Early Look

Thursday, November 19, 2020

Futures	Up/Down	%	Last
DJ Industrials	-105.00	0.36%	29,285
S&P 500	-10.50	0.30%	3,554
Nasdaq	-46.50	0.39%	11,850

 

 

U.S. stock futures are pulling back for a second day after major averages were unable to hold record gains on Wednesday, plunging into the close after New York City’s mayor said the largest U.S. school district will halt in-person learning starting today after the city reached a threshold of a 3% positive COVID-19 test rate over the last seven days. Markets have recently been weighing the surge in coronavirus cases in the U.S. and Europe against a recent flood of positive vaccine news. While the S&P 500 spent most of the morning in positive territory, the benchmark index turned lower in afternoon trading and then sold off sharply in the last 45 minutes of the session. Of the three major averages, the Nasdaq held up best, with a 0.8% decline, versus losses of 1.2% for both the S&P 500 and the Dow. The Russell 2000 and Dow Transports each pulled back after touching record intraday highs. For a 4^th consecutive day there is positive news on the vaccine front as the University of Oxford, which is working in collaboration with AstraZeneca (AZN), was shown to have generated a healthy immune response in adults in their 60s and 70s. Preliminary results revealed that the vaccine, ChAdOx1 nCoV-19, prompted what’s known as a “T-cell response” within 14 days of the first dose, as well as an antibody response within 28 days of a booster dose. On today’s economic calendar, initial jobless claims will likely come in at 710,000, roughly flat compared with the prior week. Forty-one U.S. states have reported daily record increases in COVID-19 cases in November, 20 have registered new all-time highs in coronavirus-related deaths from day to day, and 26 have reported new peaks in hospitalizations, according to Reuters. In Asian markets, The Nikkei Index dropped -93 points to 25,634, the Shanghai Index rose 15 points to 3,363 and the Hang Seng Index fell -187 points to 26,356. In Europe, the German DAX is lower by 140 points to 13,060, while the FTSE 100 slipped over 60 points to 6,320.

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -41.74 points, or 1.16%, to 3,567.79

·     The Dow Jones Industrial Average fell -344.93 points, or 1.16%, to 29,438.42

·     The Nasdaq Composite dropped -97.74 points, or 0.82%, to 11,801.60

·     The Russell 2000 Index declined -22.60 points, or 1.26% to 1,769.32

 

Economic Calendar for Today

·     8:30 AM EST      Weekly Jobless Claims…est. 707K

·     8:30 AM EST      Continuing Claims…est. 6.47M

·     8:30 AM EST      Philly Fed Business Index for November…est. 22.0

·     10:00 AM EST    Existing Home Sales MoM for October…est. 6.45M

·     10:00 AM EST    Leading Index for Oct…est. 0.7%

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

·     11:00 AM EST    Kansas City Fed Manufacturing for November

 

Earnings Calendar:

·     Earnings Before the Open: ATKR, BERY, BJ, BRC, CSIQ, M, MMS, NTES, OCSI, OCSL, ONEW, QIWI

·     Earnings After the Close: AMSWA, ASYS, BECN, BRBR, CAL, DLA, EAR, ESE, GEOS, HP, IIIV, INTU, MATW, NGVC, OOMA, POST, ROST, WDAY, WWD

 

Other Key Events:

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

·     Cowen Annual Semi and Semi-cap Equipment Bus Tour, 11/17-11/20

·     Deutsche Bank Gaming, Lodging and Leisure Virtual Conference, 11/19-11/20

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

·     REITWorld 2020 Annual Virtual Conference, 11/17-11/19

·     Oppenheimer Virtual Internet Bus Tour, 11/19-11/20

·     Wolfe Virtual Healthcare Conference, 11/18-11/19

 

 

Macro	Up/Down	Last
WTI Crude	-0.61	41.21
Brent	-0.40	43.94
Gold	-11.40	1,860.85
EUR/USD	-0.0028	1.1825
JPY/USD	0.30	104.12
10-Year Note	-0.027	0.855%

 

 

World News

·     The Turkish lira rises vs. the dollar after the central bank raised its key interest rate by 475 basis points to 15% from 10.25%. Turkey’s central bank said it decided to implement “transparent and strong monetary tightening” to reign in high inflation resulting from a weaker lira. It said it will continue to tighten policy further until a “permanent fall” in inflation is achieved.

