{"id":12665,"date":"2020-05-08T09:54:10","date_gmt":"2020-05-08T14:54:10","guid":{"rendered":"https:\/\/www.eoption.com\/2020\/05\/08\/mid-morning-look-may-08-2020\/"},"modified":"2020-05-08T09:54:10","modified_gmt":"2020-05-08T14:54:10","slug":"mid-morning-look-may-08-2020","status":"publish","type":"post","link":"https:\/\/www.eoption.com\/mid-morning-look-may-08-2020\/","title":{"rendered":"Mid-Morning Look: May 08, 2020"},"content":{"rendered":"
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Mid-Morning Look<\/o:p><\/span><\/b><\/p>\n

Friday, May 08, 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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328.02<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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1.37%<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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24,203<\/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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34.68<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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1.20%<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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2,915<\/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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105.82<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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1.16%<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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9,083<\/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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33.24<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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2.59%<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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1,316<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n<\/tr>\n

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U.S. equities in rally mode on the final day of trading for the week, on pace for solid gains despite unprecedented U.S. job losses reported this morning (over -20M people in April) instead focusing on the latest steps toward lifting coronavirus restrictions and U.S.-China trade developments. U.S. employers cut an unprecedented 20.5 million workers in April, propelling the unemployment rate to around 15% as the coronavirus lockdown reversed a decade of labor-market gains in a single month. In trade news, U.S. Trade Negotiator Robert Lighthizer and his Chinese counterpart Liu He and Treasury Secretary Steven Mnuchin held a phone call on Friday, which resulted in the two largest economies in the world agreeing to strengthen macroeconomic and public-health cooperation, Reuters reported. Trump has said he would impose more tariffs on Chinese goods as punishment for what he says is misleading the world about the novel strain of coronavirus which was first identified in Wuhan, China, in December. Fear has subsided in markets as the volatility index (VIX<\/span>) falls to a 9-week low after surging to 2008 highs late March when the virus news took hold. However strength in gold and Treasury markets (yield on the 2 yr and 5 yr fell to lifetime lows yesterday), tell you another story about fear. Oil prices are higher, still on track for massive weekly gains, while gold is flat. Stocks look to hold gains after one of the busiest earnings nights of the season, with now around 440 S<\/span>&P companies having reported thus far. <\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>Nonfarm payrolls for April drop<\/b>, showing -20.5M jobs were lost in the month vs. estimates for -22M jobs, private payroll jobs fell -19.52M vs. est. for 22M jobs lost and manufacturing jobs lost were -1.33M vs. est. for -2.5M; the unemployment rate rises to 14.7% from estimate 16% and averages hourly earnings expected jumped 4.7% vs. est to rise 0.4% while hours worked was 34.2 hours (note downward revision to last month job declines as nonfarm to -870K from -701K, private to -842K from -713K and manufacturing to -34K from -18K)<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Wholesale Inventories fell<\/b> (-0.8%) in March vs. estimate decline (-1%) as March wholesale inventories decreased to $650.7B from $655.7B in prior month; wholesale inventories excluding oil rose 0.1% in March; wholesale sales fell 5.2% in March after falling 0.7% the prior month<\/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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1.16<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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24.71<\/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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0.93<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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30.39<\/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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-2.50<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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1,723.30<\/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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-0.0014<\/o:p><\/span><\/p>\n<\/td>\n

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1.0819<\/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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0.35<\/o:p><\/span><\/p>\n<\/td>\n

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106.63<\/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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0.023<\/o:p><\/span><\/p>\n<\/td>\n

