Morning Preview: March 05, 2020

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Early Look

Thursday, March 5, 2020





DJ Industrials




S&P 500










The volatility in global stock markets continued overnight with the roller coaster ride in the U.S. taking futures lower this time following a broad market rally on Wednesday that saw major averages top key psychological levels (Dow back above 27K and the Nasdaq above 9K). Gains yesterday were fueled by positive election results in the Democratic primaries the night before, showing market unfriendly nominees such as Sanders and Warren not getting enough support while Biden won the delegate count. But this morning the attention once again turns to the coronavirus and its impact on global economies. In Asian markets, The Nikkei Index rose 229 points to 21,329, the Shanghai Index jumped 60 points (2%) to 3,071 and the Hang Seng Index jumped 545 points to 26,767. In Europe, the German DAX is lower by -160 points to move back below the 12,000 level, while the FTSE 100 is down about -100 points to 6,715. The International Monetary Fund announced a $50 billion aid package to fight the virus, in a week that has seen interest rate cuts from the Federal Reserve and Australian and Canadian central banks. But the IMF also warned of a more severe global slowdown from the virus than previously estimated. Airlines a focus again today after an industry report suggested global airlines face a $113B hit due to the virus.

Market Closing Prices Yesterday

·     The S&P 500 Index surged 126.75 points, or 4.22%, to 3,130.12

·     The Dow Jones Industrial Average rose 1,173.45 points, or 4.53%, to 27,090.86

·     The Nasdaq Composite spiked 334.00 points, or 3.85%, to 9,018.09

·     The Russell 2000 Index advanced 45.11 points, or 3.04% to 1,531.20


Events Calendar for Today

·     7:30 AM EST      Challenger Job cuts YoY for Feb

·     8:30 AM EST      Weekly Jobless Claims…est. 215K

·     8:30 AM EST      Continuing Claims…est. 1.738M

·     8:30 AM EST      Nonfarm Productivity, Q4-F…est. 1.3%

·     8:30 AM EST      Unit Labor Costs, Q4-F…est. 1.4%

·     10:00 AM EST    Factory Orders for January…est. (-0.1%)

·     10:00 AM EST    Durable Goods Orders, Jan-F…est. (-0.2%)

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


Earnings Calendar:

·     Earnings Before the Open: BCRX, BJ, BURL, CIEN, CLMT, CLXT, CMD, DCI, GMS, HOV, KR, MEI, SGRY, TECD, TTC



Other Key Events:

·     Morgan Stanley Tech, Media & Telecom Conference, 3/2-3/5, in San Francisco, CA

·     UBS Global Consumer & Retail Conference, ¾-3/5, in Boston, MA






WTI Crude















10-Year Note





World News

·     California becomes latest to declare a statewide emergency due to coronavirus

·     The Federal Reserve issued a landmark overhaul of Wall Street capital rules, drawing a rebuke from one of the board’s governors who warned that the change could let banks dial back buffers meant to protect them from losses. The “stress capital buffer” rule is meant to ease a burden that has plagued lenders since the Fed instituted stress tests after the 2008 financial crisis


Sector News Breakdown


·     American Eagle (AEO) Q4 adj $0.37 vs. est. $0.36 on comps +2% vs. est. 0%; guides 1Q adj EPS $0.20-0.22 vs. est. $0.21

·     BJ Wholesale (BJ) A4 adj EPS 40c vs. est. 40c; Q4 revs $3.47B; sees FY EPS $1.55-$1.72 vs. est. $1.64; sees FY net sales $13.1B-$13.3B vs. est. $13.59B

·     Burlington Stores (BURL) Q4 adj EPS $3.25 vs. est. $3.23; sees FY EPS $7.97-$8.12 vs. est. $3.23



·     OPEC ministers agreed to cut production by 1.5m b/d in response to the coronavirus, delegates said, although their talks in Vienna didn’t include Russian Minister Alexander Novak, who yesterday had refused to support such a move – Bloomberg

·     Goodrich Petroleum (GDP) Q4 adjusted Ebitda $20.9M vs. est. $19.2M; Q4 loss per share (8c) vs. EPS 58c YoY

