Early Look

Friday, November 13, 2020

Futures	Up/Down	%	Last
DJ Industrials	215.00	0.74%	29,207
S&P 500	23.50	0.67%	3,556
Nasdaq	79.50	0.67%	11,899

 

 

U.S. stock futures are looking at a strong open, with Dow futures getting a bounce from components Disney (DIS) and Cisco (CSCO) as each offered quarterly results last night that topped consensus. Disney also reported strong Disney+ subscriber numbers, benefitting from the “stay-at-home” theme due to the coronavirus impact. Stocks will try to reverse yesterday’s declines which focused on surging coronavirus cases and hospitalizations, as well as remarks by Fed Chair Powell (noting the need for fiscal stimulus and said the next few months could be challenging) and Senate Majority leader Mitch McConnell (who said he did not see a need for a giant coronavirus relief bill). The political uncertainty also remains a question mark for markets as President Trump has yet to concede as he continues to challenge the voting results in key battleground states. On the economic calendar today are producer prices (PPI) for October, as well as the University of Michigan’s preliminary index of consumer sentiment for November – which follows better jobless claims data Thursday and tame CPI data. Reopen stocks took a hit yesterday as Chicago Mayor issued a 30-day advisory calling for residents to stay home and not have visitors, adding to some recent restrictions in CA and NY. In Asian markets, the Nikkei Index fell from 30-year highs, down -135 points to 25,385 (still remains up roughly 10% for the month so far), the Shanghai Index dropped -28 points to 3,310 and the Hang Seng Index dipped -12 points to 26,156. In Europe, the German DAX is up 35 points to13,090, while the FTSE 100 is down -15 points to 6,321.

Economic Calendar for Today

·     8:30 AM EST      Producer Price Index (PPI) MoM for Oct…est. 0.2%

·     8:30 AM EST      PPI Ex: Food & Energy MoM for Oct…est. 0.4%

·     8:30 AM EST      Producer Price Index (PPI) YoY for Oct…est. 0.2%

·     8:30 AM EST      PPI Ex: Food & Energy YoY for Oct…est. 1.2%

·     10:00 AM EST    University of Michigan Confidence, Nov-P…est. 82.0

·     1:00 PM EST       Baker Hughes Weekly Rig Count

 

Other Key Events:

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

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

 

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -35.65 points, or 1.00%, to 3,537.01

·     The Dow Jones Industrial Average fell -317.46 points, or 1.08%, to 29,080.17

·     The Nasdaq Composite dropped -76.84 points, or 0.65%, to 11,709.59

·     The Russell 2000 Index declined -28.47 points, or 1.64% to 1,708.47

 

 

Macro	Up/Down	Last
WTI Crude	-0.52	40.60
Brent	-0.41	43.12
Gold	2.20	1,879.00
EUR/USD	0.0002	1.1826
JPY/USD	-0.18	104.95
10-Year Note	+0.008	0.89%

 

 

Sector News Breakdown

Consumer

·     Beazer Homes (BZH) Q4 EPS 82c and Q4 revenue down 12.2% to $679.1M; dollar value of homes in backlog as of September 30, 2020 increased 49.6% to $995.3 mln, or 2,509 homes; at close of q4, company had $577.7 mln of available liquidity

·     Blink Charging (BLNK) falls -8%; Q3 results missed top and bottom-line estimates with a $900K (+18% Y/Y) and a $0.12 loss respectively; product sales increased 74% to $600K.

·     The company says 668 EV charging stations were sold, deployed or acquired across 25 states.

