Early Look

Thursday, September 10, 2020

Futures	Up/Down	%	Last
DJ Industrials	-160.00	0.57%	27,691
S&P 500	-20.50	0.60%	3,369
Nasdaq	-64.50	0.56%	11,315

 

 

U.S. stocks futures are pointing to a lower open, with declines picking up steam after having finished sharply higher Wednesday, snapping a three-day selloff that a day earlier drove the Nasdaq Composite into a correction at the fastest pace in history following its record high last week. On the calendar this morning, traders brace for a European Central Bank meeting to gauge policymakers’ views on the common currency’s recent appreciation and its impact on inflation. While markets expect the ECB to keep policy steady, investors will closely watch President Christine Lagarde’s comments on how the euro’s rise to a two-year high this month affects the outlook for inflation and economic growth. In Asian markets, The Nikkei Index gained 202 points to 23,235, the Shanghai Index dipped -19 points to 3,234 and the Hang Seng Index fell -155 points to 24,313. In Europe, the German DAX is up about 25 points to 13,265, while the FTSE 100 slips around -40 points to 5,970. In Washington, Congress remains deadlocked over a fresh coronavirus stimulus package, and while Senate Republicans united around a skinny bill, Democrats oppose the measure, and it isn’t expected to clear its first procedural hurdle in the Senate today. Regarding data, weekly jobless claims are expected today with just under 1Mm people expected to file for first time unemployment claims with producer price data also on the agenda. Yesterday stocks were powered by technology stocks as the Nasdaq Composite rose nearly 3% as investors scooped up recently beaten up stocks.

Market Closing Prices Yesterday

·     he S&P 500 Index jumped 67.12 points, or 2.01%, to 3,398.96

·     The Dow Jones Industrial Average rose 439.58 points, or 1.60 %, to 27,940.47

·     The Nasdaq Composite surged 293.87 points, or 2.71%, to 11,141.56

·     The Russell 2000 Index advanced 21.89 points, or 1.45% to 1,526.48

 

Economic Calendar for Today

·     8:30 AM EST      Weekly Jobless Claims…est. 991.75K

·     8:30 AM EST      Continuing Claims…

·     8:30 AM EST      Producer Price Index (PPI) MoM for August…est. 0.2%

·     8:30 AM EST      PPI Ex: Food & Energy MoM for August…est. 0.2%

·     8:30 AM EST      Producer Price Index (PPI) YoY for August…est. (-0.3%)

·     8:30 AM EST      PPI Ex: Food & Energy YoY for August…est. 0.2%

·     10:00 AM EST    Wholesale Inventories MoM for July…est. (-0.1%)

·     10:30 AM EST    Weekly EIA Natural Gas Inventory Data

·     11:00 AM EST    Weekly EIA Oil Inventory data (pushed out one day due to holiday)

 

Earnings Calendar:

·     Earnings Before the Open: None

·     Earnings After the Close: CHWY, FARM, LTRX, PLAY, PTON, USAT, ZUMZ

 

Other Key Events:

·     Barclay’s Consumer Staples Virtual Conference, 9/8-9/10

·     Citigroup Global Technology Virtual Conference, 9/8-9/10

·     Cowen Global Transportation virtual conference, 9/9-9/11

·     Credit Suisse Virtual Asset & Wealth Manager CEO week, 9/8-9/11

·     Goldman Sachs virtual Annual Global Retail conference, 9/9-9/10

·     Goldman Sachs virtual European Medtech & Healthcare conference, 9/9-9/10

·     Morgan Stanley Industrial CEO’s unplugged virtual conference, 9/9-9/11

·     Raymond James US Bank Conference, 9/9-9/10

·     Wells Fargo virtual Healthcare Conference, 9/9-9/10

 

 

Macro	Up/Down	Last
WTI Crude	-0.61	37.44
Brent	-0.50	40.29
Gold	2.00	1,948.75
EUR/USD	0.0003	1.1833
JPY/USD	-0.07	106.10
10-Year Note	-0.002	0.70%

 

 

World News

·     Japan core machinery orders, a highly volatile data series regarded as an indicator of capital spending in the coming six to nine months, grew 6.3% in July after a 7.6% decline in June. The rise was bigger than a 1.9% gain seen by economists in a Reuters poll.

 

Sector News Breakdown

Consumer

·     Energizer Holdings (ENR) raises Q4 organic revenue growth to 3% to 6% with full year organic revenue growth expected to be 1.5% to 2.5%; reaffirms previous guidance for fiscal 2020 adjusted Ebitda, eps and free cash flow

·     GameStop (GME) Q2 adj EPS loss ($1.40) on sales $942M vs. est. loss ($1.13) and $1.02B; qtrly comparable store sales declined (-12.7%), qtrly global e-commerce sales rose 800% and are included in comparable store sales; continuing to suspend guidance; at end of August, had substantially all of its worldwide locations open to limited customer access or curbside delivery

·     Limoneira Co (LMNR) Q3 adj EPS $0.10 vs. est. $0.01 on revs $53.6Mm vs. est. $46.5Mm, avocado volume rose to 6.1Mm pounds in 3Q; continues to expect record lemon volumes in FY20

·     Purple Innovation (PRPL) files to sell 11.8M shares of common stock for InnHold LLC

·     RH Corp. (RH) shares rose 13%; Q2 EPS $4.90 on revenue $709.7M vs. est. $3.41/$707.14M; Q2 gross margin up 550bps to 47.5% and Q2 free cash flow $218M vs. $109M last year; said real estate activity in second home markets should drive increased spending in our market for an extended period of time; said believe it’s safe to assume that some level of elevated spending on home will remain through 2021, and possibly beyond

 

Energy, Industrials and Materials

·     The American Petroleum Institute (API) showed a build of 2.97M barrels of oil for the week ending Sept. 4, while gasoline inventories showed a draw of 6.89M barrels, distillate inventories show a build of 2.29M barrels and Cushing inventories show a build of 2.61M barrels.

