{"id":12650,"date":"2020-05-06T05:50:41","date_gmt":"2020-05-06T10:50:41","guid":{"rendered":"https:\/\/www.eoption.com\/2020\/05\/06\/morning-preview-may-06-2020\/"},"modified":"2020-05-06T05:50:41","modified_gmt":"2020-05-06T10:50:41","slug":"morning-preview-may-06-2020","status":"publish","type":"post","link":"https:\/\/www.eoption.com\/morning-preview-may-06-2020\/","title":{"rendered":"Morning Preview: May 06, 2020"},"content":{"rendered":"
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Early Look<\/o:p><\/span><\/b><\/p>\n

Wednesday, May 6, 2020<\/span><\/b><\/o:p><\/span><\/b><\/p>\n\n\n\n\n\n\n
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Futures<\/o:p><\/span><\/p>\n<\/td>\n

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

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

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

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

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

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0.97%<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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23,991<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n<\/tr>\n

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

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

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0.94%<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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2,885<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n<\/tr>\n

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

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

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0.86%<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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9,001<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

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Stocks in the U.S. are looking at a higher open, building on gains the last two sessions as optimism over the re-opening of the U.S. economy appears to be supporting risk assets as stocks climb and oil prices look to make it a sixth straight session of advances. President Trump overnight outlined that restarting business activity was key and said “we have to get our country open and we have to get it open soon.” Stocks closed with gains on Tuesday, but finished well-off session highs following some profit taking in the final hour, as efforts by many major economies to start easing COVID<\/span>-19 restrictions inspire confidence and hope for an economic recovery. Economic data has been dismal, with no exception expected for today when monthly private payroll data from ADP<\/span> is expected to show a decline of -21M jobs. But the hope of states reopening their economies have been overshadowing the data, with many hoping the numbers in April will mark the bottom. Yesterday, California detailed initial steps to ease restrictions that have been in place for weeks, which gave investors more confidence that we’re at the worst point in the downturn and that things should start to improve. Fed Vice Chairman Clarida said late yesterday that the unemployment rate will get very elevated and more support may be needed from the Fed and fiscal policy. In Asian markets, The Nikkei Index remained closed while the Shanghai Index gained 18 points to 2,878 and the Hang Seng Index gained 268 points to 24,137. In Europe, the German DAX<\/span> is higher by about 20 points to 10,750, while the FTSE 100 is up about 30 points to 5,880. Disney shares slip after the Dow component posted sharp earnings miss as profit fell 90%, while investors prepare for another onslaught of earnings results today<\/a>. <\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>The S&P 500 Index<\/b> gained 25.70 points<\/span>, or 0.90%, to 2,868.44<\/o:p><\/p>\n

·     <\/span><\/span><\/span>The Dow Jones Industrial Average<\/b> rose 133.33 points<\/span>, or 0.56%, to 23,883.09<\/o:p><\/p>\n

·     <\/span><\/span><\/span>The Nasdaq Composite <\/b>rose 98.41 points<\/span>,<\/span> or 1.13%, to 8,809.12<\/o:p><\/p>\n

·     <\/span><\/span><\/span>The Russell 2000 Index<\/b> advanced 9.54 points<\/span>, or 0.75% to 1,273.51<\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>7:00 AM EST      MBA Mortgage Applications Data<\/o:p><\/p>\n

·     <\/span><\/span><\/span>8:15 AM EST      ADP Employment Change for April…est. (-21.0M)<\/o:p><\/p>\n

·     <\/span><\/span><\/span>10:30 AM EST    Weekly DOE Inventory Data<\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>Earnings Before the Open: AEIS<\/span>, AEP<\/span>, ALE<\/span>, ALL<\/span>, ALLO<\/span>, BCRX<\/span>, BG<\/span>, BWA<\/span>, CARS<\/span>, CIM<\/span>, CVS<\/span>, DISCA<\/span>, SNOW<\/span>, EXTR<\/span>, FLIR<\/span>, FUN<\/span>, GM<\/span>, GPC<\/span>, GPN<\/span>. HEP<\/span>, HZNP<\/span>, KKR<\/span>, NI<\/span>, NXST<\/span>, NYT<\/span>, ODP<\/span>, OMI<\/span>, SBGI<\/span>, SMG<\/span>, SPR<\/span>, TCP<\/span>, TXMD<\/span>, VMC<\/span>, WEN<\/span>, WING<\/span>, WM<\/span>, WYND<\/span><\/o:p><\/p>\n

