Early Look

Wednesday, February 12, 2020

Futures	Up/Down	%	Last
DJ Industrials	128.00	0.44%	29,357
S&P 500	13.50	0.39%	3,370
Nasdaq	50.00	0.52%	9,577

 

 

Stocks in the U.S. are again on track to open at fresh record highs, tracking strong gains in Europe (also at or near records) and Asia again following upbeat earnings and signs of slowing coronavirus cases overseas (though the death toll has topped 1,100). China reported another drop in the number of new cases of a viral infection and 97 more deaths, pushing the total dead past 1,100 even. The National Health Commission on Wednesday said 2,015 new cases had been reported over the last 24 hours, declining for a second day, as the total number of cases in mainland China is 44,653. In Asian markets, The Nikkei Index gained 175 points to 23,861, the Shanghai Index rose 25 points to 2,926 and the Hang Seng Index gained 239 points to 27,823. In Europe, the Stoxx Europe 600 index is higher after closing on Tuesday up 0.9% to 428.48, which marked a record close, while the German DAX gained nearly 0.7% to 13715.39, after marking a new closing high on Tuesday of 13627.84, rising nearly 1%. Expectations that China could introduce additional stimulus as they did last week to help offset the impact from the coronavirus on its economy is also helping sentiment ahead of another busy day of earnings. Also on the calendar today, day two of Fed Chairman Powell testimony on the economy and monetary policy as he speaks to the Senate Banking Panel at 10:00 AM EST.

Market Closing Prices Yesterday

·     The S&P 500 Index climbed 5.66 points, or 0.17%, to 3,357.75

·     The Dow Jones Industrial Average fell -0.48 points, or 0.00%, to 29,276.34

·     The Nasdaq Composite gained 10.55 points, or 0.11%, to 9,638.94

·     The Russell 2000 Index advanced 9.85 points, or 0.59% to 1,677.51

 

Events Calendar for Today

·     7:00 AM EST      MBA Mortgage Applications Data

·     10:00 AM EST    Fed Chairman Powell testifies to Senate Banking Panel

·     10:30 AM EST    Weekly DOE Inventory Data

·     2:00 PM EST       Monthly Budget Statement for January

 

Earnings Calendar:

·     Earnings Before the Open: AB, BG, BXMT, CME, COWN, CVS, ECOM, GPN, IPG, IQV, KALA, LAD, MCO, NBL, NBLX, NTWK, TAP, TW, VERU, WNC

·     Earnings After the Close: AEL, AIZ, AKR, AM, AMAT, ANDE, AR, ASGN, ATUS, BLBD, BRKR, CDNS, CF, CHEF, CHNG, COHU, CSCO, CTL, CXW, EFX, EQIX, FTSI, HR, HUBS, IFF, LPI, MGM, MRO, NTAP, NUS, PEGA, PRSP, PS, QDEL, QLYS, RDFN, REG, RUSHA, SPWR, SSNC, STAG, TCO, TRIP, TRMB, TYL, VNOM

 

Other Key Events:

·     Annual WORLD Symposium 2020, 2/10-2/13, in Orlando, FL

·     Baird 5th Annual Private Company & Tech Conference, 2/12-2/13, in New York

·     Cowen 41st Annual Aerospace & Defense Industrials Conference, 2/12-2/13, in New York

·     EnerCom Dallas 2020, 2/11-2/12, in Dallas, TX

·     Goldman Sachs Technology & Internet Conference, 2/11-2/13, in San Francisco

·     Loop Capital Transportation and Material Conference, 2/12-2/13, in Florida

·     Stifel Transportation and Logistics Conference, 2/11-2/12, in Miami, FL

 

 

Macro	Up/Down	Last
WTI Crude	0.80	50.74
Brent	1.13	55.14
Gold	-0.90	1,569.20
EUR/USD	-0.0004	1.0912
JPY/USD	0.15	109.94
10-Year Note	+0.01	1.61%

 

 

World News

·     Bernie Sanders won New Hampshire’s first-in-the-nation Democratic primary on Tuesday, narrowly topping nearest competitor Pete Buttigieg as voters went for the self-avowed democratic socialist over the former mayor of South Bend, Ind.

 

Sector News Breakdown

Consumer

·     Lyft (LYFT) 4Q revs $1.02B vs. est. $985.8Mm; guides 2020 revs $4.58-4.65B vs. est. $4.6B, sees 2020 adj EBITDA loss $450-490Mm vs. est. loss $489.6Mm; sees 1Q revenue $1.055B-$1.06B vs. est. $1.05B; 4Q active riders 22.9 million, 4Q revenue per active rider $44.40

·     Bed Bath & Beyond (BBBY) shares fell over 10% as reports 5.4% decline in comp store sales for first two months of Q4 driven primarily by store traffic declines combined with inventory management issues, and increased promotional activity and markdowns; On a directional basis, comparable sales from stores declined nearly 11%, while comparable sales from digital channels grew approximately 20%

·     Urban Outfitters (URBN) 4Q net sales $1.17B vs. est. $1.16B; 4Q comparable retail segment sales +4% vs. +3% YoY; segment breakdown: 4Q Urban Outfitters comparable sales 0% vs. +4% YoY, Free People comps +9% vs. +4% YoY and Anthropologie comps +6% vs. +2% YoY – said wholesale segment net sales decreased 10% due to a 12% decrease in Free People

·     Denny’s (DENN) 4Q adj EPS $0.23 vs. est. $0.17 on revs $113.8Mm vs. est. $105.4Mm; guides 2020 op revs $453-459Mm; sees 2020 adj EBITDA $97-100Mm vs. est. $102.7Mm; Q4 company restaurant comparable sales +0.5% vs. +2.10% YoY

