Early Look

Thursday, October 22, 2020

Futures	Up/Down	%	Last
DJ Industrials	-47.00	0.17%	28,087
S&P 500	-5.50	0.17%	3,426
Nasdaq	-14.50	0.12%	11,677

 

 

Stock futures are pointing to a weaker open (but well-off overnight lows) along with weakness in Europe as another night passes with no stimulus deal out of Washington and as investors brace for the final Presidential debate ahead of the election that is less than 2-weeks away. The U.S. also accused Iran of interfering in the coming election, saying the country was behind threatening emails to Democratic-registered voters in battleground states, and that Russia also obtained voter registration data. Markets have been focused on the prospect of a new wave of fiscal stimulus, even as the prospects of a deal being struck by House Democrats and Senate Republicans before the Nov. 3 election remain unclear. In Asian markets, The Nikkei Index fell -165 points to 23,474, the Shanghai Index dropped -12 points to 3,312 and the Hang Seng Index rose 31 points to 24,786. In Europe, the German DAX is lower by about -60 points to drop just under 12,500, while the FTSE 100 is down -25 points to 5,750. European markets were lower for the fourth successive day, after German consumer confidence numbers came in weaker than expected. Europe has also been struggling with a surge of new Covid-19 cases and fresh restrictions that threaten the region’s economic rebound. On today’s economic calendar, initial jobless claims are likely to fall to 860K for the week ended Oct. 17, down from 898K in the prior week, but still well above the pre-pandemic record of 695K, while U.S. existing home sales are expected to rise in September for a fourth straight month. Earnings results are again plentiful with shares of Tesla (TSLA) rising over 5% following its record revenue results and several bank and energy related results.

Market Closing Prices Yesterday

·     The S&P 500 Index dipped -7.56 points, or 0.22%, to 3,435.56

·     The Dow Jones Industrial Average fell -97.97 points, or 0.35%, to 28,210.82

·     The Nasdaq Composite dropped -31.80 points, or 0.28%, to 11,484.69

·     The Russell 2000 Index declined -13.93 points, or 0.86% to 1,603.78

 

Economic Calendar for Today

·     8:30 AM EST      Weekly Jobless Claims…est. 860K

·     8:30 AM EST      Continuing Claims…est. 9.5M

·     10:00 AM EST    Existing Home Sales MoM for September…est. +5% to 6.3M

·     10:00 AM EST    Leading Index for September…est. 0.7%

·     10:30 AM EST    Weekly EIA Natural Gas Inventory Data

·     11:00 AM EST    Kansas City Fed Manufacturing for October…prior 18

 

Earnings Calendar:

·     Earnings Before the Open: AB, AEP, ALK, BANC, CRS, CTXS, DGX, DHR, DOW, ENTG, EQT, EWBC, FITB, GPC, GTLS, GWW, HBAN, KO, LNN, LUV, MTB, NOC, NUE, PHM, POOL, PTEN, RS, SAFE, SCHN, SIRI, SNA, SON, TSCO, UNP, VLO, VLY, WBS, WSO, WST

·     Earnings After the Close: ABCB, ASB, BJRI, BOOM, BY, COF, CYBE, EHTH, GBCI, ICBK, INTC, LLNW, MANH, MAT, NXGN, OZK, PBCT, SIVB, USX, VICR, VRSN, WAL

 

 

Macro	Up/Down	Last
WTI Crude	0.19	40.22
Brent	0.18	41.91
Gold	-9.20	1,920.30
EUR/USD	-0.0034	1.1827
JPY/USD	0.13	104.72
10-Year Note	-0.014	0.81%

 

 

World News

·     The U.S. accused Iran of interfering in the coming election, saying the country was behind threatening emails to Democratic-registered voters in battleground states, and that Russia also obtained voter registration data.

·     Democrats on the U.S. Senate Judiciary Committee intend to boycott a vote set for Thursday on Amy Coney Barrett’s nomination for the U.S. Supreme Court, Reuters’ reports, citing a Senate Democratic aide

 

Sector News Breakdown

Consumer

·     Tesla (TSLA) Q3 non-GAAP EPS 76c vs. est. 56c; on revs $8.77B vs. est. $8.36B, qtrly auto gross margin 27.7% vs. 22.8% year ago; operating income improved in Q3 to a record level of $809M, resulting in a 9.2% operating margin; says goal of producing and delivering 500K vehicles this year has become more difficult but remains the target; should have sufficient liquidity to fund product roadmap, long-term expansion plans and other expenses

·     Chipotle Mexican Grill (CMG) Q3 EPS $3.76 on sales $1.6B vs. est. $3.46 and $1.59B; 3Q comparable sales +8.3% vs. estimate +7.5%; Q3 restaurant level operating margin 19.5% vs. 20.8% YoY; qtrly digital sales grew 202.5% and accounted for 48.8% of sales for quarter; not providing year guidance

·     Las Vegas Sands (LVS) Q3 adjusted EPS loss (67c) on revs $586M vs. est. loss (73c)/$601M; on a Gaap basis, total net revenues in qtr for sands china ltd decreased 92.1% to $167M

·     Whirlpool (WHR) 3Q ongoing EPS $6.91 vs. est. $4.20 on net sales $5.29B vs. est. $4.76B; sees ongoing FY EPS $17.50-18.00 vs. est. $13.71, sees FY net sales -5-7% vs. est. -10.6%; Q3 ongoing Ebit $635 million, +74% YoY; organic sales increased 7.0% in Q3.

