Morning Briefing - Better-than-expected earnings and EU stimulus package pushing futures higher


The S&P 500 futures trade 26 points, or 0.8%, above fair value following yesterday's mega-cap rally, with many of these widely-held names continuing to lead the market higher this morning. 
Cited catalysts contributing to the momentum include IBM (IBM 133.31, +6.94, +5.5%) exceeding quarterly expectations and the EU agreeing to a 750 billion fiscal stimulus package. The Europe Stoxx 600 currently trades higher by 1.1%. 
Notably, Amazon (AMZN 3265.79, +68.95, +2.2%) is up another 2% in pre-market action after the stock soared 8% yesterday, while Tesla (TSLA 1693.00, +50.00, +3.0%) is up another 3% after yesterday's 9.5% gain. Coca-Cola (KO 47.00, +0.88, +1.9%), meanwhile, can credit its EPS beat for its pre-market gain. 
U.S. Treasuries continue to trade near their flat lines despite the bullishness in the futures trade. The 2-yr yield is flat at 0.15%, and the 10-yr yield is flat at 0.62%. The U.S. Dollar Index is down 0.1% to 95.73. WTI crude futures are up 3.1%, or $1.25, to $42.19/bbl. 
In U.S. Corporate news:
  • IBM (IBM 133.31, +6.94): +5.5% after beating top and bottom-line estimates.
  • Coca-Cola (KO 7.00, +0.88): +1.9% after beating earnings estimates. 
  • Lockheed Martin (LMT 378.60, +13.07): +3.6% after beating top and bottom-line expectations, guiding FY20 revenue above consensus, and being awarded $860 mln Navy contract. The company also guided EPS below consensus, though. 
  • Albertsons (ACI 15.97, +0.38): +2.4% after being initiated with the equivalent of a Buy rating at more than ten brokerage firms. 
  • eBay is selling
  •  its classified ad business to Norway's Adevinta (OTCPK:ADEVF) for $9.2B in cash and stock, making the latter the largest online classifieds company globally. The unit is one of eBay's last remaining businesses outside the company's core after selling its StubHub ticketing division last year. As part of the transaction, eBay (NASDAQ:EBAY) will receive $2.5B in cash and approximately 540M Adevinta shares - representing 44% ownership of the pro forma company and a ~33.3% voting stake. The deal is expected to close by Q1 of 2021 and is forecast to create estimated annual synergies of $150M-185M within the next three years. EBAY +2.4% premarket.
  • eBay is selling its classified ad business to Norway's Adevinta (OTCPK:ADEVF) for $9.2B in cash and stock, making the latter the largest online classifieds company globally. The unit is one of eBay's last remaining businesses outside the company's core after selling its StubHub ticketing division last year. As part of the transaction, eBay (NASDAQ:EBAY) will receive $2.5B in cash and approximately 540M Adevinta shares - representing 44% ownership of the pro forma company and a ~33.3% voting stake. The deal is expected to close by Q1 of 2021 and is forecast to create estimated annual synergies of $150M-185M within the next three years. EBAY +2.4% premarket.

