Early Look

Thursday, November 5, 2020

Futures	Up/Down	%	Last
DJ Industrials	392.00	1.41%	28,127
S&P 500	65.50	1.90%	3,500
Nasdaq	327.50	2.78%	12,090

 

 

Stock futures continue to surge, adding to the prior day solid market gains as the Presidential picture gets clearer with Joe Biden leading in the Associated Press electoral college count, needing only Georgia, Nevada, North Carolina or Pennsylvania to defeat President Donald Trump. At the same time, the AP tally on the U.S. Senate got closer after it appeared Republicans would hold the Senate (Four Senate races remained undecided by Wednesday evening. Republican incumbents led in three: Alaska, Georgia and North Carolina). A comment from Senator Majority Leader Mitch McConnell of a possible stimulus deal by the end of the calendar year also helped financial markets. Stock markets continue to defy expectations, absolutely surging over the last few days with so many other factors at work including the rising coronavirus cases as the U.S. reported more than 100,000 new cases in a single day for the first time ever on Wednesday, as well as the jobs data Friday and the FOMC meeting today. In Asian markets, The Nikkei Index gained 410 points to 24,105, the Shanghai Index jumped 42 points to 3,320 and the Hang Seng Index surged over 800 points or 3.25% to settle at 25,695 in a massive move for Asian markets. In Europe, the German DAX is up 200 points to move above 12,500, while the FTSE 100 rises 25 points to 5,910. Europe got a surprise as the BOE extended the size of its quantitative easing program by £150 billion.

Market Closing Prices Yesterday

·     The S&P 500 Index jumped 74.28 points, or 2.20%, to 3,443.44

·     The Dow Jones Industrial Average rose 367.63 points, or 1.34%, to 27,847.66

·     The Nasdaq Composite spiked 430.21 points, or 3.85%, to 11,590.78

·     The Russell 2000 Index advanced 0.79 points, or 0.05% to 1,615.08

 

Economic Calendar for Today

·     7:30 AM EST      Challenger Layoffs for October

·     8:30 AM EST      Weekly Jobless Claims

·     8:30 AM EST      Continuing Claims

·     8:30 AM EST      Nonfarm Productivity for Q3

·     8:30 AM EST      Unit Labor Costs for Q3

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

 

Earnings Calendar:

·     Earnings Before the Open: AAWW, ABC, AEIS, AGIO, ALNY, AMRS, ANIP, AXSM, BCRX, BLL, BMY, CAH, CBB, CCOI, CEVA, CHH, CI, CLVS, CNK, CNP, CMM, CORE, CTVA, D, DISCA, DNB, DUK, ECOM, EIGI, EVRG, EYE, FOLD, FOUR, FWONA, GM, GTN, HBI, HFC, IDCC, IIVI, INCY, IRM, KALA, KELYA, KIM, LAMR, LAUR, LSXMA, LTRPA, LXP, MAC, MDP, MUR, NLSN, NXST, NYT, ODP, PBH, PGTI, PH, PPL, PZZA, REGN, SAGE, SEAS, SFE, SRCL, SRE, STOR, STWD, TAST, TECH, TGI, THS, TREE, TWI, UTZ, VG, VMC, VSTO, WCC, WMS, WRK, WWW, XRAY, YETI, ZEUS, ZTS

·     Earnings After the Close: AAOI, ACLS, AEE, AIG, AINV, ALRM, ANGI, APPN, AVLR, AYX, BCEI, BFAM, BHF, BIGC, BILL, BNFT, CLR, COLD, CPS, CSLT, CSOD, CZR, DBX, DDD, DLX, EA, EBS, ECOL, EOG, EVBG, EVH, FLDM, FLO, FRT, GH, GKOS, GLUU, GPRO, HASI, HCI, HLF, IAC, INFN, LASR, LGF/A, LMNX, LOPE, LSI, LTHM, MANT, MCHP, MTD, MTSI, MXL, NET, NEWR, NLOK, NRG, PCTY, PK, PRA, PS, PTON, RMAX, ROKU, RTRX, RUN, SAIL, SHO, SPCE, SQ, SYNA, TDC, TNDM, TTWO, TVTY, TWNK, UBER, VIAV, XPO, ZG

 

 

Macro	Up/Down	Last
WTI Crude	-0.18	38.97
Brent	-0.10	41.13
Gold	13.90	1,916.80
EUR/USD	0.0079	1.1805
JPY/USD	-0.28	104.24
10-Year Note	-0.026	0.74%

 

 

