Early Look

Monday, November 16, 2020

Futures	Up/Down	%	Last
DJ Industrials	286.00	0.97%	29,696
S&P 500	29.50	0.82%	3,611
Nasdaq	66.50	0.56%	12,000

 

 

U.S. futures are looking higher, adding to Friday’s gain as markets once again shake off coronavirus related fears amid hopes of vaccine news to help offset the recent surge in cases. Last week, it was the Pfizer and BioNTech positive news for their COVID-19 vaccine while expectations are high that Moderna will report a similar performance for its coronavirus vaccine (possible as early as today), which also uses mRNA technology. In the U.S., the number of Covid-19 cases crossed the 11-million mark on Sunday (1 million more cases in just 8-days when it hit 10 million). This compares with 10 days it took to get from 9 to 10 million and 16 days it took to reach 9 million from 8 million cases. U.S. hospitalizations continue to rise, crossing 69,000 on Saturday. European coronavirus cases still rising: Italy reports 33,979 new coronavirus cases on Sunday and reports 546 coronavirus-related deaths in last 24 hours; UK records 24,962 new cases on Sunday vs. Saturday: 26,860 and records 168 new deaths on Sunday vs. Saturday 462). In political news, President Donald Trump on Sunday briefly acknowledged losing the U.S. election in a morning Twitter post but then backtracked, saying he concedes “nothing,” and vowing to keep up a court fight that election-law experts say is unlikely to succeed. In Asian markets, The Nikkei Index surged 521 points to 25,906, the Shanghai Index gained 36 points to 3,346 and the Hang Seng Index jumped 224 points to 26,381. In Europe, the German DAX is higher by 85 points to 13,160, while the FTSE 100 rises 40 points to 6,360. Last week saw wild market swings and mixed results as the S&P 500 index rose 2.16%, the Dow Jones Industrials added 4.08%, while the Nasdaq Composite lost 0.55%. Small caps dominated the week as the Russell 2000 advanced 6% gain, while the Dow Transports gained 4%. It was a wild week that saw the spring reopening story take off with the biggest gains coming from oil refiners, mall and shopping center REITs, travel & shopping! For the week, VLO +34%, PSX +27%, HFC +27% in refiners, while in REITs, KIM surged +38%, SPG +20%, VNO +27% and SLG +25%.

 

Market Closing Prices Yesterday

·     The S&P 500 Index gained 48.14 points, or 1.36%, to 3,585.15

·     The Dow Jones Industrial Average rose 399.64 points, or 1.37%, to 29,479.81

·     The Nasdaq Composite climbed 119.70 points, or 1.02%, to 11,829.29

·     The Russell 2000 Index advanced 35.57 points, or 2.08% to 1,744.04

 

Economic Calendar for Today

·     8:30 AM EST      Empire Manufacturing for November

·     2:00 PM EST       Fed’s Clarida discusses Economic Outlook

 

Earnings Calendar:

·     Earnings Before the Open: ACM, ATEX, CLSN, CSPR, JAGX, PANW, RADI, SRAX, TSN, VERO

·     Earnings After the Close: BOXL, CIDM, CODX, CRMT, FTK, IBEX, IBIO, LIVX, MARK, NDRA, NGS, PCYG, QRHC, SDC, SLP, T, SNSS, LMD, WYY

 

Other Key Events:

·     Citigroup Financial Technology Virtual Conference, 11/16-11/19

·     American Association for Study of Liver Diseases virtual, 11/16-11/19

·     Stifel Virtual Healthcare Conference, 11/16-11/18

 

 

Macro	Up/Down	Last
WTI Crude	0.87	41.00
Brent	0.81	43.59
Gold	3.55	1,892.75
EUR/USD	0.001	1.1844
JPY/USD	-0.03	104.60
10-Year Note	-0.01	0.89%

 

 

13F Filings:

·     Softbank Group reported Q3 total portfolio value of $12.92B sharply down from $17.52B at the end of Q2 and reduced its holding to just 4 companies from 26 companies at the end of Q2. Notable exits include Amazon (AMZN), Alphabet (GOOG), Adobe (ADBE), Netflix (NFLX), Microsoft (MSFT) and Tesla (TSLA); reduced stakes in NVIDIA (NVDA) and T-Mobile US (TMUS) and took new position in Line (LN) and Lemonade (LMND).

·     3G Capital takes new positions in three recent tech IPOs, Snowflake (SNOW) 40K shares, JFrog (FROG) 30K shares and nCino (NCNO) 25K shares; added fresh position in JD. Com (JD); boost stakes in existing e-commerce portfolio by adding positions in Amazon (AMZN), Sea (SE), Carvana (CVNA) to its portfolio; adds Microsoft (MSFT) and Square (SQ) is a notable add.

·     Baupost fund takes new positions in Bill Ackman’s Pershing Square Tontine (PSTH) with 17.5M shares and Micron Technology (MU) with 5.22M shares, according to its latest 13F filing. Exits stakes in Akebia Therapeutics (AKBA), Univar (UNVR), and Ventas (VTR)and added to holdings in PG&E (PCG) to ~30.7M shares from 4.70M and SS&C Technologies (SSNC) to ~3.03M shares

·     Carl Icahn increased his stake in two holdings, by size of previous position, Icahn Enterprises (IEP) and Xerox Holdings (XRX), reduced its stake in two holdings, by size in Herbalife (HLF) and Cheniere Energy (LNG) while Icahn’s top holdings as of September 30, in order of size, were Icahn Enterprises, Herbalife, Cheniere Energy, Occidental Petroleum (OXY), and CVR Energy (CVI).

