Early Look
Wednesday, February 26, 2020
Futures |
Up/Down |
% |
Last |
DJ Industrials |
33.00 |
0.12% |
27,150 |
S&P 500 |
9.50 |
0.29% |
3,141 |
Nasdaq |
38.50 |
0.44% |
8,893 |
Stock futures are slightly higher, erasing initial gains overnight and bouncing off morning lows as stocks try to recover after the Dow Jones Industrial Average posted its worst 2-day point decline in its history, shedding more than $1.7 trillion in value on coronavirus fears. The skid puts the Dow 8.4% away from its Feb. 12 record-high close of 29,551.42. The S&P 500 is off 7.6% from its recent record high on Feb. 19 and has shed nearly $1.74 trillion this week. The Nasdaq is off 8.6% from its Feb. 19 all-time closing high. Overall, U.S. equities plunged to an 11-week low on increasing concern the coronavirus will disrupt crucial global supply chains, also leading Treasury markets to surge, pushing both the 10-and 30-year year U.S. Treasury yields to a record low. In Asian markets overnight, The Nikkei Index fell -179 points to 22,426, the Shanghai Index dropped -25 points to 2,987 and the Hang Seng Index dropped -196 points to 26,696. In Europe, the German DAX is lower by -170 points to 12,615, while the FTSE 100 is down about -50 points to 6,970. Fear of the COVID-19 disease infecting the U.S. is intensifying, starting to affect global trade and travel and taking a bite out of confidence about earnings and economic growth. The World Health Organization hasn’t declared the viral infection a pandemic, but the disease has sickened people in China, South Korea, Japan, Malaysia, Italy and Iran, with numbers growing.
Market Closing Prices Yesterday
· The S&P 500 Index dropped -97.68 points, or 3.03%, to 3,128.21
· The Dow Jones Industrial Average fell -879.44 points, or 3.15%, to 27,081.36
· The Nasdaq Composite plunged -255.67 points, or 2.77%, to 8,965.61
· The Russell 2000 Index declined -56.21 points, or 3.45% to 1,571.90
· 7:00 AM EST MBA Mortgage Applications Data
· 10:00 AM EST New Home Sales MoM for January
· 10:30 AM EST Weekly DOE Inventory Data
Earnings Calendar:
· Earnings Before the Open: AEE, AMCX, BOX, CARS, CHK, CLH, DOC, DY, ESI, EYE, FWONA, HZNP, LOW, LSXMA, MNTA, MRNA, NI, NXST, OAS, OCN, ODP, PZZA, SABR, SBGI, SEAS, SJM, SSYS, TILE, TJX, VER, WEN, WYND
· Earnings After the Close: ACAD, ADPT, ANSS, APA, ARNA, BEAT, BKNG, BMRN, CCI, CHDN, CLGX, CLI, CPE, CVNA, CW, EDIT, EQH, ETSY, GEF, LB, MAR, MD, NDLS, NTNX, NTRA, PTLA, RUBI, SQ, SRPT, STAY, TDOC, TPC, UHS, UPWK, VKTX, WHD
Other Key Events:
· Bank America Global Agriculture and Materials Conference, 2/26-2/27, in Ft Lauderdale, FL
· BMO Capital 29th Annual Global Metals & Mining Conference, 2/23-2/26, in Florida
· Credit Suisse 21st Annual Financial Services Forum, 2/26-2/28 in Miami, FL
· Leerink Annual Global Healthcare Conference, 2/25-2/27, in New York
· RSA Conference 2020, 2/24-2/28, in San Francisco, CA
· Stephens West Coast Bank Trip, 2/24-2/26, starting in Denver, CO
· Wedbush West Coast Bank Forum, 2/25-2/26, in San Francisco, CA
· Wolfe Auto, Auto Tech and Mobility Conference, 2/24-2/26, in New York
Macro |
Up/Down |
Last |
WTI Crude |
-0.42 |
49.48 |
Brent |
-0.80 |
54.15 |
Gold |
0.80 |
1,650.80 |
EUR/USD |
-0.0003 |
1.0879 |
JPY/USD |
0.28 |
110.48 |
10-Year Note |
+0.01 |
1.362% |
World News
· South Korea confirms 169 more coronavirus cases, total 1,146 (among 169, 134 was confirmed from Daegu) with the total death toll at 11
· Italy now reports 13 more cases of #coronavirus, raising the total to 32 new cases today
