Early Look

Friday, November 20, 2020

Futures	Up/Down	%	Last
DJ Industrials	-61.00	0.21%	29,382
S&P 500	-4.50	0.12%	3,575
Nasdaq	12.00	0.10%	11,999

 

 

Stock futures are mixed with several vaccine related headlines for investors to digest overnight including the WHO saying Gilead’s (GILD) drug remdesivir is not recommended for patients hospitalized with COVID-19, regardless of how sick they are, as there is no evidence it improves survival or reduces the need for ventilation. Meanwhile, Pfizer (PFE) intends to file an application to the FDA for emergency use of its coronavirus vaccine today, according to Health and Human Services Secretary Alex Azar, with Moderna (MRNA) soon to follow. Earlier this week, Azar said there will be roughly 40M doses of vaccine available by the end of this year between the two companies, enough to inoculate about 20M people. In Asian markets, The Nikkei Index fell -106 points to 25,527, the Shanghai Index rose 14 points to 3,377 and the Hang Seng Index gained 94 points to 26,451. In Europe, the German DAX is up about 50 points to 13,140, while the FTSE 100 rises 30 points to 6,365.

 

Also weighing, surging virus cases as several U.S. states have already rolled back reopening plans and implemented new restrictions to curb the spread of COVID-19 as the U.S. logged its highest-ever number of daily reported infections at 187,833, as well as a record amount of hospitalizations. Also of market concern potentially, U.S. Treasury Secretary Steven Mnuchin said late on Thursday that key pandemic lending programs at the Federal Reserve would expire on Dec. 31. Recall earlier this week, the Fed’s Bullard had said related to if the program would be extended – “This is getting a lot of debate, but I‘m going to make the case that whether we extend them or not may not be that material to financial markets,” St. Louis Fed President James Bullard said earlier this week. “We can always start up the liquidity programs again in the future.”

Market Closing Prices Yesterday

·     The S&P 500 Index gained 14.08 points, or 0.39%, to 3,581.87

·     The Dow Jones Industrial Average rose 44.81 points, or 0.15%, to 29,483.23

·     The Nasdaq Composite jumped 103.11 points, or 0.87%, to 11,904.71

·     The Russell 2000 Index advanced 14.82 points, or 0.84% to 1,784.13

 

Economic Calendar for Today

·     1:00 PM EST       Baker Hughes Weekly Rig Count

 

Earnings Calendar:

·     Earnings Before the Open: BKE, DXLG, FL, HIBB, IEC, RMR

 

Other Key Events:

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

·     Deutsche Bank Gaming, Lodging and Leisure Virtual Conference, 11/19-11/20

·     Oppenheimer Virtual Internet Bus Tour, 11/19-11/20

 

 

Macro	Up/Down	Last
WTI Crude	0.38	42.12
Brent	0.50	44.70
Gold	1.25	1,867.25
EUR/USD	-0.0013	1.1862
JPY/USD	0.09	103.83
10-Year Note	-0.013	0.842%

 

 

World News

·     U.S. Treasury Secretary Steven Mnuchin said that key pandemic lending programs at the Federal Reserve would expire on Dec. 31, putting the outgoing Trump administration at odds with the central bank and potentially adding stress to the economy as President-elect Joe Biden organizes his administration. In a letter to Fed Chair Jerome Powell, Mnuchin said the $455 billion allocated to Treasury under the CARES Act last spring, much of it set aside to support Fed lending to businesses, nonprofits and local gov’ts, should be instead available for Congress to reallocate

 

Sector News Breakdown

Consumer

·     Beacon Roofing (BECN) 4Q EPS $0.83 vs. est. $0.99 on revs $2.02B vs. est. $2B; said residential-roofing sales rose about 6% in the latest quarter, but non-residential items dropped almost 12%; lowered its cost of products sold down about 2% and amortization expenses were down 15%

·     Caleres (CAL) Q3 adj EPS 48c on revs $647.5M vs. est. 4c and $619.5M; announces strategic exit of Naturalizer stores to drive digital growth; says plans to close approximately 133 Naturalizer stores by end of fiscal year 2020; expects pre-tax charges in q4 of 2020 of between $20M-$25M; Q3 Famous Footwear comparable sales -9.1% vs. +2.50% YoY

·     Capri Holdings (CPRI) upgraded to Buy from Neutral at BTIG

·     Natural Grocers (NGVC) declares special cash dividend of $2.00 per share; 4Q net sales $264.2 million, +16% YoY and 4Q daily average comparable sales +13.2% vs. +1.80% YoY

·     Ross Stores (ROST) 3q eps $1.02 (ex-charge) vs. est. $0.61 on revs $3.8B vs. est. $3.43B, comps -3% to easily top the -12.6% consensus expectation; not providing guidance for 4Q

