Early Look

Thursday, October 29, 2020

Futures	Up/Down	%	Last
DJ Industrials	147.00	0.56%	26,556
S&P 500	22.50	0.69%	3,286
Nasdaq	109.50	0.98%	11,242

 

 

Stocks futures are bouncing following the sharpest drop for U.S. stocks since June, as a recent resurgence in the number of deaths and hospitalizations due to COVID-19 has thrown a curve ball to investors that fear the economic recovery will be interrupted. On the economic calendar, investors will get the last GDP reading before the election. Forecasts are for annualized growth of 31% in Q3, a record high, but that comes after a record annualized decline of 31.4% in Q2. But today marks the biggest day of earnings of the quarter (at least among the most important), which tech giants Apple, Amazon, Facebook and Google all expected to report results after the close along with other high-profile names such as Twitter and Starbucks. Social media stocks got another boost last night after Pinterest (PINS) strong results sent shares soaring 30%, while semiconductors get another potential M&A deal, with INPHI shares rising 40% on a WSJ report that MRVL is looking to buy the company (would follow the recent $35B deal AMD for XLNX). The CBOE Volatility Index (VIX) jumped more than 18% to its highest level since June. WTI crude futures fall further, down over 4% to the lowest levels since mid-June.

 

Stocks dropped sharply on Wednesday, as investors nervously eyed elevated coronavirus case counts in the U.S. and Europe, weighed outcomes of Election Day next week and contemplated when another round of fiscal stimulus out of Washington might get passed. The drop in domestic equities came alongside a plunge in European stocks, with the STOXX 600 selling off and hitting the lowest level since May. Concerns of even more restrictions across the region weighed on global risk assets, with French President Emmanuel Macron imposing a new national lockdown, effective Friday, as cases in the region jump. Germany also announced a one-month partial lockdown earlier in the day, which will span all of November. In Asian markets, The Nikkei Index fell -86 points to 23,331, the Shanghai Index gained 3 points to 3,272 and the Hang Seng Index dropped -122 points to 24,586. In Europe, the German DAX is higher by 35 points to move just under 11,600, while the FTSE 100 is up a few points to 5,590.

Market Closing Prices Yesterday

·     The S&P 500 Index plunged -119.65 points, or 3.53%, to 3,271.03

·     The Dow Jones Industrial Average fell -943.24 points, or 3.43%, to 26,519.95

·     The Nasdaq Composite dropped -426.48 points, or 3.73%, to 11,004.87

·     The Russell 2000 Index declined -47.21 points, or 2.97% to 1,543.28

 

Economic Calendar for Today

·     8:30 AM EST      Weekly Jobless Claims…est. 775K

·     8:30 AM EST      Continuing Claims…est. 7.70M

·     8:30 AM EST      Q3 Gross Domestic Product (GDP)…est. 31.0%

·     8:30 AM EST      GDP Price Deflator…est. 2.8%

·     8:30 AM EST      Q3 Personal Consumption…

·     8:30 AM EST      Q3 PCE Core Prices…est. 4.0%

·     10:00 AM EST    Pending Home Sales MoM for September…est. 3.4%

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

 

Earnings Calendar:

·     Earnings Before the Open: ABMD, ADS, ALXN, AME, AMT, AOS, APO, APRN, ARW, ATI, BAX, BC, BCO, BWA, CARR, CBRE, CBZ, CFR, CG, CHD, CMCSA, CMS, CNX, COHU, COOP, COP, CRL, CTB, DD, DNKN, EME, EXP, FIS, GEP, GPI, GPN, HOME, ICE, IDXX, IP, K, KBR, KDP, KEX, KHC, KTB, LZA, MCO, MDC, MLM, MMC, MRNA, NBR, NEM, OSIS, OSK, PATK, PBF, PCG, PENN, PWR, RL, RLGY, SAH, SAIA, SNDR, TAP, TFX, TKR, TPR, TPX, TROW, TXT, USCR, VC, VNT, WAB, WD, WEX, XEL, XYL, YUM

