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End of Day Briefing - Recap of Thursday Oct. 15, 2020

Stocks end lower as unemployment claims rose

The major averages continued their recent pullback despite Treasury Secretary Steven Mnuchin stating that the White House is not giving up on stimulus talks. Mnuchin stated in an interview on CNBC that he'll tell House Speaker Nancy Pelosi that he won't let testing stand in the way as the sides work to broker a relief agreement. Meanwhile, The Hill reports that Senate Majority Leader Mitch McConnell shot down the prospect of a COVID-19 aid package totaling $1.8T-$2.2T, the goalposts of the current negotiations between Democrats and the Trump administration. McConnell told reporters in his home state of Kentucky, according to the report, that "My members think half a trillion dollars, highly targeted, is the best way to go," when asked about the prospect of a deal totaling between $1.8T and $2.2T.

ECONOMIC EVENTS: In the U.S., initial jobless claims jumped 53,000 to 898,000 in the week ended October 10. The Empire State manufacturing index fell -6.5 to 10.5 in October, missing expectations. However, the Philly Fed manufacturing index surged 17.3 to 32.3 in October, beating expectations. Import prices rose 0.3% in September and export prices increased 0.6%.

TOP NEWS: Shares of Fastly ($FSLY) finished 27.2% lower after the company lowered its revenue guidance for the third quarter, citing reduced use from its largest customer, the video-sharing app TikTok.

Walgreens Boots Alliance ($WBA) reported better than expected profit and revenue, with executive vice chairman and CEO Stefano Pessina noting that the company is seeing "gradual improvement in key U.S. and UK markets and continued strong performance in our wholesale business" despite uncertainty amid the global COVID-19 pandemic.

In other earnings news, Morgan Stanley ($MS) reported higher than expected headline earnings and revenue, with chairman and CEO James Gorman telling investors that the "completion of the E*TRADE acquisition, the subsequent ratings upgrade from Moody's, and the recently announced acquisition of Eaton Vance significantly strengthen our Firm and position us well for future growth."

Meanwhile, Bloomberg reported that Fiat Chrysler ($FCAU) has agreed to invest up to $1.1B in one of its two Canadian assembly plants under a tentative deal with over 9,000 local autoworkers.

Peloton ($PTON) was sued by Icon Health & Fitness, the maker of the NordicTrack fitness bicycle, accusing it of infringing two patent claims, including one for a swiveling touchscreen and one related to automatic change of resistance levels during classes. In response, a lawyer for Peloton told Bloomberg that the lawsuit is "a retaliatory filing intended to deflect attention away from Icon's blatant infringement of Peloton's leaderboard technology and other deceptive practices."

MAJOR MOVERS: Among the noteworthy gainers was Organogenesis ($ORGO), which rose 21.2% after guiding Q3 revenue above consensus. Also higher was Cars.com ($CARS), which gained 25.6% after providing above-consensus Q3 revenue guidance.

Among the notable losers was Vertex Pharma ($VRTX), which slid 20.7% after discontinuing its VX-814 study. Also lower was Aphria ($APHA), which fell 18.4% after reporting quarterly results.

INDEXES: The Dow fell 19.80, or 0.07%, to 28,494.20, the Nasdaq lost 54.86, or 0.47%, to 11,713.87, and the S&P 500 declined 5.33, or 0.15%, to 3,483.34.


Reviewing Thursday's economic data:

  • Initial claims for the week ending October 10 increased by 53,000 to 898,000 (Briefing.com consensus 830,000). Continuing claims for the week ending October 3 declined by 1.165 million to 10.018 million.
    • The key takeaway from the report is that the exceedingly high level of initial claims will contribute to the view that the recovery in the labor market is slowing and speaks to the need for more stimulus to keep it from getting worse.
  • The Philadelphia Fed Index climbed to 32.3 in October (Briefing.com consensus 16.0) from 15.0 in September.
  • The Empire State Manufacturing Survey for October decreased to 10.5 (Briefing.com consensus 14.0) following the prior month's reading of 17.0.
  • Import prices increased 0.3% in September; and prices excluding oil increased 0.6%. Export prices increased 0.6% in September; and prices excluding agriculture increased 0.3%.

Looking ahead to Friday, investors will receive Retail Sales for September, Industrial Production and Capacity Utilization for September, the preliminary University of Michigan Index of Consumer Sentiment for October, Business Inventories for August, and Net Long-term TIC Flows for August.

  • Nasdaq Composite +30.6% YTD
  • S&P 500 +7.8% YTD
  • Dow Jones Industrial Average -0.2% YTD
  • Russell 2000 -1.8% YTD
Market Snapshot
Dow28494.14-19.80(-0.07%)
Nasdaq11713.80-54.86(-0.47%)
SP 5003483.34-5.33(-0.15%)
10-yr Note 0/320.730
NYSEAdv 1698 Dec 1306 Vol 758.4 mln
NasdaqAdv 1850 Dec 1532 Vol 3.3 bln

Industry Watch
Strong: Real Estate, Financials, Energy, Industrials
Weak: Information Technology, Communication Services, Health Care

Moving the Market

-- Stocks staged rebound off early lows

-- Value stocks outperformed growth stocks

-- Growth concerns were attributed to the early weakness


Source: (Briefing.com)(theFly.com)

Disclosure: I may trade in the ticker symbols mentioned, both long or short. My articles represent my personal opinion and analysis and should not be taken as investment advice. Readers should do their own research before making decisions to buy or sell securities. Trading and investing include risks, including loss of principal.

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