Morning Preview: August 31, 2020

Auto PostDaily Market Report

Early Look

Monday, August 31, 2020





DJ Industrials




S&P 500










Stock futures are pointing to a higher open, with markets looking to extend current winning streaks for the S&P 500 and record new all-time highs in what has been a continued market surge off the March lows, pushing the Dow Jones Industrial Average back into positive territory on the year late last week. Today marks a busy day of changes for some of the biggest stocks on Wall Street as Apple (AAPL) begins trading on a split-adjust basis (4 for 1 split) while Tesla (TSLA) will start trading Monday after a 5-for-1 stock split. Tesla shares have gained more than 400% this year, hitting 33 record closes in the process. Also, index changes in the Dow are effective today as CRM, AMGN, and HON are added while PFE, RTX and, XOM will be removed as of today. In Asian markets, The Nikkei Index rose 257 points to 23,139, the Shanghai Index fell -8 points to 3,395 and the Hang Seng Index fell -245 points to 25,177. In Europe, the German DAX is higher by around 65 points to the 13,100 level, while the FTSE 100 is closed for a holiday. In COVID-19-related news, the FDA said it was willing to fast-track a coronavirus vaccine before phase three trials end if the “benefits outweigh the risks.” Stocks extended their strong gains last week as the S&P 500 rose for a seventh day on Friday and the Nasdaq Composite hit new record highs again last week as the Federal Reserve’s new approach to inflation rippled through global markets as Fed Chair Jerome Powell signaled that the Fed will stay accommodative by showing more tolerance toward consumer-price increases. Consumer sentiment increased slightly in late August on an improving economic outlook. The S&P 500 was up roughly 3.3% for the week, its best performance since early July, while stocks broadly advanced again as Treasury prices slipped and yields rose to their best levels in months.

Market Closing Prices Yesterday

·     The S&P 500 Index climbed 23.46 points, or 0.67%, to 3,508.01

·     The Dow Jones Industrial Average rose 161.60 points, or 0.57%, to 28,653.87

·     The Nasdaq Composite jumped 70.30 points, or 0.60%, to 11,695.63

·     The Russell 2000 Index advanced 13.78 points, or 0.88% to 1,578.34


Economic Calendar for Today

·     10:30 AM EST    Dallas Fed Manufacturing Activity, for Aug


Earnings Calendar:

·     Earnings Before the Open: CTLT

·     Earnings After the Close: RXT, SCSC, ZM






WTI Crude















10-Year Note





World News

·     China’s official manufacturing purchasing managers’ index fell to 51.0 in August from 51.1 in July, the National Bureau of Statistics said missing the median forecast of 51.2 though marked the sixth consecutive month it was above the 50 mark that separates expansion from contraction.

·     The China sub-index measuring production dropped to 53.5 in August, compared with July’s 54.0. Total new orders increased to 52.0 in August, compared with 51.6 in July. New export orders rose to 49.1 and while it still below the 50 mark it was an improvement from July’s 48.4

·     China’s official nonmanufacturing purchasing managers index rose to 55.2 in August, compared with 54.2 in July, the National Bureau of Statistics said The sub-index measuring business activity in the service sector rose to 54.3 in August from July’s 53.1, while the sub-index measuring construction activity fell slightly to 60.2 from 60.5.


Sector News Breakdown


·     Barron’s said luxury homebuilders Toll Brothers (TOL) and Taylor Morrison Home (TMHC), which recently raised its exposure to the entry-level home market, look like better bets in the near term, noting both have rallied by a more modest amount year to date than competitors’ builders D.R. Horton (DHI) and Meritage Homes (MTH).

