{"id":12617,"date":"2020-05-05T05:48:31","date_gmt":"2020-05-05T10:48:31","guid":{"rendered":"https:\/\/www.eoption.com\/2020\/05\/05\/morning-preview-may-05-2020\/"},"modified":"2020-05-05T05:48:31","modified_gmt":"2020-05-05T10:48:31","slug":"morning-preview-may-05-2020","status":"publish","type":"post","link":"https:\/\/www.eoption.com\/morning-preview-may-05-2020\/","title":{"rendered":"Morning Preview: May 05, 2020"},"content":{"rendered":"
\n
\n

Early Look<\/o:p><\/span><\/b><\/p>\n

Tuesday, May 5, 2020<\/span><\/b><\/o:p><\/span><\/b><\/p>\n\n\n\n\n\n\n
\n

Futures<\/o:p><\/span><\/p>\n<\/td>\n

\n

Up\/Down<\/o:p><\/span><\/p>\n<\/td>\n

\n

%<\/o:p><\/span><\/p>\n<\/td>\n

\n

Last<\/o:p><\/span><\/p>\n<\/td>\n<\/tr>\n

\n

DJ Industrials<\/span><\/b><\/o:p><\/span><\/p>\n<\/td>\n

\n

219.00<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

\n

0.93%<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

\n

23,790<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n<\/tr>\n

\n

S&P 500<\/span><\/b><\/o:p><\/span><\/p>\n<\/td>\n

\n

24.50<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

\n

0.87%<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

\n

2,849<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n<\/tr>\n

\n

Nasdaq<\/span><\/b><\/o:p><\/span><\/p>\n<\/td>\n

\n

84.50<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

\n

0.96%<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

\n

8,879<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

 <\/o:p><\/span><\/p>\n

 <\/o:p><\/p>\n

Stocks are looking to open the day notably higher, extending its gains from yesterday as U.S. crude oil settled above $20 a barrel (and is higher by another 10% this morning topping $22 per barrel), more U.S. states announce a reopening of their economies and tensions for the time being simmered between China and the U.S. over Beijing’s handling of the coronavirus outbreak. Stock recovered nicely on Monday as the S&P 500 yesterday, at session lows was down 1.2% and the Dow was 1.5% lower at Monday’s bottom, marking their best intraday turnarounds since March 25 and March 19, respectively. Gains were led yesterday by technology and energy shares, and it appears those could be the key drivers once again today. In Asian markets, The Nikkei Index remained closed for holiday, as was the Shanghai Index and the Hang Seng Index jumped 254 points to 23,868. In Europe, the German DAX<\/span> is up about 175 points to 10,640, while the FTSE 100 is higher by over 70 points to 5,830. The euro is lower against the dollar after Germany’s highest court said on Tuesday that the European Central Bank exceeded its powers by launching a massive quantitative easing effort in 2015, and ordered the German government “to take active steps” against the program in its current form. Investors also await another hefty round of earnings data today and await the monthly jobs report on Friday which is again expected to show massive declines in jobs and surging unemployment rate amid the impact of the coronavirus.<\/o:p><\/p>\n

Market Closing Prices Yesterday<\/o:p><\/p>\n

·     <\/span><\/span><\/span>The S&P 500 Index<\/b> climbed 12.03 points<\/span>, or 0.42%, to 2,842.74<\/o:p><\/p>\n

·     <\/span><\/span><\/span>The Dow Jones Industrial Average<\/b> rose 26.07 points<\/span>, or 0.11%, to 23,749.76<\/o:p><\/p>\n

·     <\/span><\/span><\/span>The Nasdaq Composite <\/b>jumped 105.77 points<\/span>,<\/span> or 1.23%, to 8,710.71<\/o:p><\/p>\n

·     <\/span><\/span><\/span>The Russell 2000 Index<\/b> advanced 3.49 points<\/span>, or 0.28% to 1,263.97<\/o:p><\/p>\n

 <\/o:p><\/p>\n

<\/a><\/a><\/a>Economic Calendar for Today<\/o:p><\/a><\/p>\n

·     <\/span><\/span><\/span>7:45 AM EST      ICSC Weekly Retail Sales<\/o:p><\/p>\n

