Mid-Morning Look: September 04, 2020

Mid-Morning Look

Friday, September 04, 2020

Index

Up/Down

%

Last

 

DJ Industrials

-489.61

1.73%

27,803

S&P 500

-89.19

2.58%

3,365

Nasdaq

-485.47

4.24%

10,972

Russell 2000

-16.29

1.05%

1,528

 

 

Tech wreck continues into a second day, as the Nasdaq Composite falls another 4% after sliding nearly 5% Thursday as profit taking hits stocks! The S&P and Nasdaq Composite pulling back sharply for a second day off record highs Wednesday, both on track to snap their 5-week winning streaks as investors continue to lighten positions, take profits after a record run since late March. A strong jobs report (reported inline job gains along with a drop in unemployment and a rise in wages) lifted futures early, but markets quickly succumbed to selling pressure, led again by a decline in technology stocks (2020 winners). Nonfarm payrolls increased by 1.37 million jobs last month after advancing 1.73 million in July, while unemployment rate fell to 8.4% from 10.2% in July, steeper than the 9.8% fall that economists polled by Reuters forecast. At the same point, markets are still hopeful the White House and Congress can restart stalled negotiations over the next coronavirus relief package to lift the economy out of the worst recession since the Great Depression. The S&P 500 and Nasdaq suffered their worst day in nearly three months on Thursday as investors booked gains – carrying over again this morning. The euro falls against the dollar after a better-than-expected U.S. non-farm payrolls report for August fueled optimism over the economic recovery.

 

Economic Data

·     Nonfarm payrolls for August rose 1.371M, mostly in-line with ests but down from the 1.734M reading in July; August private sector jobs rose 1.027M vs. est. 1.2M (July was 1.481M) and factory jobs rose 29K missing the 50K estimate (July upped to 41K from 26K); the unemployment rate at 8.4% vs. est. 9.8% and compared to July 10.2%; hourly earnings rose 0.4% vs. est. flat; the labor force participation rate 61.7% in August vs. 61.4% in July

 

 

Macro

Up/Down

Last

 

WTI Crude

-1.30

40.07

Brent

-1.16

42.91

Gold

-7.00

1,924.00

EUR/USD

-0.0052

1.18

JPY/USD

0.19

106.38

10-Year Note

0.031

0.67%

 

 

Stock GAINERS

·     ANPC +7%; following positive results from a successfully completed a multi-year lung cancer prognosis and recurrence study in collaboration with a major hospital in China.

·     AVGO +3%; reported results above Consensus on better guidance driven by healthy demand from cloud and telecom customers, which more than offset weakness in the wireless market

·     COO +7%; after mixed Q2 results, but Q3 sales guidance that came in above consensus views ($665M-$693M vs. est. $664m)

·     CVAC +3%; after being notified by the German Federal Ministry of Education and Research that the Company is expected receive up to €252M to support the development of its COVID-19 vaccine candidate

·     DOMO +16%; after forecasts smaller-than-expected loss for Q3 and FY21; revenue estimates higher than Street expectations for same period

·     DPW +21%; after the company’s power electronics business expects initial orders for EV charger products starting Q4

·     IMAB +12%; after announced a collaboration agreement with ABBV to develop and commercialize I-Mab’s lemzoparlimab for the treatment of multiple cancers

·     KCAC +19%; adds to huge gain in previous session (rose over 87% after Volkswagen backed EV battery startup QuantumScape said it plans to go public in $3.3B merger with the SPAC

 

Stock LAGGARDS

·     AAPL -7%; as tech wreck continues, broad selling pressure for the group

·     DOCU -13%; falls despite a beat and raise quarter as 2020 winners continue to be sold off in the tech space amid rally in shares and high valuations

·     LULU -7%; after being downgraded to neutral from buy at Citigroup citing its 63% rally this year as thinks highly of the brand and growth prospects, but the stock seems to be pricing in perfection

·     OSTK -15%; was initiated neutral and $78 tgt at Bank America with the stock up 13x YTD, would require “several quarters” of COVID-less performance to gauge the company’s performance

·     VUZI -19% after struck a deal for a $15.5 million direct offering at $4.23

·     W -5%; downgraded to shares down around 5% after Bofa downgrade earlier

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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.