·     <\/span><\/span><\/span>Earnings After the Close: ADTN<\/span>, ALB<\/span>, ANGI<\/span>, APA<\/span>, AVB<\/span>, AZPN<\/span>, BRKR<\/span>, CDAU<\/span>, CF<\/span>, CHEF<\/span>, CVNA<\/span>, DDD<\/span>, EPR<\/span>, EQIX<\/span>, ETSY<\/span>, EXAS<\/span>, EXR<\/span>, FIT<\/span>, FORM<\/span>, FTNT<\/span>, GBT<\/span>, GDDY<\/span>, GRUB<\/span>, H<\/span>, HUBS<\/span>, IAC<\/span>, IRWD<\/span>, LCI<\/span>, LNC<\/span>, LVGO<\/span>, LYFT<\/span>, MET<\/span>, MNKD<\/span>, MRO<\/span>, NUS<\/span>, OSUR<\/span>, PPD<\/span>, PTON<\/span>, PXD<\/span>, PYPL<\/span>, QRTEA<\/span>, RDN<\/span>, RNG<\/span>, RUBI<\/span>, RUN<\/span>, SBRA<\/span>, SQ<\/span>, STAY<\/span>, TALO<\/span>, TMUS<\/span>, TWLO<\/span>, TWO<\/span>, UDR<\/span>, WATT<\/span>, WMC<\/span>, WPX<\/span>, ZEC<\/span>, ZNGA<\/span><\/o:p><\/p>\n

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

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

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

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

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

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

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

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

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

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

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-3.90<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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1,706.70<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n<\/tr>\n

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

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-0.0049<\/o:p><\/span><\/p>\n<\/td>\n

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1.0791<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n<\/tr>\n

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

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-0.23<\/o:p><\/span><\/p>\n<\/td>\n

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

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

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+0.017<\/o:p><\/span><\/p>\n<\/td>\n

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0.679%<\/o:p><\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

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

·     <\/span><\/span><\/span>German manufacturing orders declined<\/b> sharply in March falling 15.6% in adjusted terms after a downwardly revised 1.2% decline in February. On an annual basis, orders fell 16.0%, adjusted for calendar and price effects. Domestic orders decreased 14.8% while foreign orders contracted 16.1% in March,<\/o:p><\/p>\n

·     <\/span><\/span><\/span>President Donald Trump<\/b> on Tuesday admitted it’s “possible” that reopening the country for business will result in additional coronavirus deaths, but said that the economy has to get going again. “But at the same time, we’re going to practice social distancing, we’re going to be washing hands, we’re going to be doing a lot of the things that we’ve learned to do over the last period of time.”<\/o:p><\/p>\n

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

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

·     <\/span><\/span><\/span>Beyond Meat (BYND<\/span>)<\/b> Q1 net revs $97.1M vs. est. $88.2M; Q1 adj Ebitda $12.7M vs. $2.1M loss YoY; said saw reduction in sales to food service customers and suspends year forecast<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Cheesecake Factory (CAKE<\/span>)<\/b> 1Q prelim loss (9c) ; 1Q co-owned comps (-12.9%), says 32 locations temporarily closed, sees 1Q comps ahead of plan<\/o:p><\/p>\n

