Early Look

Friday, August 14, 2020

Futures	Up/Down	%	Last
DJ Industrials	-143.00	0.51%	27,680
S&P 500	-11.50	0.33%	3,356
Nasdaq	-14.50	0.13%	11,161

 

 

Stock futures in the U.S. are pointing to a lower open, as the S&P 500 came up just short of its all-time intraday closing high of 3,393 on Thursday before sliding along with broader markets into the close. Stock selling late day was broad based, starting mid-afternoon following a very weak Treasury auction. In Asian markets, The Nikkei Index rose 39 points to 23,289, the Shanghai Index gained 39 points to 3,360 and the Hang Seng Index fell -47 points to 25,183. In Europe, the German DAX is drops -175 points to 12,820, while the FTSE 100 is lower by -140 points to 6,050. Today marks a very busy day of economic data with nonfarm productivity, retail sales for July, Industrial Production, Business Inventories and Sentiment data from the University of Michigan which could impact currencies and Treasuries. The White House and Democratic Senators fighting in Washington over details of the stimulus bill has moved into its 3^rd week as the two sides are still not close to a deal, very far apart in the dollar figure at this point along with several other sticking points. Markets also await upcoming high-level trade talks between U.S. and Chinese officials over the weekend, with Vice Premier Liu He expected to bring up concerns over the executive orders against WeChat and TikTok.

Market Closing Prices Yesterday

·     The S&P 500 Index slipped -6.92 points, or 0.20%, to 3,373.43

·     The Dow Jones Industrial Average fell -80.12 points, or 0.29%, to 27,896.72

·     The Nasdaq Composite gained 30.26 points, or 0.27%, to 11,042.50

·     The Russell 2000 Index declined -3.46 points, or 0.22% to 1,579.79

 

Economic Calendar for Today

·     8:30 AM EST      Nonfarm Productivity, Q2-P…est. 1.5%

·     8:30 AM EST      Unit Labor Costs, Q2-P…est. 6.9%

·     8:30 AM EST      Retail Sales Advance MoM for July…est. 2.0%

·     8:30 AM EST      Retail Sales – Less Autos for July…est. 1.3%

·     9:15 AM EST      Capacity Utilization for July…est. 70.3%

·     9:15 AM EST      Industrial Production for July…est. 3.0%

·     10:00 AM EST    Business Inventories for June…est. (-1.1%)

·     10:00 AM EST    University of Michigan Sentiment, Aug-P…est. 71.9

·     1:00 PM EST       Baker Hughes Weekly Rig Count

 

Earnings Calendar:

·     Earnings Before the Open: BABA, DKNG, EFOI, NDRA, NEON, PLXP, RMBL

 

 

Macro	Up/Down	Last
WTI Crude	-0.25	41.99
Brent	-0.24	44.72
Gold	-13.40	1,957.00
EUR/USD	-0.0007	1.1807
JPY/USD	-0.20	106.73
10-Year Note	-0.026	0.694%

 

 

World News

·     China’s economy returned to growth in Q2 following a deep plunge at the start of the year, but unexpected weakness in domestic consumption has failed to shake off wariness about the coronavirus. Marking the seventh straight monthly drop, retail sales unexpectedly slipped 1.1% in July from a year ago, worse than a predicted 0.1% rise.

·     China Industrial output advanced 4.8%, missing analyst forecasts for 5.1% growth, suggesting the recovery in the world’s second-largest economy remains fragile.

·     European countries are reimposing restrictions and checks on holidaymakers in the region, in response to rising coronavirus infections among people traveling within the continent. Italy on Thursday became the latest country to introduce mandatory coronavirus testing on travelers from European countries with rising infections.

·     The Trump administration has for the first-time confiscated cargo in vessels allegedly loaded with Iran fuel in violation of sanctions, U.S. officials said, as it steps up its campaign of maximum pressure against Tehran – WSJ

 

Sector News Breakdown

Consumer

·     Blink Charging (BLNK) said revenues for first six months of 2020 surpass full year 2019 revenues; Product Sales of EV charging equipment increased more than 350%; total Q2 revenues increased 120%

·     Dillard (DDS) shares rise 9%; Q2 EPS loss (37c) on sales $919M vs. est. $1.01B; sales performance in stores since re-opening through august 1, 2020 was approximately 72% of prior year sales on corresponding days; qtr end inventory decreased 20% from prior year q2; expects to be in a net operating loss position for fiscal year

·     Farfetch (FTCH) Q2 EPS loss (20c) on revs $364.7M vs. est. loss (35c)/$326.92M; said Q2 Digital Platform GMV was an all-time high $651 million, we attracted more than half a million new consumers; sees 3q digital platform GMV of $588M-$609M and sees Q3 brand platform GMV of $90M-$95M; sees Q3 adj Ebitda of negative $20M to negative $25M

