Morning Preview: June 19, 2020

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Early Look

Friday, June 19, 2020





DJ Industrials




S&P 500










Stock futures head into an expected high-volume session (due to quad witching option expiration) much higher than yesterday’s close, getting a boost after Bloomberg reported that China plans to accelerate purchases of American farm goods to comply with the Phase 1 trade deal after buying fell behind due to coronavirus disruptions. The headlines overnight helped propel global markets higher across the board in what has been a solid week of gains. In Asian markets, The Nikkei Index rose 123 points to 22,478, the Shanghai Index gained 28 points to 2,967 and the Hang Seng Index gained 178 points to 24,643. In Europe, the German DAX is up 140 points to 12,420, while the FTSE 100 is higher by 90 points to 6,315. Back to expiration, Quadruple witching could shake up markets with increased volume early on and late day. Quadruple witching occurs on the third Friday of the month of every quarter, in March, June, September, and December, and refers to the simultaneous expiration of single-stock options, single-stock futures, and stock-index options and stock-futures. Stocks have managed to erase much of last week’s market “hiccup” when major averages fell across the board on several factors. Markets could see even more volatility to come amid continued protesting and unrest related to George Floyd and other incidences, the uptick in COVID-19 cases in the US, China and elsewhere (though recall earlier in the week positive vaccine developments), the start of quarterly earnings in July (which is expected to be downbeat), surprises in economic data (retail sales, housing data, was strong this week) and the implementation of fiscal and monetary policy stimulus that has been promised by the Federal Reserve and U.S. government in the form of stimulus. At least for today, markets look to end the week strong.

Market Closing Prices Yesterday

·     The S&P 500 Index inched higher 1.85 points, or 0.06%, to 3,115.34

·     The Dow Jones Industrial Average fell -39.51 points, or 0.15%, to 26,080.10

·     The Nasdaq Composite gained 32.52 points, or 0.33%, to 9,943.05

·     The Russell 2000 Index rose 0.54 points, or 0.04% to 1,427.08


Economic Calendar for Today

·     8:30 AM EST      Current Account Balance

·     1:00 PM EST       Baker Hughes Weekly Rig Count


Earnings Calendar:

·     Earnings Before the Open: JBL, KMX






WTI Crude















10-Year Note





World News

·     Russian Central Bank lowers its key interest rate a full point to 4.5% from 5.5% and says a rate cut is possible at its next meeting

·     The Bank of England, the Bank of Japan, the European Central Bank and the Swiss National Bank, in consultation with the Federal Reserve, have jointly decided to reduce the frequency of their 7-day U.S. dollar operations from daily to three times per week. The central banks cited the improvements in U.S. dollar funding conditions and the low demand at recent 7-day maturity

·     U.K. retail sales volumes partly bounced for May, with a rise of 12%, compared to record falls, but sales were still 13.1% lower than February. The proportion spent online reached the highest proportion on record in May 2020 at 33.4%, versus 30.8% reported in April 2020.


Sector News Breakdown


·     DraftKings (DKNG) 40M share Secondary priced at $40.00

·     At Home Group (HOME) Q1 adjusted EPS loss (61c) on revs $189.8M vs. est. loss (42c) and $194.15M; 1Q comp sales -46.5% vs. -0.80% YoY and est. -45.8%; isn’t providing 2Q and FY 2021 guidance; net inventories decrease 0.3% at the end of 1Q

·     Smith & Wesson Brands (SWBI) Q4 EPS Q4 adj EPS 57c on sales $233.6M vs. est. 40c and $217.6M; 4Q gross margin 34.8% vs. 36.1% YoY; 4Q adjusted operating income $47.9 million vs. $21.3 million YoY



·     Marathon Petroleum (MPC) is in talks with potential suitors for its Speedway gas-station business, reviving a sale that fell apart in the early stages of the COVID-19 crisis, the Wall Street Journal reported last night

·     PQ Group Holdings (PQG) lowers its Q2 sales view to $350M-$360M from its original guidance of $360M-$375M, on continued weaker demand in Europe; raising its Adjusted EBITDA expectation to $107M-$112M from prior guidance of $95M-$105M, and margin is anticipated to be ~27%.



