Mid-Morning Look: July 17, 2020

Auto PostDaily Market Report

Mid-Morning Look

Friday, July 17, 2020






DJ Industrials




S&P 500








Russell 2000






U.S. equities have erased initial gains and slipped into negative territory as mixed earnings and economic data (better housing starts but weaker sentiment data) along with surging COVID-19 cases in the U.S. and its impact on slowing reopenings is weighing on markets early. Stocks overall have held up remarkably dwell the last few weeks despite coronavirus cases surging all over the country as ABC News the U.S. saw a 18.4% increase in new coronavirus cases from the previous week, according to an internal FEMA memo obtained by them, which has prompted several U.S. states over the last week to institute mandatory mask wearing outdoors (Alabama, Colorado, Arkansas, California, New Jersey among them). The headlines have stunted the rally in sectors hardest hit from the pandemic such as cruise lines, airlines, restaurants, retailers and leisure, seen again today. The U.S. dollar erases some of yesterday gains, pulling lower following the weaker than expected University of Michigan Sentiment reading for July prelim. Oil prices dip on signs that the recovery in oil consumption may be starting to slow. Tech got a negative earnings result as NFLX shares fall after guiding next quarter sub numbers below views – but earnings start kicking into high gear next week with many big tech names. This week earnings was dominated by financials with GS and MS among the biggest winners and WFC, RF among losers, though nearly all banks reported rising provision for credit losses, well above estimates.


Economic Data

·     June housing starts rise 17.3% to 1.186M unit rate (mostly in-line with the 1.169M est.) while May was revised higher to 1.011M from 974K; June single-family starts +17.2% to 831,000 unit rate and multifamily up +17.5% to 355,000 unit rate. June building permits rose 2.1% to 1.241M annual rate vs. est. 1.29M while May steady at 1.216M

·     University of Michigan consumers sentiment prelim July was 73.2, below the consensus 79.0 and below the final June reading of 78.1; the current conditions index prelim July 84.2 vs. final June 87.1 and expectations index prelim July 66.2 below final June 72.3







WTI Crude















10-Year Note





Sector Movers Today

·     Bank movers; STT reported Q2 EPS more than 20c above street driven by better than expected fee revenue, despite lower NII (better fee revenue which decreased 0.9% q/q but increased ~5% yoy and NII down ~16% q/q and down 9% yoy as per Bank America); RF reported a worse-than-expected loss of (25c) vs. estimate for a profit as well as a credit loss provision topping net charge-offs of $700M citing adverse conditions and significant uncertainty around the economic outlook from COVID; SNV was downgraded to underperform at RBC Capital and lower tgt to $16 driven by the implications of our updated recession outlook, which include higher credit losses with expectations of dividend cuts sometime next year; CFG, FHN, BLK also rise on earnings

·     Transports; in rails, KSU Q1 EPS $1.15 on revs $547.9M was mixed vs. $1.11 and $553.6M estimate; truckers higher after JBHT reported Q1 EPS $1.14 on revs $2.15B vs. est. 83c while MRTN Q2 EPS 33c vs. est. 23c and revs $212.4M was above the $205.5M estimate

·     Metals & Materials; HL was upgraded to Sector Perform from Underperform at RBC Capital and raises his tgt to $4.50 from $2.50 as believe the risk/reward profile is more balanced as we look toward forecast operational/financial improvements in 2H20; in chemicals, ASH shares advanced following earnings results and PPG posted a top and bottom line quarter beat

·     Healthcare services and providers; ALGN tgt raised to $350 at Stifel saying current diligence lays out the long-term bullish thesis (teen share-of-chair; resilient Adult market; limited competitive inroads and pricing tailwinds); AHPI, LAKE and APT remain strong as companies continue to benefit from the mask wearing mandates by many states this week

·     Housing & Building Products; Bank America raised tgt on LOW to $170 from $160, and on HD to $275 from $260 as home improvement spending in June ’20 continued to soar, while broader indicators of economic growth remained weak; ZG tgt raised to $75 from $60 at JMP Securities saying housing looks stable and growing, backing the company’s Premier Agent business; gain in homebuilders early on record low 30-year mortgage rates and strong monthly housing starts data (DHI, PHM, MDC)



·     APDN +43%; reported positive results from preclinical studies of its COVID-19 vaccine candidates, being developed by partner Takis Biotech/says all five of its LineaDNA vaccine candidates showed strong antibody responses at low doses in mice studies

·     BNTX and MRNA shares rise; after Reuters story earlier that the EU was in talks with MRNA, BNTX for purchase deals on possible covid-19 vaccines

·     ERIC +13%; after better results, buoyed by strong 5G sales; company keeps 2020 and 2022 targets unchanged (no 2021 guide)

·     LGIH +1%; gain in homebuilders early on record low 30-year mortgage rates and strong monthly housing starts data (DHI, PHM, MDC)

·     RTN +10%; after earnings beat, dividend increase and stock split announcement

·     RMBL +112%; after CARG announced late yesterday it would use the co’s technology and transportation and distribution services

·     TREE +3%; said Q2 revenue is now anticipated in the range of $182-$186M, above the prior $160M-$175M

·     VRNA +107%; after announcement of $200M private placement at $4.50 per share



·     MGM -2%; pullback again on casinos, travel and cruise stocks on rising COVID-19 cases in US

·     NFLX -7%; following mixed Q2 results (EPS missed while revs beat) but issued a weaker Q3 subscriber outlook (sees 3q streaming paid net change +2.50M, below est. +5.12M and guides Q3 revs $6.327B vs. est. $6.4B)

·     NIO -6% was downgraded to sell with $7 target at Goldman Sachs as believe the current share price reflects over-optimism given no substantial changes to volume/profit expectations

·     RF -2%; reported a worse-than-expected loss of (25c) vs. estimate for a profit as well as a credit loss provision topping net charge-offs of $700M citing adverse conditions

·     WBT -7%; downgraded to neutral at Citigroup as latest round of industry checks points to a more cautious 2H outlook for commercial FS equipment


·     ALX Oncology (ALXO) 8.5M share IPO priced at $19.00

·     Berkeley Lights (BLI) 8.1M share IPO priced at $22.00

·     Cytokinetics (CYTK) 7.292M share Secondary priced at $24.00

·     Norwegian Cruise (NCLH) 16.7M secondary priced at $15.00 per share

·     Pandion Therapeutics (PAND) 7.5M share IPO priced at $18.00

·     Renalytix AI (RNLX) 5.5M share IPO priced at $13.50


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.

Live Trading

Open an Account

Paper Trading