Early Look

Tuesday, November 10, 2020

Futures	Up/Down	%	Last
DJ Industrials	175.00	0.60%	29,223
S&P 500	-12.50	0.34%	3,532
Nasdaq	-225.50	1.91%	11,595

 

 

U.S. futures are looking mixed with Dow futures pointing to a higher open, building on its gains yesterday, while the S&P 500 looks modestly lower and technology appears under pressure for a second day as the Nasdaq trades down nearly 2% in a bout of profit taking. A global rally, triggered by Pfizer and BioNTech’s announcement of a successful COVID-19 vaccine trial lifted stocks yesterday with the Dow, S&P 500, Dow Transports and Nasdaq Composite all reaching intraday record highs, but stocks faded throughout the day failing to close below those levels. After rallying nearly 4% in early trade to a high of 3,645.99 Monday, the S&P 500 index pared its gains and finished up around 1.2% at 3,550.50 (below its 3,580.84-record close set on September 2). The Nasdaq closed down 1.5% as the stay-at-home tech trade unwound, while the re-opening trade underpinned energy, financials and Treasury yields. In Asian markets, The Nikkei Index rose 65 points to 24,905, the Shanghai Index slipped -13 points to 3,360 and the Hang Seng Index jumped 285points to 26,301. In Europe, the German DAX is flat around 13,100, while the FTSE 100 is up over 80 points to 6,275. Gold futures with a modest bounce back to $1,875 after plunging over 4% on Monday as investors rotated out of defensive assets. Tensions over the size of a coronavirus stimulus package also resurfaced as lawmakers reconvened following the election, while President Trump continues to challenge the results of the national vote.

Market Closing Prices Yesterday

·     The S&P 500 Index gained 41.06 points, or 1.17%, to 3,550.50

·     The Dow Jones Industrial Average rose 834.57 points, or 2.95%, to 29,157.97

·     The Nasdaq Composite dropped -181.45 points, or 1.53%, to 11,713.78

·     The Russell 2000 Index surged 60.88 points, or 3.70% to 1,705.04

 

Economic Calendar for Today

·     6:00 AM EST      NFIB Small Business Optimism Outlook

·     7:45 AM EST      ICSC Weekly Retail Sales

·     8:55 AM EST      Johnson/Redbook Weekly Sales

·     10:00 AM EST    JOLTs Job Openings for September

·     4:30 PM EST       API Weekly Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: AAP, ALT, BBDC, CRSR, CXDO, DHI, HAIN, NEON, PASG, RMBL, ROK, TCP, VITL, VTNR

·     Earnings After the Close: ADPT, ASH, AVGR, BRKS, CLPT, CLSD, COHR, CPST, CRIS, CTIC, DDOG, DOX, EGAN, FAT, FICO, FOXF, GEVO, GO, HTGM, INVE, ISR, KODK, LUNG, LYFT, MODN, MYO, ONEM, PLMR, PRPL, PRSP, RKT, RXT, SANM, SILK, SYN, TCON, TXG, WSTG, XGN

 

 

Macro	Up/Down	Last
WTI Crude	0.34	40.63
Brent	0.46	42.86
Gold	13.00	1,876.00
EUR/USD	-0.0022	1.1791
JPY/USD	-0.10	105.28
10-Year Note	+0.018	0.94%

 

 

World News

·     The emergency lending programs the Federal Reserve set up during the coronavirus pandemic have eased distress in financial markets and are still needed, Cleveland Federal Reserve Bank President Loretta Mester said on Monday.

·     Federal Reserve Governor Randal Quarles said on Monday that while the initial market stress from the coronavirus crisis has passed, a “distinct, formidable, and complex” challenge remains. “The surprise of the COVID event is gone, replaced by a clearer view of its economic consequences,” Quarles said in testimony prepared for a Congressional appearance Tuesday

·     NFIB Small Business Optimism Index: 104.0 vs. 104.8 consensus, 104.0 in September.

 

Sector News Breakdown

Consumer

·     Beyond Meat (BYND) shares fell -25%; Q3 adj EPS loss (28c) on sales $94.4M vs. est. 5c and $132.8M; 3Q cash and cash equivalents $214.6M and Q3 R&D expenses $8.28 million, +39% YoY; due to covid-19 pandemic, company continues to experience a meaningful slowdown in its foodservice business; remains unable to predict continuing impact of covid-19 on its business for balance of year with reasonable certainty

·     Lowe’s (LOW) is in preliminary discussions to acquire HD Supply Holdings (HDS), Bloomberg reported citing people familiar with the matter https://reut.rs/32tjlAK – LOW overnight refuted the report saying in a company statement “Lowe’s is not in discussions with HD Supply and we have no plans to pursue a transaction with them”

