Early Look

Friday, August 7, 2020

Futures	Up/Down	%	Last
DJ Industrials	-128.00	0.47%	27,157
S&P 500	-15.50	0.46%	3,328
Nasdaq	-54.50	0.48%	11,207

 

 

Stock futures are pointing to a lower open heading into the final trading day of the week as major U.S. markets have closed higher every day this week, with the S&P 500 and Dow Jones Industrials coming into the day with 5-day win streaks and the Nasdaq Composite riding a 7-day win streak after closing in record territory for a 32^nd time last night. Gold and silver futures are also edging lower for the first time in six days after their recent outperformance amid a plunging dollar, all ahead of the monthly jobs report at 8:30 AM today. The estimate for the nonfarm payrolls figure for July is expected for 1.5M jobs being added (vs. 4.8M month prior) and private payrolls to add 1.398M jobs (prior month 4.767M), manufacturing jobs to rise 266K (vs. 356K prior) as the unemployment rate is expected to fall to 10.5% from 11.1% – average hourly earnings expected to fall (-0.5%) vs. last month decline (-1.2%). In Asian markets, The Nikkei Index fell -88 points to 22,329, the Shanghai Index dropped -32 points to 3,354 and the Hang Seng Index plunged nearly -400 points to 24,531. In Europe, the German DAX is down a couple of points to 12,580, while the FTSE 100 is down a few points to 6,020. German industrial production rose 8.9% month-on-month in June, beating expectations. It was a busy night of earnings results, but now nearly 425 of the S&P components have reported for Q2, with the pace of results slowing heading into the dog days of summer. In an escalation of tensions overnight, President Trump issued executive orders Thursday night banning “transactions” with the Chinese owners of the TikTok and WeChat apps starting Sept. 20. WeChat’s owner — Shenzhen-based tech giant Tencent Holdings Inc. (TCEHY) is one of the world’s largest and most valuable companies with stakes in many video game companies.

Market Closing Prices Yesterday

·     The S&P 500 Index jumped 21.39 points, or 0.64%, to 3,349.16

·     The Dow Jones Industrial Average rose 185.46 points, or 0.68%, to 27,386.98

·     The Nasdaq Composite spiked 109.67 points, or 1.00%, to 11,108.07

·     The Russell 2000 Index declined -1.61 points, or 0.10% to 1,544.62

 

Economic Calendar for Today

·     8:30 AM EST      Nonfarm payroll change for July…est. 1.5M

·     8:30 AM EST      Change in private payrolls for July…est. 1.398M

·     8:30 AM EST      Change in Manufacturing payrolls for July…est. 266K

·     8:30 AM EST      Unemployment Rate for July…est. 10.5%

·     8:30 AM EST      Average Hourly Earnings for July…est. (-0.5%)

·     10:00 AM EST    Wholesale Inventories MoM for June

·     1:00 PM EST       Baker Hughes Weekly Rig Count

·     3:00 PM EST       Consumer Credit for June

 

Earnings Calendar:

·     Earnings Before the Open: ESNT, IEP, KIM, NFG, NJR, RDN, ROAD, SABR, SSP, TILE, VIRT

 

 

Macro	Up/Down	Last
WTI Crude	-0.35	41.60
Brent	-0.32	44.77
Gold	-5.10	2,058.50
EUR/USD	-0.0057	1.182
JPY/USD	0.10	105.65
10-Year Note	-0.009	0.53%

 

 

World News

·     The 30-year fixed-rate mortgage averaged 2.88% for the week ending August 6, dropping 11 basis points from the week prior, marking the eighth time this year the benchmark mortgage rate slipped to a record low. In comparison, these loans had an average rate of 3.6% a year ago.

 

Sector News Breakdown

Auto & Travel

·     Booking Holdings (BKNG) Q2 adjusted EPS loss ($10.81) on revs $630M vs. est. loss ($11.70)/$569.31M; Q2 gross travel bookings for Booking Holdings were $2.3B, a decrease of 91% over a year ago, or approximately a 91% decrease on a constant-currency basis; room nights booked decreased 87% over a year ago

·     CarGurus (CARG) Q2 EPS 6c/$94.74M vs. est. 0c/$86.32M; sees Q3 EPS 21c-23c on revs $132M-$135M vs. est. 8c/$124.44M; sees FY20 EPS 66c-69c on revs $518M-$524M vs. est. 44c/$516.67M; offered united states and Canadian paying dealers fee reductions of 50%, 50%, and 20% in months of April, May, and June, respectively

·     Uber (UBER) 2q gross bookings fell -35% YoY to $10.22B vs. est. $10.42B; 2q mobility bookings fell 75% to $3.05B, while delivery bookings rose 106% to $6.96B; 2q adjusted Ebitda loss $837M, +28% YoY; Q2 EPS loss ($1.02) on revs $1.92B vs. est. loss (84c) and $1.82B; 2q monthly active platform consumers 55 million, -44% YoY

