Morning Preview: June 22, 2020

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Early Look

Monday, June 22, 2020





DJ Industrials




S&P 500










Stock futures are edging higher, on track for a solid opening and looking to extend the recent advances over the last few weeks (major averages up 4 of the last 5 weeks). Today marks the phase 2 reopening of New York City amid the recent closures due to the coronavirus pandemic, though several states continue to see rises in cases after they recently reopened parts of their economies. Overall, the U.S. reported more than 30K additional coronavirus cases on Friday, the highest number of confirmed one-day infections since May 1, while Nevada, Florida, California and Arizona reported record-high single-day infections. In Asian markets, The Nikkei Index fell -41 points to 22,437, the Shanghai Index dipped -2 points to 2,965 and the Hang Seng Index dropped -132 points to 24,511. In Europe, the German DAX is up around 10 points to 12,340, while the FTSE 100 is up a few points above the 6,300 level. General stocks news is relatively quiet, economic data today also light and earnings season still a few weeks away as major averages continue to turn their attention on the coronavirus cases. Even trading news with China has quieted down along with other macro focuses (elections, protests).

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -17.60 points, or 0.56%, to 3,097.74

·     The Dow Jones Industrial Average fell -208.64 points, or 0.80%, to 25,871.46

·     The Nasdaq Composite gained 3.07 points, or 0.03%, to 9,946.12

·     The Russell 2000 Index declined -8.44 points, or 0.59% to 1,418.63


Economic Calendar for Today

·     8:30 AM EST      Chicago Fed Nat Activity Index for May

·     10:00 AM EST    Existing Home Sales MoM for May






WTI Crude















10-Year Note





World News

·     Beijing will set up a dedicated central-government office in Hong Kong to collect intelligence and handle crimes against national security, according to the state-run Xinhua News Agency.

·     The WHO’s general director this weekend said “the world is entering a new and dangerous phase of the pandemic.” “Many people are understandably fed up with being at home. Countries are understandably eager to open up their societies and economies, but the virus is still spreading fast. It is still deadly, and most people are still susceptible,” he said. The number of new cases reported Thursday were the most in a single day so far at 150K.

·     Florida coronavirus cases rose 3.7%, more than the seven-day average, while New York infections increased 0.2%, in line with the average


Sector News Breakdown


·     American Airlines (AAL) said it plans to raise $1.5 billion in senior secured notes due in 2025, will sell $750 million in shares and another $750 million in senior convertible notes due in 2025, and will enter a $500 million loan facility

·     Brunswick (BC) stock could be worth 50% more said Barron’s as the boat maker’s business streamlined and sales perking up, and also noted people’s desire to go outdoor has fueled share prices of recreational-vehicle makers, but boating stocks have lagged so far

·     China suspended imports from a Tyson Foods (TSN) U.S. poultry plant after a cluster of coronavirus cases. Germany also blamed outbreaks in the meat industry as the infection rate rose for a second day.



·     PG&E (PCG) has filed a prospectus for $4B shares with underwriters’ over-allotment of another $400M shares

·     ProPetro Holding (PUMP) announced the completion of its previously announced Audit Committee internal review process and the filing of its Quarterly Reports on Form 10-Q for the quarters ended June 30, 2019 and September 30, 2019 and its Annual Report on Form 10-K for the year ended December 31, 2019



·     American Express (AXP) downgraded to sell from neutral at UBS and upgraded Discover Financial (DFS) and Capital One (COF) to buy from neutral in the credit card sector



·     Evoke Pharma (EVOK) shares continue to rise as FDA approved their Gimoti (metoclopramide) nasal spray on Friday.

·     Nabriva Therapeutics (NBRV) received a CRL from the FDA in response to its refiled marketing application seeking approval of Contepo (Fosfomycin) for the treatment of complicated urinary tract infections

·     PTC Therapeutics (PTCT) files automatic common stock offering for holders

·     China’s National Medical Products Administration has approved Merck’s (MRK) Keytruda (pembrolizumab) for the treatment of patients with locally advanced/metastatic esophageal squamous cell carcinoma whose tumors express PD-L1


Industrials & Materials

·     Albemarle (ALB) downgraded to underweight from sector weight at KeyBanc

·     The IT consultancy arena such as government-focused IT services contractors CACI International (CACI) and Leidos Holdings (LDOS) are growing sales more than 10% annually while Accenture (ACN) should see a boost with the push toward digital transformation once the economy rebounds, said Barron’s

·     Barron’s said industrial companies Emerson Electric (EMR), Ametek (AME), Wabtec (WAB), and RBC Bearings (ROLL) are four names that should benefit as economic activity picks up, as William Blair analyst expects RBC to move higher on a recovery in commercial air travel, reaching $150 over the next 12 months from $133.80 now


Technology, Media & Telecom

·     Maxar Technologies (MAXR) has won $23M five-year contract from the U.S. Department of Homeland Security (DHS) to develop an analytics system for characterizing and tracking the behavior of vehicles

·     Cirrus Logic (CRUS) downgraded to Underweight with $60 price target at Barclays

·     Western Digital (WDC) upgraded to Speculative Buy from Hold at Benchmark

·     The semiconductor/ equipment sector group downgraded to neutral at Stifel and lowered the rating on eight stocks to hold from buy (ACLS, NVMI, LRCX, ICHR, ACMR, KLAC, BRKS, PLAB) as believe the recent rally in the markets and the group has led to a less attractive valuation that has risen “too high” and “too fast.” Our estimates for CY-2H20 and 2021 are generally below consensus and this has not changed since the most recent earnings season.

·     Barron’s said tech stocks have become pricier during the pandemic with a few exceptions: 1) Western Digital (WDC) should benefit in the back half of the year from an expected pickup in flash-memory pricing Barron’s reported citing tech strategist Steve Milunovich at Wolfe Research, 2) Intel (INTC) remains a compelling bet on the future of computing Barron’s noted saying the company should benefit from its push into markets beyond PC microprocessors, including data centers, artificial intelligence, 5G, and the Internet of Things, 3) MKS Instruments (MKSI)’s expansion into optical parts like lasers has reduced the cyclicality of its business


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.

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