Mid-Morning Look
Thursday, September 17, 2020
Index |
Up/Down |
% |
Last |
|
||
DJ Industrials |
-153.32 |
0.55% |
27,879 |
|||
S&P 500 |
-33.04 |
0.98% |
3,352 |
|||
Nasdaq |
-181.94 |
1.65% |
10,866 |
|||
Russell 2000 |
-10.39 |
0.67% |
1,541 |
|||
U.S. stocks markets open lower, pulling back further on additional profit-taking, especially in large cap tech names following a late day pullback on Wednesday following mixed reactions to the FOMC policy meeting. Fed Chairman Powell kept asset purchases at current levels (as expected) though raised market caution saying additional fiscal support is likely to be needed, as the Fed can’t rescue the economy alone and Congress needs to act quickly on another coronavirus relief package. Cyclicals likes Energy and Financials are also falling despite a recent bounce in the unloved sectors. Interest rates are falling, with the 10-year Treasury yield at 0.65% while oil bounced and gold falls for the first time in 3-days. Consumer discretionary is also taking a hit after a good run. Economic data was mixed as jobless claims improved again from the prior week, but housing starts unexpectedly slipped. The Philly Fed’s business index showed a reading of 15, down from 17.2 last month but in line with consensus. Markets volatile ahead of quadruple witching options expiration tomorrow.
Economic Data
· US jobless claims fell to 860K from 893K last week and vs. the 850K consensus; continued claims fell to 12.628M vs. est. 13M and last week 13.54M; the 4-week moving average fell to 912K from 973K and US insured unemployment rate fell to 8.6% from 9.3%
Macro |
Up/Down |
Last |
|
||
WTI Crude |
0.25 |
40.41 |
|||
Brent |
0.39 |
42.61 |
|||
Gold |
-18.50 |
1,940.50 |
|||
EUR/USD |
-0.0009 |
1.1805 |
|||
JPY/USD |
-0.25 |
104.69 |
|||
10-Year Note |
-0.018 |
0.669% |
|||
Sector Movers Today
· Refiners; Credit Suisse noted reports that the Trump administration is considering at least $300M in cash aid to U.S. oil refiners that are denied exemptions to U.S. biofuel blending laws for the 2019 compliance year – the firm said they see a low probability that this cash relief program is actually implemented but if so, DK, CVI and HFC will likely be the only ones benefiting from it; RBC Capital updated 3Q20 estimates based on QTD cracks noting both crude spreads and product cracks came in worse than their prior expectations, and our 3Q20 EPS estimates are moving down by $0.53 on average.
· E&P sector; energy stocks outperformed yesterday; WLL was upgraded to buy at Truist saying it went through a reorganization quicker than we expected with an outcome better than we expected; KeyBanc noted for WLL announced job cuts, new 2H20 oil production guide was 5% below consensus and its new 2H20 total production guide was 2.4% below, though WLL is expecting 2,500 Boepd of shut-ins in 2H20, which explains some of the difference; Reuters reported that EQT has made a $750M offer for CVX’s Appalachia properties and a pipeline interest – RBC Capital says they think this is a fair offer for both parties
· Pharma movers; BHC was upgraded to Neutral from Underperform at Bank America; LLY and AMGN announce a global antibody manufacturing collaboration to increase the supply capacity available for Lilly’s potential COVID-19 therapies; RIGL said it had started a randomized, double-blind, placebo-controlled Phase 2 clinical trial evaluating Tavalisse as a treatment for hospitalized COVID-19 patients
· Housing & Building Products; following a bout of better housing related data points, housing starts came in a bit lower today for August, falling -5.1% to 1.416M annual rate vs. est. 1.478M and July at 1.492M and building permits fell -0.9% vs. July +17.9%; in furniture, MLHR shares rise after better earnings last night (SCS, KNL other comps); APOG reported a better-than-expected Q2 adjusted profit despite sales figures that were dented by project delays during the pandemic
Stock GAINERS
· APOG +5%; reported a better-than-expected Q2 adjusted profit despite sales figures that were dented by project delays during the pandemic
· JOBS +16%; received a preliminary non-binding proposal from DCP Capital Partners, L.P. to acquire all of the outstanding common shares for $79.05 in cash https://bit.ly/3hBcVo1
· MLHR +20%; shares rise after better earnings last night (SCS, KNL other comps)
· RIGL +7%; said it had started a randomized, double-blind, placebo-controlled Phase 2 clinical trial evaluating Tavalisse as a treatment for hospitalized COVID-19 patients
· SRNE +30%; after saying the FDA had allowed it to start early-stage trial of its antibody candidate, STI-1499, in hospitalized COVID-19 patients
Stock LAGGARDS
· BA -3%; LUV temporarily grounds 130 Boeing 737-800 jets after it discovered discrepancies in aircraft weight data, Reuters reported
· GD -4%; was double downgraded to sell from buy at Goldman Sachs as see incremental fundamental challenges in each of the main business segments and no longer find the valuation case compelling
· PLAY -16%; shares fell after the WSJ reported the company might need to file for bankruptcy if it does not reach a deal with lenders noting PLAY flagged going concern doubts earlier this year and last week reported an 85% fall in Q2 revs https://on.wsj.com/2FFjg4p
Syndicate:
· American Well (AMWL) 41.222M share IPO priced at $18.00
· 89bio (ETNB) 3.3M share Secondary priced at $28.00
· Broadstone Net Lease (BNL) 33.5M share IPO priced at $17.00
· Chewy (CHWY) 4.98M share Spot Secondary priced at $55.25
· Dyne Therapeutics (DYNE) 12.252M share IPO priced at $19.00
· Forterra (FRTA) 10M share Secondary priced at $13.50
· First Solar (FSLR) 8.65M share Spot Secondary priced at $69.00
· Kornit Digital (KRNT) 4.078M share Secondary priced at $56.50
· NuCana (NCNA) 15.6M share Spot Secondary priced at $4.50
· Pactiv Evergreen (PTVE) 41.026M share IPO priced at $14.00
· PPD, Inc. (PPD) 38M share Secondary priced at $32.25
· Strongbridge Biopharma (SBBP) 11.1M share Spot Secondary priced at $2.25
· Sumo Logic (SUMO) 14.8M share IPO priced at $22.00
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.