Early Look

Monday, December 7, 2020

Futures	Up/Down	%	Last
DJ Industrials	-115.00	0.38%	30,082
S&P 500	-14.50	0.38%	3,684
Nasdaq	-4.50	0.03%	12,522

 

 

Global stock markets are pausing after a massive rally (closing at the highs last week), as major averages in the U.S. closed at or near record highs following upbeat vaccine news recently with several companies nearing approval and/or rollout of their treatments (PFE, BNTX, MRNA, LLY) as well as expectations of a trimmed down coronavirus relief packet to help individual and small businesses. Weaker non-farm payrolls data on Friday, which showed the slowest growth of jobs (245,000) in five months built on those expectations for a coronavirus aid package. Post-Brexit trade talks hung in the balance on Monday as Britain and the European Union made a last-ditch attempt to bridge significant differences and reach a deal that would avoid a disorderly exit in just 24 days. In Asian markets, The Nikkei Index fell -203 points to 26,547, the Shanghai Index dropped -28 points to 3,416and the Hang Seng Index fell -329 points to 26,506. In Europe, the German DAX is lower by about -50 points to 13,250, while the FTSE 100 is up about 20 points to 6,570. The recent stimulus expectations coupled with vaccine news has been the catalyst for markets for since the election overshadowing any concerns about the impact of the rising coronavirus cases and its impact to new restriction being set in place.

Market Closing Prices Yesterday

·     The S&P 500 Index jumped 32.40 points, or 0.88%, to 3,699.12

·     The Dow Jones Industrial Average rose 248.76 points, or 0.83%, to 30,218.26

·     The Nasdaq Composite gained 87.03 points, or 0.70%, to 12,464.23

·     The Russell 2000 Index advanced 43.75 points, or 2.37% to 1,892.45

 

Economic Calendar for Today

·     3:00 PM EST                      Consumer Credit for October

 

Earnings Calendar:

·     Earnings Before the Open: ALOT, DLHC, IESC

·     Earnings After the Close: CASY, COUP, HQY, KLXE, ODC, SFIX, SGUM SMAR, SUMO, TOL

 

Other Key Events:

·     American Society of Hematology virtual meeting, 12/5-12/8

·     Raymond James Technology Investors Conference (virtual) 12/7-12/9

·     UBS Global TMT Conference (virtual), 12/7-12/9

 

 

Macro	Up/Down	Last
WTI Crude	-0.38	45.88
Brent	-0.36	48.89
Gold	-8.40	1,830.45
EUR/USD	-0.001	1.2111
JPY/USD	0.06	104.23
10-Year Note	-0.025	0.943%

 

 

World News

·     U.S. Attorney General William Barr is weighing whether to step down before President Donald Trump’s term ends next month, the New York Times reported, citing three people familiar with his thinking – Bloomberg

·     The global tally for confirmed cases of the coronavirus rose above 67M on Monday, according to data aggregated by Johns Hopkins University, while the death toll rose above 1.5 million. The U.S. has the highest case tally in the world at 14.8 million and the highest death toll at 282,324, or more than a fifth of the global total. The U.S. counted 173,459 new cases on Sunday

·     China’s November exports were up 21% from a year earlier, according to the General Administration of Customs, while imports were 4.5% higher, resulting in a $75.42B trade surplus that topped records set in May.

·     German Oct Industrial Production 3.2% m/m vs 0.7% cons; -3.0% y/y vs -4.8% cons; German IFO: German prod expectations have fallen from 16.3 in Oct to 5.5 in Nov with carmakers notably dropping from +39 in Oct to -1 in Nov

 

Sector News Breakdown

Consumer

·     Airbnb (ABNB) mentioned positively in Barron’s saying it will be valued at about $30 billion if its shares are priced at the top of the $44 to $50 range which isn’t cheap based on earnings and sales, but the valuation looks reasonable given the company’s market position, brand value

·     DoorDash (DASH) is a Covid winner according to Barron’s, but a return to normalcy could make its IPO tricky. The arrival of vaccines next year means people will order delivery less. Consumers are price-sensitive and can easily switch between platforms. At the top end of the $90 to $95 price range, DoorDash will be valued at more than $35 billion, higher than Lyft (LYFT).

·     Ford (F) has told its dealers that it will delay the launch of its upcoming Bronco SUV from spring to summer of next year due to COVID-related problems in its supply chain, CNBC reported

·     GOL Linhas Aéreas Inteligentes S.A. (GOL) has increased its capacity to an average of 369 flights per day, a 2% increase from an average of 363 daily flights in October, reaching peaks of 450 daily flights with 94 aircraft operating in its network equivalent to 51% of the same period last year.