·     <\/span><\/span><\/span>8:30 AM EST      Trade Balance for March…est. (-$44.2B)<\/o:p><\/p>\n

·     <\/span><\/span><\/span>8:55 AM EST      Johnson\/Redbook Weekly Sales<\/o:p><\/p>\n

·     <\/span><\/span><\/span>9:45 AM EST      Markit US Services PMI, Apr-F…est. 27.0<\/o:p><\/p>\n

·     <\/span><\/span><\/span>9:45 AM EST      Markit US Composite PMI, Apr-F<\/o:p><\/p>\n

·     <\/span><\/span><\/span>10:00 AM EST    ISM Non-Manufacturing Index for April…est. 37.9<\/o:p><\/p>\n

·     <\/span><\/span><\/span>4:30 PM EST       API Weekly Inventory Data<\/o:p><\/p>\n

 <\/o:p><\/p>\n

Earnings Calendar: <\/o:p><\/p>\n

·     <\/span><\/span><\/span>Earnings Before the Open: ACM<\/span>, ADNT<\/span>, AGCO<\/span>, ALK<\/span>, AME<\/span>, AOS<\/span>, ARMK<\/span>, ARCC<\/span>, ATI<\/span>, BGCP<\/span>, BKI<\/span>, CBB<\/span>, CTLT<\/span>, D<\/span>, DBD<\/span>, DD<\/span>, EXPD<\/span>, HWM<\/span>, INCY<\/span>, IPGP<\/span>, ITW<\/span>, JLL<\/span>, KEX<\/span>, KPTI<\/span>, LDOS<\/span>, LHX<\/span>, LITE<\/span>, LPX<\/span>, MDC<\/span>, MLM<\/span>, MNK<\/span>, MPC<\/span>, MPLX<\/span>, NEM<\/span>, NRZ<\/span>, REGN<\/span>, SEE<\/span>, SYY<\/span>, TDG<\/span>, TREE<\/span>, TTI<\/span>, USCR<\/span>, USFD<\/span>, VST<\/span>, W<\/span>, WRK<\/span>, XYL<\/span><\/o:p><\/p>\n

·     <\/span><\/span><\/span>Earnings After the Close: AKR<\/span>, ANET<\/span>, ASH<\/span>, ATVI<\/span>, BGS<\/span>, BKD<\/span>, BYND<\/span>, CAKE<\/span>, CC<\/span>, CERS<\/span>, CLVS<\/span>, CNO<\/span>, DCPH<\/span>, DIS<\/span>, DK<\/span>, DVA<\/span>, DVN<\/span>, EA<\/span>, EMKR<\/span>, EXEL<\/span>, FMC<\/span>, GNW<\/span>, HTA<\/span>, IOVA<\/span>, KLAC<\/span>, LADR<\/span>, LC<\/span>, MAT<\/span>, MTCH<\/span>, MYGN<\/span>, NBR<\/span>, NR<\/span>, NVRO<\/span>, OXY<\/span>, PAA<\/span>, PEAK<\/span>, PINS<\/span>, PKI<\/span>, PLNT<\/span>, PRU<\/span>, RSG<\/span>, RYAM<\/span>, SBAC<\/span>, STOR<\/span>, VOYA<\/span>, VRSK<\/span>, WU<\/span><\/o:p><\/p>\n

