Early Look

Wednesday, April 22, 2020

Futures	Up/Down	%	Last
DJ Industrials	219.00	0.96%	23,148
S&P 500	28.50	1.04%	2,760
Nasdaq	85.50	1.01%	8,516

 

 

Stock futures are pointing to a higher open, rebounding from initial overnight losses and after posting their first back-to-back losing sessions in three weeks as commodity markets are quiet and the U.S. government took another step in helping small businesses overnight after a bill passed in the Senate. Oil prices are quiet after two of the most volatile days in the commodity’s existence, as front month June prices are down only slightly, holding above the $11 per barrel level after plunging the last two sessions. Last night the Senate passed a $484B virus relief bill which adds to the Payroll Protection Program for small businesses, also provides aid to hospitals and funding for COVID-19 testing. The $350B PPP ran out of money last Thursday after less than two weeks. The House is set to vote on the bill this Thursday. And President Trump said he’ll sign the legislation. Markets are also keeping a close eye on some Southern States, as governors in Georgia, South Carolina and Tennessee are among the first to attempt to reopen their economies as the U.S. takes its first steps to normalcy after being on “lockdown” the last few weeks in their homes to prevent the spread of the coronavirus. In Asian markets, The Nikkei Index dropped -142 points to 19,137, the Shanghai Index rose 16 points to2,843and the Hang Seng Index rose 99 points to 23,893. In Europe, the German DAX is higher by over 100 points to 10,360, while the FTSE 100 is up about 85 points to 5,725. Earnings kick into gear after shares f CMG, SNAP and TER advance on earnings overnight while NFLX holds still steady after its run into numbers that proved to be strong.

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -86.60 points, or 3.07%, to 2,736.56

·     The Dow Jones Industrial Average fell -631.56 points, or 2.67%, to 23,018.88

·     The Nasdaq Composite plunged -297.50 points, or 3.48%, to 8,263.23

·     The Russell 2000 Index declined -28.25 points, or 2.33% to 1,185.09

 

Economic Calendar for Today

·     7:00 AM EST      MBA Mortgage Applications Data

·     9:00 AM EST      FHFA House Price Index MoM for February

·     10:30 AM EST    Weekly DOE Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: APH, BIIB, BKR, BOKF, DAL, DGX, EVR, FCFS, KMB, LAD, NDAQ, NEP, SLGN, T, TMO, WWW

·     Earnings After the Close: AA, AXTI, CASH, CDE, CNS, CSX, DFS, ECHO, EGBN, FNF, FR, GGG, HLX, KMI, LRCX, LSTR, LVS, MC, MMLP, NTGR, ORLY, PFBC, PLXS, RUSHA, SAM, SLG, SLM, SNBR, SRE, STX, TCBI, UMPQ, VMI, WRE, XLNX, ZGNX

 

 

Macro	Up/Down	Last
WTI Crude	-0.10	11.47
Brent	0.10	19.43
Gold	34.30	1,722.10
EUR/USD	0.0002	1.086
JPY/USD	-0.08	107.72
10-Year Note	+0.02	0.589%

 

 

Sector News Breakdown

Consumer

·     Chipotle Mexican grill (CMG) Q1 adj EPS $3.08 on revs $1.4B vs. est. $2.70 and $1.42B; Q1 comp sales 3.3% vs. est. 1.8% (was 9.9% YoY); withdraws yearly guidance; has $909.2M in cash, restricted cash, and short-term investments as of March 31 and no debt; Digital sales grew 80.8% year over year to $371.8M, highest ever quarterly level, and represented 26.3% of sales

·     GameStop (GME) said it’s cutting pay for senior management team, other employees, cutting capital spending; said comp store sales for the nine-week period ended April 4, declined approximately -23% YoY; as of April 4, the Company had approximately $772 million in total cash and liquidity

·     Expedia (EXPE) is nearing a deal to sell a stake in itself valued at about $1B to private equity firms Silver Lake and Apollo (APO), The Wall Street Journal reported saying the deal could be announced as soon as this week, but could also still fall apart

·     Lyft (LYFT) said in light of the evolving and unpredictable effects of COVID-19, Lyft is currently not in a position to forecast the expected impact of COVID-19 on its financial and operating results for the remainder of 2020. As a result, Lyft is withdrawing the annual revenue and adjusted EBITDA guidance it provided on February 11, 2020 for the fiscal year ending December 31, 2020.

·     Lear (LEA) said it had approximately $2.45 billion in cash on hand, which includes $1 billion of cash proceeds from the Company’s revolver drawdown, which was announced on March 26, 2020. Lear also has $750 million of remaining availability on its revolving credit facility, which matures in August 2024

·     United Airlines (UAL) 39.25M share secondary priced at $26.50

·     Macy’s (M) is looking to raise as much as $5B in debt by using inventory as collateral for $3B and real estate to bring in $1B-$2B, CNBC reports, citing unidentified people; said not planning to pledge its Herald Square location in NYC, one of the people said

 

Energy

·     The American Petroleum Institute (API) showed a build of 13.22M barrels of oil for the week ended April 17, its third consecutive increase, while gasoline inventories rose 3.44M barrels, distillate inventories rose 7.64M barrels, and Cushing inventories show a build of 4.91M barrels.

