Early Look

Wednesday, September 29, 2021

Futures	Up/Down	%	Last
Dow	191.00	0.56%	34,366
S&P 500	30.25	0.69%	4,373
Nasdaq	134.50	0.91%	14,899

 

 

U.S. stock futures are looking higher, bouncing after the S&P posted its worst drop in months, as Treasury yields ease back below 1.5% for the 10-year and markets remain hopeful that negotiations tied to the debt ceiling and the infrastructure take a turn for the better. The S&P 500 500 suffered the biggest one-day percentage drop since May 12 and the Nasdaq Composite closes with biggest one-day percentage drop since March 18 as all three major U.S. stock indexes slid nearly 2% or more, with interest rate sensitive tech and tech-adjacent stocks weighing heaviest as investors lost their risk appetite. Rising Treasury yields and deepening inflation concerns dampened risk appetite particularly pressuring growth stocks, along with rising fears of Fed asset tapering shortly and the drama in D.C. regarding the debt ceiling deadline and upcoming infrastructure bill vote later this week. Tech getting a bounce after semiconductor ASML raised guidance overnight, while MU slips after guiding next quarter results below analyst views. The 10-year yield at overnight lows, dropping below 1.5% (off highs of 1.56%), giving a boost to Nasdaq Futures up nearly 1%. European equities trade well, bouncing after Tuesday’s sell-off so far as the Stoxx 600 adds as much as 1.1% (after falling 2% Tuesday). The Nikkei Index tumbled -639 points (2.12%) to 29,544, the Shanghai Index fell -65 points (1.83%) to 3,536 and the Hang Seng Index gained 163 points to 24,663. In Europe, the German DAX is up 165 points to 15,410, while the FTSE 100 rises 60 points to 7,090. All eyes remain on Washington with a vote on the infrastructure packing set for tomorrow, that holds the fate of the debt ceiling in it as well (for now).

Market Closing Prices Yesterday

·     The S&P 500 Index plunged -90.48 points, or 2.04%, to 4,352.63

·     The Dow Jones Industrial Average fell -569.38 points, or 1.63%, to 34,299.99

·     The Nasdaq Composite sunk -423.29 points, or 2.83%, to 14,546.68

·     The Russell 2000 Index declined -51.23 points, or 2.25% to 2,229.78

 

Events Calendar for Today

·     7:00 AM ET         MBA Mortgage Applications Data

·     10:00 AM ET      Pending Home Sales MoM for Aug

·     10:30 AM ET      Weekly DOE Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: CTAS, EPAC, JBL, WOR

·     Earnings After the Close: LNDC, MLHR

 

Other Key Events:

·     China Caixin PMI Sept-Final

·     China’s NBS Manufacturing PMI for Sept

·     BTIG Inaugural Cannabis Conference (virtual), 9/29

·     Cantor Global Healthcare Conference (virtual), 9/27-9/30

·     North American Spine Society Annual Meeting, in Boston 9/29-10/2

·     Wolfe Utilities & Midstream Conference 2021, 9/28-9/31

 

 

Macro	Up/Down	Last
Nymex	-0.50	74.79
Brent	-0.51	78.58
Gold	10.50	1,744.50
EUR/USD	-0.0021	1.1662
JPY/USD	-0.17	111.33
10-Year Note	-0.037	1.499%

 

 

World News

·     U.S. Senate Republicans for a second day in a row blocked a bid by President Joe Biden’s Democrats to head off a potentially crippling U.S. credit default, as partisan tensions rattled an economy recovering from the COVID-19 pandemic.

·     North Korea claims that it tested a newly developed hypersonic missile on Tuesday

·     Germany Aug Import Prices rise +1.4% m/m vs 1.2% consensus; +16.5% y/y vs +16.1% consensus

·     Spain Sep CPI YoY rises +4.0% vs 3.5% consensus and MoM +0.8% vs 0.4% consensus

 

Sector News Breakdown

Consumer

·     Cal-Maine (CALM) Q1 EPS loss (-$0.37) vs. est. loss (-$0.62); Q1 revs $331.7M vs. est. $313.43M; said results were affected by lower conventional egg sale volumes that partially offset a higher average conventional egg selling price; shell egg average selling price increased to $1.24 per dozen in Q1 from $1.08 per dozen YoY; said will not pay a dividend in Q1; 1Q gross margins reflect higher production costs primarily related to a significant increase in feed costs

