Thursday, October 22, 2020

4 Solid Stocks for a Volatile Market

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Stocks posted decent gains in yesterday’s session, and the DJIA led the pack with a 1.2% rally. The S&P 500’s 0.8% advance was good for second place, while the Nasdaq came up the rear with a 0.7% bump.

In Asia, the Tokyo Stock Exchange experienced a system problem that forced the exchange to halt trading before the end of the session. Meanwhile, China’s Shanghai Composite fell 0.2% and Hong Kong’s Hang Seng jumped 0.8%.

European stocks are mostly higher, and the Eurozone Stoxx 600 is up 0.4%.

Futures are currently pointing to a higher open for U.S. stocks. S&P 500 contracts are up 0.8% ahead of the opening bell.

Today’s featured earnings docket includes pre-market reports from Pepsi [PEP], Bed Bath & Beyond [BBY] , and Constellation Brands [STZ].

Here’s what’s moving the market this morning.

Boeing [BA]

The head of the FAA gave his tentative personal endorsement to Boeing’s proposed 737 MAX fixes, raising hopes that the end of the worst fiasco in the plane manufacturer’s history could be in sight. FAA Administrator Steve Dickson personally took one of Boeing’s modified 737 on a test flight yesterday, and he said afterwards, ““I like what I saw on the flight this morning.”

Boeing has proposed ground-simulator training will be enough to re-certify pilots on the new & improved aircraft. Dickson, who also went through Boeing’s training regimen, said he felt “very prepared based on the training.”

International regulators have also expressed preliminary support for the 737 MAX fixes, and Boeing is expected to iron out its pilot training regimen over the next few weeks. If everything proceeds smoothly, the 737 MAX could be cruising U.S. skies again as early as November.

Boeing is up 2.7% in the pre-market and it’s currently the top performer in both the S&P 500 and DJIA.

Advanced Emissions Solutions Inc. [ADES]

ADES just landed a major supply deal with Cabot Corp. [CBT] and investors are bullish. The 15-year agreement to supply carbon products is expected to generate 30% to 40% incremental revenue growth. The agreement covers several products, including powder activated carbon and granular activated carbon, and ADES says the deal represents a major step toward its “post-Refined Coal future.”

Under the terms of the agreement, ADES will also take over operations at a Cabot-owned lignite mine that currently supplies Cabot’s facility in Marshall, TX.

ADES is making a sharp move on news of this deal. It’s currently up 47.3% in the pre-market.

Enlivex [ENLV]

Recently released top-line results from clinical trials of AllocetraTM, Elivex’s experimental treatment for severe to critical cases of COVID-19, and the numbers look good. The small trial included only five patients, but clinicians found the drug helped hasten recovery time and produced no reported adverse side effects relating to its administration.

The firm now plans to move forward with larger-scale Phase-II trials of Allocetra, although the firm didn’t specify a timeline for the study.

ENLV is rallying sharply on the news. It’s one of this morning’s most actively traded stocks and it’s currently up 89.3%.

American Equity Investment Life Holding Co. [AEL]

This tiny Iowa-based insurance company is the talk of Wall Street this morning after a pair of insurance companies made a $3 billion takeover offer. Massachusetts Mutual Life Insurance Co. and Athene Holdings [ATH] offered American Equity an all-cash deal that would pay $36 per share for the company.

American Equity has received similar offers in 2018 and 2019, and the firm also confirmed publicly that it was up for sale at the time. However, none of the talks resulted in a deal.

Since the story broke, shares of AEL have rallied to match the takeover offer. It’s currently trading actively in the pre-market and it’s up 60.3% to $35.25 per share, just a hair below the proposed buyout bid.

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