Mid-Morning Look: August 10, 2020

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Mid-Morning Look

Monday, August 10, 2020






DJ Industrials




S&P 500








Russell 2000






U.S. equities are mixed as the Dow outperforms, up over 200 points led by shares of Boeing (BA) and Nike (NKE), while the tech heavy Nasdaq underperforms major averages for a second straight day, pulling back from all-time highs late last week in a bout of profit taking. Stocks got a boost after President Trump signed several executive orders this weekend aimed at extending coronavirus relief, including providing additional payments to the unemployed (though it is unclear whether the executive orders are enforceable), while tensions remain heated between the U.S. and China heading into a trade meeting later this week. Early gainers include energy, industrials, transports and communication services and consumer discretionary while defensive-oriented health care and utilities groups lag. U.S. Treasury prices edge higher, pushing yields down a basis point on both the two-year and 10-year yields to a respective 0.12% and 0.55%. Commodity prices jumping early after a small pullback Friday, as gold resumes strength and oil prices gain as the dollar slides. Stock markets have rallied in five of the last six weeks having lifted the S&P 500 to within 1% of its all-time high reached in February. Stimulus talks, China trade talks, and coronavirus cases remain center stage for markets which are starting the week mostly higher outside of the slide in tech). Transports outperform a second day behind airlines strength and continued momentum in package delivery names (UPS, FDX).







WTI Crude















10-Year Note





Sector Movers Today

·     Transports; Dow Transports outperform, rising for a 9th straight day, behind airlines strength (AAL, UAL, ALK) after talk last week the U.S. was looking to include them in the next relief package and continued momentum in package delivery names (UPS, FDX) after they each announced price increases for the upcoming holiday season; FDX upgraded to Outperform from Market Perform at Bernstein with $225 tgt as we expect the company to deliver better than consensus expectations on 1) better residential pricing, 2) continued strength in Express and air cargo rates, 3) an inflection in ground margins. E-commerce parcel pricing is expected to remain strong as the pull forward of e-commerce penetration has strained delivery capacity

·     Internet; TWTR shares active after the WSJ reported this weekend the social media company has held early talks about a potential combination with TikTok, citing people familiar with the matter https://on.wsj.com/3kwUjbw ; WIX announces private offering of $500M of convertible senior notes due 2025; PINS was upgraded to Overweight at Morgan Stanley with $44 tgt saying it is driving/benefiting from accelerating e-commerce and social shopping

·     Casino & Leisure movers; Macau casino operators rose early (WYNN, MLCO) after China said it will resume issuing tourist visas for visitors to Macau; MGM rises as IAC says it has accumulated a 12% interest for an aggregate of about $1 billion over the last few months; in theme parks, SEAS posted a worse-than-expected Q2 EPS loss as adjusted EBITDA was -$53.8M in Q2 vs. profit $149.7M a year ago and said attendance was 300K vs. 6.5M a year ago; cruise lines rally despite RCL posting net loss attributable of $1.64B, also writing down value of certain assets by $156.5M while expects to burn about $250M-$290M of cash on average per month while its operations are suspended

·     Semiconductors; QCOM active after weekend reports it is telling U.S. policymakers their export ban won’t stop Huawei from obtaining necessary components and just risks handing sales to the U.S. firm’s overseas competitors, according to a presentation reviewed by WSJ; ON Q2 EPS 12c on revs $1.21B vs. est. 2c/$1.18B while sees Q3 revenue $1.2B-$1.33B above consensus $1.27B based on product booking trends, backlog levels, and estimated turns levels; NVDA receives street wide tgt high of $520 at Bank America as expects Q2 results to meet consensus “as data center demand remains resilient, offset somewhat by softness in more cyclical businesses.



·     AVYA +14%; after Q3 EPS beat, swinging to profit from same period last year and guides year revs $2.84B-$2.86B vs., est. $2.78B

·     FL +5%; after saying Q2 same-store sales increased about 18% driven by pent-up demand at its reopened stores and the effect of fiscal stimulus, while guided Q2 EPS 66c-70c after posting a 67c loss in Q1, as an increase in sales helped counter higher promotions

·     MCRB +417%; after saying its lead drug, SER-109, met the main goal of a late stage trial in patients with C. difficile infections

·     MGM +12%; as IAC says it has accumulated a 12% interest in MGM Resorts International for an aggregate of about $1 billion over the last few months

·     NKLA +13%; after saying it secured an order to make at least 2,500 electric garbage trucks for refuse giant Republic Services Inc., fulfilling one of the electric-vehicle startup’s three major business goals for the year

·     OMER +75%; reports recovery and survival of all six-patients in a study of Narsoplimab, its investigational treatment for the acute respiratory distress syndrome caused by COVID-19 disease

·     SPG +3% after the WSJ reported it is in talks with AMZN to transform some of its anchor department-store spaces into Amazon fulfillment centers

·     TRVN +37%; said the FDA approved the drugmaker’s Olinvyk, an opioid agonist for the management of moderate to severe acute pain in adults, where the pain is severe enough to require an intravenous opioid and for whom alternative treatments are inadequate

·     WYNN +7%; as Macau casinos bounce after China said it will resume issuing tourist visas for visitors to Macau (MLCO as well)



·     ANAB -3%; as patients dosed with etokimab every four or eight weeks failed to achieve statistically significant improvement in their bilateral nasal polyps score and in their sino-nasal outcome test versus placebo at week 8 time point

·     AYX -7%; extends Friday decline (slid -28% on Friday) after a disappointing outlook last week in the software space

·     EGRX -14%; cut its R&D expenses forecast for the full year.to $40-$44M from $46M-$50M on Q2 rev miss

·     ITCI -10%; as Q2 EPS loss and revenue missed estimates while said plans to initiate clinical program of lumateperone in MDD in 2020

·     KODK -38%; after the federal agency that announced a $765M loan to Kodak less than two weeks to make generic drugs ago said the offer is on hold pending probes into allegations of wrongdoing

·     RETA -26%; after reporting Q2 revenue of $3.1M vs $7.8M YoY and a larger EPS loss of ($1.23) while also provided regulatory updates on various drugs


Market commentary provided by Catena Media Financials US, LLC, a firm separate from and not affiliated with Regal Securities. Regal Securities has not participated in the creation of the content, and does not explicitly or implicitly endorse the content.

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