Early Look

Tuesday, November 24, 2020

Futures	Up/Down	%	Last
DJ Industrials	315.00	1.08%	29,865
S&P 500	29.50	0.82%	3,605
Nasdaq	46.50	0.39%	11,951

 

 

Stock futures are surging yet again, boosted by news that U.S. President-elect Joe Biden was given the go-ahead to begin his White House transition, which added to an already brighter mood from progress made on COVID-19 vaccine and the prospects for a speedy global economic revival. President Donald Trump tweeted that he had told his team “do what needs to be done with regard to initial protocols”, an indication he was moving toward a transition after weeks of legal challenges to the election results. U.S. stocks also got an added boost after reports that Biden plans to nominate former Federal Reserve Chair, Janet Yellen, to become the next Treasury Secretary. News that Biden selected former Fed Chair Janet Yellen as Treasury Secretary (who was very dovish as Chair President) helped rally markets late day yesterday (also a sigh of relief it wasn’t Elizabeth Warren who is not looked upon markets favorably). Gold prices tumble further to fresh 4-month lows as investors pour money into global equities. The SmallCap Russell 2000 index poised to open at another record all-time high as the rotation into cyclical sectors continues with retailers, energy financials and industrials all rising. U.S. Treasury yields moved higher on Monday and the yield curve steepened. In Asian markets, The Nikkei Index surged 638 points (2.5%) to 26,165, the Shanghai Index slipped -11 points to 3,402 and the Hang Seng Index gained 102 points to 26,588. In Europe, the German DAX is up about 125 points to 12,350, while the FTSE 100 rises over 70 points to top the 6,400 level.

Economic Calendar for Today

·     7:45 AM EST      ICSC Weekly Retail Sales

·     8:55 AM EST      Johnson/Redbook Weekly Sales

·     9:00 AM EST      Monthly Home Price Index for September…prior 1.5%

·     9:00 AM EST      CaseShiller 20 city for September…est. 0.7%

·     10:00 AM EST    Consumer Confidence for November…est. 98.0

·     10:00 AM EST    Richmond Fed Manufacturing for November…prior 29

·     4:30 PM EST       API Weekly Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: ADI, AMWD, ANF, BBY, BURL, CHS, DKS, DLTR, DY, EV, HRL, IMBI, J, MOV, PLAN, SJM, TITN

·     Earnings After the Close: ADSK, AEO, DELL, GPS, HPQ, JWN, PSTG, QADB, VMW

 

Market Closing Prices Yesterday

·     The S&P 500 Index gained 20.05 points, or 0.56%, to 3,577.59

·     The Dow Jones Industrial Average rose 327.79 points, or 1.12%, to 29,591.27

·     The Nasdaq Composite climbed 25.66 points, or 0.22%, to 11,880.63

·     The Russell 2000 Index advanced 32.96 points, or 1.85% to 1,818.30

 

 

Macro	Up/Down	Last
WTI Crude	0.53	43.59
Brent	0.52	46.58
Gold	-28.10	1,809.75
EUR/USD	0.0036	1.1877
JPY/USD	-0.17	104.35
10-Year Note	+0.007	0.86%

 

 

World News

·     President Donald Trump’s administration cleared the way for President-elect Joe Biden to transition to the White House, giving him access to briefings and funding even as Trump vowed to continue fighting the election results

 

Sector News Breakdown

Consumer

·     Urban Outfitters (URBN) Q3 EPS 78c vs. est. 44c and revs $969.61M vs. est. $924.23M; Q3 comps retail segment net sales were flat as a result of negative retail store sales driven by lower store productivity due to reduced store traffic, offset by double-digit growth in the digital channel; brand breakdown: comp retail segment net sales increased 17% at Free People and 4% at Urban Outfitters and decreased 9% at the Anthropologie Group; 3Q gross margin 33.3% vs. 32.5% YoY and 3Q inventory $489.2 million, -8% YoY

·     Tiffany (TIF) Q3 adjusted EPS $1.11 vs. est. 66c; Q3 revenue $1B vs. est. $980.71M; Q3 comp store sales rose 3% YoY; on a constant-exchange-rate basis, net sales decreased 2% and comp sales increased 1% from the prior year; net inventories at October 31 were down -4% YoY

·     American Woodmark (AMWD) Q2 adjusted EPS $1.97 vs. est. $1.88 and revs $448.6M vs. the consensus $451.68M; said achieved adjusted EBITDA margins of 14.5% and we paid down $40.0Mof our term loan facility

·     Hormel (HRL) raises its quarterly dividend by 5% to 24.5c; reports Q4 EPS 43c vs. est. 44c and reports Q4 revenue $2.42B vs. est. $2.59B

·     L Catterton, the largest and most global consumer-focused private equity firm sells Cholula, a leading producer and distributor of hot sauce to McCormick & Company (MKC) for $800M

 