· Iranian Health Official: 44 new confirmed virus cases in the last 24 hours; total Iranian cases 139, death toll 19
· French Health Service: 3 more virus case confirmed, total now at 17; 1st French death has been recorded
· Kuwait Health Ministry: report 13 more virus cases, total now at 25
Sector News Breakdown
Consumer
· Lowe’s (LOW) Q4 adj. EPS 94c on revs $16.03B vs. est. 91c/$16.15B; reports Q4 comp store sales up 2.5% below estimate 3.7%; guides year EPS $6.45-$6.65 vs. est. $6.67, sees FY sales up 2.5%-3% and comp sales up 3%-3.5%
· Tesla (TSLA) and Panasonic (PCRFY) have decided to end their partnership in producing solar cells after years of struggling to ramp up output at the Gigafactory 2 in upstate New York, according to reports which has TSLA shares lower
· Danone (DANOY) has scaled back its sales growth and profit margin targets for 2020 as the coronavirus dents demand in China, its second-largest market
· Diageo (DEO) warned the coronavirus outbreak will knock its profits this year by up to £200m, around 5 per cent of last year’s total
· Alarm.com Holdings (ALRM) guides 2020 adj EPS $1.48-1.49 vs. est. $1.48; guides 2020 revs $547-557.5Mm vs. est. $541Mm; SaaS and license revenue increased 16% to $90.1M, compared to $77.8M. SaaS and license revenue increased 15% and 34%, respectively
· B&G Foods (BGS) Q4 adjusted EPS 28c/$470.2M vs. est. 29c/$466.39M; sees FY20 adjusted EPS $1.60-$1.80 on revs $1.66B-$1.68B vs. est. $1.68/$1.67B
· Caesars Entertainment (CZR) Q4 revenue $2.17B vs. est. $2.13B; Q4 loss per share (45c) vs. est. loss (10c); Q4 adjusted Ebitda $583 million, +2.8% YoY
· Planet Fitness (PLNT) 4Q adj EPS $0.44 vs. est. $0.41 on comps +8.6% vs. 10.1% YoY; guides 2020 comps +8%, sees 2020 adj EPS about +16%
· RealReal (REAL) Q4 adj EPS loss (17c) on revs $97.3M vs. est. loss (19c) and $91.4M; Q4 total GMV 39% and sees 2020 total GMV 30%-33%
· Red Robin Gourmet (RRGB) Q4 adj EPS loss (36c) on in-line revs of $302.9Mvs. est. loss (17c); Q4 co-owned restaurant comp sales up 1.3% vs. down -4.5% YoY; sees FY20 adjusted EBITDA at least flat compared to FY19 and sees FY20 comparable restaurant revenue growth in low single digits
· Revolve Group (RVLV) shares fell -14%; Q4 EPS 12c/$147.6M vs. est. 11c/$152.56M; guides FY20 revenue $679M-$703M, below consensus $736.77M while sees FY20 adj. EBITDA $56M-$61M vs. $55.6M last year
· Toll Brothers (TOL) 1Q EPS 41c vs. est. 45c on revs $1.33B below the $1.45B est.; 1Q deliveries 1,611 – 1Q backlog $5.45B up 1.6% YoY, SG&A as percentage of revenue 14.8% vs. 12.3% YoY
· WW International (WW) shares rise 9%; Q4 EPS 42c on sales $332.6M vs. est. 38c and $330.2M; sees 2020 EPS $2.15-$2.40 vs. est. $2.15 and sees 2020 revs up to $1.6B vs. est. $1.49B; Q4 subscribers rose 8% Y/Y to 4.2M, of which 3.0M were digital subs (says it now has over 5M subscribers total)
Energy, Industrials and Materials
· The American Petroleum Institute (API) reported that U.S. crude supplies rose by 1.3 million barrels for the week ended Feb. 21, showed gasoline stockpiles edged up by 74,000 barrels, while distillate inventories fell by 706,000 barrels
· Matador Resources (MTDR) Q4 adjusted EPS 39c/$258.6M vs. est. 28c/$257.84M; sees FY20 oil production 16M-16.5M bbl and sees FY20 total oil equivalent production 27M-28.3M BOE; reduced its capital expenditures for drilling, completing and equipping wells while keeping its unit operating costs flat as compared to 2018.
