Early Look

Wednesday, November 11, 2020

Futures	Up/Down	%	Last
DJ Industrials	219.00	0.75%	29,538
S&P 500	29.50	0.83%	3,570
Nasdaq	127.50	1.10%	11,745

 

 

Stock futures are looking sharply higher as tech appears poised to rebound after two days of selling pressure in pandemic stay at home YTD winners, while energy looks strong with 3% gains for oil, on track for a third straight day of gains on rising demand hopes. Treasury markets are closed today in observance of Veteran’s Day, as the 10-year yield ended around its best levels since March around 0.97%. Major averages were mixed on Tuesday as tech stocks continued to lose favor, but with a gain of nearly 1%, the Dow Jones Industrial Average closed solidly higher led by shares of Boeing, Chevron and Walgreens, while the S&P 500 edged just slightly higher. Markets have seen a continued rotation out of growth and into value since the election, with Smallcaps outperforming markedly over that stretch. In Asian markets, The Nikkei Index jumped 444 points (1.78%) to 25,349, the Shanghai Index dipped -18 points to 3,342 and the Hang Seng Index slid about -75 points to 26,226. In Europe, the German DAX is up around 50 points to 13,215, while the FTSE 100 gains 40 points to 6,340. Markets have been jolted higher on the positive potential vaccine news on Monday from PFE and BNTX, which has shaken up markets and pushed investors back into “re-open” related trades such as energy, travel, leisure, lodging, retail and restaurants – though the coronavirus case tallies continue to grow into the winter and forcing some U.S. states and EU countries to reimpose restrictions to slow the spread.

Market Closing Prices Yesterday

·     The S&P 500 Index slipped -4.97 points, or 0.14%, to 3,545.53

·     The Dow Jones Industrial Average rose 262.95 points, or 0.90%, to 29,420.92

·     The Nasdaq Composite dropped -159.93 points, or 1.37%, to 11,553.86

·     The Russell 2000 Index advanced 31.97 points, or 1.88% to 1,737.01

 

Economic Calendar for Today

·     7:00 AM EST      MBA Mortgage Applications Data

·     10:30 AM EST    Weekly DOE Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: ADNT, APD, APG, BDR, DCTH, LINC, LMND, MCFT, RPRX, SANM, VERX, XPEL

·     Earnings After the Close: ATO, BKTI, CCMP, FOSL, FTHM, GRWG, HI, LMB, OM, OPGN, REYN, RVLV, SLRX, SPTN, TELA, TTEK, VEL, VRM

 

Other Key Events:

·     Baird Industrials Conference, 11/10-11/12 (virtual)

·     Credit Suisse 29th Annual Healthcare Conference, 11/9-11/2 (virtual)

·     Morgan Stanley Chemicals, Ag & Packaging Conference, 11/10-11/11 (virtual)

·     Roth Capital Technology Conference 11/11-11/12 (virtual)

·     Society of Immunotherapy Conference, 11/9-11/14 (virtual)

·     UBS European Virtual Conference, 11/9-11/13

 

 

Macro	Up/Down	Last
WTI Crude	1.33	42.69
Brent	1.30	44.91
Gold	-4.70	1,872.60
EUR/USD	-0.0034	1.1781
JPY/USD	0.14	105.44
10-Year Note	closed	For holiday

 

 

Sector News Breakdown

Consumer

·     Lyft Corp. (LYFT) Q3 EPS loss ($1.46) on revs $499.7M vs. est. $495.8M; 3q active riders 12.44M (down 44%) vs. est. 12.8M and 3q revenue per active rider $39.94 (down 7%); qtrly contribution of $248.8 mln, down 48%; qtrly contribution margin was 49.8%, relatively flat vs q3 2019; remain focused on achieving adjusted Ebitda profitability by q4 of next year, even with a slower recovery

·     Grocery Outlet (GO) 3Q EPS $0.41 vs. est. $0.23 on revs $764.1Mm vs. est. $759.4Mm; Quarter-to-date comparable store sales growth for the fourth quarter of fiscal 2020 is in the positive mid-single digits driven by an increase in average basket size partially offset by declines in store traffic

·     Vehicle sales in China including trucks and buses rose 12.5% Y/Y in October as the industry recovered from the coronavirus. However, the sales were down from September’s 17.4%

 

Energy, Industrials and Materials

·     The American Petroleum Institute (API) showed a bigger than expected draw of 5.15M barrels of oil for the week ending Nov. 7; gasoline inventories show a draw of 3.3M barrels, distillate inventories show a draw of 5.62M barrels and Cushing inventories show a draw of 1.17M barrels.

