Morning Preview: March 09, 2020

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Early Look

Monday, March 9, 2020





DJ Industrials




S&P 500










A scary morning for global stock markets and investors as U.S. stock futures fell limit-down overnight (when so-called circuit breakers were triggered after a 5% fall), cratering due to the decline in oil prices overnight which plummeted over 30% with prices falling to 4-year lows after Saudi Arabia over the weekend slashed crude prices and is preparing to increase production, in a direct attack against Russia’s market share. The move came in response after talks between OPEC and their allies collapsed on Friday, with Russia refusing to agree to a Saudi-led plan for additional crude production cuts. The shock to the system has pushed Treasury yields to new record lows as well, with even the 30-year yield dropping below 1% (down over 40bps to 0.86%), and the 10-year yield down 30bps to 0.45%. In Asian markets, The Nikkei Index plunged over 1,000 points (over 5%) to settle at 19,698, the Shanghai Index dropped -90 points to 2,943 and the Hang Seng Index dropped 1,106 points (4.2%) to 25,040. In Europe, the German DAX is lower by 6.5% t0 10,780, while the FTSE 100 is down nearly 7% to the 6,000 level. Global markets are in a tailspin, adding to already fragile markets on the coronavirus fear impact. Coronavirus total update: In total, there are 107,897 cases of COVID-19 and 3,658 deaths worldwide, as of early Sunday; more than 60,000 people have recovered. In the U.S., there are 469 cases and 19 deaths, including 105 cases in New York state, where Gov. Andrew Cuomo declared a state of emergency – Iran has seen 6,566 cases and 194 deaths; Italy has had 5,883 cases and 233 deaths; South Korea’s figures are 7,314 cases and 50 deaths; France has reported 949 cases and 11 deaths, while Germany has had 1,039 cases but zero deaths. Central banks can try to help the systems, but with the Fed recently cutting rates on fears of the virus impact, a few bullets have already been released – though many will look for some sort of global coordinated response by banks to help the system.

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -51.57 points, or 1.71%, to 2,972.37

·     The Dow Jones Industrial Average fell -256.50 points, or 0.98%, to 25,864.78

·     The Nasdaq Composite sunk -162.98 points, or 1.87%, to 8,575.62

·     The Russell 2000 Index declined -29.60 points, or 2.00% to 1,449.22


Economic Calendar for Today

·     No Major Economic Data to be Released


Earnings Calendar:

·     Earnings Before the Open: MTNB, NERV, NINE, THO

·     Earnings After the Close: ASNA, BXG, CASY, CLAR, MTN, SFIX, SNCR


Other Key Events:

·     Deutsche Bank 28th annual Media, Internet & Telecom Conference, 3/9-3/11 in Palm Beach, FL

·     Optical Networking & Communication Conference, 3/8-3/12, in San Diego, FL

·     Wolfe Research FinTech Forum 2020, 3/9-3/11, in New York, NY






WTI Crude















10-Year Note





World News

·     N.Y. Governor Andrew Cuomo declared a state of emergency on Saturday after the number of confirmed coronavirus cases in New York increased to 76


Sector News Breakdown


·     Carnival Cruise (CCL), Royal Caribbean (RCL): U.S. health officials over the weekend blocked several ships operated by Carnival’s Princess Cruises from leaving or docking in an effort to contain any further spread of coronavirus, which has already hit two of the cruise line’s voyages

·     Nissan’s (NSANY) vehicle sales in China dropped 80% in February as coronavirus concerns hit demand

·     Thor Industries (THO) Q2 net sales $2.00B vs. est. $1.82B; Q2 EPS 52c vs. est. 70c



·     Oil prices plunged last week, especially on Friday after the OPEC+ meeting failed to generate an agreement on additional production cuts, with Russia being the main opposition to a previously agreed upon 1.5M output cut. Saudi Arabia responded on Saturday, slashing official selling prices leading Middle East stock markets going into freefall Sunday. The prospect of competing price-cuts by the biggest crude producers and the looming economic slowdown are stoking anxiety in a world already on edge over the spread of the Covid-19 outbreak

·     Diamondback Energy Inc. (FANG) said it will reduce its capital budget for year; is now releasing two more completion crews as a result of recent and expected oil price weakness; drill, complete and equip spend for 2020 expected to decrease through lower completed well count and lower expected well costs; corresponding infrastructure and midstream capital budgets are expected to decrease as well

·     Qatar Petroleum said on Sunday it had signed an agreement with Yara international to acquire its 25% stake in Qatar Fertilizer Company for $1 billion, according to statements by both companies



·     J&J (JNJ), Anthem (ANTM), Medtronic (MDT) and Amgen (AMGN) are among healthy dividend stocks as COVID-19 fears grow, Barron’s reported noting healthcare stocks have been volatile, partly owing to concerns about heightened regulation that may come about depending on the outcome of the presidential election in November, but many of these stocks offer solid dividends with attractive yields at a time when coronavirus fears are intensifying

·     Biogen Inc. (BIIB) ordered all staff to work from home until further notice, as part of a sweeping round of measures implemented after employees who attended a management meeting in Boston tested positive for the coronavirus that causes COVID-19.

·     Kala Pharmaceuticals (KALA) said Stride 3 met both prespecified primary efficacy endpoints, ocular discomfort severity in the overall ITT population and in ITT patents with more severe baseline discomfort in trial evaluating Eysuvis for signs and symptoms of dry eye disease.

·     PerkinElmer (PKI) said it experienced “significant deterioration in demand in China” in February from extension of Lunar New Year, commercial disruptions from COVID-19, as it now sees Q1 EPS and revs below previous guidance


Technology, Media & Telecom

·     A U.S. judge said Amazon (AMZN) is likely to succeed in its challenge to the U.S. Department of Defense’s decision to award an up to $10B cloud computing deal to Microsoft (MSFT), Reuters reported


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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