·     William Sonoma (WSM) 3Q adj EPS $2.56 vs. est. $1.53 on revs $1.765B vs. est. $1.6B, comps +24.4%; sees long-term total net revs +mid-high single digit %; said Q3 sales again outperformed expectations with demand comp up nearly 31% compared to a net comp of 24%, driven by strength across all brands

 

Energy

·     Helmerich & Payne (HP) Q4 EPS loss (55c) vs. est. loss (80c) and revs $208M vs. est. $201.98M; expects its Q1 of fiscal 2021 North America solutions rig count to exit at approximately 90 rigs up over 30% during quarter; Gross capital expenditures are expected to be approximately $85 to $105 million

·     Haynes Int’l (HAYN) Q4 EPS loss (46c) vs. est. loss (70c) and sales $79.9M vs. est. $76.6M; decrease in qtrly volume primarily attributable to covid-19 pandemic in addition to impact caused by grounding of Boeing 737 Max; expects revenue in Q1 of fiscal 2021 to be lower than Q4 of fiscal 2020

·     Tetra Tech (TTEK) announced that the Federal Emergency Management Agency awarded a Tetra Tech-led joint venture a five-year, single-award contract, valued up to $50M, to increase resilience and reduce the costs of recovery efforts in disaster-stricken communities.

·     Woodward (WWD) Q4 adj. EPS 75c vs. est. 54c and revs $531.26M vs. est. $520.52M; said will not be providing financial guidance for the year

 

Financials, Industrials and Materials

·     Intuit (INTU) 1Q adj EPS $0.94 vs. est. $0.37 on revs $1.3B vs. est. $1.2B; sees 2Q adj EPS $1.31-1.34 vs. est. $1.21, sees 2Q revs +8-9% vs. est. +6.1%; guides FY adj EPS $8.40-8.55 vs. est. $8.43, sees FY revs $8.265-8.415B vs. est. $8.29B

·     I3 verticals (IIIV) Q4 EPS loss (6c) on revs $38.4M vs. est. 18c and $38.1M; not providing outlook

 

Healthcare

·     Gilead’s (GILD) drug remdesivir is not recommended for patients hospitalized with COVID-19, regardless of how sick they are, as there is no evidence it improves survival or reduces the need for ventilation, a World Health Organization panel said on Friday.

·     Avrobio (AVRO) 5M share Spot Secondary priced at $15.00

·     Amarin (AMRN) rises after saying a late-stage trial of its heart drug, Vascepa, conducted by its Chinese partner met main goal. AMRN said Vascepa significantly reduced high levels of triglycerides when compared to placebo in Chinese patients

·     Mesoblast Ltd (MESO) rises as Novartis (NVS) signs a $50M deal with MESO, securing rights to develop, commercialize and manufacture company’s experimental cell therapy Remestemcel-L, which is currently in late-stage trials

·     Maravai Lifesciences (MRVI) 60M share IPO priced at $27.00

·     Sotera Health (SOHC) 46.6M share IPO priced at $23.00

·     Stoke Therapeutics (STOK) 2.5M share Secondary priced at $39.00

 

Technology, Media & Telecom

·     FireEye (FEYE) announced a $400M strategic investment led by Blackstone Tactical Opportunities (BX) to support the company’s vision to create the industry’s leading intelligence-led cyber security platform and services company

·     51job (JOBS) Q3 adjusted EPS 53c vs. est. 50c; Q3 revenue $133.5M, down 8.4% vs. a year ago; Q3 online recruitment services revenues were $80.3M, a 13.9% decrease from the same quarter in 2019

·     MacAfee Corp (MCFE) Q3 revenue $728M vs. est. $721.5M; acceleration of net new core DTC subscribers with additional 2.4 mln subscribers at quarter end, up 16%; sees total revenue of $732M-$742M for quarter ending December 26, 2020 vs. est. $728.2M

·     Ooma (OOMA) raises FY21 EPS view to 45c-47c from 34c-40c and ups FY21 revenue view to $167.7M-168.5M from $163.0M-$164.5M; 3Q adj EPS $0.13 vs. est. $0.08 on revs $43Mm vs. est. $41.3Mm; guides 4Q adj EPS $0.08-0.11 vs. est. $0.06, sees 4Q revs $43-43.8Mm vs. est. $41.1Mm

·     Workday (WDAY) Q3 EPS 86c vs. est. 67c and revs $1.11B vs. est. $1.09B; Q3 Subscription Revenue of $968.5 Million, Up 21.3% YoY and subscription Revenue Backlog of $8.87 Billion, Up 23.4% YoY; 3q adjusted operating margin 24.2% vs. 15.2% YoY vs. estimate 19.1%; raises year sub revs view to $3.77B-43.78B from prior $3.73B-$3.74B

·     Accenture (ACN) has acquired Arca, a Spanish engineering services company with a focus on network operations and business services