Early Look

Friday, March 6, 2020

Futures	Up/Down	%	Last
DJ Industrials	-562.00	2.16%	25,498
S&P 500	-73.50	2.43%	2,942
Nasdaq	-239.50	2.77%	8,409

 

 

Stock futures are pointing to another sharply lower open, adding to yesterday’s hefty declines in one of the most volatile weeks in the stock markets history as the S&P fell 3.4% on Thursday and notched its 4^th straight daily swing of at least 2.8%, while it looks like more volatility is in store for today as well. The decline in Treasury market yields over the last to record lows has been astounding, with the 10-year yield down another 15 bps to 0.76% (falling below 0.7% at one point) and the 30-year yield down almost 19 bps to 1.35% (after touching lows of 1.27%) as investors continue to scramble for safe haven assets given the ongoing uncertainty of the coronavirus impact on global economies as cases rise, quarantines and travel bans are instituted by companies and production becomes affected. In Asian markets overnight, The Nikkei Index fell -579 points to 20,749, the Shanghai Index was down 37 points to 3,034 and the Hang Seng Index declined -621 points to 26,146. In Europe, the German DAX is down over 400 points (3.5%) to move around the 11,500 level, while the FTSE 100 is cratering over 200 points or more than 3% to move below 6,500. The number of those affected by the virus world-wide neared 100,000 on Friday, with cases falling in Asia but climbing in Europe and the U.S., where more than 230 cases have been reported. Concerns about the outbreak are also likely to overshadow any signs of a strong labor market today as investors digest the most recent non-farm payrolls report where economists suggest employers added 175K new jobs to the economy last month, a step down from the 225K created in January. Overall, its fear and uncertainty that continues to grip markets into the weekend.

Economic Calendar for Today

·     8:30 AM EST      Change in Nonfarm Payrolls for February…est. 175K

·     8:30 AM EST      Change in Private Payrolls for February…est. 160K

·     8:30 AM EST      Change in Manufacturing Payrolls for February…est. (-3K)

·     8:30 AM EST      Unemployment Rate for February…est. 3.6%

·     8:30 AM EST      Average Hourly Earnings MoM for February…est. 0.3%

·     8:30 AM EST      Trade Balance for January…est. (-$46.1B)

·     10:00 AM EST    Wholesale Inventories MoM, Jan-F…est. (-0.2%)

·     1:00 PM EST       Baker Hughes Weekly Rig Count

·     3:00 PM EST       Consumer Credit for January…est. $16.5B

 

Earnings Calendar:

·     Earnings Before the Open: BAX, GLP, SYNL

 

Other Key Events:

·     Fed’s Evans and Mester speaks at Shadow Open Market Committee, 9:20 AM

·     Fed’s Bullard speaks at Shadow Committee Event in New York, 11:20 AM

·     Fed’s George speaks at Shadow Committee Event in New York, 3:30 PM

 

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -106.18 points, or 3.39%, to 3,023.94

·     The Dow Jones Industrial Average fell -969.58 points, or 3.58%, to 26,121.28

·     The Nasdaq Composite plunged -279.49 points, or 3.10%, to 8,738.59

·     The Russell 2000 Index declined -52.37 points, or 3.42% to 1,478.82

 

 

Macro	Up/Down	Last
WTI Crude	-1.97	43.93
Brent	-2.22	47.77
Gold	20.10	1,688.10
EUR/USD	0.0092	1.1139
JPY/USD	-0.93	105.23
10-Year Note	-0.145	0.765%

 

 

World News

·     The U.S. economy should be able to avoid a severe downturn as a result of the coronavirus, Dallas Fed President Rob Kaplan said Thursday. “I still believe we can get through this year without a recession,” Kaplan said, in an interview on Bloomberg Television. The Dallas Fed president wouldn’t comment directly when asked if he would support another interest-rate cut at the central bank’s March 17-18 meeting

 

Sector News Breakdown

Consumer

·     Costco (COST) Q4 EPS $2.10 vs. est. $2.06; Q2 revs $39.07B vs. est. $38.18B; Q2 total comp sales including gas and FX up 8.9% vs. est. 6.3% while Feb total comp sales ex gas 11.7% vs. est. 6.8%

·     Starbucks (SBUX) said Feb China comp sales down 78% YoY; expect at end of q2 fy20, about 95% of our stores in china will be open but will continue to operate with elevated safety protocols

·     American Outdoor Brands (AOBC) 3Q adj EPS $0.13 vs. est. $0.23 on net sales $166.7Mm below est. $187.4Mm; guides 4Q adj EPS $0.33-0.37 vs. est. $0.45, and lowers FY adj EPS to $0.58-0.62 from prior $0.76-0.84 (est. $0.81)

