Enough is enough: Following a sharp sell-off yesterday, which saw the tech-heavy Nasdaq index drop a further 4%, investors are showing a more positive sentiment this morning. Nasdaq futures are currently rising 1.6%, while Dow and S&P futures are up 0.8% and 1.02%, respectively. Notably Tesla stock is trading 7% higher this morning, after a 20% fall on Tuesday, while Apple is also climbing 2.6%.
Not so lucky: Post-print popular athleisure retailer Lululemon is sinking 5% after the company said that it is “cautiously optimistic with regard to the holiday season” and expects 3Q profit to plunge as much as 20%. “Buy the weakness” recommends Susquehanna analyst Sam Poser. He notes that LULU cleared an exceptionally high bar in 2Q20- and blames lower store traffic on capacity constraints and reduced store hours. Demand for product remains robust, as illuminated by the 155% increase in digital sales, says Poser.
Similarly, Slack is plunging 17% right now after the company reported lower-than-expected 2Q billings, a key indicator for future revenues. The cloud-based business solution provider’s 2Q billings amounted to $218.2 million, while analysts had forecast $232.9 million. “Slack remains one of the fastest growing companies in our coverage with a large opportunity and well positioned to benefit from digital transformation; however, the company has failed to impress investors and we remain Neutral” summed up Monness analyst Brain White.
Also in the red this morning is AstraZeneca with shares down 3% after the biopharma put its late-stage Covid-19 vaccine trial on hold, due to a suspected serious adverse reaction in a participant in the UK. “Our standard review process triggered a pause to vaccination to allow review of safety data,” AZN said in a statement. Analysts from Jefferies moved to reassure investors that all is not lost, writing: “Temporary pauses in dosing of subjects is standard clinical trial practice and given the expedited path into Phase III (trials) for AZN/Oxford Uni Covid-19 vaccine AZD1222, we believe it is not surprising a serious adverse event triggered a study halt to investigate if drug-related.” They envisage a short-term stock correction which ‘may prove misplaced.’
More positively, Pfizer and BioNTech SE have now tied up exploratory talks with the European Commission for a proposed supply of 200 million doses of their investigational BNT162 mRNA-based Covid-19 vaccine candidate to EU Member States. The agreement includes an option for a further 100 million doses, and if all goes well, deliveries could start before year-end. PFE is now up 1% in early morning trading, with BNTX soaring 5%.
Meanwhile Trillium Therapeutics is surging over 40% right now, after the immuno-oncology company announced updated data from its ongoing TTI-622 and TTI-621 dose escalation studies. The stock has exploded an incredible 818% year-to-date and JonesTrading analyst Soumit Roy sees further upside potential ahead.
Qorvo is up 6% after updating its financial guidance for the fiscal 2021 second quarter, citing better-than-expected mobile demand for its advanced 4G and 5G mobile products. Mastercard, Uber and Lyft also revealed continued improvement, and stability, after updating guidance. Notably Lyft revealed that in the week ended September 6, 2020, rideshare rides reached a new high since April as the change in rideshare rides recovered to less than a 50% year-over-year decline.
Nikola is up a further 4% this morning after a savvy General Motors tie-up saw the stock explode 41% yesterday. As part of the deal, GM will receive a 11% stake in Nikola valued at about $2 billion. GM will also provide Nikola with batteries, fuel cell systems and a factory to build its Nikola Badger pickup. The Badger is anticipated to start production by year-end 2022. Wedbush analyst Daniel Ives called the deal a “paradigm changer” for Nikola’s future EV and fuel cell ambitions.
Another win for India’s Reliance: Reliance Industries announced Wednesday that US private equity firm Silver Lake will invest $1.02 billion into its retail unit Reliance Retail Ventures Ltd. (RRVL), India’s largest retail chain. It marks the second multi-billion dollar deal by Silver Lake in a Reliance subsidiary after the $1.35 billion investment in Jio Platforms announced earlier this year. Also looking for a piece of the action is private equity firm KKR which is in advanced talks for a stake in Reliance Retail of up to $1.5 billion, according to a Bloomberg report.
And last but not least, billionaire Warren Buffett’s Berkshire Hathaway is planning to buy a stake in software company Snowflake’s IPO (initial public offering), which is expected to list at a price range of $75 and $85.
