Early Look

Tuesday, July 14, 2020

Futures	Up/Down	%	Last
DJ Industrials	99.00	0.38%	26,067
S&P 500	10.50	0.32%	3,158
Nasdaq	19.50	0.19%	10,619

 

 

Stock futures are looking at a bounce after yesterday’s sharp reversal midday that saw stocks erase early gains, settling near their lows of the session ahead of the unofficial start to earnings season today with big banks getting the ball rolling. Stocks nosed-dived late Monday afternoon after California Governor Gavin Newsom announced a broad rollback of operations state-wide at restaurants, bars, zoos, gyms, salons, wineries, museums, card rooms, places of worship and movie theatres. “This is in every county in the state of California, not just those on the watch list,” he said. He said the coronavirus was spreading at an “alarming rate.” The Nasdaq 100 rallied more than 1% intraday to set an all-time high, then reversed to close down by more than 2% as the high-flying technology names over the last few weeks finally ran out of gas. The S&P and Dow posted gains early led by healthcare after the FDA granted “fast track” status to a pair of COVID-19 vaccine candidates produced by Pfizer and German biotech firm BioNTech SE. In Asian markets, The Nikkei Index fell -197 points to 22,587, the Shanghai Index dropped -28 points to 3,414 and the Hang Seng Index dropped -294 points to 25,477. In Europe, the German DAX is down about -180 points to -12,620, while the FTSE 100 is down a few points to 6,165. In trade related news, China said it is imposing sanctions on Lockheed Martin (LMT) for its involvement in a $620M deal for the U.S. to provide refurbished Patriot missile parts to Taiwan.

Economic Calendar for Today

·     6:00 AM EST      NFIB Small Business Optimism for June…est. 97.8

·     7:45 AM EST      ICSC Weekly Retail Sales

·     8:30 AM EST      Consumer Price Index (CPI) MoM for June…est. 0.5%

·     8:30 AM EST      CPI Ex: Food & Energy MoM for June…est. 0.1%

·     8:30 AM EST      Consumer Price Index (CPI) YoY for June…est. 0.6%

·     8:30 AM EST      CPI Ex: Food & Energy YoY for June…est. 1.1%

·     8:55 AM EST      Johnson/Redbook Weekly Sales

·     4:30 PM EST       API Weekly Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: BNED, C, DAL, FAST, FRC, JPM, WFC

 

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -29.82 points, or 0.94%, to 3,155.22

·     The Dow Jones Industrial Average rose 10.50 points, or 0.04%, to 26,085.80

·     The Nasdaq Composite plunged -226.60 points, or 2.13%, to 10,390.84

·     The Russell 2000 Index declined -19.11 points, or 1.34% to 1,403.57

 

 

Macro	Up/Down	Last
WTI Crude	-0.36	39.74
Brent	-0.30	42.42
Gold	-19.90	1,794.20
EUR/USD	0.0013	1.1357
JPY/USD	0.09	107.38
10-Year Note	+0.008	0.626%

 

 

World News

·     China’s imports rose 2.7% in June, reversing a 16.7% slump in May, the General Administration of Customs said Tuesday. Economists expected June’s imports to drop 10.0%. Exports edged up 0.5% in June, compared with a 3.3% decline in May, customs data showed. June’s exports were also better than economists’ median forecast of a 4.3% decline.

·     China recorded a trade surplus of $46.42 billion last month, much smaller than May’s $62.93 billion surplus and below the $59.30 billion surplus economists expected

·     German economic expectations fell slightly in July after three months on the rise, the ZEW economic research institute said as the measure of economic expectations declined to 59.3 in July from 63.4 in June, the institute said.

·     The NFIB Small Business Optimism Index (NFIB) stood at 100.6 in June, a 6.2 points increase compared with May’s reading. Economists had expected a lower level of 98.0.

