Early Look

Thursday, September 9, 2021

Futures	Up/Down	%	Last
Dow	-96.00	0.28%	34,800
S&P 500	-12.25	0.27%	4,491
Nasdaq	-31.50	0.20%	15,579

 

 

Following a day of weakness, U.S. stock futures are again looking modestly lower, pulling back along with declines in both Europe and Asia as the spread of the delta strain of Covid-19 continues to weigh on the U.S. economy. This morning, two airlines noted impact to revenues due to a decline in travel. Tech stocks in China fell after regulators again increased pressure on gaming companies for focusing solely on profit. In Asian markets, The Nikkei Index declines -173 points to hold just above 30K, the Shanghai Index rose 17 points to 3,693 and the Hang Seng Index dropped over -600 points (2.3%) to settle at 25,716. In Europe, the German DAX is down about -40points to 15,570, while the FTSE 100 tumbles over -80 points (1.2%) to hold around the 7,000 level. Yesterday, Europe’s Stoxx 600 was down 1.0%, marks worst day in nearly 3 weeks as the German Dax down 1.4%, marks worst day since mid-July. Later this morning, we get the European Central Bank (ECB) rate decision at 7:45 AM and press conference at 8:30 AM where investors will look for clues about inflation and or asset tapering. The S&P 500 Index was lower for a third straight session Wednesday amid increasing concerns about economic growth and the ongoing spread of Covid. The Federal Reserve’s Beige Book report showed that economic growth downshifted slightly to a moderate pace from early July through August, largely due to a pullback in dining out, travel and tourism because of consumers’ safety fears. The dollar pared earlier gains, while Treasuries recovered Tuesday’s losses.

 

Market Closing Prices Yesterday

·     The S&P 500 Index slipped -5.96 points, or 0.13%, to 4,514.07

·     The Dow Jones Industrial Average fell -68.93 points, or 0.20%, to 35,031.07

·     The Nasdaq Composite dropped -87.69 points, or 0.57%, to 15,286.64

·     The Russell 2000 Index declined -25.88 points, or 1.14% to 2,249.73

 

Events Calendar for Today

·     8:30 AM ET         Weekly Jobless Claims

·     8:30 AM EST      Continuing Claims

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

·     11:00 AM ET      Weekly DOE Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: ASO, HOFT, HOV, JILL, LOVE, TUESQ

·     Earnings After the Close: AFRM, AMRK, AOUT, COOK, CXM, FARM, KLXE, LAKE, PLAY, PWSC, SUMO, VRNT, ZS, ZUMZ

 

Other Key Events:

·     Barclay’s Global Consumer Staples Conference (virtual) 2021, 9/8-9/10

·     Barclay’s CEO Energy-Power Conference 2021 (virtual), 9/8-9/10

·     BTIG Cloud Communications and Collaboration Investor Forum (virtual), 9/8

·     Citigroup Annual BioPharma Conference (virtual), 9/8-9/10

·     Citigroup GEMS Conference 2021 (virtual), 9/8-9/10

·     Cowen 14th Annual Global Transportation & Sustainable Mobility Conference, 9/8-9/10

·     Credit Suisse 2021 Global Steel & Mining Conference (virtual), 9/8-9/10

·     Stephens Building Materials Investor Trip, 9/8-9/9

·     Wolfe Inaugural TMT Conference, 9/8-9/9

·     Barrington Annual Fall Investment Conference (virtual), 9/9

·     DA Davidson Annual Software & Internet Conference (virtual), 9/9

·     Deutsche Bank 2021 Technology Conference (virtual), 9/9-9/10

·     Goldman Sachs 11th Annual Financial Technology Conference (virtual), 9/9

·     Needham 1st Annual Needham Crypto Conference (virtual), 9/9

·     Wells Fargo 2021 Healthcare Conference (virtual), 9/9-9/10

 

 

Macro	Up/Down	Last
Nymex	0.20	69.50
Brent	0.26	72.86
Gold	3.70	1,797.20
EUR/USD	0.0018	1.1834
JPY/USD	-0.35	109.90
10-Year Note	-0.013	1.328%

 

 

Sector News Breakdown

Consumer

·     Lululemon (LULU) shares rise 10%; 2Q adj EPS $1.65 vs est. $1.19 on revs $1.5B vs est. $1.33B; guides 3Q adj EPS $1.33-1.38 vs est. $1.32, sees 3Q revs $1.4-1.43B vs est. $1.32B; guides FY adj EPS $7.38-7.48 vs est. $6.91; raises year revs to range of $6.19B-$6.26B, compared with its prior range of $5.83B-$5.91B

·     RH Corp. (RH) 2Q adj EPS $8.48 vs est. $6.48 on revs $989Mm vs est. $975.5Mm; guides FY revs +31-33% up from prior 25%-30% view and vs est. +29.2% and op margin 24.9-25.5% , sees ROIC 70% vs prior 60%; says currently expecting manufacturing to restart in Vietnam in October with full capacity by end of year

·     Boston Beer Company Inc (SAM) shares fell -8%; said since last guidance update market for hard seltzer products has continued to experience decelerating growth trends; believe there will be continuing uncertainty about hard seltzer demand trends for remainder of 2021; said it is withdrawing its 2021 financial guidance issued on July 22, 2021 as EPS will fall below previously-reported estimate of between $18.00-$22.00

·     Caesars (CZR) announced an agreement to sell the non-US assets of William Hill to 888 Holdings for approximately GBP 2.2B

