TheChek News Flow

After Hours Summary: PD +15.3%, DOMO +8.5%, CLDR +7.9%, DOCU +2.2% up on earnings; YEXT -11.1%, OLLI -9.5%, MRVL -6.1%, ULTA -4.3% weak on earnings

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: PD +15.3%, DOMO +8.5%, CLDR +7.9%, ZUO +6.6%, DOCU +2.2%, SWBI +2%, ZUMZ +0.6% (also announces $100 mln share repurchase program)

Companies trading higher in after hours in reaction to news: STRO +20.6% (reports "encouraging" Interim data on STRO-002 Phase 1 study), ZGNX +3.5% (enters into collaboration agreement with Tevard Biosciences), CGNX +3.2% (declares special dividend of $2/sh), CBIO +3.2% (to host call on systemic complement regulator programs), TTEC +2.4% (announces special dividend of $2.14/share), TUP +1.5% (completes debt refinancing, which co believes has now solved any going concern issues), OC +1.2% (increases dividend; also authorizes 10 mln share repurchase program), STC +0.2% (to acquire NotaryCam), NOVA +0.2% (prices offering), SRC +0.1% (provides update on rent collection activity), ACA +0.1% (renews $50 mln share repurchase program), ECL +0.1% (increases dividend), ASR +0.1% (Nov passenger traffic data), FTAI +0.1% (AIR and FTAI ink deal to provide CFM56 engine material to aviation aftermarket), HI +0.1% (increases dividend)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: YEXT -11.1%, OLLI -9.5%, MRVL -6.1%, ULTA -4.3%, MDLA -4.2%, SAIC -2.6%, COO -1.7%

Companies trading lower in after hours in reaction to news: AIR -1.8% (AIR and FTAI ink deal to provide CFM56 engine material to aviation aftermarket), MRNA -1.6% (provides update on mRNA-1273; reaffirms expectation to have 20 mln doses in US by end of 2020), AXTI -1.5% (completes ramp of its gallium arsenide substrate shipments for OSRAM), EA -1.3% (says two execs to leave BioWare unit), AEO -0.7% (establishes new payment date for dividend that had been deferred), O -0.4% (provides update on rent collection activity), STN -0.1% (to acquire Wenck)

Closing Stock Market Summary

The S&P 500 declined 0.1% on Thursday, as its record-setting hopes were interrupted by news that Pfizer (PFE 40.10, -0.70, -1.7%) is aiming to distribute only half of its COVID-19 vaccines it originally planned due to supply chain issues. Prior to the late-session news, the benchmark index was trading at all-time highs with a 0.4% gain. 

The Russell 2000 (+0.6%), Dow Jones Industrial Average (+0.3%), and Nasdaq Composite (+0.2%) still closed higher, as investors had broadened their risk exposure outside the S&P 500 throughout the day.

Generally, the Pfizer headline was a good excuse to temper the pervasive bullish sentiment and upwards momentum in the market. Six of the 11 S&P 500 sectors slipped into negative territory on a closing basis, led lower by the utilities (-1.1%) and materials (-0.7%) sectors. The energy (+1.1%) and real estate (+0.7%) sectors outperformed. 

For most of the day, investors were relatively pleased with the slate of macro news and the big gains in Boeing (BA 237.20, +13.35, +6.0%), Tesla (TSLA 593.38, +24.46, +4.3%), and many of the software companies following their earnings reports.

Boeing was boosted by news that Ryanair is ordering 75 737 MAX planes, and Tesla was upgraded to Buy from Hold at Goldman Sachs with a Street-high $780 price target. Software companies Snowflake (SNOW 339.89, +47.20, +16.1%), Zscaler (ZS 185.61, +38.82, +26.5%), and CrowdStrike (CRWD 161.19, +19.35, +13.6%) were among the earnings winners. 

Positive macro news included Senate Majority Leader McConnell observing that a stimulus compromise is "within reach," weekly initial jobless claims decreasing more than expected to 712,000 (consensus 775,000), and the November ISM Non-Manufacturing Index (55.9%) denoting a sixth straight month of expansionary activity (over 50.0%). 

We could nitpick that Senate Minority Leader Schumer (D-NY) didn't believe that Mr. McConnell was in a deal-making mood, jobless claims remained elevated, or that the ISM reading was less than expected, but a bull market tends to look at things positively. As such, despite the Pfizer-induced blip, today was a relatively constructive day. 

The 2-yr yield decreased one basis point to 0.15%, and the 10-yr yield decreased three basis points to 0.92%. The U.S. Dollar Index fell 0.5% to 90.70 -- its lowest level since April 2018. WTI crude futures gained 0.8%, or $0.38, to $45.66/bbl after OPEC+ agreed to a smaller-than-expected 500K bpd production increase, starting in January.

