Morning Preview: April 02, 2020

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Early Look

Thursday, April 2, 2020





DJ Industrials




S&P 500










U.S. stock index futures are on the rise, helped by a rebound in oil futures as President Donald Trump expressed optimism that a damaging price war between Saudi Arabia and Russia. Trump said last night “I have confidence in both that they’ll be able to work it out,” in regards to the price spat between Russia and Saudi Arabia. Trump is also expected to meet with oil-industry chief executives on Friday to discuss the current market situation. Also helping oil futures, reports overnight that China may be buying an additional 100 million barrels over the course of the year. The bounce in futures and oil prices follows another day of sharp losses on Wall Street on coronavirus pandemic impact fears. The number of COVID-19 cases world-wide rose to 922,00 on Wednesday, while the number of deaths rose to at least 46,000, according to data from Johns Hopkins University. The U.S. has the greatest number of cases world-wide, at 203,608, and 4,476 deaths. The headline shocker today is expected to be the weekly jobless claims report which is expected to spike to a new record high, somewhere between 4M-5M after a record 3.3M people filed for first time unemployment last week.


Stocks sunk on Wednesday as the three main indexes registered declines of at least 4%, while the SmallCap Russell 2000 index tanked more than 7%, led behind weakness in energy related names and REITs as the Dow fell nearly 1,000 points, as it and the S&P 500 logged the worst start to a quarter in history. Stocks dropped after President Donald Trump warned the night prior that the coming weeks will be “very tough” as the death toll from the coronavirus pandemic surges and businesses remain closed in an effort to slow its spread. In Asian markets overnight, The Nikkei Index lost -246 points to settle at 17,818, the Shanghai Index advanced 46 points to close at 2,780 and the Hang Seng Index gained 194 points to 23,280. In Europe, the German DAX is up around 30 points to 9,580, while the FTSE 100 is up a few points at 5,470.

Market Closing Prices Yesterday

·     he S&P 500 Index plunged -114.09 points, or 4.41%, to 2,470.50

·     The Dow Jones Industrial Average sunk -973.65 points, or 4.44%, to 20,943.51

·     The Nasdaq Composite dropped -339.52 points, or 4.41%, to 7,360.58

·     The Russell 2000 Index was decimated -81.11 points, or 7.03% to 1,071.99


Economic Calendar for Today

·     7:30 AM EST      Challenger Job Cuts YoY

·     8:30 AM EST      Weekly Jobless Claims…est. 3.7M

·     8:30 AM EST      Continuing Claims…est.4.94M

·     8:30 AM EST      Trade Balance for Feb…est. (-$40.0B)

·     10:00 AM EST    Factory Orders for Feb…est. 0.2%

·     10:00 AM EST    Durable Goods Orders, Feb-F…est. 1.2%

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


Earnings Calendar:

·     Earnings Before the Open: APOG, AYI, KMX, SCHN, WBA

·     Earnings After the Close: AEHR, CHWY, FC, RECN






WTI Crude















10-Year Note





Sector News Breakdown


·     American Airlines (AAL) said it drew ~$2.73b from three separate revolving credit facilities, borrowing the full $450M from an April 2016 RCF, the full $750M from a 2013 revolver and borrowed ~$1.53B from a $1.64B 2014 revolving facility

·     The Federal Trade Commission (FTC) sued to unwind Altria Group Inc.’s (MO) $12.8B investment in Juul Labs Inc., claiming it violated antitrust laws. That 2018 deal gave cigarette-maker Altria a roughly 35% stake in vaping company Juul.

·     PVH Corp. (PVH) reported Q4 EPS $1.88 on revs $2.6B vs. est. $1.81; noted virus-related concerns, others resulted in sharply reduced traffic and consumer spending trends and sales stoppages in co’s retail stores in Q1; suspends its cash dividend and stock repurchase plan

·     Vail Resorts (MTN) said it would suspend its dividend for the next two quarters, while also cutting capital expenditures for the rest of 2020 citing global travel restrictions



·     CenterPoint Energy (CNP) cuts quarterly dividend by 48%, to cut capex spending by $300< as targets expense reduction of $40M

·     DMC Global (BOOM) reduces its workforce by 264 positions, 97 of which were temporary workers, primarily to address sharply lower activity levels in the Company’s core oil and gas end market; also said DynaEnergetics’ manufacturing facilities in the US and Europe have transitioned to reduced work weeks

·     TechnipFMC (FTI) says plans 30% reduction in 2020 capital expenditures to $300 million; continues to exhibit solid financial strength and liquidity and that has cash and cash equivalents of $5.2 billion at the end of 2019; says company’s liquidity is further supported by a revolving credit facility of $2.5 billion



·     The Federal Reserve is temporarily relaxing a rule that imposes additional capital requirements on deposits and Treasury securities held by the biggest U.S. banks. The supplementary leverage ratio, or SLR, requires banks to hold an extra buffer of high-quality capital against a bank’s total assets (including derivatives exposure and off-balance sheet transactions). Under the Fed’s new rule, banks’ Treasury securities and deposits with Federal Reserve Banks won’t count toward those assets.



·     AxoGen (AXGN) said it is suspending its financial guidance for 2020 and says amid coronavirus shutdowns, it may not be able to complete the enrollment of patients for its Recon study by the end of June, as scheduled

·     Boston Scientific (BSX) sees Q1 revenue flat to up slightly which compares to estimate for a 7.9% increase; says is reducing work week schedules and cutting discretionary spending

·     CryoLife Inc. (CRY) cuts Q1 revenue guidance to $65M from prior view $67M-$69M and with draws guidance for the year and said it borrowed the entire available amount under its $30M revolving credit facility

·     DaVita Inc. (DVA) said that it plans to hire at least 15,000 new employees this year, from jobs ranging from care giving to corporate support; said previous health care experience is not required for many of the new roles.

·     Invitae (NVTA) announces offering of $125M of common stock

·     Nevro Corp. (NVRO) guides Q1 rev $86.4M-$86.9M below est. $96.6M and withdraws year guidance; says cannot predict extent or duration of impact of covid-19 virus on its financial and operating results


Technology, Media & Telecom

·     Snap Inc. (SNAP) says video calling on its site shot up more than 50% in late March compared with late February as the coronavirus pandemic spreads. In a company blog post the company also said Snaps between friends as well as Group Chats hit all-time highs – MarketWatch

·     Criteo (CRTO) guides Q1 revenue ex-TAC $204M-$206M below the $223M estimate and to withdraw its previously issued financial guidance for fiscal year 2020; says for Q1 adjusted Ebitda, now expects a range of $59M-$61M vs. est. $55M


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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