Early Look

Tuesday, September 29, 2020

Futures	Up/Down	%	Last
DJ Industrials	-15.00	0.05%	27,468
S&P 500	-1.50	0.04%	3,344
Nasdaq	-20.00	0.18%	11,374

 

 

Stock futures are looking slightly lower ahead of the first of three presidential debates tonight between President Trump and former Vice President Joe Biden at 9:00 PM (Oct 15^th and Oct 22^nd the other two), while increasing hopes of a new stimulus bill out of Washington grows after Democrats released their own version of a corona relief bill. Overnight, House Democrats released a $2.2 trillion coronavirus relief package that would restore $600 weekly jobless benefits, a last-ditch effort to revive stalled talks with the White House. The roughly $2.2 trillion legislation has a vote possible later this week, according to multiple Democratic aides. House Speaker Nancy Pelosi spoke with Treasury Secretary Steven Mnuchin Monday evening and the two agreed to talk again Tuesday morning, her spokesman said on Twitter. In Asian markets, The Nikkei Index rose 27 points to 23,539, the Shanghai Index gained 6 points to 3,224 and the Hang Seng Index declined -200 points to 23,275. In Europe, the German DAX is down about -50 points to 12,820, while the FTSE 100 is lower by about -20 points to 5,900. There are also a handful of economic data points this morning including Consumer Confidence and housing data.

 

Monday’s rallied from beginning to end with cyclical stocks leading the way as the S&P 500 index closed up 1.6%, the Nasdaq ended up 1.9% and the Dow was up 1.5% as all 11 S&P sectors closed in the green. The top leaders were beaten up energy stocks following an M&A deal in the E&P sector (WPX/DVN agree to merger of equals) while financials jumped led by strength in regional banks. Technology added to last Friday gains with the Nasdaq Composite moving back above its 50-day moving average of 11,025 (firmly rising above the 11,100 level). Market talk of some progress toward a fresh coronavirus aid package in Washington has helped lift stocks the last two trading sessions, helping offset the recent rise of global COVID-19 cases (especially in Europe) and a fear of a second wave this fall.

 

Market Closing Prices Yesterday

·     The S&P 500 Index surged 53.14 points, or 1.61%, to 3,351.60

·     The Dow Jones Industrial Average rose 410.10 points, or 1.51%, to 27,584.06

·     The Nasdaq Composite spiked 203.96 points, or 1.87%, to 11,117.53

·     The Russell 2000 Index advanced 35.43 points, or 2.40% to 1,510.34

 

Economic Calendar for Today

·     7:45 AM EST      ICSC Weekly Retail Sales

·     8:30 AM EST      Advance Goods Trade Balance for August

·     8:55 AM EST      Johnson/Redbook Weekly Sales

·     9:00 AM EST      S&P CaseShiller House Index for July

·     10:00 AM EST    Consumer Confidence for September

·     4:30 PM EST       API Weekly Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: ANGO, MKC

·     Earnings After the Close: PRGS, MU, SNX

 

Other Key Events:

·     China Caixin Manufacturing PMI for September

·     China NBS Manufacturing PMI for September

·     Paris Auto Conference, 9/29-9/30

·     Piper Oil Field SMID virtual Symposium

 

 

Macro	Up/Down	Last
WTI Crude	-0.16	40.44
Brent	-0.13	42.30
Gold	3.50	1,885.00
EUR/USD	0.0026	1.1692
JPY/USD	0.14	105.64
10-Year Note	-0.016	0.65%

 

 

IPO Calendar this week:

·     September 29^th

–Chindata Group (CD) 40 million shares ($12-$14 price range)

–Yalla Group (YALA) offering 18.6 million shares ($7-$9 range

·     September 30^th
–Palantir Technologies (PLTR) registered 257.2 million shares for a direct listing on the NYSE in ($25 billion deal)

–Mission Produce (AVO) offering 9.4 million shares ($15-$17 range)

–Pulmonx (LUNG) offering 6.7 million shares ($14-$16 range)

·     October 1^st:

–Academy Sports & Outdoors (ASO) offering 15.6 million shares ($15-$17 range)

 

Sector News Breakdown

Consumer

·     United Natural Foods (UNFI) Q4 adjusted EPS $1.06 on revs $6.75B vs. est. 74c/$6.63B; sees FY21 adjusted EPS $3.05-$3.55 vs. est. $2.32 and sees FY21 revenue $27B-$27.8B vs. est. $26.48B; Q4 gross margin 14.81% vs. 14.4% a year ago

·     LVMH Moet Hennessy Louis Vuitton SE sued Tiffany & Co (TIF) over their soured merger deal, saying the U.S. jeweler’s business has been so deeply damaged during the pandemic that their takeover agreement is invalidated.

