Early Look

Friday, October 8, 2021

Futures	Up/Down	%	Last
Dow	42.00	0.12%	34,678
S&P 500	2.50	0.06%	4,392
Nasdaq	0.00	0.00%	14,881

 

 

After a week of overnight swings and market volatility, U.S. futures come into Friday’s trading looking flat, with the S&P little changed at 4,390 after a strong session on Thursday was met with a late day pullback, as major averages finished well off their best levels. U.S. futures steady as investors anticipate a key employment report that could offer clues on the Fed’s timeline for reducing bond purchases. Nonfarm payroll data at 8:30 AM with an est. for +500K jobs added, private payrolls est. +455K, manufacturing payrolls +25K and the unemployment rate to fall to 5.1% from 5.2%; average hourly earnings expected to rise +0.4% (vs. last month +0.6%). Equities rose and Treasuries sank on Thursday after Senate leaders pulled the U.S. from the brink of default with a deal for a short-term debt ceiling increase in the amount of $480B to a $28.9 trillion debt limit. However, this could be short lived as the agreement only funds Treasury debt until Dec. 3, meaning Senators will again face a deadline for default. In Asian markets, the Shanghai Index opened for trading after a week long pause to celebrate its Golden Week holiday, rising 24 points to 3,592, the Hang Seng Index gained 136 points to 24,837 and the Nikkei advanced 370 points (1.34%) to 28,048. In Europe, the German DAX is down a few points at 15,235, while the FTSE 100 is up a few at 7,085. Oil prices are higher, heading for its seventh weekly gain with WTI crude nearing $80

 

Market Closing Prices Yesterday

·     The S&P 500 Index gained 36.21 points, or 0.83%, to 4,399.76

·     The Dow Jones Industrial Average rose 337.95 points, or 0.98%, to 34,754.94

·     The Nasdaq Composite surged 152.10 points, or 1.05%, to 14,654.02

·     The Russell 2000 Index advanced 35.14 points, or 1.59% to 2,250.09

 

Events Calendar for Today

·     8:30 AM ET         Non-Farm Payrolls for September…est. +500K

·     8:30 AM ET         Private Payrolls for September…est. +455K

·     8:30 AM ET         Manufacturing Payrolls for September…est. +25K

·     8:30 AM ET         Unemployment Rate for September…est. 5.1%

·     8:30 AM ET         Average Hourly Earnings for September…est. +0.4%

·     10:00 AM ET      Wholesale Inventories MoM for Aug

·     1:00 PM EST       Baker Hughes Weekly rig count data

 

 

Macro	Up/Down	Last
Nymex	0.58	78.86
Brent	0.65	82.60
Gold	0.90	1,762.00
EUR/USD	0.0014	1.1563
JPY/USD	0.23	111.82
10-Year Note	+0.021	1.593%

 

 

World News

·     The U.S. Senate on Thursday approved legislation to temporarily raise the federal government’s $28.4 trillion debt limit and avoid the risk of a historic default this month, but it put off until early December a decision on a longer-lasting remedy.

·     German Aug Trade Balance smaller surplus: +€13.0b vs +€15.8b consensus; German August Exports lower down -1.2% vs +0.5% consensus and German Aug Imports higher rising +3.5% vs 1.8% consensus

 

Sector News Breakdown

Consumer

·     Home Depot (HD) and Lowe’s (LOW) both downgraded to Hold from Buy at Loop Capital

·     Tesla (TSLA) CEO Elon Musk confirmed that the car maker is moving its headquarters from Fremont, California to Austin, Texas, where the company has been constructing a new factory for a little over a year. CEO Musk also said a global shortage of chips and ships is the only thing standing in the way of the company maintaining sales growth in excess of 50%

·     Oatly Group (OTLY) upgraded to Overweight from Neutral with a $21 price target

·     Drive Shack (DS) reports prelim Q3 revs of $75M vs. est. $76.74M

·     Scientific Games (SGMS) wins 10-year Vermont lottery systems contract; company’s advanced platforms and game services will modernize lottery play and maximize revenues for programs in green mountain state

·     Thor Industries (THO) increases regular quarterly dividend 5% to 43c per share

 

Energy, Industrials and Materials

·     Dow Transports finished the day down -0.25% just above the 14,500 level, but slipping below its 50-day MA at 14,515

