After Hours Report

The S&P 500 rebounded 6.0% on Tuesday, as investors reacted positively to additional monetary stimulus measures and the possibility of an estimated $1 trillion fiscal stimulus package. The Dow Jones Industrial Average rose 5.2%, the Nasdaq Composite rose 6.2%, and the Russell 2000 rose 6.7%.  

The plan from the White House reportedly includes $500-550 billion for direct payments or tax cuts to Americans, $200-300 billion for small business assistance, and $50-100 billion for airline industry relief. The administration is also considering support for homeowners whose income was cut due to the coronavirus, according to Bloomberg. 

The Fed, meanwhile, established a temporary commercial paper funding facility to help alleviate strains induced on commercial paper markets. Companies typically acquire short-term financing from this market. The Treasury Secretary approved the decision and the Treasury will provide the Fed $10 billion in credit protection and the ability to purchase up to $1 trillion in commercial paper if needed.

Elsewhere, efforts to contain the spread of COVID-19 continued to be made: NYC Mayor Bill De Blasio said New Yorkers should be prepared for an order to "shelter in place," the EU temporarily closed external borders, and Apple (AAPL 252.63, +10.42, +4.3%) extended store closures outside Greater China until further notice.

Despite the stimulus plans, and preventative measures, it was a defensive-minded rally led by the S&P 500 utilities (+13.1%), consumer staples (+8.4%), and real estate (+6.9%) sectors. The energy sector (+0.7%) underperformed amid continued weakness in the price of oil ($27.02/bbl, -1.83, -6.3%).

This defensiveness might be attributed to an understanding that economic disruptions will continue to lead to a negative, and currently unquantifiable, impact to the economy. This was painfully manifested in Marriott (MAR 75.24, -11.18, -12.9%) starting to furlough workers without pay. On a related note, Facebook (FB 149.42, +3.41, +2.3%) said it would give $1000 to employees.

Separately, the slight underperformance of the Dow was mainly due to the loss in shares of Boeing (BA 124.14, -5.47, -4.2%), which had its S&P credit rating downgraded to BBB due to weaker cash flows. President Trump did say he wants to help the company, though. 

U.S. Treasuries sold off in a curve-steepening trade, not because of a better economic view but because of worries that longer-dated bonds will be needed to fund a rising deficit. The 2-yr yield rose eight basis points to 0.45%, and the 10-yr yield rose 27 basis points to 1.00%. The U.S. Dollar Index rose 1.7% to 99.81.

Reviewing Tuesday's economic data, which was wasn't fully representative of current conditions caused by the coronavirus:

• Total retail sales declined 0.5% m/m (Briefing.com consensus +0.1%) following an upwardly revised 0.6% increase (from 0.3%) in January. Excluding autos, retail sales were down 0.4% m/m (Briefing.com consensus +0.1%) after an upwardly revised 0.6% increase (from 0.3%) in January.
  • The key takeaway from this report is that it reflected soft spending activity before the the coronavirus impact (and reaction) truly hit the U.S. That's not comforting knowing that the retail sales data in March is going to be absolutely awful.
• Industrial production increased 0.6% m/m in February, as expected, following a downwardly revised 0.5% decline (from -0.3%) in January. Total capacity utilization was 77.0% (Briefing.com consensus 77.1%) following a downwardly revised 76.6% (from 76.8%) in January.
  • The key takeaway from the report is that the good feelings about the pickup in output in February will be stunted by the reality that March output is apt to look much worse given the economic shutdown measures employed to help curb the spread of the coronavirus.
• The NAHB Housing Market Index for March declined to 72 (Briefing.com consensus 74) from 74 in February.
• The January Job Openings and Labor Turnover Survey showed job openings increase to 6.963 million from a revised 6.552 million in December (from 6.423 million).
• Business inventories decreased 0.1% in January, as expected, while the December reading was unrevised at 0.1%.

Looking ahead, investors will receive Housing Starts and Building Permits for February and the weekly MBA Mortgage Applications Index on Wednesday.

