Morning Preview: April 06, 2020

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Early Look

Monday, April 6, 2020





DJ Industrials




S&P 500










U.S. stock-index futures are firmly higher, rising by more than 3.5% across the board, after President Trump provided hope this weekend saying coronavirus cases are stabilizing, despite warning that the upcoming days and weeks may be some of the toughest in the pandemic era. He said Sunday evening “the U.S. will reach a horrific point in terms of death, but it will be a point where things will start changing for the better. New cases new cases around the world jumped by more than 100,000 in a single day on Sunday for the first time, and a third of those new cases were from the U.S., where New York has emerged as one of the epicenters of the outbreak that started in December. In Asian markets, The Nikkei Index jumped over 750 points (4.2%) to settle at 18,576, the Shanghai Index fell -16 points to 2,763 and the Hang Seng Index rose513 points to 23,749. In Europe, the German DAX is higher by 400 points (over 4%) to move back above 9,900, while the FTSE 100 is up around 100 points to 5,520. As for last week, the Dow lost 2.7%, the S&P 500 declined 2.1% and the Nasdaq put in a weekly drop of 1.7%.


Oil prices slide: After rising over 30% last week (though still remain down 54% YTD), oil prices dipped after initial reports that Saudi Arabia sharply criticized Russia on Saturday, blaming the kingdom for the collapse in global energy prices, and showing the tensions ahead of an emergency virtual meeting between OPEC and other oil producers expected today. Also affecting prices, President Donald Trump said on Saturday he would put tariffs on imports of crude oil or take other measures if he has to protect energy workers from the oil price crash. Prices slightly had rebounded with President Donald Trump tweeting and talking about the need for a production late last week. Prices have pared losses since (down 4% from -12% prior) as reports now indicate a deal on production cuts is very close.


Regarding the coronavirus, as of late Sunday, globally, there are now 1.3 million cases of COVID-19, and 70,000 people have died while 252,538 people have recovered. The U.S. continues to show the highest number of cases at 330,000 with over 8,503 fatalities and New York state remains the pandemic’s epicenter in the U.S. at over 113K cases in the state and at least 3,565 people have died. Italy has 124,632 cases and at least 15,362 deaths, the highest death toll of any of the 183 countries that have been affected, while Spain now has 130,759 cases of COVID-19 and 12,418 fatalities.

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -38.25 points, or 1.51%, to 2,488.65

·     The Dow Jones Industrial Average fell -360.91 points, or 1.69%, to 21,052.53

·     The Nasdaq Composite slumped -114.23 points, or 1.53%, to 7,373.08

·     The Russell 2000 Index declined -33.76 points, or 3.11% to 1,052.05


Economic Calendar for Today

·     No Major Economic Data Released Today in the U.S.






WTI Crude















10-Year Note





World News

·     A Wall Street Journal study estimates that at least 25% of the U.S economy is offline as the COVID-19 pandemic has led states and cities to issue stay-at-home orders. 8 in 10 U.S. counties, accounting for almost 96% of national output — are under lockdown orders, according to Moody’s. That’s resulted in U.S. daily production falling ~29% vs. the first week of March

·     St. Louis Federal Reserve President James Bullard said Sunday that he didn’t believe the U.S. economy or jobs market was in “free fall” as the coronavirus sweeps the country.

·     U.K. Prime Minister Boris Johnson was hospitalized on Sunday as a precautionary measure after the British leader contracted the coronavirus about 10 days ago.


Sector News Breakdown


·     Warren Buffett’s Berkshire Hathaway (BRK.A) disclosed the sale of 12.9M common shares of Delta Air lines (DAL) and about 2.3M shares of Southwest (LUV) according to regulatory filings

·     Luckin Coffee (LK) said it will maintain normal operations at its stores and apologized to the public, days after it announced an internal investigation had shown its chief operating officer and other employees fabricated sales deals – Reuters


Energy, Industrials and Materials

·     President Donald Trump said on Saturday he would put tariffs on imports of crude oil or take other measures if he has to protect energy workers from the oil price crash. “If I have to do tariffs on oil coming from outside or if I have to do something to protect our … tens of thousands of energy workers and our great companies that produce all these jobs, I’ll do whatever I have to”

·     Boeing Co. (BA) said it is extending its temporary shutdown of production facilities in the Seattle area “until further notice” due to the coronavirus pandemic. The company halted is airplane manufacturing there last month, saying at the time it was intended to last two weeks.

·     Honeywell Int’l (HON) is asking at least some of its suppliers for a 30% price cut, extended payment terms, and other concessions in the price of goods it buys from them following the swift economic downturn caused by Covid-19 is cutting across the American industry.

·     Avolon said it has terminated an order for 75 Boeing (BA) MAX jets that were scheduled to be delivered by 2023 as it adjusts its order book to the sector disruption caused by the COVID-19 pandemic



·     Gilead Sciences (GILD) said it is donating 1.5M doses of its experimental anti-coronavirus drug remdesivir, which could treat 140,000 patients. In an open letter, Chairman and CEO Daniel O’Day said that the drug will be offered for compassionate use, expanded access and clinical trials, and will treat patients with severe symptoms

·     Axonics Modulation Technologies (AXNX) submitted a supplemental premarket approval (PMA) to the FDA to gain full-body magnetic resonance imaging (MRI) conditional labeling for 3.0T MRI scans.

·     RedHill Biopharma (RDHL) shares rise 19%; dosed the first patient with COVID-19 infection with its IND, opaganib (Yeliva, ABC294640), in Israel


Technology, Media & Telecom

·     Apple (AAPL) CEO Tim Cook said this weekend “”We’ve launched a company-wide effort, bringing together product designers, engineering, operations and packaging teams, and our suppliers to design, produce, and ship face shields for health workers”

·     GoDaddy (GDDY) guides Q1 prelim revs $790M-$800M vs. est. $788.7M – recall GDDY hosted a virtual investor event yesterday outlining new LT targets, new products, and monetization opportunities across a large installed base of 19M+ customers


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.

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