Early Look

Tuesday, December 8, 2020

Futures	Up/Down	%	Last
DJ Industrials	-141.00	0.47%	29,916
S&P 500	-18.50	0.50%	3,672
Nasdaq	-44.50	0.35%	12,552

 

 

U.S. futures are looking lower as markets are becoming weary with rising COVID-19 cases and wait for a breakthrough in U.S. stimulus plans that could revive the economy. The UK has begun rolling out the first doses of a widely tested and reviewed COVID-19 vaccine, starting a global immunization program. According to the reports, the first 800,000 doses are going to people over 80 who are either hospitalized or already have outpatient appointments scheduled, along with nursing home workers. Also, the FDA is set to release detailed analyses of the first Covid-19 vaccine being considered for U.S. distribution, providing the foundation for Thursday’s pivotal meeting of a panel that will advise on its possible approval for emergency use. The agency is expected Tuesday to release two separate analyses, one from its own staff scientists and one from the vaccine’s manufacturers, Pfizer Inc. (PFE) and German partner BioNTech SE (BNTX). In Asian markets, The Nikkei Index fell -80 points to 26,467, the Shanghai Index dipped -6 points to 3,410 and the Hang Seng Index fell -202 points to 26,304. In Europe, the German DAX is down about -40 points to 13,230, while the FTSE 100 is down around -30 points to 6,525. In stock news, Tesla (TSLA), a day after touching record highs, announced they would sell up to $5B in common stock.

 

A late day spike helped stocks finish off their lows on Monday, but still ended the day broadly lower outside of the tech heavy Nasdaq Composite, settling at another all-time high behind strength in mega cap Apple, Tesla, Facebook and Tesla. Energy stocks were the worst performers as oil prices dropped from nine-month highs back below $46 per barrel. There was little progress made (again) on stimulus relief measures as the two sides in Washington remain far apart as Senate Majority Leader Mitch McConnell continues to push his targeted spending bill, well below the $908B bipartisan proposal while GOP Senator Hawley called for a veto to any bill that didn’t include direct check payments.

 

Market Closing Prices Yesterday

·     The S&P 500 Index dipped -7.16 points, or 0.19%, to 3,691.96

·     The Dow Jones Industrial Average fell -148.47 points, or 0.49%, to 30,069.79

·     The Nasdaq Composite jumped 55.71 points, or 0.45%, to 12,519.95

·     The Russell 2000 Index slipped -1.20 points, or 0.06% to 1,891.25

 

Economic Calendar for Today

·     6:00 AM EST      NFIB Small Business Optimism for November

·     7:45 AM EST      ICSC Weekly Retail Sales

·     8:55 AM EST      Johnson/Redbook Weekly Sales

·     4:30 PM EST       API Weekly Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: ALCO, AZO, BNED, CMD, CONN, GIII, HRB, JW/A, LQDT, THO

·     Earnings After the Close: AVAV, BF/B, CHWY, GME, GWRE, MDB, PHR, POWL, STRM

 

Other Key Events:

·     China CPI, PPI for November

·     American Society of Hematology virtual meeting, 12/5-12/8

·     Raymond James Technology Investors Conference (virtual) 12/7-12/9

·     UBS Global TMT Conference (virtual), 12/7-12/9

·     Wells Fargo Midstream & Utility Symposium (virtual), 12/8-12/9

 

 

Macro	Up/Down	Last
WTI Crude	-0.31	45.45
Brent	-0.31	48.48
Gold	-0.70	1,862.00
EUR/USD	0.0008	1.2117
JPY/USD	0.02	104.07
10-Year Note	+0.005	0.933%

 

 

World News

·     The NFIB Small Business Optimism Index: 101.4 vs. 102.5 consensus and 104.0 in October.

·     Prime Minister Boris Johnson said there may be a time when Britain should call an end to post-Brexit trade talks, a day after agreeing to meet the European Commission head in a last-ditch attempt to break the stalemate.  Johnson is due to meet European Commission head Ursula von der Leyen in the coming days, after negotiators failed to close the gaps in talks.