·     Purple Innovation (PRPL) shares fell -9%; Q2 diluted EPS loss (11c) on revs $165.1M vs. est. 19c/$175.88M; not providing guidance at this time; reports Q2 gross margin 49.4% vs. 41.5% a year ago

·     Tesla (TSLA) was upgraded to Equal Weight from Underweight at Morgan Stanley and raise the price target of $1,360, up from $1,050 as model now assumes the benefits of a transfer of supply of batteries and EV powertrains to 3rd party OEMs as part of his base case scenario vs. a bull case previously (TSLA also upgraded to neutral at Bank America)

·     Griffon (GFF) 8M share Secondary priced at $21.50

 

Energy, Industrials and Materials

·     Air Group Inc. (ALK) provided traffic and revenue expectations for the month of August; said it expects total revenue for the month to be down 70% to 75% from a year ago, after a 73% decline in July (est. for 67.5% decline to $776M); expects August load factor of 40% to 45%, compared with July load factor of 54% and capacity is expected to be down 50% from a year ago

·     Sunnova Energy (NOVA) 10M share Spot Secondary priced at $25.00

·     Intrepid Potash (IPI) announces 1-for-10 reverse stock split

 

Financials

·     Credit Acceptance Corp (CACC) said on August 11, 2020, received a subpoena from attorney general of state of Maryland; Maryland subpoena restates most of requests contained in March 18, 2016 and April 3, 2020 subpoenas

 

Healthcare

·     Novavax (NVAX) signed term sheet agreement with the UK Government for the purchase of 60M doses of company’s COVID-19 vaccine, NVX-CoV2373 and a Phase 3 clinical trial to assess the efficacy of the vaccine in the UK population; the late-stage trial expected to begin in Q3, will enroll ~9,000 adults 18-85 years of age in UK.

·     CureVac BV (CVAC), a clinical-stage biotech headquartered in Germany, priced its initial public offering on Friday at $16 a share, the high end of its proposed range. The company sold 13.3 million shares to raise $213.3 million.

·     Accuray (ARAY) Q4 EPS loss (1c) on revs $95M vs. est. loss (2c)/$91.56M; not providing guidance; 4Q gross orders $94.3 million, -3% YoY

·     Arcadia Biosciences (RKDA) Q2 EPS loss ($1.04) vs. est. loss (59c); reports Q2 revs up 38% for the quarter and 63% YTD; says believe our recently announced multiple GoodWheat distribution arrangements, in both B2B and B2C channels, and the conversion of our $3.7M GoodHemp seed purchase backlog to grower seed shipments during the balance of the year, will drive a strong revenue finish for2020.

·     Co-Diagnostics (CODX) Q2 EPS 43c on revs $24.04M vs. est. 59c/$26.45M.

·     Myriad Genetics (MYGN) Q4 EPS loss (31c) on revs $93.2M (down -57% YoY) vs. est. loss (47c) and $93.9M; not providing FY guidance

·     Kamada (KMDA) said the first three patients treated with a new COVID-19 “passive vaccine” developed by Kamada, have recovered from COVID-19 symptoms and been released from the hospital, according to co-developer Hadassah Medical Center, reported The Jerusalem Post

 

Technology, Media & Telecom

·     Applied Materials (AMAT) Q3 adj EPS $1.06 on revs $4.4B vs. est. 95c and $4.18B; 3Q adjusted gross margin 45% vs. 44% YoY; sees Q4 net sales $4.4B-$4.8B vs. est. $4.36B and sees Q4 EPS $1.11-$1.23 vs. est. $1.02

·     Baidu (BIDU) 2q revenue 26.03 billion yuan vs. est. 25.72 billion yuan; 2q adjusted ADS 14.73 yuan vs. 10.11 yuan YoY; 2q adjusted operating profit 5.61 billion yuan and cash and other 154.1 billion yuan, +12% YoY; expects Q3 revenues to be between RMB 26.3 bln ($3.7 bln) and RMB 28.7 bln ($4.1 bln); Q2 DAUs reached 204M in June, adding 16M users in last 12 months

·     iQIYI Inc. (IQ) shares fell -16%; as the SEC’s Division of Enforcement is seeking the production of certain financial and operating records dating from January 1, 2018, as well as documents related to certain acquisitions and investments that were identified in a report issued by short-seller firm Wolfpack Research in April 2020; also reported earnings results

·     Globant (GLOB) Q2 EPS 51c on revs $182.7M vs. est. 48c and $179.8M; sees Q3 non-IFRS adjusted diluted EPS at least 58c on revs at least $203M vs. est. 54c and $188.87M

·     Duck Creek Technologies (DCT) 15M share IPO priced at $27.00