·     Callaway Golf (ELY) Q3 adjusted EPS 60c on revs $476M vs. est. 38c and $451.3M; is not providing financial guidance for q4 of 2020; says golf business now experiencing unprecedented demand, soft goods business is recovering significantly more quickly than expected

·     Hain Celestial (HAIN) Q1 adjusted EPS 27c on revs $498.6M vs. est. 20c and $493.7M; reaffirms its expectation for gross and adjusted EBITDA margin expansion as well as strong double-digit adjusted EBITDA and operating free cash flow growth for fiscal year 2021

·     IFF Inc. (IFF) Q3 EPS $1.40 on revs $1.27B vs. est. $1.45 and $1.28B

·     Nautilus (NLS) 3Q adj EPS $0.87 vs. est. $0.32 on revs $155Mm vs. est. $115.7Mm; guides FY20 revs $540-565Mm vs. est. $448.6Mm

·     Nikola (NKLA) Q3 adjusted EPS loss (16c) vs. est. loss (19c); said made substantial progress toward completion of building modifications necessary to construct Tre BEV production line at Nikola’s manufacturing facility on IVECO’s industrial complex in Ulm, Germany; broke ground on construction at Nikola’s Coolidge, Arizona greenfield manufacturing facility; ended the quarter with a strong cash position of $908 million, net of $15 million in restricted cash; says is continuing its discussions with General Motors

·     Norwegian Cruise Line (NCLH) Q3 adj. EPS loss ($2.35) on revs $6.52M vs. est. loss ($2.24) and $10.61M

·     RealReal (REAL) 3Q adj EPS ($0.41) vs. est. ($0.38) on revs $78.1Mm vs. est. $76.7Mm

 

Energy, Industrials and Materials

·     Occidental Petroleum (OXY) Q3 adjusted EPS loss (84c) on revs $4.09B vs. est. loss (72c) and $4.28B; Q3 production of 1,237 MBoed from continuing operations; sees Q4 production of ~1,160 MBoed, or 5% below Q3

·     NextEra Energy Inc (NEE) made a roughly $15 billion all-stock acquisition offer for U.S power utility Evergy Inc (EVRG), Reuters reported late yesterday, but the report said Evergy turned down the offer in recent days and it is unclear whether NextEra will make a new approach https://reut.rs/35cUpiE

·     Air Lease (AL) Q3 adjusted EPS $1.47 on revs $494M vs. est. $1.06 and $506.28M; authorizes share buyback of up to $100M and raises its dividend

·     Mueller Water (MWA) Q4 adjusted EPS 17c on revs $265.3M vs. est. 15c and $259.83M; anticipate that our full-year fiscal 2021 consolidated net sales will be between flat and 3% higher than the prior year

·     Pacific Ethanol (PEIX) Q3 EPS 24c on revs $204.7M vs. est. 22c and $199.38M; Q3 net income of $14.9 million and Adjusted EBITDA of $34.1 million reflect our efforts to reposition the company to produce sustainable and profitable results going forward

·     Southwest Airlines (LUV) is in advanced talks with Boeing (BA) and aircraft lessors to acquire as many as 30 “white tail” 737 MAX jets – new jets that have lost their original buyers – Bloomberg

 

Financials

·     Simon Property (SPG) 3Q FFO/shr $2.05 vs. est. $2.28, US malls and premium outlets occupancy was 91.4% end qtr, portfolio net operating income -22.4% and comparable property NOI -24.4%; qtrly revs $696.2Mm vs. est. $1.08B

·     Taubman Centers (TCO) Q3 adjusted FFO 60c on revs $130.99M vs. est. 58c and $120.52M; said all properties are open and operating and nearly 94 percent of our U.S. tenants have reopened. Since May, traffic, sales and collections have consistently improved.

 

Healthcare

·     Arena Pharmaceuticals (ARNA) falls -20% in reaction to results from a Phase 2b clinical trial, ADVISE, evaluating etrasimod (APD334) in patients with moderate-to-severe atopic dermatitis (AD). The study failed to achieve the primary endpoint of percent change in Eczema Area and Severity Index (EASI) at week 12 versus placebo.

·     Amgen (AMGN) and AstraZeneca (AZN) announce positive topline results from the Phase 3 NAVIGATOR trial evaluating investigational medicine Tezepelumab compared to placebo in patients with severe asthma; the NAVIGATOR trial met the primary endpoint

·     Eli Lilly (LLY) said the FDA authorized emergency use of its experimental COVID-19 antibody treatment based on clinical trials showing that the treatment, bamlanivimab, reduced the need for hospitalization or emergency room visits in COVID-19 patients at high risk of disease progression

·     Supernus Pharmaceuticals (SUPN) said it received a Refusal to File letter from the FDA regarding its NDA for SPN-830 for the continuous treatment of motor fluctuations in Parkinson’s disease.