·     German investor sentiment soared more than expected in December as the ZEW economic research institute said its survey of investors’ economic sentiment moved up to 55.0 from 39.0 in the previous month vs. ests of a reading of 45.5.

 

Sector News Breakdown

Consumer

·     Tesla (TSLA) to sell shares, sees proceeds up to $5B

·     Uber Technologies Inc (UBER) is selling its autonomous driving unit, Uber Advanced Technologies Group (ATG), to self-driving car startup Aurora, the companies said as the equity deal valued the ATG at $4 billion, according to reports which marks a major drop in valuation for ATG

·     Stitch Fix (SFIX) soars 30%; Q1 adj EPS 9c vs. est. loss (20c) and revs $490.4M vs. est. $481.2M; active clients of nearly 3.8 million, an increase of 347,000 or 10% year over year, and 241,000 client’s quarter over quarter; Q1 net revenue per active client of $467, a decrease of 4% year over year; sees Q2 revenue $506M-$515M vs. est. $509.1M

·     Toll Brothers (TOL) 4Q EPS $1.55 vs. estimate $1.24; Q4 revenue $2.55B vs. est. $2.09B; 4Q deliveries 2,940, +10% YoY, backlog $6.37 billion, +21% YoY, SG&A as percentage of revenue 9.9% vs. 9% YoY and 4Q cancellation rate 2.7%; sees Q1 2021 deliveries of approximately 1,675 homes with an average price of between $780,000 and $800,000

·     GrowGeneration (GRWG) files automatic mixed securities shelf

·     IFF (IFF) and DuPont (DD) announced that the intended combination of DuPont’s Nutrition & Biosciences (N&B) business with IFF has received unconditional clearance from the European Commission.

·     Nomad Foods (NOMD) raised Q4 organic revenue growth to increase in the high-single digit percent range; organic revenue growth increased 10% through the first two months of the fourth quarter and is expected to remain above historical levels during the month of December

·     Casey’s General Stores (CASY) Q2 EPS $3.00 vs. est. $2.80; Q2 revenue $2.22B vs. est. $2.21B; raises quarterly dividend by 6% to 34c per share; Q2 same-store sales increased 3.5% with a margin of 41.0% vs. 39.6% in Q1; Q2 digital sales increased 127% compared to prior year vs. 162% in Q1

·     Conn’s (CONN) Q3 adjusted EPS 25c vs. est. 24c; Q3 revenue $334.2M vs. est. $345.19M; Q3 same-store sales fell -10.9%

·     Thor Industries (THO) Q1 EPS $2.05 vs. est. $1.56; Q1 revenue $2.54B vs. est. $2.37B; consolidated backlog $8.92B +194.5%; expect to achieve continued growth in 2021

 

Energy

·     Aramco and Baker Hughes (BKR) has formed a 50/50 joint venture forming a new company called Novel Non-Metallic Solutions Manufacturing (Novel) to develop and commercialize a broad range of non-metallic products for multiple applications in the energy sector

·     Gran Tierra Energy (GTE) guided FY 2021 high case/base case oil production of 28K-30K bbl/day on total capital spending of $130M-150M; also sees base case FY 2021 EBITDA of $200M-220M and $150M-170M in cash flow.

 

Financials

·     Moelis (MC) declares special $2.00 per share dividend

·     Pzena Investment Management (PZN) reported its preliminary assets under management as of November 30, AUM for month-end November 2020 $40.7B

 

Healthcare

·     Bristol Myers Squibb (BMY) presents data evaluating potential of liso-cel across leukemia and lymphomas at ash 2020. Liso-cel elicited high overall response rates in relapsed or refractory chronic lymphocytic leukemia and small lymphocytic lymphoma both as monotherapy and in combination with ibrutinib, and rapid, deep and durable responses were observed with the longer-term follow-up monotherapy treated cohort in TRANSCEND CLL 004

·     Atara Biotherapeutics (ATRA) files to sell $150M in common stock

·     ALX Oncology (ALXO) files to sell 2M shares of common stock

·     Kura Oncology (KURA) files to sell $200M in common stock

·     Sutro Biopharma (STRO) files to sell 5M shares of common stock

·     Axsome Therapeutics (AXSM) announced positive results from the open-label Phase 2 COMET-SI trial of AXS-05 in patients with major depressive disorder who have suicidal ideation (SI)

