Early Look

Wednesday, December 2, 2020

Futures	Up/Down	%	Last
DJ Industrials	-110.00	0.37%	29,694
S&P 500	-8.50	0.23%	3,652
Nasdaq	-24.50	0.19%	12,428

 

 

Stock futures are off their worst levels of the night after Pfizer (PFE) and BioNTech (BNTX) have won permission for emergency use of their COVID-19 vaccine in Britain, with two doses three weeks apart required for protection (the headlines are also lifting shares of other vaccine makers (MRNA, NVAX). Markets are still pointing lower a day after the S&P 500 index rose over 1% to new record highs along with new all-time bests for the tech heavy Nasdaq Composite Index as continued market bets that a COVID-19 vaccine will be available soon, boosting prospects about a speedy economic recovery. Upbeat Chinese factory data also helped propel stocks on Tuesday as well as more talk about a possible stimulus plan out of Washington. All eleven S&P 500 sector indexes rose, with communication services among the leaders. In Asian markets, The Nikkei Index gained 13 points to 26,800, the Shanghai Index dipped -2 points to 3,449 and the Hang Seng Index fell -35 points to 26,532. In Europe, the German DAX is down around -40 points to 13,335, while the FTSE 100 is up slightly trading just below the 6,400 level.

Market Closing Prices Yesterday

·     The S&P 500 Index jumped 40.82 points, or 1.13%, to 3,662.45

·     The Dow Jones Industrial Average rose 185.28 points, or 0.63%, to 29,823.92

·     The Nasdaq Composite spiked 156.37 points, or 1.28%, to 12,355.11

·     The Russell 2000 Index advanced 16.23 points, or 0.89% to 1,836.05

 

Economic Calendar for Today

·     7:00 AM EST      MBA Mortgage Applications Data

·     8:15 AM EST      ADP Employment Change for November

·     10:30 AM EST    Weekly DOE Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: DAKT

·     Earnings After the Close: CDMO, CRWD, ESTC, FIVE, GHLD, OKTA, PVH, SMTC, SNOW, SNPS, SPLK, SPWH, ZS

 

Other Key Events:

·     Caixin Services PMI for November

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

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

·     Credit Suisse Industrials Conference (virtual), 12/2-12/4

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

 

 

Macro	Up/Down	Last
WTI Crude	-0.19	44.36
Brent	-0.09	47.33
Gold	13.10	1,828.35
EUR/USD	-0.002	1.2051
JPY/USD	0.36	104.69
10-Year Note	-0.015	0.92%

 

 

World News

·     U.S. Attorney General William Barr said on Tuesday the Justice Department has found no evidence of widespread voter fraud in last month’s election, even as President Donald Trump kept up his legal efforts to reverse his defeat.

·     The U.S. House of Representatives is expected to pass legislation this week that could prevent some Chinese companies from listing their shares on U.S. exchanges unless they adhere to U.S. auditing standards, congressional aides said on Tuesday.

·     Republicans in the U.S. Senate are proposing a coronavirus relief package that would be paid for by rescinding $429 billion in unused funds from the Federal Reserve’s emergency lending facilities and repurposing $140 billion in untapped small business aid, according to a summary provided to Reuters. Republicans want to dedicate $332.7 billion to small business assistance and provide $105 billion for helping students return to school.

 

Sector News Breakdown

Consumer

·     JetBlue (JBLU) 36.5M share Spot Secondary priced at $14.40

·     Fisker (FSR) files with the SEC to sell up to 27.8M shares, consisting of up to 9,360,000 shares of Class A shares that are issuable upon the exercise of warrants in connection with the IPO of Spartan Energy Acquisition at an exercise price of $11.50 per share and up to 18,400,000 shares of Class A shares that are issuable upon the exercise of 18,400,000 warrants originally issued in the IPO of Spartan at an exercise price of $11.50 per share.

·     Workhorse Group (WKHS) shares fell -22% overnight; report indicates the U.S. Postal Service announced another delay in its efforts to award a more than $6 billion contract to replace its fleet of aging mail trucks. Previously the agency said it would award the business early this year but then pushed it back to the end of 2020 after missing several targets for 2019 and 2018, but is now planned for quarter two of 2021 – the three teams left competing for the contract are: Workhorse Group (WKHS), Turkey-based Karsan, and Oshkosh Corp., of Oshkosh, Wisc., and Ford Motor Co. of Dearborn, Mich. https://bit.ly/2VrRE7n

·     Li Auto (LI) said it delivered 4,646 Li ONEs in November, +25.8% M/M; YTD deliveries reached 26,498 units and as of November 30, LI had 45 retail stores covering 38 cities.

·     Inter Parfums (IPAR) sets guidance below expectations as expects 2021 sales to be in the range of $610M-$625M vs. $670M consensus and EPS of between $1.20 and $1.25 vs. $1.60 consensus.

·     At Home Group (HOME) 3Q adj EPS $0.74 pro forma vs. est. $0.63 on sales $470Mm vs. est. $469.8Mm

 

Energy, Industrials & Materials

·     The American Petroleum Institute (API) showed a surprise build of 4.15M barrels of oil for the week ending Nov. 27; gasoline inventories show a build of 3.4M barrels, distillate inventories show a build of 334K barrels and Cushing inventories show a draw of 132K barrels.