·     The number of confirmed cases of the coronavirus illness COVID-19 worldwide edged closer to 13 million on Monday, a day after the World Health Organization reported another one-day case record above 230,000,

 

Sector News Breakdown

Consumer

·     Mohawk Industries (MHK) shares slipped after hours following its disclosure of receiving subpoenas from a U.S. attorney and the SEC, shortly before a class action complaint alleging securities-law violations was filed.

·     Ford (F) on Monday evening unveiled a new retro-looking Bronco reminiscent of the rugged, boxy original from the 1960s

·     Fisker says it’s in talks with Volkswagen (VWAGY) to use the Germany’s EV platform when it starts producing vehicles. A Volkswagen spokesperson says Audi subsidiary Italdesign has used the MEB platform as the basis for the development of the Fisker Ocean SUV, but notes a “final decision” has not yet been made about a possible cooperation with Fisker

·     HelloFresh (HLFFF) said it expects revenue and adjusted EBITDA for Q2 to land significantly above market expectations; boosted its full year guidance due to the strong trends (shares of APRN advanced after the close following the guidance)

·     Harley-Davidson (HOG) upgraded to Outperform from Market Perform at BMO Capital

 

Energy, Industrials & Materials

·     Boeing (BA) was awarded an order for its first batch of F-15EX fighter jets from the Air Force with a contract that puts a $22.89B ceiling value for the entire program. The first delivery order, which has a not-to-exceed value of ~$1.19B, covers the first lot of eight F-15EXs

·     China said it is imposing sanctions on Lockheed Martin (LMT) for its involvement in a $620M deal for the U.S. to provide refurbished Patriot missile parts to Taiwan.

·     Ryerson (RYI) said it sees Q2 revenue $765M-$775M vs. estimates of $761.4M, while sees Q2 adj. EBITDA $19M-$21M and net loss of $26M to $28M

 

Financials

·     Banks JPMorgan, Citigroup and Wells Fargo expected to report earnings this morning

·     AllianceBernstein’s (AB) June preliminary assets under management rose to $600B from $596B at the end of May led by market appreciation, partially offset by firmwide net outflows.

·     Invesco (IVZ) preliminary assets under management of $1.14T at the end of June increased 0.2% from May; favorable market returns increased AUM by $22B while reinvested distributions and FX contributed $1.6B and $1.1B, respectively.

·     Manning & Napier (MN) preliminary assets under management of $18.6B at June 30, 2020 is little changed from the end of May.

·     Victory Capital Holdings (VCTR) assets under management of $129.1B at the end of June increased from $127.7B at the end of May.

 

Healthcare

·     Abbott (ABT) announces that it has settled all outstanding patent disputes with Edwards Lifesciences (EW) related to transcatheter mitral and tricuspid repair products

·     Dr. Reddy’s Laboratories (RDY) announces the launch of Over-the-Counter (OTC) Nicotine Polacrilex Lozenges, 2 mg and 4 mg in the U.S., the store brand version of GlaxoSmithKline’s (GSK) Nicorette Lozenges.

·     Altimmune (ALT) 3.37M share Secondary priced at $23.00

·     Blueprint Medicines (BPMC) announced a collaboration with Roche Holding (RHHBY) on the development of pralsetinib, an investigational, precision therapy in late-stage development for people with lung cancer; Roche to pay $675M in cash in addition to $100M equity investment in BPMC while BPMC is eligible to receive up to $927M in potential milestones, plus royalties on net product sales outside U.S.

·     Osmotica Pharmaceuticals (OSMT) 5M share Secondary priced at $6.55

 

Technology, Media & Telecom

·     Siemens (SIEGY) and SAP SE (SAP) announce a new partnership to leverage their expertise and bring together their complementary software solutions.

·     Netflix (NFLX) downgraded to Neutral from Buy at UBS on valuation, tougher comps in 2021

·     nCino (NCNO) 8.06M share IPO priced at $31.00

·     Spotify (SPOT) downgraded to Sell from Buy at UBS