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Broadcast Highlights

CNBC’s Full Interview with Treasury Secretary Mnuchin on Federal Coronavirus Response

  • Mnuchin delivering one of the more clear messages from the administration on actions to support the economy and the capital markets.
  • He says negotiation with democrats is progressing on a bill that would cut the payroll tax, delaying IRS payments and other measures to support small and mid size businesses. He also confirmed support of hardest hit industries, e.g. airlines.
  • He confirmed that the Fed stands ready to provide market liquidity, and he highly discounted views that the markets as markets have been operating in an orderly manner.
  • He views the current crisis as a "short-term issue that will take a couple months to resolve.

Goldman’s David Kostin: The S&P 500′s Bull Market Will End Soon

  • Very negative comments from Kostin with expectations of the market trading down 15%, then almost recovering by year end.
  • He sees an earnings recession and analyst consensus estimates remain too high with major revisions the coming months.  Goldman lowered their S&P 2Q earnings estimate to a YOY 15% decline and down 5% for 2020.  From us, clearly the fact that analysts' estimates need to come down is not new and is mostly in stock valuations, although the magnitude of coming adjustments may not be fully reflected.
  • Nothing that incremental beyond the view on earnings, but worth a watch for updated consensus view.
  • Click through for the video.

Hyman Capital Management’s Kyle Bass On Coronavirus-Driven Sell-Off, Oil Prices

  • One of the best market commentaries we saw this morning came from Kyle Bass commenting "that this too will pass".
  • He said he is not buying or selling, but there will be big opportunities on the other side of this, which he thinks will take another month to sort out as the virus begins to fade from warm summer weather and prevention actions, which need to be intensified.
  • He also said company's balance sheets really matter to ensure they can get to the other side.
  • He said this is not 2008 as the US banks are not going broke as they are stressed tested and in good shape.  This is not the same in Europe and parts of Asia where bank capital has not been modified enough since 2008.  He expects ECB action will be necessary for Italy.

Southwest CEO On Lowered Guidance Due to Coronavirus

  • The company lowered 1Q rev forecast saying that traffic was actually very strong through most of February, then last week CEO Kelly said there was a significant drop due to coronavirus showing up in the US.  He said that the hit could be "several hundred million dollars".
  • The company is not cutting capacity at this point, but obviously evaluating.
  • He says it is "encouraging" to look to China where the number of new cases is declining.
  • Stock is down 3.9% today and down about 25% since mid February.

Watch CNBC’s Full Interview with GE CEO Larry Culp

  • Culp talks about dealing with the coronovirus.  Sees some free cash flow impact in the $3 billion to $5 billion impact.
  • Is this an inflection year for your power business?  Expects over time to drive better margins and cash flow which will be seen in years to come.
  • On the aviation jet engine business and the impact of 737-Max. Same view as Boeing being a mid-year return to service.
  • Gross margins are sector low.  Says the refresh of product portfolio in aviation and power and better cost controls in factories and at corporate levels will push margins and free cash to peer levels.  He also talked about continued deleverage of the balance sheet. Said a lot of the progress has not yet shown up in financials and in 2nd inning of turnaround.
  • As GE is a big complex company, as such we found Culp's comments very big picture.

Beyond Meat talks Q4 report, expanding to international markets and sustainability

  • Stock got killed last Thursday when reported missing EPS slightly, but guided margins down as they invest in the business.  Stock was down 15%.
  • CEO Ethan Brown tells a compelling story viewing his company as an innovation engine with their platform being beef, pork and poultry.
  • They are in "hyper growth phase" seeking market share across plant based products, restaurant partners and geographically (he mentioned China and the UK).
  • Brown also defended the health benefits of his plant products, citing lower sodium, fat and obviously animal fat.
  • Key pursuits of the company which are resonating with younger consumers in addition to health are core ecological, climate and sustainability objectives.
  • We are big fans of the company and its leadership.

Etsy CEO Talks Q4 Earnings, Carbon-Neutral Strategy, Coronavirus Impact

2/27/2020
  • Company reported a strong 4Q and guided 2020 up.
  • Company seems to be also benefiting as a "stay at home" stock in the coronavirus environment.
  • CEO says not concerned with supply side disruptions.
  • Television advertising is working as it taps peoples creative sides.
  • Stock was up 14% on Thursday.

Trade Desk CEO Talks Q4 Results, 2020 Political Advertising and Coronavirus Impact

2/20/2020
  • Company is a digital ad management company.
  • After stock was hit especially hard by the market in February, the company reported a strong 4Q although they guided conservatively in 2020 as it continues to invest in connected TV.  The company is benefiting from cored cutting.
  • Trade Desk is also benefiting from campaign spending from candidates in both parties.
  • Management not seeing any global effect on its advertising business from coronavirus.
  • Stock was up 14.9% on Friday.
 

Grubhub CEO Matt Maloney On Coronavirus, Its New Membership Program and More

  • Idea is that if coronavirus takes hold materially in the US, food delivery services like Grubhub would benefit.
  • They are studying the potential issue, but not making any real change in ops at this time.
  • Company announced in 3Q that he believes shifted the industry (with too many competitors losing too much money) with focus on getting aggressive with supply and incentives.  To support this, they announced a Membership Program with 10% back and free delivery.  Maloney said they are "leaning into profits" to buy market share (which hit the stock when announced).
  • Seems like the the growth path goes through consolidation, with GH well positioned because they are profitable.
  • Also interesting was 3Q food delivery market share: Door Dash = 35%, Uber Eats = 25%, GH = 23% and Postmates = 6%.
  • Meanwhile separately, Door Dash just filed to go public.

A Coronavirus Outbreak in the US Could Be Cause for Global Recession: Moody’s Mark...

  • Interview with Mark Zandi from Moodys and David Leboviz from JP Morgan.
  • DL: Concerns relate to not knowing where the virus is and it shows no symptoms, and the resulting impact on global growth and corporate profits.
  • MZ: Concern is if it does cross over to multiple continents in a meaningful way becoming a pandemic, this could push an already weak global economy into a recession.
  • There has been much discussion on corporate supply chains, but growing concern is with people's unwillingness to congregate and the resulting impact on consumer and services.
  • In the US, political risk relates to how the US government responds to the threat.