 <\/o:p><\/span><\/p>\n

 <\/o:p><\/span><\/p>\n\n\n\n\n\n\n\n\n\n
\n

Macro<\/o:p><\/span><\/p>\n<\/td>\n

\n

Up\/Down<\/o:p><\/span><\/p>\n<\/td>\n

\n

Last<\/o:p><\/span><\/p>\n<\/td>\n<\/tr>\n

\n

WTI Crude<\/span><\/b><\/o:p><\/span><\/p>\n<\/td>\n

\n

2.11<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

\n

22.50<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n<\/tr>\n

\n

Brent<\/span><\/b><\/o:p><\/span><\/p>\n<\/td>\n

\n

2.19<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

\n

29.39<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n<\/tr>\n

\n

Gold<\/span><\/b><\/o:p><\/span><\/p>\n<\/td>\n

\n

-8.80<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

\n

1,704.50<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n<\/tr>\n

\n

EUR\/USD<\/o:p><\/span><\/b><\/p>\n<\/td>\n

\n

-0.0059<\/o:p><\/span><\/p>\n<\/td>\n

\n

1.0848<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n<\/tr>\n

\n

JPY\/USD<\/o:p><\/span><\/b><\/p>\n<\/td>\n

\n

0.03<\/o:p><\/span><\/p>\n<\/td>\n

\n

106.77<\/o:p><\/span><\/p>\n<\/td>\n<\/tr>\n

\n

10-Year Note<\/o:p><\/span><\/b><\/p>\n<\/td>\n

\n

+0.036<\/o:p><\/span><\/p>\n<\/td>\n

\n

0.669%<\/o:p><\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

 <\/o:p><\/span><\/p>\n

 <\/o:p><\/p>\n

World News<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Germany’s highest court<\/b> said on Tuesday that the European Central Bank exceeded its powers by launching a massive quantitative easing effort in 2015, and ordered the German government “to take active steps” against the program in its current form<\/o:p><\/p>\n

 <\/o:p><\/p>\n

Sector News Breakdown<\/o:p><\/span><\/p>\n

Consumer<\/o:p><\/p>\n

·     <\/span><\/span><\/span>L Brands (LB<\/span>)<\/b> shares fell -16%; said it reached a mutual agreement with Sycamore Partners to terminate their previously announced transaction. As part of L Brands’ strategy, the company remains committed to establishing Bath & Body Works as a pure-play public company<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Chegg (CHGG<\/span>)<\/b> shares rose 15%; Q1 adjusted EPS 22c\/$131.59M above est. 15c\/$122.73M; sees Q2 revs $135M-$137M vs. est. $123.8M and Q2 adj Ebitda $48M-$50M; said they had 2.9M subscribers, an increase of 35% YoY<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Dolby Labs (DLB<\/span>)<\/b> Q2 EPS $1.04\/$351.8M vs. est. $1.09\/$361.35M; guides Q3 EPS 1c-18c on sales $225M-$250M well below consensus of 72c\/$309.08M noting a vast majority of global cinema sites are currently closed and most are unlikely to reopen before the end of June; said its unit volume shipments, aggregated across various end markets and devices, could be lower by 15% to 25% from prior models<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Hertz Global (HTZ<\/span>)<\/b> shares fell over 2% overnight as the WSJ reported the company has hired a restructuring expert.<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Mohawk Industries (MHK<\/span>)<\/b> 1Q adj EPS $1.66 vs. est. $1.68 on net sales $2.3B vs. est. $2.3B; says all plants are in operation except Mexico and Pennsylvania; at end Apr sales rate about 35% below prior yr; unable to provide 2Q guidance; remain optimistic about long term<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Shakeshack (SHAK<\/span>)<\/b> 1Q adj EPS $0.02 vs est. ($0.01) on revs $143.2Mm vs est. $145.1Mm, same-store -12.8% (-2% Feb, -29% Mar); has seen steady increase in domestic sales since last week or qtr (remains strongly negative), but does expect incremental cost pressures\/inefficiencies<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Starbucks (SBUX<\/span>)<\/b> sees more than 85% of company-operated U.S. stores reopened by May 9<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Texas Roadhouse (TXRH<\/span>)<\/b> Q1 EPS 23c\/$652.5M below est. 60c\/$709.31M; said for Q1, comp sales breakdown at company restaurants increased 8.0%, increased 4.2% and decreased 29.7%, respectively (Jan, Feb, March); notes March period was negatively impacted by the onset of the COVID-19 pandemic; for quarter, comparable restaurant sales decreased 8.4% at company restaurants and 8.5% at domestic franchise restaurants<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Trex Company (TREX<\/span>)<\/b> Q1 EPS 73c\/$200.4M vs. est. 61c\/$197.71M; said Q1 products net sales increased 13% to $187M, Trex Commercial Products contributed an additional $14M; Q1 consolidated gross margin expanded by 620 bps to 44.8%, representing gross margins of 45.6% and 33.6%, respectively; sees Q2 sales $180M-$190M vs. est. $189.9M<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Wholesale beef prices jumped 8.6% today to a record, according to the USDA. That’s 18 straight days of gains, with the price now having more than doubled during that period. Pork rose to its highest since 2014(shares of HRL<\/span>, PPC<\/span>, SAFM<\/span>, TSN<\/span>, CAG<\/span><\/b> leveraged to data)<\/o:p><\/p>\n