• Nasdaq Composite: -18.3%
• S&P 500: -21.7%
• Dow Jones Industrial Average: -24.1%
• Russell 2000: -33.7%

Overseas: 

• Europe: DAX +2.2%, FTSE +2.8%, CAC +2.8%
• Asia: Nikkei +0.1%, Hang Seng +0.9%, Shanghai -0.3%

Commodities: 

• Crude Oil -1.60 @ 27.17
• Nat Gas -0.08 @ 1.73
• Gold +43.60 @ 1541.60
• Silver -0.24 @ 12.58
• Copper -0.08 @ 2.32

• Addus HomeCare (ADUS) issues upside preliminary results for Q4; Provides COVID-19 update.. ADUS up 3.7% after hours
• CNBC reports sources saying that Boeing (BA) is seeking tens of billions of dollars in government aid... BA down 3.0% after hours
• FedEx (FDX) misses by $0.05, beats on revs; suspends FY20 earnings forecast due to coronavirus; suspends FY20 earnings forecast... FDX up 1.6% after hours
• Fox Corporation (FOXA) to acquire Tubi for approx. $440 mln in net cash consideration at closing... FOXA flat after hours
• Goodyear Tire (GT) to temporarily close European tire and retread plants in phases by the end of this week, until at least April 3... GT up 1.8% after hours
• Greif (GEF) says its Q2 performance to date is in-line to slightly better than expected; also, to date, COVID-19 has not had a material adverse effect on the co to change its full year guidance... GEF down 4.9% after hours
• MongoDB (MDB) beats by $0.03, beats on revs; guides Q1 EPS in-line, revs above consensus; guides FY21 EPS below consensus, revs in-line... MDB down 7.2% after hours
• Ryman Hospitality (RHP) suspends future dividends following issuance of Q1 dividend... no indication for RHP after hours
• Sabre (SABR) to suspend the payment of quarterly cash dividends and repurchase program... SABR down 10.7% after hours
• Smartsheet (SMAR) beats by $0.03, beats on revs; guides Q1 EPS below consensus, revs above consensus; guides FY21 EPS below consensus, revs in-line... SMAR down 1.2% after hours
• Target (TGT) to reduce store hours beginning March 18 to allow additional cleaning and restocking... TGT down 0.6%
• Wyndham Hotels & Resorts (WH) withdrawals its full-year 2020 outlook due to coronavirus... no indication for WH after hours

Fair Value for Wednesday, March 18:

• S&P 500: 2514
• Nasdaq 100: 7451
• DJIA: 21070

Today's News Summary:

For a full rundown of today's market and after hours developments, see Live In Play

