Early Look
Thursday, October 1, 2020
Futures |
Up/Down |
% |
Last |
DJ Industrials |
212.00 |
0.77% |
27,877 |
S&P 500 |
28.50 |
0.86% |
3,380 |
Nasdaq |
146.50 |
1.28% |
11,553 |
Stock futures are looking higher with the September slump behind investors, as investors look to hopes of more stimulus as While House Democrats, which initially aimed to pass their roughly $2.2T rescue legislation Wednesday night, called off the vote to allow more time for bipartisan talks. The move comes a day after Treasury Secretary Mnuchin and House Speaker Pelosi failed to muster an agreement yesterday. The signing of a stopgap bill to avoid a U.S. government shutdown also boosts optimism. Stocks closed out the final day of the month higher on Wednesday, but still posted its first monthly decline since March as the Dow Jones Industrial Average slides -2.3%, S&P 500 down -3.9%, and the Nasdaq Comp was down -5.2% for September. Stocks were sharply higher most of yesterday but sank sharply after Senate Majority Leader Mitch McConnell said both sides were still far apart. The last hour of trading for the S&P became a fight to recover and end above its 50-day simple moving average of 3,355, which it did on buying into the close. Stocks also slipped on vaccine news after Moderna’s CEO told the FT it wouldn’t seek approval of its vaccine before the election. Crude oil based on the front-month contracts, prices fell 5.6% for the month, but inched up by 2.4% for the quarter. Gold futures end the month lower by over 4% (worst since Sept 2016), but managed a 5.3% advance for the quarter. The U.S. dollar dropped over 3% in the quarter as hopes for a swift recovery from the COVID-19 economic crash made investors exit safe havens. In Asian markets, The Nikkei Index was unchanged at 23,185, the Shanghai Index fell -6 points to 3,218 and the Hang Seng Index gained 183 points to 23,459. In Europe, the German DAX is up a few points at 12,765, while the FTSE 100 rises 50 points to 5,920. Today marks another busy day of economic data following strong manufacturing, jobs and housing data yesterday, with jobless claims, inflation readings and services data all expected ahead of the nonfarm payroll report tomorrow morning. There are 33-days until the Presidential election.
Market Closing Prices Yesterday
· The S&P 500 Index climbed 27.53 points, or 0.83%, to 3,363.00
· The Dow Jones Industrial Average rose 329.04 points, or 1.20%, to 27,781.70
· The Nasdaq Composite gained 82.26 points, or 0.74%, to 11,167.51
· The Russell 2000 Index advanced 2.96 points, or 0.20% to 1,507.69
· 7:30 AM EST Challenger Layoffs for September
· 8:30 AM EST Weekly Jobless Claims…est. 850K
· 8:30 AM EST Continuing Claims…est. 12.22M
· 8:30 AM EST Personal Income for August…est. (-2.4%)
· 8:30 AM EST Personal Spending for August
· 8:30 AM EST Core PCE Price Index MoM for August…est. 0.3%
· 8:30 AM EST Core PCE Price Index YoY for August…est. 1.4%
· 9:45 AM EST Markit PMI Manufacturing PMI
· 10:00 AM EST Construction Spending for August…est. 0.8%
· 10:00 AM EST ISM Manufacturing PMI, for Sept…est. 56.3
· 10:30 AM EST Weekly EIA Natural Gas Inventory Data
Earnings Calendar:
· Earnings Before the Open: BBBY, CAG, PEP, STZ
· Earnings After the Close: IDT, SGH
Macro |
Up/Down |
Last |
WTI Crude |
-0.38 |
39.84 |
Brent |
-0.32 |
41.98 |
Gold |
11.70 |
1,897.50 |
EUR/USD |
0.0025 |
1.1746 |
JPY/USD |
0.10 |
105.58 |
10-Year Note |
+0.017 |
0.70% |
World News
· European Commission President Ursula von der Leyen said the EU remains committed to reaching a trade deal with the U.K., providing the U.K. government withdraws its Brexit bill that breaches international law. Von der Leyen said the Commission would send a formal notice to the U.K. government as the “first step” in infringement proceedings over the internal market bill, which overrides key parts of the Brexit withdrawal agreement.
