Morning Preview: April 20, 2020

Auto PostDaily Market Report

Early Look

Monday, April 20, 2020





DJ Industrials




S&P 500










U.S. stock-index futures are sharply lower, led by another massive decline in oil prices as WTI crude drops over 25% to around $13.50 per barrel, its lowest levels since early 2002, raising fresh fears for U.S. oil company bankruptcies and banks that loan to them. Stocks are also pulling back after surging last week on announced plans for the reopening of economies all over the world in the wake of the deadly coronavirus pandemic. The price spread between the front-month and future-month delivery for oil has risen well above the spot market, situation known as contango, which can encourage traders to store oil. On Friday, May WTI crude, which expires at Tuesday’s settlement, settled at $18.27 a barrel on the NYMEX. The June contract, which will become the front month at May’s expiration, was at $28.08. Meanwhile, equity markets were coming off a strong rally last week, which was led by the technology-laden Nasdaq Composite Index which jumped over 6% on the week, while the Dow gained 2.2%, and the S&P 500 advanced 3% as all marked the first back-to-back weekly gains for the benchmarks in about five weeks. Investors have been paying attention to signs of peak infections in parts of the world, including New York, and were watching for plans from Europe. Over the weekend, Democratic leaders and Treasury Secretary Steven Mnuchin said they were close to striking a deal to replenish a roughly $350 billion small-business recovery program. In Asian markets, The Nikkei Index fell -228 points to 19,669, the Shanghai Index gained 14 points to 2,852 and the Hang Seng Index slipped -50 points to 24,330. In Europe, the German DAX is down about -30 points to 1,600, while the FTSE 100 is down about -25 points to 5,760.

Market Closing Prices Yesterday

·     The S&P 500 Index jumped 75.01 points, or 2.68%, to 2,874.56

·     The Dow Jones Industrial Average rose 704.81 points, or 2.99%, to 24,242.49

·     The Nasdaq Composite gained 117.78 points, or 1.38%, to 8,650.14

·     The Russell 2000 Index surged 51.01 points, or 4.33% to 1,229.10


Economic Calendar for Today

·     8:30 AM EST      Chicago Fed Nat Activity Index for March


Earnings Calendar:

·     Earnings Before the Open: ALLY, BOH, CBU, HAL, KALU, LII, MTB, ONB, TFC

·     Earnings After the Close: ACC, ADC, BXS, CCK, EFX, ELS, GSBC, HXL, IBM, PNFP, STLD, TBK, ZION






WTI Crude















10-Year Note





World News

·     Democratic leaders and Treasury Secretary Steven Mnuchin said Sunday they were close to striking a deal to replenish a popular program to help small businesses weather the coronavirus pandemic. The agreement was also expected to include $75 billion for hospitals and $25 billion to expand testing for the virus nationwide, Mnuchin said.

·     The global case tally for the coronavirus that causes COVID-19 climbed to 2.42 million on Monday, according to data by Johns Hopkins University. The death toll rose to 165,903. At least 632,484 people have recovered. The U.S. has the highest case toll in the world at 759,786 and the highest death toll at 40,683. Spain has the highest number of cases in Europe at 200,210 and 20,852 deaths.154,098 cases and 19,744 deaths, while Germany has 145,743 cases.

·     New York, which has recorded nearly half the country’s deaths from COVID-19, on Saturday reported 540 coronavirus-related deaths for April 17, down from 630 a day earlier and the lowest daily tally since April 1.


Sector News Breakdown


·     U.S. Concrete (USCR) guides Q1 revenue above consensus as sees prelim revs of ~$334M vs. consensus of $321.14M and said it plans to reduce capital spending and modifying operating structure to maximize financial strength and flexibility

·     Neiman Marcus Group is preparing to seek bankruptcy protection as soon as this week, becoming the first major U.S. department store operator to fall to the economic fallout from the coronavirus outbreak, people familiar with the matter said – Reuters

·     Norwegian Cruise Line Holdings Ltd (NCLH) has hired Goldman Sachs Group Inc to explore financing options that could include the sale of a stake in the company, Reuters reported, citing people familiar with the matter. Norwegian Cruise in talks with several private equity firms about a private investment in public equity (PIPE)

·     Wynn Resorts Ltd. (WYNN) on Sunday called for the Las Vegas Strip to reopen in mid- to late May, as long as a number of health precautions are taken.



·     Energy stocks suffered a broad selloff in premarket trading Monday, as crude oil prices plunged amid concerns over reduced demand resulting the COVID-19 pandemic coupled with excess supply. The SPDR Energy Select Sector ETF (XLE) dropped 3.8%, with all of its components seeing activity trading lower. WTI crude plunges 25% as the spread between the current contract and future contracts are near the widest in a decade, encouraging traders to store oil.

·     Halliburton (HAL) Q1 EPS 31c vs. est. 25c; Q1 revenue $5.04B vs. est. $5.01B; recorded $1.1B pretax impairments and other charges; expects a further decline in revenue and profitability



·     U.S. banks are pushing the Federal Reserve to change the terms of a $600 billion lending program for small and medium-sized businesses, including reducing minimum loan amounts and allowing more flexibility on underlying reference rates – Reuters

·     M&T Bank (MTB) reported provision for credit losses for the first quarter of $250.0M vs. prior year $22M with net interest margin 3.65% vs. 4.04% YoY and net charge-offs $49M vs. $22M YoY



·     Incyte (INCY) was granted FDA accelerated approval to Pemazyre, the first treatment approved for adults with certain types of previously treated, advanced cholangiocarcinoma

·     Novartis (NVS) said it would conduct a Phase III clinical trial of hydroxychloroquine in hospitalized patients with COVID-19 disease, after reaching an agreement with the U.S. FDA

·     Teledoc (TDOC) and Livongo (LVGO) are among choices to ride digital health wave according to Barron’s say noting the coronavirus pandemic is catapulting telemedicine and may push the online care to the mainstream

·     AbbVie (ABBV) upgraded to Outperform from Sector Perform at RBC Capital


Industrials & Materials

·     DuPont (DD) suspends full-year forecast; gets $2B in committed financing; sees Q1 EPS 82c-84c vs. est. 68c

·     Germany will order 45 fighter jets from Boeing (BA) to replace aging craft, Der Spiegel reports today. The country will order 30 F/A-18 Super Hornets and 15 EA-18G Growlers to replace aging Tornado jets according to the report

·     Three industrial companies have made their debut at possibly the worst time for any business and yet Raytheon Technologies (RTX), Otis Worldwide (OTIS) and Carrier Global (CARR) all look appealing, despite a downturn that will sap this year’s results said Barron’s

·     Vale (VALE) cuts its 2020 production forecast for iron ore annual production to 310M-330M tonnes from prior outlook of 340M-355M tonnes; pellet production guidance is reduced to 35M to 40M tonnes from 44M tonnes earlier and copper production forecast slashed to 360,000-380,000 tonnes from 400,000 tonnes previously


Technology, Media & Telecom

·     Zoom Video (ZM) has become the poster child for the work-from-home economy, but it has also become an “absurdly expensive” stock, according to Barron’s while noting there are ways to play our new stay-at-home economy at far lower multiples of sales, such as Akamai (AKAM), RingCentral (RNG) and 8×8, Inc. (EGHT). Also notes storage companies have largely been ignored in the scramble for work-from-home plays, with Box (BOX) and DropBox (DBX)

·     Juniper (JNPR) was upgraded to overweight at JPMorgan from neutral

·     Cognizant Technology Solutions (CTSH) said some clients have seen service disruptions after the company was hit by a “Maze” ransomware attack.


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