After Hours Report

Updated: 09-Jul-20 16:55 ET

WD-40 slides after earnings report

The S&P 500 lost 0.6% on Thursday, but continued strength in the mega-cap technology stocks helped the benchmark index overcome an early 1.7% decline. The Nasdaq Composite, powered by these household names, rose 0.5% to close at a record high. The Dow Jones Industrial Average (-1.4%) and Russell 2000 (-2.0%) underperformed.

Despite the gain in the Nasdaq, today was a weak performance by the market. Declining issues outpaced advancing issues by a 3:1 margin at the NYSE and a 2:1 margin at the Nasdaq, and the cyclical S&P 500 energy (-4.9%), financials (-2.2%), and industrials (-2.1%) sectors succumbed to noticeable losses.

Only the consumer discretionary (+0.8%) and information technology (+0.4%) sectors finished higher, and that was predominately due to record closes in Amazon (AMZN 3182.63, +101.52, +3.3%), Microsoft (MSFT 214.32, +1.49, +0.7%), and Apple (AAPL 382.73, +1.36, +0.4%).

The underperformance of the cyclical sectors, and the curve-flattening activity in the Treasury market, suggested that the reopening trade lost some of its luster. The 2-yr yield declined one basis point to 0.15%, and the 10-yr yield declined five basis points to 0.61%. The U.S. Dollar Index gained 0.4% to 96.78. WTI crude fell 3.1%, or $1.28, to $39.63/bbl.

While there wasn't a confirmed catalyst for today's decline, there were some key developments. Weekly initial claims decreased by 99,000 to 1.314 million (Briefing.com consensus 1.350 million), which was its 14th straight weekly decline but also a persistently high number of claims, and the Supreme Court ruled that a New York Grand Jury may access President Trump's tax returns.

Note, the market did appear to lose some steam in early action after the Supreme Court ruling, but the judges ruled in separate decision against efforts by Democratic-led House Committees to get access to the president's financial records.

Separately, shares of Walgreens Boots Alliance (WBA 39.01, -3.28, -7.8%) fell 8% after the company missed earnings estimates and issued downside FY20 EPS guidance.

Reviewing Thursday's economic data:

Initial claims decreased by 99,000 for the week ending July 4 to 1.314 million (Briefing.com consensus 1.350 million). Continuing claims for the week ending June 27 plunged by 698,000 to 18.062 million.
- The key takeaway from the report is that it suggests things are less bad on the job loss front, but less bad is clearly still a long way from good for both initial claims and continuing claims.
Wholesale inventories decreased 1.2% in May, as expected, following a revised 0.2% increase in April (from +0.3%).

Looking ahead, investors will receive the Producer Price Index for June on Friday.

Nasdaq Composite +17.6% YTD
S&P 500 -2.4% YTD
Dow Jones Industrial Average -9.9% YTD
Russell 2000 -16.2% YTD

Overseas:

Europe: DAX flat, FTSE -1.7%, CAC -1.2%
Asia: Nikkei +0.4%, Hang Seng +0.3%, Shanghai +1.4%

Commodities:

Crude Oil -1.28 @ 39.62
Nat Gas -0.04 @ 1.78
Gold -16.40 @ 1804.20
Silver -0.19 @ 18.98
Copper +0.02 @ 2.84

After-Hours Spotlight:

ANI Pharma (ANIP) files for $350 mln mixed securities shelf offering... no after hours indication for ANIP
Integra (IART) reports preliminary Q2 revenue slightly below consensus estimate... IART up 2.5% after hours
Matson (MATX) provides EPS guidance for Q2 above consensus estimate... MATX up 16.6% after hours
Merck's (MRK) Merck Animal Health announces FDA approval of BRAVECTO monthly chews... no after hours indication for MRK
NASDAQ (NDAQ) reports June 2020 metrics -- U.S. equity options volume was 230 mln contracts vs 181 mln prior month and 132 mln one year ago... no after hours indication for NDAQ
PriceSmart (PSMT) beats by $0.19, beats on revs... PSMT up 5.8% after hours
Simulations Plus (SLP) files for mixed securities shelf offering, no amount given... SLP up 5.4% after hours
Spirit Realty Capital (SRC) reports that June and Q2 rent collections reached approximately 75% as of July 8th... no after hours indication for SRC
WD-40 (WDFC) beats by $0.11, revenue decreased 14% yr/yr... WDFC down 5.5% after hours