·     Air Products (APD) Q3 adj EPS $2.19 vs. est. $2.21 and revs $2.32B vs. est. $2.27

·     CNH Industrial (CNHI) upgraded to Buy from Neutral at Bank America

·     Boeing’s (BA) Defense, Space & Security division has been awarded a $9.8B IDIQ contract for F-15 support for Saudi Arabia

·     Raytheon Technologies (RTX) to acquire privately held Blue Canyon Technologies (BCT), a provider of small satellites and spacecraft systems components. BCT will report into Raytheon Intelligence & Space, a business of Raytheon Technologies

 

Financials

·     Arbor Realty (ABR) announces offering of 7M shares of common stock

·     Artisan Partners Asset Management Inc. (APAM) reported that its assets under management as of October 31, 2020 totaled $131.5 billion. Separate accounts accounted for $69.6 billion of total firm AUM, while Artisan Funds and Artisan Global Funds accounted for $61.9 billion.

·     Fair Isaac (FICO) 4Q adj EPS $3.25 vs. est. $2.32 on revs $374.4Mm vs. est. $316.4Mm

·     Franklin Resources, Inc. (BEN) reported preliminary month-end assets under management of $1,391.6 billion at October 31, 2020, compared to $1,418.9 billion at September 30, 2020.

·     Lemonade (LMND) plans to launch its business in France in Q4, adding to its German and Dutch products, but maintains that its footprint will remain weighted to the U.S. for a while; for Q4 expects in-force premium of $200M-$250M at Dec. 31, 2020, which compares with $188.9M at Sept. 30; also sees: adjusted EBITDA loss of $32M-$34M

·     Rocket Companies (RKT) Q3 adj EPS $1.21 on revs $4.73B vs. est. $1.09 and $4.56B; approves $1B share repurchase program; closed origination volume up 122% YoY to $89.0B at qtr end; sees q4 closed loan volume of between $88B and $93B; sees Q4 gain on sale margins of 3.80%-4.10%

·     Virtus Investment Partners, Inc. (VRTS) reported preliminary long-term and total assets under management (AUM) as of October 31, 2020 of $115.2 billion and $116.6 billion (including $1.4 billion of liquidity assets), respectively

 

Healthcare

·     Pfizer (PFE) and BioNTech (BNTX) reach an agreement to supply the EU with 200 million doses of their bnt162b2 MRNA-based vaccine candidate against covid-19; expect to produce up to 1.3 billion doses globally in 2021

·     1Life Healthcare (ONEM) reports Q3 EPS loss (13c) vs. est. loss (19c) and revs $101.67M vs. est. $86.18M; membership count as of quarter-end was 511,000 compared to 397,000, a 29% increase; sees FY20 revenue $362M-$367M vs. est. $333.88M and sees FY20 adjusted EBITDA ($29M)-($24M).

·     Health Catalyst (HCAT) Q3 adj. EPS loss (21c) vs. est. loss (27c) and revs $47.19M vs. est. $44.59M; sees Q4 revenue $50.5M-$53.5M vs. est. $47.44M and sees Q4 adjusted EBITDA ($7.3M)-($5.3M) and raises year outlook

·     Five Prime Therapeutics (FPRX) soars over 350% after the close as announced positive topline results from the global, randomized, double-blind placebo-controlled Phase 2 FIGHT trial. All three efficacy endpoints in the FIGHT trial – PFS, OS and ORR – achieved pre-specified statistical significance

·     Silk Road Medical (SILK) 3Q EPS ($0.31) vs. est. ($0.29) on revs $20.1Mm vs. est. $19.6Mm; says not providing annual guidance given Covid uncertainty

 

Technology, Media & Telecom

·     Chinese technology shares tumbled for a second day after Beijing’s crackdown on the internet industry, erasing more than $260B of value, reports Bloomberg. Hong-Kong listed shares of Alibaba Group (BABA) and Tencent Holdings (TCEHY) fell 8.3% and 5.5%, respectively after the Communist Party unveiled regulations to root out monopolistic practices in the internet industry.

