Early Look

Friday, October 16, 2020

Futures	Up/Down	%	Last
DJ Industrials	65.00	0.23%	28,451
S&P 500	7.50	0.22%	3,483
Nasdaq	39.50	0.33%	11,913

 

 

Stock futures in the U.S. pointing to a higher open after broader markets overcame persistent tech stock weakness on Thursday and steadily erased the lows to post only modest losses amid gains in cyclical sectors as energy and financials stepped up. Six of 11 S&P sectors ended higher yesterday, after all of them started the session in the red led by energy as crude oil bounced back from down 4% to little changed near $41 per barrel level. In Asian markets, The Nikkei Index fell -96 points to 23,410, the Shanghai Index rose 4 points to 3,336 and the Hang Seng Index jumped 228 points to 24,386. In Europe, the German DAX is up 140 points to 12,840, while the FTSE 100 rises around 75 points to move back above the 5,900 level. Retail sales, industrial production and a consumer sentiment survey are ahead on the economic front in the U.S. on Friday a day after weak jobless claims and mixed manufacturing. Markets remain concerned about rising coronavirus cases both in the U.S. and Europe and the effect those are having on economies. Several European countries were forced to tighten restrictions this week. On-again, off-again stimulus talks in Washington, as well as risks of a second wave of coronavirus infections has kept trading volatile this week.

Market Closing Prices Yesterday

·     The S&P 500 Index slipped -5.33 points, or 0.15%, to 3,483.34

·     The Dow Jones Industrial Average fell -19.80 points, or 0.07%, to 28,494.20

·     The Nasdaq Composite dropped -54.86 points, or 0.47%, to 11,713.87

·     The Russell 2000 Index advanced 17.23 points, or 1.06% to 1,638.88

 

Economic Calendar for Today

·     8:30 AM EST      Advance Retail Sales MoM for September…est. 0.7%

·     8:30 AM EST      Retail Sales Less Autos MoM for September…est. 0.5%

·     9:15 AM EST      Industrial Production MoM for September…est. 0.5%

·     9:15 AM EST      Capacity Utilization for September…est. 71.9%

·     10:00 AM EST    Business Inventories for August…est. 0.4%

·     10:00 AM EST    University of Michigan Sentiment for Oct…est. 80.5

·     1:00 PM EST       Baker Hughes Weekly Rig Count

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

 

Earnings Calendar:

·     Earnings Before the Open: ALLY, BCLI, BK, BMI, CFG, JBHT, JNJ, KSU, SLB, STT, SXT, VFC

 

 

Macro	Up/Down	Last
WTI Crude	-0.61	40.35
Brent	-0.69	42.47
Gold	-1.15	1,907.55
EUR/USD	0.0008	1.1716
JPY/USD	-0.18	105.27
10-Year Note	-0.008	0.726%

 

 

Sector News Breakdown

Consumer

·     Clorox (CLX) downgraded to neutral from overweight at JPMorgan

·     Daimler (DDAIF) posted forecast-beating third-quarter results, citing a faster than expected market recovery and strong business in September; Q3 Ebit reached 3.07 billion euros ($3.59 billion), Daimler said, beating the 2.14 billion Refinitiv forecast

·     Del Taco (TACO) Q3 15c on revs $120.8M vs. est. 10c and $120.5M; Q3 system-wide comparable sales +4.1% vs. +1% YoY and Q3 company-owned restaurant comp sales +2% vs. +0.40% YoY

·     Chewy (CHWY) upgraded to Buy from Hold at Jefferies

·     Ford Motor (F) and its joint ventures sold 164,352 vehicles in China in Q3, representing rise of 25.4% Y/Y and 3.6% Q/Q.

·     Passenger-car registrations in the European Union increased in September, the first monthly rise in 2020 as registrations grew by 3.1% last month to reach 933,987 new cars sold across the European Union

 

Energy, Industrials and Materials

·     A technical committee of OPEC+ ended a meeting on Thursday expressing concerns about rising oil supply as social restrictions to curb the spread of COVID-19 limit fuel usage. OPEC+ is set to reduce its current supply cuts of 7.7 million barrels per day (bpd) by 2 million bpd in January even as OPEC Secretary General Mohammed Barkindo admits fuel demand is looking “anemic.”