·     Earnings After the Close: AAPL, ACHC, ADM, AIV, AMZN, ASPN, ATUS, ATVI, BAND, BE, BLDR, CAKE, CAR, CDNA, CENX, CHE, COG, COLM, CPT, CURO, VUZ, CVA, CVNA, CWST, DECK, DVA, DVN, EMN, ERII, ETH, EXAS, FB, FLEX, FND, FTNT, GOOGL, HIG, ILMN, IPHI, KN, LOCO, LPSN, MDRX, MGM, MHK, MPWR, MSI, MTZ, NATI, NUVA, OLED, PEB, PFPT, POWI, PTCT, QDEL, RMD, RRC, SBUX, SGEN, SHAK, SKX, SKYW, SWN, SYK, TWTR, VRTX, WRE, WU, WWE, X, ZEN

 

Other Key Events:

·     European Central Bank Meeting

·     Bank of Japan monetary meeting

 

 

Macro	Up/Down	Last
WTI Crude	-1.45	35.94
Brent	-1.41	37.71
Gold	0.30	1,877.50
EUR/USD	-0.0021	1.1725
JPY/USD	-0.26	104.06
10-Year Note	+0.042	0.78%

 

 

Sector News Breakdown

Consumer

·     Ford (F) Q3 adjusted EPS 65c on sales $37.5B vs. est. 16c and $32.86B; expects positive full-year 2020 adjusted ebit, including Q4 adjusted ebit between break-even and a $500 million loss; ended the period with cash of nearly $30 billion and total liquidity of more than $45 billion; says will reveal a new, all-electric transit van for global markets in November; sees temporarily lower F-150 wholesale shipments in Q4

·     LVMH Moet Hennessy Louis Vuitton SE (LVMUY) and Tiffany & Co. (TIF) announced that they have concluded an agreement modifying certain terms of their initial agreement to reflect a purchase price of $131.50 in cash and to reduce closing conditionality, down from their prior deal price of $135

·     Churchill Downs (CHDN) Q3 adj. EPS $1.19 on revs $337.8M (est. $293.5M) saying Q3 financial results were materially impacted by the rescheduling of the 146th Kentucky Oaks and Derby from Q2 to Q3 without spectators

·     O’Reilly (ORLY) Q3 EPS $7.07 on sales $3.21B vs. est. $6.34 and $3.02B; 3Q gross profit margin 52.4% vs. 53.3% YoY and 3Q comparable sales +16.9% vs. +5% YoY

·     Texas Roadhouse (TXRH) Q3 EPS 42c on sales $631.18M vs. est. 18c and $614.57M; said for the July, August, and September periods, comparable restaurant sales at company restaurants decreased 13.0%, 6.6%, and 0.5%, respectively; overall Q3 comp sales fell -6.3%

·     Yum China (YUMC) Q3 Adj EPS 66c on revs $2.35B vs. est. 47c and $2.29B; 3q comparable sales -6% vs. +2% YoY, Pizza Hut casual dining comparable sales -7% vs. +1% YoY; Q3 restaurant margin 18.6% vs. 17.7% YoY

 

Energy

·     Antero Midstream Corp (AM) 3Q revenue $233.4M vs. est. $215M; 3Q capital expenditure down -73% YoY to $36.8M; 3Q adjusted Ebitda $229 million, +5.2% YoY and EPS beat at 25c vs. est. 23c

·     QEP Resources (QEP) 3Q adj EPS $0.13 vs. est. $0.02 on revs $177.8Mm vs. est. $228.3Mm; sees total oil equivalent production 29.2-30.1 MMBOE

·     SunPower (SPWR) Q3 non-GAAP EPS loss (4c) on revs $274.8M vs. est. loss (5c) and $235.64M; still sees Q4 revenue $330M-$370M (est. $350.28M) and sees Q4 GAAP net income $11M-$21M; raises 2020 non-GAAP revenue view to $1.12-$1.16B from $1.06B-$1.10B and sees FY20 GAAP net income $190M-$200M and MW recognized in the range of 465 MW to 515 MW.

 

Financials

·     Visa (V) Q4 EPS $1.12 on revs $5.1B vs. est. $1.10 and $5.0B; Q4 cross-border volume excluding transactions within Europe declined 41%; total cross-border volume on a constant-dollar basis declined 29% in the quarter; total processed transactions were 37.4B, a 3% increase over the prior year; says not proving outlook for FY21

·     Ameriprise (AMP) Q3 adjusted EPS $4.27 on revs $3.0B vs. est. $2.43 and $3.0B; Advice & Wealth Management pretax adjusted operating earnings were $320 million. The year-over-year decline was driven by $116 million of lower revenue from the reduction in interest rates, primarily the Federal Funds effective rate, partially offset by strong wrap net inflows and continued expense management