 <\/o:p><\/p>\n

Energy<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Diamondback Energy (FANG<\/span>)<\/b> Q1 adjusted EPS $1.45\/$899M vs. est. $1.29\/$979.58M; Q1 production of 27,575 boe\/d, +45% YoY; sees FY20 total net production of 295-310 MBOE\/d and sees FY20 oil production of 183-193 MBO\/d; sees FY20 capital spend of $1.5B-$1.9B<\/o:p><\/p>\n

·     <\/span><\/span><\/span>National Fuel Gas (NFG<\/span>)<\/b> to Buy Shell’s Integrated Assets in Pennsylvania for about $541M; now sees FY EPS excluding items $2.80 to $3.00 per share, a $0.05 per share increase from prior midpoint given<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Williams (WMB<\/span>)<\/b> Q1 EPS 26c in-line with estimates; reports Q1 adjusted EBITDA $1.26B, up 4%; continues to expect 2020 Adjusted EBITDA toward the lower end of its previously stated range of between $4.95B-$5.25B and also continues to expect 2020 growth and maintenance capex toward the lower end of its previously stated range of between $1.55B-$1.85B<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Mueller Water Products (MWA<\/span>)<\/b> said it expects the Q3 to be the most challenging quarter of FY20 as sees Q3 net sales down 20%-30% vs. last year and lowers FY20 CapEx view to $70M-$75M from $80M-$90M<\/o:p><\/p>\n

 <\/o:p><\/p>\n

Financials<\/o:p><\/p>\n

·     <\/span><\/span><\/span>AIG Inc. (AIG<\/span>)<\/b> Q1 adj EPS 11c vs. est. 74c (said EPS decrease was primarily due to lower net investment income driven by declines in equity markets and losses on fair value option bonds from widening spreads in credit markets); Q1 net premiums written $5.92B vs. est. $6.02B; Q1 net investment income $2.5B down from $3.9B YoY; withdrew its previously issued guidance, including that relating to adjusted return on common equity<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Compass Diversified (CODI<\/span>)<\/b> 5M share Spot Secondary priced at $17.60<\/o:p><\/p>\n

·     <\/span><\/span><\/span>CoreSite Realty (COR<\/span>)<\/b> 2.62M share Spot Secondary priced at $119.50<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Insperity (NSP<\/span>)<\/b> 1Q adj EPS $1.70 vs. est. $1.63 on revs $1.23B vs. est. $1.22B; guides 2Q adj EPS $1.02-1.29 vs. est. $0.81; sees FY EPS $3.19-3.86 vs. prior $3.73-4.16<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Unum Group (UNM<\/span>)<\/b> Q1 adjusted EPS $1.35\/$2.87B vs. est. $1.38\/$3.05B; 1Q book value per share $48.21 vs. $42.68 YoY; suspends share repurchase plan<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Vornado Realty (VNO<\/span>)<\/b> 1Q adj FFO\/share $0.72 vs. est. $0.73 on revs $444.5Mm vs. est. $427.3Mm, says collected substantially all rent due for March, collected 83% of rent due for April<\/o:p><\/p>\n

 <\/o:p><\/p>\n

Healthcare<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Acadia Healthcare (ACHC<\/span>)<\/b> 1Q adj EPS $0.42 vs. est. $0.38 on revs $$782.8Mm vs. est. $793.5Mm; withdraws FY guide<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Addus HomeCare (ADUS<\/span>)<\/b> 1Q adj EPS $0.77 vs. est. $0.61 on adj EBITDA $17.7Mm vs. est. $15.8Mm<\/o:p><\/p>\n

·     <\/span><\/span><\/span>AmerisourceBergen (ABC<\/span>)<\/b> has approached drugstore Walgreens Boots Alliance (WBA) to explore a deal for its pharmaceutical wholesaling division, Reuters reported overnight<\/o:p><\/p>\n

