Early Look

Thursday, July 9, 2020

The disconnect between the tech heavy Nasdaq Composite and other major averages continues as Nasdaq futures are pointing to a broadly higher open while the S&P and Dow are down slightly after reports that more than 60,000 new daily COVID-19 infections were recorded in the U.S. yesterday to mark the single-largest total of any country since the coronavirus outbreak began in early January. Investors also await weekly jobless claims, which are expected to slide to 1.375M from 1.427M the week prior and continuing claims to dip to 18,750 from 19,290 the week prior as people begin to rejoin the workforce following the coronavirus disruption. In Asian markets, The Nikkei Index rose 90 points to 22,529, the Shanghai Index jumped another 47 points (1.39%) to settle at 3,450 (now up over 9% for the week), and the Hang Seng Index gained 80 points to 26,210. In Europe, the German DAX is higher by 160 points to 12,655, while the FTSE 100 is down over -30 points to 6,115 as the Pound advances. Stocks snapped back from Tuesday’s losses, driven by the Nasdaq 100’s outperformance as the overall Nasdaq Composite posted yet another closing all-time record high as technology companies such as Apple, Amazon, Microsoft and chip-maker Nvidia set records. The market recovered from midday weakness and avoiding a second-straight day of losses to close at the best levels of the day. Twitter was one of the top gainers in the S&P, up 7.3% on hopes that a subscription service was in the works. Gains were broad based as the upward momentum continues for stock markets globally.

Market Closing Prices Yesterday

·     The S&P 500 Index rose 24.62 points, or 0.78%, to 3,169.94

·     The Dow Jones Industrial Average rose 177.10 points, or 0.68%, to 26,067.28

·     The Nasdaq Composite jumped 148.61 points, or 1.44%, to 10,492.50

·     The Russell 2000 Index advanced 11.41 points, or 0.81% to 1,427.40

Economic Calendar for Today

·     8:30 AM EST      Weekly Jobless Claims

·     8:30 AM EST      Continuing Claims

·     10L00 AM EST   Wholesale Inventories MoM for May

·     10:30 AM EST    Weekly EIA Natural Gas Inventory Data

Earnings Calendar:

·     Earnings Before the Open: AZZ, HELE, WBA

·     Earnings After the Close: FC, PSMT, WDFC

Sector News Breakdown

Consumer

·     Bed Bath & Beyond (BBBY) Q1 adj EPS loss ($1.96) on sales $1.3B vs. est. loss ($1.21) and $1.34B; quarter-end cash and investments of approximately $1.2B; said Q1 net sales decreased 49% due to temporary store closures; Q1 net sales from digital channels grew 82% and represented nearly two-thirds of total net sales; plans to close about 200 mostly bed bath & beyond stores over next 2 years under real estate and fleet optimization strategies

·     Carnival Corp. (CCL) said that its Germany-based cruise line AIDA Cruises will resume operations in August, with three ships set to restart sailing. AIDAperla will set sail on Aug 5

·     Costco Wholesale (COST) June net sales were $16.18B, five weeks ended July 5, 2020, an increase of 11.1%; June total comp sales rose 11.5% and US comp sales ex: gas and FX rose 13.6%

·     Tesla (TSLA) CEO Elon Musk said at the opening of the World Artificial Intelligence Conference in Shanghai that it is “very close” to achieving level 5 autonomous driving technology,

·     Eldorado Resorts Inc. (ERI) received approval from Nevada casino regulators to buy Las Vegas-based Caesars Entertainment Corp. (CZR) in a $17.3 billion deal

·     Havertys Furniture (HVT) Q2 sales $110M vs. $191.M YoY

·     Helen of Troy (HELE) Q1 net sales $420.8M vs. est. $347M and EPS $2.53 vs. est. $1.49;not providing guidance due to pandemic uncertainty

·     Keurig Dr. Pepper (KDP) upgraded to Buy from Neutral at Goldman Sachs and tgt to $33 from $27

·     Norwegian Cruise Line (NCLH) files to sell 46.58M ordinary shares for holders

·     Turning Point Brands (TPB) 2M share Spot Secondary priced at $23.50

·     Turning Point Brands (TPB) announces a new public offering of 1.8M shares held by holders while also issues preliminary Q2 net sales of $100M vs. guidance for $81M to $87M and the consensus of $85.0M

Energy, Industrials and Materials

·     Air Lease (AL) reported 2Q20 revenue of $87M from the sales of three aircraft to Thunderbolt Aircraft Lease Limited III and one to a third-party buyer.

·     Celanese (CE) said to increase selling prices for its acetyl intermediates products, effective immediately.

·     Pentair (PNR) was upgraded to buy from underperform at Bank America with $46 tgt

·     Rio Tinto (RIO) said it will start planning for the wind-down of operations and the eventual closure of New Zealand Aluminum Smelters, or NZAS, following the conclusion of its strategic review which has shown the business is no longer viable given high energy costs and a challenging outlook for the Aluminum industry

Healthcare

·     Acer Therapeutics (ACER) announces administration of ACER-001 in a fasted state increased systemic exposure of phenylbutyrate in healthy volunteer food effect study

·     AnaptysBio (ANAB) said the U.S. FDA has granted orphan drug designation for imsidolimab, the company’s proprietary anti-interleukin-36 receptor antibody, for the treatment of patients with Generalized Pustular Psoriasis

·     Applied DNA Sciences (APDN) shares rise 13%; forms clinical testing subsidiary dedicated to the commercial development of its tests to detect COVID-19, in virology and in oncology

·     HealthEquity (HQY) 4.6M share Secondary priced at $56.00

·     Revolution Medicines (RVMD) 6M share Secondary priced at $26.00

·     Merck (MRK) signed an agreement with Zymeworks (ZYME) for a global license to develop and commercialize up to three multi-specific antibodies to Merck targets in the animal health field using ZYME’s Azymetric and EFECT platforms.

·     OptiNose (OPTN) signed an agreement with pharmaceutical firm Kaléo to co-promote its XHANCE exhalation nasal spray for the treatment of nasal polyps in adult patients.

·     ShockWave Medical (SWAV) receives initial rulings related to two of the inter partes review cases initiated by Cardiovascular Systems (CSII), challenging the validity of three of ShockWave’s issued patents. The Patent Trial and Appeal Board ruled that a key claim in the ‘371 patent is valid, related to a device that creates shockwaves inside of a balloon catheter that is delivered over a guidewire. Some claims of the ‘371 patent and all claims for the ‘091 patent were ruled invalid

Technology, Media & Telecom

·     SAP AG (SAP) said business activity “gradually improved” in Q2, based on preliminary results for the period ended June 30; reiterated its 2020 financial outlook of revenue between €27.8 billion and €28.5 billion; said during Q2, revenue grew 2% YoY to €6.74 billion, led by a 21% improvement in cloud-related sales

·     Ping Identity (PING) 8.98M share Secondary priced at $32.00

·     PTC Corp. (PTC) said it expects to report fiscal 3Q ARR growth of 9% YoY and 10% in constant currency and expects to report 3Q revenue and free cash flow growth in the double digits YoY

·     Veritone (VERI) raises Q2 revenue view to $13.1M-$13.3M from $11.8M-$12.2M (est. $11.95M) while ups its Q2 net view to ($6.0M)-($5.8M) from prior loss ($6.5M)-($6.1M) saying based on our strong revenue performance and the continuing results of our cost reduction initiatives, we now expect to report record financial performance in the second quarter

·     United Microelectronics (UMC) reports June sales of NT$14.58B (+24.56% Y/Y); 1H sales of NT$86.65B (+26.29% Y/Y)