Morning Preview: April 07, 2020

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Early Look

Tuesday, April 7, 2020





DJ Industrials




S&P 500










U.S. stock futures are pointing to another opening jump, extending gains by around 3%, following a broad-based advance on Monday that saw major U.S. indexes rally more than 7%. U.S. stocks are once again tracking solid gains in both Asia and Europe with the Nikkei higher by 2% to 18,950, the Hang Seng up over 500 points to 24,253 and the Shanghai Index rising 56 points to 2,820. In Europe, the FTSE 100 is up 150 points to 5,740, and the German DAX is higher by 400 points to around 10,500. Stocks are getting a boost on more hopes as President Trump said yesterday there’s “tremendous light at the end of the tunnel” noting there are several therapeutic agents in active trials to fight the coronavirus. US oil prices rally ahead of a virtual emergency meeting between OPEC+ on Thursday where production cuts are expected to materialize. Late yesterday, the Federal Reserve also moved to bolster a new small business lending program by allowing financial institutions to turn those loans over to the U.S. central bank for cash.


Market Closing Prices Yesterday

·     The S&P 500 Index gained 175.03 points, or 7.03%, to 2,663.68

·     The Dow Jones Industrial Average rose 1,627.46 points, or 7.73%, to 22,679.99

·     The Nasdaq Composite spiked 540.15 points, or 7.33%, to 7,913.24

·     The Russell 2000 Index advanced 86.72 points, or 8.24% to 1,138.78


Economic Calendar for Today

·     7:45 AM EST      ICSC Weekly Retail Sales

·     8:55 AM EST      Johnson/Redbook Weekly Sales

·     10:00 AM EST    JOLTs Job openings for Feb

·     3:00 PM EST       Consumer Credit for Feb

·     4:30 PM EST       API Weekly Inventory Data


Earnings Calendar:

·     Earnings Before the Open: ANGO, LNN, NTIC

·     Earnings After the Close: GBX, LEVI, SGH






WTI Crude















10-Year Note





Sector News Breakdown


·     Beazer Homes USA’s (BZH) March cancellation rate surged to 25% of gross new orders vs. 15% in March 2019; net new orders for the month of 405 fell 26% Y/Y; March closings of 589, slipped 0.5% Y/Y; Q2 ending backlog of 2,231 is up 12% Y/Y

·     Kraft Heinz Co (KHC) said surging demand driving about 3% expected q1 net sales growth, about 6% organic net sales growth; does not expect full benefit from incremental sales in q1 to flow through to net income/(loss) from continuing ops, eps

·     Nio (NIO) said it delivered 1,533 vehicles in March, up 116.8% from the previous month due to its recovering production capacity.                                                                                                                                                                                                                          

·     Thor Industries (THO) says it has been able to significantly reduce its overhead and expenses as a result of temporarily shutting down a majority of its manufacturing worldwide. Top execs and employees are also taking a pay cut, including a base salary of $0 for the CEO.

·     Blue Apron (APRN) shares rose after D.E. Shaw reports a stake of 5.2%.



·     Martin Midstream Partners (MMLP) sait it has hired Stephens as financial advisor to explore strategic alternatives to strengthen its balance sheet and address near-term maturities

·     Plunging oil demand and dwindling storage options, not a coordinated supply cut with Saudi Arabia and Russia, will force U.S. producers to voluntarily cut production 30%-35%, Continental Resources (CLR) Executive Chairman Harold Hamm tells S&P Global Platts.

·     Lawyers who negotiated the $13.5B settlement for California wildfire victims with PG&E (PCG) say they no longer support the deal because of the risk due to the volatility in the company’s stock price. Under the settlement, ~80K victims would get $13.5B to cover uninsured losses from the massive 2017-18 fires, but half the payout would come in the form of at least 21% of PG&E’s stock, worth $6.75B



·     Global Payments (GPN) said that it expects Q1 adjusted net revenue to be up only slightly on a combined basis vs. a year ago; sees Q1 adjusted EPS to grow approximately mid-teens vs. a year ago and withdrew its full year outlook.

·     Two Harbors (TWO) lowers quarterly dividend to 5c from 40c



·     Luminex (LMNX) said 1Q revenue was about 8% higher than the top end of its guidance range of $82 to $84M; any change to 2020 guidance will be discussed on its 1Q earnings call, currently scheduled for May 11

·     NanoString (NSTG) withdraws FY20 guidance; sees Q1 product and service revenue $24.5M, up 15% YoY as compares to guidance for first quarter product and service revenue of $25M to $28M

·     Penumbra (PEN) guides Q1 revenue $137M-$137.3M vs. est. $140.9M saying began to observe more notable negative impact on business trends in March due to COVID-19.; is now withdrawing its previously announced annual revenue guidance for 2020

·     Regeneron Pharmaceuticals (REGN) announces that it has restructured its Praluent (alirocumab) agreements with collaboration partner Sanofi (SNY) that, it says, will increase efficiency and streamline operations. It will have sole responsibility in the U.S.

·     Zimmer Biomet Holdings (ZBH) said 1Q revenue will drop about 9.5 to 10.5% on a reported basis and fall 8.5 to 9.5% on a constant currency basis amid a decline in elective procedures; expects a significant negative impact in 2Q from the drop in elective procedures; withdraws full-year financial guidance


Industrials & Materials

·     Lindsay (LNN) Q2 EPS 51c on revenue $113.8M vs. est. 46c and $112.8M

·     Matson (MATX) said it expects Q1 consolidated operating income to be higher than our expectations with operating income for Ocean Transportation of $6.5 to $9.0 million and Logistics operating income of $4.5 to $5.5 million; also expect first quarter 2020 net income to be $2.0 to $5.0 million.


Technology, Media & Telecom

·     Broadcom (AVGO) priced an offering for $4.5B in senior debt and increased the size of a debt tender it had announced; is offering $2.25B in 4.7% senior notes due 2025, and $2.25B in 5% senior notes due 2030

·     Blackbaud (BLKB) has taken steps to provide additional near-term liquidity including ending the payment of quarterly dividends, restricting non-essential employee options and cutting costs

·     IAC Inc. (IAC) said it expects ANGI Services (ANGI) to be among hardest hit of businesses in terms of revenues, but with flexible cost base, this hit, co believes, will be temporary; IAC on Vimeo, says in March “we hit gross bookings figures we didn’t otherwise expect to hit until sometime in 2021”

·     SeaChange (SEAC) Q4 EPS 13c on revs $19.3M vs. est. 18c and $23.77M; says will provide FY21 guidance upon understanding virus impact

·     Varonis (VRNS) announces prelim Q1 saying revenues negatively impacted by COVID-19; ARR range of $220.2 million to $220.6 million, representing growth of approximately 60%; subscription revenues mix greater than 95%, compared to 31% in Q1 2019; guides Q1 revs Q1 revenue $53.9M-$54.3M vs. est. $58.75M


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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