 

Healthcare

·     Amgen (AMGN) 3Q adj EPS $4.37 vs. est. $3.81 on revs $6.42B vs. est. $6.38B, says revs driven by higher volume, partially offset by lower net selling prices and Covid effects; FY revs guide $25.1-25.5B vs. est. $25.4B, sees FY adj EPS $15.80-16.15 vs. est. $15.78

·     Cerner (CERN) announces its CFO to leave; Q3 adj EPS 72c was in-line with estimates on revs $1.37B (also in-line) and guided Q4 EPS 76c-80c vs. est. 78c on revs $1.365B-$1.415B vs. est. $1.39B; sees Q4 new business bookings between $1.550 billion and $1.750 billion

·     Gilead (GILD) 3Q adj EPS $2.11 vs. est. $1.90 on revs $6.6B vs. est. $6.3B; guides FY adj EPS $6.25-6.60 vs. est. $6.90, expects core business to gradually recover in 4Q and into 1H21; reports 17% rise in quarterly revenue, helped by sales of antiviral drug remdesivir which brought in $873M in Q3, vs. est. of $960M

·     Molina Healthcare (MOH) 3Q adj EPS $3.36 vs. est. $2.17, medical care ratio was 85.9% vs. 86.3% year ago; guides FY revs about $19.6B vs. est. $18.9B, sees FY EPS $11.20-11.70 vs. est. $11.63

·     PerkinElmer (PKI) Q3 adjusted EPS $2.09 vs. est. $1.50 and Q3 revenue $964.0M; guides Q4 adjusted EPS $2.60-$3.00 and sees Q4 GAAP revenue in the range of $1.12B-$1.23B

·     Teladoc (TDOC) Q3 EPS loss (43c) on revs $288.8M vs. est. loss (32c) and $281.99M; sees Q4 EPS loss (36c)-(33c) on revs $294M-$304M vs. est. loss (35c) and $287.21M

·     Scholar Rock (SRRK) 2.949M share Spot Secondary priced at $39.00

 

Industrials & Materials

·     Allison Transmission (ALSN) Q3 EPS 68c on revs $532M vs. est. 54c and $473.3M; sees FY20 revenue $2.025B-$2.075B vs. est. $2.0B; guidance reflects lower demand across all end markets except for the Defense end market as a result of the pandemic, partially offset by price increases on certain products

·     Carrier Global (CARR) Q3 adj EPS $0.67 vs. est. $0.46 on sales $5.0B vs. est. $4.35B, says plans to reduce debt by $1.5B in 4Q20; sees FY sales about $17.3B vs. est. $16.4B, sees FY adj op profit about $2.2B vs. est. $2.05B

·     DuPont (DD) Q3 adj. EPS 88c on revs $5.1B vs. est. 75c and $5B; guides FY20 adj. EPS $3.17-$3.21 vs. est. $3.03 and sales FY20 $20.1B-$20.2B vs. est. $20.1B

·     Textron (TXT) Q3 adj EPS 53c on revs $2.74B vs. est. 35c and $2.8B; reported a 48% fall in quarterly profit as aircraft deliveries dropped during the coronavirus crisis.

·     Rayonier (RYN) Q3 EPS 6c on revs $191.2M vs. est. 4c and $186.47M; says based on our year-to-date results and expectations for the fourth quarter, we anticipate that full-year Adjusted EBITDA will be modestly above the high end of our prior guidance while pro forma EPS will be around the high end of our prior guidance

·     Rent-A-Center (RCII) 3Q adj EPS $1.04 vs. est. $1.02 on revs $712Mm vs. est. $702Mm; guides FY revs $2.795-2.825B vs. est. $2.8B, sees FY adj EPS $3.35-3.50 vs. est. $3.36

·     United Rentals (URI) Q3 adj EPS $5.40 on revs $2.187B vs. est. $4.28 and $2.14B; raises FY20 revenue view to $8.35B-$8.45B from $8.05B-$8.45B (est. $8.36B) and ups FY20 adjusted EBITDA view to $3.825B-$3.875B from $3.6B-$3.8B

·     Werner (WERN) Q3 EPS 69c on revs $590.2M vs. est. 66c and $602.96M

·     Workhorse Group (WKHS) files to sell 6.82M shares of common stock for holders

 

Internet:

