Morning Preview: November 17, 2020

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Early Look

Tuesday, November 17, 2020





DJ Industrials




S&P 500










Stock futures are looking mixed a day after touching record highs for major averages following upbeat vaccine news from Moderna for the coronavirus. The Dow Jones Industrial Average (1st since February), S&P 500 index and Russell 2000 Smallcaps all closed at records Monday after a second set of upbeat test results from a potential Covid-19 vaccine lifted shares of companies that have been economically impacted by the coronavirus pandemic. Major averages have managed to overcome a tumultuous Presidential election (that has yet to be officially concluded given President Trump’s continued fight saying the results were rigged), and surging Covid-19 cases in Europe and the U.S. having been overshadowed by strong quarterly earnings and the prospects of a vaccine after more than 90% efficacy results from the likes of Pfizer and Moderna the last week. The index of blue-chip companies ended higher by about 470 points, or 1.6%, at 29,950, moving within striking distance of the 30,000 mark — a milestone that the index has neared but never reached. Markets had expected volatility in the weeks following the election, but optimism about a vaccine has turbocharged bets on a faster economic recovery and powered indexes higher on a daily basis with major averages on track for more than double-digit % this month. Economically sensitive companies that have struggled with people stuck at home led the charge Monday along with energy and financial stocks as the Russell 2000 SmallCap index also finished at a record high. Oil futures are flat on the morning after rising yesterday. In Asian markets, The Nikkei Index rose 107 points to move above the 26,000 level while the Shanghai Index dipped -7 points to 3,339 and the Hang Seng Index gained 33 points to 26,415. In Europe, the German DAX falls around -50 points to 13,085, while the FTSE 100 is down -70 points to 6,350. In stock news, Tesla (TSLA) to join the S&P 500 index effective December 21st.

Market Closing Prices Yesterday

·     The S&P 500 Index gained 41.76 points, or 1.16%, to 3,626.91

·     The Dow Jones Industrial Average rose 470.63 points, or 1.60%, to 29,950.44

·     The Nasdaq Composite climbed 94.84 points, or 0.80%, to 11,924.13

·     The Russell 2000 Index advanced 41.29 points, or 2.37% to 1,785.34


Economic Calendar for Today

·     7:45 AM EST      ICSC Weekly Retail Sales

·     8:30 AM EST      Retail Sales MoM for October…est. 0.5%

·     8:30 AM EST      Retail Sales Ex: Autos for October…est. 0.6%

·     8:30 AM EST      Import Prices MoM for October…est. 0.2%

·     8:30 AM EST      Export Prices MoM for October…est. 0.3%

·     8:55 AM EST      Johnson/Redbook Weekly Sales

·     9:15 AM EST      Industrial Production MoM for Oct…est. 1.0%

·     9:15 AM EST      Capacity Utilization MoM for Oct…est. 72.3%

·     10:00 AM EST    NAHB Housing Market Index for Nov…est. 85

·     10:00 AM EST    Business Inventories MoM for September…est. 0.6%

·     4:00 PM EST       Net Long-term TIC flows for September

·     4:30 PM EST       API Weekly Inventory Data


Earnings Calendar:

·     Earnings Before the Open: ARMK, AQUA, ECC, EIC, HD, WMT

·     Earnings After the Close: CURA, LZB, VREX


Other Key Events:

·     Citigroup Financial Technology Virtual Conference, 11/16-11/19

·     Cowen Annual Semi and Semi-cap Equipment Bus Tour, 11/17-11/20

·     American Association for Study of Liver Diseases virtual, 11/16-11/19

·     Jefferies West Coast Consumer Virtual Conference, 11/17-11/18

·     RBC Capital Global Tech, Media, Telecom Virtual Conference, 11/17-11/18

·     REITWorld 2020 Annual Virtual Conference, 11/17-11/19






WTI Crude















10-Year Note





Sector News Breakdown


·     Tesla (TSLA) shares surged over 13% after news it will be added to the S&P 500 index effective prior to the open of trading December 21st to coincide with the December quarterly rebalance

·     Home Depot (HD) Q3 EPS $3.18 on revs $33.54B above est. $3.05 and $32.04B; Q3 comp store sales rose 24.1% vs. est. 14.8%, and comparable sales in the U.S. were up 24.6%; plans to invest $1B in compensation enhancements for associates; sales rose amid a surge in demand for tools, gardening equipment and building materials from people upgrading their homes during the COVID-19 pandemic

·     Costco (COST) declares special cash dividend of $10 per share

·     Airbnb (ABNB) said net loss for year ended Dec. 31, 2019 was $674.3M, generated gross booking value of $38.0B in 2019, representing growth of 29% from $29.4B in 2018; in 2019, generated revenue of $4.8 billion, representing growth of 32% from $3.7 billion in 2018

·     International Game Technology PLC (IGT) announced that its subsidiary, IGT Global Solutions signed a seven-year base contract with the Nebraska Lottery to serve as the primary vendor for its instants and draw-based games and related services. IGT was selected as the preferred bidder following the State’s competitive procurement process.