·     Amdocs (DOX) Q4 EPS $1.23 on revs $1.05B vs. est. $1.18 and $1.03B; signed an agreement for the divestiture of OpenMarket, an Amdocs subsidiary, for approximately $300 million cash with Infobip; guides Q1 EPS 1.09-$1.15 on revs $1.055-$1.095 vs. est. $1.14/$1.06B

·     Brooks Automation (BRKS) 4Q adj EPS $1.26 vs. est. $0.36 on revs $246Mm vs. est. $234Mm; guides 1Q adj EPS $0.37-0.47 vs. est. $0.32, sees 1Q revs $237-251Mm vs. est. $230Mm

·     Coherent (COHR) 4Q adj EPS $1.01 vs. est. $0.80 on revs $316.8Mm vs. est. $309.6Mm

·     DataDog Inc. (DDOG) Q3 EPS 5c on revs $155M vs. est. 1c and $144.3M; guides Q4 EPS 1c-2c on revs $162M-$164M (est. 1c and $155M); extends strategic partnership with Google Cloud from EMEA to North America to support organizations as they migrate, optimize, and secure new and migrated workloads; raises FY20 EPS view to 17c-18c from 11c-13c and ups revenue view to $588M-$590M from $566M-$572M

·     DoYu (DOYU) Q3 adj EPS 6c on revs $373.28M vs. est. 9c and $381.96M; Q3 average MAUs 194M, compared with 163.6M in the same period of 2019 and average mobile MAUs in Q3 increased by 14.4% to 59.6M from 52.1M in the same period of 2019

·     Huya (HUYA) Q3 EPS 15c on revs $414.58M vs. est. 22c and $435.13M; Q3 average mobile MAUs of Huya Live 4.2M, representing an increase of 16.3% from 63.8M in Q3 of 2019; average MAUs of Huya Live in Q3 reached 172.9M, representing an increase of 18.3% from 146.1M YoY

·     FuboTV (FUBO) Q3 EPS loss ($1.65) on revs $61.2M vs. est. loss (37c)/$53.89M; Q3 sub revenue up 64% YoY to $53.4M, ad revs up 153% YoY to $7.5M and had paid subscribers at quarter end totaled 455,000, an increase of 58% YoY; guides Q4 revs $80M-$85M vs. est. $77.2M

·     Model N (MODN) Q4 EPS 14c on revs $41.5M vs. est. 9c and $40.42M; Q4 adjusted EBITDA was $7.0M, up 38% YoY; sees year EPS 27c-35c on revs $40.2M-$40.6M vs. est. 43c and $174.6M

·     Perspecta (PRSP) Q2 adj EPS 53c on revs $1.14B vs. est. 50c and $1.11B; raises FY21 adj. EPS view to $2.03-$2.11 from $1.90-$2.03 (est. $1.96) and ups FY21 revenue view to $4.41B-$4.56B from $4.26B-$4.41B

·     Rackspace Technology (RXT) Q3 EPS 19c on revs $682M vs. est. 18c and $667.25M; Q3 bookings were $315M, up 64% YoY; sees FY20 EPS 79c-81c vs. consensus 79c and raising full year 2020 guidance for revenue growth, core revenue growth, adjusted Ebitda and adjusted EPS

·     Sanmina (SANM) 4Q adj EPS $1.20 vs. est. $0.78 on revs $1.87B vs. est. $1.79B; guides 1Q revs $1.70-1.80B vs. est. $1.68B, sees 1Q adj EPS $0.75-0.85 vs. est. $0.64