May 18th 2021: Market Overview; Pre Opening Bell #29

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

Equity Markets

US Equity Market

  • S&P: -0.3%

  • Nasdaq composite -0.6%

  • Russel 2000 +0.1%.

  • VIX @ 19.72

  • Concerns over inflation continue to be the dominant theme as tech underperformed on Monday

  • Tech, consumer discretionary and utilities were the worst performing sectors with energy and materials the best.

  • S&P futures +11, or +0.3%, vs prior close

(Source: FinViz)

European Equity Markets higher

  • European equities higher on inline volumes (+5% vs 10d).

  • Commodity sensitive themes/sectors remain in focus and leading the strength today – Oi l& Gas and resources are best performing.

    • Outperformers:

      • Oil & Gas +1.44%, Basic Resources +1.18%, Autos & Parts +1.12%, Banks +0.75%, Travel & Leisure +0.65%, Technology +0.59%, Retail +0.59%, Utilities +0.52%, Financial Svcs +0.42%, Ind Goods & Svcs +0.40%, Media +0.39%, Insurance +0.29%

    • Underperformers:

      • Telecom (1.04%), Health Care (0.40%), Food & Beverage (0.38%), Chemicals (0.12%), Real Estate+0.02%, Persnl & HHold Goods +0.05%, Construct & Mtls +0.18%

Asia Equity Markets higher

  • Asian equities finished higher across the region Tuesday. 

  • Rally led by Taiwan that bounced back from Monday's losses.

  • Japan also higher after yesterday's sell off, Australia finished higher on stronger energy and commodity prices.

  • Greater China led by Hong Kong, Korea also stronger.


News Stories Moving the Markets

  • Gojek and Tokopedia (Sea competitor) have officially announced yesterday to merge and form a new SuperApp called “GoTo” in a US$18bn deal

  • Amazon in talks to acquire MGM - The Information

    • Citing a person familiar with the matter, Amazon is in discussions to acquire MGM which would be its largest move to expand its entertainment offerings.

  • Apple, Comcast looked at Metro-Goldwyn-Mayer - NY Times

    •  NYT reports that the suitors concluded that MGM is worth $6B vs the $9B that the studio is seeking.

  • AT&T executives displeased by Elliott's crowing over Discovery deal - NY Post

    • Sources close to the situation tell the NY Post that Elliott Management's statement rubbed AT&T the wrong way, given that the hedge fund "had nothing to do with getting this deal done."

    • A source close to Elliott counters to the NY Post that the deal wouldn't have been possible without the activist: "There's not even a debate that Elliott provided  cover for AT&T CEO John Stankey to make the necessary changes."

    •  An Elliott insider tells the NY Post that Elliott and AT&T are on the same team, saying, "Stankey saw things the way we did. This is a feel-good story."

  • EU to press ahead with investigation into Apple Pay regardless of what happens in the US suit against Epic Games - Bloomberg

    • The article cites an interview with the EU's antitrust chief Margrethe Vestager, who said that the investigation into Apple Pay is quite advanced and European regulators need to do their own thing regardless of what happens in the US suit against Epic Games

    • Vestager said that the EU is following the US trial very closely, because of the Epic complaint filed in the EU in February and the bloc's digital rules that could require phones to allow a rival app store, which Apple does not allow

    • According to Vestager, the EU would have to do its own thing no matter the outcome of the US casework, as she pointed to the differences between EU and US antitrust law and markets

    • Vestager added that legislation also takes a long time and a lot can happen in the market in the meantime if EU regulators don't investigate

    Supply-chain issues persist for Apple's iPad Pro - Bloomberg

    • People familiar with the matter say that Apple's manufacturing partners are having problems producing the 12.9-inch device's new Liquid Retina XDR screens in quantity, and deliveries may therefore be delayed until late July even though the model goes on sale in a week.

    • The article says that 11-inch iPad Pros, which use more standard screens, are scheduled to be delivered in late May and early June.

  • EBAY names Steve Priest as CFO, to join co 21-Jun-21


Earnings Calendar

Overnight

  • No notable earnings overnight

This morning

  • SE Sea Ltd. Q1 Earnings

    • Total GAAP revenue of $1.8B  vs consensus $1.6B (10% beat)

      • Digital entertainment bookings $1.1b (beat consensus by 17%)

      • Ecommerce revenue $922m (beat the consensus by 12%)

      • DFS/other revenue: $60m (beat consensus estimate by 67%)

    • Total EBITDA $88m vs consensus of $153m

      • Digital entertainment EBITDA $717m

      • DFS EBITDA -$153m.

Today


Notable After-Hours Market Movements

Positive Movements

  • +6.2% RAVN (Raven Industrie)-- earnings

  • +4.5% TRIT (Triterras) -- acquisition

Negative Movements

  • -18.8% EVFM (Evofem Biosciences) -- common stock offering of indeterminate amount

  • -12.1% DM (Desktop Metal) -- earnings


Notable Analyst Upgrades/Downgrades

Initiations

  • No notable initiation reports

Upgrades

  • SNOW (Snowflake) – upgraded to buy from neutral at Rosenblatt Securities

Downgrades

  • SMPL (Simply Good Foods) - downgraded to equal-weight from overweight at Morgan Stanley


Economic News

US

  • US Mar net TIC Flows $146.4B vs prior $72.6B

Europe

  • Eurozone

    • Mar Trade Balance €15.8B vs consensus €26.5B and prior €17.7B

    • Q1 GDP 2nd estimate (1.8%) y/y vs preliminary (1.8%)

  • UK March ILO Unemployment Rate 4.8% vs consensus 4.9% and prior 4.9%

  • Italy March Trade Balance €5.19B vs consensus €4.20B and prior €4.75B

  • Japan Q1 preliminary GDP q/q annualized (5.1%) vs consensus (3.9%) and prior revised to +11.6% from +11.7%

Asia

Japan

  • Q1 GDP (5.1%) q/q annualized vs consensus (4.6%) and revised +11.6% in prior quarter

    • GDP (1.3%) q/q vs consensus (1.2%) and +2.8% in prior quarter

  • March tertiary sector activity +1.1% m/m vs consensus +0.8% and +(0.3%) in prior month


Capital Markets

Problem uploading capital market data to substack. See hard data

  • S&P futures +11.4, or +0.28%, vs Monday's close

  • FTSE 100 +0.40% to 7060.70

  • DAX +0.30% to 15442.37

  • Nikkei +2.09% to 28406.84

  • Hang Seng +1.42% to 28593.81

  • 2-year yield +1 bps to 0.15%

  • 10-year yield +1 bps to 1.65%

  • WTI Crude (Jun 21): +$0.35 or +0.53% to $66.62

  • Gold (Jun 21): +$1.50 or +0.08% to $1869.10

  • €-$ +0.0065 or +0.53% to 1.2218

  • £-$ +0.0070 or +0.50% to 1.4205

  • $-¥ (0.24) or (0.22%) to 108.98

  • €-¥ +0.39 or +0.29% to 133.13