·     Tellurian (TELL) tells the Federal Energy Regulatory Commission (FERC) that it wants to withdraw its application to build the Permian Global Access natural gas pipeline in Texas and Louisiana saying “current market conditions do not support the economic thresholds to pursue the pipeline at this time.”

·     FuelCell (FCEL) 34.25M share Spot Secondary priced at $6.50

·     FuelCell Energy (FCEL) announced a 34.5M-share public offering, comprising more than 19.8M common shares offered by the company and nearly 14.7M common shares offered by certain selling stockholders; says preliminary FQ4 revenues $16M-$17.5M, below analyst consensus $18.5M and year-ago revenues of $11M.

·     Virgin Galactic (SPCE) rises as the company has set a new test-flight window opening on Dec. 11, after pausing preparations last month due to COVID-19 restrictions imposed by New Mexico. SPCE is aiming to obtain a commercial operating license from the U.S. Federal Aviation Administration after conducting some test flights

·     Evoqua Water (AQUA) announces 12M share stock offering by holders

·     Rexford Industrial (REXR) files to sell 6M shares of common stock

 

Financials

·     Root (ROOT) Q3 EPS loss ($2.20) vs. ($2.88) last year and revs $50.5M vs. $79.6M last year; said will share 2021 outlook when they report Q4 and FY2020 results

·     Royal Bank of Canada (RY) Q4 Non-GAAP EPS of C$2.27 beats by C$0.20; GAAP EPS of C$2.23 beats by C$0.26; revenue of C$11.09B (-2.5% Y/Y) misses by C$360M; provision for credit losses of C$427M vs. C$791.3M consensus.

 

Healthcare

·     Pfizer (PFE) and BioNTech (BNTX) have won permission for emergency use of their COVID-19 vaccine in Britain, with two doses three weeks apart required for protection. First in line are frontline health care workers and nursing home residents, followed by older adults.

·     Ibio (IBIO) enters into an agreement with Belgium-based ATB Therapeutics to produce its bioengineered antibody-toxin fusion proteins

·     Vanda Pharmaceuticals (VNDA) rises as the FDA approves its drug Hetlioz (tasimelteon) as a treatment for night-time sleep disturbances associated with Smith-Magenis syndrome, a rare neurodevelopmental disorder

·     Ovid Therapeutics (OVID) shares fell over 40% after saying its Phase III Neptune clinical trial of OV101 (gaboxadol) for the treatment of Angelman syndrome failed to meet its primary endpoint.

·     Cogent Biosciences (COGT) 10.256M share Secondary priced at $9.75

·     Intellia Therapeutics (NTLA) 4.795M share Secondary priced at $36.50

·     Medigus (MDGS) 7.098M share Secondary priced at $1.83

·     Reata Pharmaceuticals (RETA) 2M share Spot Secondary priced at $140.85

·     Syneos Health (SYNH) announces offering of 6M shares of common stock for holders

·     Trupanion (TRUP) files to sell 3.64M shares of common stock for holders

 

Technology, Media & Telecom

·     Salesforce.com (CRM) will acquire Slack (WORK) where Slack shareholders will receive $26.79 in cash and 0.0776 shares of Salesforce common stock for each Slack share, representing an enterprise value of approximately $27.7 billion; CRM raising our FY21 revenue guidance to $21.11B at the high end and initiating FY22 guidance of $25.5B; CRM Q3 EPS $1.74 on revenue $5.42B vs. est. 75c and $5.25B

·     Slack (WORK) 3Q adj EPS $0.01 vs. est. ($0.04) on revs $234.5Mm vs. est. $224.6Mm, added 12,000 net new paid customers in qtr +140% yr/yr, qtrly calculated billings was $252.4Mm +36% yr/yr, ended qtr with 1,080 customers spending more than $100,000 annually +32% yr/yr

·     Box Inc. (BOX) 3Q adj EPS $0.20 vs. est. $0.15 on revs $196Mm vs. est. $194.3Mm; guides 4Q adj EPS $0.16-0.18 vs. est. $0.15, sees 4Q revs $196-197Mm vs. est. $198.75Mm

·     FuboTV (FUBO) shares rose 10%; has acquired Balto Sports, marking the company’s first move into the online sports wagering market; terms of the deal were not disclosed

·     Hewlett Packard Enterprises Inc. (HPE) Q4 net revs $7.21b, vs. est. $6.88b; 4q adj eps 37c, vs. est. 34c; sees 1q adj eps 40c to 44c vs. est. 35c and still sees 2021 free cash flow $900M to $1.1b; sees 2021 adj eps $1.60-$1.78, from prior $1.56- $1.76

·     NetApp (NTAP) 2Q adj EPS $1.05 vs. est. $0.73 on revs $1.42B vs. est. $1.31B; guides 3Q adj EPS $0.94-1.02 vs. est. $0.89, sees net revs $1.34-1.49B vs. est. $1.36B

·     Veeva (VEEV) Q3 EPS 78c vs. est. 68c on revs $377.5M vs. est. $361.8M; sees Q4 EPS 67c-68c on revs $378M-$380M vs. est. 62c and $367.7M; 3Q adjusted gross margin 75.3%, and 3Q adjusted operating margin 41.2%

·     Cambium Networks (CMBM) announces offering of 2.5M ordinary shares for holders

·     ZoomInfo (ZI) 12.5M share Secondary priced at $45.00

·     Vodafone Business and RingCentral (RNG) announced a strategic partnership that seeks to transform business communications and collaboration