{"id":12660,"date":"2020-05-07T09:48:42","date_gmt":"2020-05-07T14:48:42","guid":{"rendered":"https:\/\/www.eoption.com\/2020\/05\/07\/mid-morning-look-may-07-2020\/"},"modified":"2020-05-07T09:48:42","modified_gmt":"2020-05-07T14:48:42","slug":"mid-morning-look-may-07-2020","status":"publish","type":"post","link":"https:\/\/www.eoption.com\/mid-morning-look-may-07-2020\/","title":{"rendered":"Mid-Morning Look: May 07, 2020"},"content":{"rendered":"
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Mid-Morning Look<\/o:p><\/span><\/b><\/p>\n

Thursday, May 07, 2020<\/span><\/b><\/o:p><\/span><\/b><\/p>\n\n\n\n\n\n\n\n\n
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Index<\/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

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

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

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1.22%<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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23,954<\/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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35.86<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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1.26%<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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2,884<\/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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103.27<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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1.17%<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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8,958<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n<\/tr>\n

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Russell 2000<\/span><\/b><\/o:p><\/span><\/p>\n<\/td>\n

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

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1.46%<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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1,281<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n<\/tr>\n

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U.S. stocks rise as investors look past the mixed earnings reports and softer economic data, tending now to focus on the ongoing stimulus measures enacted by the Fed and Treasury, and that many U.S. states are starting to reopen their economies, lifting demand for products, energy. Oil prices jump again, topping $26 per barrel up nearly 10% and on track for weekly gains of over 35%, supported by bullish factors including U.S. companies cutting production, Saudi Arabia raising its official oil selling price and gasoline demand improving as economies around the world reopen. The Nasdaq Composite jumped more than 1.3% to start the day (highs 8,988), erasing its year-to-date losses briefly (Dow still down 16% YTD<\/span> and the S&P down 11%) les by strength in software and Internet names. Economic data weak as more than 3 million more Americans filed for unemployment benefits last week, bringing the total to about 33.5 million since the coronavirus outbreak began. Upbeat Fed commentary today also sparking buying interest as the Fed’s Bostic said he is hopeful that the Fed’s emergency programs and fiscal support will reduce the likelihood of a lengthy, enduring downturn. In the early going, stocks, gold, oil, Treasuries and the dollar are all trading higher as markets remain very resilient.<\/o:p><\/p>\n

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Treasuries, Currencies and Commodities<\/o:p><\/p>\n

·     <\/span><\/span><\/span>In currency markets, the euro extends losses against the dollar, moving to 2-week lows at 1.0768, down -0.25% as the dollar rises despite another awful jobs data point this morning. Commodity prices are broadly higher despite the bounce in the dollar as gold jumps after sliding yesterday and oil prices also gaining on rising demand expectations as US states reopen. Treasury market’s rally as well, as yields pullback from 3-week highs reached yesterday.<\/o:p><\/p>\n

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Economic Data<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Weekly jobless claims<\/b> were 3.16M vs. est. 3.0M (last week 3.839M) while continuing claims surge to 22.647M vs. est. 19.8M (prior week claims were 17.992M); the 4-week moving average fell to 4,173,500 May 2 week from 5,035,000 prior week (previous 5,033,250); insured unemployment rate rose to 15.5% from 12.4% prior week<\/o:p><\/p>\n

·     <\/span><\/span><\/span>U.S. Q1 nonfarm productivity fell<\/b> (-2.5%), better than the expected decline of (-5.5%), while nonfarm productivity rose 1.2% in the fourth quarter. Unit labor costs rose 4.8% in 1Q vs. up 0.9% prior quarter and slightly more than the 4.5% estimate. Output fell 6.2% in 1Q vs. up 2.4% prior quarter and compensation per hour rose 2.2% in 1Q vs. up 2.1% prior quarter<\/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

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

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

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25.57<\/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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0.82<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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30.54<\/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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12.80<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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1,701.30<\/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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-0.0021<\/o:p><\/span><\/p>\n<\/td>\n

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1.07.74<\/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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0.45<\/o:p><\/span><\/p>\n<\/td>\n

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106.57<\/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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0.685%<\/o:p><\/span><\/p>\n<\/td>\n<\/tr>\n

