Morning Preview: September 30, 2020

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Wednesday, September 30, 2020





DJ Industrials




S&P 500










U.S. stock futures decline (but off their worst levels) amid uncertainty as the first Presidential debate between Trump and Democratic candidate Joe Biden appeared a total fail as the ninety-minute supposed debate turned into a free-for-all of insults, yelling over the top of one another, failure to address the issues and constant bickering. Chaos could be the word best described for last night’s debate which likely didn’t change the minds of any undecided voters. Futures losses may reflect fears that a Biden win will mean higher corporate taxes (saying he would look to raise it to 28% from 21%), which could be a negative for the stock market. Attention for investors now turns to stimulus hopes for last-ditch efforts by U.S. lawmakers to get a coronavirus fiscal stimulus package passed. Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi are expected to talk again today despite skepticism on Capitol Hill that a deal is possible at this stage.


Stocks slipped on Tuesday, as the S&P 500 index snaps its 3-day win streak as COVID spike dents sentiment, as it closed below its 50-day SMA of 3,355, but above the 3,330 level that had held as the September low until last week. Cyclicals, which led Monday’s advance were the top decliners on Tuesday with energy tumbling as crude tumbled 4%, while financials and Industrials were weak and airlines also slumped. A busy day and week are expected new issues with direct listings for PLTR, ASAN due today and IPO pricings for BQ, YALA. In Asian markets, The Nikkei Index fell -353 points (1.5%) to 23,185, the Shanghai Index dipped -6 points to 3,218 and the Hang Seng Index rose 183 points to 23,459. In Europe, the German DAX is down around -75 points to 12,750, while the FTSE 100 is lower by about -15 points to 5,880. China’s economic recovery following its coronavirus outbreak earlier in the year picked up the pace. The official manufacturing purchasing managers index rose to 51.5 in September, beating forecasts and August’s reading of 51.0, The service sector also rebounded with a strong September.

Market Closing Prices Yesterday

·     The S&P 500 Index plunged -81.72 points, or 0.81%, to 3,830.75

·     The Dow Jones Industrial Average fell -622.01 points, or 0.55%, to 26,723.69

·     The Nasdaq Composite dropped -284.60 points, or 0.20%, to 10,904.95

·     The Russell 2000 Index declined -50.18 points, or 0.83% to 1,560.48


Economic Calendar for Today

·     7:00 AM EST      MBA Mortgage Applications Data

·     8:15 AM EST      ADP Employment Index for September…est. 648K

·     8:30 AM EST      Gross Domestic Product (GDP) Q2 Final…est. (-31.7%)

·     8:30 AM EST      GDP Price Deflator for Q2-F…est. (-2.0%)

·     8:30 AM EST      Personal Consumption for Q2-F

·     8:30 AM EST      Core PCE Prices for AQ2…est. (-1.0%)

·     9:45 AM EST      Chicago PMI for September…est. 52.0

·     10:00 AM EST    Pending Home Sales MoM for August…est. 3.4%

·     10:30 AM EST    Weekly DOE Inventory Data


Other Key Events:

·     Paris Auto Conference, 9/29-9/30

·     Wolfe Research Utilities and Energy Virtual Conference, 9/30-10/1

·     CNBC hosts its annual Delivering Alpha Conference






WTI Crude















10-Year Note





Sector News Breakdown


·     Lowe’s (LOW) said to restart its stock repurchase program

·     General Motors (GM) and Nikola (NKLA) are not expected to close a $2B deal before Wednesday after allegations of fraud and sexual abuse surfaced against Nikola’s founder and former executive chairman – CNBC reported last night

·     HD Supply (HDS) said its board authorized co to enter into a share repurchase program of up to $500M

·     Lithia Motors (LAD) announces offering of $700M of Class A common stock; preliminary Q3 EPS $6.10-$6.40 vs. est. $4.23 and prelim Q3 revenue up mid to high single digit range from $3.3B in Q3 of 2019 vs. est. $3.37B; expected continued sequential improvements in Q3 same store sales in all business lines compared to Q2 of 2020


Energy, Industrials and Materials

·     The American Petroleum Institute (API) reported that U.S. crude supplies fell by 831,000 barrels for the week ended Sept. 25, showed gasoline stockpiles climbed by 1.6 million barrels, while distillate inventories fell by 3.4 million barrels. Crude stocks at the Cushing, Okla., storage hub, meanwhile, added 1.6 million barrels for the week

·     American Airlines (AAL) reached an agreement with Jamaica to launch initial Covid testing program at Miami hub, has also started working with Bahamas and will soon offer Covid testing for travel from Dallas to Hawaii

