Early Look

Thursday, April 16, 2020

Futures	Up/Down	%	Last
DJ Industrials	95.00	0.41%	23,846
S&P 500	14.50	0.52%	2,789
Nasdaq	75.50	0.88%	8,669

 

 

Stock futures in the U.S. are holding higher, gaining ground after U.S. President Donald Trump said late yesterday that data indicates the country has overcome the peak on new COVID-19 infections, and said he would announce “new guidelines” for reopening the economy. “The battle continues but the data suggests that the nation has passed the peak on new cases,” Trump said at his daily White House news briefing. The comments provide hope for major averages that saw steep declines on Wednesday following a round of worrisome economic data as reports of U.S. retail, manufacturing and homebuilding data added to investors’ concerns about a global recession. The data points come ahead of weekly jobless claims today, which are expected to show another 5.5M individuals filing for first time unemployment claims in the latest week, adding to the 16M that have filed over the last 3-weeks. In Asian markets, The Nikkei Index dropped -259 points to 19,290, the Shanghai Index gained 8 points to 2,819 and the Hang Seng Index fell -138 points to 24,006. In Europe, the German DAX is up around 90 points to 10,370, while the FTSE 100 is little changed at the 5,600 level.

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -62.70 points, or 2.20%, to 2,783.36

·     The Dow Jones Industrial Average fell -445.41 points, or 1.86%, to 23,504.35

·     The Nasdaq Composite slumped -122.56 points, or 1.44%, to 8,393.18

·     The Russell 2000 Index declined -53.36 points, or 4.31% to 1,183.98

 

Economic Calendar for Today

·     8:30 AM EST      Weekly Jobless Claims…est. 5.5M

·     8:30 AM EST      Continuing Claims…est.13.26M

·     8:30 AM EST      Housing Starts MoM for March…est. (-18.7%) to 1.3M

·     8:30 AM EST      Building Permits MoM for March…est. (-10.5%) to 1.3M

·     8:30 AM EST      Philly Fed Business Survey for April…est. (-32.0)

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

 

Earnings Calendar:

·     Earnings Before the Open: ABT, BK, BLK, BMI, IIIN, KEY, LOVE, RAD, SON

·     Earnings After the Close: UAL, WAL

 

 

Macro	Up/Down	Last
WTI Crude	0.36	20.23
Brent	0.91	28.60
Gold	16.90	1,757.10
EUR/USD	-0.0035	1.0875
JPY/USD	0.21	107.67
10-Year Note	-0.002	0.631%

 

 

Sector News Breakdown

Consumer

·     Bed Bath & Beyond (BBBY) Q4 comp sales fell (-5.6%) vs. vs. est. (-6%); in-store comp sales fell (-10%) while online comp sales rose 16%; Q4 adj EPS 38c vs. est. 20c and sales $3.11B; said to draw down added $236M in revolver while suspends 2020 plan for buybacks, dividends and debt cuts; not providing guidance for fiscal 2020 at this time

·     Carnival (CCL) is considering cruising with less than full capacity and checking the temperature of passengers as preventative measures, according to Business Insider.

·     Costco (COST) raises quarterly dividend to 70c form 65c

·     United Airlines (UAL) confirmed the airline expects to receive a total of approximately $5B from the federal government, including a $1.5B low-interest rate loan and a $3.5B grant

 

Energy

·     Cimarex Energy (XEC) reported additional actions to address the continued weakness in oil prices; sees 55%-60% cut in 2020 capex from original view of $1.25B-$1.35B

·     TC Energy (TCP) was hit with negative court ruling as a U.S. judge has ruled against the U.S. Army Corps of Engineers’ use of a permit that allows new pipelines to cross water bodies, in a new setback to its plans to build the Keystone XL oil pipeline. The Montana Chief District Judge said the Army Corps violated federal law by failing to adequately evaluate the risks to endangered species and habitat, and it must comply before it can apply the nationwide permit to any project.