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Sector Movers Today<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Software movers; TWLO<\/span><\/b> shares jumped after Q1 beat and guided Q2 revs $365M-4370M, above the $337M estimate on a smaller loss and said active customers up 23% YoY to 190K; AYX<\/span><\/b> posted a Q1 beat top and bottom line but guided Q2 revs $91M-$95M vs. est. $107M weighing on shares; CRM <\/span><\/b>to replace AGN<\/span><\/b> in the S&P 100 index; FSLY <\/span><\/b>reported strong Q1 results (revs $62.9M vs. est. $45.6M) and meaningfully raised 2020 revenue and profitability guidance, with broad-based strength more than offsetting exposures to hard hit areas; HUBS<\/span><\/b> handily beat Q1 expectations, but guided Q2 and 2020 modestly below consensus estimates, primarily due to significant headwinds from COVID-19 that led to a major decline in net retention; in internet security, FTNT<\/span><\/b> tgt raised by several analysts after Q1 beats on better Q2 guidance; RNG<\/span><\/b> reported strong 1Q results as the work-from-home trend drove an acceleration in business communication requirements, healthy big deals, ARR growth, and cash generation; ZNGA <\/span><\/b>Q1 revs beat and Q2 bookings guide of $460M above est. at $422 but FY guide only up slightly and Ad revenue was a headwind and EPS missed; SPT <\/span><\/b>jumps after beat to top & bottom lines & ARR growing 41% while customers over $10k up 58%<\/o:p><\/p>\n

·     <\/span><\/span><\/span>REITs; SPG<\/span><\/b> downgraded at Wells Fargo as continue to favor strip center REITs over mall REITs given greater exposure to necessity-oriented tenants; WELL <\/span><\/b>cuts its May 2020 dividend to 61c from 87c while authorizes share repurchase program for up to $1B of common stock; INVH<\/span><\/b> posted solid 1Q20 operating results that met recently lowered expectations and like peers, pulled its prior 2020 guidance given greater COVID-related uncertainty; Mizuho noted four Apartment REITs (AVB<\/span>, ESS<\/span>, MAA<\/span><\/b> and UDR<\/span><\/b>) reported earnings last night – firm found ESS<\/span><\/b> (April new lease rate up vs 1Q20) and UDR<\/span><\/b> (leading rent collections) most encouraging, while MAA’s<\/b> (April new lease rate decline) was least encouraging; EXR<\/span><\/b> reported a steady 1Q beat, with SSREV and SSNOI growth in line with expectations at 1.9% and 1.2%, respectively<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Pharma movers; BMY<\/span><\/b> Q1 adj EPS $1.72 on revs $10.78B vs. est. $1.45 and $9.53B\/reaffirms year EPS $6.00-$6.20 vs. est. $6.08\/Q1 Opdivo revs $1.77B vs. est. $1.73B; GSK<\/span><\/b> says starts clinical trial to test experimental rheumatoid-arthritis drug Otilimab as treating for severe covid-19 related pulmonary disease; in generics, TEVA <\/span><\/b>Q1 EPS of 76c topped the 58c estimate on higher sales ($4.4B); ENDP<\/span><\/b> beats Q1 profit and revs on higher patient demand and increased customer purchasing amid the COVID-19 pandemic while suspends 2020 financial forecast; NBIX<\/span><\/b> reported strong 1Q20 results with Ingrezza’s sales beating expectations despite the challenges posed by the COVID-19 pandemic (1Q net Ingrezza product sales $231.1M, +69% YoY); ELAN <\/span><\/b>reported 1Q results light of consensus, with revenue of $658M (vs. $722M) and EPS of $0.13 ($0.24 est.), with the company citing working capital issues driven by COVID-19 and distribution channel<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Retailers; GPS <\/span><\/b>said it plans to open 800 stores by the end of May, starting with select Texas locations this weekend and includes re-openings across the company’s portfolio of chains including Old Navy, Banana Republic and Athleta; KSS <\/span><\/b>said it opened stores across four states on Monday and will re-open doors to stores across an additional 10 states on May 11; VSTO<\/span><\/b> mixed as EPS beat while sales fell 17% YoY to $426M and guides Q1 sales $370M-$400M, down from the $460M figure in the year ago period and a weaker EPS outlook; COST <\/span><\/b>reported a flat April comp (ex. gas and FX) in the US while US comparable sales ex-gas, etc. rose 11.2%; RGR <\/span><\/b>reported strong 1Q results that beat estimates and had strong backlog of orders at the end of the quarter<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Casino & Leisure movers; PTON<\/span><\/b> raises its forecast for full-year revenue to be in the range of $1.72B-$1.74B from prior $1.53B-$1.55B after Q3 revs of $524.6M topped the $487.7M; casinos active on results as WYNN <\/span><\/b>posted Q1 EPS loss ($3.54)\/$953.7M vs. est. loss (72c)\/$1.08B; saw a 64% decline in Wynn Palace operating revenue and 56% drop in Wynn Macau revenue during the quarter; PENN<\/span><\/b> reports drops in every segment during Q1 as COVID-19 disrupted casino traffic in March as adjusted EBITDAR was $252.3M vs. $391.4M a year ago\/says the Barstool Sportsbook app will be launched in Q3 (casino stocks still higher despite weaker results)<\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>AMP <\/span><\/b>+18%; shares surged after the wealth mgmt firm posted earnings and revs that easily topped consensus and raised its dividend<\/o:p><\/p>\n

