Early Look

Wednesday, November 4, 2020

Futures	Up/Down	%	Last
DJ Industrials	-3.00	0.01%	27,373
S&P 500	19.50	0.58%	3,381
Nasdaq	244.50	2.17%	11,509

 

 

Volatility grips U.S. futures as several battleground states in the Presidential election remain too close to call, with Dow, S&P and Nasdaq futures bouncing around all evening. Currently, battleground states that remain undecided at this point include PA, GA, NC, WI, MI and NV, with the electoral vote standing at Biden 238 vs. Trump 213 as each candidate still has a path to victory. Despite the massive swings for Dow and S&P futures overnight, Nasdaq futures remain firmly higher, up over 200 points. For tech’s outperformance, an increasing chance of a Trump win would allay any concerns of greater regulatory scrutiny, as well as higher corporate and capital gains taxes, that could hurt tech stocks in a Biden administration. President Trump vowed to ask the Supreme Court to weigh in on the inconclusive election, calling the process “a major fraud on our nation.” In voting for Senate seats, Democrats have flipped seats in Colorado and Arizona, but did not manage to flip a seat in Alabama. Republicans held seats considered vulnerable in South Carolina, Iowa, Texas and Kansas, making a flip of the Senate overall more unlikely. In Asian markets, The Nikkei Index jumped 400 points to 23,695, the Shanghai Index gained 6 points to 3,277 and the Hang Seng Index fell -53 points to 24,886. In Europe, the German DAX is flat just below the 12,100 level, while the FTSE 100 is up about 15 points to move above the 5,800 level. the prospect of political uncertainty also sent investors to U.S. Treasuries, sparking the biggest one-day drop in 10- and 30-year bond yields since June. Shares of U.S. banks, which typically track Treasury yields, slipped between 1.1% and 2.5%. In addition to the election uncertainty, the FOMC concludes its 2-day FOMC meeting results today, though no changes are expected.

Market Closing Prices Yesterday

·     The S&P 500 Index gained 58.92 points, or 1.78%, to 3,369.16

·     The Dow Jones Industrial Average rose 554.98 points, or 2.06%, to 27,480.03

·     The Nasdaq Composite jumped 202.96 points, or 1.85%, to 11,160.57

·     The Russell 2000 Index advanced 45.70 points, or 2.91% to 1,614.30

 

Economic Calendar for Today

·     7:00 AM EST      MBA Mortgage Applications Data

·     8:15 AM EST      ADP Employment Change for October…est. 650K

·     8:30 AM EST      International Trade for September…est. (-$63.8B)

·     9:45 AM EST      Markit Comp final PMI

·     9:45 AM EST      Markit Services PMI

·     10:00 AM EST    ISM Non-Manufacturing PMI for Oct…est. 57.5

·     10:30 AM EST    Weekly DOE Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: ASTE, AVA, BWEN, CFMS, CLH, DFIN, DNOW, ENBL, FUN, HAE, HEP, HLNE, HLT, IONS, LANC, PFGC, PIRS, QUAD, SBGI, SGA, SMG, SPKE, TA, TRMB, VST, WEN

·     Earnings After the Close: ACAD, ALB, ALL, ALSK, ANSS, APA, AWK, BKD, BRX, CCRN, CF, CHNG, CLI, CMP, CPK, CRK, CRY, CSGS, CUTR, CXW, DCP, DK, ELF, EPR, EQH, ET, EXPE, FIT, FNF, FTDR, GDDY, GDOT, GNK, GNW, GV, H, HOLX, HST, JKHY, KW, LCI, LHCG, LNC, LPI, MCHX, MDU, MET, MRO, MTCH, MTG, MTW, NUS, OSUR, OUT, PAHC, PAYC, PING, PODD, PRAH, PRI, PXD, QCOM, QLYS, RDN, RGLD, RPD, RYAM, SGMO, SGMS, SUN, TPC, TTGT, TWO, TYL, UHAL, VAC, VOYA, XEC, ZNGA

 

 

