Early Look

Tuesday, December 1, 2020

Futures	Up/Down	%	Last
DJ Industrials	353.00	1.19%	29,
S&P 500	39.50	1.10%	3,
Nasdaq	108.50	0.88%	12,

 

 

Global markets are surging again as vaccine optimism continues to be a positive force in the markets, as one of the leading Covid-19 vaccine candidates moved closer to regulatory approval. Biotech Moderna has filed for the vaccine’s emergency use in the U.S., while in the U.K. regulators could approve the drug for use within days. Meanwhile, have applied to the European drugs regulator for conditional authorization of their COVID-19 vaccine, following similar steps in the U.S. and Britain. Asian stocks marched higher after an index of Chinese manufacturing released by Caixin hit a decade high in November as the country’s recovery from the pandemic gained strength. Sentiment is super bullish heading into the holiday season with stocks surging around the global as vaccine hopes, stimulus expectations and recovering economies are offsetting the recent spike in coronavirus cases and renewed restrictions to temper the rise of cases.

 

Stocks slipped on Monday, but that didn’t stop major averages from posting incredible returns for the month as the S&P 500 index held on to record the best November in its history, rising 10.9% above the previous record, a 10.2% gain seen in November 1980. The Russell 2000 index posted an all-time best monthly return, up 18.29% while the Dow Jones notched the best month since 1987, up 11.9%. The Nasdaq Composite had its best November since 2001, rising 11.8%. Energy was the top gainer in November, rising 30% for the sector, followed by gains in financials and industrials. Crude oil jumped 26% in November to top $45 per barrel while gold ended the month down 5.4%.

 

In Asian markets, The Nikkei Index jumped 352 points to 26,787 (Nikkei closed near the highest level since 1991, which it hit in the session’s trading), the Shanghai Index rose 60 points (1.77%) to 3,451 and the Hang Seng Index gained 226 points to 26,567. In Europe, the German DAX is higher by 130 points to 13,425, while the FTSE 100 is higher by 120 points (1.93%) to 6,386.

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -16.72 points, or 0.46%, to 3,621.63

·     The Dow Jones Industrial Average fell -271.73 points, or 0.91%, to 29,638.64

·     The Nasdaq Composite slipped -7.11 points, or 0.06%, to 12,198.74

·     The Russell 2000 Index declined -35.45 points, or 1.91% to 1,819.82

 

Economic Calendar for Today

·     7:45 AM EST      ICSC Weekly Retail Sales

·     8:55 AM EST      Johnson/Redbook Weekly Sales

·     9:45 AM EST      Markit Manufacturing PMI Nov-F

·     10:00 AM EST    Construction Spending for October

·     10:00 AM EST    ISM Manufacturing PMI for November

·     4:30 PM EST       API Weekly Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: CTRN, GBDC

·     Earnings After the Close: BOX, CRM, HOME, HPE, NTAP, ROOT, VEEV

 

Other Key Events:

·     Cowen Cannabis Conference (virtual), 11/30-12/2

·     Credit Suisse 24th Annual Technology Conference (virtual), 11/30-12/3

·     HC Wainwright Mining Conference (virtual), 11/30-12/1

·     Piper 32nd Annual Healthcare Conference (virtual), 11/30-12/3

 

 

Macro	Up/Down	Last
WTI Crude	0.04	45.38
Brent	0.12	48.00
Gold	30.00	1,807.00
EUR/USD	0.0035	1.1962
JPY/USD	0.08	104.39
10-Year Note	+0.017	0.857%

 

 

World News

·     An index of Chinese manufacturing released by Caixin, hit a decade high in November as the country’s recovery from the pandemic gained strength. A separate survey Monday by the government statistics agency showed activity at a three-year high.

·     Euro zone factory growth cooled last month as renewed coronavirus lockdown measures hurt demand, as the IHS Markit’s final Manufacturing Purchasing Managers’ Index (PMI) fell to 53.8 in November from October’s 54.8 but was ahead of the 53.6 flash estimate.

·     Bitcoin soared to an all-time high on Monday, hitting $19,850 in the morning before again slipping below $19,500 by the afternoon as prices have nearly doubled in just the past two months. New buyers appear to view the crypto currency as a hedge against currency devaluation at a time when governments have loosened monetary policy to deal with the coronavirus

·     Treasury’s Mnuchin said based on recent economic data, “I continue to believe that a targeted fiscal package is the most appropriate federal response” to coronavirus pandemic – statement to senate banking committee (more). Mnuchin strongly encourage congress to use the $455 billion in unused funds from the cares act to pass an additional bill with bipartisan support

 

Sector News Breakdown

Consumer

·     Albertsons (ACI) ratify agreement with UFCW local unions for variable annuity pension plan; company will record pre-tax charge of about $286Mm to record withdrawal liability for benefits earned for prior service in 3Q

·     Nio (NIO) reported 109.3% Y/Y growth to 5,291 vehicles in November; the deliveries consisted of 2,386 ES6s, 1,387 ES8s and 1,518 EC6s; YTD deliveries reached 36,721 units, an increase of 111.1% Y/Y; cumulative deliveries of the ES8, ES6 and EC6 were 68,634 vehicles

·     XPeng (XPEV) said it delivered 4,224 vehicles in November, up +342% YoY; delivered 21,341 vehicles YTD, +87% YoY consisting of 2,732 P7s, the company’s smart sports sedan and 1,492 G3s, its smart compact SUV

·     Macau’s gaming bureau reported November gross revenue from games of fortune in the region decreased 70.5% year-over-year to 6.75B patacas (watch WYNN, MLCO, MGM)

·     Phoenix Motorcars recently acquired by EdisonFuture, a subsidiary of SPI Energy (SPI) has delivered two of its all-electric Z500 utility trucks to the Port of Oakland, one of California’s largest ports; these are the first all-electric Class-4 utility trucks to be deployed at a major port in the U.S.