World News

·     President Trump alleged fraud, filed lawsuits and called for recounts in a race yet to be decided more two days after polls closed. The presidential race was coming down to close contests in five states. Biden held narrow leads in Nevada and Arizona while Trump was watching his slim advantage fade in must-win states Pennsylvania and Georgia as mail-in and absentee votes were being counted. Trump clung to a narrow lead in North Carolina as well, another must-win for him

·     The Bank of England decided to extend the size of its bond purchase program by £150 billion as it warned output would fall in the fourth quarter amid the lockdown that starts in England today. The unanimous Bank of England decision kept interest rates at 0.1%, and the extension of its quantitative easing program brings the size of its government bond purchase program to £875 billion. The BOE also has a £20 billion corporate bond purchase program.

·     German industrial orders grew less than expected in September as euro zone orders dropped; Industrial orders rose 0.5% in September, less than the 2% analysts had expected, partly because bookings from other members of euro zone fell by 6%

 

Sector News Breakdown

Consumer

·     Costco (COST) reports comparable sales rose 14.4% in October to top the consensus expectation for +10.5%; comparable sales were up 13.6% in the U.S., rose 13.9% in Canada and ran up 19.6% for other international markets. E-commerce sales jetted up 91.1%.

·     e.l.f. Beauty (ELF) Q2 EPS 16c on revs $72.4M vs. est. 13c and $68.47M; Gross margin rose 100 bps to 65%; expects FY21 sales of $290M to $303M and FY21 EPS of $0.59 to $0.63 vs. $0.67 consensus

·     Expedia (EXPE) Q3 EPS loss (22c) on revs $1.5b (down -58% YoY) vs. est. loss (84c) and $1.39B; 3q gross bookings $8.63 billion, -68% YoY and Q3 room nights stayed -58% vs. +11% YoY

·     Frontdoor Inc. (FTDR) 3Q EPS $0.57 vs. est. $0.59 on revs $440Mm vs. est. $434Mm, says home service plans +4%, customer retention 76%, expanded on-demand offering to 35 cities; guides 4Q revs $315-325Mm vs. est. $317.8Mm

·     Scientific Games (SGMS) Q3 EPS loss ($1.23) on revs $698M vs. est. loss (77c) and $645.74M; Lottery, SciPlay and Digital businesses grew in the quarter, highlighting the strategic investments we have made in the Digital space and the breadth of our portfolio.

 

Energy

·     Apache (APA) Q3 EPS loss (2c) on revs $1.1B vs. est. loss (35c) on revs $992.3M; upstream capital investment significantly below guidance in Q3; reduced full-year 2020 capital outlook to $1.0B; increased estimated annual run-rate cost savings associated with organizational redesign to $400M from $300M; looking ahead to 2021, anticipate an upstream capital budget of $1B or less

·     Cimarex Energy (XEC) Q3 adjusted EPS 51c on revs $401.66M vs. est. 26c and $389.11M; oil production averaged 71.6 Mbbls per day; total company production volumes for the quarter averaged 249.4 thousand barrels of oil equivalent per day

·     Laredo Petroleum (LPI) Q3 adj EPS $4.02 on revs $132.46M vs. est. $3.03 and $181.53M; produced 87,857 BOE per day in the third quarter of 2020, including oil production of 25,120 BOPD, with both figures exceeding the midpoint of guidance; maintains year cap-ex view

·     Marathon Oil (MRO) Q3 EOS loss (28c) in line with ests on revs $754M (down 44% Yoy) vs. est. $757M; 3Q Eagle Ford production 91,000 net boe/d, -15% YoY; Ended third quarter with $4.1 billion of liquidity; Q3 total Company oil-equivalent production of 370,000 net boed; full year oil-equivalent guidance raised by 5,000 net boed at midpoint

·     Pioneer Natural (PXD) Q3 EPS 17c on revs $1.82B vs. est. 25c and $817.16M; average Q3 oil production of 201 thousand barrels of oil per day (MBOPD), at the top end of guidance, and averaged Q3 production of 355 thousand barrels of oil equivalent per day (MBOEPD), near the top end of guidance; is increasing its guidance for 2020 oil production to a range of 209 to 211 MBOPD and total production range of 365 to 369 MBOEPD and maintaining its 2020 drilling, completions and facilities capital budget range of $1.3 billion to $1.5 billion

 

Financials

·     Allstate (ALL) Q3 adj EPS $2.94 vs. est. $1.77; Q3 combined ratio reported 91.6% vs. 91.6% YoY, Q3 net investment income $832 million, -5.5% YoY and Q3 catastrophe losses $990.0 million, +94% YoY; will incur restructuring charges of approximately $290m, pre-tax, with $198m recognized in 3q and balance in future quarters