Macro	Up/Down	Last
WTI Crude	0.93	38.59
Brent	1.00	40.71
Gold	-18.75	1,890.40
EUR/USD	-0.0012	1.1703
JPY/USD	0.11	104.60
10-Year Note	-0.088	0.793%

 

 

World News

·     Battleground states: Trump has won Florida, Texas and Ohio, according to the AP, while Biden has won Arizona. Pennsylvania, Michigan Wisconsin, North Carolina, Georgia and Nevada have yet to be called. Pennsylvania 20 EV Trump 55.7%, Biden 43.1% (64% reporting). At 2:55 AM ET, Pennsylvania Governor Tom Wolf tweeted that there are more than 1M ballots left to be counted in Pennsylvania. Michigan 16 EV Trump 49.9% Biden 48.5% (87% reporting). Wisconsin 10 EV Biden 49.4% Trump 49.1% (95% reporting). North Carolina 15 EV Trump 50.1% Biden 48.7% (94% reporting). Georgia 16 EV Trump 50.5% Biden 48.3% (94% reporting). Nevada 6 EV Biden 50% Trump 47.9% (67% reporting). (Update): Nevada has stopped reporting until 9 AM PT Nov. 5

·     Voters in New Jersey and Arizona legalized marijuana for recreational use on Tuesday, and in Oregon approved the country’s first therapeutic use for psilocybin, the hallucinogenic drug known as magic mushrooms

·     In voting for Senate seats, Democrats have flipped seats in Colorado and Arizona, but did not manage to flip a seat in Alabama. Republicans held seats considered vulnerable in South Carolina, Iowa, Texas and Kansas, making a flip of the Senate overall more unlikely.

 

Sector News Breakdown

Consumer

·     Uber (UBER) and Lyft (LYFT) shares likely to benefit as Californians have overwhelmingly voted in favor of Proposition 22, a ballot measure that would exempt drivers for app-based transportation and delivery companies from being classified as employees.

·     Darling Ingredients (DAR) Q3 GAAP EPS 61c on revs $850.6M vs. est. 44c and $854.45M; Combined adjusted EBITDA was $218.5M during Q3 vs. $147.8M a year ago. The tally easily topped the consensus mark of $199.1M

·     Hilton Worldwide (HLT) Q3 Non-GAAP EPS of $0.06 beats by $0.10; GAAP EPS of -$0.28 misses by $0.04, revenue of $933M (-61.1% Y/Y) misses by $33.3M; system-wide comparable RevPAR decreased 59.9% vs. consensus of -61.8%.

·     Las Vegas Sands (LVS) files mixed shelf offering

 

Energy

·     The American Petroleum Institute (API) shows a draw of 8M barrels of oil for the week ending Oct. 30; gasoline inventories show a build of 2.5M barrels, distillate inventories show a draw of 577K barrels and Cushing inventories show a build of 981K barrels.

·     Berry Corp. (BRY) 3Q adj EPS $0.17 vs. est. $0.19, adj EBITDA $61.5Mm vs. est. $65.7Mm

·     Eversource Energy (ES) Q3 EPS $1.01 on revs $2.34B vs. est. $1.02 and $2.26B; reaffirmed both its 2020 earnings per share projection of $3.60 to $3.70 per share (excluding costs) and its long-term EPS growth rate from its core regulated businesses

·     Nabors (NBR) Q3 op revs $438.4M (-42% YoY) vs. est. $445.9M; and 3Q loss per share from continuing operations ($23.42); 3Q adjusted Ebitda $114.2M (down -45% YoY); 3Q average rigs working 132.1, -37% y/y

·     NexTier Oilfield (NEX) Q3 adjusted EPS loss (38c) on revs $163.7M vs. erst. Loss (37c) and $169.88M; currently expects a sequential increase in revenue of between 10% and 15% and positive Adjusted EBITDA

 