·     TripAdvisor (TRIP) reports hotels, media & platform revenue fell -85% to $38M in Q2 vs. $35.5M consensus; experiences & dining revenue was down 89% to $14M; says it observed an improving monthly trend in the back half of the quarter; April and May consolidated revenue was ~10% of last year’s comparable period and June revenue was ~20% of last year’s comparable period; free cash flow was -$93M vs. +$165M a year ago

·     TrueCar (TRUE) Q2 adjusted eps 4c on revs $62.7M vs. est. loss (7c) and $55.6M; announces $75M share buyback plan; 2q average monthly unique visitors 8.3 million, +15% YoY and 2q average revenue per transaction $290.00, -13% YoY

 

Consumer

·     Callaway Golf (ELY) Q2 adjusted EPS 6c on revs $297M vs. est. loss (2c)/$286.33M; suspends quarterly dividend

·     DraftKings (DKNG) and Major League Baseball announced a multi-year extension to remain the Official and Exclusive Daily Fantasy Sports, DFS, Partner of the League

·     Funko (FNKO) Q2 EPS loss (30c) on revs $98.1M vs. est. loss (41c) and $76.71M.

·     Herbalife Nutrition (HLF) Q2 adjusted EPS 95c on revs $1.3B vs. est. 86c/$1.3B; Q2 volume points of 1.7 billion, up 12.4% compared to last year; says not providing guidance

·     Mohawk Industries (MHK) Q2 adj EPS 37c on sales $2.05B vs. est. loss (9c) and $1.87B; restructuring our business to enhance our results and our future performance; reducing SG&A, headcount and lower performing products and SKUs; anticipate global restructuring actions will deliver annual savings of approximately $110M-$120M

·     Post Holdings (POST) Q3 EPS 75c on revs $1.34B vs. est. 71c/$1.38B; sees Q4 adjusted EBITDA similar to Q3; it previously withdrew its FY20 outlook as a result of the COVID-19 pandemic

·     Zillow (ZG) shares rise 9%l Q2 revs rose 28% YoY to $768M; 2Q homes sold 1,437, +83% YoY, 2Q homes purchased 86, -94% YoY; 2Q average monthly unique visitors 218 million and says exited the quarter with the highest cash balance in its history, growing cash and investments to $3.5B

 

Energy, Industrials & Materials

·     Livent (LTHM) Q2 EPS 0c on revs $64.9M (down 43% YoY) vs. est. 2c and $74.64M; said demand for lithium was “very weak,” particularly in electric vehicle applications, as COVID-19 caused “serious disruption”; Q2 adjusted EBITDA plunged 77% Y/Y to $6.4M

·     RBC Bearings (ROLL) Q1 adjusted EPS 95c on revs $156.5M vs. est. 87c and $152.57M; guides Q2 revenue $148M-$152M vs. est. $152.65M

·     TimkenSteel (TMST) cuts FY20 CapEx view to $15M-$20M from $25M; reports Q2 EPS loss of (34c) on revs $154M vs. est. loss (80c)/$276.7M

·     LyondellBasell (LYB) confirmed it extinguished a fire at a hydrotreater at its 263K bbl/day Houston refinery.

·     First Solar (FSLR) has entered agreement whereby NovaSource will acquire its North American Operations & Maintenance business, no terms were disclosed

 

Financials

·     Intercontinental Exchange Inc. (ICE), the owner of the New York Stock Exchange, said it would acquire mortgage-software firm Ellie Mae, from private-equity firm Thoma Bravo which values Ellie Mae at $11 billion, including debt (Thoma Bravo acquired Ellie Mae last year for $3.7B)

·     Envestnet (ENV) Q2 adjusted EPS 59c on revs $235.3M vs. est. 47c and $227.47M; sees Q3 adjusted EPS 59c on revs $244.5M-$246M vs. est. 52c/$241.04M

·     RE/MAX Holdings (RMAX) Q2 adjusted EPS 38c on revs $52.2M vs. est. 39c and $52.09M

 

Healthcare

·     AstraZeneca (AZN) struck a deal for a Chinese company to produce its experimental COVID-19 vaccine in China. Shenzhen Kangtai Biological Products will produce the vaccine, being developed by the University of Oxford

·     Clovis Oncology (CLVS) Q2 EPS loss ($1.15) vs. est. loss $1.04); 2q Rubraca revenue $39.9M up 21% YoY but misses estimates around $47M

·     Nektar Therapeutics (NKTR) Q2 EPS loss (45c) on revs $48.8M vs. est. loss (68c) and $22.8M; Q2 cash and equivalents -32% YoY to $58.2M

·     Puma Biotechnology (PBYI) Q2 adj EPS 35c on revs $70.6M vs. est. loss (33c); Q2 operating expenses fell -20% YoY to $63.5M; cash equivalents $90.9M vs. $27.2M YoY; Q2 NERLYNTX product revs $48.8M down from $53.8M YoY

·     AMN Healthcare (AMN) Q2 adjusted EPS 83c on revs $608.4M vs. est. 64c/$560.74M; sees Q3 revenue $510M-$525M vs. est. $504.46M; Q3 gross margin is expected to be 33.0-33.5%, operating margin is expected to be above 7%