·     SolarEdge (SEDG) upgraded to Neutral from Sell at Goldman Sachs and raise tgt to $283 from $142

·     First Solar (FSLR) downgraded to Neutral from Buy at Bank America

 

Financials

·     Bank of New York (BK) 3Q EPS $0.98 vs. est. $0.94 on revs $3.8B vs. est. $3.83B, says looks forward to recommencing share buybacks as soon as possible and expects to be meaningfully accretive to EPS

·     CIT Group (CIT) Q3 EPS 84c on revs $474M vs. est. 11c/$447.6M; tangible book value per share of $50.29; reports Q3 CET1 capital ratio 9.9%

·     First Citizens Bancshares (FCNCA) and CIT Group (CIT), jointly announced today that they have entered into a definitive agreement under which the companies will combine in an all-stock merger of equals https://on.mktw.net/2H7G7X2

 

Healthcare

·     Intuitive Surgical (ISRG) Q3 revs $1.08B vs. est. $970.0M; Q3 adj eps $2.77 vs. est. $2.06; cannot, at this time, reliably estimate the future impact on operations and financial results; shipped 195 da Vinci Surgical Systems, a decrease of 29% compared with 275 in the third quarter of 2019; grew its da Vinci Surgical System installed base to 5,865 systems as of September 30, 2020, an increase of 8% compared with 5,406 as of the end of the third quarter of 2019

·     Amarin (AMRN) said that Vascepa was found to significantly reduce ischemic events in patients with prior percutaneous coronary intervention citing a post hoc subgroup analyses of the REDUCE-IT study

·     Intersect (XENT) said it sees Q3 2020 revenue $22.4M-$22.8M vs. est. $21.4M; cash and marketable securities are expected to be about $130 mln as of September 30, 2020; remain well-positioned to sustain sequential revenue growth in Q4 of 2020 and into 2021

·     Zogenix (ZGNX) presents New Data for FINTEPLA(R) in Dravet Syndrome at CNS 2020: Interim data from open-label extension trial showed substantial seizure reductions were maintained in patients treated with FINTEPLA(R) for up to two years. Post-hoc analysis demonstrated NNTs (Number Needed to Treat) to achieve a clinically meaningful response compared favorably to similar studies of other Dravet syndrome therapies

·     Aligos Therapeutics (ALGS) 10M share IPO priced at $15.00

·     Eargo (EAR) 7.85M share IPO priced at $18.00

·     Kiromic BioPharma (KRBP) 1.25M share IPO priced at $12.00

·     Praxis Precision Meds (PRAX) 10M share IPO priced at $19.00

·     Royalty Pharma (RPRX) 17.3M share Secondary priced at $42.00

·     Tarsus Pharmaceuticals (TARS) 5.5M share IPO priced at $16.00

 

Industrials and Materials:

·     Boeing (BA) rises as Europe’s top aviation regulator says changes to BA’s 737 MAX model have made the plane safe to fly in the region before end-2020, according to Bloomberg

·     Agco Inc. (AGCO) upgraded to buy from neutral at Citigroup and raise tgt to $95 from $70

·     Caterpillar (CAT) upgraded to Overweight from Equal Weight at Wells Fargo

·     Celanese Corporation (CE) says that it will increase prices by up to 10 percent on its engineered materials product portfolio globally.

·     Huntsman (HUN) said a mechanical failure at a third-party raw material supplier, its Geismar, Louisiana MDI facility will lead to a partial outage and is likely to impact its Q4 adj. EBITDA by ~$15M.

·     Marten Transport (MRTN) Q3 eps 22c on revs $216M vs. est. 20c and $219.5M

·     Raytheon Technologies (RTX) business unit Raytheon Missiles and Defense has been awarded a ~$239.11M definitization modification to contract for StormBreaker production Lot 6

 

Technology, Media & Telecom

·     HP Enterprise (HPE) sees FY21 adjusted EPS $1.56-$1.76 vs. est. $1.46 and sees FY21 GAAP EPS 34c-54c, up 77c year-over-year at the mid-point; said expects free cash flow to grow at a 3-year CAGR of over 50% between FY20-FY23

·     Fastly (FSLY) files to sell 6.37M shares of Class A common stock for holders

·     Twitter (TWTR) a massive outage that started in the early evening Thursday, with some users reporting problems sending tweets and refreshing their timelines beginning just after 5:30 pm ET

·     Yandex (YNDX) terminates discussions on a possible takeover of online bank Tinkoff