·     Starboard Value disclosed two new buys during the third quarter included Corteva (CTVA), while exited one position during the quarter, eBay (EBAY); increased its stake in eight holdings, including by size of previous position, Aecom (ACM), ACI Worldwide (ACIW), and Green Dot (GDOT) and reduced its stake in five holdings, including by size of previous position, Norton LifeLock (NLOK), Advance Auto Parts (AAP), and Cerner (CERN).

·     Soros Fund Management exited stakes in Bank of America (BAC), Bank of New York Mellon (BK), JPMorgan Chase (JPM), PNC Financial (PNC), Truist Financial (TFC), and Wells Fargo (WFC) during Q3, according to its latest 13F filing; adds stakes in Palantir Technologies (PLTR) (~18.5M shares), Disney (DIS) and Axalta Technologies (AXTA) and lowered stakes in PG&E (PCG) to ~2.46M shares from ~11.8M shares and NortonLifeLock (NLOK) to 2.31M shares from 4.80M shares.

 

Sector News Breakdown

Consumer

·     Casper Sleep (CSPR) 3Q EPS ($0.40) vs. est. ($0.33) on revs $123.5Mm vs. est. $145.9Mm; guides 4Q revs $132-142Mm vs. est. $142.95Mm

·     Target (TGT) shares called undervalued in Barron’s saying it is classified as a big-box retailer but these days the company looks more like a department store than any department store, and is using the department-store model to succeed where department stores can’t

 

Energy, Industrials & Materials

·     Gulfport Energy (GPOR) is the latest energy company filing for Chapter 11 bankruptcy saying as part of the restructuring plan, Gulfport says it expected to eliminate $1.25B in funded debt and significantly reduce annual cash interest expense.

 

Financials

·     Capital One (COF) reports October net charge-offs 3.11% vs. 3.95% last year and reports October 30-plus day delinquencies 2.19% vs. 3.79% last year.

·     Synchrony Financial (SYF) reported charge-offs for Oct. of +3% and Oct. delinquencies 1.76%

·     Discover Financial Services (DFS) credit card delinquency rate 1.31% at October end vs 1.28% at September end and credit card charge-off rate 1.88% at October end vs 1.98% at September end

·     Simon Property (SPG) and Taubman Centers (TCO) reached a definitive agreement modifying certain terms of the original merger agreement, including a modified purchase price of $43.00 per share in cash and other provisions to reduce closing conditionality. The modified merger agreement continues to provide that Simon will acquire an 80% ownership interest in The Taubman Realty Group Limited Partnership. The Taubman family will sell approximately one-third of its ownership interest at the transaction price and remain a 20% partner in TRG

 

Healthcare

·     Johnson & Johnson’s (JNJ) Janssen unit expands its partnership with the Department of Health and Human Services where Janssen will commit $604M and HHS’s Biomedical Advanced Research and Development Authority will commit $454M to support the ongoing Phase 3 ENSEMBLE trial evaluating Janssen’s investigational COVID-19 vaccine

·     Adverum Biotechnologies (ADVM) said wet age-related macular degeneration patients receiving its ADVM-022 continued to see a benefit as long as 92 weeks after the initial injection.

·     Atara Biotherapeutics (ATRA) said it intends to present 15-month safety and efficacy data from all patients in the two highest dose cohorts of the Phase 1a study of ATA188 at European Charcot Foundation meeting Nov 15-19 following patient responses that “likely indicate a treatment effect with ATA188,” said Jakob Dupont, Global Head, Research and Development at Atara.

·     Zosano Pharma (ZSAN) reports Q3 EPS loss (11c) vs. est. loss (10c); as of September 30, cash and cash equivalents were $43.6M as compared with $6.3M as of December 31, 2019

·     ObsEva (OBSV) rises 15%; after announcing positive topline results of PROLONG, the Phase 2a proof-of-concept trial of ebopiprant (OBE002) in preterm labor.

·     Lipocine (LPCN) files $150M mixed securities shelf

 

Technology, Media & Telecom

·     JD.com (JD) Q3 Non-GAAP EPS of $0.50 beats by $0.09; GAAP EPS of $0.69 beats by $0.38; Q3 revenue of $25.7B (+36.0% Y/Y) misses by $40M; annual active customer accounts increased by 32.1% y/y to 441.6M in TTM ended Sept. 30, 2020

·     Logitech (LOGI) positive mention in Barron’s noting it has been one of the big winners of the coronavirus crisis, raising guidance twice already this year thanks to strong sales of webcams, keyboards, and software to workers locked down at home, while the stock could have further to rise, as working from home becomes an enduring trend

·     Micron (MU) called a cheap play on 5G, electric vehicle according to Barron’s saying investors have long viewed memory as a commodity and while says the outlook for Micron is brightening – and the stock could double from here

·     Intel (INTC) positive mention in Barron’s saying at less than 10 times expected earnings for the next 12 months, trades as if it’s the next General Electric (GE) – a manufacturing leader in steady decline. But Intel isn’t GE, and there are already signs of the chip maker’s rebound