Early Look

Tuesday, August 4, 2020

Futures	Up/Down	%	Last
DJ Industrials	-47.00	0.20%	26,509
S&P 500	-10.50	0.33%	3,278
Nasdaq	-38.50	0.37%	11,005

 

 

Stock futures in the U.S. are pointing to a slightly lower open following a strong surge in stocks yesterday, as the tech heavy Nasdaq Composite recorded its 29^th record close of the year after trading as high as 10,927 before paring gains. Strong manufacturing data as well as vaccine hopes and mostly stronger than expected quarterly earnings helped offset the disappointment out of Washington on a new stimulus relief bill, as Democratic leaders and White House officials are still at odds over a new coronavirus aid package. While the two sides have agreed on another round of stimulus checks, they remain deadlocked on whether to cut a $600-a-week federal jobless supplement. In Asian markets, The Nikkei Index jumped 378 points to 22,573, the Shanghai Index gained 3 points to 3,371 and the Hang Seng Index surged 488.50 points or 2% to settle at 24,946. In Europe, the German DAX is down -50 points to trade just under 12,600, while the FTSE 100 is little changed around the 6,030 level. Today marks another busy day of earnings highlighted by Dow component Disney (DIS) after the close tonight.

Market Closing Prices Yesterday

·     The S&P 500 Index gained 23.49 points, or 0.72%, to 3,294.61

·     The Dow Jones Industrial Average rose 236.10 points, or 0.89%, to 26,664.40

·     The Nasdaq Composite jumped 157.50 points, or 1.47%, to 10,902.80

·     The Russell 2000 Index advanced 26.37 points, or 1.78% to 1,506.80

 

Economic Calendar for Today

·     7:45 AM EST      ICSC Weekly Retail Sales

·     8:55 AM EST      Johnson/Redbook Weekly Sales

·     10:00 AM EST    Factory Orders for June

·     10:00 AM EST    Durable Goods Orders, June-F

·     10:00 AM EST    Durable Goods Orders Ex: Transportation, June-F

·     4:30 PM EST       API Weekly Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: AMCX, AME, ARMK, ATI, CNK, EMR, EPC, ETRN, EVFM, EXC, EXPD, FIS, HISC, IAA, INCY, IPGP, IPHI, IT, JELD, KKR, KPTI, LCII, LDOS, LEA, LPX, NS, RCM, REZI, RL, SHO, SPR, TDG, TTI, USCR, VMC, VPG, VSH, WEC, WMG, WRK, ZBH

·     Earnings After the Close: ACOR, AIZ, ALL, ALSN, ANET, ATVI, BMRN, BOOT, BYND, CDLX, CNO, CPE, DIS, DK, EVER, EVH, EVRI, FMC, FOXA, GDOT, GLUU, INGN, LC, LMNX, MCHP, MNST, MTCH, NEWR, NKLA, NPTN, OI, OMI, PAA, PLNT, PRU, PUMP, PXD, RIGL, TGI, TWLO, UIS, UPWK, VRSK, WU, WW, WYNN

 

 

Macro	Up/Down	Last
WTI Crude	-0.67	40.34
Brent	-0.71	43.44
Gold	6.50	1,992.80
EUR/USD	0.0026	1.1788
JPY/USD	0.03	105.98
10-Year Note	-0.013	0.541%

 

 

World News

·     The China Daily and Global Times labeled the U.S. a “rogue country” and likening the potential sale to Microsoft (MSFT) as “open robbery.” “China has plenty of ways to respond if the administration carries out its planned smash and grab,” they declared.

·     White House trade adviser Peter Navarro has suggested that Microsoft could divest its holdings in China if it were to buy the Chinese owned short-video app, while President Trump said “key money” would have to be paid to the U.S. Treasury for making the deal possible (he previously said TikTok would be banned from Sept. 15).

 

Sector News Breakdown

Consumer

·     Ascena Retail (ASNA) sees $290-$310M impairment charges for May 2 qtr; won’t be able to timely file qtrly report

·     Chegg (CHGG) Q2 adj EPS $0.37 vs est $0.32 on revs $153Mm vs est $136.6Mm; sees revs $140-145Mm vs est $123.4Mm, guides FY20 revs $605-615Mm vs est $551Mm

·     Edgewell Personal Care Company (EPC) to acquire CREMO, a premier men’s grooming company in the U.S., in an all-cash transaction of $235M

·     Hyatt (H) Q2 adjusted EPS loss ($1.80) on revs $250M vs. est. ($1.34)/$316.39M; comparable system-wide RevPAR decreased 89.4%; net rooms growth rose 5.8%; says recovery in RevPAR has been mixed