Fair Value for Friday, July 10:

S&P 500: 3143
Nasdaq 100: 10753
DJIA: 25585

Today's News Summary:

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

Earnings/Guidance (Full E arnings Calendar):
- A10 Networks (ATEN) sees Q2 adj. EPS above consensus, revs below consensus
- ASE Technology (ASX) reports June revs increased 15.5% yr/yr to NT$36.5 bln
- AZZ (AZZ) misses by $0.26, misses on revs
- Bed Bath & Beyond (BBBY) misses by $0.65, misses on revs, not providing comp data or guidance; plans to close approx 200 stores over next two years
- Buckle (BKE) reports June net sales increased 26.8% yr/yr to $94.8 mln (does not plan to separately report comps during this time)
- Costco (COST) reports total adjusted comparable sales growth of 14.4% for the five weeks ended July 5, 2020
- Haverty Furniture (HVT) reports Q2 sales well below two analyst estimate
- Helen of Troy (HELE) beats by $1.04, beats on revs
- PTC (PTC) guides JunQ revenue above consensus
- Osisko Gold Royalties (OR) reports prelim Q2 revenues of C$40.8 million and has received approximately 12,300 attributable gold equivalent ounces
- Qiagen (QGEN) sees upside Q2 EPS and revs
- SAP SE (SAP) provides Q2 update; cloud non-IFRS revenue grew 19% to €2.04 bln; says business activity gradually improved over the course of Q2; Software licenses revenue recovered more than expected; reaffirms 2020 outlook
- Turning Point Brands (TPB) reports preliminary 2Q20 sales above prior guidance
- United Micro (UMC) reports June revs increased 24.6% yr/yr to NT$14.58 bln
- Veritone (VERI) guides Q2 revenue above consensus
- Walgreens Boots Alliance (WBA) misses by $0.39, reports revs in-line; guides FY20 EPS below consensus; raises dividend; also details reorganization actions that will impact more than 4,000 positions (7% of the workforce)
- Zynex (ZYXI) raises Q2 and FY20 rev guidance
General News:
- Daily coronavirus cases in the U.S. continue rising; mask order reimposed in Catalonia, Spain, according to the New York Times
- Supreme Court rules that New York grand jury can get President Trump's tax returns; in a second ruling, Supreme Court rejects bid from Democratic-led House committees, including the House Oversight Committee, to have access to President Trump's financial documents
- In CNBC interview, Treasury Secretary Mnuchin says administration wants to make sure unemployment benefits aren't more than 100% of previous pay after July 31 expiration of enhanced benefits.
- Ivy League to cancel sports competitions for the fall semester on account of COVID-19 concerns, according to Bloomberg
- Australia officially terminates extradition treaty with Hong Kong, according to Reuters
- Engine maker Rolls-Royce warns of unprecedented volatility in the aviation sector, according to The Telegraph
- Altimmune (ALT) enters into teaming agreement with DynPort Vaccine Company on US Government funding efforts for its COVID-19 candidate, AdCOVID
- Amazon (AMZN) to remove Washington Redskins merchandise from its site, according to CNBC
