Mid-Morning Look: September 16, 2020

Mid-Morning Look

Wednesday, September 16, 2020






DJ Industrials




S&P 500








Russell 2000






Stocks markets start the day higher, looking to make it a third straight day of gains ahead of the FOMC policy meeting results later this afternoon (2:00 PM EST). The Fed is expected to indicate a rosier economic forecast but also likely to renew its recent pledge to keep interest rates low for as long as the economy needs to recover from its pandemic related downturn. The two-day meeting is the U.S. central bank’s first under a newly adopted framework that promises to shoot for inflation above 2% to make up for periods, such as now, where it is running below that target. U.S. Treasury yields are lower after retail sales data while oil prices jumping after recent pullback amid bullish inventory data. Dow Transports outperform behind better earnings results from FedEx while in the tech space all eyes on highly anticipated IPO of cloud computing co SNOW which priced last night at $120, well above prior range.


Economic Data

·     U.S. retail sales increased 0.6% in August, missing the 1.0% estimate and down from the +0.9% in July while Aug retail sales ex-autos rose +0.7% vs. est. 0.9% and July’s 1.3%; Aug retail sales ex-autos/gas/building materials/food services fell -0.1%

·     U.S. July business sales rose +3.2% vs. June +8.6%, business inventories rose +0.1%, in-line with estimates and better than the (-1.1%) in June

·     The NAHB housing market index rises to record high in September at 83 better than the consensus 78 and prior month reading and current single-family home sales 88 versus 84 in Aug







WTI Crude















10-Year Note





Sector Movers Today

·     Software movers; shares in the highly anticipated IPO SNOW, the cloud storage and computing company, were priced at $120, above an already-increased range valuing the company at $33.3B; ADBE with strong earnings results as net Digital Media ARR ($458M) came in well ahead of Street estimates ($344M) and elevated investor expectations of (>$400M) which also pushed revenue above consensus expectations ($3.23B vs. $3.16B); MSFT raises quarterly dividend 10% to 56c from 51c per share

·     Consumer Staples; USFD said that current case volume trends are showing continued improvement as expects Q3 adjusted EBITDA to more than double from the level of Q2 to $214.6M; KHC was upgraded from Sell to Neutral at Guggenheim following a strong investor day presentation Tuesday morning that highlighted the significant work being done to reinvigorate the brands, re-tool the prioritization and strategy, and ultimately improve the algorithm; Bernstein said highlights private label and branded sales growth and share trends in U.S. Nielsen tracked channels (including convenience stores) for the 13 U.S. packaged food names in coverage showed U.S. packaged food sales in measured channels increased by +7.9% in the 4 weeks ending September 5th, 2020 (excluding HAIN, SMPL and BYND), continuing to show a benefit from the shift to eating at home, though a slowdown from the previous 4 weeks

·     Retailers; TPR was upgraded to buy at Deutsche bank with $21 tgt saying while have long appreciated TPR’s robust international growth engine, Coach’s merchandising strength, they believe increased efforts to refocus its brands, reduce SKU count, will result in meaningful GPM expansion; OSTK active as Credit Suisse, Wedbush begin coverage with outperform as Wedbush sets a PT of $92, while CS introduces a $91 PT; KSS reducing corporate positions by ~15%, which is expected to save $65m annually



·     ADBE ; with strong earnings results as net Digital Media ARR ($458M) came in well ahead of Street estimates ($344M) and elevated investor expectations of (>$400M) which also pushed revenue above consensus expectations

·     AMCX +15%; said it plans to buy back up to $250M of its stock in “modified Dutch auction” tender offer, sets price range of $22.50-$26.50 while also announced Charles F. Dolan stepping down from Executive Chairman

·     AXGN +20%; says it now expects total Q3 revs at least $30M vs. est. $23M

·     CCL +2%; AIDA Cruises, a German cruise line and a wholly owned subsidiary of CCL, will expand its range of cruises this autumn to include new voyages to Italy

·     DKNG +8%; announced an exclusive, multi-year arrangement with the New York Giants while also rises on news the Big Ten will resume its college football season

·     FDX+7%; Q1 earnings easily beat as results were better than expected in all three of FDX’s business segments but Express was the largest driver of upside with revenue growth of 7.8% YoY

·     KODK +63%; shares jump as the company’s law firm said securities transactions made by CEO Continenza around the time co learned it could receive a $765 mln government loan did not violate internal policies

·     TPR +9%; upgraded to Buy from Hold at Deutsche Bank saying its increased efforts to refocus its brands, reduce SKU count, and accelerate its omnichannel strategy will result in “meaningful” gross margin expansion

·     ZG +5%; mentioned as a catalyst call buy at Deutsche Bank noting the $4.8 billion SPAC deal for real estate start-up Opendoor sets the stage for Zillow to get more value attribution for the Homes segment of its business



·     BA ; shares volatile after The House Committee on Transportation and Infrastructure released a 238-page filing, showing numerous designs, management and regulatory failures during the development phase of the 737 MAX had preceded the “preventable death” of 346 people in two crashes of the popular jetliner

·     BWA -4%; slides after the SEC announced a settlement with BorgWarner that fully resolved an investigation into the company’s historical accounting for asbestos-related claims; the agency had disclosed the investigation on July 31, 2018

·     FB -1%; shares slipped on reports the FTC is readying a potential antitrust lawsuit against Facebook that it could file by the end of 2020, in a case that would challenge the social media giant’s dominant position in the space https://on.wsj.com/3km9eUV

·     TSLA ; fell initially on reports GM is set to announce plans to put into production an interchangeable “family” of electric vehicle (EV) drive systems and motors, boosting manufacturing efficiencies as it transitions to a fully electric lineup (stocks has rebounded)

·     WYNN -4%; as Roth Capital downgraded shares of WYNN, LVS, MGM to hold from buy



·     Snowflake (SNOW) 28M share IPO priced at $120.00, deal priced above the revised range of $100.00-$110.00

·     ADT Inc. (ADT) 43.5M share Spot Secondary priced at $10.00

·     JFrog (FROG) 11.568M share IPO priced at $44.00

·     Metracrine (MTCR) 6.54M share IPO priced at $13.00

·     Stepstone Group (STEP) 17.5M share IPO priced at $18.00

·     Shopify (SHOP) 1.1M share Secondary priced at $900.00

·     Syneos Health (SYNH) 7M share Spot Secondary priced at $59.75


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.