Financials

·     Prudential Corp. (PRU) Q3 adjusted operating EPS $3.21 tops $2.71 est.; said assets under management $1.65 trillion versus $1.519 trillion for the year-ago; 3Q adjusted book value per share $94.36; ahead of pace with our cost savings program, already realizing $135M of savings through the third quarter of 2020 versus our full-year goal of $140M

·     Barrett Business (BBSI) Q3 EPS $2.40 on revs $227.51M (est. $224.72M) and raises FY20 EPS view to $4.10 from $3.70

·     Healthcare Trust (HTA) Q3 normalized FFO 43c vs. est. 42c; Q3 revenue $187.33M in-line and reported Same-Property Cash NO growth of 0.5% compared to Q3 2019

·     MarketAxess Holdings (MKTX) reported $489.8B in October 2020 trading volume consisting of $216.9B in credit volume and $272.8B in rates volume; open trading percentage of credit volume stood at 32% vs. 26% in year ago month

 

Healthcare

·     Acorda Therapeutics (ACOR) Q3 EPS loss (23c) vs. est. loss (30c) and reports Q3 revenue $53.1M vs. $47.7M last year; continues to expect AMPYRA net revenue to be $85M- 110M, and operating expenses to be $170M-$180M

·     Canopy Growth (CGC) to transfer its U.S. stock exchange listing from NYSE to Nasdaq effective November 13, 2020 after market close.

·     Haemonetics (HAE) FQ2 Non-GAAP EPS of $0.62 beats by $0.11; GAAP EPS of $0.94 beats by $0.67; Q2 revenue of $209.5M (-17.1% Y/Y) beats by $1.84M.

·     Ormat Technologies (ORA) Q3 EPS 31c on revs $158.9M vs. est. 27c and $162.47M; cuts FY20 revenue view to $707M-$717M from $710M-$725M while raises FY20 adjusted EBITDA view to $417M-$425M from $400M-$410M

·     Supernus (SUPN) Q3 EPS 74c on revs $155.1M vs. est. 30c and $130.66M; raises FY20 GAAP operating earnings view to $145M-$160M from $90M-$110M and raises FY20 net product sales view to $500M-$525M from $460M-$500M

·     Zymeworks (ZYME) Q3 Non-GAAP EPS of -$1.06 misses by $0.07; GAAP EPS of -$1.43 misses by $0.53 while revenue of $2.64M (-66.4% Y/Y) misses by $8.17M

 

Industrials & Materials

·     Chemours (CC) Q3 adjusted EPS 47c on sales $1.23B vs. est. 33c and $1.2B; Q3 adjusted Ebitda fell -15% YoY to $210.0M and said Q3 cash and cash equivalents $956M, +38% YoY

·     Clearwater Paper (CLW) Q3 EPS $1.59 vs. est. $1.38 and Q3 revenue $457M vs. est. $461.62M; guides 4Q adj EBITDA $52-62Mm vs. est. $64.1Mm;

·     Huntington Ingalls (HII) raises quarterly dividend to $1.14, 10.7% increase from prior dividend

·     Mercury Systems (MRCY) Q1 EPS 51c on revs $205.62M above est. 47c and $199.61M; Q1 total bookings were $200.7M, yielding a book-to-bill ratio of 0.98 for the quarter and said total backlog at October 2 was $826.1M, a $114.3M increase from a year ago; sees Q2 EPS 48c-51c vs. est. 55c and revs $200M-$210M vs. est. $213.71M.

·     Ternium (TX) Q3 EPS 74c on revs $2.14B vs. est. 26c and $1.99B; reports Q3 iron ore shipments 869K tons vs. 904K tons last year and reports Q3 EBITDA $353.4M vs. $388.0M last year

 

Technology, Media & Telecom

·     Mega cap tech names such as Apple, Amazon, Alphabet see early gains

·     Super Micro Computer (SMCI) Q1 EPS 55c on revs $762M vs. est. 16c and $748.02M; sees Q2 EPS 35c-58c vs. est. 25c and Q2 revenue $780M-$880M vs. est. $819.8M; board authorized a new $50M stock repurchase program