·     ECB’s LaGarde: Key challenge for policy makers will be to bridge the gap until vaccination can build its own momentum; surge in virus cases add to heightened level of uncertainty; indicators signal that Euro Area activity lost momentum going into Q4; economy is expected to be severely affected by fallout

 

Sector News Breakdown

Consumer

·     L Brands (LB) 3Q adj EPS $1.13 vs. est. $0.09 on sales $3.055B vs. est. $2.67B, comps +28%; Bath & Body Works reported a Q3 comparable store sales increase of 56% including direct, or 38%, stores only; Victoria’s Secret reported a Q3 comparable store sales increase of 4% including direct, or decrease of 10%, stores only; says as we head into holidays we are cautious about our ability to exceed last year’s Q4 sales and earnings results

·     Jack in the Box (JACK) 4Q adj EPS $1.61 vs. est. $1.14 on revs $255.4Mm vs. est. $249.2Mm; Q4 Jack system comparable sales +12.2% vs. +3% y/y, and estimate +8.40%; Q4 Jack company comp sales +9.6% vs. +3.50% y/y and franchise comparable sales +12.4% vs. +3% y/y

·     Alaska Air Group (ALK) reports revenue passenger miles declined 64% Y/Y in to 1.4M in October, with capacity reduction of 45%; total revenue squeezed 62% Y/Y; load factor was 49% vs. 47% in September and 46% in August.

·     Coca-Cola (KO) placed too much of its profit in its foreign operations instead of its higher-taxed domestic parent company according to a U.S. tax judge, backing the Internal Revenue Service, which has been seeking more than $3.3B from the company for the 2007-09 tax years.

·     Lear Corp. (LEA) resumes dividend of 25c

·     Playa Hotels & Resorts (PLYA) 13.6M share Secondary priced at $4.10

·     Yatsen (YSG) 58.75M share IPO priced at $10.50

·     Shoe Carnival (SCVL) Q3 EPS $1.03 on revs $274.6M vs. est. 70c and $275.58M; Q3 comp store sales up 0.9% and E-commerce sales up over 150% from last year; Q3 gross margin 32% vs. 30.9% YoY; not providing guidance for the year; sees 4 store openings and 13 store closures during 2020

·     Universal Technical (UTI) Q4 EPS 9c in-line with estimates on revs $76.3M vs. est. $85.5M; new student starts increased 1.1% on a comparable basis but were down 10.3% when including the July 1, 2019 start date; expects double-digit growth in new student starts, rev, adjusted Ebitda, net income, and adj free cash flow in 2021

 

Energy, Industrials and Materials

·     Canadian Solar (CSIQ) Q3 EPS 15c on revs $914.36M vs. est. loss (5c) and $861.93M; reports Q3 solar module shipments of 3.2 GW, exceeding guidance of 2.9 GW to 3.1 GW; reiterates 2021 module shipment guidance of 18 GW to 20 GW

·     Kraton Corporation (KRA) announces a general price increase of up to 10% for Tall Oil Fatty Acids (TOFA); subject to the terms of any applicable contracts, this price increase will take effect January 1, 2021

·     Transocean Ltd. (RIG) said that Petrobras has exercised a 680-day preexisting, fixed price option for the Deepwater Corcovado, and a 815-day preexisting, fixed price option for the Deepwater Mykonos. Together these contract extensions add approximately $297 million to Transocean’s industry leading backlog. Both rigs will continue to operate in Brazil and are subject to annual indexed day rate escalations.

·     Cubic Corp. (CUB) 4Q adj EPS $2.82 vs. est. $2.04 on sales $475.4Mm vs. est. $479.6Mm; guides FY21 adj EPS $3.00-3.60 vs. est. $3.24, sees FY21 revs $1.55-1.6B vs. est. $1.54B

·     Ormat Technologies (ORA) 4.15M share Secondary priced at $74.00

 

Financials

·     Citi (C) has selected Mastercard (MA) as its network partner for the Citi Plex Account on Google Pay, a new digital checking and savings account

 

Healthcare

·     University of Oxford, which is working in collaboration with AstraZeneca (AZN), was shown to have generated a healthy immune response in adults in their 60s and 70s. Preliminary results revealed that the vaccine, ChAdOx1 nCoV-19, prompted what’s known as a “T-cell response” within 14 days of the first dose, as well as an antibody response within 28 days of a booster dose.