·     Copart (CPRT) Q4 non-GAAP EPS $1.03 vs. est. $0.91; Q4 revs $748.6M vs. est. $690.87M

·     VICI Properties (VICI) announces offering of 100M shares of common stock

·     GameStop (GME) Q2 EPS loss (-$0.76) vs. est. loss (-$0.67); Q2 revs $1.183B vs. est. $1.12B; Ended the period with cash and restricted cash of $1.78B

·     Calavo Growers (CVGW) 3Q adj EPS ($0.17) vs est. ($0.05) on revs $285Mm vs est. $281.7Mm

·     Limoneira (LMNR) Q3 adj EPS $0.20 vs. est. $0.18; Q3 revs $49.1M vs. est. $48.8M; Agribusiness revenue Q3 includes $24.4M in fresh lemon sales, compared to $35.4M of fresh lemon sales during the same period of fiscal year 2020; approximately 1,144,000 cartons of fresh lemons were sold in aggregate

·     Torrid (CURV) 2Q adj EPS $0.36 vs est. $0.16 on sales $332.9Mm vs est. $294.7Mm; guides 3Q sales $305-315Mm vs est. $305.1Mm; guides FY sales $1.29-1.31B vs est. $1.3B

 

Energy, Industrials and Materials

·     The American Petroleum Institute (API) reports that crude inventories fell 2.88M barrels last week and gasoline inventories fell 6.41M barrels

·     United Airlines (UAL) said it expects third-quarter capacity to fall at least 28% compared with the same period in 2019, as bookings take a hit due to the rise in COVID-19 cases fueled by the Delta variant.

·     Southwest Airlines (LUV) said it sees October operating revenue down 20% to 30% vs 2019; expects q4 2021 capacity to increase about 60% YoY and to decrease about 5% vs. Q4 2019

·     Sherwin-Williams (SHW), Axalta Coating (AXTA), and PPG Industries (PPG) all downgraded to Neutral from Buy at Citigroup

·     ABM Industries (ABM) Q3 revenue $1.54B vs. est. $1.51B; Q3 EPS from continuing operations $0.90 vs. est. $0.81; sees FY adj eps cont ops $3.45 to $3.55, vs. prior view $3.30 to $3.50

·     AeroVironment (AVAV) Q1 adj EPS loss (-$0.17) vs. est. loss (-$0.24); Q1 revs $101M vs. est. $96.48M; backs FY22 adj EPS view $2.50-$2.70 (est. $2.64) and backs FY22 revenue view $560M-$580M (est. $569.34M)

 

Financials

·     Digital Realty (DLR) 6.25M share Spot Secondary priced at $160.50

·     Riot Blockchain (RIOT) produces 441 Bitcoins in August, down from the 444 BTC produced in July; on a Y/Y basis, its production increased 451% from 80 BTC in August 2020.

 

Healthcare

·     Humanigen (HGEN) plunges over 50% after U.S. FDA declines emergency use approval for COVID-19 drug; said the FDA declined to grant emergency use authorization for its drug, lenzilumab, to treat patients hospitalized with COVID-19

·     ProQR Therapeutics (PRQR) announces a global licensing and research collaboration with Eli Lilly (LLY) to discover new medicines for genetic disorders in the liver and nervous system, in a deal that could be worth over $1.25B

·     Avid Biosciences (CDMO) Q1 EPS $0.10 vs. est. $0.04; Q1 revs $30.8M vs. est. $27.8M;

·     HealthEquity Corp. (HQY) 2Q adj EPS $0.40 vs est. $0.36 on revs $189.1Mm vs est. $184.7Mm; guides FY adj EPS $1.45-1.50 vs est. $1.49, sees FY revs $755-765Mm vs est. $762.8Mm; says re: WageWorks have achieved approximately $70 million of the approximately $80 million in annualized ongoing net synergies we expect to achieve by the end of fiscal year 2022.

·     Cardiff Oncology (CRDF) updated data from its Phase 1b/2 clinical trial for onvansertib in combination with standard-of-care (SOC) as second-line therapy in patients with KRAS-mutated metastatic colorectal cancer (mCRC); said as of data cut off July 2, 2021, eight of 19 (42%) patients who received the recommended Phase 2 dose of onvansertib 15 mg/m2 and were evaluable for disease response achieved a partial response

·     Turning Point Therapeutics (TPTX) announces early clinical data for Repotrectinib in NTRK fusion-positive advanced solid tumors selected for late-breaker plenary presentation at 2021 AACR-NCI-EORTC conference

·     Beauty Health (SKIN) announces $400M convertible senior notes offering

 

Technology, Media & Telecom

·     Cisco (CSCO) downgraded to Equal Weight from Overweight at Morgan Stanley

·     NetEase (NTES) and Tencent (TCEHY) tumble again as China’s focus on reining in the power of tech companies hasn’t abated. A report in the South China Morning Post notes that the government will halt approvals for new online games.

·     Sea Limited (SE) is looking to sell 11 million ADRs with the option to offer 1.65 million more as part of a so-called green shoe option; it is also raising $2.5 billion in a convertible bond that has a $375 million green shoe attached

·     SentinelOne (S) Q2 revenue $45.8M vs. est. $40.4M; Q2 ARR up 127% YoY; total customer count grew more than 75% year-over-year to over 5,400 customers as of July 31; Customers with ARR over $100K grew 140% year-over-year to over 345 as of July 31, 2021; guides year revs $188M-$190M vs. est. $176.4M