 

Energy, Industrials and Materials

·     Exxon (XOM) said it sees 15% global workforce reductions by the end of 2021 on top of cost savings that are seen at $10B, or 30% of capital spending and 15% of cash operating expenses this year; a non-cash, after-tax charge of $17B-$20B is expected in Q4; capital spending next year is seen at $16B-$19B, and then $20B-$25B annually through 2025.

·     Virgin Galactic (SPCE) shares rose after hours after winning a NASA contract to provide flight and integration services for payloads chosen by the agency’s Flight Opportunities program; the multiple award contracts are firm-fixed-price orders with a total combined value of $45 million

·     FedEx (FDX) upgraded to Overweight from Equal Weight at Barclays

·     Occidental Petroleum (OXY) downgraded to Sell from Neutral at UBS

·     Sunnova Energy (NOVA) 7M share Spot Secondary priced at $37.00

·     Knight-Swift Transport (KNX) board approved repurchase of up to $250 mln of company’s outstanding common stock

 

Financials

·     Bank of Nova Scotia (BNS) Q4 Non-GAAP EPS of C$1.45 beats by C$0.20; GAAP EPS of C$1.42; revenue of C$7.51B (-5.8% Y/Y) misses by C$100M; provision for credit losses of C$1.13B vs. consensus of C$1.45B.

·     Invesco Mortgage Capital Inc. (IVR) may offer and sell up to 45 million shares of company’s common stock from time to time through JMP Securities LLC – Reuters

·     Golub Capital (GBDC) 4Q EPS $0.57 vs. est. $0.27; declares 1Q21 distribution of $0.29/share

·     Shift4 Payments (FOUR) announces convertible notes offering of $400 mln due 2025

·     Noah Holdings (NOAH) announces $100M share repurchase program; Q3 revenue rose 2 pct to RMB 859.1 mln

 

Healthcare

·     Moderna (MRNA) rises again after hours after touching another all-time high on Monday, as a panel of outside experts advising the U.S. FDA will meet Dec. 17 to review the evidence for Moderna’s vaccine and vote on whether to recommend that the agency authorize its emergency use; a similar meeting has been set for Dec. 10 for the Pfizer-BioNTech vaccine

·     Pfizer Inc (PFE) and BioNTech (BNTX) have applied to the European drugs regulator for conditional authorization of their COVID-19 vaccine, following similar steps in the U.S. and Britain, the companies said. The application to the European Medicines Agency (EMA) comes after the companies applied for U.S. approval on Nov. 20, taking them a step closer to launching their vaccine

·     Axsome Therapeutics (AXSM) announced positive results from the long-term, open-label Phase 3 COMET trial of AXS-05 in patients with major depressive disorder, or MDD, and the open-label Phase 2 COMET-AU trial in patients failing one prior antidepressant treatment

·     Elanco (ELAN) 54.5M share Secondary priced at $30.25

·     Galapagos NV (GLPG) announces positive topline results from a Phase 2 proof-of-concept clinical trial, PINTA, evaluating GLPG1205 in 68 patients with ideopathic pulmonary fibrosis (IPF)

·     Cogent Biosciences (COGT) announces $60M public offering of common stock

·     Intellia Therapeutics (NTLA) announces $150M common stock offering

 

Technology, Media & Telecom

·     Zoom Video (ZM) 3Q adj EPS $0.99 vs. est. $0.76 on revs $777.2Mm vs. est. $694Mm, approx. 433,700 customers in qtr with more than 10 employees (+485%); sees 4Q adj EPS $0.77-0.79 vs. est. $0.66 on revs $806M-$811M vs. est. $719M; guides FY revs $2.575-2.58B (prior $2.37B-$2.39B) vs. est. $2.414B, sees FY adj EPS $2.85-2.87 vs. est. $2.55

·     Booking Holdings (BKNG) initiated with an Underperform at Bernstein and $1,720 price target, TripAdvisor (TRIP) initiated with an Outperform at Bernstein and $35 price target and Expedia (EXPE) initiated with a Market Perform at Bernstein and $113 price target

·     Shift Pixy (PIXY) Quarterly gross billings improved to $18.7 million for Q4 2020, a sequential increase of $4.3 million or 30% from Q3 2020, due to new customer additions and COVID-19 recovery for existing customers. Quarterly revenues improved to $2.4 million for Q4 2020, a sequential increase of 20% from Q3 2020