Reviewing Thursday's economic data:

• Initial claims for the week ending November 28 decreased by 75,000 to 712,000 ( consensus 775,000) -- the lowest since the pandemic started -- while continuing claims for the week ending November 21 decreased by 569,000 to 5.520 million.
  • The key takeaway is that there were still 712,000 initial jobless claims and 5.520 million continuing claims. In the same weeks a year ago, the totals stood at 206,000 and 1.697 million, respectively.
• The ISM Non-Manufacturing Index slipped to 55.9% in November (consensus 56.3%) from 56.6% in October. The dividing line between expansion and contraction is 50.0%. The November reading reflects a slightly slower pace of expansion than the prior month but the sixth straight reading above 50.0%.
  • The key takeaway from the report is that it didn't reflect any significant weakness in the services sector in November despite the election uncertainty, the surge in coronavirus cases, and restrictions implemented to help contain the spread of the coronavirus.
• The Markit Services PMI for November was revised higher to 58.4 from 57.7 in the preliminary reading.

Looking ahead, investors will receive the Employment Situation Report for November, the Trade Balance for October, and Factory Orders for October on Friday.

• Nasdaq Composite +37.9% YTD
• S&P 500 +13.5% YTD
• Russell 2000 +10.8% YTD
• Dow Jones Industrial Average +5.0% YTD

Gapping down
In reaction to earnings/guidance:

• SPLK -21.8%, GHLD -5.8%, DG -2.1%, SNOW -2%, COST -1.1%

Other news:

• VERI -16.5% (commenced public common stock offering)
• GLNG -6.7% (announced public offering of 11.0 mln common shares)
• DADA -6.7% (prices follow-on offering of 9 mln ADSs at $50.00 per ADS)
• JAZZ -6.5% (Jazz Pharma and PharmaMar report results of ATLANTIS Phase 3 study evaluating Zepzelca in combination with Doxorubicin did not meet primary endpoint)
• CDXS -4.7% (prices offering of 4,285,715 shares of its common stock at $17.50 per share)
• ORAN -3% (considering a conditional voluntary public takeover bid on Orange Belgium)
• OM -2.6% (prices secondary offering by selling shareholders of 4 mln shares of common stock at $53.00 per share)
• OSH -2.2% (prices offering of 5,632,430 shares of its common stock by certain selling stockholders at $46.00 per share)
• XP -1.6% (prices follow-on offering by co and selling shareholders of 31,654,894 Class A common shares at $39.00 per share)
• TWST -1.4% (prices offering of 2,802,272 shares of its common stock at $110.00 per share)

Gapping up
In reaction to earnings/guidance:

• CRWD +12.8%, ZS +11.1%, ESTC +8.4%, SCWX +8.4%, OKTA +7.5%, SIG +5.7%, MIK +5.4%, MEI +5%, GES +3.9%, AZEK +3.8%, FIVE +3.2%, DCI +2.6%, SPWH +2.3%, TD +1.5%, PVH +0.7%, SNPS +0.7%

M&A news:

• NSCO +55.9% (to acquire Custom Truck One Source for a purchase price of $1.475 bln; expected to close in the first quarter of 2021)
• WDR +48.4% (agreed to be acquired by Macquarie Group for $25.00/share in cash)
• CLNY +3.6% (announced sale of Bulk Industrial Portfolio)
• ISBC +2.7% (agreed to acquire eight Berkshire Bank [BHLB] branches)

Other news:

• LIZI +101.3% (enters in-car audio collaboration with Xpeng Motors)
• OMER +23.5% (confirms that the CMS will continue separate payment for Omeros' FDA-approved OMIDRIA in ambulatory surgery centers)
• IMV +10.2% (IMV's survivin-targeted T cell therapy shows durable clinical benefits in Phase 2 Study in patients with hard-to-treat advanced recurrent ovarian cancer)
• PROG +6.5% (prices offering of 7,645,259 shares of its common stock at $3.27 per share and of $75.0 mln of 7.25% convertible senior notes due 2025)
• FIZZ +4% (announced extra $3.00/share special dividend)
• SYK +2.3% (increased dividend; lightly traded)
• TRMB +2.2% (Trimble and SiriusXM (SIRI) establish alliance to deliver Trimble RTX GNSS corrections via satellite radio for autonomous vehicles)
• XPO +1.8% (announced planned spin-off of logistics segment)
• TW +1.2% (reports november total trading volume of $18.7 trillion)

Early premarket gappers

• Gapping up:
  • WDR +48.4%, LIZI +46.2%, OMER +23.5%, CRWD +13.3%, ZS +11.3%, ESTC +11%, OKTA +7.8%, PROG +5%, FIZZ +4%, CLNY +3.6%, ISBC +2.7%, GES +2.6%, FIVE +2.5%, SYK +2.3%, TRMB +2.2%, XPO +1.8%, PVH +1.7%, FOUR +0.9%
• Gapping down:
  • SPLK -20.7%, VERI -16.5%, GLNG -6.7%, GHLD -5.8%, CDXS -4.7%, SNOW -3.9%, DADA -3.3%, ORAN -3%, ARRY -2.9%, OSH -2.7%, DSGX -2%, TWST -1.8%, JAZZ -1.8%, OM -1.7%, XP -1%