Morning Preview: March 17, 2020

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Early Look

Tuesday, March 17, 2020





DJ Industrials




S&P 500










Stock futures are modestly higher in comparison to the sharp declines seen over the last week, but still pointing in the right direction as markets attempt to stabilize after major averages posted one of their biggest daily declines in its history amid the coronavirus economic toll. Stocks plunged on Monday as the Dow ended nearly 3,000 points lower on Monday, capping an ugly session for Wall Street that saw circuit breakers temporarily halt trading for 15 minutes, amid rising fears that fresh Federal Reserve stimulus won’t be enough to combat the threat of lost jobs and wages from the coronavirus outbreak. The CBOE Volatility Index (VIX) closed at an all-time high (82.69), surpassing the close of 80.86 on 11/20/08. In Asian markets overnight, The Nikkei Index was up 9 points to 17,011, the Shanghai Index dipped -9 points to settle at 2,779 and the Hang Seng Index rose 200 points to23,263. In Europe, the German DAX is down about -100 points to 8,640, while the FTSE 100 is down over -80 points to 5,065. France is promising 45 billion euros ($50.2 billion) in immediate aid for businesses and employees impacted by the coronavirus epidemic, which is slowing or shutting down large swaths of the global economy. Several sectors have been crushed including energy, technology, financials and Transportation while the S&P 1500 Homebuilder group is now down 50.5% since February 20th. Markets hopeful for stimulus after Politico reported Treasury Secretary Steven Mnuchin is likely to seek a phase three stimulus package of $850b or more today, citing unidentified people familiar. At the same time, the global cases of the coronavirus has now risen another 7K to over 180K total. The U.S. dollar posted a 4-year high against the Canadian dollar, topping the 1.40 level, while the dollar is generally much higher vs. all rival currencies.

Market Closing Prices Yesterday

·     The S&P 500 Index plunged -324.89 points, or 11.98%, to 2,386.13

·     The Dow Jones Industrial Average fell -2,997.10 points, or 12.93%, to 20,188.52

·     The Nasdaq Composite dropped -970.28 points, or 12.32%, to 6,904.59

·     The Russell 2000 Index declined -172.72 points, or 14.27% to 1,037.42


Economic Calendar for Today

·     7:45 AM EST      ICSC Weekly Retail Sales

·     8:30 AM EST      Retail Sales MoM for February

·     8:30 AM EST      Retail Sales – Less Autos for February

·     8:55 AM EST      Johnson/Redbook Weekly Sales

·     9:15 AM EST      Industrial Production for Feb

·     9:15 AM EST      Capacity Utilization for Feb

·     10:00 AM EST    JOLTs Job openings for January

·     10:00 AM EST    Business Inventories for January

·     10:00 AM EST    NAHB Housing Market Index for March

·     4:30 PM EST       API Weekly Inventory Data


Earnings Calendar:

·     Earnings Before the Open: HDS, LE, MIK

·     Earnings After the Close: ADUS, FDX, MDB, SMAR






WTI Crude















10-Year Note





World News

·     Japan bought a record 121.6 billion ETFs, a day after it doubled the upper limit of ETFs it can purchase to 12 trillion yen

·     France’s financial market regulator has banned short selling in 92 shares. The ban will last until the end of March 17. The ban applies to the most impacted shares by the fall in prices during the trading day of March 16.

·     France is promising 45 billion euros ($50.2 billion) in immediate aid for businesses and employees impacted by the coronavirus epidemic, which is slowing or shutting down large swaths of the global economy.

·     Major League Baseball pushed back opening day until mid-May at the earliest on Monday because of the new coronavirus after the federal government recommended restricting events of more than 50 people for the next eight weeks.


