Morning Preview: September 17, 2020

Early Look

Thursday, September 17, 2020

Futures

Up/Down

%

Last

DJ Industrials

-259.00

0.93%

27,678

S&P 500

-36.50

1.09%

3,342

Nasdaq

-126.50

1.12%

11,128

 

 

U.S. futures are pulling back after mixed results on Wednesday, tracking European and Asian markets lower as the U.S. Fed failed to boost market sentiment following their policy meeting results late yesterday. While the FOMC said interest rates could stay anchored to the zero bound through 2023, Fed Chairman Powell kept asset purchases at current levels and sounded some alarm bells noting that additional fiscal support is likely to be needed signaling the Fed can’t rescue the highly uncertain economy alone and Congress needs to act quickly on another coronavirus relief package. In Asian markets, The Nikkei Index dropped -156 points to 23,319, the Shanghai Index slid -13 points to 3,270 and the Hang Seng Index declines -384 points to 24,340. In Europe, the German DAX is lower by about -70 points to 13,185, while the FTSE 100 falls roughly -50 points to 6,030. Today also marks a busy day of economic data with weekly jobless claims, housing starts and the Philly Fed survey due. Gold prices drop about 1% to move below $1,950 after the U.S. Federal Reserve disappointed expectations for further stimulus to spur inflation and support the economy, battered by the coronavirus crisis (gold miners are weak AEM, AUY, GOLD, NEM), while oil prices are flat. The Bank of England also is deciding on interest rates, and isn’t expected to take dramatic action.

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -15.71 points, or 0.46%, to 3,385.49

·     The Dow Jones Industrial Average rose 36.78 points, or 0.13%, to 28,032.38

·     The Nasdaq Composite dropped -139.85 points, or 1.25%, to 11,050.47

·     The Russell 2000 Index advanced 14.17 points, or 0.92% to 1,552.33

 

Economic Calendar for Today

·     8:30 AM EST      Weekly Jobless Claims…est. 850K

·     8:30 AM EST      Continuing Claims…est. 13.0M

·     8:30 AM EST      Housing Starts for Aug MoM…est. 1.478M

·     8:30 AM EST      Building Permits MoM for Aug…est. 1.52M

·     8:30 AM EST      Philly Fed Survey for September…est. 15.0

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

 

Earnings Calendar:

·     Earnings Before the Open: APOG, CMD

·     Earnings After the Close: AFIB, ISR

 

Other Key Events:

·     Credit Suisse Annual Basic Materials Conference,9/15-9/17

·     Goldman Sachs Communacopia Virtual Conference, 9/15-9/17

·     Morgan Stanley 18th Annual Global Healthcare Virtual Conference, 9/14-9/18

·     Roth Capital Solar & Storage Symposium, 9/14-9/17

·     ShopTalk 2020 (rescheduled from March 2020), 9/14-9/17

·     Wells Fargo Virtual Consumer Conference,9/16-9/17

 

 

Macro

Up/Down

Last

WTI Crude

0.00

40.16

Brent

0.00

42.22

Gold

-17.50

1,941.75

EUR/USD

-0.0022

1.1794

JPY/USD

-0.19

104.76

10-Year Note

-0.02

0.68%

 

 

Sector News Breakdown

Consumer

·     Apogee Enterprises (APOG) Q2 adjusted EPS 73c on revs $319.5M vs. est. 30c/$314.73M; reports total backlog of $1.1B, above prior year level; not providing financial guidance due to impact of COVID-19

·     Carnival Corp (CCL) shares fall -4%; as its British cruise line, P&O Cruises, extends a cancellation in all sailings until early 2021 (watch shares of NCLH, RCL)

·     Chewy (CHWY) commences an underwritten public offering of ~$275M of shares of its Class A common stock

·     Herman Miller (MLHR) Q1 EPS $1.24 on revs down -6.6% YoY to $626.8M vs. est. 21c

 