• Earnings/Guidance (Full Earnings Calendar):
  • American Express (AXP) lowers Q1 guidance
  • Arco Platform (ARCE) reports Q4 results with Q1 / 2020 guidance
  • Baxter (BAX) beats by $0.13, reports revs in-line; guides Q1 EPS below consensus
  • Becton Dickinson (BDX) and BioGX announce FDA Emergency use authorization submissions for new COVID-19 diagnostics for use in U.S.
  • Benchmark Electronics (BHE) says it will not achieve prior guidance for Q1
  • Bloom Energy (BE) reports Q4 results, misses on revs; guides Q1 revs below consensus
  • Carnival (CCL) now expects results of operations for the fiscal year ending November 30, 2020 to result in a net loss
  • Casper Sleep (CSPR) announced the temporary closure of all its retail stores in North America, from March 17, 2020 through March 27, 2020
  • Core Labs (CLB) withdraws Q1 guidance; reduces future quarterly dividend to $0.01/share from $0.25/share
  • Coupa Software (COUP) beats by $0.16, beats on revs; guides Q1 EPS in-line, revs above consensus; guides FY21 EPS below consensus, revs in-line
  • Designer Brands (DBI) beats by $0.01, misses on revs; not providing FY20 guidance due to COVID-19
  • HD Supply Holdings (HDS) beats by $0.08, reports revs in-line; will not provide Q1 and FY20 guidance due to COVID-19
  • HealthEquity (HQY) beats by $0.03, reports revs in-line; guides FY21 EPS in-line, revs below consensus
  • Hilton Grand Vacations (HGV) withdraws FY20 guidance; authorizes new $200 mln share repurchase program
  • HUYA (HUYA) beats by $0.07, beats on revs; guides Q1 revs above consensus
  • Insmed (INSM) suspends previously issued FY20 revenue guidance; announces new drug application submission for ARIKAYCE in Japan; announces option exercise by AstraZeneca (AZN) for clinical development of INS1007 in COPD or asthma
  • JOYY (YY) beats by $0.05, beats on revs
  • JPMorgan Chase (JPM) has taken actions to help ensure that financial system remains strong, resilient and well positioned - is actively supporting the use of the discount window
  • Lands' End reports EPS in-line, revs in-line
  • PennyMac (PFSI) updates guidance - expects record quarterly results from its Production segment, driven by significantly elevated production volumes and margins across all three of its production channels
  • Repay Holdings (RPAY) reports Q4 results
  • ShotSpotter (SSTI) lowers 2020 revs guidance and initiates resiliency plan to maintain gunshot detection services with a remote and distributed incident review center
  • Southwest Air (LUV) withdraws previously issued FY20 financial guidance due to rapidly changing environment caused by COVID-19 pandemic; draws down full $1.0 bln on $1.0 bln unsecured revolving credit facility
  • Summit Hotel (INN) withdraws FY20 outlook as a result of the COVID-19 outbreak
  • Tencent Music (TME) beats by $0.11, beats on revs
  • The Children's Place (PLCE) beats by $0.28, reports revs in-line; Q4 comps -3.6%; not providing guidance due to COVID-19
  • T-Mobile US (TMUS) provides another COVID-19 update; is further reducing the number of company-owned retail stores open
  • Volkswagen AG (VWAGY) reports FY19 operating profit before special items grows to EUR 19.3 bln (+12.8%); sales revenue increases to EUR 252.6 bln (+7.1%)
  • ZTO Express (ZTO) beats by $0.24, reports revs in-line; announces $0.30 per ADS special dividend
• General News:
  • President Trump wants $1.2 trillion economic stimulus package which would include direct payments to Americans in late April and a second direct payment in late May, according to Bloomberg
  • Federal Reserve Board announces establishment of a Commercial Paper Funding Facility (CPFF) to support the flow of credit to households and businesses; Treasury will provide $10 bln of credit protection to the Federal Reserve
  • New York Fed to conduct two $500 bln repurchase operations each day this week
  • New York Mayor Bill De Blasio says New Yorkers should be prepared for order to "shelter in place", according to CNBC
  • Marriott CEO tells President Trump that business in China fell 90% due to COVID-19; hotel execs asking for financial assistance, according to CNBC
  • UAW auto workers want two week plant shutdown based on COVID-19, according to Reuters
  • Paid sick leave provisions are a key sticking point regarding passage of House coronavirus bill, according to CNBC