Energy

·     Cabot (CBT) Q4 adjusted EPS 68c on revs $659M vs. est. 54c and $675M; Liquidity remains strong at approximately $1.4 billion; Debt decreased by $69 million during the quarter; Debt to EBITDA ratio of 2.9 times as of September 30, 2020; sees Q1 EPS 80c-90c vs. est. 54c

·     SPI Energy (SPI) rises 17%; as its all-electric zero emission shuttle bus will serve the Santa Cruz trolley, replacing their existing wooden trolleys and helping to promote the City’s sustainability goals

·     Sempra Energy (SRE) says its California utilities Southern California Gas and San Diego Gas & Electric are developing a program to use surplus renewable electricity generated in the middle of the day to produce green hydrogen that can be injected into the natural gas grid to help cut carbon emissions.

 

Financials

·     BlackRock (BLK) agreed to buy Aperio from Golden Gate Capital for $1.05B in cash, adding customized indexing capabilities to BlackRock’s wealth platform with tax-managed equities, factors and ESG strategies.

·     Eaton Vance (EV) declares special dividend $4.25 per share

·     Monmouth Real Estate Investment’s (MNR) Q4 earnings fell mostly due to lower dividend income from its securities investments and an increase in its preferred dividend expense; Q4 adjusted FFO of 20c vs. est. 21c; portfolio occupancy was 99.4% for the quarter ended Sept. 30, 2020, a 50 basis-point increase over the year-ago period.

 

Healthcare

·     Agilent (A) Q4 EPS 98c vs. est. 93c and revs $1.48B vs. est. $1.4B; 2021 revenue expected in the range of $5.6 billion to $5.7 billion (est. $5.67B), representing reported growth of 5% to 7% and core growth of 4% to 6%. Fiscal year 2021 non-GAAP earnings guidance of $3.57 to $3.67 per share (est. $3.68); Diagnostics and Genomics Group (DGG) generated fourth-quarter revenue of $294 million, up a reported 9% YoY

·     Arrowhead (ARWR) said in qtr., earned a $20 million milestone payment from Amgen following the administration of the first dose of AMG 890, now called olpasiran, in a Phase 2 clinical study; reports FY20 EPS (84c) loss and revenue $87.99M

·     Enanta (ENTA) Q4 EPS loss ($1.46) on revs $23.6M vs. est. loss (95c) and $25.74M; cash, cash equivalents and marketable securities totaled approximately $419 million at September 30, 2020. This compares to a total of approximately $400 million at September 30, 2019

·     Ionis Pharmaceuticals (IONS) said AstraZeneca (AZN) has licensed ION455, an investigational antisense medicine being developed as a potential treatment for nonalcoholic steatohepatitis

 

Industrials and Materials

·     Dycom (DY) Q3 adj. EPS $1.06 on revs $810.26M vs. est. $1.05 and $817.69M; said sees modestly lower contract revenues in Q4, consensus $744.13M

·     Ferroglobe (GSM) reported Q3 adj loss of (14c) vs. (10c) the year prior and lower sales falling over 45% to $262M, as COVID-19 pandemic hammered demand for its products; says it is difficult to forecast all impacts of COVID-19 pandemic which affected demand for their products in Q3

·     General Electric (GE) upgraded to Outperform from Perform at Oppenheimer

·     Huntington Ingalls Industries (HII) announces that its Newport News Shipbuilding division has been awarded a $2.2B contract modification from General Dynamics Electric Boat in support of construction on the first two Columbia-class ballistic missile submarines.

·     Paccar (PCAR) downgraded to Hold from Buy at Deutsche Bank

 

Technology, Media & Telecom

·     Ambarella (AMBA) Q3 EPS 9c vs. est. 5c and revs $56.1M vs. est. $55M; sees Q4 revs $56M-$60M vs. est. $51.8M, gross margin of 59-61%, and operating expenses of $31-33M

·     Datto (MSP) Q3 subscription revenue grew 17% y/y to $122.8M, ARR grew 17% year-over-year to $522.8M, Q3 adjusted EPS 18c on revs $130.67M vs. est. 19c and $130.27M; sees FY20 revenue $512.8M-$514.8M vs. est. $509.91M and sees FY20 adjusted EBITDA $147.7-$148.7M

·     Nutanix (NTNX) Q1 adjusted EPS loss (44c) on revs $312.8M vs. est. loss (57c) and $299.24M; 1Q adjusted gross margin improved 180 bps on the year to 81.9% vs. 80.1% YoY; Q1 billings fell -12% YoY to $334.9M and subscription revs $278.2M; Q1 ACV billings $137.8M and sees Q2 ACV billings $145M-$148M

·     MercadoLibre (MELI) has selected Amazon Web Services (AWS), an Amazon.com company (AMZN) as its primary cloud provider to support the development of a common platform

·     HF Enterprises (HFEN) 2.16M share Secondary priced at $7.00