- Air Lease (AL) provides Q2 activity update
- AnaptysBio (ANAB) receives orphan drug designation for imsidolimab for the treatment of patients with generalized pustular psoriasis
- Applied DNA Sciences (APDN) forms clinical testing subsidiary to maximize utility of FDA EUA-approved Linea COVID-19 assay kit
- AstraZeneca (AZN): FDA accepts sNDA and grants Priority Review for BRILINTA for the reduction of subsequent stroke in patients who experienced an acute ischemic stroke or transient ischemic attack
- Biogen (BIIB) announces publication of results from Phase 1/2 study of tofersen for a genetic form of ALS
- Burger King (QSR) may close up to 10% of its locations in the U.K., according to BBC
- Carnival's (CCL) AIDA Cruises to restart sailing vacations in August; Bookings for the first short cruises start today, July 9, 2020
- ChromaDex (CDXC) announced the latest preclinical findings indicating Niagen inhibits replication of a form of Coronavirus, the virus that causes COVID-19 infection, in mouse cells
- Comcast (CMCSA): CNBC reporting NBCUniversal’s Peacock may not reach licensing deal with Roku (ROKU), Amazon (AMZN) ahead of July 15 national launch
- Costco (COST) reports total adjusted comparable sales growth of 14.4% for the five weeks ended July 5, 2020
- Google (GOOG) says no plan to offer cloud services in China, according to Reuters
- Halliburton (HAL) and TechnipFMC (FTI) launch joint subsea fiber optic service
- Harley-Davidson (HOG) announces overhaul of global operating model through Rewire initiative; announces departure of CFO John Olin
- JetBlue Airways (JBLU) will make Los Angeles International Airport (LAX) its primary base of operations in greater Los Angeles
- Merck (MRK) reports the FDA grants priority review to Merck’s Supplemental Biologics License Application for KEYTRUDA for second-line treatment of patients with relapsed or refractory classical Hodgkin lymphoma
- Moderna (MRNA): Dr. Fauci reiterated optimism that Moderna coronavirus vaccine trial will enter phase 3
- Norwegian Cruise Line (NCLH): Auditor adds explanatory paragraph regarding the removal of language regarding substantial doubt about NCLH’s ability to continue as a going concern
- Osmotica Pharmaceuticals (OSMT) receives FDA approval for Upneeq
- Peloton (PTON) CFO indicates that company could look to introduce a new, lower-priced treadmill product, according to Barron's
- Rio Tinto (RIO) to begin planning for the eventual closure of New Zealand Aluminium Smelters
- Twitter (TWTR) facing more allegations of censoring conservatives, according to Reuters
- United Airlines (UAL) confirmed it informed ~36,000 U.S.-based employees, either directly or through a union representative, of plans to implement a workforce reduction at their work location
- Zymeworks (ZYME) signs new license agreement with Merck; granting Merck the right to develop additional candidates using Zymeworks' Azymetric and EFECT platforms