 

Energy, Industrials & Materials

·     Helmerich & Payne (HP) downgraded to Underperform from Neutral at Bank America

·     JinkoSolar (JKS) Q3 EPS $1.06 vs. est. 85c and revs $1.29B vs. est. $1.3B; quarterly shipments were 5,117MW, up 53.8% year over year; sees Q4 revenue $1.31B-$1.43B vs. est. $1.52B and sees Q4 total solar module shipments 5.5 GW to 6 GW; sees Q4 gross margin 13%-15%

·     Southwest Airlines (LUV) upgraded to Outperform from Market Perform by Bernstein with $59 tgt

·     In Aerospace, Boeing (BA) upgraded to Buy at UBS and raise tgt to $300 and also upgraded Spirit AeroSystems (SPR) to Buy from Neutral

·     Linde (LIN) has signed a memorandum of understanding (MoU) with Snam, a world leading energy infrastructure company in Europe having ~42,000 kilometers of pipeline across the continent to develop clean hydrogen projects and related infrastructure in Europe

 

Financials

·     BlackRock (BLK), the world’s biggest asset manager, seems primed for long-term gains even after a 40% jump so far this year, according to Barron’s. It has plenty earnings drivers, including its iShares ETF franchise, increased fees from actively managed funds, and a growing risk-management platform Aladdin

·     Goldman Sachs Group Inc. (GS) is weighing plans for a new Florida hub to house one of its key divisions, in another potential blow to New York’s stature as the de facto home of the U.S. financial industry, Bloomberg reported. Executives have been scouting office locations in South Florida, speaking with local officials and exploring tax advantages as they consider creating a base there for its asset management arm

 

Healthcare

·     AbbVie (ABBV) announces new, updated results from the Phase 3 MURANO and CLL14 clinical trials evaluating VENCLEXTA/VENCLYXTO (venetoclax) fixed duration treatment combinations in first-line or previously treated chronic lymphocytic leukemia (CLL) patients

·     Constellation Pharmaceuticals (CNST) CEO said they are pleased both with the response rates and consistency of the results they are seeing in MANIFEST. The Phase 2 MANIFEST trial showed 42 of 63 evaluable patients (67%) achieved a ≥35% reduction in spleen volume (SVR35) at 24 weeks (the primary endpoint for Arm 3). 34 of 60 evaluable patients (57%) achieved a ≥50% reduction in Total Symptom Scores (TSS50) at 24 weeks

·     CRISPR Therapeutics (CRSP) and Vertex Pharmaceuticals (VRTX) report data at ASH this weekend that 10 patients treated with investigational CRISPR/Cas9-based gene-editing therapy, CTX001, show a consistent and sustained response to treatment.

·     Hookipa Pharma (HOOK) announced positive interim Phase 1 data on HB-201, its replicating monotherapy for the treatment of HPV16+ cancers

·     Pfizer (PFE) India has applied to India’s drug regulator for emergency-use authorization for its COVID-19 vaccine, after the company’s parent received clearance for the treatment from Britain and Bahrain – Bloomberg

·     Syros Pharmaceuticals (SYRS) acquires from Orsenix all of its assets related to SY-2101, formerly known as ORH-2014, an oral form of arsenic trioxide that’s a candidate for treating acute promyelocytic leukemia. Syros has made an upfront cash payment of $12M

 

Technology, Media & Telecom

·     Kodak (KODK) shares rise 60% after a federal agency probe revealed no wrongdoing regarding the stalled U.S. government loan to the photography giant turned pharmaceutical manufacturer. The inspector general for the U.S. International Development Finance, which was administering the loan, told Democratic lawmakers he found no evidence that agency officials had any conflicts of interest in the plans

·     Salesforce (CRM) is paying a high price for Slack (WORK), and the deal might not work, Barron’s reported. Slack doesn’t yet have sustained profitability, and it faces intense competition from Microsoft (MSFT), which effectively offers rival software Teams for free through a bundle

·     MicroStrategy (MSTR) disclosed the purchase of another 2,574 bitcoins at an average price of $19,427 each. That brings total company holdings up to 40,824 coins purchased for an aggregate price of $475M – Seeking Alpha

·     JD.com (JD), China’s second-biggest online retailer, will become the country’s first virtual mall to use digital yuan, the cryptocurrency backed by the central bank, according to Bloomberg

·     Perion Network (PERI) raises FY20 revenue view to $310M-$315M from $290M-$300M (est. $295.95M) and raises FY20 adjusted EBITDA view to $30M-$31M from $25M-$27M