·     Brookfield Senior Living (BKD) 3Q EPS ($0.68) vs. est. ($0.29) on revs $808Mm vs. est. $841.3Mm

·     Green Dot (GDOT) Q3 EPS 25c on revs $279.4M vs. est. 11c and $243.62M; sees 2020 EPS $1.95-$2.00 vs. est. $1.81 and sees 2020 revenue $1.175B-$1.185B vs. est. $1.13B

·     Lincoln National (LNC) Q3 adjusted ops EPS (72c) vs. est. $2.03; Q3 revenue $5.36B; says resuming buybacks in Q4 and raises dividend to 42c for quarter; Q3 BVPS, including AOCI, of $111.51, up 11%; BVPS, excluding AOCI, of $71.10, up 3%

·     MetLife (MET) Q3 adjusted EPS $1.95 vs. est. $1.61; Q3 book value per share $76.20, Q3 premiums, fees other revs $11.89B, net investment income $4.73B

·     Verisk (VRSK) 3Q adj EPS $1.32 vs. est. $1.20 on revs $703Mm vs. est. $691.8Mm

·     Commerzbank reported a €69 million loss as revenue missed analyst expectations.

·     Société Générale reported a third-quarter profit of €862 million and lifted its capital ratio outlook for the year.

 

Healthcare

·     AstraZeneca (AZN) which is working on one of the world’s leading COVID-19 vaccine hopefuls, reported progress in its pipeline of other medicines on Thursday as it posted a mixed set of third-quarter results.

·     Cigna (CI) Q3 adjusted EPS $4.41 on revs $40.96B above est. $4.24 and $39.18B; sees FY20 adjusted EPS $18.30-$18.60 raising the lower end from $18.00-$18.60 (est. $18.55) while sees year revs approximately $158B vs. prior view $154B-$156B (est. $155.84B)

·     Cannabis stocks surge after yesterday profit taking (ACB, APHA, CGC, CRON, TLRY) as Democrat Joe Biden’s electoral vote nears him close the becoming the 46th U.S. president. Biden, and his running mate Kamala Harris, have voiced support for decriminalizing marijuana on a federal level, and are expected if they come into power to adopt a more pro-cannabis legalization agenda than incumbent President Donald Trump.

·     ACADIA Pharma (ACAD) 3Q EPS ($0.54) vs. est. ($0.38) on sales $120.6Mm vs. est. $118.8Mm; guides 2020 Nuplazid net sales $430-450Mm, no change; sees 2020 GAAP R&D $325-340Mm

·     Bluebird Bio (BLUE) Q3 EPS loss ($2.94) on revs $19.27M vs. est. loss ($3.01) and $24.16M; Q3 cash, cash equivalents and marketable securities as of sept 30 and December 31, 2019 were $1.44 bln and $1.24 bln, respectively; adjusting sickle cell timeline

·     Hologic (HOLX) Q4 adjusted EPS $2.07 on revs $1.35B above est. $1.22 and $1.12B; sees Q1 adjusted EPS $2.10-$2.25 vs. est. $1.23 and guides Q1 revenue $1.35B-$1.425B vs. est. $1.13B

·     CryoLife Inc. (CRY) 3Q adj EPS $0.13 vs. est. ($0.05) on revs $65.1Mm vs. est. $59.2Mm; not issuing 2020 guidance at this time

·     Insulet (PODD) Q3 EPS 17c on revs $234.0M above est. 8c and $221.68M; reports Q3 adjusted EBITDA of $42.3 million or 18.1% of revenue, compared to $29.6 million or 15.4% of revenue in the prior year; raises FY20 revenue growth guidance to 20%-21% from 17%-19%

·     MannKind (MNKD) 3Q EPS ($0.05) vs. est. ($0.05) on revs $15.4Mm vs. est. $15.6Mm

·     OraSure technologies (OSUR) 3Q EPS $0.01 vs. est. ($0.07) on revs $48Mm vs. est. $41.7Mm; guides 4Q revs $55-60Mm vs. est. $61.5Mm

·     Phibro Animal Health (PAHC) 1Q adj EPS $0.27 vs. est. $0.23 on net sales $195Mm vs. est. $189.1Mm; guides Q2 adj EPS $0.28 vs. est. $0.33, sees 2Q sales about $205Mm vs. est. $213.7Mm