·     Southwest Airlines (LUV) said in recent days, experienced significant decline in customer demand, increase in cancellations; now estimates Q1 operating revenues to be negatively impacted in the range of $200 million to $300 million; sees Q1 operating RASM to be in the range of down 2% to up 1% vs previous guidance of increase of 3.5%-5.5%

·     ABM Industries (ABM) 1Q adj EPS cont ops $0.39 vs. est. $0.30 on revs $1.61B vs. est $1.6B; guides FY adj EPS cont ops $1.90-2.10 vs. est. $1.96

·     Culp, Inc. (CULP) Q3 EPS 0c/$72.0M vs. est. 13c/$73.15M; said expect overall sales to increase slightly compared with Q4 of last year and says cap-ex for FY20 are now expected to be in the $6.0M to $6.5M range; says FY20 FCF expected to be moderately down as compared to last year’s results

·     REV Group (REVG) Q1 adj EPS loss (4c) on revs $532.1M vs. est. loss (4c) and $508.1M; Q1 adj Ebitda $11.3M vs. est. $9.07M, down 8% YoY; raises FY revenue $2.6B-$2.8B from prior $2.45B-$2.6B (est. $2.49B); raises FY adjusted Ebitda $107M-$123M from $105M-$120M prior



·     Align Technology, Inc. (ALGN) has signed a definitive agreement to acquire Exocad Global Holdings GmbH for EU376M, which is majority owned by Carlyle Europe Technology Partners

·     Cross Country Healthcare (CCRN) Q4 adjusted EPS 7c/$215.1M vs. est. 6c/$208.22M; 4Q adjusted Ebitda $8.29M up 35% YoY vs. estimate $7.36M; sees Q1 adjusted EPS (3c)-0c on revs $207M-$212M vs. est. 2c/$207.33M

·     Canopy Growth Corp. (CGC) said that it was shutting down two of its cannabis-production facilities in British Columbia, and eliminating roughly 500 related jobs. Canopy also said that it no longer planned to begin production in a third facility in Ontario; said that it expects to record a pre-tax charge of C$700 million to C$800 million related to the announcement


Technology, Media & Telecom

·     Marvell (MRVL) shares rose 9%; Q4 adjusted EPS 17c/$718M vs. est. 16c/$712.95M; sees Q1 adjusted EPS 11c-17c vs. est. 13c and sees Q1 revenue $680M +/- 5%, vs. est. $674.81M and non-GAAP gross margin is expected to be approximately 63%

·     Splunk (SPLK) shares fell -3%; 4Q revs $791Mm vs. est. $782.2Mm, 4Q adj EPS $0.96 vs. est. $0.96; guides FY21 revs $2.6B vs. est. $2.88B; sees Q1 revenue $450M below the consensus $526.7M; sees Q1 operating margin approximately down 25%

·     Comtech Telecom (CMTL) 2Q adj EPS $0.32/$161.7M vs. est. $0.22; cut its EPS for year to $1.08, down from prior $1.35-$1.50 and sees FY adjusted Ebitda $99M, below prior view of $99M-$103M and sees year net sales $712M below prior view $712M-$732M (est. $721M)

·     Guidewire (GWRE) shares dropped -14%; Q2 adj EPS 21c on revs $173.5M vs. est. 12c and $163.4M; reports Q2 service revs $47.4M; guides Q3 revs $153M-$157M, below the $187.5M estimate and sees Q3 EPS loss 2c-6c vs. est. up 22c; also lowers year revs to $702M-$714M from prior $75M-$771M

·     Hewlett Packard (HPQ) rejects unsolicited exchange offer from Xerox (XRX)

·     Ping Identity (PING) Q4 adjusted EPS 14c vs. est. 10c and revs $68.2M vs. est. $65.74M; sees Q1 revs $60.5M-$62.5M vs. est. $53.2M and year revs $263M-$273M vs. est. $265.4M

·     Zoom Media (ZM) shares fell -6%; Q4 adj EPS 15c on revs $188.3M vs. est. 7c and $175M; sees Q1 revs $199M-$201M vs. est. $185.4M and EPS 10c vs. est. 6c; sees FY21 adjusted EPS 42c-45c on revs $905M-$915M above consensus 30c and $868.37M


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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