·     Meritage Homes (MTH) Q3 EPS $2.84 vs. est. $2.42; sees FY home sales gross margin 21% to 21.5%, saw about 21%; sees FY home closing rev. $4.2b to $4.4b, saw $4B to $4.3b; Q3 home orders 3,851 vs. 2,258 units

·     Tractor Supply (TSCO) Q3 EPS $1.62 on revs $2.61B vs. est. $1.33 and $2.39B; Q3 comp sales rose 26.8%; sees Q4 EPS $1.37-$1.47 vs. est. $1.34 and sees Q4 revenue $2.6B-$2.7B vs. est. $2.44B and guides Q4 comp sales up 15%-20%

·     Kandi Technologies (KNDI) files $300M mixed securities shelf

·     Peloton (PTON) downgraded to Neutral from Buy at Goldman Sachs

 

Energy

·     Kinder Morgan (KMI) Q3 EPS 20c on revs $2.92B vs. est. 21c and $2.94B; sees FY adj Ebitda below plan `slightly’ over 8% and sees FY DCF below plan by `slightly’ over 10%

·     Piedmont Lithium (PLL) says it will price its public offering of 2M American Depositary Shares at $25 each; the offering was expected to total 1.5M shares.

·     TechnipFMC (FTI) Q3 adj EPS 16c on revs $3.335B vs. est. 22c and $3.29B; All three segments delivered sequential improvement in adjusted EBITDA margin, with total Company adjusted EBITDA of $321 million and a margin of 9.6%; sees FY20 Subsea revenue $5.3B-$5.6B and Technip Energies revenue $6.3B-$6.8B

·     Exxon Mobil (XOM) is “very close” to completing its workforce appraisals in the U.S. and Canada and expects to lay off employees in the coming weeks, Reuters reports, citing an internal email from CEO Darren Woods.

·     Patterson-UTI (PTEN) Q3 EPS loss (60c) on revs $207.14M vs. est. loss (62c) and $196.1M

·     Valero (VLO) Q3 adj EPS loss ($1.16) on revs $15.81B below ests of ($1.37) loss and $16.55B in revs

·     Helix Energy (HLX) Q3 EPS 16c on revs $193.5M vs. est. 0c and $179.65M

·     Sun Life (SLF) will acquire a 51% interest in Crescent for up to $338M, consisting of an upfront payment of $276M and a future payment of up to $62M based on the achievement of certain milestones.

 

Financials

·     Banner Corp. (BANR) reports Q3 EPS $1.03 on revs $149.2M vs. est. 82c and $124.62M

·     Discover (DFS) Q3 EPS $2.45 on revs $2.71B vs. est. $1.53 and $2.67B; 3Q loans $88.7 billion, -4% YoY; payment service volumes up 11% to $69.7B; provision for credit losses $750M, down $49M from year ago

·     Cohen & Steers (CNS) Q3 adjusted EPS 67c on revs $111.16M vs. est. 60c/$106.07M; Q3 assets under mgmt. of $70.5B and average AUM of $69.8B

·     Getty Realty (GTY) reported FFO per share for Q3 of 48c vs. 46c YoY; 3q FFO per share as adjusted 47c vs. 43c YoY; given the uncertainty related to the covid-19 pandemic, the related shelter-in-place restrictions, and the length and depth of economic impact to the us economy and businesses, the company has previously withdrawn its 2020 earnings guidance

·     Sallie Mae (SLM) Q3 core EPS 47c vs. est. 8c and initiated restructuring program focused on improving operational efficiencies; recorded a $24 mln restructuring charge in qtr; $1.9 bln in private education loans originated during qtr

 

Healthcare

·     Align Technology (ALGN) shares rise 20%; Q3 EPS $2.25 on revs $734.14M vs. est. 54c and $514.4M; 3q Invisalign case shipments 496,065 vs. 221,900 QoQ and 385.4 million YoY; Q3 clear aligner gross margin of 74.7%, up 10.2 points sequentially and up 1.2 points year-over-year

·     Edwards Lifesciences (EW) 3Q adj EPS $0.51 vs. est. $0.44 on sales $1.1B vs. est. $1.08B; guides 4Q underlying sales growth similar to 3Q, sees FY adj EPS $1.85-1.95 (was $1.75-1.85) vs. est. $1.84; sees 2021 TAVR sales return to double-digit growth

·     Icon Plc (ICLR) 3Q adj EPS $1.72 vs. est. $1.53 on revs $701.7Mm vs. est. $660.8Mm; guides FY EPS $6.35-6.50 vs. est. $6.27, sees FY revs $2.75-2.81B vs. est. $2.72B