·     Marinus Pharma (MRNS) Q3 EPS loss (51c) vs. est. loss (60c); said at September 30, 2020, the company had cash, cash equivalents and investments of $91.3 million, compared to $91.7 million at December 31, 2019. Marinus believes its cash and cash equivalents as of September 30, 2020 will enable it to fund its operating expenses and capital expenditures into 2022

·     Neurocrine Bioscience (NBIX) shares fell -12% on revs miss; 3Q adj EPS $0.97 vs. est. $0.22 on revs $258.5Mm vs. est. $283Mm

·     Novavax (NVAX) 3Q EPS ($3.21) vs. est. $1.73 on revs $157Mm vs. est. $230.6Mm, says NVX-COV2373 UK phase 3 interim data expected as soon as early 1Q21

·     Organogenesis (ORGO) 3Q EPS $0.19 vs. est. ($0.08) on revs $100.8Mm vs. est. $72Mm; sees FY20 revs $311-314Mm vs. est. $275.1Mm, expect 4Q to report positive GAAP net income and positive adj EBITDA

·     Revance Therapeutics (RVNC) 3Q EPS ($1.34) vs. est. ($1.03) on revs $3.8Mm vs. est. $1.78Mm; phase 2 trial for Daxibotulin does not meet primary efficacy endpoint

·     Tilray (TLRY) Q3 EPS loss (2c) on revs $51.4M vs. est. loss (21c) and $54.88M; Q3 total cannabis kilogram equivalents sold decreased 53% to 5,107 kilograms from 10,848 kilograms in the prior year’s third quarter; qtrly average cannabis net selling price per gram increased to $6.15 (c$8.15) compared to $3.25 (c$4.32) in q3 of 2019; says believe we are poised to deliver positive or break even adjusted Ebitda in q4 of 2020

 

Technology, Media & Telecom

·     European regulators today will announce formal antitrust charges against Amazon (AMZN) over how it uses data about the merchants on its platform, according to the FT.

·     Boingo Wireless (WIFI) Q3 EPS loss (7c) on revs $58.8M vs. est. loss (11c) and $59.37M; posted a 5.7% increase in adjusted EBITDA to $22.5 million compared to the prior quarter; Cash, cash equivalents and marketable securities were $54.6 million at September 30, 2020 down from $172.0 million at June 30, 2020

·     LiveRamp (RAMP) 2Q adj EPS $0.03 vs. est. ($0.07) on revs $105Mm vs. est. $100.4Mm; sees Q3 revenue $113M and Q3 non-GAAP operating income of up to $4M

·     RingCentral (RNG) Q3 adjusted EPS 26c on revs $304M vs. est. 24c and $287.33M; sees Q4 adjusted EPS 26c-27c on revs $315M-$318M vs. est. 26c and $307.56M; raises FY20 adj. EPS view to 96c from 92c-94c and ups FY20 revenue view to $1.164B-$1.167B from $1.135B-$1.143B

·     ShotSpotter (SSTI) Q EPS $0.05 vs. est. $0.03 on revs $11.4Mm vs. est. $11.2Mm; guides FY20 revs $44.5-45Mm vs. est. $44.7Mm; in definitive agreement to acquire Leeds for approx $22Mm cash and stock including potential earnout of up to $5Mm; expects FY21 to be GAAP profitable, sees FY21 revs $58-60Mm including $10Mm from Leeds

·     Sprout Social (SPT) Q3 EPS loss (9c) on revs $33.37M vs. est. loss 912c) and $33.03M; raises FY20 EPS view to (45c)-(44c) from (57c)-(50c) while narrows FY20 revenue view to $131.4M-$131.5M from $131.7M-$133.7M (est. $129.98M); Total ARR was $141.9 million, up 30% compared to the third quarter of 2019 and organic ARR was $140.6 million, up 35% compared to the third quarter of 2019.

·     Uniti Group (UNIT) 3Q adj FFO/shr $0.42 vs. est. $0.51 on revs $258.8Mm vs. est. $259.2Mm; guides FY revs $1.055-1.063B vs. est. $1.053B

·     Xperi Holding (XPER) Q3 revs $202.8M vs. est. 20c and $194.41M; raises H2 revenue view to $625M-$645M from $390M-$410M; XPER and CMCSA enter into long-term patent license agreement

·     Zix Corp. (ZIXI) Q3 adjusted EPS 17c on revs $54.8M vs. est. 15c and $53.74M; sees FY20 adjusted EPS 60c-61c on revs $217M-$218M vs. est. 58c and $214.8M

·     ZoomInfo (ZI) Q3 adjusted EPS 11c on revs $123.4M vs. est. 9c and $117.39M; sees Q4 adjusted EPS 9c-10c on revs $129M-$131M vs. est. 9c and $122.57M; closed the quarter with more than 720 customers with $100,000 or greater in annual contract value; Grew our professional data set more than 30% since the beginning of the year