·     Agilent Technologies (A) raises quarterly dividend 7.8% to $19.4c from prior dividend of $18.0c

·     Berkeley Lights (BLI) 3M share Secondary priced at $86.00

·     SmileDirectClub (SDC) 5M share Block Trade priced at $10.70

·     Corcept Therapeutics (CORT) rose over 20% after a favorable ruling in Teva Pharmaceuticals’ (TEVA) challenge of its Korlym Label patent for Korlym; U.S. Patent Trial and Appeal Board upheld Corcept’s patent

·     Lantheus Holdings (LNTH) announced the FDA has approved the supplemental new drug application for DEFINITY Room Temperature Injectable Suspension

·     MeiraGTx Holdings (MGTX) announced that it has commenced an underwritten public offering of 5M of its ordinary shares

·     Olema Pharmaceuticals (OLMA) 11M share IPO priced at $19.00

·     Stoke Therapeutics (STOK) announces offering of 2.5M shares of common stock

·     QIAGEN (QGEN) announced a strategic collaboration with BioNTech SE (BNTX) to develop and commercialize a tissue-based companion diagnostic – to be used with investigational cancer treatment BNT113

 

Technology, Media & Telecom

·     NVIDIA (NVDA) Q3 adj EPS $2.91 on revs $4.73B vs. est. $2.58 and $4.42B; qtrly data center revenue of $1.90 bln, up 16% from a year earlier and qtrly gaming revenue of $2.27 bln, up 37% from a year earlier; sees 4q rev $4.80B plus or minus 2%, vs. est. $4.41B; Q4 Gaap and non-Gaap gross margins are expected to be 62.8% and 65.5%, respectively, plus or minus 50 basis points

·     Bilibili (BILI) Q3 Non-GAAP EPS of -$0.41 misses by $0.02; revenue of $475.1M (+82.7% Y/Y) beats by $6.93M; average monthly active users (MAUs) reached 197.2M (+54% Y/Y) and mobile MAUs reached 183.5M (+61% Y/Y); average daily active users at 53.3M (+42% Y/Y)

·     Camtek (CAMT) 3.5M share Secondary priced at $17.00

·     Neogames (NGMS) 4.81M share IPO price $17.00

·     Jamf Holding (JAMF) 11M share Secondary priced at $32.00

·     GoPro (GPRO) announces $100M convertible senior notes offering

·     Keysight Technologies (KEYS) Q4 adj EPS $1.62 on revs $1.22B vs. est. $1.46 and $1.18B; sees Q1 adj EPS $1.32-$1.38 vs. est. $1.25 and guides Q1 revenue $1.14B-$1.16B vs. est. $1.11B; 4Q Communications Solutions revenue $901M up 28% YoY and 4Q Electronic Industrial Solutions revenue $319M, +12% YoY

·     Kulicke & Soffa (KLIC) Q4 EPS 29c on revs $177.7M vs. est. 31c and $177.02M; sees Q1 EPS 48c-58c on revs $230M-$250M vs. est. 25c and $165.9M

·     NetEase (NTES) Q3 Non-GAAP EPS of $0.80 beats by $0.34; GAAP EPS of $0.65 beats by $0.40; revenue of $2.75B (+34.1% Y/Y) in-line.

·     Nuance (NUAN) Q4 adjusted EPS 18c on revs $352.9M vs. est. 16c and $345.72M; sees FY21 adj EPS 71c-77c vs. est. 87c and sees FY21 revenue $1.327B-$1.367B vs. est. $1.53B; sees FY21 adjusted gross margin ~66%

·     PagSeguro (PAGS) Q3 total revenue and income of R$1.78B (~US$330M) rose 22% YoY, primarily from its increase in total payment volume, topping the consensus estimate of R$1.74B; total payment volume jumped 52.5% YoY to R$44.8B; 6.7M active PagBank users, up 1.8M from Q/Q and 4.8M YoY

·     Palantir (PLTR) said the U.S. Army chose the company to receive one of two prototype contracts to support network design implementation for the Army’s next network modernization

·     Sonos Inc. (SONO) rises 23%; Q4 EPS 33c on revs $339.8M vs. est. 0c and $298.8M; sees FY21 revs $1.44B-$1.5B vs. est. $1.38B; announces $50 million stock repurchase program and completion of previous stock repurchase program

·     Warner Bros. (T) announced that Wonder Woman 1984 would arrive on HBO MAX on Dec. 25, the same day it hits theaters.