·     McKesson (MKC) 3Q adj EPS $1.53 vs. est. $1.52 on revs $1.43B vs. est. $1.39B; guides FY adj EPS $5.64-5.72 vs. est. $5.76, sees sales growth at upper end of +4-5% range

·     Party City (PRTY) files to sell 13.2M shares of common stock for holders

·     Polaris (PII) announced a decade-long partnership with Zero Motorcycles Inc to co-develop electric vehicles as they will develop, manufacture and sell electrified off-road vehicles and snowmobiles using Zero’s powertrain technology, hardware and software

·     Bright Scholar Education Holdings (BEDU) to acquire 60% equity interests in Leti Camp Education

 

Energy

·     Petrobras (PBR) said it plans to spend $6B through 2024 to decommission 18 offshore platforms, underwater gas pipelines and offshore wells, it says in a Brazilian securities filing; also says it predicts proceeds of $1B from divestments in 2020, after receiving $14.4B from asset sales

·     Dominion Energy (D) upgraded to Overweight from Neutral with a price target of $84 at JPMorgan

·     Refiners: watch shares of VLO, PBF, MPC, PSX, HFC after Reuters reported late yesterday that the U.S. EPA administrator questions California plan to require new passenger vehicles to emit zero emissions in 2035 – in a letter (note oil refiners have been hit hard over the last week on the proposal)

 

Financials

·     IHS Markit (INFO) Q3 adjusted EPS 77c/$1.073B vs. est. 69c/$1.07B; said are positioned to deliver results for the year that include recurring organic revenue growth, strong margin expansion, and double-digit normalized earnings growth and are exiting the year in good position to achieve our 2021 outlook

 

Healthcare

·     Biogen (BIIB) disclosed a passive 11.16% stake in Denali Therapeutics (DNLI), which represents over 13.3M shares

·     Fluidigm Corp (FLDM) said it executes a definitive contract with National Institutes of Health (NIH) to expand capacity for increased COVID-19 testing and is now eligible to receive up to ~$34 mln upon achievement of certain milestones

·     Sorrento Therapeutics (SRNE) said both COVI-GUARD and COVI-AMG showed potent neutralizing activities against SARS-CoV-2 virus, that causes COVID-19, in Syrian golden hamsters; says it intends to submit application to start human trials for COVI-AMG as soon as possible

·     Tonix Pharma (TNXP) said it purchased a 40,000 sq-ft facility in Massachusetts to house its new manufacturing center for vaccines, including those for COVID-19; says the facility to be operational within 24 months

·     Pfizer (PFE) says the FDA has approved Xeljanz (tofacitinib) for treating children/adolescents age 2 and older with active polyarticular course juvenile idiopathic arthritis (pcJIA).

·     Molina Healthcare (MOH) to acquire Medicaid managed care organization Affinity Health Plan for ~$380M, to be funded with cash on hand.

·     Providence Service (PRSC) said it expands into Home Care Segment with acquisition of Simplura Health Group for enterprise value of $575M.

·     TransMedics Group (TMDX) announced that the FDA has temporarily postponed the Advisory Committee meeting to review TransMedics’ premarket approval application for its OCS Heart

 

Industrials & Materials

·     Fluor (FLR) says it received a notice from Wells Fargo with respect to its unsecured debt facilities, alerting the company that it had failed to file its financial report for the June quarter with the trustee

·     Radiant Logistics (RLGT) Q4 adjusted EPS 18c on revs $275.5M vs. est. 9c/$160.85M; Q4 adjusted Ebitda $13.1M, +19% YoY

 

Technology, Media & Telecom

·     McAfee (MCFE) files for an IPO to list on the Nasdaq under the “MCFE”. The number of shares weren’t disclosed and McAfee listed the $100M placeholder figure, which tends to mean the IPO seeks to raise in the lower nine-digit range.

·     Nokia (NOK) extended its long-term strategic relationship with BT into the 5G arena, making it BT’s largest equipment provider, following its selection as a 5G RAN vendor for the UK operator.

·     Oracle (ORCL) and Zoom (ZM) are introducing a series of integrations between Zoom’s communications platform and Oracle Cloud CX applications