Early Look

Tuesday, August 18, 2020

Futures	Up/Down	%	Last
DJ Industrials	71.00	0.26%	27,86
S&P 500	6.50	0.18%	3,386
Nasdaq	36.50	0.32%	11,322

 

 

Stock futures are pointing to another strong open, led by strength in retailers as Advance Auto Parts (AAP) and Dow component Home Depot (HD) both post quarterly results that easily surpass consensus estimates along with much higher comp sales, as both benefit from increased traffic due to the pandemic. The S&P 500 index will try a 4^th time in the last week to surpass its all-time intraday closing high which stands just above the 3,393 after falling just short again yesterday. The Nasdaq Composite is higher, giving it another record intraday high as chip stocks paced gains yesterday, with the Philly semi index touching a new record high led by NVDA ahead of earnings tomorrow night. Tech giant Apple (AAPL) and Tesla (TSLA) also posted record high yesterday as well. Financials remain one of the weaker sectors as rates slipped with the 10-year Treasury dropped to 0.69%, down 2 basis points. In Asian markets, The Nikkei Index fell -45 points to 23,051, the Shanghai Index jumped 12 points to 3,451 and the Hang Seng Index rose 20 points to 25,367. In Europe, the German DAX is higher by 75 points to move around the 13,000 level, while the FTSE 100 is up about 10 points to 6,140. All quiet on the China trade front and no new news in Washington pertaining to the stimulus bill overnight.

Market Closing Prices Yesterday

·     The S&P 500 Index gained 9.14 points, or 0.27%, to 3,381.99

·     The Dow Jones Industrial Average fell -86.11 points, or 0.31%, to 27,844.91

·     The Nasdaq Composite jumped 110.42 points, or 1.00%, to 11,129.73

·     The Russell 2000 Index advanced 7.59 points, or 0.48% to 1,585.47

 

Economic Calendar for Today

·     7:45 AM EST   ICSC Weekly Retail Sales

·     8:30 AM EST   Housing Starts MoM for July

·     8:30 AM EST    Building Permits MoM for July

·     8:55 AM EST    Johnson/Redbook Weekly Sales

·     4:30 PM EST    API Weekly Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: AAP, HD, IMBI, KSS, NGS, WMT

·     Earnings After the Close: A, CREE, JKHY, KE, LZB

 

Other Key Events:

·     Credit Suisse Virtual FinTech Conference 8/18-8/19

·     EnerCom Virtual Oil & Gas Conference, 8/17-8/19

·     JMP Securities Cannabis Technology Virtual forum

·     Raymond James Virtual SMID Cap Growth Conference, 8/18-8/19

 

 

Macro	Up/Down	Last
WTI Crude	-0.27	42.62
Brent	-0.20	45.17
Gold	14.30	2,013
EUR/USD	0.0037	1.1907
JPY/USD	-0.42	105.58
10-Year Note	-0.014	0.67%

 

 

Sector News Breakdown

Consumer

·     Home Depot (HD) Q2EPS $4.02 on sales $38.05B vs. est. $3.66 and $34.47B; Q2 comp sales soared 23.4% vs. est. 11.4% and up from 3% YoY; 2Q average ticket sales $74.12, +10% YoY and 2Q customer transactions +12.3% vs. 0% YoY

·     Advance Auto Parts (AAP) Q2 adj EPS $2.92 on sales $2.5B vs. est. $1.98 and $2.38B; Q2 comp sales rose 7.5% vs. est. 2.7%; says continues to see strong growth in its GIY channel; is not providing guidance for FY; maintains liquidity and return cash to holders

·     America’s Car-Mart (CRMT) reports FQ1 revenue growth of 9.3% Y/Y to $187.9M; same-store revenue was up 5.5% during the quarter on a 12.2% lift in the average retail sales price to $12,800; retail units sold were 12,176 (+2.8% Y/Y) with Average retail units sold/store/month were 27.4 (-5.5% Y/Y).

·     Best Buy (BBY) upgraded to Outperform at Wedbush and raise tgt to $130 from $95

·     Keurig Dr. Pepper (KDP) offers to sell 45M shares of common stock for holders

·     Cal-Maine Foods (CALM) files to sell 6M shares of common stock

·     Chegg (CHGG) files to sell $750M of convertible notes due 2026

·     Uber (UBER) and Lyft (LYFT) are considering licensing their brands to operators of vehicle fleets in California, with the change resembling an independently operated franchise – NY Times reports

 

Energy, Industrials & Materials

·     BHP Group Ltd. (BHP) reported a 4% drop in annual net profit, and said it wanted to stop mining thermal coal and would seek buyers for some older oil and gas assets; reported a net profit of $7.96 billion for the 12 months through June, down from $8.31 billion a year earlier; said its underlying profit fell by 1% to $9.06 billion, but missed the $9.33 billion median forecast

·     Boeing Co. (BA) said it will offer its employees a second round of buyouts

·     Northern Genesis (NGAU) 30M share IPO priced at $10.00

·     Seanergy Marine (SHIP) 35.7M share Spot Secondary priced at 70c

·     Fly Leasing (FLY) files $700M mixed securities shelf

·     Abraxas Petroleum Corp (AXAS) said it has determined to renew strategic alternatives review announced last October and led by Petrie Partners, LLC

 

Financials

·     Intercontinental Exchange Inc. (ICE) borrowed $6.5 billion on Monday in the corporate bond market to help expand its footprint in the U.S. mortgage industry

·     NexPont Residential Trust (NXRT) collects ~96.9% of August rent as of Aug. 16, 2020; that compares with 97.3% of rent collected as of Aug. 16, 2019.

·     American Homes 4 Rent (AMH) 13M share Spot Secondary priced at $28.00

 

Healthcare

·     The FDA has accepted AstraZeneca’s (AZN) supplemental marketing application seeking approval of a four-week, fixed-dose regimen for PD-L1 blocker Imfinzi (durvalumab) for non-small cell lung cancer and bladder cancer under priority review

·     Histogen (HSTO) files $125M mixed securities shelf

·     Gilead Sciences, Inc. (GILD) and Tango Therapeutics today announced an expanded strategic collaboration focused on the discovery, development and commercialization of innovative targeted immune evasion therapies for patients with cancer. Gilead will make a $125 million upfront payment to Tango and a $20 million equity investment in the company

 

Technology, Media & Telecom

·     Oracle (ORCL) entered the picture as a potential buyer of TikTok, the Financial Times reported. Citing sources, the FT reported that Oracle has held preliminary talks with TikTok owner ByteDance Inc., and was working with a group of investors that already holds a stake in the Chinese company https://on.mktw.net/317DwE2

·     Amazon.com (AMZN) is going to add 3,500 corporate jobs in six cities and expanding its physical offices, according to the WSJ

·     Fabrinet (FN) Q4 adj EPS 96c on revs $405.1M vs. est. 87c and $387M; sees Q1 EPS 93c-$1.00 on revs $410M-$430M vs. est. 95c and $416.3M; approves additional buyback of up to $58.5M in common stock

·     ZoomInfo (ZI) offers to sell 12M shares of common stock for holders