Early Look

Wednesday, August 12, 2020

Futures	Up/Down	%	Last
DJ Industrials	276.00	1.00%	27,890
S&P 500	27.50	0.83%	3,357
Nasdaq	109.50	1.01%	10,988

 

 

Stock futures are firmly higher, with the S&P and Dow bouncing back after their seven-day winning streaks were snapped yesterday in a late day rout that saw major averages erases gains earlier in the day as the two sides in Washington remain far apart from a stimulus relief deal. The Nasdaq Composite is looking to snap its 3-day losing streak (the longest such since early March) after pulling back from record highs late last week. Out of Washington, democratic Presidential nominee Joe Biden picked California Sen. Kamala Harris as his running mate who is also the first black woman to appear on a presidential ticket of a major party. In stock news, Moderna’s (MRNA) stock jumps around 10% after an agreement to sell its COVID-19 vaccine doses to the U.S. government, while Tesla (TSLA) shares jump over 8% after announcing a 5 for 1 stock split last night. Gold futures are slightly lower after posting its biggest daily dollar decline in 7-years. In Asian markets, The Nikkei Index rose 93 points to 22,843, the Shanghai Index fell -21 points to 3,319 and the Hang Seng Index surged 353 points to 25,244. In Europe, the German DAX is down -10 points to 12,930, while the FTSE 100 is up 55 points to 6,212. On the economic front, traders will examine the latest consumer price (CPI) report where its’s forecast to have increased 0.3% in July, half the monthly increase seen in June, while the core CPI is expected to rise by 0.2%, or 1.2% on an annualized basis.

Economic Calendar for Today

·     7:00 AM EST      MBA Mortgage Applications Data

·     8:30 AM EST      Consumer Price Index (CPI) MoM for July…est. 0.3%

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

·     8:30 AM EST      Consumer Price Index (CPI) YoY for July…est. 0.7%

·     8:30 AM EST      CPI Ex: Food & Energy YoY for July…est. 1.1%

·     10:00 AM EST    Fed’s Rosengren discusses the US economy

·     10:30 AM EST    Weekly DOE Inventory Data

·     11:00 AM EST    Fed’s Kaplan speaks

·     2:00 PM EST       Monthly Budget Statement for July…est. (-$137.5B)

·     3:00 PM EST       Fed’s Daly speaks with Economic Club of Las Vegas

 

Earnings Calendar:

·     Earnings Before the Open: ALT, EAT, LMND, PFGC, PGTI, RPRX, TELA

·     Earnings After the Close: AZPN, BBI, BIOC, CACI, CSCO, FOSL, LYFT, ONEM, OPGN, PING, RVLV, SDC, SPTN, TNAV, CREX, VRM

 

Other Key Events:

·     BTIG Virtual Biotech Conference, 8/11-8/12

·     Canaccord Annual Global Growth Conference, 8/12-8/13

·     Cowen 2020 Virtual Communications Infrastructure Summit, 8/11-8/12

·     Oppenheimer Annual Technology Virtual Conference, 8/11-8/12

·     UBS Financial Services Virtual Conference, 8/11-8/12

·     Wedbush Healthcare Virtual Conference, 8/11-8/12

 

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -26.78 points, or 0.80%, to 3,333.69

·     The Dow Jones Industrial Average fell -104.53 points, or 0.38%, to 27,686.91

·     The Nasdaq Composite slid -185.53 points, or 1.69%, to 10,782.82

·     The Russell 2000 Index declined -9.57 points, or 0.60% to 1,575.10

 

 

Macro	Up/Down	Last
WTI Crude	0.66	42.27
Brent	0.65	45.15
Gold	-4.10	1,942.20
EUR/USD	0.0027	1.1767
JPY/USD	0.38	106.87
10-Year Note	+0.034	0.676%

 

 

World News

·     Democratic Presidential nominee Joe Biden picks California Sen. Kamala Harris as his running mate who is also the first black woman to appear on a presidential ticket of a major party

·     The European Union’s statistics agency said industrial production–which also includes the output of utilities and mines–was 9.1% higher than in May, a month that saw the largest rise since records began in 1991.

 

Sector News Breakdown

Consumer

·     Tesla (TSLA) announces 5-for-1 stock split

·     CoreCivic (CXW) to replace Valaris (VAL) in S&P 600 at the open on 8/17; Builders FirstSource (BLDR) to replace CoreCivic (CXW) in S&P 400 at open on 8/17

·     G-III Apparel (GIII) announced that it has renewed its license agreements with Levi Strauss (LEVI) for the Levi’s and Dockers brands

·     Allegiant Travel (ALGT) reported traffic for July of -48.2% vs. +14.0% YoY, July capacity fell -11.1%

·     K12 Inc. (LRN) 4Q EPS adj $0.31 vs. est. $0.03 on revs $268.9Mm vs. est. $261.5Mm; guides FY21 revs and adj op income double digits

·     Overstock.com (OSTK) files to sell 1.7M shares of common stock

·     Red Robin Gourmet (RRGB) 2Q adj EPS ($3.31) vs. est. ($3.27) on revs $161.1Mm vs. est. $161.8Mm; qtrly comp restaurant revs -41.4%; Q2 average guest check decreased 2.9%

·     Wyndham (WYND) cuts quarterly dividend 40% to 30c

·     CarParts.com (PRTS) files to sell 5M shares of common stock

·     Overstock.com (OSTK) 2.1M share Spot Secondary priced at $84.50

 

Energy, Industrials and Materials

·     The American Petroleum Institute (API) reported that U.S. crude supplies dropped by 4.4 million barrels for the week ended Aug. 7, showed gasoline stockpiles declined by 1.3 million barrels, while distillate inventories were down by 2.9 million barrels. Crude stocks at the Cushing, Okla., storage hub, meanwhile, edged up by 1.1 million barrels for the week

