Morning Preview: October 13, 2020

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Early Look

Tuesday, October 13, 2020





DJ Industrials




S&P 500










Stock futures are mixed ahead of big bank earnings this morning (JPM, C) as the Dow Jones futures are lower by -0.5% but the tech rally continues as Nasdaq futures rise another 1% after yesterday’s outperformance led by mega cap giants again. Dow component Johnson & Johnson (JNJ) shares dipped overnight after reports they paused the clinical trials of its Covid vaccine due to an unexplained illness in a study participant, delaying high profile efforts to contain the global pandemic. In Asian markets, The Nikkei Index rose 43 points to 23,601, the Shanghai Index edged up a point to 3,359 and the Hang Seng Index was closed. In Europe, the German DAX is down over -40 points to 13,100, while the FTSE 100 slips -25 points to 5,975. U.S. stocks booked their 4th straight day of gains on Monday, propelled higher by a surge in technology stocks as the Nasdaq Composite came within a 100-points of its all-time record high, rising over 2.5% led by mega cap companies including Apple and rising 6.4% and 4.8%, respectively ahead of key events for each this week. Apple is set on Tuesday to unveil a 5G-enabled iPhone, while Amazon kicked off its Prime Day event of shopping deals overnight. With less than three weeks to the presidential election, investors are now focusing on the outlook for the Democratic Party controlling both the White House and Congress, which could in turn see a bigger than expected boost for a coronavirus stimulus aid. Meanwhile the beginning of third-quarter earnings season gets underway unofficially today as big banks roll out earnings this week. The materials sector was the only one of the S&P 500’s 11 industry groups to post a decline in midafternoon trading.


Market Closing Prices Yesterday

·     The S&P 500 Index gained 57.09 points, or 1.64%, to 3,534.22

·     The Dow Jones Industrial Average rose 250.62 points, or 0.88%, to 28,837.52

·     The Nasdaq Composite surged 296.32 points, or 2.56%, to 11,876.26

·     The Russell 2000 Index advanced 11.51 points, or 0.70% to 1,649.05


Economic Calendar for Today

·     6:00 AM EST      NFIB Small Business Optimism for September

·     7:45 AM EST      ICSC Weekly Retail Sales

·     8:30 AM EST      Consumer Price Index MoM for September…est. 0.2%

·     8:30 AM EST      CPI Core Ex: Food & Energy MoM for September…est. 1.8%

·     8:30 AM EST      Consumer Price Index YoY for September

·     8:30 AM EST      CPI Core Ex: Food & Energy YoY for September

·     8:55 AM EST      Johnson/Redbook Weekly Sales

·     2:00 PM EST       Federal Budget for September

·     4:30 PM EST       API Weekly Inventory Data


Earnings Calendar:

·     Earnings Before the Open: AZZ, BLK, C, DAL, FAST, FRC, JNJ, JPM, SCHW

·     Earnings After the Close: ENZ, ODC, VOXX


Other Key Events:

·     Apple (AAPL) to hold a special event

·     Amazon (AMZN) holds two-day Prime event Oct 13-14th

·     Cowen Virtual Therapeutics Conference, 10/13-10/14






WTI Crude















10-Year Note





Sector News Breakdown


·     Ethan Allen (ETH) guides Q1 sales $151.1M vs. est. $137.8M; Retail segment written orders continued to accelerate with growth of 10.8% over the prior year; Consolidated gross margin of 56.8% and adjusted diluted EPS in the range of $0.34 to $0.36

·     Williams-Sonoma Inc. (WSM) boosted its dividend by 10% to 53 cents a share and also said it has resumed its share buyback program

·     Tesla (TSLA) cuts the Model S starting price by 3% in China, trimming the U.S. price of Model S Long Range Plus by 4% to $71,990

·     Marriott (MAR) upgraded to Market Perform from Underperform, Park Hotels & Resorts (PK) upgraded to Outperform from Market Perform, Host Hotels (HST) upgraded to Outperform from Market Perform and Hilton (HLT) upgraded to Market Perform from Underperform all at BMO Capital


Energy, Industrials & Materials

·     CSX Corp. (CSX) upgraded to Outperform from Market Perform at Bernstein

·     Exelon (EXC) rises after Bloomberg reported the company is considering a breakup that would involve separating its non-utility assets, working with advisers to evaluate the split, adding the company could opt to keep its current structure

·     The IEA said it sees global energy demand falling by 5% in 2020, with oil and coal consumption falling 8% and 7%, respectively.