Energy, Industrials & Materials

·     First Solar (FSLR) 8.65M share Spot Secondary priced at $69.00

·     Forterra (FRTA) 10M share Secondary priced at $13.50

·     General Dynamics (GD) double downgraded at Goldman Sachs to sell from buy as see incremental fundamental challenges in each of the main business segments

·     Hygo Energy Transition Ltd. (HYGO) set terms for its initial public offering on Thursday with plans to offer 23.1 million shares priced at $18 to $21 each

·     Gold prices drop about 1% to move below $1,950 after the U.S. Federal Reserve disappointed expectations for further stimulus to spur inflation and support the economy, battered by the coronavirus crisis (gold miners weak AEM, AUY, GOLD, NEM)

·     Duke Energy (DUK) reaches deal with Vote Solar, Sunrun (RUN), renewable energy advocates to modernize, expand rooftop solar in South Carolina- Deal will create innovative pricing and incentives for residential solar customers- Plan is latest step in implementing bipartisan, collaborative path for growth of renewables in the Carolinas

·     Raytheon Technologies Corp. (RTX) plans to eliminate more than 15,000 jobs this year at its corporate offices, jet engine-maker Pratt & Whitney and aviation and military equipment manufacturer Collins Aerospace

 

Financials

·     Fair Isaac Corp (FICO) will reduce its global workforce by 3.5%, affecting approximately 140 positions; expects actions to result in pre-tax charge of about $42 mln in q4 2020, substantially all of which to result in future cash expenditures

 

Healthcare

·     Bausch Health (BHC) upgraded to Neutral from Underperform at Bank America

·     Sorrento (SRNE) rises 30% after saying the FDA had allowed it to start early-stage trial of its antibody candidate, STI-1499, in hospitalized COVID-19 patients

·     American Well (AMWL) 41.222M share IPO priced at $18.00

·     89bio (ETNB) 3.3M share Secondary priced at $28.00

·     Dyne Therapeutics (DYNE) 12.252M share IPO priced at $19.00

·     Strongbridge Biopharma (SBBP) 11.1M share Spot Secondary priced at $2.25

·     Tiziana Life Sciences (TLSA) announced that it has signed an agreement for a collaborative clinical study investigating nasally administered Foralumab in COVID-19 patients in Brazil, either alone or in combination with orally administered dexamethasone

·     Eli Lilly (LLY) and Amgen (AMGN) announce a global antibody manufacturing collaboration to increase the supply capacity available for Lilly’s potential COVID-19 therapies.

·     Moderna (MRNA) signs a research collaboration and licensing agreement with Vertex Pharmaceuticals (VRTX) aimed at the discovery and development of lipid nanoparticles (LNPs) and mRNAs for the delivery of gene-editing therapies for cystic fibrosis (CF).

·     Mersana Therapeutics (MRSN) updates interim safety, tolerability and efficacy data for the ovarian cancer cohort of the ongoing expansion portion of the Phase 1 study evaluating XMT-1536

·     WebMD and Twitter (TWTR) announced a partnership, marking the first content collaboration between Twitter and a health care platform.

 

Technology, Media & Telecom

·     Kornit Digital (KRNT) 4.078M share Secondary priced at $56.50

·     PPD, Inc. (PPD) 38M share Secondary priced at $32.25

·     Sumo Logic (SUMO) 14.8M share IPO priced at $22.00

·     51job (JOBS) received a preliminary non-binding proposal from DCP Capital Partners, L.P. to acquire all of the outstanding common shares for $79.05 in cash; the bid price is 16% premium to $68.12 closing price on 16 September, Wednesday. https://bit.ly/3hBcVo1

·     Sony’s (SNE) PlayStation 5 will launch Nov. 12 with a price of $500 for the base system, and the discless PS5: Digital Edition will be $400 on the same launch date. That compares with recent news that Microsoft’s (MSFT) Xbox Series X would launch at $500 two days before, on Nov. 10, with its mini-sized Series S priced at $300

·     Fox News (FOXA) digital announced 25% increase for august in multiplatform unique visitors according to comScore; Fox Corp digital announced 14% increase for august in multiplatform views according to comScore

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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.