·     Casinos Wynn Resorts (WYNN) and Las Vegas Sands (LVS) both upgraded to buy from neutral at Bank America

·     Goodyear Tire (GT) downgraded to Neutral from Overweight at JPMorgan

 

Energy, Industrials & Materials

·     Viper Energy (VNOM) Q4 EPS 3c/$92.71M vs. est. 17c/$90.92M; said Q4 average production of 16,476 bo/d, an increase of 20% from Q3 2019 average daily oil production; Q4 average realized prices were $53.90 per barrel of oil, $1.29 per Mcf of natural gas and $14.53 per barrel of natural gas liquids, resulting in a total equivalent realized price of $38.20/boe

·     Noble Corp. (NE) and ExxonMobil (XOM) announced the execution of a unique commercial enabling agreement for drilling services in the Guyana-Suriname Basin

·     Kinder Morgan Inc. (KMI) said that it plans a 25% increase to its dividend in 2020, to $1.25 a share from $1.00 a share; that increases the quarterly dividend rate to 31.25 cents from 25.00 cents

 

Financials

·     Arch Capital (ACGL) Q4 operating EPS 74c vs. est. 68c; Q4 book value per share $26.42 vs. $21.52 YoY; Q4 net premiums written +12% YoY to $1.46B

·     Assurant (AIZ) 4Q net op EPS $2.25 vs. est. $2.35 on revs $2.61B vs. est. $2.54B, net premiums earned $2.07B

·     ABN AMRO shares tumbled after the Dutch bank disappointed with flat income and a drop in operating income for the fourth quarter.

·     AllianceBernstein L.P. (AB) announced that preliminary assets under management increased to $629 billion during January 2020 from $623 billion at the end of December 2019; Q4 EPS 85c vs. est. 70c on revs $987.3M

·     Huize (HUIZ) 5.25M share IPO priced at $10.50

·     CNO Financial (CNO) Q4 EPS 52c vs. est. 47c and revs $1.07B vs. est. $942.8M; Q4 book value per share 431.58 vs. $20.78 YoY

·     Insperity (NSP) 4Q adj EPS $0.57 vs. est. $0.55 on revs $1.1B vs. est. $1.05B; guides 1Q adj EPS $1.61-1.70 vs. est. $1.77; sees 1Q adj EBITDA $98-103Mm vs. est. $99.6Mm; guides 2020 adj EPS $3.73-4.16

·     Invesco Ltd. (IVZ) reported preliminary month-end assets under management (AUM) of $1,218.7 billion, a decrease of 0.6% versus previous month-end. The decrease was driven by unfavorable market returns, net outflows in non-management fee earning AUM, and roughly equal impacts from long-term AUM net outflows and foreign exchange, which were partially offset by net inflows in money market AUM and reinvested distributions.

·     Primerica (PRI) Q4 adj EPS $2.22 on revs $530.9M vs. est. $2.11 and $526.7M; 4Q net investment income $22.4 million, +3% YoY

·     Western Union (WU) Q4 adj EPS 38c/$1.31B vs. est. 43c/$1.32B and guides year EPS $1.95-$2.05 vs. est. $1.96; raises dividend to 22.5c from 20c; affirming its three-year financial targets including operating margin of approximately 23% in 2022

 

Healthcare

·     Exact Sciences (EXAS) Q4 revs $295.6M vs. est. $287.3M; guides 2020 revenue $1.61B-$1.65B vs. est. $1.63B; Q4 Cologuard test volume was 477,000, an increase of 63% YoY; said Average Cologuard recognized revenue per test was $481; Average Cologuard cost per test was $123, an improvement of $6

·     Ligand Pharma (LGND) agrees to buy assets from Icagen for $15Mm; revises 2020 forecast, sees 2020 revs $128Mm (was $121Mm), sees 2020 adj EPS $3.45 (was $3.40)

·     Varex Imaging Corporation (VREX) announced it has entered into a renewed three-year pricing agreement with Canon Medical Systems Corporation effective for calendar years 2020 -2022

·     Adverum Biotechnologies (ADVM) 9.5M share Secondary priced at $13.75

·     Moderna (MRNA) 26.316M share Secondary priced at $19.00

·     Xeris Pharmaceuticals (XERS) 9M share Secondary priced at $4.15

·     Theravance Biopharma (TBPH) 5.5M share Secondary priced at $27.00

·     PDS Biotechnology (PDSB) 9.23M share Secondary priced at $1.30

 

Technology, Media & Telecom

·     Akami (AKAM) 4Q adj EPS $1.23 vs. est. $1.13 on revs $772Mm vs. est. $749.3Mm; sees Q1 EPS $1.13-$1.18 vs. est. $1.16 and 2020 $4.80-$4.95 vs. est. $4.79

·     Diodes (DIOD) 4Q adj EPS $0.65 vs. est. $0.62 on revs $301.2Mm vs. est. $300Mm; guides 1Q revs $290Mm (was $294-306Mm) below est. $291.7Mm

·     Lattice Semi (LSCC) 4Q adj EPS $0.17 vs. est. $0.15 on revs $100.2Mm vs. est. $100.0Mm; guides 1Q revs $96-104Mm vs. est. $99.7M

·     NCR Corp. (NCR) Q4 EPS 85c/$1.89B vs. est. 84c/$1.75B; sees 2020 adjusted Ebitda $1.06 billion to $1.10 billion with FCF $250 million to $300 million and sees 2020 revenue about flat to up 1%

·     Micron (MU) upgraded to Buy from Neutral at UBS