·     <\/span><\/span><\/span>NIO (NIO<\/span>)<\/b> delivered 3,155 vehicles in April 2020, +105.8% sequentially and +180.7% Y\/Y.<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Masonite (DOOR<\/span>)<\/b> Q1 adjusted EPS $1.24\/$551M vs. est. 60c\/$521.64M; withdraws outlook<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Mattel (MAT<\/span>)<\/b> shares fell -10%; reports Q1 EPS loss (61c)\/$594.1M vs. est. loss (41c)\/$652.66M; Worldwide Gross Sales for Dolls were $225.9 million, down 11% as reported, and down 9% in constant currency, versus the prior year’s first quarter, primarily driven by declines in Barbie and American Girl; worldwide Gross Sales for Infant, Toddler and Preschool were $140.3 million, down 28% as reported, and down 26% in constant currency<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Planet Fitness (PLNT<\/span>)<\/b> Q1 adjusted EPS 16c\/$127.2M vs. est. 35c\/$155.67M; reports system-wide comparable sales were up 9.8% in Q1, while total revenue was down 14.5% due to the pandemic disruption; Q1 adjusted EBITDA came in at $46.5M vs. $63.4M a year ago<\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>The American Petroleum Institute (API<\/span>)<\/b> reported that U.S. crude supplies rose by 8.4M barrels for the week ended May 1, showed gasoline stockpiles down by 2.2M barrels, while distillate inventories climbed by 6.1M barrels<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Devon Energy (DVN<\/span>)<\/b> Q1 core EPS 13c vs. est. loss (22c); is lowering its 2020 expense outlook by $250 million to $1.65 billion saying the improved cost structure is driven by expectations of lower production costs across Devon’s portfolio coupled with reductions in G&A expenses\/reduction in G&A includes an expected decrease in executive cash compensation of approximately 40% compared to 2019<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Enphase Energy (ENPH<\/span>)<\/b> Q1 earnings beat and a doubling of revenue from the year-ago quarter to $205M; Q1 adjusted gross margin increased to 39.5% from 37.3% in Q4 2019, driven by disciplined pricing and cost management; sees Q2 downside guidance of $150M-$130M in revenues vs. $133.6M est.<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Occidental Petroleum (OXY<\/span>)<\/b> Q1 adjusted EPS loss (52c)\/$4.09B vs. est. loss (63c); reports total average daily production volume of 1,416 thousands of barrels of oil equivalent per day for Q1; said identified an additional $1.2 billion in operating and corporate cost savings and reduced our full-year capital budget to between $2.4 billion to $2.6 billion<\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>Allstate (ALL<\/span>)<\/b> Q1 EPS $3.54\/$10.08B vs. est. $3.50\/$9.18B; said 1Q combined ratio reported 84.9% vs. 91.8% YoY, 1Q net investment income $421 million, -35% YoY, 1Q book value per share $69.67 vs. $63.59 YoY and 1Q catastrophe losses $211 million, -69% YoY<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Equity Residential (EQR<\/span>)<\/b> withdrew its full-year 2020 guidance, citing an inherent uncertainty surrounding the social and economic disruption resulting from the COVID-19 pandemic; is also suspending issuing guidance in future periods<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Prudential (PRU<\/span>)<\/b> Q1 adj EPS $2.32 vs. est. $2.77; AUM for the quarter was $1.48 trillion; Q1 book value per share $152.45 and adj book value per share $99.71<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Reinsurance Group (RGA<\/span>)<\/b> Q1 adjusted EPS $1.41\/$3.2B vs. est. $2.34\/$3.58B; reports book value per share $150.88 vs. $154.61 last year; said consolidated net premiums totaled $2.8B, up 3% from last year’s period<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Verisk Analytics (VRSK<\/span>)<\/b> 1Q adj EPS $1.17 vs. est. $1.12 on revs $689.8Mm vs. est. $683.3Mm, maintains qtrly dividend of 27c<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Voya Financial (VOYA<\/span>)<\/b> reported assets under management of $210.70 billion, +0.5% YoY with Q1 normalized adj. operating EPS $1.10 and said will revisit earnings growth view ranges provided<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Western Union (WU<\/span>)<\/b> Q1 EPS 44c\/$1.19B vs. est. 42c\/$1.21B; says to provide update 2020 outlook when appropriate; has temporarily paused share repurchases; sees 2020 cost savings about $50M<\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>Clovis Oncology (CLVS<\/span>)<\/b> Q1 EPS loss ($1.39) vs. est. loss ($1.22) and last year ($1.63); Q1 Rubraca revenue $42.6M was up 29% YoY; had $228.4M in cash, cash equivalents and available-for-sale securities as of March 31<\/o:p><\/p>\n

·     <\/span><\/span><\/span>DaVita (DVA<\/span>)<\/b> Q1 adjusted EPS $1.83\/$2.84B vs. est. $1.47\/$2.8B; sees FY20 revenue $11.5B-$11.7B, consensus $11.65B<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Invitae (NVTA<\/span>)<\/b> Q1 adjusted EPS loss (80c)\/$64.2M vs. est. loss (79c)\/$59.41M; said at March 31 cash, cash equivalents, restricted cash, and marketable securities totaled $301.0M; net decrease in cash, cash equivalents and restricted cash for the quarter was $61.0M<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Jazz Pharmaceuticals (JAZZ<\/span>)<\/b> Q1 adjusted EPS 45c\/$535M vs. est. 67c\/$544.55M; cuts FY20 revenue view to $2.120B-$2.260B from $2.305B-$2.375B (below est. $2.3B) and also lowers FY20 total net product sales view to $2.105B-$2.240B from $2.305B-$2.375B<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Myriad Genetics (MYGN<\/span>)<\/b> Q3 EPS loss (8c) vs. est. loss (5c); on revs $164Mm vs est $160Mm<\/o:p><\/p>\n

·     <\/span><\/span><\/span>PerkinElmer (PKI<\/span>)<\/b> Q1 adj EPS cont ops $0.67 vs. est. $0.53; guides 2Q adj EPS cont ops at least $0.65 vs. est. $0.66 on revs $610-720Mm vs. est. $621Mm<\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>Chemours (CC<\/span>)<\/b> 1Q adj EPS $0.71 vs. est. $0.45 on revs $1.3B vs. est. $1.3B; says launching program to cut FY costs by $160Mm, also cutting FY20 CAPEX by $125Mm (now $275MM vs prior $400Mm); withdraws other FY20 guidance<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Clearwater Paper (CLW<\/span>)<\/b> Q1 EPS 57c\/$478M vs. est. loss (1c)\/$443.84M; Q1 Adjusted EBITDA was $55M vs. $40M last year; says Q1 results significantly benefited from an increase in demand for our products<\/o:p><\/p>\n