    Rally continues
    Big tech led the charge for Wall Street on Monday as the Nasdaq 100 had its best gain in three months, boosted by the FAANG and Tesla (NASDAQ:TSLA). Pfizer (NYSE:PFE) and BioNTech (NASDAQ:BNTX) also reported early positive data on a joint coronavirus vaccine, while another candidate from Oxford University and AstraZeneca (NYSE:AZN) showed a positive immune response in an early trial. Everyone is partying... Industrial stocks are rallying along with stay-at-home players this morning as U.S. stock index futures climb 0.7% before quarterly results from Coca-Cola (NYSE:KO), Philip Morris (NYSE:PM), Lockheed Martin (NYSE:LMT) and United Airlines (NASDAQ:UAL).
    Coronavirus stimulus package
    "We did it! We have reached a deal on the [coronavirus] recovery package and the European budget for 2021-2027," tweeted European Council President Charles Michel after nearly five days of talks in Nice, France. "This agreement sends a concrete signal that Europe is a force for action," he added, prompting the euro to hit a fresh four-month high of $1.1470. Within the €750B coronavirus recovery fund, €390B will be offered as non-repayable grants (down from €500B originally proposed), and the rest in repayable loans. Leaders also agreed to an EU budget of over €1T that will run from next year to 2027.
    China tensions
    The U.K. will "bear the consequences if it insists on going down the wrong road," a Chinese embassy spokesman declared, after Britain announced it would suspend extraditions and arms sales to Hong Kong due to China's national security law. The news comes as U.S. Secretary of State Mike Pompeo visits the U.K., where he'll meet with MPs who want to see sanctions on Chinese officials and the Asian superpower cut from Britain's nuclear power program. Prime Minster Boris Johnson has already ordered the removal of Huawei equipment from British 5G networks by the end of 2027, while Chinese-owned Tiktok (BDNCE) reportedly ditched plans for a global headquarters in the U.K.
    Go deeper: U.S. sanctions 11 Chinese companies over treatment of Uyghurs.
    Fed nominees
    Judy Shelton, President Trump's controversial pick to join the Fed's Board of Governors, is poised to clear a key confirmation hurdle today after Louisiana Senator John Kennedy said he'd vote in her favor. The Senate Banking Committee will also decide on the nomination of Christopher Waller, director of research at the St. Louis Fed, which is expected to easily pass muster. Shelton has a long history of unorthodox economic commentary, like questioning the basic role of the Fed, calling for near-zero interest rates and advocating a return to the gold standard. If Shelton and Waller are cleared, the nominations advance to a full Senate vote.
    Masking up
    Mask makers like Alpha Pro Tech (NYSEMKT:APT), Allied Healthcare (NASDAQ:AHPI) and Lakeland Industries (NASDAQ:LAKE) soared into the close on Monday after President Trump offered his strongest endorsement yet for wearing face coverings in public. "We are United in our effort to defeat the Invisible China Virus, and many people say that it is Patriotic to wear a face mask when you can't socially distance," he wrote in a tweet that included a photo of himself wearing a mask with a presidential seal. More than half of U.S. states currently have mask mandates to curb the spread of the coronavirus.
    Prime delay
    Amazon (NASDAQ:AMZN) Prime Day 2020 will be postponed by three months, according to an email to third-party sellers that suggests this year's big deals will launch in October. "This year we'll be holding Prime Day later than usual, while ensuring the safety of our employees and supporting our customers and selling partners," the company announced, adding that it would share "more details soon." While Prime Day in the U.S. is being put on hold, Amazon said Prime Day will take place in India next month on August 6 and 7.
    Media misconduct
    Walt Disney (NYSE:DIS) has fired ABC News' Barbara Fedida, who was one of the most powerful executives in television news, after an investigation confirmed allegations that she made insensitive remarks and racial slurs about colleagues. Reports previously suggested that Fedida used terms like "pick cotton" and "low rent," and asked which employee would most likely be an "active shooter" (she was placed on administrative leave on June 13). In other media news, former Fox News (NASDAQ:FOX) reporter Jennifer Eckhart has leveled rape allegations against former Fox host Ed Henry, while journalist Cathy Areu alleged that she was sexually harassed by Henry, as well as current on-air talent like Sean Hannity, Tucker Carlson, Howard Kurtz and Gianno Caldwell.
    What else is happening...
    Chevron (NYSE:CVX) to buy Noble Energy (NASDAQ:NBL) in $5B all-stock deal.
    Novartis ((NYSE:NVS) tightens outlook as Q2 sales, profit fall.
    UBS (NYSE:UBS) settles SEC charges on muni bond flipping for $10M.
    Marriott (NASDAQ:MAR) institutes mask policy for hotel guests.
    Tesla (TSLA) guns for record Q3 as shares gain another 10%.
    Monday's Key Earnings
    Halliburton (NYSE:HAL) +2.5% as cost cuts, cash flow impressed analysts.
    IBM (NYSE:IBM) +4.3% AH on Q2 upside despite pandemic pressure.
    Today's Markets
    In Asia, Japan +0.7%. Hong Kong +2.3%. China +0.2%. India +1.4%.
    In Europe, at midday, London +0.5%. Paris +1.2%. Frankfurt +1.8%.
    Futures at 6:20, Dow +0.7%. S&P +0.7%. Nasdaq +0.8%. Crude +2.4% to $41.91. Gold +0.5% to $1826.80. Bitcoin +1.8% to $9341.
    Ten-year Treasury Yield flat at 0.62%
    Today's Economic Calendar
    8:30 Chicago Fed National Activity Index
    8:55 Redbook Chain Store Sales

    Put/Call Ratio

    Yesterday, 1,656,567 call contracts traded on the Chicago Board Options Exchange (CBOE) compared to 749,290 put contracts. The single-session put/call ratio was 0.45.