·     J.B. Hunt (JBHT) downgraded to Underweight on relative valuation at JPMorgan

·     Union Pacific (UNP) upgraded to Overweight from Neutral with a price target of $247, up from $234 at JPMorgan on recent selloff

·     Sundial Growers Inc. (SNDL) announced it will acquire liquor and pot retailer Alcanna in an all-stock deal with a total consideration of about C$346M

 

Financials

·     Pzena Investment Management Inc. (PZN) prelim AUM as of Sept 30 of $50.8 bln

·     Chubb (CB) announced a definitive agreement to acquire the life and non-life insurance companies that house the personal accident, supplemental health and life insurance business of Cigna (CI) in seven Asia-Pacific, or APAC, markets for $5.75B in cash

 

Healthcare

·     Accolade Inc. (ACCD) Q2 revs $73.3M vs. est. $70.4M; Q2 adj Ebitda loss (-$19.4M) vs. est. loss (-$21.9m); sees FY revs $303M-$307M, from prior view $300M-$305M (est. $303.4M); guides Q3 adj Ebitda loss $21.5M-$24.5M vs. est. loss $20.2M, but Q3 revs above views

·     Quidel (QDEL) guides Q3 revs $505M-$510M vs. est. $186.3M; says covid-19 revenues for Q3 of 2021 expected to be about $406M, compared with $375.7M YoY

·     Allogene Therapeutics (ALLO) shares fall over 35% after reporting the FDA put a clinical hold of Allocar T trials based on a single patient case in alpha2 trial; believes data from alpha trials demonstrates a favorable clinical profile of allo-501a

·     Apollo EndoSurgery (APEN) sees 3Q revs $16-16.4Mm vs est. $14.4Mm; sees 3Q net loss $6.1-7.3Mm vs est. net loss $8.3Mm

·     BeiGene’s (BGNE) BRUKINSA (zanubrutinib) has been approved in Australia for the treatment of adult patients with Waldenström’s macroglobulinemia who have received at least one prior therapy or in first line treatment for patients unsuitable for chemo-immunotherapy.

·     Mirati Therapeutics (MRTX) to collaborate with Sanofi (SNY) on phase 1/2 study evaluating combination of adagrasib with a SHP2 inhibitor in KRAS g12c-mutated lung cancer

·     Nkarta (NKTX) provided updates on its NKX019 and NKX101 clinical development programs saying patients have been dosed in the international phase 1 trial of NKX019 in advanced B-cell malignancies

·     IsoPlexis (ISO) 8.333M share IPO priced at $15.00

·     Pyxis Oncology (PYXS) 10.5M share IPO priced at $16.00

·     Prelude Therapeutics (PRLD) shares fall after announces presentation of encouraging data from multiple programs at the AACR-NCI-EORTC virtual international conference on molecular targets and cancer therapeutics

·     Relay Therapeutics (RLAY) announces interim clinical data for RLY-4008, in a first-in-human trial in patients with FGFR2-altered cholangiocarcinoma and multiple other solid tumors

 

Technology, Media & Telecom

·     VMware (VMW) authorized new stock buyback program for up to $2B

·     Samsung Electronics Co Ltd (SSNLF) said Q3 operating profit likely jumped 28% to its highest in three years, helped by rising memory chip prices and brisk sales of its new foldable smartphones; estimated July-September profit at 15.8 trillion won ($13.3 billion) vs. est. of 16.1 trillion won.

·     ChipMOS (IMOS) reports Q3 revenues rose 25.9% on a Y/Y basis to $257.2M (+2.6% Q/Q) vs. a consensus of $262.90M.

·     Taiwan Semiconductor Manufacturing Co.’s (TSM) September revenue was up 19.7% Y/Y to NT$152.69B or about $5.44B.

·     AU Optronics (AUOTY) reports September revenue rose 26.5% Y/Y to NT$33.0B (+0.9% M/M); Q3 revenues rose 35.3% Y/Y NT$99.05B

·     Oracle (ORCL), Telecom Italia, and Noovle, TIM Group’s cloud company, have signed a collaboration agreement to offer multi-cloud services for enterprises and the public sector organizations in Italy.

·     Sirius XM (SIRI) downgraded to Neutral from Overweight with a price target of $7, down from $8 at JPMorgan