  • EU to close borders due to COVID-19, according to CNBC
  • CNBC reporting UK Finance Minister Rishi Sunak announced a near $400 bln (£330 bln) government-backed loan program for businesses to aid in coronavirus crisis
  • Airbus (EADSY) provides update on COVID-19 related measures; has decided to temporarily pause production and assembly activities at its French and Spanish sites across the Company for the next four days
  • Amazon (AMZN) announces it's opening 100,000 new full and part-time positions; Amazon (AMZN) is struggling to hire people to meet delivery demand as five European warehouse workers test positive for coronavirus
  • AMC Entertainment (AMC) to close all US locations for 6-12 weeks beginning March 17
  • American Airlines (AAL) in discussions to raise debt in the billions of dollars, according to Bloomberg
  • Boeing (BA) asks White House and Congress for aid for itself, suppliers, and airlines, according to Bloomberg; S&P lowered Boeing rating to 'BBB' on weaker cash flows due to MAX grounding
  • Caesars Entertainment (CZR) has fully drawn the remaining available capacity under each of the Revolving Credit Facilities as a precautionary measure
  • Canada Goose (GOOS) to close all retail stores in North America and Europe as of March 17 until at least March 31; reaffirms FY20 outlook
  • Churchill Downs (CHDN): Kentucky Derby has been postponed until September, according to WDRB
  • Co-Diagnostics (CODX): FDA changes policy to allow rapid domestic expansion of co-diagnostics COVID-19 test
  • Concho Resources (CXO) reduced its 2020 capital program to approximately $2 billion from the $2.6 to $2.8 billion range previously announced
  • Delta (DAL) in talks to raise $4 bln in new debt, according to Bloomberg
  • Dunkin (DNKN) to limit service nationwide to drive-thru, carry-out and delivery service only - will take effect on Tuesday, March 17
  • Exxon Mobil (XOM) evaluating significant near-term capital and operating expense reductions
  • The Information earlier reported Facebook (FB) will issue $1,000 bonuses to employees
  • General Motors (GM) and Ford (F) are offering 0% financing for seven years, according to CNBC
  • Hologic's (HOLX) molecular test for the novel coronavirus, SARS-CoV-2, receives fda emergency use authorization
  • Kraft (KHC) aiming to draw down as much as $4 bln from its revolving credit facility, according to Bloomberg
  • Lam Research (LRCX) to temporarily stop on-site work at its Fremont and Livermore locations for three weeks effective March 17, 2020, withdraws Q1 guidance
  • Las Vegas Sands (LVS) announces temporary closure of Las Vegas properties until at least April 1
  • L Brands (LB) details actions in response to the continued spread of novel coronavirus - withdraws Q1 guidance
  • Macy's (M) to temporarily close all stores by end of business today, March 17, 2020, through March 31, 2020
  • McDonald's (MCD) to close all company-owned restaurants seating areas
  • Northern Trust (NTRS) announces it has temporarily suspended purchases of its common stock under its share repurchase program due to COVID-19
  • Norwegian Cruise Line (NCLH) borrowed under its credit agreements the full amount of $1.55 billion as a precautionary measure
  • PG&E (PCG) secures court approval for $23 bln bankruptcy financing plan, according to Bloomberg
  • Pioneer Natural Resources (PXD) to reduce 2020 capital spending in response to lower oil prices and global macroeconomic uncertainty
  • PNC (PNC) temporarily suspends share repurchase program through June 30, 2020
  • Regeneron Pharma (REGN) 'announced the latest progress in its efforts to discover and develop a novel multi-antibody cocktail that can be administered as prophylaxis before exposure to the SARS-CoV-2 virus or as treatment for those already infected'
  • Regions Fincl (RF) temporarily suspends share buyback program for Q1 and Q2 in response to the COVID-19 pandemic
  • Roche Hldg (RHHBY) announces that it has begun shipping the first allotment of its cobas SARS-CoV-2 Test for COVID-19
  • Uber (UBER) suspends shared rides to limit spread of COIVD-19, according to Reuters
  • Wintrust Fin (WTFC) is temporarily closing or modifying service locations at approximately 50 Wintrust community bank locations in Northern Illinois and Southern Wisconsin beginning Tuesday, March 17

