Morning Preview: June 24, 2020

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Early Look

Wednesday, June 24, 2020





DJ Industrials




S&P 500










U.S. stock futures are pointing to a lower open, as the Nasdaq Composite drops for the first time in 9-days as markets take a pause following a strong run over the last week on better economic data, dovish Fed commentary and buying optimism as economies around the world reopen from the coronavirus pandemic closures. The U.S. is weighing new tariffs of over $3B of imports from France, Germany, Spain and the U.K., according to reports overnight. The news comes after reports yesterday that the EU may extend a ban on visitors from America as Europeans are still prohibited from entering the U.S. under virus travel restrictions. A recent spike in COVID-19 cases in heavily populated states (FL, TX, CA, AZ) also weighs on sentiment as it threatens the economic recovery story from the forced coronavirus lockdown. Infectious disease expert Dr. Anthony Fauci told lawmakers on Tuesday that recent COVID-19 trends were “disturbing” as the U.S. recorded a 25% surge in new infections for the week ending June 21, with 10 states recording increases of 50%. Stocks are coming off strong returns on Tuesday as the Nasdaq registered another record closing high (8-straight days of gains) and the Dow and S&P 500 both advanced though all three indexes finished off their highs of the session.


Hopes of further stimulus helped to support stocks Tuesday after White House economic adviser Lawrence Kudlow said tax rebates and direct mail checks are on the table in the next coronavirus relief bill, with Treasury Secretary Mnuchin echoing similar comments about another relief bill. Technology has been the market driver over the last few weeks with shares of AAPL, AMZN, MSFT, NFLX, NVDA among names touching record highs on a daily basis. Despite the small decline in futures, the S&P 500 is up more than 40% from its March bottom and the Nasdaq’s record was its fifth all-time closing high this month. However, there are risks to the sustainability of the recent upturn, including how active consumers will be, how responsive office workers will be to reopened workplaces as long as the virus poses a risk, and also how many jobs will be lost permanently. In Asian markets, The Nikkei Index dipped -14 points to 22,534, the Shanghai Index gained 8 points to 2,979 and the Hang Seng Index fell -125 points to 24,781. In Europe, the German DAX is lower by nearly 300 points to 12,230, while the FTSE 100 is down over 140 points to 6,175.

Market Closing Prices Yesterday

·     The S&P 500 Index gained 13.43 points, or 0.43%, to 3,131.29

·     The Dow Jones Industrial Average rose 131.14 points, or 0.50%, to 26,156.10

·     The Nasdaq Composite jumped 74.89 points, or 0.74%, to 10,131.37

·     The Russell 2000 Index advanced 5.81 points, or 0.41% to 1,439.34


Economic Calendar for Today

·     7:00 AM EST      MBA Mortgage Applications Data

·     9:00 AM EST      FHFA House Price Index MoM for April

·     10:30 AM EST    Weekly DOE Inventory Data

·     12:30 PM EST    Fed’s Evans in virtual discussion on the economy

·     3:00 PM EST       Fed’s Bullard discusses the economy and COVID-19


Earnings Calendar:

·     Earnings Before the Open: PDCO, SOHO, WGO

·     Earnings After the Close: FUL, KBH, QMOC, USAT


Other Key Events:

·     Goldman Sachs Business Service, Transport & Leisure Conference, 6/22-6/24

·     Jefferies Virtual Consumer Conference, 6/23-6/24






WTI Crude















10-Year Note





Sector News Breakdown


·     La-Z-Boy (LZB) Q4 adj EPS 49c on sales $367.3M vs. est. 20c and $391.7M; Cash, cash equivalents, and restricted cash were $263.5 million at year end, including $75.0 million in cash proactively drawn on the company’s credit facility; written same-store sales for furniture galleries network decreased 35% in Q4 and said Q4 comp sales fell -10%

·     GNC Holdings (GNC) files for Chapter 11 bankruptcy, with a commitment from certain term lenders to provide $100M in “new money” debtor-in-possession financing and $30M from modifications to the existing ABL credit agreement.

·     Founder and chief executive of meat substitute maker Impossible Foods, Patrick Brown, made a said in an interview with CNBC’s Jim Cramer that “this is why I think people are increasingly aware plant-based products are going to completely replace the animal-based products in the food world within the next 15 years. That’s our mission. That transformation is inevitable.”


Energy, Industrials & Materials

·     The American Petroleum Institute (API) shows a build of 1.75M barrels of oil for the week ending June 19, gasoline inventories showed a draw of 325K barrels, distillate inventories show a draw of 3.85M barrels, and Cushing inventories show a draw of 2.6M barrels.

·     Renewable Energy Group, Inc. (REGI) said Q2 EBITDA is expected to be between negative $12M and negative $2M, below its prior guidance of $20M-$35M; adjusted EBITDA for 1H’20 is expected to be between $78M-$88M

·     AeroVironment (AVAV) Q4 EPS 75c on revs $135.2M vs. est. 70c and $123.6M; sees FY21 EPS $1.65-$1.85 on revs $390M-$410M vs. est. $1.89 and $398.1M



·     Avinger (AVGR) 20M share secondary priced at $0.27

·     Editas Medicine (EDIT) 6M share secondary priced at $31.25per share

·     Palomar (PLMR) files $500M mixed securities shelf

·     Quest Diagnostics (DGX) has agreed to purchase its partners’ interests in Indianapolis-based joint venture Mid America Clinical Laboratories in an all-cash transaction

·     The FDA has lifted partial clinical hold placed on Innate Pharma SA’s (IPHA) TELLOMAK Phase II clinical trial, evaluating the efficacy and safety of lacutamab in patients with advanced T-cell lymphomas.


Technology, Media & Telecom

·     Dell Technologies Inc.(DELL) is examining options including a spinoff for its roughly $50 billion stake in VMWare Inc. (VMW) as the PC maker seeks to boost the value of its shares; Dell recently kicked off a process to explore the possibility of unloading the stake or taking other steps that could include buying the rest of VMWare – Dow Jones reported

·     SoftBank’s (SFTBY) 198M share sale of T-Mobile (TMUS) priced at $103 per share

·     Thomson Reuters (TRI) files for debt shelf registration up to $3B

·     WWE (WWE) and Discovery has signed new multi-year agreement in Italy beginning July 1, to make WWE’s weekly flagship programming available exclusively live and on-demand with original U.S. commentary on DPlay PLUS, the OTT premium pay service of Discovery, along with versions featuring Italian commentary on DMAX

·     Yandex (YNDX) proposed a public offering of $200M in newly issued class A shares, via Goldman Sachs


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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