·     Chuy’s Holdings (CHUY) 4Q adj EPS $0.17 vs. est. $0.12, comps +2.9%; guides 2020 adj EPS $1.15-1.19 vs. est. $1.09, sees 2020 comps +2-3%, sees 2020 net CAPEX $23-30Mm

·     El Pollo Loco (LOCO) Q4 EPS 18c vs. est. 16c; Q4 system-wide comp sales 3.9% vs. 4.9% YoY; sees year EPS 75c-80c vs. est. 80c and system wide comp sales up 2%-4%

·     Funko (FNKO) 4Q adj EPS $0.18 vs. est. $0.16; guides FY20 $0.85-1.00 vs. est. $0.94; Sees FY20 revenue $840M-$865M vs. est. $845.83M; sees FY20 adjusted EBITDA of $115M-$125M and EBITDA margin of 13.7% to 14.5%

·     HomeStreet (HMST) board authorizes the company to buy back as much as an additional $10M of common stock, boosting the size of its stock repurchase program to up to $35M.

·     Quanex Building (NX) Q1 EPS 4c vs. est. loss (6c); 1Q adjusted Ebitda up 30% YoY to $15.7M, 1Q net sales $196.6M; still sees FY revenue $865M-$885M vs. est. $875.5M; still sees FY adjusted Ebitda $102M-$110M

 

Energy, Industrials & Materials

·     Evoqua Water (AQUA) 13M share Secondary priced at $19.50

·     JinkoSolar (JKS) raises Q4 revenue view to $1.35B-$1.38B from $1.17B-$1.23B (est. $1.21B); Q4 total solar module shipments will be in the range of 4.5 GW to 4.6 GW, exceeding the company’s previous guidance range of 4.2 GW to 4.4 GW

·     ADT Inc. (ADT) Q4 EPS loss (10c) on revs $1.3B vs. est. $1.27B; Q4 adj Ebitda $607M in-line with estimates; sees 2020 revs $5.0B-$5.3B vs. est. $5.12B and Ebitda $2.18B-$2.25B vs. est. 42.28B

 

Financials

·     JPMorgan Chase & Co. (JPM) CEO Jamie Dimon successfully underwent emergency heart surgery and is recovering, the bank said Thursday. “We want to let you know that Jamie experienced an acute aortic dissection this morning,” JPMorgan said in a memo to bank employees. “He underwent successful emergency heart surgery to repair the dissection

·     Square (SQ) cut its adjusted loss per share forecast for Q1 to (2c-4c) down from prior view up 16c-18c (est. 17c) and sees FY adjusted EPS 88c to 92c, compared to prior 90c-94c (est. 93c)

·     H&R Block (HRB) Q3 adj EPS loss (66c) vs. est. loss (55c); Q3 revenue $519.2M vs. est. $485.7M; said Q3 operating expenses rose 11% YoY to $671.8M; reiterates its FY outlook

 

Healthcare

·     Cooper Companies (COO) 1Q adj EPS $2.69 vs. est. $2.72 on net sales $646.2Mm vs. est. $647.7Mm; narrows FY adj EPS $12.80-13.20 vs. prior $12.60-13.00 and sees FY revs $2.77-$2.82B vs. est. $2.80B

·     Cryoport (CYRX) Q4 EPS loss (5c) on revs $9.24M vs. est. loss (7c) and $9.19M; reports $94.3M in cash, cash equivalents and short-term investments as of December 31, 2019, compared with $47.3M as of December 31, 2018

 

Technology, Media & Telecom

·     Advanced Micro Devices Inc. (AMD) said it will maintain its revenue guidance for the current quarter despite the spread of COVID-19, though admitted that sales will likely come in toward the low end of its $1.8 billion, plus or minus $50 million range

·     Okta (OKTA) Q4 adjusted EPS loss (1c)/$167.3M vs. est. loss (5c)/$155.85M; sees Q1 adjusted EPS loss (24c)-(23c) vs. est. loss (14c) and sees Q1 revenue $171M-$173M vs. est. $166.37; sees FY21 adjusted EPS loss (42c)-(37c) vs. est. loss (27c) and revs $770M-$780M vs. est. $756.28M

·     Ooma (OOMA) Q4 EPS 4c/$40.6M vs. est. 0c/$39.89M; sees FY21 EPS 9c-17c vs. est. 2c and sees FY21 revenue $167M- $170M vs. est. $167.07M