibo Corp (WB) files for potential offering of class a shares
· Bumble (BMBL) upgraded to Outperform from Market Perform at Raymond James with $48 tgt
· Newegg Commerce (NEGG) announced its expansion into two new distribution centers located in Atlanta, Georgia and Ontario, California.
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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.