·     BeyondSpring (BYSI) 1.93M share Spot Secondary priced at $13.00

·     Forma Therapeutics (FMTX) 13.88M share IPO priced at $20.00

·     Repare Therapeutics (RPTX) 11M share IPO priced at $20.00

·     Bright Horizons (BFAM) files automatic mixed securities shelf

·     Dynavax (DVAX) announced that the first participants have been dosed in the Phase 1 clinical trial to evaluate Clover Biopharmaceuticals’ vaccine candidate to prevent COVID-19 that contains the company’s CpG 1018 adjuvant


Industrials & Materials

·     Steel Dynamics (STLD) sees Q2 adjusted EPS 40c-44c above consensus of 26c; says Q2 earnings from the company’s steel operations is expected to be significantly lower than Q1 due to lower shipments and selling values as a result of the temporary closures of numerous steel consuming businesses in response to the coronavirus (COVID-19) pandemic

·     Textron (TXT) approved a restructuring plan to reduce the company’s operating expenses through headcount reductions, facility consolidations and other actions in response to the economic challenges and uncertainty resulting from the COVID-19 pandemic

·     Enviva (EVA) lowers FY20 net income view to $33.9M-$43.9M from $52.2M-$62.2M while raises FY20 adjusted EBITDA view to $185.0M-$195.0M from $165.0M-$175.0M

·     Kratos Defense (KTOS) 13.5M share Secondary priced at $16.25

·     KBR (KBR) and L&T Hydrocarbon Engineering will collaborate to develop business opportunities for which KBR will license proprietary technology and engineering services and LTHE will be the EPC provider


Technology, Media & Telecom

·     AMC Entertainment (AMC) said it will open the bulk of its U.S. theaters on July 15, with the rest just over a week later, it says in unveiling its reopening plan. AMC will open 450 locations in mid-July, with the remaining 150 opening up on July 24th

·     Alibaba (BABA) and (JD) handled a record $136.51B in sales in 24 hours during 618, a major Chinese shopping event, according to reports.’s transaction volume totaled 269.2B yuan, or $37.99B, while Alibaba’s GMV was 698.2B yuan, or $98.52B – CNBC

·     AutoWeb (AUTO) surges after saying revenues were $5.8M for May and $5.3M for April, an increase of 9% as per the monthly comparison; net loss for May reduced to $0.4M, compared to loss of $1M in April; gross margin expanded by 660 bps to 37.4% in May compared to April

·     LiveXLive Media (LIVX) Q4 EPS loss (15c)/$9.88M vs. est. loss (15c)/$10.09M; Q4 2020 paid subscribers increased 25%, or by a net 169,000 subscribers YoY; streamed 14 live events during its Q4 2020, as compared to 5 in Q4 2019; sees FY21 revenue $61.0M-$67.0M vs. est. $63.21M

·     Wirecard shares slide again, extending the declines from Thursday when the German payments processor said Ernst & Young said it didn’t have sufficient audit evidence for€1.9 billion euros in cash. CEO resigns with immediate effect

·     Yatra Online Inc (YTRA) said it expects revenue for the quarter ended June 30 to be between $1.8M-$2.2M vs. $32.6M for the same period in 2019; says quarter is hurt by the significant impact of the COVID-19 pandemic; says that due to higher cancellations, refunds and lower new bookings in air ticketing, hotels and packages segments, co is experiencing unfavorable working capital trends and “material negative” cash flow

·     Yatra (YTRA) 12.5M share Spot Secondary priced at 80c


Market commentary provided by Catena Media Financials US, LLC, a firm separate from and not affiliated with Regal Securities. Regal Securities has not participated in the creation of the content, and does not explicitly or implicitly endorse the content.

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