Notable Ratings

(see Upgrades/Downgrades calendar for full list):

Upgrades:
- Autodesk (ADSK) upgraded to Outperform from Perform at Oppenheimer; tgt $300
- Becton Dickinson (BDX) upgraded to Overweight from Equal Weight at Barclays; tgt $300
- Cisco (CSCO) upgraded to Overweight from Equal-Weight at Morgan Stanley; tgt $54
- CNX Resources (CNX) upgraded to Buy from Neutral at MKM Partners; tgt $12
- Constellation Brands (STZ) upgraded to Buy from Hold at Argus; tgt $230
- Corp Office Props (OFC) upgraded to Sector Weight from Underweight at KeyBanc Capital Markets
- CrowdStrike (CRWD) upgraded to Neutral from Sell at Citigroup; tgt $116
- Enterprise Products (EPD) upgraded to Overweight from Neutral at Piper Sandler; tgt $22
- F5 Networks (FFIV) upgraded to Overweight from Equal-Weight at Morgan Stanley; tgt $175
- Farfetch (FTCH) upgraded to Buy from Hold at China Renaissance; tgt $33
- FleetCor (FLT) upgraded to Buy from Hold at Jefferies; tgt $300
- Grainger (GWW) upgraded to Hold from Underperform at Gordon Haskett; tgt $295
- Harley-Davidson (HOG) upgraded to Buy from Neutral at Northcoast
- Independence Realty Trust (IRT) upgraded to Overweight from Sector Weight at KeyBanc Capital Markets; tgt $13
- Keurig Dr Pepper (KDP) upgraded to Buy from Neutral at Goldman; tgt raised to $33
- Ormat Tech (ORA) upgraded to Overweight from Neutral at JP Morgan; tgt $82
- NICE (NICE) upgraded to Buy from Neutral at Citigroup; tgt $221
- P.A.M. Transport (PTSI) upgraded to Buy from Hold at Stifel; tgt $39
- Pentair (PNR) upgraded to Buy from Underperform at BofA Securities; tgt $46
- ProAssurance (PRA) upgraded to Neutral from Underweight at Piper Sandler; tgt $14
- Prothena (PRTA) upgraded to Outperform from Perform at Oppenheimer; tgt $16
- Range Resources (RRC) upgraded to Buy from Neutral at MKM Partners; tgt $9
- Regeneron Pharma (REGN) upgraded to Buy from Hold at SunTrust; tgt raised to $750
- Six Flags (SIX) upgraded to Buy from Neutral at Janney; tgt $30
- Southwestern Energy (SWN) upgraded to Buy from Neutral at MKM Partners; tgt $4
- Zscaler (ZS) upgraded to Buy from Neutral at Citigroup; tgt $152
Downgrades:
- Assoc Banc-Corp (ASB) downgraded to Hold from Buy at Jefferies
- Cedar Fair (FUN) downgraded to Neutral from Buy at Janney; tgt $29
- CoreLogic (CLGX) downgraded to Equal Weight from Overweight at Barclays; tgt raised to $70
- Hub Group (HUBG) downgraded to Neutral from Overweight at JP Morgan; tgt $52
- Plug Power (PLUG) downgraded to Equal Weight from Overweight at Barclays; tgt $10
- SeaWorld Entertainment (SEAS) downgraded to Neutral from Buy at Janney; tgt $18
- Square (SQ) downgraded to Market Perform from Outperform at Cowen; tgt $119
- TPI Composites (TPIC) downgraded to Neutral from Overweight at JP Morgan; tgt $26
- U.S. Xpress (USX) downgraded to Neutral from Overweight at JP Morgan; tgt $7
- Wingstop (WING) downgraded to Neutral from Buy at BTIG Research
- Waitr Holdings (WTRH) downgraded to Hold from Buy at Deutsche Bank
Others:
- Bloomin' Brands (BLMN) initiated with a Neutral at Credit Suisse; tgt $12
- Cheesecake Factory (CAKE) initiated with a Neutral at Credit Suisse; tgt $24
- City Holding Co (CHCO) resumed with a Neutral at Piper Sandler; tgt $63
- CMS Energy (CMS) initiated with an Outperform at BMO Capital Markets; tgt $63
- CNX Resources (CNX) initiated with a Neutral at Piper Sandler; tgt $9
- Comstock (CRK) initiated with a Neutral at Piper Sandler; tgt $5.50
- Darden Restaurants (DRI) initiated with an Outperform at Credit Suisse; tgt $95
- Dell (DELL) initiated with a Neutral at Daiwa Securities; tgt $54
- DTE Energy (DTE) initiated with an Outperform at BMO Capital Markets; tgt $116
- Enbridge (ENB) initiated with an Outperform at Raymond James
- EQT Corp. (EQT) initiated with an Overweight at Piper Sandler; tgt $16
- Silk Road Medical (SILK) initiated with an Outperform at SVB Leerink; tgt $51
- United Bankshares (UBSI) resumed with a Neutral at Piper Sandler; tgt $28
- WesBanco Inc (WSBC) resumed with an Overweight at Piper Sandler; tgt $24

Upcoming Events:

Econ data (Friday):
- 08:30 ET: PPI for June (Briefing.com consensus 0.4%; Prior 0.4%) and Core PPI (Briefing.com consensus 0.1%; Prior -0.1%)
Earnings:
- Monday (July 6)
  - Pre-Market: None of note
  - After-Hours: None of note
- Tuesday (July 7)
  - Pre-Market: PAYX
  - After-Hours: FLEVI SGH
- Wednesday (July 8)
  - Pre-Market: SMPL
  - After-Hours: BBBY
- Thursday (July 9)
  - Pre-Market: AZZ HELE WBA
  - After-Hours: PSMT WDFC
- Friday (July 10)
  - Pre-Market: GBX
  - After-Hours: SJR
  - Full Earnings Calendar