·     Accolade (ACCD) 5M share Secondary priced at $38.50

·     Aptinyx (APTX) 14M share Secondary priced at $3.00

·     Danaher (DHR) 3Q adj EPS $1.72 vs. est. $1.36 on revs $5.9B vs. est. $5.51B; guides 4Q adj revs incl Cytiva will be +low-double-digit range

·     Replimune Group (REPL) 4.688M share Secondary priced at $40.00

 

Industrials & Materials

·     CSX Corp (CSX) 3Q EPS $0.96 vs est. $0.93 on revs $2.65B vs. est. $2.68B, qtrly operating ratio 56.9%; also authorizes $5B share buyback

·     Dow Inc. (DOW) Q3 EPS 50c on revenue $9.7B vs. est. 33c and $9.52B; Packaging and specialty plastics sales declined 9.8% to $4.57 billion but beat expectations of $4.41 billion, industrial intermediates and infrastructure sales fell 9.1% to $3.06 billion but topped forecasts of $2.73 billion and performance materials and coatings sales slid 11.0% to $2.00 billion but was above expectations of $1.93 billion

·     Axalta Coating (AXTA) Q3 adj EPS 59c on revs $1.03B vs. est. 33c/$954.27M; Q3 revenues decreased 7.2% YoY, including a 0.1% foreign currency benefit, driven by 6.0% lower volumes and 1.4% lower average price and product mix; sees FY20 adjusted EPS $1.15-$1.20 vs. est. 87c

·     Graco (GGG) Q3 EPS 66c on revs $439.3M vs. est. 42c and $385.41M

·     Landstar System (LSTR) Q3 EPS $1.61 on revs $1.09B vs. est. $1.37 and $1.02B; closed fiscal July with truckload volumes and revenue per load on loads hauled via truck down only 1% and 2%, respectively, compared to fiscal July 2019; in the first week of the Company’s fiscal August period, the number of loads and revenue per load on loads hauled via truck both turned positive on a weekly basis compared to the corresponding week of 2019; sees Q4 EPS $1.61 -$1.71 above consensus $1.45 and Q4 revenue $1.15B- $1.2B vs. est. $1.06B

·     Trinity Industries (TRN) 3Q adj EPS $0.17 vs. est. $0.07 on revs $459Mm vs. est. $486.3Mm; announces new $250Mm share repurchase

 

Technology, Media & Telecom

·     Xilinx (XLNX) Q2 EPS 82c on revs $766.5M vs. est. 74c and $755.13; sees 3q adj gross margin 68.5% -71.5% and sees Q3 revs $750M to $800M, est. $774.4m; 2Q North American revenue -4% vs. +12% y/y, 2Q Asia Pac rev growth -13% vs. +29.0% y/y, 2Q Europe sales +10% vs. -19% y/y

·     Lam Research (LRCX) Q3 EPS $5.67 on revs $3.18B vs. est. $5.19 and $3.11B; Cash and cash equivalents, short-term investments, and restricted cash and investments balances decreased slightly to $6.9B; sees Q2 EPS $5.60, +/- 40c vs. est. $5.16 and revs $3.3B, +/- $200M vs. est. $3.08B

·     AT&T (T) 3Q adj EPS $0.76 vs. est. $0.76, wireless postpaid more than 1Mm net adds incl 645K phones, 245K prepaid net adds incl 131K prepaid phone net adds; qtrly postpaid phone churn 0.69%; HBO Max activations more than 2x 2Q, HBO and HBO Max domestic subs top 38Mm, 57Mm worldwide

·     Check Point (CHKP) Q3 EPS $1.64 on revs $509M vs. est. $1.53 and $504.06M; said revenues grew in all key areas with security subs growing by 10 % and EPS grew by 14 % year over year

·     Facebook (FB) is finally launching its dating service in 32 European countries after an earlier Valentine’s Day debut was put on ice due to privacy concerns.

·     Crown Castle (CCI) 3Q AFFO/shr $1.56 vs. est. $1.55; guides FY20 AFFO/shr $6.07-$6.11 vs. est. $6.05, sees FY21 AFFO/shr $6.64-6.74 vs. est. $6.74

·     Viavi (VIAV) raises Q1 non-GAAP EPS view to 18c-19c from 14c-16c (est. 15c) and raises Q1 revenue view to $282M-$284M from $258M-$282M (est. $271.35M); says its CFO resigns

·     Brightcove (BCOV) 3Q adj EPS $0.11 vs. est. ($0.02) on revs $49.1Mm vs. est. $46.3Mm; guides 4Q adj EPS $0.07-0.08 vs. est. ($0.01), sees 4Q revs $49.5-50.5Mm vs. est. $46Mm; guides FY adj EPS $0.29-0.30 vs. est. $0.09, sees FY revs $193.2-194.2Mm vs. est. $186.9Mm

·     Netgear (NTGR) Q3 adj EPS $1.13 on revs $378.1M vs. est. 66c and $313.51M