·     Rapt Therapeutics (RAPT) files $350M mixed securities shelf; files to sell 1M shares of common stock for holders

·     Sangamo Bioscience (SGMO) 3Q EPS ($0.01) vs. est. ($0.24) on revs $57.8Mm vs. est. $26.5Mm

 

Industrials & Materials

·     Albemarle (ALB) Q3 adjusted EPS $1.09 on revs $747M vs. est. 78c and $739.6M; sees FY20 adjusted EPS $3.80-$4.15 vs. est. $3.52 and sees FY20 revenue $3.05B-$3.15B vs. est. $3.04B

·     CF Industries (CF) Q3 EPS loss (13c) on revs $874M vs. est. 7c and $885.24M; Average selling prices for the third quarter of 2020 were lower than the third quarter of 2019 across all segments due to increased global supply availability as lower global energy costs drove higher global operating rates

·     Compass Minerals (CMP) 3Q EPS ($0.07) vs. est. $0.44 on revs $282.4Mm vs. est. $319.7Mm; guides FY20 adj EBITDA $330-345Mm vs. est. $342.5Mm

·     Dalian and Singapore iron ore futures fell on Thursday as exports of the steelmaking ingredient by top producer Australia likely picked up last month that may push China’s portside inventories higher – Reuters

·     Manitowoc (MTW) Q3 adjusted EPS 10c on revs $355.6M vs. est. loss (29c) and $315.6M; guides Q4 revs $425M-$450M and Ebitda $18M-$23M; Q3 orders of $389.9 million increased 10.5% from the prior year, favorably impacted by 1.7% due to changes in foreign currency exchange rates. Backlog as of September 30, 2020 totaled $464.8 million, approximately flat to prior year and an increase of 8.0% from June 30, 2020.

 

Lodging:

·     Hyatt Hotels (H) Q3 adjusted EPS loss ($1.48) vs. est. loss ($1.30); Adjusted EBITDA decreased 129.9% to $(48) million; cash and cash equivalents of $1,778 million; Q3 comparable system-wide RevPAR decreased 72.0%.

·     Host Hotels (HST) Q3 EPS loss (44c) on revs $198M vs. est. loss (45c) and $220.21M; does not expect to see a material improvement in operations until government restrictions have been lifted and business and leisure travelers are comfortable;

·     Marriott Vacations (VAC) Q3 loss EPS (81c) on revs $649M vs. est. loss (59c) and $620.94M

 

Technology, Media & Telecom

·     GoDaddy (GDDY) Q3 EPS 38c on revs $844.4M vs. est. 33c and $835.17M; sees Q4 revenue approximately $865M vs. est. $855.65M; added over 1 million net new customers in 2020; Domains revenue of $387.4 million, up 12.2% year over year; Hosting and presence revenue of $302.4 million, up 6.1% year over year; Business applications revenue of $154.6 million, up 18.7% year over year

·     Match Group (MTCH) Q3 EPS 45c on revs $640M vs. est. 44c and $605.13M; Q3 average subscribers increased 12% to 10.8M vs. est. 10.5M, ARPU was $0.62, an increase of 4% over the prior year quarter; Tinder, Match’s most popular app, had about 6.6 million subscribers, a 16% increase from the year-earlier period; Q3 company’s operating expenses increased 20% YoY

·     Ping Identity (PING) 3Q EPS ($0.01) vs. est. $0.02 on revs $59.9Mm vs. est. $55.8Mm, qtrly ARR $242.6Mm +17%; guides 4Q total ARR $250-257Mm, sees 4Q total revs $67-70Mm vs. est. $68.75Mm

·     Qualcomm (QCOM) rises 8%; 4Q adj EPS $1.45 vs. est. $1.17 on revs $8.346B vs. est. $5.94B; guides 1Q21 revs $7.8-8.6B vs. est. $7.15B, sees 1Q21 adj EPS $1.95-2.15 vs. est. $1.69;

·     Qorvo (QRVO) 2Q EPS $2.43 vs. est. $2.12 on revs $1.06B vs. est. $1.01B; guides 3Q revs $1.06B +/- $15Mm vs. est. $923.4Mm, sees 3Q adj EPS $2.65 at midpoint of range vs. est. $1.90

·     Zynga (ZNGA) 3Q EPS ($0.11) vs. est. $0.09) on revs $503Mm vs. est. $625.7Mm, qtrly bookings $628Mm, qtrly mobile DAUs 31Mm (+53%), qtrly mobile MAUs 83Mm (+23%); says over coming years plans to release additional titles currently in development including games based on Cityville, Star Wars