·     eBay (EBAY) 3Q adjusted EPS 85c on sales $2.61B vs. est. 80c and $2.58B; 3Q gross merchandise volume rose 15% YoY to $25.05 billion; Annual active buyers grew by 5%, for a total of 183M global active buyers; sees Q4 adj EPS 68c-74 and year $3.00-$3.06

·     Etsy Inc. (ETSY) 3Q EPS $0.70 vs. est. $0.60 on revs $451.5Mm vs. est. $413Mm; sees 4Q revs +70-90% vs. est. +63%

·     Pinterest (PINS) Q3 adj EPS 13c on revs $443M vs. est. 2c and $387.6M; 3q monthly active users 442 million, +37% YoY; Q3 adjusted Ebitda $93M vs. $3.87M YoY; current expectation is that Q4 revenue will grow around 60% year over year, a modest acceleration compared to our growth rate in Q3

·     Spotify Technology SA (SPOT) forecast strong growth in the current quarter as more users tuned in to its streaming music service; said premium subscribers rose 27% to 144 million from a year earlier, beating the view of roughly 142.5M and expects total premium subscribers in the range of 150M-154M

 

Technology, Media & Telecom

·     Marvell Technology Group Ltd. (MRVL) is nearing a deal to buy Inphi Corp. (INPHI) for as much as $10 billion, according to people familiar with the matter, in what would be the second big semiconductor tie-up this week as the industry consolidates https://on.wsj.com/3kDyW81 

·     Cognex (CGNX) 3Q adj EPS $0.47 vs. est. $0.31 on revs $251.1Mm vs. est. $213.5Mm; guides 4Q revs $190-210Mm vs. est. $178.9Mm; increases qtrly dividend to $0.06

·     Cognizant (CTSH) Q3 adjusted EPS 97c on revs $4.2B vs. est. 90c and $4.15B; raises FY20 adjusted EPS view to $3.63-$3.67 from $3.48-$3.58 (est. $3.53) while narrows FY20 revenue view to $16.7B from $16.4B-$16.7B (est. $16.54B)

·     Cree (CREE) Q1 adjusted EPS loss (19c) on revs $216.6M vs. est. loss (21c) and $209.88M; sees Q2 adjusted EPS loss (27c)-(23c) more than the consensus (18c) and sees Q2 revenue from continuing operations $118M-$124M

·     Fastly (FSLY) Q3 EPS loss (4c) on revs $71M vs. est. 0c and $73.57M; Q3 Net Retention Rate (NRR) of 122%, compared to 138% in Q2, last-twelve-month NRR of 141%, up from 136% in Q2 20203; said total customer count increased to 2,047 up from 1,951 in Q2 2020 and total enterprise customer count of 313, up from 304 in Q2 2020

·     Impinj Inc. (PI) 3Q adj EPS ($0.29) vs. est. $($0.32) on revs $28.2Mm vs. est. $24.7Mm; guides 4Q adj loss/shr $0.40-0.34 vs. est. ($0.27), sees 4Q revs $2.5-28.5Mm vs. est. $28.25Mm

·     Inovalon (INOV) Q3 EPS 16c on revs $161.4M vs. est. 16c and below $179.71M; reports Q3 subscription-based platform revenue of $142.5M, up 1% year-over-year, equating to 88% of Q3 total revenue; lowers FY20 revenue guidance to $657M-$668M from $675M-$698M (est. $685.21M)

·     KLA-Tencor (KLAC) 1Q adj EPS $3.03 vs. est. $2.77 on revs $1.54B vs. est. $1.49, sees 2Q revs $1.51-1.66B vs. est. $1.5B, sees 2Q adj EPS $2.82-3.46 vs. est. $2.80

·     PTC (PTC) Q4 non-GAAP EPS 78c on revs $390.98M vs. est. 55c and $356.5M as results came from financial statements posted to company’s website prior to expected release after the close

·     ServiceNow (NOW) 3Q adj EPS $1.21 vs. est. $1.03 on revs $1.15B vs. est. $1.1B, subscription revs $1.09B vs. est. $1.06B; guides FY subscription revs $4.257-4.262B vs. est. $4.24B

·     Western Digital (WDC) 1Q adj EPS $0.65 vs. est. $0.55 on revs $3.9B vs. est. $3.84B; guides 2Q adj EPS $0.40-0.60 vs. est. $0.62, sees 2Q revs $3.75-3.95B vs. est. $3.85B