·     Invitation Homes (INVH) Q2 EPS 8c on revs $449.8M vs. est. 6c/$445.63M; said YoY core FFO per share increased 4.4% to 32c, and AFFO per share increased 9.4% to 27c; said continued to achieve strong rent collection from our mature, stable resident base, with collections in June and July near historical average levels

·     Texas Roadhouse (TXRH) Q2 EPS loss (48c) on sales $476.4M vs. est. loss (63c)/$474.75M; for the April, May, and June periods, comparable restaurant sales at company restaurants decreased 46.7%, 41.9%, and 14.1%, respectively; for the quarter, comparable restaurant sales decreased 32.8% at company restaurants and 32.1% at domestic franchise restaurants

·     Trex Company (TREX) Q2 EPS 81c on revs $220.6M vs. est. 65c/$200.73M; approves two-for-one stock split; sees Q3 revenue $215M-$225M above consensus $193.94M (13% YoY growth); expect full year 2020 incremental gross margin to be 45% to 50%

 

Energy

·     BP Plc (BP) halved its dividend overnight to 5.25 cents per share after reporting a record $6.7B loss; the figure included $9.2B in impairments across the group, largely due to BP’s revised forecast for oil and gas prices over the next three decades, and $1.7B of exploration write-offs.

·     Continental Resources (CLR) 2Q adjusted EPS loss (71c) vs. est. loss (62c); Q2 avg production 202,815 boe/d, -39% YoY; 2Q adjusted Ebitda $36.0 million, -96% YoY; said 2Q Bakken production 88,822 net boe/d, -54% YoY

·     Diamondback Energy (FANG) Q adj EPS $0.15 vs est $0.02, sees 2020 total net production 290-305 MBOE/D, says 3 completion crews working to stem production declines to meet 4Q production target range 17,000-175,000 bbls/day

·     SolarEdge Technologies (SEDG) Q2 adj EPS 97c on revs $331.9M vs. est. 68c and $319.7M; sees Q3 revenue $325M-$350M vs. est. $333.1M

·     Williams (WMB) Q2 adjusted EPS 25c vs. est. 24c; reports Q2 adjusted EBITDA $1.24B; backs FY20 adjusted EBITDA at lower end of $4.95B-$5.25B range; continues to expect 2020 Adjusted EBITDA toward the lower end of its previously stated range of between $4.95 billion and $5.25 billion; now expects 2020 growth capex of $1 billion to $1.2 billion, down from the original range of $1.1 billion to $1.3 billion.

 

Financials

·     AIG Inc. (AIG) Q2 adj EPS 66c vs. est. 48c; general insurance reported $674 mln of pre-tax catastrophe losses, net of reinsurance in qtr; Q2 general insurance catastrophe losses included $458 mln of estimated covid-19 losses, $126 mln of civil unrest related losses; net premiums written $5.55 bln, down 16%; underwriting loss of $343 mln vs income of $147 mln; $71.68 of book value per common share in qtr, an increase of 3.4% from march 31, 2020

·     Vornado Realty Trust (VNO) announced that Facebook (FB) has leased 730,000 square feet comprising all of the office space at The Farley Building in Vornado’s PENN DISTRICT; Q2 FFO 55c on revs $343M vs. est. $1.00 and $394M

 

Healthcare

·     Voyager (VYGR) shares fell after announces termination of its research collaborations with biopharmaceutical firm AbbVie Inc. (ABBV) to study and develop a type of antibody; VYGR retains full rights to the technology and certain novel antibodies developed as part of the collaborations

·     Potential COVID-19 vaccines from Moderna (MRNA), Pfizer (PFE) and its partner BioNTech (BNTX) are drawing early enthusiasm, but investors are wary of upping stakes because valuations have soared, the WSJ reported. Though vaccines based on messenger RNA technology appear to be performing best at eliciting antibodies that can potentially neutralize the coronavirus, the early-stage studies that have produced results so far weren’t designed to show whether the vaccines truly protect people from COVID-19, only to test safety and immune responses.