·     <\/span><\/span><\/span>DXCM<\/span><\/b> +8%; to replace AGN<\/span><\/b> in the S&P 500 index<\/o:p><\/p>\n

·     <\/span><\/span><\/span>LVGO<\/span><\/b> +14%; as reported 1Q20 revenue growth of 115%+ y\/y and management guided to 71-78% growth in 2020 and announced a deal with the Government Employees Health Association (GEHA<\/span>), covering ~2M individuals<\/o:p><\/p>\n

·     <\/span><\/span><\/span>LYFT<\/span><\/b> +20%; after the co reported revs of $995M, rising 23% YoY and topping the $884.7M estimate while saying expects to remove $300M in expenses in Q4<\/o:p><\/p>\n

·     <\/span><\/span><\/span>MRNA <\/span><\/b>+12%; said it expects mid-stage trial for its COVID-19 vaccine to begin shortly and says late-stage trial will start early summer as the FDA has completed its review of co’s Investigational NDA for its COVID-19 vaccine candidate, mRNA-1273<\/o:p><\/p>\n

·     <\/span><\/span><\/span>PTON<\/span><\/b> +15%; raises its forecast for full-year revenue to be in the range of $1.72B-$1.74B from prior $1.53B-$1.55B after Q3 revs of $524.6M topped the $487.7M<\/o:p><\/p>\n

·     <\/span><\/span><\/span>PYPL<\/span><\/b> +11%; rises as processed $191B in payments in Q1, up 18% from a year earlier and forecasts strong recovery in payments volume as social distancing led to surge in digital transactions (profit plunged 87.4% as it boosted credit loss reserves, but still beat)<\/o:p><\/p>\n

·     <\/span><\/span><\/span>TVTY<\/span><\/b> +20%; said it’s exploring alternatives for nutrition business; engaged Lazard as the company’s financial advisor<\/o:p><\/p>\n

·     <\/span><\/span><\/span>TWLO<\/span><\/b> +36%; after Q1 beat and guided Q2 revs $365M-4370M, above the $337M estimate on a smaller loss and said active customers up 23% YoY to 190K<\/o:p><\/p>\n

·     <\/span><\/span><\/span>VIAC <\/span><\/b>+12% announced a comprehensive, multi-year distribution agreement with $GOOGL to deliver more content from ViacomCBS’ leading portfolio of news, entertainment and sports networks for YouTube TV subscribers<\/o:p><\/p>\n

·     <\/span><\/span><\/span>ZM<\/span><\/b> +6%; after Bloomberg reported overnight that the NY Education Dept reversed its ban on the app; to make Zoom Video accessible to educators<\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>AYX<\/span><\/b> -6%; posted a Q1 beat top and bottom line but guided Q2 revs $91M-$95M vs. est. $107M weighing on shares<\/o:p><\/p>\n

·     <\/span><\/span><\/span>CVNA<\/span><\/b> -3%; after a larger than expected Q1 loss on light revs\/said weekly retail unit sales dropped about 30% in April before rebounding to roughly 20%-30% YoY growth in recent weeks<\/o:p><\/p>\n

·     <\/span><\/span><\/span>DHR<\/span><\/b> -3%; falls after offering $2.5B worth of stocks, and convertible preferreds <\/o:p><\/p>\n

·     <\/span><\/span><\/span>PING<\/span><\/b> -5%; guides Q2 revs below views and withdraws guidance<\/o:p><\/p>\n

·     <\/span><\/span><\/span>SAVE <\/span><\/b>-14%; posts Q1 rev of $771.1M, missing the $810M est while adj EPS loss was wider and files to sell shares and convertible senior notes<\/o:p><\/p>\n

·     <\/span><\/span><\/span>SEDG<\/span><\/b> -16%; after posting Q1 EPS loss of (95c) vs. an expected profit, while the mid-point of SEDG’s expected Q2 revenue range of $305M-$335M missed the $335.99M estimate<\/o:p><\/p>\n

·     <\/span><\/span><\/span>VSTO<\/span><\/b> -25%; mixed as EPS beat while sales fell 17% YoY to $426M and guides Q1 sales $370M-$400M, down from the $460M figure in the year ago period and a weaker EPS outlook<\/p>\n<\/div>\n

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