·     NextEra Energy (NEE) recently made a takeover approach to Duke Energy (DUK), testing the waters for what would be a $60B+ combination, but reports indicate DUK rebuffed the offer

·     PBF Energy (PBF) downgraded to Equal Weight from Overweight at Wells Fargo

·     Sherwin-Williams (SHW) raises FY20 EPS to $20.96-$21.46 from $19.21-$20.71 and sees FY20 consolidated net sales to be flat to up slightly compared to last year vs. prior guidance for FY20 consolidated net sales to be approximately flat year-over-year



·     Ameriprise Financial (AMP) announces added $2.5b share buyback

·     Brookfield (BAM) files $3.5B mixed securities shelf



·     Biogen (BIIB) said that the FDA will convene a virtual advisory committee meeting of the Peripheral and Central Nervous System Drugs Advisory Committee to review data supporting the Biologics License Application – BLA – for aducanumab, an investigational product for Alzheimer’s disease. The advisory committee meeting is scheduled for November 6, 2020 and will be available for live streaming

·     Regeneron (REGN) said its trial antiviral drug cocktail reduced the coronavirus load and the time needed to ease symptoms in non-hospitalized patients with COVID-19. The cocktail, named REGN-COV2, also showed “positive trends in reducing medical visits,” the company said. The drug cocktail is under an ongoing, randomized trial that measures the effect of adding it to usual COVID-19 standard-of-care compared with adding a placebo.

·     CureVac (CVAC) said it started a mid-stage study testing its experimental coronavirus vaccine; doses first patient; said plans to start a decisive global trial with ~30,000 volunteers in Q4 2020

·     Moderna’s (MRNA) Phase 1 trial of its mRNA vaccine to prevent COVID-19 has shown to be “well-tolerated and generates a strong immune response in older adults. In its expansion to include older adults, the trial enrolled 40 healthy volunteers: 20 adults ages 56 to 70 years, and 20 adults ages 71 years and older.

·     Pulmonx (LUNG) upsized its planned IPO and raised the proposed price range, saying in a regulatory filing it will now offer 10 million shares priced at $17 to $18 each (has previously said it would offer 6.7 million shares priced at $14 to $16 each)

·     Arcutis Biotherapeutics (ARQT) files to sell 4M shares of common stock

·     CTI Biopharma (CTIC) to submit a new drug application for the accelerated approval of pacritinib for the treatment of myelofibrosis patients with severe thrombocytopenia; rolling NDA expected to commence in q4 of 2020

·     Owens & Minor (OMI) announces $150M common stock offering


Technology, Media & Telecom

·     Micron Technologies (MU) 4Q adj EPS $1.08 vs. est. $0.99 on revs $6.06B vs. est. $5.9B, had strong DRAM sales in cloud, pc and gaming consoles and extraordinary increase in QLC NAND shipments in qtr.; guides 1Q adj EPS $0.47 +/- $0.07 vs. est. $0.69, sees 1Q revs $5.2B +/- $200Mm vs. est. $5.3B

·     Walt Disney Co. (DIS) announced 28,000 layoffs in its Parks, Experiences and Products segment on Tuesday, victims of theme-park closures caused by the coronavirus pandemic that an executive says has been “exacerbated” by California’s refusal to allow Disneyland to reopen

·     Blackbaud (BLKB) says forensic investigation of security incident found cybercriminal may have accessed some unencrypted fields intended for bank account information, social security numbers, usernames, passwords – filing

·     Boqii Holding Ltd. (BQ), a Chinese pet products online platform, priced its initial public offering at $10 per American Depositary Share on Wednesday, selling 7 million ADS to raise $70 million

·     Shopify (SHOP) upgraded to Outperform from Neutral at Wedbush

·     Comtel (CMTL) 4Q EPS $0.04 vs. est. ($0.12) on sales $149.7Mm vs. est. $142.4Mm; guides FY21 net sales and adj EBITDA slightly higher than FY20 levels; also announced a new $100M stock repurchase program

·     Progress Software (PRGS) Q3 adj EPS 78c on revs $110.9M vs. est. 77c and $109M; Q3 software license revenue fell -10% YoY to $27.5M, Q3 product development expense $20.7M and adjusted operating margin 42% vs. 40% YoY; sees 4Q adj EPS $0.76-0.79 vs. est. $0.80

·     SYNNEX (SNX) Q3 adjusted EPS $3.33 on revs $6.47B vs. est. $2.26/$5.7B; guides Q4 EPS $3.68-$3.93 n revenue $6.45B-$6.65B vs. est. $3.36 and $6.04B; 3Q adjusted operating margin 4.02% vs. 4.36% Yoy


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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