·     McDonald’s (MCD) is still a buy amid the pandemic and a legal battle with former CEO, according to Barron’s saying the fast-food giant has prospered during Covid, and its stock is back near all-time highs. The near-term future may hinge on spicy chicken nuggets and breakfast items, whereas its longer-term prospects involve legal proceedings and corporate culture

·     Regis (RGS) Q4 adj EPS loss ($1.01) vs. est. loss (66c); Q4 comp sales fell (-20.2%)

·     Starbucks (SBUX) a positive mention in Barron’s calling it a stock to add to your portfolio as shares rose this week after a Stifel analyst’s upgrade, citing the coffee chain’s ability to adapt during Covid. Back-to-school season means there’ll be more chances for parents to grab a coffee

·     NIO Inc. (NIO) secondary offering priced at $17.00



·     KKR (KKR) is in final talks to sell Epicor Software to a group led by private-equity firm Clayton Dubilier & Rice LLC (CDR) for ~$4.7B, including debt, reported the WSJ. KKR bought Epicor in 2016 for around $3.3B, including debt, from private-equity firm Apax Partners.

·     Vornado Realty Trust (VNO), SL Green Realty (SLG), Empire State Realty Trust (ESRT) are the three major New York City commercial landlords trade cheaply based on cash flow, Barron’s said

·     Berkshire Hathaway (BRK.A) said it invested in five major trading companies in Japan which include Itochu, Marubeni, Mitsubishi, Mitsui and Sumitomo. Berkshire says it’s been buying shares in the five over the past 12 months, and now has a bit more than a 5% stake in each



·     Nestle SA (NSRGY) entered into a definitive agreement for the acquisition of Aimmune Therapeutics Inc. (AIMT) by its subsidiary Nestle Health Science, or NHSc; NSRGY will pay $34.50 per share, in a roughly $2.6B deal

·     The chief of the FDA is willing to bypass the full federal approval process in order to make a COVID-19 vaccine available as soon as possible. The comments come a week after the FDA allowed emergency use of convalescent plasma to treat COVID-19 patients

·     Abbott Labs (ABT) has trials underway for its rapid COVID-19 test to determine whether it could effectively be used on asymptomatic people, CEO Robert Ford told CNBC late Friday.

·     The U.S. Department of Defense’s research arm is probing patents filed by and awarded to Moderna (MRNA), which is developing a Covid-19 vaccine, after researchers accused the company of failing to disclose government funding as is required by federal law, the FT reports

·     Gilead (GILD) said the FDA expanded emergency use authorization on Veklury to treat all hospitalized patients with Covid-19.

·     Lipocine (LPCN) shares fell 20% after saying FDA needs additional time to complete its review of Tlando’s new drug application


Industrials & Materials

·     Huntsman (HUN) said it agreed to sell about 42.5 million of the shares it holds in Venator Materials (VNTR) to SK Capital Partners for about $100 million in cash.

·     United Airlines (UAL) says it will permanently end its $200 change fee on tickets for U.S. travel effective immediately, the latest attempt to try to stimulate bookings

·     Veolia Environnement SA said Sunday it made an offer to acquire a 29.9% stake in its peer Suez SA from Engie SA at a price of 15.50 euros ($18.46) a share


Technology, Media & Telecom

·     ByteDance “will strictly abide” by China’s newly amended rules on exporting technology and that could make any sale of TikTok’s U.S. operations more complicated. On Friday, China updated its list of technologies subject to export restrictions to include a number of areas like voice recognition, chip design, recommendation algorithms and artificial intelligence. The new rule is aimed at delaying the sale and is not an outright ban, sources told Bloomberg,

·     AT&T Inc. (T) is taking a fresh look its DirecTV business, according to people familiar with the matter said late Friday, exploring a deal for a service wounded by cord-cutting. The telecom and media giant and its advisers at Goldman Sachs Group Inc. have been in talks with private-equity suitors about the satellite TV unit

·     Comcast (CMCSA) is looking to turn its set-top box software into an operating system for smart TVs, Protocol reports; Comcast’s X1 platform manages its set-top boxes for traditional cable subscribers, and it also powers Flex, the company’s “Roku-ish” streaming system.


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.

Live Trading

Open an Account

Paper Trading