Early Look

Thursday, September 2, 2021

Futures	Up/Down	%	Last
Dow	45.00	0.13%	35,335
S&P 500	6.25	0.14%	4,527
Nasdaq	29.50	0.19%	15,638

 

 

Stock index futures are indicating a higher open with rates edging down (10-year drops back below 1.3%) as investors await another set of numbers on the labor market in the form of weekly jobless claims, ahead of Friday’s payrolls report (which followed a weaker private payroll report from ADP yesterday). A brutal night across the Northeast saw tornado watches and flash flood warnings for parts of the Tri-State Area as remnants of Hurricane Ida brought in heavy winds and drenching rains that turned major highways into rivers and even showed water rushing through Newark Liberty International Airport, canceling all flights there. The tail-end of hurricane Ida dumped a “record breaking” amount of rain over New York and New Jersey putting both areas into states of emergency. Hurricane Ida, which devastated Louisiana this week, could mobilize lawmakers to pass the bipartisan $1T infrastructure bill, which is making its way through Congress. In Asian markets, The Nikkei Index rose 92 points to 28,543, he Shanghai Index climbed 29 points to 2,597, and the Hang Seng Index advanced 62 points to settle at 26,090. In Europe, markets are quiet as the German DAX is flat at 15,825, while the FTSE 100 is down a few points to 7,145. Bitcoin prices moved back above the $50K level overnight, last trading up 3.3% around $49,900 in a rebound for crypto; Ethereum prices up modestly after outperformance Wednesday, last around $3,750. Crude is rising after OPEC+ ministers’ unity reinforced market stability

Events Calendar for Today

·     7:30 AM ET         Challenger Layoffs for Aug

·     8:30 AM ET         Weekly Jobless Claims…est. 345K

·     8:30 AM EST      Continuing Claims…est. 2.775M

·     8:30 AM ET         International Trade for July…est. (-$71.0B)

·     8:30 AM ET         Nonfarm Productivity, Q2…est. 2.4%

·     8:30 AM ET         Unit Labor Costs for Q2…est. 0.9%

·     10:00 AM ET      Factory Orders MoM for July…est. 0.3%

·     10:00 AM ET      Durable Goods Orders MoM for July

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

 

Earnings Calendar:

·     Earnings Before the Open: AEO, BNED, BRC, CIEN, DCI, DLTH, GCO, GIII, GMS, JRL, JW/A, KIRK, LE, MCFT, MEI, SCWX, SIG, TTC

·     Earnings After the Close: AVGO, COO, CTHR, CTLP, DOCU, GWRE, HPE, JOAN, LAW, MDB, MDLA, MEIP, NX, OOMA, OXM, PD, SAIC, TLYS, YEXT

 

Other Key Events:

·     Barclay’s Media & Telecom Forum (virtual), 9/1-9/2

·     Stephens Auto investor Field Trip, 9/1-9/2

·     Caixin Services PMI for Aug

 

Market Closing Prices Yesterday

·     The S&P 500 Index gained 1.41 points, or 0.03%, to 4,524.09

·     The Dow Jones Industrial Average fell -48.20 points, or 0.14%, to 35,312.53

·     The Nasdaq Composite climbed 50.15 points, or 0.33%, to 15,309.38

·     The Russell 2000 Index advanced 13.28 points, or 0.58% to 2,287.06

 

 

Macro	Up/Down	Last
Nymex	0.36	68.95
Brent	0.38	71.97
Gold	1.50	1,815.40
EUR/USD	0.0015	1.1854
JPY/USD	0.00	110.01
10-Year Note	-0.013	1.289%

 

 

Sector News Breakdown

Consumer

·     Chewy (CHWY) shares fell -10%; 2Q adj EBITDA $23.3Mm vs est. 34.4Mm on sales $2.16B vs est. $2.2B; sees FY net sales $8.9B-$9.0B vs. est. $9.0B

·     Costco (COST) reported total comparable sales for Aug. that beat the average analyst estimate; Aug. total comparable sales +14.2%, estimate +12.5%; Aug. U.S. comparable sales excluding fuel, currencies +10.1%, estimate +7.10%

·     Five Below (FIVE) shares fell -9%; 2Q EPS $1.15 vs est. $1.11 on sales $646.6Mm vs est. $648.3Mm; guides 3Q net sales $550-565Mm on +MSD comps vs est. $551Mm, sees EPS $0.23-0.30 vs est. $0.27

·     Hormel Foods (HRL) shares fall -4%; Q3 adj EPS $0.39, in-line with estimates; Q3 revs $2.86B vs. est. $2.73B; Q2 volume of 1.2B pounds, up 1%; organic volume down 2%; operating margin 7.2%; cuts FY21 EPS view to $1.65-$1.69 from $1.70-$1.82, while raises FY21 revenue view to $11B-$11.2B from $10.2B-$10.8B