·     The Trump administration is considering paying U.S. oil producers to essentially stop producing, in a bid to help alleviate the oversupply in the market that has pushed crude prices to 18-year lows, Bloomberg reports.

 

Financials

·     Bank of New York (BK) Q1 EPS $1.05 vs. 94c YoY; net interest margin 1.01% vs. 1.2% YoY and provision for credit losses $169M vs. $7M same time last year

·     Square (SQ) downgraded at Raymond James to underperform from market perform as the stock hasn’t fallen far enough this year

·     KeyCorp (KEY) Q1 EPS 12c vs. 38c YoY and revs $1.47B, -3.6% YoY; said 1Q net charge-offs $84 million, +31% YoY while provision for credit losses $359 million vs. $62 million YoY

·     Minneapolis Fed President Neel Kashkari said the most patriotic thing large U.S. banks could do today would be to stop paying dividends and raise about $200B in equity capital

·     American Financial Group (AFG) lowers FY20 core EPS to $6.45-$7.25 from $8.75-$9.25 saying since providing 2020 guidance, the COVID-19 pandemic has had widespread financial and economic impacts, including a significant decrease in both equity and credit markets.

·     Redfin (RDFN) said home-buying demand fell 25% in April 13 week compared with 36% decrease in March 28 week; U.S. pending sales down 54% in week ended April 10

·     MasterCard (MA) downgraded to neutral from buy at Guggenheim

 

Healthcare

·     Inovio (INO), the International Vaccine Institute (IVI), & Korea National Institute of Health (KNIH) to partner with the Coalition for Epidemic Preparedness Innovations (CEPI) in a phase 1/2 clinical trial, according to a statement.

·     Athersys (ATHX) announces offering of $50M of common stock

·     Novavax (NVAX) announces that it intends to launch a Phase 1 clinical trial in the coming weeks at its Melbourne and Brisbane clinics for NVX-CoV2373, its SARS-CoV-2 Recombinant Spike Protein Nanoparticle vaccine.

 

Industrials & Materials

·     Airbus (EADSY) said it will delay the planned Canadian production ramp-up of its A220 jet by a year, as the coronavirus outbreak weighs on broader demand for aircraft; said it plans to start picking up production of the narrow-body jet from the current four per month by mid-2021

·     Greif (GEF) to implement a $50/ton price increase for all grades of uncoated recycled paperboard, effective with shipments beginning May 18, 2020 and $50/ton increase for all grades of coated recycled paperboard, effective with shipments beginning May 13, 2020.

·     Greenbrier Companies Inc. (GBX) said it has laid off 3,700 people, or more than 20% of its workforce this fiscal year, because of the economic impacts of the COVID-19 pandemic.

·     KBR Corp (KBR) was awarded an indefinite-delivery, indefinite-quantity contract by the U.S. Air Force for worldwide contingency and humanitarian support with a maximum ceiling of $6.4B.

 

Technology, Media & Telecom

·     GoPro (GPRO) guided Q1 prelim revs $119M, down 51% YoY which was below the prior view of $140M-$160M and said it plans to lay off more than 20% of its remaining staff as part of a restructuring plan to save $100M in operating expenses this year and $250M next year

·     Globant (GLOB) said it expects Q1 2020 revenues to be at least $190M, implying a minimum growth of 30% Y/Y compared to consensus of $187.2M and prior guidance of $188M

·     Ciena Corp. (CIEN) downgraded to equal-weight from overweight at Morgan Stanley

·     TSMC (TSM) Q1 EPS 75c on revs $10.31B vs. est. 69c/$10.11B; said for Q1, shipments of 7-nanometer accounted for 35% of total wafer revenue and 10-nanometer process technology contributed 0.5% while 16-nanometer accounted for 19%; sees Q2 revenue $10.1B-$10.4B vs. est. $9.65B and gross profit margin is expected to be between 50% and 52%

·     Twitter (TWTR) was downgraded to neutral from overweight at JPMorgan