• Upgrades:
  • AppFolio (APPF) upgraded to Neutral from Underperform at DA Davidson
  • Armstrong World Industries (AWI) upgraded to Hold from Sell at Loop Capital; tgt lowered to $83
  • Arthur J. Gallagher (AJG) upgraded to Outperform from Mkt Perform at Keefe Bruyette; tgt raised to $110
  • Bank of America (BAC) upgraded to Outperform from Neutral at Robert W. Baird; tgt $34
  • BJ's Wholesale (BJ) upgraded to Buy from Hold at Gordon Haskett
  • Blueprint Medicines (BPMC) upgraded to Outperform from Market Perform at BMO Capital Markets; tgt raised to $89
  • Boston Beer Co (SAM) upgraded to Buy from Neutral at MKM Partners; tgt $351
  • CarGurus (CARG) upgraded to Buy from Neutral at BTIG Research; tgt $23
  • Check Point Software (CHKP) upgraded to Buy from Hold at SunTrust; tgt $115
  • Citrix Systems (CTXS) upgraded to Outperform from Mkt Perform at Raymond James; tgt $124
  • Cochlear (CHEOY) upgraded to Neutral from Sell at Citigroup
  • Commercial Metals (CMC) upgraded to Buy from Underperform at BofA/Merrill
  • CoreSite Realty (COR) upgraded to Buy from Neutral at Citigroup
  • CyrusOne (CONE) upgraded to Neutral from Sell at Citigroup
  • Domtar (UFS) upgraded to Outperform from Sector Perform at RBC Capital Mkts; tgt lowered to $32
  • Electronic Arts (EA) upgraded to Buy from Neutral at MKM Partners; tgt lowered to $114
  • Enanta Pharmaceuticals (ENTA) upgraded to Outperform from Neutral at Robert W. Baird; tgt $60
  • Equity Residential (EQR) upgraded to Neutral from Underperform at Robert W. Baird; tgt $73
  • Esperion Therapeutics (ESPR) upgraded to Buy from Neutral at Citigroup
  • Heartland Express (HTLD) upgraded to Outperform from Neutral at Robert W. Baird; tgt $22
  • Hill-Rom (HRC) upgraded to Overweight from Equal Weight at Barclays; tgt $116
  • JD.com (JD) upgraded to Outperform from Mkt Perform at Bernstein; tgt raised to $52
  • Mercer Intl (MERC) upgraded to Outperform from Sector Perform at RBC Capital Mkts; tgt $10
  • MOGU (MOGU) upgraded to Buy from Hold at China Renaissance; tgt $3.40
  • Mosaic (MOS) upgraded to Neutral from Underweight at JP Morgan; tgt $10
  • Navient (NAVI) upgraded to Overweight from Equal Weight at Barclays; tgt $11
  • Old Dominion (ODFL) upgraded to Neutral from Underperform at BofA/Merrill; tgt lowered to $180
  • Pearson Plc (PSO) upgraded to Neutral from Sell at Goldman
  • PepsiCo (PEP) upgraded to Outperform from In-line at Evercore ISI; tgt $130
  • Procter & Gamble (PG) upgraded to Buy from Hold at Deutsche Bank; tgt $130
  • Rightmove (RTMVY) upgraded to Buy from Neutral at Goldman
  • Sanofi (SNY) upgraded to Equal Weight from Underweight at Barclays
  • SGL Carbon (SGLFF) upgraded to Buy from Hold at HSBC Securities
  • Sprouts Farmers Market (SFM) upgraded to Buy from Hold at Gordon Haskett
  • Square (SQ) upgraded to Outperform from Market Perform at Cowen; tgt $70
  • Standard Chartered PLC (SCBFF) upgraded to Hold from Reduce at HSBC Securities
  • Sunstone Hotel (SHO) upgraded to Overweight from Equal Weight at Barclays; tgt $11
  • Triumph Bancorp (TBK) upgraded to Overweight from Equal-Weight at Stephens
  • Truist (TFC) upgraded to Outperform from Neutral at Robert W. Baird; tgt $56
  • U.S. Bancorp (USB) upgraded to Outperform from Neutral at Robert W. Baird; tgt $56
  • Vale S.A. (VALE) upgraded to Buy from Neutral at Citigroup; tgt lowered to $12
  • Vivint Smart Home (VVNT) upgraded to Neutral from Underweight at JP Morgan
  • Walmart (WMT) upgraded to Outperform from Perform at Oppenheimer; tgt $125
  • Werner Enterprises (WERN) upgraded to Outperform from Neutral at Robert W. Baird; tgt $42
  • Wipro (WIT) upgraded to Buy at ICICI Securities
  • Wix.com (WIX) upgraded to Neutral from Sell at Rosenblatt; tgt $102
  • Wolters Kluwer N.V. (WTKWY) upgraded to Neutral from Sell at Goldman
• Downgrades:
  • Azul S.A. (AZUL) downgraded to Hold from Buy at Deutsche Bank
  • Apple Hospitality REIT (APLE) downgraded to Equal Weight from Overweight at Barclays; tgt $10
  • Bluerock Residential Growth (BRG) downgraded to Neutral from Outperform at Robert W. Baird; tgt $8
  • Cinemark (CNK) downgraded to Neutral from Overweight at JP Morgan; tgt $20
  • Copa Holdings (CPA) downgraded to Hold from Buy at Deutsche Bank; tgt lowered to $55
  • Dave & Buster's (PLAY) downgraded to Neutral from Overweight at Piper Sandler; tgt lowered to $7
  • DBV Technologies (DBVT) downgraded to Hold from Buy at Stifel; tgt lowered to $6
  • Ecolab (ECL) downgraded to Underweight from Neutral at JP Morgan; tgt $152
  • Fortinet (FTNT) downgraded to Neutral from Buy at DA Davidson
  • GNC Holdings (GNC) downgraded to Underperform from Hold at Jefferies; tgt $0.50
  • GOL Linhas Aereas Inteligentes S.A. (GOL) downgraded to Hold from Buy at Deutsche Bank
  • IMAX (IMAX) downgraded to Neutral from Overweight at JP Morgan; tgt $15
  • Investors Real Estate Trust (IRET) downgraded to Neutral from Outperform at Robert W. Baird; tgt $64
  • LATAM Airlines (LTM) downgraded to Hold from Buy at Deutsche Bank
  • Norwegian Cruise Line (NCLH) downgraded to Neutral from Buy at BofA/Merrill; tgt $18
  • Park Hotels & Resorts (PK) downgraded to Equal Weight from Overweight at Barclays; tgt $10
  • Pebblebrook Hotel Trust (PEB) downgraded to Hold from Buy at Stifel; tgt lowered to $9.50
  • ProPetro (PUMP) downgraded to Neutral from Buy at B. Riley FBR; tgt $7.25
  • Ranger Energy Services (RNGR) downgraded to Neutral from Buy at B. Riley FBR; tgt lowered to $6
  • RLJ Lodging Trust (RLJ) downgraded to Equal Weight from Overweight at Barclays; tgt $8
  • Royal Caribbean (RCL) downgraded to Underperform from Neutral at BofA/Merrill; tgt $25
  • Ruth's Hospitality Group (RUTH) downgraded to Neutral from Overweight at Piper Sandler; tgt lowered to $8
  • Santander Consumer USA (SC) downgraded to Underweight from Equal Weight at Barclays; tgt $13
  • Societe Television Francaise 1 (TVFCF) downgraded to Neutral from Buy at Goldman
  • Tetraphase Pharmaceuticals (TTPH) downgraded to Sell from Hold at Gabelli & Co
  • Tufin Software (TUFN) downgraded to Neutral from Buy at DA Davidson; tgt $10
  • USA Compression Partners (USAC) downgraded to Neutral from Buy at B. Riley FBR; tgt lowered to $14
  • Volaris Aviation (VLRS) downgraded to Hold from Buy at Deutsche Bank; tgt lowered to $5.50
• Others:
  • Arrowhead (ARWR) initiated with a Neutral at Goldman; tgt $45
  • Bunge (BG) added to Conviction Buy List at Goldman
  • Zoom Video (ZM) initiated with a Buy at Needham; tgt $140

