May 13th 2021: Market Overview; Pre Opening Bell #26

Everything you need to know to get your day started on the market

Equity Markets

US Equity Market

• US index movements for Wednesday:

  • S&P 500 (2.14%)

  • Dow (1.99%)

  • Nasdaq (2.67%)

  • Russell 2000 (3.26%)

• Overnight, US lower on volumes +30% (vs 20dma).

• Equities across the board ended lower on the back of a higher than expected CPI print which sent the 5y breakeven rate to its highest level in fifteen years. S&P delivered its largest one day downward move (-2.15%) since February, and a loss of this magnitude or greater has only occurred nine times over the last year.

• Similarly, the Russell 2000 has delivered a loss of similar or greater magnitude seven times over the last year

• 12m Momentum ended (-3.8%) as the combination of the weakness in Consumer Discretionary stocks along with Software, Biotech and Renewables

• 6m Momentum ended lower as well (-2.4%). This basket captures many of the reflationary and reopening sectors given change in leadership of momentum over last few months. Weakness across Metals & Mining (-4.7%) and Hotels & Leisure (-4.2%) drove performance.

• Energy was the only sector that ended up for the day,

• Within Tech, Semis (-4.4%) suffered disproportionately along with Tech Hardware (-4.3%) and Unprofitable Tech basket (-4.4%). Value factor ended higher (+1%).

• S&P futures -16, or -0.39%, vs prior close

European Equity Markets lower

• European markets lower tracking a sell-off in the US on Wednesday late afternoon.

• Relatively quiet in Europe this morning with Switzerland, Sweden, Denmark, Norway and Finland closed for market holidays.

• In the UK, the Telegraph reports an emergency meeting of the Government's Scientific Advisory Group for Emergencies (Sage) committee will convene on Thursday to discuss the rapid spread of the Indian variant of Covid

  • Outperformers:

    Health Care (0.31%), Financials (0.88%), Food & Beverage (0.93%), Utilities (0.99%), Technology (1.03%), Persnl & HHold Goods (1.02%), Retail (1.08%), Industrials (1.10%), Telecom (1.27%), Real Estate(1.28%),

  • Underperformers:

    Basic Resources (3.76%), Autos & Parts (2.92%), Oil & Gas (2.49%), Banks (2.19%), Travel & Leisure (1.94%), Insurance (1.83%), Media (1.50%), Construct & Mtls (1.44%), Chemicals (1.37%),

Asia Equity Markets lower

• Asian markets finished notably lower Thursday.

• Tech-led sell-off on major benchmarks with Japan the weakest, followed by sharp declines in Hong Kong, South Korea and Taiwan. 

• Mainland China and Australia fell moderately though still finished near intraday lows.

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News Stories Moving the Markets

• Gas prices highest since 2014 following pipeline shutdown (WSJ)

• Tesla suspends vehicle purchases using Bitcoin- Tweet by @elonmusk

  • Musk provided a photo of statement noting 'concern about rapidly increasing use of fossil fuels for Bitcoin mining and transactions' and also said ' Tesla will not be selling any Bitcoin and we intend to use it for transactions as soon as mining transitions to more sustainable energy

• Boeing nearing fix for engine covers that could strengthen components as United looks to return jets to service (WSJ)

• Facebook revamps digital currency project in a bid to address regulatory concerns (WSJ)

• GOOG (Alphabet) - Italian Competition Authority imposes €100M (~$121M) fine on Google for abuse of dominant position

• How Uber used around 50 Dutch sell companies to help reduce its global tax burden -Business Insider

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Earnings Calendar

Overnight

WISH (ContextLogic)  Q1 Earnings

• Revenue $772.0M vs Cons $743.1M

• Adj. EBITDA ($79.0M) vs FS ($83.1M)

• 2Q guidance:

  • Revenue $715-730M vs Cons $759.1M

  • Adj. EBITDA ($60M)-($55M) vs Cons ($42.0M)

VRM  (Vroom) Q1 Earnings

• Total revenue $591.1M vs Cons $517.2M

• Unique visitors +63.7%.

• EBITDA ($72.6M) vs Cons ($80.4M)

  2Q guidance

  • Revenue $618-640M vs Cons $599.6M.

  • EBITDA ($70)-(61M) vs Cons ($57.9M) butThis Morning

This Morning

• No notable earnings this morning

Today

• After market close

  • ABNB (AirBNB)

  • FTCH (Farfetch)

  • DASH (DoorDash)

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Notable After-Hours Market Movements

Positive Movements

• 16.3% SI (Silvergate Capital) -- Diem Networks partnership

• +10.3% VRM (Vroom) -- earnings

• +6.7% GRWG (GrowGeneration) -- earnings

Negative Movements

• -14.2% POSH (Poshmark) - earnings

• -12.9% WISH (ContextLogic) - earnings

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Notable Analyst Upgrades/Downgrades

Initiations

• APPN (Appian) assumed with a Hold at Berenberg

• PATH (UiPath) initiated with a Hold at Berenberg 

• Boeing initiated with an Equal Weight at Wells Fargo »
  
  

Upgrades

• CPNG (Coupang) upgraded from hold to Buy at Deutsche Bank with 30% upside
  

Downgrades

• DE (Deere) downgraded to Market Perform from Outperform at BMO Capital
  

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Economic News

US

• Apr US PPI +0.6% vs. consensus +0.3%;

• Apr ex-Food & Energy +0.7% vs. cons +0.3%

Europe

• UK Apr house price balance 75% vs consensus 62% and prior revised 62% from 59% - RICS press release

• Ireland Apr CPI +1.1% y/y vs cons +0.8% and prior 0.0% ; +0.7% m/m vs cons +0.4% and prior +0.8%

• EU Harmonised: +1.1% y/y vs cons +0.8% and prior +0.1%; +0.6% m/m vs cons +0.3% and prior +0.9%

Asia

• PBOC sets yuan fixing at 6.4612 vs consensus 6.4592 and prior 6.4258

• Japan

  • Mar Current Account NSA ¥2650B vs prior revised to ¥2917B from ¥2917B

  • Apr bank lending +4.8% y/y vs prior revised +6.2%

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Capital Markets

(Source: Factset)

(Source: Factset)

(Source: Koyfin)

Crypto:

(Source: CoinMarketCap)