·     Exxon Mobil (XOM) upgraded to Neutral from Sell at Goldman Sachs

·     AZZ Inc. (AZZ) Q2 adj EPS 49c on sales $203.4M vs. est. 43c and $219M

·     Agco (AGCO) upgraded to Overweight from Neutral at JPMorgan



·     AllianceBernstein L.P. (AB) announced that preliminary assets under management decreased to $631 billion during September 2020 from $643 billion at the end of August. The 1.9% decrease was due primarily to market depreciation, and to a lesser extent, firmwide net outflows.

·     Blackrock (BLK) Q3 adj EPS $9.22 vs. est. $7.80 on revs $4.37B vs. est. $3.93B; AUM 7.81T; more than 50% of long-term flows in qtr driven by clients in Europe and Asia

·     Invesco Ltd. (IVZ) preliminary month-end assets under management (AUM) of $1,218.2 billion, a decrease of 2.2% versus previous month-end. Total net outflows were $0.7 billion. The firm achieved net long-term inflows of $1.4 billion this month. Non-management fee earning net inflows were $2.1 billion and money market net outflows were $4.2 billion. AUM was negatively impacted by unfavorable market returns

·     Manning & Napier (MN) reports preliminary AUM $19.2B as of September 30, which included approximately $13.6B in separately managed accounts and approximately $5.6B in mutual funds and collective investment trusts

·     In 3Q 2020, US luxury home sales increased 41.5% Y/Y, according to Redfin (RDFN). Medium-priced homes sales up 3% Y/Y and sales of affordable homes down 4.2% due to the impact o

·     Victory Capital (VCTR) reports September AUM $132.7B vs. $136.8B in prior month



·     Johnson & Johnson’s (JNJ) Covid-19 vaccine has been paused due to an unexplained illness in a study participant, Stat’s Matthew Herper reported; said a document sent to outside researchers running the 60,000-patient clinical trial stating that a “pausing rule” was triggered, and that the online system used to enroll patients in the study has been closed

·     Johnson & Johnson (JNJ) Q3 adj EPS $2.20 on sales $21.1B vs. est. $1.98 and $20.2B; guides year EPS $7.95-$8.05 vs. est. $7.89

·     Axis Therapeutics (ATNX) announces research collaboration with Pharmaessentia for development of TCR-t cell therapy in Taiwan

·     Itamar Medical (ITMR) sees Q3 revenue $10.7M-$11.0M vs. est. $9.57M and sees Q3 U.S. WatchPAT revenue $8.6M-$8.9M, an increase of 51%-56% compared to $5.7M in the same quarter in 2019

·     Inventiva (IVA) announced that the FDA has granted breakthrough therapy designation to lanifibranor, the company’s lead drug candidate, for the treatment of NASH. The company said lanifibranor is believed to be the first drug candidate to be granted this status for the treatment of NASH since January 2015

·     Sorrento Therapeutics (SRNE) enters into an exclusive license agreement with Personalized Stem Cells to acquire global rights to its adipose derived mesenchymal stem cells (or MSCs), which have been cleared for a Phase 1 clinical trial by the FDA.

·     Voyager Therapeutics (VYGR) said its Investigational New Drug (IND) submission for VY-HTT01 for the treatment of Huntington’s disease has been placed on clinical hold pending the resolution of certain chemistry, manufacturing and controls (CMC) matters


Technology, Media & Telecom

·     Disney (DIS) announced a strategic reorganization of its media and entertainment businesses. Under the new structure, Disney’s creative engines will focus on developing and producing original content for the company’s streaming services, as well as for legacy platforms, while distribution and commercialization activities will be centralized into a single, global Media and Entertainment Distribution organization

·     Micron (MU) upgraded to Buy from Hold at Deutsche Bank

·     Maxar Technologies’ (MAXR) longtime partner Esri, has signed a multi-million dollar contract extension to continue licensing data for the ArcGIS Living Atlas of the World through 2023


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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