Upcoming Events:

• Econ Data (Wednesday):
  • 07:00 ET: Weekly MBA Mortgage Index (prior 55.4%)
  • 08:30 ET: February Housing Starts (Briefing.com consensus 1.475 mln; prior 1.567 mln) and Building Permits (Briefing.com consensus 1.480 mln; prior 1.551 mln)
  • 10:30 ET: Weekly crude oil inventories (prior +7.7 mln)
• Earnings:
  • Monday (March 16)
    • Pre-Market: NBEV
    • After-Hours: APYX BE CPRX COUP HQY HUYA YY RPAY TME TERP ZTO
  • Tuesday (March 17)
    • Pre-Market:  DBI HDS LE MIK
    • After-Hours: ADUS BILI FDX MDB SMAR WPRT
  • Wednesday (March 18)
    • Pre-Market:  BZUN FUTU GIS IAA NIO QTT
    • After-Hours:  FIVE GES MLHR PD QADA TLRD TCOM VFF WSM
  • Thursday (March 19)
    • Pre-Market:  ACN CMC DRI DOYU DLTH EPAC GDS LEN MOM PLCE
    • After-Hours: CTAS CRWD OLLI SCHL
  • Friday (March 20)
    • Pre-Market: HIBB
    • After-Hours: None of note
    • Full Earnings Calendar