    Futures and Currencies

    Energy futures are up today. The price for West Texas Intermediate crude oil is up 1.16 at 41.97 per barrel. Brent crude is up 1.26 at 44.54 per barrel. Natural Gas is up 0.01 at 1.65. Precious metals are up this morning. Gold is up 9.6 at 1827 per ounce. Platinum is up 11.08 at 1828.85 while silver is up 0.7 at 20.9. The dollar is mixed compared to the major currencies today. The greenback is up against the euro, down against the Yen and down against the Pound.

    Stocks on the Move

    Halliburton Company (HAL), IBM Common Stock (IBM) and Comerica Incorporated (CMA) are moving higher this morning, while Tiffany & Co. (TIF), Juniper Networks, Inc. (JNPR) and H & R Block Inc (HRB) are headed lower. LGI Homes Inc (LGIH), TE Connectivity Ltd (TEL) and Sempra Energy (SRE) were upgraded by analysts this morning, while Jeld-Wen Holding Inc (JELD), Banco Macro SA ADR Class B (BMA) and Autohome Inc (ATHM) were downgraded.

    Moderna Inc (MRNA) is down -9.68% today as competing COVID-19 vaccine researchers Pfizer, BioNTech, AstraZeneca, and Oxford University all released positive data results from their own COVID-19 vaccine studies. Moderna stock fell after the news of all these researchers showing promising results. This comes as officials from Moderna along with Merk, Pfizer, AstraZeneca, and Johnson & Johnson are set to give testimony before the House Committee tomorrow. MRNA is still up around 20% over the past week as traders continue to speculate on biotech companies researching coronavirus cures. The race for a vaccine is extremely competitive though and strong results from other researchers will have a major impact on Moderna and other vaccine developers.
    MRNA stock has risen 509.75% over the last 12 months, and the average rating from Wall Street analysts is a Strong Buy. InvestorsObserver’s proprietary scoring system, gives MRNA stock a score of 68 out of a possible 100.
    That score is primarily influenced by a short-term technical score of 100. MRNA’s score also includes a long-term technical score of 99. The fundamental score for MRNA is 7. In addition to the average rating from Wall Street analysts, MRNA stock has a mean target price of 90.454. This means analysts expect the stock to gain 5.58% over the next 12 months.

    What’s Happening with MRNA Stock Today

    Moderna Inc (MRNA) stock is lower by -9.68% while the S&P 500 has risen 0.32% as of 10:37 AM on Monday, Jul 20. MRNA is lower by -$9.18 from the previous closing price of $94.85 on volume of 32,756,944 shares. Over the past year the S&P 500 is higher by 8.38% while MRNA has risen 509.75%. MRNA lost -$1.50 per share in the over the last 12 months.
    Cumberland Pharmaceuticals, Inc. (CPIX) is trading up 0.91% at $3.32 per share so far Monday. CPIX stock is trading up today on no apparent news.
    Cumberland Pharmaceuticals, Inc. (CPIX) stock has fallen -41.34% over the last 12 months, and the average rating from Wall Street analysts is a Strong Buy. InvestorsObserver’s proprietary scoring system, gives CPIX stock a score of 39 out of a possible 100.