·     Dillard’s (DDS) Q3 EPS $1.43 on sales $1.025B as Q3 comp store sales fell (-24%); Gross margin improved 249 basis points of sales; Q3 Inventory decreased approximately 22%

·     Dolby (DLB) Q4 EPS 45c on revs $271.2M vs. est. 34c and $244.44M; says expects continued significant uncertainty in global financial markets

·     Farfetch (FTCH) 3Q revs $438Mm vs. est. $370.4Mm; adj EPS ($0.17) vs. est. ($0.40); Q3 gross merchandise value jumped 62% in Q3 and the digital platform GMC growth rate was 60%; says the increase in digital platform GMV was primarily driven by growth in active consumers to 2.7M in Q3; adjusted EBITDA came in at -$10M vs. -$36M a year ago

·     Spectrum Brands (SPB) 4Q adj EPS from cont ops $1.72 vs. est. $1.24 on net sales $1.17B vs. est. $1.03B; guides FY21 net sales +3-5% vs. est. +2.8%, sees fy21 adj EBITDA +msd % vs. est. +2.2%

·     Cruise lines (CCL, NCLH, RCL): Five people aboard the SeaDream 1 cruise ship have tested positive for COVID-19, CNN reported. All guests and non-essential crew are quarantining in their rooms, according to the report. SeaDream 1 is the first cruise ship to embark on a voyage in the Caribbean since the coronavirus shut down the cruise industry

·     Li Auto (LI) Q3 EPS loss (8c) on revs $379.8M vs. est. loss (8c) and $290.17M; says vehicle deliveries rose 31% from previous quarter to 8,660 vehicles in Q3; guides Q4 revenue $457.8M-$499.4M vs. est. $342.38M and sees Q4 deliveries 11,000-12,000 units, about 27%-38.6% higher than Q3

 

Energy

·     Drilling rights in the Permian Basin averaged $24K/acre in recent deals, down 67% from 2018, and the average price across all U.S. shale has plummeted to ~$5K/acre from $17K two years ago, Rystad Energy reported

·     Nearly 10% of U.S. refining capacity is offline due to low demand, plant repurposing or extended turnarounds, and many companies believe it is still not enough to support refining margins, S&P Global Platts reports. According to the report, 1.69M bbl/day of refinery capacity is offline

 

Healthcare

·     Amwell (AMWL) Q3 EPS loss (92c) on revs $62.6M vs. est. loss (28c) and $55.77M; Q3 adjusted EBITDA ($26.2M) vs. ($20.3M) last year; guides FY20 revenue $235M-$239 vs. est. $231.74M and sees FY20 adj. EBITDA ($110M) to ($105M)

·     Annexon (ANNX) has initiated a Phase 2 study of monoclonal antibody ANX005 in Huntington’s Disease (HD), a progressive movement disorder. Initial results from the trial expected in 2H of 2021.

·     Five Prime (FPRX) 7.2M share Secondary priced at $21.00

·     Keros Therapeutics (KROS) 2.6M share Secondary priced at $50.00

·     Organogenesis (ORGO) 17.5M share Secondary priced at $3.25

·     Elon Musk CEO of tesla said via Twitter: “Something extremely bogus is going on. Was tested for Covid four times today. Two tests came back negative, two came back positive. Same machine, same test, same nurse. Rapid antigen test from BD.”

·     Harpoon Therapeutics, Inc. (HARP) presented preclinical data on HPN601 for the treatment of solid tumors at the 35th Society for Immunotherapy of Cancer (SITC) virtual annual meeting. HPN601 is the first conditionally active T cell engager program from Harpoon

·     Inari Medical (NARI) 3Q EPS $0.13 vs. est. ($0.04) on revs $38.7Mm vs. est. $26.5Mm, ended qtr w/ $168Mm cash and equivalent; not providing guidance for remainder of FY20 at this time

·     Sumitovant Biopharma to acquire the balance 28% shares in Urovant Sciences (UROV) for $16.25 per share, or ~$584M, in an all-cash merger. Sumitovant is largest shareholder with ~72% equity ownership of the company. https://bit.ly/3f6ysW5

 