·     Editas Medicine (EDIT) Q2 EPS loss (43c) on revs $10.75M vs. est. loss (79c)/$6.34M

·     Illumina (ILMN) Q2 EPS 62c on revs $633M vs. est. 67c/$679.6M; Q2 non-GAAP gross margin was 68.6% for the second quarter of 2020 compared to 69.5% in the prior year period

 

Media & Telecom

·     Lionsgate (LGF/A) Q1 adjusted EPS 39c on revs $813.7M vs. est. 19c/$767.35M; Q1 OIBDA $173.7M vs. est. $120.8M

·     Liberty Broadband (LBRDA) and GCI Liberty (GLIBA) entered into a definitive merger agreement under which Liberty Broadband has agreed to acquire GCI Liberty in a stock-for-stock merger. Under the terms of the merger agreement: Each holder of GLIBA will receive 0.580 of a share of LBRDK; Each holder of GLIBB will receive 0.580 of a share of LBRDB; Each holder of GLIBP will receive one share of Liberty Broadband Cumulative Redeemable Preferred Stock

·     News Corp. (NWSA) Q4 adj EPS loss (3c) on revs $1.92B vs. est. loss (8c) and $1.82B; beginning with q4, company is presenting Dow Jones as a separate reportable segment; qtr includes non-cash impairment charges of $292 mln and higher restructuring costs due to covid-19; Dow Jones achieved average subscriptions of 3.8 mln to its consumer products

·     T-Mobile (TMUS) Q2 EPS $0.09 (vs. est. $0.03); Q2 Adj. EBITDA $7.02B (est. $5.85B); Q2 Revenue $17.67B (vs. est. $17.65B); sees H2 adj. EBITDA $12.4B-12.7B

 

Technology

·     Alteryx (AYX) shares fall -15%; Q2 non-GAAP EPS 2c on revs $96.2M vs. est. loss (14c)/$94.11M; sees Q3 non-GAAP 9c-14c on revs $111M-$115M vs. est. 13c/$119.33M

·     Appian (APPN) Q2 EPS loss (12c) on revs $66.78M vs. est. loss (25c)/$61.07M; sees Q3 EPS (18c)-(16c) on revs $70.5M-$71.5M vs. est. loss (19c)/$66.33M

·     Applied Optoelectronic (AAOI) shares rise 15%; Q2 Adj eps loss (24c) on revs $65.2M vs. est. loss (25c) and $57.3M; sees Q3 EPS loss (3c-2c) vs. est. loss (19c) and revs $76M-$83M well above the $59M est.

·     Cloudflare (NET) Q2 adjusted EPS loss (3c) on revs $99.7M vs. est. loss (6c)/$94.14M; raises FY20 adj. EPS view to (18c)-(17c) from (21c)-(19c) and also boosts FY20 revenue view to $404M-$408M from $389M-$393M (est. $393.06M)

·     DataDog (DDOG) shares fell -16%; Q2 beats with 68% Y/Y revenue growth and raising the full-year outlook as sees $566-572M in revenue (from prior $555M-$565M and est. $563.6M) and $0.11-$0.13 EPS (vs, consensus: $0.05).; Q2, $100k+ ARR customers totaled 1,015, up from 594 in last year’s quarter; operating cash flow totaled $24.7M with FCF of $18.6M.

·     Dropbox (DBX) Q2 adjusted EPS 22c on revs $467.4M vs. est. 17c/$465.29M; paying users ended at 15.0 mln in qtr, as compared to 13.6 mln for same period last year; qtrly average revenue per paying user was $126.88, as compared to $120.48 for same period last year; announced it CFO is stepping down; raises FY20 revenue view to $1.891B-$1.901B from $1.88B-$1.90B and ups FY20 free cash flow view to $465M-$475M from $460M-$470M

·     Groupon (GRPN) shares rise over 30%; Q2 EPS loss (93c) on revs $395.6M vs. est. loss ($2.64) and $201.6M; for 2021, we expect to realize approximately $200 million in savings from our restructuring actions

·     Stamps.com (STMP) shares up 20%; 2Q adjusted EPS $3.11 on revs $206.7M vs. est. $1.09 and $144M; 2Q mailing and shipping revenue $197.9 million, +46% YoY, 2Q customized postage revenue $8.8M vs. $3.13M YoY; raises year revs to $650M-$725M from prior $570M-$600M

·     Switch (SWCH) Q2 adj EPS 6c on revs $126.9M vs. est. 5c and $127.3M; 2Q adjusted Ebitda rose 18% YoY to $69.1M; still sees FY revenue $507M-$521M vs. est. $517.8M; still sees FY adjusted Ebitda $251M-$261M

·     Twilio (TWLO) 5.06M share Secondary priced at $247.00

·     Universal Display (OLED) Q2 EPS 2c/$58M vs. est. 30c/$74.19M; said while COVID-19 uncertainties will likely continue to weigh on consumer demand in the near-term, we continue to invest and further strengthen our leadership position in the OLED ecosystem and expect to emerge a stronger partner to our customers and the OLED industry