Sector News Breakdown


·     HD Supply (HDS) Q4 adjusted EPS 64c on revs $1.385B vs. est. 55c $1.38B; announces new $500M share repurchase program; says not providing Q1, FY20 guidance due to COVID-19

·     Churchill Downs (CHDN): the Kentucky Derby will be postponed until September 5, the latest sporting event to be affected by the coronavirus pandemic

·     Hilton Grand Vacations Inc. (HGV) has withdrawn its previous full-year 2020 guidance and authorized a new $200 million share repurchase program

·     Southwest Airlines (LUV) said it is withdrawing its previous 2020 financial guidance amid the coronavirus pandemic, with revenue trends expected to deteriorate further

·     GNC Holdings (GNC) says it doesn’t expect to have sufficient cash flow from operations to pay indebtedness under 1.5% convertible senior notes or its tranche B-2 term loan when they come due.

·     Nordstrom (JWN) said it will temporarily close its stores, including Nordstrom full-line, Nordstrom Rack, Trunk Club clubhouses and Jeffrey in the U.S. and Canada for two weeks, effective March 17, and provide pay and benefits for its store employees during this period; said in light of the current economic uncertainty, Nordstrom is making further reductions to its expense and capital expenditure plans and is currently suspending share repurchases.

·     Eldorado Resorts (ERI) announced that it will comply with the Louisiana Gaming Control Board order and will temporarily suspend operations at the Isle of Capri Lake Charles, Belle of Baton Rouge and Eldorado Shreveport


Energy, Industrials & Materials

·     Pioneer Natural Resources (PXD) reduces cap-ex budget by about 45% and expects ranger between $1.6B-$1.8B; expects its revised capital program to be fully funded from forecasted cash flow of approximately $2.3B and generate free cash flow of approximately $500M; cutting operated rig count from 22 currently to 11 operated rigs within the next two months

·     EnLink Midstream (ENLK) cuts its FY20 cap-ex to $225M-$285M from prior view $315M-$425M

·     World Fuel Services (INT) announces $200M stock buyback

·     Bloom Energy (BE) Q4 adjusted Ebitda $3.7M, well below the $34.3M estimate on revs $213.8M

·     ExxonMobil (XOM) is looking to significantly reduce spending as a result of market conditions caused by the COVID-19 pandemic and commodity price decreases, the company said



·     JPMorgan (JPM), Goldman Sachs (GS) and Bank America (BAC) will tap the Fed’s discount window along with five other big banks to reassure smaller firms they can do the same without stigma



·     DBV Technologies (DBVT) shares fell over 50% after it said the FDA raised some questions regarding efficacy, including the impact of patch-site adhesion, during a review of the company’s Biologics License Application for investigational Viaskin Peanut (shares of AIMT rose which has competing drug rose over 20% on the DBVT news)

·     HealthEquity (HQY) Q4 EPS 39c/$201.2M vs. est. 35c/$199.26M; cut its revenue forecast for 2021 for revs to $770M-$790M from prior view $812M-$820M (est. $821.5M); sees 2021 adjusted Ebitda $245M vs. est. $255M vs. est. $265.6M

·     Chiasma (CHMA) Q4 EPS loss (29c) vs. est. loss (24c); cash, cash equivalents and marketable securities as of December 31, 2019, were $92.4M, compared with $41.7M as of December 31, 2018

·     Conformis (CFMS) said the FDA cleared the 510(k) for new onsite Steris VHP LTS-V sterilization unit


Technology, Media & Telecom

·     Coupa Software (COUP) 4Q adj EPS $0.21 vs. est. $0.05 on revs $111.5Mm vs. est. $102.5Mm; guides 1Q adj EPS $0.06-0.08 vs. est. $0.05; sees 2021 adj EPS $0.30-0.33 vs. est. $0.38, sees 2021 revs $488-490Mm vs. est. $489.4Mm

·     Tencent Music (TME) Q4 revenue 7.29B yuan vs. est. 7.08B yuan; 4Q mobile monthly active users for online music 644 million, -2.6% QoQ, 4Q mobile monthly active users for social entertainment 222 million, -8.3% QoQ, 4Q paying users for online music 39.9 million, +13% QoQ

·     AMC Theatres (AMC) announced that as of Tuesday, March 17, all AMC locations in the United States will close for at least six to 12 weeks, in compliance with local, state and federal directives

·     Cineworld Group unit Regal said closure of all theater locations to start March 17 as a precaution amid current circumstances


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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