·     Playa Hotels & Resorts (PLYA) announces offering of 12.5M ordinary shares for holders


Energy, Industrials and Materials

·     Devon Energy (DVN) upgraded to Buy from Neutral at Goldman Sachs

·     Plug Power (PLUG) 38M share Spot Secondary priced at $22.25

·     Textron (TXT) upgraded to Positive from Neutral at Susquehanna

·     U.S. weapon maker’s Raytheon (RTX) missile system intercepts and destroys intercontinental ballistic missile (ICBM) target outside Earth’s atmosphere calling it an “unprecedented homeland defense test”



·     LendingTree (TREE) 2.96M share Spot Secondary priced at $295.00

·     Welltower (WELL) expects Q4 same-store average revenue generated per occupied room per month growth at its senior housing operating properties about flat vs. Q3, it said in its November business update.



·, Inc. (AMZN) announced Amazon Pharmacy, a new store on Amazon, allows customers to complete an entire pharmacy transaction on their desktop or mobile device through the Amazon App. Using a secure pharmacy profile, customers can add their insurance information, manage prescriptions, and choose payment options before checking out. Prime members receive unlimited, free two-day delivery on orders from Amazon Pharmacy included with their membership (watch potential weakness from ABC, CAH, CVS, MCK, WBA)

·     Warren Buffett’s Berkshire Hathaway (BRK.B) adds onto its pharmaceutical holdings with fresh positions in AbbVie (ABBV), 21.2M shares, Merck (MRK), 22.4M shares, Bristol Myers (BMY), ~30M shares, Pfizer (PFE), 3.71M shares, during Q3, according to Berkshire’s 13F filing.

·     Bristol Myers Squibb (BMY) said the FDA has informed the company that its review of the Biologics License Application (BLA) for lisocabtagene maraleucel (liso-cel) for the treatment of adults with relapsed or refractory large B-cell lymphoma after at least two prior therapies will not be completed by the Prescription Drug User Fee Act (PDUFA) action date of November 16, 2020.

·     Co-Diagnostics (CODX) Q3 EPS 53c on revs $21.8M vs. est. 63c and $32.79M; said continues to see widespread uptake of our COVID-19 test domestically and abroad, and believe our customer and distributor bases are laying the foundation for a strong future

·     Kodiak Sciences (KOD) files to sell $400M in common stock

·     Ormat Technologies (ORA) files to sell 4.15M shares of common stock

·     QIAGEN (QGEN) launches NeuMoDx Multiplex test to complete range of sars-cov-2 testing solutions in Europe and other markets

·     SmileDirectClub (SDC) Q3 EPS loss (11c) on revs $168.5M vs. est. loss (14c) and $146.23M; Q3 unique aligner shipments of 93,301; said average aligner gross sales price of $1,794 for Q3, compared to $1,788 YoY; adjusted EBITDA of $3M for Q3 compared to loss ($45M) YoY, an improvement of 106.7%

·     Zymeworks (ZYME) and ALX Oncology Holdings (ALXO) announced they have entered into a clinical collaboration to evaluate the combination of Zymeworks’ zanidatamab


Technology, Media & Telecom

·     Baidu (BIDU) Q3 EPS $3.00 on revs $4.16B vs. est. $2.05 and $4.14B; Q3 adj. EBITDA margin 32% vs. 18% last year; said Q3 Baidu App’s daily active users, or DAUs, reached 206 million and its monthly active users, or MAUs, reached 544 million in September 2020; sees Q4 revenue $4.2B-$4.6B, consensus $4.38B; sees Q4 revs to be between RMB 28.6B ($4.2B) and RMB 31.3B ($4.6B), representing a growth rate of -1% to 8% YoY

·     Baidu, Inc. (BIDU) entered into definitive agreements to acquire JOYY’s (YY) domestic video-based entertainment live streaming business in China, which includes YY mobile app, website and PC YY, among others, for purchase price of approximately $3.6 billion in cash

·     Appaloosa LP dissolves share stake in AVGO, HUM and QCOM, cuts share stake in NFLX by 42.8% to 131,500 shares, cuts share stake in DIS by 26.7% to 880,000 shares, cuts share stake in FB by 20.8% to 1.77 mln class a shares and cuts share stake in T by 49% to 4.63 mln shares, cuts stake IN BABA to 2.22M shares from 3.38M, trims PYPL, SQ and WFC shares

·     LiveXLive Media (LIVX) Q2 EPS loss (15c) on revs $14.6M vs. est. loss (12c) and $16.68M; revenue streams diversified in q2 fiscal 2021 comprised of 53% subscription, 39% advertising and sponsorship and 8% pay-per-view ticketing compared to 94% subscription and 6% advertising in q2 fiscal 2020; sees year revs $63.5M-$69.5M vs. est. $64.1M

·     Sea Limited (SE) Q3 EPS loss (38c) on revs $1.2B vs. est. loss (53c) and $1.4B; expects bookings for digital entertainment to exceed $3.1B, representing over 75.4% growth from 2019; also expect GAAP revenue plus sales incentives net-off for e-commerce to exceed $2.3B

·     CN Innovations Group, a supplier to Apple Inc. (AAPL), is weighing a sale of its cover glass business that could fetch as much as $1 billion, Bloomberg reported

·     Veritiv (VRTV) 1.4M share Spot Secondary priced at $18.50

·     Autodesk (ADSK) to acquire Spacemaker for $240M net of cash.


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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