· Heico (HEI) Q1 EPS 89c on sales $506.3M vs. est. 77c and $508.5M; backs FY20 revenue growth view of 6%-8% and raises FY20 net income view to up 14%-15% from 13%-14% prior
· Rio Tinto (RIO) unveiled its highest profit in eight years, aided by a rise in iron-ore prices, but warned the coronavirus outbreak could hit its business in the short term
Financials
· EVERTEC Inc. (EVTC) 4Q adj EPS $0.48 vs. est. $0.49 on revs $127.2Mm vs. est. $121.7Mm; guides 2020 adj EPS $2.00-2.06 vs. est. $2.17, sees 2020 revs $501-508Mm vs. est. $505.9Mm
· Public Storage (PSA) 4Q core FFO $2.84 vs. est. $2.86 on revs $717.5Mm vs. est. $721Mm and increased from $692.5M a year ago; Q4 same-store facilities rental income of $572.2M rose 1.2% Y/Y; Q4 same-store facilities net operating income of $462.3M rose 0.1% Y/Y
Healthcare
· Insulet (PODD) shares fell over 9%; Q4 EPS 8c on revs $209.4M vs. est. 11c and $199.5M; sees FY20 revenue growth 14%-18%, sees FY20 Omnipod revenue growth of 17%-21% and sees FY20 Drug Delivery decline of 15%-20%
· Jazz Pharma (JAZZ) 4Q adj EPS $4.42 vs. est. $4.12 on revs $581.7Mm vs. est. $560.5Mm
· SmileDirectClub (SDC) shares fell -15%; Q4 EPS loss (25c) vs. est. loss (9c) and revs $197M vs. est. $199.9M; Q4 adj Ebitda loss $60M vs. est. loss $33.2M
· Vanda Pharmaceuticals Inc. (VNDA) says its results from Phase III clinical trial (EPIONE) of Tradipitant for the treatment of pruritus in atopic dermatitis in adults did not meet its primary endpoint; reports Q4 EPS 8c on sales $60.9M vs. est. 11c and $59.5M
Technology, Media & Telecom
· Salesforce (CRM) co-CEO Keith Block steps down, Marc Benioff is Chair and CEO; Q4 adjusted EPS 66c/$4.85B vs. est. 55c/$4.75B; sees Q1 adjusted EPS 70c-71c on revs $4.875B-$4.885B vs. est. 55c/$4.84B; raises FY21 revenue view to $21B-$21.1B from $20.8B-$20.9B; Subscription and support revenue grew 35% to $4.56B and professional services sales were up 21% to $1.1B; to acquire Vlocity for about $1.33B in cash
· Walt Disney (DIS) Company Board of Directors announced that Bob Chapek has been named CEO of The Walt Disney Company, effective immediately. Mr. Chapek most recently served as Chairman of Disney Parks, Experiences and Products. Robert Iger assumes the role of Executive Chairman
· Infinera (INFN) 4Q adj EPS $0.03 vs. est. loss (3c) on adj revs $386.5Mm vs. est. $365.6Mm, adj gr margin 35.2% vs. est. 35.1%
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.