Morning Preview: March 26, 2020

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Early Look

Thursday, March 26, 2020





DJ Industrials




S&P 500










Stock futures in the U.S. are pointing to a lower open as investors prepare for a historic release of weekly jobless claims which are expected at 8:30 AM. The Department of Labor last week reported the number of first-time filings for unemployment insurance spiked by 70,000 to a two-year high of 281,000…but today the number is expected to surge to total 1.64 million (with some economists actually expecting a figure double that), a print that would be a record by a wide margin, eclipsing the prior one week highs of 695,000 seen back in October 1982. S&P 500 futures are off less than 1% ahead of the big release, which is set to offer the clearest evidence yet of the coronavirus’ devastating impact on the economy. In Asian markets, The Nikkei Index fell -882 points (4.5%) to 18,664, the Shanghai Index dipped -16 points to 2,764 and the Hang Seng Index dropped -174 points to 23,352. In Europe, the German DAX is down around -200 points to 9,675, while the FTSE 100 is down about -100 points to 5,580. Stocks posted two strong day of gains ahead of the Senate passing of the $2 trillion stimulus bill (expected to be approved by the House today or tomorrow), as the S&P posted its first back-to-back daily gains in over a month on Wednesday, though pared gains late day as Senator Bernie Sanders threatened not to sign off on the bill if a certain change was made and a report that Apple may delay the release of its next iPhone launch by months took its toll on technology stocks.

Economic Calendar for Today

·     8:30 AM EST      GDP Annualized QoQ, Q4-T…est. 2.1%

·     8:30 AM EST      Personal Consumption, for Q4-T…est. 1.7%

·     8:30 AM EST      GDP Price Index, Q4-T…est. 1.3%

·     8:30 AM EST      Core PCE QoQ, Q4-T…est. 1.2%

·     8:30 AM EST      Weekly Jobless Claims…est. 1.64M

·     8:30 AM EST      Continuing Claims…

·     8:30 AM EST      Advance Goods Trade Balance, for Feb…est. (-$63.4B)

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

·     11:00 AM EST    Kansas City Fed Manufacturing Activity, for March…est. (-10)


Earnings Calendar:

·     Earnings Before the Open: SIG. TITN, WOR

·     Earnings After the Close: GME, KBH, OXM, SAIC, SPWH, STKS


Market Closing Prices Yesterday

·     The S&P 500 Index jumped 23.25 points, or 0.94%, to 2,490.25

·     The Dow Jones Industrial Average rose 279.00 points, or 1.33%, to 21,305.00

·     The Nasdaq Composite climbed 62.50 points, or 0.84%, to 7,530.25

·     The Russell 2000 Index advanced 9.00 points, or 0.82% to 1,106.10






WTI Crude















10-Year Note





Sector News Breakdown


·     Boyd Gaming (BYD) has suspended its quarterly cash dividend program due to the impact of the COVID-19 pandemic on the company’s operations. Currently, all of the company’s operations nationwide are closed due to state and local government orders

·     The Cheesecake Factory (CAKE) sent a letter notifying landlords that its restaurants won’t pay rent for month of April after business slowed due to the coronavirus pandemic

·     Shoe Carnival (SCVL) Q4 EPS 24c on sales $239.9M vs. est. 21c and $238M; 4Q comparable sales +3.2% vs. +4.70% YoY; said 4Q gross margin 29.1% vs. 28.5% YoY; not providing guidance for fiscal year 2020 due to the uncertainty caused by COVID-19

·     Barnes & Noble Education, Inc. (BNED) said its Board of Directors has approved the adoption of a short-term stockholder rights plan and declared a dividend distribution of one preferred share purchase right on each outstanding share of the Company’s common stock

·     Alaska Airlines (ALK) announced plans to reduce its flight schedule for April and May by approximately 70% following “historic and unprecedented” falloff in demand related to the COVID-19 outbreak across the U.S. and beyond



·     Noble Midstream (NBLX) cuts quarterly distribution by 73% to $0.1875

·     Valero Energy (VLO) is closing at least two of its ethanol plants and declaring force majeure on shipments of dried distillers’ grains or corn purchases, according to Bloomberg late yesterday; the company is temporarily closing its plants in Albion, Neb., and Albert City, Iowa, after the coronavirus hurt gasoline demand worldwide

·     Canadian Solar (CSIQ) reports Q4 EPS $1.04/$919.71M vs. est. 45c/$865.46M; sees Q1 revenue $780M-$810M vs. est. $888.06M and sees Q1 total module shipments to be in the range of 2.15 GW to 2.25 GW



·     CoStar Group (CSGP) said it borrowed $745 million under the revolving credit facility and expects to use the proceeds of the borrowing to fund the pending acquisition of RentPath Holdings

·     Two Harbors (TWO) announced that in an effort to prudently manage our portfolio through unprecedented market volatility and preserve long-term stockholder value, the Company has sold substantially all of its portfolio of non-Agency securities, subject to customary settlement procedures. Firm said believes will reduce the balances under our repurchase facilities by approximately $2.0 billion. Also eliminating the risk of margin calls associated with the non-Agency residential mortgage-backed securities portfolio



·     Jazz Pharmaceuticals plc (JAZZ) said the FDA accepted for filing with Priority Review the company’s New Drug Application (NDA) seeking marketing approval for JZP-258, an investigational medicine for the treatment of cataplexy or excessive daytime sleepiness (EDS) in patients 7 years of age and older with narcolepsy

·     Quidel (QDEL) announced that its Lyra(R) SARS-CoV-2 Assay has received expanded Emergency Use Authorization, or EUA, claims from the FDA to allow testing with three additional thermocyclers


Industrials & Materials

·     Fluor (FLR) said it adopted a limited duration stockholder rights agreement to encourage anyone seeking to acquire the company to negotiate with the board prior to attempting a takeover.

·     HB Fuller (FUL) Q1 adj EPS 34c was in-line with estimates with revs $647M vs. est. $650M

·     Norbord (OSB) announced that effective March 30, it will commence reducing production across its portfolio of North American oriented strand board mills in response to the demand impact of the COVID-19 pandemic; adjusted operating configuration will initially result in a 25% reduction to Norbord’s currently operating North American mill capacity; also further reducing its 2020 capital expenditures budget by 25%, from $100M to $75M


Technology, Media & Telecom

·     Micron (MU) Q2 adjusted EPS 45c on revs $4.8B vs. est. 36c and $4.69B; sees 3Q revenue $4.6B-$5.2B vs. est. $4.88B; Q2 adjusted gross margin 29.1%; said it sees Q3 adj EPS 55c +/- 15c vs. est. 52c (was upgraded to buy from underperform at Bank America after results)

·     Groupon (GRPN) announced Rich Williams is no longer serving as CEO and Aaron Cooper has been appointed interim; COO Steve Krenzer is also no longer serving in his role

·     Outfront Media (OUT) is withdrawing FY20 expectation for AFFO growth and now sees Q1 total revenue growth between low single-digits and flat


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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