·     <\/span><\/span><\/span>FMC Corporation (FMC<\/span>)<\/b> Q1 adjusted EPS $1.84\/$1.25B vs. est. $1.78\/$1.24B; cuts FY20 adj. EPS view to $6.05-$6.70 from $6.45-$6.70 (est. $6.34) and cuts FY20 revenue view to $4.65B-$4.85B from $4.8B-$4.95B<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Republic Service (RSG<\/span>)<\/b> 1Q adj EPS $0.77 vs. est. $0.76 on revs $2.55B vs. est. $2.5B; says expect to generate over $1B free cash flow if economy improves 3Q\/4Q; suspends FY20 guidance<\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>Disney (DIS<\/span>)<\/b> Q1 EPS 60c\/$18B vs. 86c\/$17.8B; 2Q Cable Networks revenue $4.4B up 19% YoY, 2Q media networks revenue $7.3B, +32% YoY, 2Q studio entertainment revenue $2.5 billion, +19% YoY, 2Q broadcasting revenue $2.8 billion, +54% YoY; Q2 had 33.5M paid subscribers for Disney+ as of March 28, 2020 with paid subscribers for ESPN+ of 7.9M and 32.1M total Hulu paid subscriber; estimates COVID-19 impacts of as much as $1.4B in Q2; said to open Shanghai Disney on May 11th <\/o:p><\/p>\n

·     <\/span><\/span><\/span>Match Group (MTCH<\/span>)<\/b> Q1 EPS 55c\/$545M vs. est. 34c\/$544.94M; said Q1 average Subscribers increased 15% to 9.9 million, up from 8.6 million in the prior year quarter, and ARPU increased 1 cent to 59c; Tinder Direct Revenue grew 31% YoY, driven by 28% Average Subscriber growth and 2% ARPU growth (Tinder Average Subscribers were 6.0 million in Q1 2020)<\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>Activision Blizzard (ATVI<\/span>)<\/b> Q1 adjusted EPS 76c\/$1.52B vs. est. 38c\/$1.32B; sees Q2 adjusted EPS 64c vs. est. 39c and Q2 net bookings $1.675B vs. est. $1.31B; sees FY20 adjusted EPS $2.62 on bookings $6.9B vs. est. $2.48\/$6.86B<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Arista Networks (ANET<\/span>)<\/b> 1Q adj EPS $2.02 vs. est. $1.87 on revs $523Mm vs. est. $536.4Mm; sees 2Q revs $520-540Mm, sees 2Q adj gr margin 63-65%<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Blackbaud (BLKB<\/span>)<\/b> Q1 EPS 51c\/$223.6M vs. est. 47c\/$221.8M<\/o:p><\/p>\n

·     <\/span><\/span><\/span>EA Inc. (EA<\/span>)<\/b> 4Q adj EPS $1.08 vs. est. $0.96 on revs $1.21B vs. est. $1.18B; guides 1Q revs $1.22B vs. est. $833.1Mm; sees FY21 EPS $3.35<\/o:p><\/p>\n

·     <\/span><\/span><\/span>KLA Corp. (KLAC<\/span>)<\/b> Q3 adjusted EPS $2.47\/$1.42B vs. est. $2.28\/$1.39B; Revenue breakdown: Product, $1.05B (consensus: $1.09B); Service, $372.9M (consensus: $348.3M); gross margin was 61.2%, and operating margin was 34.6%<\/o:p><\/p>\n

·     <\/span><\/span><\/span>LivePerson (LPSN<\/span>)<\/b> Q1 EPS loss (57c) on revs $78.1M while raises year adj Ebitda view to $3.5M-$120.5M from prior loss ($3M) to up $3M; narrows year rev outlook to $340M-$355M<\/o:p><\/p>\n

·     <\/span><\/span><\/span>MercadoLibre (MELI<\/span>)<\/b> Q1 EPS loss (44c)\/$652.1M vs. est. loss (48c)\/$633.73M; reports unique active users jumped 30.9% in Q1 to 43.2M; total payment volume through Mercado Pago rose 43.5% to $8.1B (+82.2% on a FX neutral basis.; total payment transactions increased 102.0% to 290.7M transactions for the quarter; GMV was up 10.6% to $3.4B<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Pinterest (PINS<\/span>)<\/b> Q1 EPS loss (25c)\/$271.94M vs. est. loss (9c)\/$270.08M; said Q1 Global Monthly Active Users (MAUs) grew 26% YoY to 367 million; Q1 adj Ebitda loss was $53.3M; not providing guidance for 2020; said it expect to continue to grow operating expenses in 2Q year over year, but at a slower pace compared to 1Q<\/p>\n<\/div>\n

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