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Briefing.Com PORTFOLIO STRATEGY | PUBLISHED BY RAYMOND JAMES & ASSOCIATES Michael Gibbs, Director of Equity Portfolio & Technical Strategy | (901) DECEMBER 9, 2020 | 9:02 AM EST 579-4346 | [email protected] Joey Madere, CFA | (901) 529-5331 | [email protected] Richard Sewell, CFA | (901) 524-4194 | [email protected] Mitch Clayton, CMT, Senior Technical Analyst | (901) 579-4812 | [email protected] Morning Brew - December 9, 2020 U.S. FUTURES (BRIEFING.COM) The S&P 500 futures trade five points, or 0.1%, above fair value following yesterday's record closes in the benchmark index, Nasdaq Composite, and Russell 2000. Stimulus developments have been of interest this morning. Briefly, Treasury Secretary Mnuchin offered a new $916 billion stimulus bill that includes $600 direct payments to Americans but no enhanced unemployment benefits. The bill is slightly larger than the $908 billion bipartisan bill that excludes direct payments but includes unemployment relief. Democratic Congressional leadership called it progress, according to Bloomberg, but reiterated the need for unemployment relief and said talking points should still be focused on the bipartisan plan. They also shot down Senate Majority Leader McConnell's suggestion of leaving out funding for state and local governments. When the market opens for trading, attention will divert back to equities for the DoorDash (DASH) IPO, which priced shares at $102.00 for a $38.7 billion valuation on a fully-diluted basis. On the data front, investors will receive the JOLTS - Job Openings report for October and Wholesale Inventories for October (Briefing.com consensus 0.9%) at 10:00 a.m. ET. The weekly MBA Mortgage Applications Index decreased 1.2% following a 0.6% decline in the prior week. Longer-dated Treasuries are backpedaling from recent gains, pushing yields higher. The 2-yr yield is up one basis point to 0.15%, and the 10-yr yield is up three basis points to 0.94%. The U.S. Dollar Index is down 0.1% to 90.88. WTI crude is up 0.1% to $46.65/bbl. U.S equity futures: ● S&P 500 Futures +4 @ 3706 . ● DJIA Futures +67 @ 30238 Sources: Briefing.com, FactSet, Raymond James Research, ● Nasdaq Futures -15 @ 12623 Raymond James Equity Portfolio & Technical Strategy Overseas: ● Europe: DAX +0.9%, FTSE +0.3%, CAC +0.2% INTERNATIONAL HEADQUARTERS: THE RAYMOND JAMES FINANCIAL CENTER | 880 CARILLON PARKWAY | ST. PETERSBURG FLORIDA 33716 PORTFOLIO STRATEGY ● Asia: Nikkei +1.3%, Hang Seng +0.8%, Shanghai -1.1% PAGE 2 OF 9 PORTFOLIO STRATEGY . Source: FactSet and RJ Equity Portfolio & Technical Strategy In U.S. Corporate news: ● Campbell Soup (CPB 48.90, +0.70): +1.5% after beating EPS estimates and raising its dividend by 6%. ● FireEye (FEYE 14.20, -1.32): -8.5% after its software tools were compromised by a foreign-government attack, according to TheWallStreet Journal. ● DoorDash (DASH, private): the company priced its IPO at $102.00 per share, which is above the revised expected range of $90-95, for a valuation of $38.7 billion on a fully-diluted basis. Today’s U.S. Economic Data (Briefing.com)) ● 07:00 ET: MBA Mortgage Applications Index for December 5 (Briefing.com Consensus NA; Prior -0.6%) ● 10:00 ET: JOLTS - Job Openings for October (Briefing.com Consensus NA; Prior 6.436 M) ● 10:00 ET: Wholesale Inventories for October (Briefing.com Consensus 0.9%; Prior 0.4%) ● 10:30 ET: EIA Crude Oil Inventories for December 5 (Briefing.com Consensus NA; Prior -0.679 M) OVERSEAS OVERNIGHT SUMMARY (BRIEFING.COM) Reviewing overnight developments: Equity indices in the Asia-Pacific region ended the midweek session on a mostly higher note. Nikkei reported that Japan's tax revenue for FY20/21 will likely be about JPY4 trln below original expectations while bond issuance is expected to reach a record of JPY100 trln. Australia's consumer confidence reached a ten year high in the December reading. KIA's unionized employees are on a partial strike until Friday. Chinese companies will reportedly be allowed to issue bonds to international investors that will offer settlement in multiple currencies. ● In economic data: PAGE 3 OF 9 PORTFOLIO STRATEGY ○ China's November CPI -0.6% m/m (expected -0.2%; last -0.3%); -0.5% yr/yr (expected 0.8%; last 0.5%). November PPI -1.5% yr/yr (expected -1.8%; last -2.1%) and November total social financing CNY2.13 trln (expected CNY2.075 trln; last CNY1.42 trln) ○ Japan's October Core Machinery Orders 17.1% m/m (expected 2.8%; last -4.4%); 2.8% yr/yr (expected -11.3%; last -11.5%). November Machine Tool Orders 8.0% yr/yr (last -6.0%) ○ Australia's October Building Permits 3.8% m/m (last 16.2%) and December Westpac Consumer Sentiment 4.1% m/m (last 2.5%) ○ New Zealand's Q3 Manufacturing Sales Volume 17.3% qtr/qtr (last -12.2%) Major European indices trade