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0.664%<\/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; PFPT <\/span><\/b>reported a solid 1Q, with modest revenue upside and significant EPS outperformance due to cost controls but billings only grew 11% Y\/Y, missing Street estimates of +14% due to shorter duration and a slowdown in new business; RPD<\/span><\/b> reported a better than expected 1Q as ARR growth of 31% exceeded 28% target while revenue and operating loss also showed upside; PCTY<\/span><\/b> reported its FQ3 results, surpassing consensus revenue and EBITDA, but guided FQ4 below consensus estimates on the impact of COVID-19; UPLD<\/span><\/b> reported solid F1Q results, exceeding Street revenue and adj. EBITDA, while 2Q and FY20 were guided below expectations; TTD <\/span><\/b>downgraded by two analysts after reported good 1Q results despite challenging ad market conditions in March, but worsening headwinds in April point to y\/y revenue declines likely in the -10% to -20% range for TTD in 2Q\/3Q; NET<\/span><\/b> 1Q results beat cons across most major metrics but conservative guidance for 2Q & FY20 not enough for investors with shares up 73% ytd vs IGV 8%; BILL <\/span><\/b>F3Q total rev, core rev, and margins beat consensus<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Casino & Leisure movers; RCL <\/span><\/b>said it has identified approximately $3.0 billion and $1.4 billion of capital expenditure reductions or deferrals in 2020 and 2021, respectively; SEAS<\/span><\/b> reports Q1 adjusted EBITDA of -$30.9M vs. $16.4M a year ago as traffic fell 30% to 2.3M guests\/said attendance was up 9% for the first two months of the quarter; CWH<\/span><\/b> shares jump after Q1 revenue beat and smaller EPS loss driven by stronger-than-expected RV sales; educational stocks UTI<\/span>, LOPE<\/span>, PRDO<\/span><\/b> advance early after earnings results<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Autos; ride hailing industry strong back-to-back days as UBER<\/span><\/b> followed up LYFT<\/span><\/b> better earnings yesterday with solid results despite and big cost cutting measures dealing with COVID-19 impact (price target raised by many analysts and upgraded at Davidson to buy); AXL <\/span><\/b>helps lift auto suppliers early after top and bottom line Q1 beat; TEN<\/span><\/b> reports smaller-than-expected fall in Q1 sales while Q1 adjusted loss was also smaller than expected and implements cost cuts such; LEA <\/span><\/b>another auto supplier that posted a beat for the quarter today; TSLA<\/span><\/b> Fremont plant will resume ‘limited operations’ on Friday<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Medical equipment and devices; DHR<\/span><\/b> 9.509M share Secondary priced at $163.00; BSX<\/span><\/b> said a study evaluating the safety and efficacy of the EMBLEM S-ICD System met the primary endpoint; PODD<\/span><\/b> issued cautious updates for its near-term expectations as the coronavirus disrupts new patient treatments and pressures utilization of its technology; FLDM<\/span><\/b> slides after Q1 results with revs dropping 8% as 60%-70% of academic labs were closed or at low work levels in late March and April; MTD <\/span><\/b>jumps on Q1 results and Q1 guidance but warns about 2H snap back<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Semiconductors; QRVO<\/span><\/b> posted Q4 revenue and profit above Wall Street est., while guiding Q1 revenue in the range of $710M-$750M as the midpoint above Street est of $720M; IPHI <\/span><\/b>posted a beat and raise due to a strong product cycle and exposure to Work-From-Home trends; MCHP<\/span><\/b> posted an in-line March quarter and better than feared guidance<\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>AXL<\/span><\/b> +26%; helps lift auto suppliers early after top and bottom line Q1 beat, along with beats from other auto suppliers LEA<\/span>, TEN<\/span><\/b><\/o:p><\/p>\n

·     <\/span><\/span><\/span>CWH<\/span><\/b> +28%; shares jump after Q1 revenue beat and smaller EPS loss driven by stronger-than-expected RV sales<\/o:p><\/p>\n

·     <\/span><\/span><\/span>FBIO <\/span><\/b>+17%; said its Biopharm unit Oncogenuity Inc. inked deal with Columbia University to develop novel oligonucleotides platform for the treatment of genetically driven cancers<\/o:p><\/p>\n

·     <\/span><\/span><\/span>RDHL<\/span><\/b> +7% as the FDA okayed its IND for a 40-subject Phase 2a clinical trial evaluating Yeliva (opaganib) in patients with moderate-to-severe COVID-19 infection<\/o:p><\/p>\n

·     <\/span><\/span><\/span>SPWR<\/span><\/b> +10%; posted a smaller-than-expected Q1 loss on revs beat $454.4M vs. est. $406.7M) saying revs benefited from 60% growth in global Distributed Generation shipments<\/o:p><\/p>\n

·     <\/span><\/span><\/span>UBER<\/span><\/b> +4%; posted first-ever decline in rides, but said business is already starting to recover and notes the resilience of Uber’s food delivery operation, which helped offset weaker ridership<\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>BKNG<\/span><\/b> -2%; quarterly adjusted profit plunged 69%, widely missing Wall Street estimates as travel demand took a severe hit from the COVID-19 pandemic (Q1 room nights declined 43% y\/y, and March room nights fell >100% y\/y)<\/o:p><\/p>\n

·     <\/span><\/span><\/span>FLR <\/span><\/b>-3%; said it received subpoena from U.S. DOJ on April 30 seeking documents and information related to projects for which it recorded charges in Q2 2019<\/o:p><\/p>\n

·     <\/span><\/span><\/span>HEAR <\/span><\/b>-17%; Q1’20 results\/Q2 guide well ahead of ests as continues to benefit from stay at home while the FY was raised less than beat \/ guide up<\/o:p><\/p>\n

·     <\/span><\/span><\/span>MITT<\/span><\/b> -27%; as delays 10q filing, says has experienced ‘adverse developments’ related to financing and has taken steps to prudently manage portfolio amid volatility which include declining to meet margin calls, entering into two forbearance agreements<\/o:p><\/p>\n

·     <\/span><\/span><\/span>MSI <\/span><\/b>-6%; as forecasts Q2 sales below views\/says review of its prior period reporting by special committee of board is ongoing<\/o:p><\/p>\n

·     <\/span><\/span><\/span>NET <\/span><\/b>-14%; 1Q results beat cons across most major metrics but conservative guidance for 2Q & FY20 not enough for investors with shares up 73% ytd vs IGV 8%<\/o:p><\/p>\n

·     <\/span><\/span><\/span>ROKU <\/span><\/b>-5%; after results and said sees 2020 ad sales to grow at a slower pace<\/p>\n<\/div>\n

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