·     Canadian Solar Inc (CSIQ) announced proposed offering of $200 mln of convertible senior notes due 2025

·     EQT Corp. (EQT) said it sees current well cost trends validating the sustainability of its Q2 performance and improving commodity fundamentals enhancing its 2021 financial outlook in an investor presentation; says it expects 2021 free cash flow to be greater than 2020, with H2 2020 free cash flow reaching $130M

·     AeroVironment Inc. (AVAV) Q1 adjusted EPS 44c on revs $87.5M vs. est. 40c and $80.5M; still sees FY adjusted EPS $1.74-$1.94 vs. est. $1.88 and still sees FY revenue $390M-$410M vs. est. $402.5M; on track to achieve fiscal year 2021 plans and deliver another year of profitable top line growth

·     Kansas City Southern (KSU) has rejected a roughly $20 billion takeover offer from a group of investors, arguing that the bid undervalues the railroad operator, according to WSJ; said Global Infrastructure Partners and the infrastructure arm of private-equity giant Blackstone Group Inc. had offered Kansas City Southern $208 a share https://on.wsj.com/32dF2Vz 

·     Landstar System Inc. (LSTR) said it sees number of loads hauled via truck in 2020 q3 to exceed that in 2019 q3 in a low single-digit percentage range; raisesQ3 EPS to $1.40-$1.46 from $1.11-$1.17 and revenue $1.02B-$1.06B from prior $885M-$935M

 

Financials

·     Cohen & Steers, Inc. (CNS) reported preliminary assets under management of $72.1 billion as of August 31, 2020, an increase of $1.9 billion from assets under management at July 31, 2020. Net inflows of $1.0 billion and market appreciation of $1.2 billion were partially offset by distributions of $211 million.

·     Intercontinental Exchange (ICE) Ellie Mae parent, LP, intends to offer for sale in underwritten secondary offering 9.2 mln shares of ice’s common stock

·     Radian Guaranty, the mortgage insurance subsidiary of Radian Group (RDN), reported new defaults on 6,173 loans in August, down from 8,477 in July.

·     SelectQuote (SLQT) Q4 EPS 13c on revs $141.45M vs. est. 3c/$119.64M; sees FY21 revenue $775M-$815M vs. est. $756.96M and guides FY21 adjusted EBITDA $200M-$215M

·     There were more than 15,000 empty rental apartments in Manhattan in August, up from 5,600 a year ago, as more New Yorkers fled the city amid the coronavirus crisis, according to a report by Douglas Elliman and Miller Samuel.

 

Healthcare

·     Intra-Cellular (ITCI) files to sell $350M in common stock

·     Lakeland Industries (LAKE) Q2 EPS $1.17 on revs $35.0M vs. est. 32c/$33.15M

·     Natera (NTRA) announces $250M common stock offering

·     Rockwell Medical (RMTI) has entered into an exclusive license agreement with Jeil Pharmaceutical, for the rights to commercialize Triferic in South Korea.

·     Sanofi’s (SNY) BIVV001 shows positive action in hemophilia A study as the New England Journal of Medicine published positive final results from the Phase 1/2a trial evaluating the safety, tolerability and pharmacokinetics

·     Spero Therapeutics (SPRO) files to sell 8M shares of common stock

·     Sutro Biopharma (STRO) announces updated preliminary data from a dose-escalation Phase 1 clinical trial evaluating lead candidate STRO-002 in patients with treatment-resistant ovarian cancer

·     Trillium Therapeutics (TRIL) files to sell 8.5M shares of common stock

 

Technology, Media & Telecom

·     TikTok parent ByteDance Ltd is discussing with the U.S. govt options to avoid a full sale of its U.S. operations, the WSJ reported late Wednesday saying discussions around such an option have assumed increased urgency since China took steps that make a sale more difficult (shares of MSFT, ORCL were active late day on reports) https://on.mktw.net/3k3phqE

·     BigCommerce (BIGC) Q2 EPS loss (38c) on revs $36.3M vs. est. loss 945c)/$35.59M; sees Q3 revenue $35.9M-$36.3M vs. est. $34.37M and sees FY20 revenue $142.5M-$143.3M vs. est. $139.47M

·     Verint (VRNT) 2Q adj EPS $1.06 vs. est. $0.69 on adj revs $313Mm vs. est. $299.2Mm, new SAAS ACV +65% YoY; expects momentum to continue 2H, sees separation on track for shortly after fiscal year-end; guides adj revs to improve sequentially for 3Q and 4Q, sees adj EBITDA for FY to be similar to last year

·     Zscaler (ZS) 4Q adj EPS $0.05 vs. est. $0.03 on revs $125.9Mm vs. est. $118.5Mm; guides 1Q21 revs $131-133Mm vs. est. $126.7Mm; had $369.8 million in deferred revenue at the end of the quarter, up 47% from the year earlier

·     TSMC (TSM) reports August revenue of NT$122.8B (+15.9% M/M, +15.8%Y/Y); YTD sales were up 30.6% y/y to NT$850.1B