·     EnerSys (ENS) said it sees Q4 revenue approximately $782M vs. est. $759.3M, excluding currency translation impacts, to the expectation of the company’s now withdrawn guidance originally issued February 5; sees gross profit of approximately $195M, or 25% of sales; says balance sheet is well positioned with no significant maturities related to our term loans, revolving credit facility or notes until early in fiscal year 2024

·     TechnipFMC (FTI) cuts annual dividend to 13c from 52c per share

 

Financials

·     Chubb (CB) 1q net premiums earned $7.79B 1q net premiums written $8.0B, +9.4% YoY said core operating eps $2.68 vs. $2.57 est.; 1Q book value per share $115.64 vs. $114.27 YoY and 1Q property & casualty combined ratio 89.1% vs. 89.2% YoY

·     Interactive Brokers (IBKR) shares fall -5%; Q1 adjusted EPS 69c/$581M vs. est. 64c/$563.39M; recognizes provisionary loss of $88M from crude; Customer equity grew 9% from the year-ago quarter to $160.7B; customer credits increased 25% from the year-ago quarter to $65.0B; customer margin loans decreased 22% to $19.8B

·     LendingClub (LC) approves workforce reductions of ~460 employees; expects to incur pre-tax restructuring and related charges of ~$10M till December 31, 2020

·     Navient (NAVI) Q1 adj. EPS 51c vs. est. 60c

·     RLI Corp. (RLI) Q1 operating EPS 66c/$118.12M vs. est. 63c/$204.76M; Q1 net premiums earned rose 5.3% YoY to $215.6M

·     WR Berkley (WRB) Q1 revs fell -6.5% YoY to $1.81B; 1Q net premiums written $1.85B, +8% YoY, 1Q net premiums earned $1.69B, +6.2% YoY and 1Q combined ratio reported 96.9% vs. 94.3% YoY; Q1 catastrophe losses included an approximate $65M preliminary provision for COVID-19 related claims activity

 

Healthcare

·     Healthcare Services (HCSG) Q1 EPS 27c/$449.2M vs. est. 26c/$448.16M; said the pace at which the virus presented and altered operational protocol for our customers was unlike anything we’ve experienced in the industry

·     Immunic, Inc. (IMUX) reports that IMU-838, a selective oral DHODH inhibitor, has demonstrated preclinical activity against sars-cov-2 and explores plans for a phase II

·     Exact Sciences (EXAS) sees Q1 revenue of ~$348M, up 114% from a year ago and above the $341M estimate; screening revenue should be up 35% to ~$219M while Oncology revenue should be up 18% to ~$128M

·     Quest Diagnostics Inc. (DGX) said it has started testing blood for COVID-19 antibodies. Quest said it is using tests made by Abbott Laboratories (ABT) and PerkinElmer Inc.’s (PKI) Euroimmun. By the end of the week, Quest expects to be able to run about 70,000 tests a day, and about 150,000 test a day by early May

·     Roche (RHHBY) said sales in the period came in at 15.14 billion Swiss francs ($15.61 billion) from CHF14.82 billion in the previous-year period and compared to forecast sales at CHF14.65 billion, while it backed its full-year outlook

·     Thermo Fisher (TMO) Q1 EPS $2.94 on revs $6.23B vs. est. $2.79/$6.17B; Revenues: $6,230M (+1.7%); Life Sciences Solutions: $1,774M (+10.4%); Analytical Instruments: $1,101M (-16.7%); Specialty Diagnostics: $958M (+0.1%); Laboratory Products and Services: $2,730M (+8.6%)

·     Germany’s Paul-Ehrlich Institute has signed off on a Phase 1/2 clinical trial evaluating BioNTech’s (BNTX) COVID-19 vaccine program, BNT192, for the prevention of the respiratory infection, the first such study there

 

Industrials & Materials

·     Canadian Pacific (CP) Q1 EPS C$4.42 on revs $C2.04B up 16% YoY; sees year EPS about unchanged (down from prior view of high-single to low double-digits) and volume down mid-single digits; still sees year cap-ex C$1.6B; Q4 operating ratio 59.2%

 

Technology, Media & Telecom

·     Netflix (NFLX) Q1 EPS $1.57/$5.77B vs. est. $1.65/$5.76B; Q1 global streaming paid net additions of 15.77M vs. 8.5M est.; Q1 global streaming paid net additions of 7.5M; sees Q2 EPS $1.81 on revs $6.05B vs. est. $1.54/$5.97B ; says sharply stronger us dollar has depressed qtrly international revenue

·     Texas Instruments (TXN) 1Q EPS $1.24 vs. est. $1.00 on revs $3.33B; guides 2Q EPS $0.64-1.04 vs. est. $0.93, sees 2Q revs $2.61-3.19B vs. est. $3.05B

·     Teradyne (TER) Q1 beats for the quarter provides a broad Q2 outlook due to the pandemic, expecting revenue of $690-800M (vs. est. $643.7M) and EPS of $0.86-1.16 (vs. est. 80c);Q1 revenue breakdown: Semiconductor Test, $484M; System Test, $116M; Industrial Automation, $60M; Wireless Test, $43M; suspended its share repurchase program on April 1.

·     Manhattan Associates (MANH) Q1 EPS 35c on revs $153.9M; cuts year EOS view to $1.50-$1.58 from $1.53-$1.60 and lowers rev view to $541M-$565M from $644M-$656M

·     Snap Inc. (SNAP) shares rose 16%; 1Q adj loss 8c vs. est. loss 7c; Q1 revs $462Mm vs. est. $430Mm; 1Q DAUs rose 20% to 229Mm vs. est. $223.8Mm, they were up sequentially and year-over-year in each of North American, Europe, and Rest of World; not giving 2Q guidance