Sector News Breakdown
Consumer
· Pepsi (PEP) Q3 adjusted EPS $1.66 on revs $18.09B vs. est. $1.49/$17.23B; Full-year organic revenue growth to be approximately 4%; Full-year core earnings per share of $5.50 compared to 2019 core earnings per share of $5.53 (est. $6.36); Q3 organic revenue up 4.2%
· Tesla (TSLA) cuts starting price of Chinese-made Model 3 sedan by ~8% to 249,900 yuan ($36,805.21), after accounting for local subsidies – TSLA’s China website. Reuters said (citing sources) that some Model 3 cars made in China would now come with lithium iron phosphate batteries, rather than previously used nickel-cobalt-manganese cells
· Lithia Motors (LAD) 3.18M share Secondary priced at $220.00
· Mission Produce (AVO) 8M share IPO priced at $12.00
Energy
· SPI Energy (SPI) 2.964M share registered direct offering priced at $5.40
· Lonestar (LONE) files for Chapter 11 bankruptcy protection due to lower demand and crash in oil prices caused by COVID-19 pandemic
Financials
· The Federal Reserve Board said it will extend for an additional quarter several measures to ensure that large banks maintain a high level of capital resilience. For the fourth quarter of this year, large banks-those with more than $100B in total assets-will be prohibited from making share repurchases. Additionally, dividend payments will be capped and tied to a formula based on recent income (watch BAC, C, JPM, PNC, USB, WFC)
· Athene Holding (ATH) offered American Equity (AEL) $36 a share in cash on Sept. 8, according to a letter sent to American Equity’s chief executive that was viewed by The Wall Street Journal. At that price, the bid would amount to a value of more than $3 billion. https://bit.ly/3l4bws0
· Allstate Corp (ALL) said it sees 3q restructuring and other charges, corp. to cut about 3,800 jobs; expects to incur restructuring charge of $50 mln to $60 mln, pre-tax, to be recognized in q4, any remaining charges to be recognized in h1 2021
· BGC Partners (BGCP) said revenue & pre-tax adj. earnings for Q3 now expected to be between mid-point & low-end of range of previously stated outlook of $440M-$490M
· BlackRock (BLK) upgraded to Buy on ESG growth potential at Deutsche Bank
· Mack-Cali Realty (CLI) said it will be suspending its common dividend for Q3 and Q4 of this year and intends to revisit the resumption of the dividend in Q1 2021.
· International Money Express (IMXI) 4.925M share Secondary priced at $13.50
· Sun Communities (SUI) 8M share Secondary priced at $139.50
Healthcare
· Selecta Biosciences (SELB) and Sobi announce topline data of sel-212 from the phase 2 compare trial supporting the potential for important clinical improvement in patients with chronic refractory gout
· Beam Therapeutics (BEAM) 5M share Secondary priced at $23.50
· Pulmonx (LUNG) 10M share IPO priced at $19.00
· Par Technology (PAR) 3.35M share Secondary priced at $38.00
· Zosano Pharma (ZSAN) shares fall over -50% in reaction to receiving a discipline review letter (DRL) from the FDA in connection with the Qtrypta (zolmitriptan transdermal microneedle system) 505(b)(2) New Drug Application (NDA).
· The U.S. Department of Justice is investigating if acquisitions by Medtronic (MDT) limited competition in ventilator manufacturing, WSJ reports, which adds that the company has received a civil subpoena from the DoJ requesting more information. https://bit.ly/3nhVwoq
Industrials & Materials
· Boeing (BA) shares rising 2% a day after Federal Aviation Administration (FAA) chief Dickson conducted a 737 MAX test flight, a milestone for BA that is on quest to bring its aircraft back to service saying “I like what I saw on the flight” at a news conference following – but said that the process was not completed and he was not ready to give the jet a clean bill of health
· American Airlines (AAL) and United Airlines (UAL) will go forward for now with a total of more than 32,000 job cuts after lawmakers were unable to agree on a broad coronavirus-relief package, the airlines told employees – WSJ
· Fluor’s (FLR) subsidiary Fluor Marine Propulsion has been awarded a $1.12B cost-plus-fixed fee modification to a previously awarded contract to exercise the fiscal 2021 option for naval nuclear propulsion work at the Naval Nuclear Laboratory.
· The Association of American Railroads (AAR) reports total weekly US rail traffic down 2.1% Y/Y to 518,290 carloads and intermodal units for the week ending Sept. 26, 2020 (watch CSX, NSC, UNP)
· Rolls-Royce Holdings (RYCEY) plans to raise £2B ($2.6B) by selling shares to existing investors after airlines around the world cut flights due to COVID-19; also plans to raise at least £1B by selling bonds, and it may increase borrowing by up to £2B.
Technology, Media & Telecom
· SailPoint Technologies Holdings (SAIL) will be joining the S&P MidCap 400 Index, replacing Sally Beauty Holdings (SBH), which is being shuttled to the SmallCap 600 as more representative of the small-cap space as Oasis Petroleum (OAS) is removed
· Salesforce.com (CRM) CEO Marc Benioff said on CNBC the company is stepping in on the COVID-19 effort by adapting its software for vaccine distribution. Work.com for Vaccines, announced earlier, will build on the already deployed Work.com to safely and efficiently manage vaccinations at scale
· Maxar Technologies (MAXR) has surpassed 200 customers using SecureWatch, its cloud-based, geospatial subscription service.
· STMicroelectronics (STM) reports that preliminary Q3 revenues for quarter ended September 26, are above the business outlook provided on July 23; Q3 net revenues are $2.67B, up 27.8% sequentially (consensus: $2.47B). The prior outlook was $2.45B; FY2020 revenues are expected to be above $9.65B (consensus $9.45B) vs. prior range of $9.25B-9.65B.
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.