·     Bruker (BRKR) Q2 EPS 21c/$424.6M vs. est. 6c/$390.92M; sees sequential improvement in financial results in Q3 vs. Q2 but says fiscal 2020 guidance remains suspended

·     Neurocrine Biosciences (NBIX) 2Q adj EPS $1.42 vs est $0.84 on revs $267.6Mm vs est $272.6Mm

·     Tenet (THC) 2Q adjusted EPS $1.26 vs. est loss (71c); 2Q net operating rev. $3.65 billion, -20% YoY; 2Q adjusted Ebitda $732 million, +11% YoY

 

Industrials & Materials

·     Boeing (BA) files mixed securities shelf

·     BWX Technologies (BWXT) 2q revenue $505M, +7.2% YoY vs. est. $458.9M; 2q adjusted eps 71c vs. 62c YoY vs. estimate 56c

·     Casella Waste (CWST) Q2 $0.27 vs est $0.06 on revs $188.8Mm vs est $183.8Mm; guides FY revs $755-770Mm vs est $760.66Mm, sees FY20 EBITDA $158-163Mm vs est $154.1Mm

·     Ingersoll Rand (IR) Q2 adj EPS 31c on revs $1.3B vs. est. 19c and $1.17B

·     KBR (KBR) has been awarded $165M task order to perform key engineering services on tactical missiles for the Tactical Aviation and Ground Munitions Project Office

·     Kennametal (KMT) Q4 adj EPS $0.15 vs est $0.12 on sales $379Mm vs est $399.8Mm, says Covid effects felt in every region and created challenging environment; guides FY21 to present ongoing economic challenges, says all production facilities operating, will not be issuing FY21 outlook beyond CAPEX plan of $110-130Mm

·     Mosaic (MOS) 2Q adj EPS $0.11 vs est ($0.01) on net sales $2.0B vs est $1.84B, says fertilizer inventory been drawn down around the world, tightness in China corn market driving domestic demand and consumption, still sees covid risks thru end of yr, on course to generate $700Mm additional transformation benefits over the 2019 base next 5 yrs

·     Virgin Atlantic (SPCE) Q2 EPS loss (30c) or $62.5M; files to sell 20.489M shares offered

·     YRCW Worldwide (YRCW) Q2 EPS loss ($1.09) on revs $1.02B vs. est. loss ($1.66) and $1.01B; secures $700M investment from US Treasury

 

Technology, Media & Telecom

·     Cirrus Logic (CRUS) 1Q adj EPS $0.53 vs est $0.30 on revs $242.6Mm vs est $225.6Mm; guides 2Q revs $290-330Mm vs est $315Mm, sees 2Q gr mgn 51-53% vs est 52.2%; 1Q adjusted gross margin 52.6% vs. 51.5% YoY; 1Q portable products sales $0.24 million, +1.8% y/y

·     Five9 (FIVN) Q2 EPS 21c/$99.8M vs. est. 15c/$91.01M; Q2 adjusted EBITDA was $18.3M from $14.4M YoY; sees FY20 EPS 77c-80c on revs $399M-$401M vs. est. 74c/$385.35M

·     KLA-Tencor (KLAC) Q4 adj EPS $2.73 on revs $1.46B vs. est. $2.38/$1.41B; sees Q1 EPS $2.42-$3.06 vs. est. $2.45 and revs $1.4B-$1.55B vs. est. $1.39B;

·     Mimecast (MIME) 1Q adj EPS $0.22 vs est $0.16 on revs $115.2Mm vs est $113.3Mm; guides 2Q revs $120.8-121.8Mm vs est $116.2Mm; sees FY20 revs $488.1-493.1Mm vs est $479.85Mm;

·     RingCentral (RNG) 2Q adj EPS $0.24 vs est $0.20 on revs $278Mm vs est $263.8Mm, qtrly subscription revs +32%; sees 3Q adj EPS $0.24 vs est $0.24, sees 3Q revs $283.5-289.5Mm vs est $283Mm; guides FY20 adj EPS $0.92-0.94 vs est $0.92 on revs $1.135-1.143B vs est $1.12B; 2Q software subscription revenue $257.0 million, +32% YoY

·     SBA Communications (SBAC) 2Q AFFO/share $2.29 vs. estimate $2.23 on revs $507.2M vs. est. $502.2M; 2Q adjusted Ebitda $368.8 million, +6.2% YoY; sees FY20 AFFO $8.94-$9.33 vs. est. $9.25 and sees FY20 revenue $2.047B-$2.087B vs. est. $2.07B

·     Take-Two (TTWO) 1q adj eps $2.30, vs. est. $1.60; 1q adj rev $996.2m, vs. est. $847.1M; sees fy adj eps $4.05 to $4.30, from prior $3 to $3.25 and sees fy adj rev $2.8b to $2.9b, saw $2.55b to $2.65b

·     Varonis (VRNS) 2Q adj EPS ($0.15) vs est ($0.35) on revs $66.57Mm vs est $57Mm; guides 3Q adj loss/shr 11-14C vs est loss/shr 17C, sees 3Q revs $68-71Mm vs est $65.7Mm