·     Chinese regulators summoned 11 ride-hailing firms including DIDI Global (DIDI) to discuss concerns related to the sector; China’s transport ministry highlighted the hiring of unqualified drivers and use of promotions that disrupt fair market order during the meeting

·     Sportsman’s Warehouse (SPWH) Q2 adj EPS $0.44 vs. est. $0.48; Q2 sales $361.8M vs. est. $345.6M; said Q2 same store sales decreased 9.9% compared to the same period last year; For the first half of fiscal year 2021, same store sales increased 3.4% compared to the same period last year; Adjusted EBITDA was $35.2M compared to $53.6M in the comparable prior year period; not providing guidance

·     Smith & Wesson Brands (SWBI) Q1 adj EPS $1.57 vs. est. $1.29; Q1 revs $274.6M vs. est. $278.59M; record gross margin of 47.3% vs. 40.2% last year

·     ChargePoint Holdings (CHPT) rises 12%; 2Q EPS ($0.29) vs est. ($0.13) on revs $56.1Mm vs est. $49.1Mm, says activated ports exceed 118,000 with over 5,400 in Europe and over 3,700 DC fast charge ports; guides 3Q revs $60-65Mm vs est. $54.7Mm, sees FY revs $225-235Mm up from $195M-$205M vs est. $206.6Mm

·     DraftKings (DKNG) announced the launch of DraftKings Online Sportsbook in Wyoming, marking the thirteenth state in which its mobile sportsbook is available

·     Tesla (TSLA) now aims for Full Self-Driving Beta public release ~September 25th, Electrek reports https://electrek.co/2021/09/01/tesla-full-self-driving-beta-public-release-4-weeks/

 

Energy, Industrials and Materials

·     Greif (GEF) Q3 adj EPS $1.93 vs. est. $1.54; Q3 revs $1.49B vs. est. $1.39B; sees FY21 EPS $5.10-$5.30 vs. est. $4.63; sees FY21 adjusted free cash flow $335M-$365M

·     Ingersoll Rand Inc. (IR) authorized a new share repurchase program of $750 mln

·     Exelon (EXC) tells Illinois lawmakers and Gov. J.B. Pritzker to finalize an energy policy deal by September 13 or face the permanent closure of one of the state’s six nuclear power plants.

·     Energy Transfer (ET) signed a 15-year power purchase agreement to buy 120 MW of electricity from SoftBank’s (SFTBY) Eiffel Solar project in northeast Texas; financial terms are not disclosed.

·     General Electric (GE) was awarded a not-to-exceed $1.65B firm-fixed-price, indefinite-delivery, performance-based logistics requirements contract for the repair, upgrade or replacement, inventory management, and required supply response times of 17 F414 engine components in support of the F/A-18 aircraft

·     Virgin Galactic (SPCE) slips after the U.S. Federal Aviation Administration (FAA) said on Wednesday it is investigating descent deviation of July 11 flight of SPCE rocket plane that carried British billionaire Richard Branson. FAA spokesman told Reuters vehicle “deviated from its Air Traffic Control clearance as it returned to Spaceport America. The FAA investigation is ongoing.”

·     Donaldson (DCI) Q4 EPS $0.66 in-line with estimates; Q4 revs $773.1M vs. est. $770.69M; sees FY22 EPS $2.50-$2.66 vs. est. $2.68; sees FY22 sales growth of 5%-10% (est. $3.12B)

·     OPEC+ and its allies agreed yesterday to stick to their existing plan for gradual monthly oil-production increases after a video conference. Ministers ratified the 400,000 barrel-a-day supply hike scheduled for October after one of the quickest meetings in recent memory.

 

Financials

·     CIBC to become exclusive credit card issuer for Costco Mastercard’s in Canada and acquire existing Costco Canadian credit card portfolio

·     Over the last six months SPACs have lost $75 billion. A group of 137 SPACs that closed mergers by mid-February have lost 25% of their combined value. At one point last month, the pullback topped $100 billion – WSJ

 

Healthcare

·     FDA AdComm to discuss Pfizer (PFE) and BioNTech SE (BNTX) application for COVID-19 Booster on September 17^th

·     Assembly Biosciences, Inc. (ASMB) shares fall -20%, as the clinical-stage biotechnology company developing innovative therapeutics targeting hepatitis B virus (HBV), today announced its decision to discontinue development of ABI-H2158 (2158) following the observation of elevated ALT levels consistent with drug-induced hepatotoxicity in an ongoing Phase 2 trial.