·     Arcturus Therapeutics (ARCT) 1.365M share Spot Secondary priced at $110.00

·     Repligen (RGEN) 1.5M share Secondary priced at $181.00

·     Bluebird bio (BLUE) said new data from group C of its ongoing Phase 1/2 HGB-206 study of investigational LentiGlobin gene therapy for adults and adolescents’ patients with sickle cell disease show a complete elimination of severe vaso-occlusive events and VOEs between six and 24 months of follow-up.

·     HealthEquity (HQY) Q3 EPS 41c vs. est. 36c; Q3 revenue $179.35M vs. est. $176.78M; raises FY21 EPS view to $1.55-$1.61 from $1.48-$1.58 (est. $1.56) and raises FY21 revenue view to $725M-$731M from $720M-$730M (est. $728.06M)

·     GlycoMimetics (GLYC) announces new data supporting the statistically significant effects of rivipansel in acute vaso-occlusive crisis in patients with sickle cell disease.

 

Industrials & Materials

·     Hollysys Automation Technologies (HOLI) disclosed a preliminary non-binding proposal to acquire all publicly held shares for $15.47 per share in cash, which represents a 24% premium to the stock’s Dec. 4 closing price https://bit.ly/2JB4aPW

·     Gol Linhas (GOL) said it would resume flying Boeing Co’s (BA) 737 MAX planes on commercial routes in its domestic network from Dec. 9. Gol said it expects all of the seven 737 MAX aircraft in its fleet to be cleared to return fully to operation by the end of December

·     Northrop Grumman (NOC) agrees to sell its federal IT and mission support services business to Veritas Capital for $3.4B in cash; expects to use the sale proceeds primarily for share repurchases, to offset dilution from the transaction and for debt retirement

·     Raytheon Technologies (RTX) authorizes to repurchase of up to $5B outstanding stock.

·     YRC Worldwide (YRCW) says revenue per shipments is up 0.3% on a QTD basis; shipments per workday are flat, weight per shipment is up 2.0% and tonnage per workday is 2.1% higher; company’s results for November improved from October

 

Technology, Media & Telecom

·     Coupa Software (COUP) 3Q adj EPS $0.18 vs. est. $0.03 on revs $133Mm vs. est. $124Mm; sees 4Q adj EPS loss $0.11-0.13 vs. est. $0.01, sees 4Q revs $145-146Mm vs. est. $130Mm; guides FY adj EPS $0.47-0.49 vs. est. $0.45, sees FY revs $523-524Mm vs. est. $501Mm

·     MicroStrategy (MSTR) announces private offering of $400M of convertible senior notes as the company intends to use the net proceeds to buy more Bitcoin

·     Smartsheet (SMAR) 3Q adj EPS ($0.12) vs. est. ($0.21) on revs $98.9Mm vs. est. $94.6Mm; guides 4Q adj loss $0.13-0.15 vs. est. ($0.13), sees 4Q revs $102-103Mm vs. est. $99.5Mm; sees FY adj EPS loss $0.42-0.44 vs. est. ($0.51), sees FY revs $378-379Mm vs. est. $370.8Mm

·     The U.S. Federal Communications Commission (FCC) said on Monday it has awarded $9.2 billion to provide high-speed broadband internet service to 5.22 million unserved homes and businesses, boosting access in rural areas. The FCC said in its “Rural Digital Opportunity Fund” auction that Charter Inc (CHTR) won $1.22 billion to provide service to 1.06 million locations, while Elon Musk’s SpaceX won $885 million to serve 642,000 locations. – Reuters

·     Acer (ACEYY) reports November revenues up 40.6% Y/Y and 12.5% M/M to NT$28.72B; YTD consolidated revenues up 17.9% to NT$248.72B

·     United Microelectronics (UMC) reports November sales rose 6% to NT$14.73B; YTD sales grew 19.8% to NT$161.53B.