in the green. German Chancellor Merkel said that there is "great uncertainty" surrounding the EU budget and that the region is prepared for a no-deal Brexit. The British Prime Minister is expected to speak with the European Commission President this evening. Italy's Prime Minister expressed hope for the EU rescue fund to become permanent. ● In economic data: ○ Germany's October trade surplus EUR18.20 bln (expected EUR18.00 bln; last EUR17.60 bln). October Imports 0.3% m/m (expected 1.0%; last 0.2%) and exports 0.8% m/m (expected 1.2%; last 2.3%) ○ Spain's October Industrial Production -1.6% yr/yr (expected -2.6%; last -3.1%) and November Consumer Confidence 55.7 (last 48.5) STOCK HEADLINES (BRIEFING.COM) Earnings/Guidance: ● AeroVironment (AVAV) beats by $0.17, beats on revs; reaffirms FY21 EPS guidance, revs guidance; to acquire Telerob, a German leader in ground robotics ● ASE Technology (ASX) reports November sales increased 31.7% yr/yr to NT$50.67 bln ● British American Tobacco (BTI) reaffirms FY20 guidance ● Campbell Soup (CPB) beats by $0.11, reports revs in-line; guides Q2 EPS in-line, revs in-line; raises dividend ● Canadian Natrl Res (CNQ) provides FY21 targets; sees 2021 production rising 5% yr/yr ● Chewy (CHWY) beats by $0.05, beats on revs; guides Q4 revs above consensus ● Designer Brands (DBI) beats by $0.15, reports revs in-line ● Deutsche Bank (DB) confirms its primary strategic and financial targets for 2020 and 2022 ● Element Solutions (ESI) provides FY20 guidance metrics ● GameStop (GME) beats by $0.32, misses on revs, comparable store sales down 24.6%, expects to realize positive comparable store sales results and profitability in Q4 ● GATO Silver (GATO) reports Q3 results ● Guidewire Software (GWRE) beats by $0.22, beats on revs; guides Q2 revs in-line; guides FY21 revs in-line ● JPMorgan Chase (JPM) CEO Jamie Dimon sees 2021 expenses topping $67 bln; sees Q4 markets revenue increase of 20%, according to Reuters ● Lovesac (LOVE) beats by $1.01, beats on revs ● MongoDB (MDB) beats by $0.13, beats on revs; guides Q4 EPS above consensus, revs above consensus ● Nielsen (NLSN) reaffirms FY20 guidance at Investor Day ● Pacira Pharma (PCRX) reports preliminary net product sales of $38.9 million for November 2020 ● Photronics (PLAB) misses by $0.05, misses on revs; guides Q1 EPS below consensus, revs in-line ● Phreesia (PHR) misses by $0.01, beats on revs; guides FY21 revs above consensus, announces planned CFO transition ● Powell Inds (POWL) reports SepQ results below two-analyst estimate PAGE 4 OF 9 PORTFOLIO STRATEGY ● Takeda Pharma (TAK) provides long-term growth outlook ● Tempur Sealy Int'l (TPX) provides market update; expects adjusted EBITDA growth of approximately 30% on low double-digit net sales growth ● United Natural Foods (UNFI) misses by $0.23, misses on revs; reaffirms FY21 EPS guidance, revs guidance ● W&T Offshore (WTI) raises Q4 production guidance General News: ● Treasury Secretary Steven Mnuchin offered a new $916 bln stimulus bill with checks, but no unemployment. Senate Majority Leader Mitch McConnell (R-KY) offered a limited stimulus bill without state and local government funding or liability protection but with funding for small businesses. Both bills were rejected by Democrats, according to the NewYorkTimes ● Supreme Court rejected challenge to election results in Pennsylvania. Texas AG Ken Paxton filed another request to ask the high court to extend the December 14 electoral college deadline, according to the NewYorkTimes ● House passes defense authorization act with enough votes to override President Trump's expected veto, according to TheHill ● JP Morgan (JPM) CEO Jamie Dimon says he wouldn't touch 10 Year Treasuries "with a ten foot pole" at current rates, according to CNBC ● Joe Biden selects Tom Vilsack as his agricultural secretary and Rep. Marcia Fudge (D-OH) as his Housing and Urban Development secretary, according to xios ● UK suspended retaliatory tariffs on US goods related to Airbus (EADSY) dispute, according to Reuters ● Akoustis Technologies (AKTS) awarded a design win from a second WiFi 6 customer for its 5.2/5.6 GHz XBAW RF coexistence filter solutions ● Albireo Pharma (ALBO) submits New Drug Application to the U.S. FDA and a Marketing Authorization Application to the European Medicines Agency seeking approval of odevixibat ● Assembly Biosciences (ASMB) announces wind-down of microbiome program ● AT&T (T) provided update to shareholders at UBS Global TMT Conference ● Brookdale Senior Living (BKD) reports consolidated occupancy for November; 89% of the company's communities were open for move-ins on November 30, 2020 ● Cabaletta Bio (CABA) announces that first patient has been dosed in the DesCAARTes Phase 1 trial of DSG3-CAART ● Cambium
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