·     Cannabis space: The newly inaugurated governor of New York says she wants to “jumpstart” the implementation of marijuana legalization—and she took a major step on Wednesday by making two key regulatory appointments for the state’s cannabis market that have now been confirmed in a Senate committee during a special session (watch shares of TLRY, CURLF, GTBIF, CRON) https://bit.ly/3jzhR0D  

·     Phreesia (PHR) 2Q EPS ($0.48) vs est. ($0.10) on revs $51Mm vs est. $47.2Mm, says avg number of provider clients was 1,987 in qtr vs 1,668 prior year +19%; guides FY revs $195-198Mm vs est. $193.4Mm, continue to expect overall cash outflow to increase in FY22 vs FY21

·     NeoGenomics Inc (NEO) files prospectus related to resale or other disposition of 4.4 mln shares by selling stockholders

·     Ascendis Pharma (ASND) 2.5M share Secondary priced at $160.00

 

Technology, Media & Telecom

·     Asana (ASAN) Q2 adj EPS loss (-$0.23) vs. est. loss (-$0.26); Q2 revs $89.5M vs. est. $82.24M; sees Q3 adj EPS loss (27c)-(26c) vs. est. loss (-$0.28); sees Q3 revs $93M-$94M vs. est. $86.72M; raises FY22 revenue view to $357M-$359M from $336M-$340M (est. $338.81M); Revenues from customers spending $5,000 or more on an annualized basis grew 97% YoY; customers spending $50,000 or more on an annualized basis increased to 598, up 111% YoY

·     C3.ai (AI) shares fell -10%; Q1 EPS loss (-$0.37) vs. est. loss (-$0.28); Q1 revs $52.4M vs. est. $51.16M; said Q1 included YoY increases of 29% in revenue and 31% in gross profit; sees Q2 revenue $56M-$58M vs. est. $56.12M; sees FY22 revenue $243M-$247M vs. est. $245.4M; Q1 Subscription revenue was $46.1M, up from $35.7M one year ago, an increase of 29% Yoy

·     eGain (EGAN) 4Q adj EPS $0.08 vs est. $0.03 on revs $20.2Mm vs est. $19.9Mm; guides 1Q adj EPS $0.02-0.05 vs est. $0.03, sees 1Q revs $20.9-21.3Mm vs est. $20.6Mm; guides FY revs $88.2-89.8Mm vs est. $87.1Mm; sees FY adj EPS ($0.03) to $0.00 vs est. $0.20

·     nCino (NCNO) 2Q adj EPS ($0.02) vs est. ($0.06) on revs $66.5Mm vs est. $63.7Mm; guides 3Q adj net EPS loss $0.06-0.07 vs est. loss $0.06, sees 3Q revs $66-67Mm vs est. $65.1Mm; guides FY adj EPS net loss $0.22-0.23 vs est. loss $0.23, sees FY revs $263-264Mm vs est. $259.1Mm

·     Nutanix (NTNX) Q4 adj EPS loss (-$0.26) vs. est. loss (-$0.42); Q4 revs $390.7M vs. est. $362.88M; operating expenses topped revenue at $454.1M though rose from $432.3M a year ago; sees Q1 ACV Billings $172M-$177M

·     Okta (OKTA) Q2 adj EPS loss (-$0.11) vs. est. loss (-$0.35); Q2 revs $316M vs. est. $296.52M; sees Q3 adj EPS loss (25c)-(24c) vs. est. loss (-$0.34); sees Q3 revs $325M-$327M vs. est. $322.93M; raises FY22 adjusted EPS loss view (77c)-(74c) from ($1.16)-($1.13); Q2 revenue grew 57% year-over-year; subscription revenue grew 59% YoY; remaining performance obligations (RPO) grew 57% YoY to $2.24 billion

·     Semtech (SMTC) 2Q adj EPS $0.65 vs est. $0.62 on sales $185Mm vs est. $182.9Mm; guides 3Q adj EPS $0.68-0.76 vs est. $0.67 with adj gr margin 62.8-63.8%, adj SG&A $33.5-34.5Mm, adj R&D $32.5-33.5Mm

·     Veev Systems (VEEV) 2Q adj EPS $0.94 vs est. $0.87 on revs $455.6Mm vs est. $451.9Mm; guides 3Q adj EPS $0.87-0.88 vs est. $0.86, sees 3Q revs $464-466Mm vs est. $460Mm; guides FY revs $1.83-1.835B vs est. $1.823B, sees FY adj EPS about $3.57 vs est. $3.47

·     China’s Alibaba Group (BABA) will invest 100 billion yuan ($15.5 billion) by 2025 in support of “common prosperity”, it said, becoming the latest corporate giant to pledge support for the initiative driven by President Xi Jinping

·     Ireland hit Facebook’s (FB) WhatsApp with a record 225 million euro ($266 million) fine on Thursday following an inquiry into the messaging app’s transparency around sharing personal data with other Facebook companies.