Early Look

Tuesday, October 6, 2020

Futures	Up/Down	%	Last
DJ Industrials	8.00	0.03%	28,003
S&P 500	-6.50	0.19%	3,386
Nasdaq	-48.00	0.42%	11,421

 

 

Stock futures are looking mixed after markets advanced broadly on Monday, though technology stocks are looking weaker after reports indicate House Democrats investigating the power of big technology firms are looking at possibly breaking up the companies. Meanwhile, President Donald Trump returned to the White House after being hospitalized for Covid-19, and investors remained hopeful Washington would come through with further economic stimulus. In Asian markets, The Nikkei Index rose 121points to 23,433, the Shanghai Index was closed and the Hang Seng Index gained 212 points to 23,980. In Europe, the German DAX is up a few points around the12,830 level, while the FTSE 100 is down around -15 points to 5,925. Stocks surged on Monday amid positive updates on President Trump’s health status (as he was released from the hospital overnight) as well as continued optimism a deal on fiscal stimulus was near, as all 11 major S&P 500 sectors closed out the session higher. Hopes for a stimulus deal were juiced as U.S. House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin spoke by phone for about an hour on Monday and were preparing to talk again Tuesday. When it was all over, the S&P 500 ended near the highs of the day and settled above 3,400 for the first time in a few weeks while the Dow Jones Industrial Average closed above the 28,000 level and the Nasdaq outperformed rising over 2.3%. The SmallCap Russell 2000 index was the top performer as energy and financials benefitted from a spike in oil prices and Treasury yields (longer rates at five-week highs as the 10-year yield is at 0.77%, the 20-year rose to 1.34% and the 30-year yield was at 1.58%, up nearly 10 basis points).

Market Closing Prices Yesterday

·     The S&P 500 Index surged 60.19 points, or 1.80%, to 3,408.63

·     The Dow Jones Industrial Average rose 465.83 points, or 1.68%, to 28,148.64

·     The Nasdaq Composite jumped 257.47 points, or 2.32%, to 11,332.49

·     The Russell 2000 Index advanced 42.67 points, or 2.77% to 1,581.96

 

Economic Calendar for Today

·     7:45 AM EST      ICSC Weekly Retail Sales

·     8:55 AM EST      Johnson/Redbook Weekly Sales

·     10:00 AM EST    JOLTs Job Openings for August

·     10:40 AM EST    Fed Chairman Powell addresses NABE Conference in Chicago

·     2:00 PM EST       Fed’s Bostic to speak to Leadership Florida

·     4:30 PM EST       API Weekly Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: PAYX

·     Earnings After the Close: LEVI, LNDC

 

Other Key Events:

·     Chardan Genetics Medicines Virtual Conference, 10/5-10/7

·     Deutsche Bank Virtual Leveraged Finance Conference, 10/5-10/7

·     2020 North American Spine Society Virtual Meeting, 10/6-10/9

 

 

Macro	Up/Down	Last
WTI Crude	0.44	39.66
Brent	0.47	41.76
Gold	-0.20	1,913.30
EUR/USD	-0.0003	1.1780
JPY/USD	-0.16	105.59
10-Year Note	-0.013	0.77%

 

 

World News

·     Fed’s Bullard said he expects the US economy will briskly snap back but that doesn’t mean there’ll be a reason for the Fed to move away from their accommodative monetary policy stance

·     German Aug Factory Orders: +4.5% m/m vs +2.6% cons; -2.2% y/y vs -3.8% cons

·     German Aug Markit Construction PMI: 45.5 vs 48.0 prior

·     UK Sep Markit Cons PMI: 56.8 vs 54.0 cons

 

Sector News Breakdown

Consumer

·     Fiesta Restaurant (FRGI) said that Q3 Pollo Tropical comp store sales fell (-11.1%), improving form the (-31.6% level in Q2) while Taco Cabana fell (-14.2%)

·     LGI Homes (LGIH) announced 811 home closings in September 2020, up from 654 home closings, representing YoY growth of 24.0%; also announced record-breaking quarterly home closings of 2,091 during Q3’20 compared to 2,003 home closings in the Q3’19, a 4.4% increase YoY