·     Pacific Ethanol (PEIX) said it expects momentum to continue into 2021 and a target to cut total term debt at year end by at least $70 million; sees adjusted Ebitda in the second half of the year $50 million to $70 million; 2Q net sales $212.1 million, vs $346.3 million YoY

·     Landec (LNDC) Q4 adj EPS 5c on sales $156.1M vs. est. 3c and $156M; overall Q4 loss $15.1M; sees year revs $530M-$550M vs. est. $590M

·     MasTec (MTZ) upgraded to Buy from Neutral at UBS

·     Plug Power (PLUG) 30.675M share Spot Secondary priced at $10.25

·     Sasol (SSL) warned it will report an annual loss after a drop in oil and chemical prices and impact of the COVID-19 pandemic hit earnings; said its headline loss is expected to be between 8.72 rand ($0.5012) and 14.86 rand in the year to June 30, compared with 30.72 rand during same period a year earlier

·     MSC Industrial (MSM) direct company July sales fell -12.6% to $233.3M

 

Financials

·     AllianceBernstein L.P. (AB) announced that preliminary assets under management increased to $623 billion during July 2020 from $600 billion at the end of June. The 3.8% increase was due to market appreciation and firm wide net inflows.

·     Artisan Partners Asset Management Inc. (APAM) reported that its assets under management as of July 31, 2020 totaled $127.8 billion. Separate accounts accounted for $67.8 billion of total firm AUM, while Artisan Funds and Artisan Global Funds accounted for $60.0 billion

·     CME Group (CME) reportedly is raising Comex gold futures initial margins by 6.9% to $10,320 per contract from $9,750 previously; also is said to raise Comex silver futures margins by 15.2% to $13,250 per contract from $11,500

·     Franklin Resources, Inc. (BEN) reported preliminary month-end assets under management of $1,428.2 billion at July 31, 2020, compared to $622.8 billion at June 30, 2020. The increase in assets under management includes approximately $797 billion from the acquisition of Legg Mason, Inc. which closed on July 31, 2020

·     Invesco Ltd. (IVZ) reported preliminary month-end assets under management (AUM) of $1,195.3 billion, an increase of 4.4% versus previous month-end. The firm achieved total net inflows of $5.1 billion this month

·     Virtus Investment Partners, Inc. (VRTS) reported preliminary long-term and total assets under management (AUM) as of July 31, 2020 of $112.7 billion and $114.1 billion (including $1.4 billion of liquidity assets), respectively.

·     XP Inc. (XP) 2Q revs $1.92B vs. est. 1.6B, adj net income $565Mm vs. est. $345Mm

 

Healthcare

·     Moderna (MRNA) shares rose 10%; announced a supply agreement with the U.S. government for an initial 100M dose of its COVID-19 vaccine as the award covers up to $1.525B for the initial doses and contains an option for the government to buy up to an additional 400M dose

·     Adverum Biotechnologies (ADVM) files to sell $200M in common stock

·     Covetrus (CVET) 2Q EPS $0.40 vs. est. $0.08 on revs $1.03B vs. est. $883.5Mm; guides FY20 adj BITDA $200-210Mm vs. est. $169.2Mm

·     Eastman Kodak (KODK) reports Q2 operational EBITDA ($7M) vs. ($1M) last year and reports Q2 revenue $211M vs. $304M last year

·     Gossamer Bio (GOSS) reports Q2 EPS loss ($1.00) vs. est. loss (86c); cash, cash equivalents and marketable securities as of June 30, 2020, were $600.4M

·     Pennant Group (PNTG) 2Q adj EPS $0.24 vs. est. $0.09 on revs $92.7Mm vs. est. $92.1Mm; reaffirms FY20 adj EPS $0.71-0.78 vs. est. $0.48

·     Shockwave Medical (SWAV) Q2 EPS loss (56c) vs. est. loss (62c) and revs $10.3M vs. est. $8.4M; not issuing guidance at this time

·     Supernus Pharmaceuticals, Inc. (SUPN) is unable to file its 10-Q for the quarter ended June 30 within the prescribed time period without unreasonable effort or expense.

·     Tenet Healthcare Corp. (THC) announced that Joseph Eazor has stepped down as CEO of Conifer Health Solutions, effective at the end of August.

·     Pacific Biosciences (PACB) 19.43M share Spot Secondary priced at $4.47

·     Personalis (PSNL) 6.579M share Spot Secondary priced at $19.00

 

Technology, Media & Telecom

·     Liberty Global PLC (LBTYA) has agreed to buy Sunrise Communications Group AG for 5 billion Swiss Francs ($5.45 billion) in cash, funded from existing cash and debt; they are offering CHF110 for each of the Swiss telecommunications company’s shares https://on.mktw.net/2XNLHDx

·     Kornit Digital (KRNT) 2Q adj EPS ($0.03) vs. est. ($0.07) on revs $37.4Mm vs. est. $33.2Mm

·     Super Micro Computer (SMCI) Q4 EPS 68c on revs $896.1M vs. est. 51c and $788.3M; sees 1Q adjusted EPS 10c-35c on sales $720M-$800M vs. est. 48c and $792.0M; 4Q adjusted gross margin 14.0%; to buy back shares up to $30M

·     Viavi Solutions (VIAV) Q4 adj EPS $0.18 vs. est. $0.13 on revs $266.6Mm vs. est. $259.4Mm; guides 1Q adj EPS $0.14-0.16 vs. est. $0.14, sees 1Q revs $258-282Mm vs. est. $268.4Mm

·     Infinera (INFN) files $100M mixed securities shelf

·     Upland Software (UPLD) 3.5M share Secondary priced at $34.00