·     <\/span><\/span><\/span>GenMark (GNMK<\/span>)<\/b> shares jump 16%; Q1 EPS loss (12c)\/$38.7M vs. est. loss (14c)\/$29.77M; says 2020 key priorities of strong revenue growth, margin expansion, and technology development remain intact despite the COVID-19 pandemic; raises year rev view to $120M-$130M vs. est. $108.5M and raises GM guidance to 38%-40% range<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Luminex (LMNX<\/span>)<\/b> Q1 revs $90.4Mm vs est $84.1Mm, 1Q adj EPS $0.01 vs est ($0.01); sees 2Q revs at least $150Mm vs est $80.7Mm; sees FY revs high end $352-362Mm<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Varian Medical (VAR<\/span>)<\/b> Q2 adjusted EPS 85c\/$794M vs. est. 85c\/$769.98M; suspends share buybacks to preserve liquidity and also is withdrawing fiscal year 2020 guidance due to uncertainty surrounding the severity and duration of COVID-19<\/o:p><\/p>\n

 <\/o:p><\/p>\n

Industrials & Materials<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Allison Transmission (ALSN<\/span>)<\/b> 1Q EPS $1.20 vs. est. $0.92 on net sales $637Mm vs. est. $573.9Mm; not providing FY guidance at this time<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Itron (ITRI<\/span>)<\/b> Q1 EPS 57c\/$598.4M vs. est. 56c\/$613.33M; said Q1 total backlog was flat at $3.0B; suspends year guidance but sees Q2 EPS loss (30c)-(10c) vs. est. profit 21c and Q2 revenue $475M-$500M vs. est. $506M<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Nucor (NUE<\/span>)<\/b> has raised the price of hot-rolled, cold-rolled and galvanized by a minimum of $50\/ton, and U.S. Steel (X<\/span>)<\/b> told customers it will increase the price of all new flat-rolled products spot orders by a minimum of $60\/ton (RSC1:COM<\/span>), Bloomberg reports.<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Woodward (WWD<\/span>)<\/b> Q2 adj EPS $1.61\/$720.22M vs. est. $1.09\/$702.09M<\/o:p><\/p>\n

·     <\/span><\/span><\/span>XPO Logistics (XPO<\/span>)<\/b> Q1 EPS 47c\/$3.86B vs. est. 42c\/$3.96B; said Q1 Transportation unit revenue $2.46 billion vs $2.66 billion YoY, Logistics unit revenue $1.44 billion vs $1.49 billion YoY; 1Q adj. operating ratio 83.4%, up 420 bps y\/y to a first-quarter record<\/o:p><\/p>\n

 <\/o:p><\/p>\n

Technology, Media & Telecom<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Acacia Communications (ACIA<\/span>)<\/b> Q1 adj EPS 54c on revs $0.13M vs. est. 38c and $118.8M; Q1 adj gross margins 47.4% and says won’t provide Q2 guidance<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Cirrus Logic (CRUS<\/span>)<\/b> 4Q adj EPS $0.68 vs. est. $0.48 on revs $279.3Mm vs. est. $256.6Mm; guides 1Q revs $200-250Mm vs. est. $249.6Mm, sees 1Q gr margin 51-53%<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Fabrinet (FN<\/span>)<\/b> Q3 EPS 92c\/$411.2M vs. est. 93c\/$414.1M; sees Q4 EPS 80c-92c on revs $370M-$400M, below consensus $1.00\/$429.3M<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Five9 (FIVN<\/span>)<\/b> Q1 EPS 17c\/$95.1M vs. est. 15c\/$89.58M; reports Q1 gross margin 64.1% vs. 63.4% last year; sees FY20 EPS 72c-76c on revs $380.5M-$383.5M, vs. est. 84c\/$380.14M<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Knowles (KN<\/span>)<\/b> Q1 EPS 3c\/$163.1M vs. est. 2c\/$162.4M; sees 2q as bottom in demand for its market and sees sequential demand improvement in 2h 2020; says it may take until `21 to get back to `19 run rates<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Skyworks Solutions (SWKS<\/span>)<\/b> Q2 adj EPS $1.34 vs est $1.33 on revs $766.1Mm vs est $761.9Mm; sees 3Q adj EPS $1.13 vs est $1.25, doesn’t see Mexicali ops suspension having significant overall impact<\/p>\n<\/div>\n

<\/p>\n