    That score is influenced by a long-term technical score of 2. CPIX’s score also includes a short-term technical score of 28. The fundamental score for CPIX is 88. In addition to the average rating from Wall Street analysts, CPIX stock has a mean target price of 9.75. This means analysts expect the stock to climb 193.67% over the next 12 months.
    During trading Monday, 118 stocks traded to a 52-week high, while 6 stocks bottomed out at new 52-week lows. The S&P 500 is up 0.62% on the day so far. Healthcare has the most stocks hitting their highs today as biotechnology is performing well after the promising COVID-19 study results released by Pfizer, BioNTech, AstraZenaca, and the University of Oxford. Technology continues to lead the market during the rally from March lows. Additional stimulus is currently being discussed as many of the CARES act programs are ending in July.
    The following stocks traded to 52-week highs: A, AAWW, ABMD, ABT, ACN, ALNY, ALRM, AMED, ANSS, APD, ASMB, AWK, BIO, BMRN, CALX, CDNS, CEVA, CGNX, CHGG, CHKP, CHTR, CMG, COUP, CREE, CRL, CSIQ, CTLT, CTXS, CVNA, CYRX, DGX, DHR, DVAX, EA, EBS, ECHO, EIGI, EPAM, FRPT, GLOB, GNRC, GRBK, HL, IAC.XX10, ICLR, IDXX, ILMN, IMMU, INSP, IOTS, IPGP, ISRG, KNX, LGND, LHCG, LSTR, MANH, MAS, MED, MNST, MSCI, MTCH.XX10, MTD, MXL, NBIX, NDAQ, NEO, NFE, NOVA, NOW, NUAN, NYT, ODFL, OPK, OSTK, PDCO, PEN, PFSI, PGR, PKI, POOL, QDEL, QTWO, REGN, RH, RMD, ROL, ROP, RUN, SAIL, SAM, SEDG, SGEN, SITE, SPGI, SPNS, SPOT, SRPT, STMP, SYRS, TECH, TERP, TMO, TPIC, TREX, TRUP, TWLO, TWOU, TXN, VCYT, VIVO, VRNS, VRSK, VSLR, WST, YNDX, YUMC, ZEN, CMBM, HWKN, MJCO
    The following Stocks traded to 52-week lows: ATAX, CATO, CRCQQ, KRNY, REV, UBA
    Healthcare: A, ABMD, ABT, ALNY, AMED, ASMB, BIO, BMRN, CRL, CTLT, DGX, DHR, DVAX, EBS, ICLR, IDXX, ILMN, IMMU, INSP, ISRG, LGND, LHCG, MTD, NBIX, NEO, OPK, PDCO, PEN, PKI, QDEL, REGN, RMD, SGEN, SRPT
    Technology: ACN, ALRM, ANSS, CALX, CDNS, CEVA, CGNX, CHKP, COUP, CREE, CSIQ, CTXS, EIGI, EPAM, GLOB, IPGP, MANH, MXL, NOVA, NOW, NUAN, QTWO, RUN, SAIL, SEDG, SPNS, STMP
    Healthcare stocks dominated our list of highs today with 36 out of the 118 total stocks that reached their high coming from the Healthcare sector. The Healthcare industry is up -0.12% so far Monday while the S&P 500 is up 0.62%. Despite Healthcare leading the way with 36 stocks hitting their highs, the sector overall is down 0.12% as the sector is extremely mixed with some performing strongly like biotechnology while industries such as Health Care Providers & Services are down big. Technology had 32 stocks hit their highs and is up 2.05% today as the NASDAQ continues to outperform the other major indices. None of the major tech stocks such as Apple, Microsoft, Intel, or IBM hit their highs as the smaller stocks hit theirs today.
    Financial Services: ATAX & KRNY

    The Financial Services industry makes up the minority of our 52-week highs, as 2 out of our 6 52-week highs comes to us from the Financial Services industry. The Financial Services industry is down -0.02% so far Monday while the S&P 500 is up 0.62% Not many stocks hit their lows today as the market is still in a much better state than it was back in mid March. Financial services have not recovered like many other sectors though as fears of unrecoverable debt loom with still over 17 million people currently unemployed.
    In equities, shares of Immuron (IMRN) were 118% higher pre-bell after the biopharmaceutical company said that IMM-124E, which is used to manufacture its gastrointestinal and digestive health immune supplements Travelan and Protecyn, demonstrated neutralizing activity against SARS-CoV-2.
    Lexicon Pharmaceuticals (LXRX) shares surged 39% after saying that all four phase 3 studies of sotagliflozin in type 2 diabetes met their primary objectives.

    On the downside, Bio-key (BKYI) shares fell 30% after pricing an offering of common stock and warrants for gross proceeds of $21.6 million.

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