·     Conagra Brands (CAG) upgraded to Neutral from Underperform at Credit Suisse

·     Lucid Group Inc (LCID) rises after announcing plans to start delivering luxury electric sedans with a Tesla-beating driving range in late-October

 

Energy, Industrials and Materials

·     Sherwin Williams (SHW) sees Q3 EPS $1.80-$1.90 with items below the consensus est. of $2.03 (includes 20c per share for acquisition-related amortization expense); narrows Q3 consolidated net sales guidance to be flat to down slightly compared to Q3 of FY20; sees FY21 EPS $7.21-$7.41 with items vs. est. $9.21

·     Vale (VALE) downgraded to Equal Weight from Overweight at Morgan Stanley

·     The American Petroleum Institute (API) showed a surprise build of 4.12M barrels of oil for the week ending September 24, showed a build of 3.55M barrels, distillate inventories show a build of 2.48M barrels and Cushing inventories show a build of 359K barrels.

·     Reuters reported the United States has reached out to China diplomatically about reducing its purchases of Iranian crude oil, U.S. and European officials said on Tuesday, as Washington seeks to persuade Tehran to resume talks about reviving the 2015 nuclear deal.

·     EQT Corporation (EQT) 25.93M share Spot Secondary priced at $20.00

·     Non-OPEC crude supply is expected to peak at 48 million barrels a day in 2025, before slipping to 39.3 million barrels a day by 2045, according to the head of OPEC’s energy studies department

 

Financials

·     China Evergrande said on Wednesday it plans to sell a 9.99 billion yuan ($1.5 billion) stake it owns in Shengjing Bank Co Ltd to a state-owned asset management company as it scrambles to raise funds.

 

Healthcare

·     The U.S. Food and Drug Administration (FDA) is leaning toward authorizing half-dose booster shots of the Moderna Inc (MRNA) COVID-19 vaccine, Bloomberg News reported on Tuesday, citing people familiar with the matter.

·     Eli Lilly (LLY) upgraded to Buy from Neutral at Citi and raise tgt to $265 from $210

·     GeoVax (GOVX) shares rise as enters license agreement with PNP Therapeutics to acquire the exclusive rights to develop and commercialize Gedeptin, a treatment of solid cancer tumors

·     Pfizer (PFE) is changing up the protocol for its Phase 3 gene therapy trial for Duchenne muscular dystrophy after three patients experienced severe side effects, including muscle weakness, following treatment. Two of the people also developed myocarditis after taking the drug – STAT news reported

 

Technology, Media & Telecom

·     Micron (MU) shares fell -5%; Q4 EPS $2.42 vs. est. $2.33; Q4 revs $8.27B vs. est. $8.22B; sees Q1 revs $7.65B plus/minus $200M vs. est. $8.57B; sees Q1 EPS $2.00 plus/minus $0.10 vs. est. $2.56; says demand outlook for 2022 is strong

·     ASML (ASML) said it would have revenue growth of around 11% annually through 2030 amid booming demand for its products; the company estimated revenue would hit 24-30 billion euros ($28 billion-35 billion) in 2025 with gross margins up to 55%. That compares with the previous forecast of a 15–24-billion-euro range in the same year, at gross margins of at least 50%.

·     Akamai Technologies Inc. (AKAM) agreed to buy Guardicore, a provider of micro-segmentation technology that blocks the spread of malware within an enterprise, for about $600 million

·     NXP Semiconductors (NXPI) downgraded to Market Perform from Outperform at Bernstein

·     HP Inc. (HPQ) downgraded to Neutral from Overweight at JPMorgan and cut tgt to $30 from $35

·     Dell Technologies (DELL), JD Group (JD) and Dada Group (DADA), announced that they will expand their partnership in promoting the digital transformation of physical stores, creating an omni-channel retail model and one-hour living circle, or services ecosystem, for digital products

·     AMC Networks (AMCX) said its longtime chief operating officer Ed Carroll has decided to step down, following an accomplished 34-year tenure with the company. He will remain with the company through the end of the year.