 

Energy, Industrials and Materials

·     Exxon Mobil Corp. (XOM) said it will cut its workforce in Europe as it works to cut costs in face of diminished demand with the pandemic. Exxon did not detail where or when the layoffs will take place, saying that it expects that up to 1,600 positions would be impacted by the end of next year

·     AECOM (ACM) advances the next stage of its strategy with integration of its design businesses into one global organization

·     Vontier (VNT) will be added to the S&P 500 effective prior to the opening of trading on Friday, October 9, replacing Noble Energy (NBL), which will be removed from the S&P 500 effective prior to the open of trading on Monday, October 12. Vontier will be added to the S&P 500 following its spin-off from S&P 500 constituent Fortive (FTV). Post spin-off, Fortive will remain in the S&P 500

 

Healthcare

·     Iovance (IOVA) shares fell over -20%; said it has not reached agreement with the FDA on the required potency assays to fully define its tumor-infiltrating lymphocyte therapy lifileucel in metastatic melanoma; as a result, a marketing application submission is not expected this year; company expects a submission will occur in 2021

·     Puma Biotechnology (PBYI) announces publication of overall survival results from phase III Extenet trial evaluating neratinib in her2-positive, hormone receptor-positive, early stage breast cancer; data published online in clinical breast cancer

·     GlycoMimetics (GLYC) announced that the U.S. FDA has granted the company a Rare Pediatric Disease designation for rivipansel for the treatment of sickle cell disease in patients 18 years old and younger

·     miRagen Therapeutics (MGEN) said an internal review of preliminary topline data from mid-stage trial of cancer therapy cobomarsen shows the treatment did not meet study’s main goal

·     BioNTech (BNTX) shares rise after Europe’s health regulator starts a rolling review of the experimental COVID-19 vaccine being developed by BioNTech (BNTX) and Pfizer (PFE)

·     Syneos Health (SYNH) upgraded to Buy from Neutral at Mizuho

 

Technology, Media & Telecom

·     Rep. Ken Buck, a Republican, says the Democrats are drafting ideas that would limit future acquisitions of giants such as Amazon (AMZN), Google owner Alphabet (GOOGL), Apple (AAPL), and Facebook (FB). Buck said he agreed with some of the measures, while disagreeing with more far-reaching breakup proposals.

·     Alteryx (AYX) shares rise over 20% as raises Q3 revenue guidance view to $126M-$118M from prior $111M-$115M view (est. $113.6M) representing 22% to 24% year-over-year growth; announced that Mark Anderson, a current member of Alteryx’s Board of Directors, has been appointed to succeed Dean Stoecker, Alteryx’s Co-founder, Chairman and current CEO

·     Himax (HIMX) issued prelim Q3 revs of $239.9M, above the $175.3M estimate as Q3 rev, gross margin and EPS all exceed outlook issued on Aug. 6 citing continued strong business momentum across all our major business sectors in Q4

·     Sonos (SONO) shares slip after Bloomberg reported Apple (AAPL) has stopped selling headphones and wireless speakers from rivals including SONO, Bose Corp and Logitech International (LOGI) as it gears up to launch new audio products

·     American Superconductor (AMSC) reports preliminary Q2 EPS less than (30c) vs. est. loss (19c) and preliminary Q2 revenue $20.5M-$21.5M vs. est. $18.77M; said it expects its cash, cash equivalents, marketable securities and restricted cash at September 30 to be approximately $57M, which is in line with the company’s previous guidance provided on August 5

·     Avalara (AVLR) acquires Transaction Tax Resources, Inc. for $377M in cash, enhancing its enterprise capabilities and creating the leading content database for tax

·     Super Micro Computer (SMCI) announces its attention to support Nvidia’s new BlueField-2 DPUs, which are sampling now.

·     A U.S. judge on Monday ordered Cisco Systems Inc (CSCO) to pay $1.9 billion to a Virginia company that accused it of copying its cybersecurity patents.

·     Cybersecurity pioneer John McAfee was arrested in Spain for tax evasion in the U.S., the Justice Department in Washington said. McAfee is accused of failing to file U.S. tax returns from 2014 to 2018 and hiding assets