Industrials & Materials

·     3M Co. (MMM) said October sales rose 3% to $2.9 billion. In the company’s health care division, sales rose 12%, while consumer sales rose 7%, safety and industrial sales were up 4% and transportation and electronics sales fell 4%. Geographically, sales rose 3% in Asia Pacific and were up 2% in EMEA and the Americas

·     LyondellBasell (LYB) and Dow Chemical (DOW) both downgraded to Market Perform from Outperform at Bernstein

·     Valvoline (VVV) raises dividend by ~11%, approves $100M share repurchase plan

·     Yield10 Bioscience (YTEN) Q3 EPS loss (87c) vs. est. loss (94c); announced it has signed a collaboration agreement with UK-based Rothamsted Research to support Rothamsted’s Flagship Program to develop omega-3 oils in Camelina sativa

 

Technology, Media & Telecom

·     Disney (DIS) shares rise 6%; Q4 EPS loss (20c) on revs $14.71B vs. est. loss (71c) and $14.2B; Q4 Disney+ subscribers 73.7m, vs. est. 65.5m; media networks revenues for quarter increased 11% to $7.2B, cable networks revenues for quarter increased 11% to $4.7B, parks, experiences and products revenues for quarter decreased 61% to $2.6B – said estimate total net adverse impact of covid-19 on parks, experiences and products segment operating income was about $2.4B

·     Applied Materials (AMAT) 4Q adj EPS $1.25 vs. est. $1.17 on revs $4.69B vs. est. $4.4B, adj gr margin 45.7% vs. est. 45.7%; guides 1Q adj EPS $1.20-1.32 vs. est. $1.11, sees net sales $4.95B +/- $200Mm vs. est. $4.5B

·     Autodesk (ADSK) CFO leaving company; co expects Q3 results above guidance range

·     Bentley Systems (BSY) 10M share Secondary priced at $32.00

·     BigCommerce (BIGC) 5M share Secondary priced at $68.00

·     Cisco (CSCO) 1Q adj EPS $0.76 vs. est. $0.70 on revs $11.9B vs. est. $11.85B; guides 2Q adj EPS $0.74-0.76 vs. est. $0.73, sees 2Q revs +0-2% vs. est. -3.1%

·     Palantir (PLTR) Q4 EPS loss (94c) on revs 4289.4M vs. est. $279.4M; raises FY revs to $1.070B-$1.072B, from prior $1.05B TO $1.06B (up 44% YoY); said new contracts in third quarter include U.S. Army ($91 million), National Institutes of Health ($36 million), and $300 million renewal with aerospace customer; sees Q4 revs $299M-$301M vs. est. $296.2M

·     Trade Desk (TTD) files automatic mixed securities shelf

·     Unity Software (U) Q3 EPS loss (9c) vs. est. loss (15c) and Q3 revenue $200.8M vs. est. $186.87M; guides Q4 revenue $200M-$204M vs. est. $196.06M and sees year revs $752M-$756M vs. est. $738.34M; Customers that generated more than $100,000 of revenue in the trailing twelve months as of Sept 30, 2020 was 739 compared to 553 as of Sept 30, 2019

·     Digi International (DGII) 4Q adj EPS $0.32 vs. est. $0.09 on revs $73.2Mm vs. est. $72Mm, will not be providing guidance

·     Globant (GLOB) Q3 adjusted EPS 60c on revs $207.2M vs. est. 58c and $203.76M; sees Q4 adj IFRS at least 66c and revs at least $220M

·     JAMF Holdings (JAMF) 3Q revs $70.4Mm vs. est. $65.5Mm, qtrly ARR +37%; guides 4Q revs $70-71Mm vs. est. $68Mm; sees 4Q adj op income $1-2Mm

·     Sierra Wireless (SWIR) 3Q ($0.40) cont ops ex items vs. est. ($0.15) on revs $180.3Mm vs. est. $158.6Mm, says has begun to initiate actions to reduce operating expense by $25-30Mm annualized; continue not to provide guidance although seeing business improvements