{"id":12667,"date":"2020-05-08T15:08:52","date_gmt":"2020-05-08T20:08:52","guid":{"rendered":"https:\/\/www.eoption.com\/2020\/05\/08\/market-review-may-08-2020\/"},"modified":"2020-05-08T15:08:52","modified_gmt":"2020-05-08T20:08:52","slug":"market-review-may-08-2020","status":"publish","type":"post","link":"https:\/\/www.eoption.com\/market-review-may-08-2020\/","title":{"rendered":"Market Review: May 08, 2020"},"content":{"rendered":"
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Closing Recap<\/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
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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<\/tr>\n

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

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

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1.91%<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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24,331<\/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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48.61<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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1.69%<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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2,929<\/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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141.66<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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

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9,121<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n<\/tr>\n

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

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

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3.64%<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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1,329<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n


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Equity Market Recap<\/o:p><\/p>\n

·     <\/span><\/span><\/span>U.S. stocks end the day and week firmly higher, climbing sharply in the final hour with all eleven S&P 500 sectors advancing, while SmallCaps outperformed on the day up over 3% despite data showing historic job losses from the coronavirus crisis (though were slightly fewer than feared). Stocks got a late day boost on more optimism after Apple (AAPL) said it will reopen some stores next starting next week. Earlier, the U.S. economy lost 20.5 million jobs in April, less than 22M estimate but still marked the steepest plunge since the Great Depression as unemployment spiked to nearly 15%. Still, fear appears to have subsided in markets as the volatility index (VIX) falls to a 9-week low after surging to 2008 highs late March when the virus news took hold. Strength in gold and Treasury markets (yield on the 2 yr and 5 yr fell to lifetime lows), tell you another story about fear as investors hedge in safe haven instruments. The rally since the March low has been helped by massive monetary and fiscal stimulus as well as moves by several state governors over the last week to reopen parts of their economy slowly. Optimism for markets was also fed by news overnight that U.S. and Chinese trade representatives discussed their Phase 1 trade deal. All of these headlines were wrapped around one of the busiest earnings weeks of the quarter, though begins to slow up next week with over 430 S&P companies having reported thus far. Oil prices climb 5% on the day, posting a 25% gain on the week. Stocks briefly took a leg lower mid-afternoon after Texas coronavirus case numbers were up vs. yesterday (3.4% today vs 2.8% yesterday), not a promising sign for a state that recently reopened parts of its economy and as President Trump says we may be talking about 95,000 deaths ultimately or more from coronavirus (currently in the 70K range as per CDC yesterday). <\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>Oil prices gained<\/b> as WTI crude rises $1.19, or 5.1% to settle at $24.74 per barrel, posting its first back-to-back weekly gain since February as output cuts from the biggest producers and a promising recovery in demand began to rebalance a market filled with crude supply. Brent crude gained 5% or $1.51 to settle at $30.97 per barrel. For the week, WTI crude finished well off its best levels, but still notched a gain for 25% amid increased economic activity in China, the Saudis raising their official selling price for oil yesterday and the aforementioned hopes for a recovery in demand as states around the country reopen their economies. The weekly Baker-Hughes rig count report revealed an eighth straight week of declines, with operational oil rigs falling by 33 to 292, the lowest since 2009, also helping with oversupply worries. Gold prices slip<\/b> -$11.90 or 0.7% to settle the day $1,713.90 an ounce, but managed to end the week higher by a little less than 1% and off its highest levels in over two weeks. <\/o:p><\/p>\n

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Currencies & Treasuries<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Treasury prices<\/b> ended the week near their best levels despite stocks finishing strong as well the last 5-days with shorter-term Treasury yields plunging as the 2-year and 5-year yield fell below yesterday’s levels to reach new all-time life lows. Another round of weak economic data in the jobs sector renewed fears of just how impactful the coronavirus has been on the economy, with figures only expecting to show greater declines in May figures going forward with many states still not in the early stages of reopening their economies. The U.S. dollar<\/b> was bouncing back and forth over the last few days, hurt by the ongoing weaker economic data ad impact to the economy, but still remains among the best places to hide as other countries around the world are dealing with the similar issues and were in rougher shape prior to the pandemic. Overall, defensive currencies such as the dollar and yen have weakened, amid rallying stock markets, which are pricing-in a reopening of major economies from virus-containing lockdowns. <\/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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1.19<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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24.74<\/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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1.51<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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30.97<\/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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-11.90<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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1,713.90<\/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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-0.0001<\/o:p><\/span><\/p>\n<\/td>\n

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1.0834<\/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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0.42<\/span><\/o:p><\/span><\/p>\n<\/td>\n

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106.70<\/span><\/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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0.043<\/span><\/o:p><\/span><\/p>\n<\/td>\n

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0.684%<\/span><\/o:p><\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

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

Consumer<\/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>Consumer Staples; SAM<\/span><\/b> tgt raised to $570 from $490 at Cowen noting over the last 5 weekly periods Nielsen data has shown consistent 300% YoY revenue growth for hard seltzer (Truly brand for SAM); TWNK <\/span><\/b>posts Q1 EPS and sales beat and Q1 adj. EBITDA rose 6.4% to $50.9M, driven by higher volume and slightly accretive Voortman performance; STZ <\/span><\/b>was cut to sell from buy at MKM Partners warning STZ is seeing productivity and availability issues with certain shipments due out from Mexico; BYND<\/span><\/b> extends gains after earnings this week and as expectations rise demand will pick up amid beef shortages; NGVC <\/span><\/b>shares higher after boosting its year EPS view to 54c-62c from prior 37c-45c view last night with sales up 20% YoY for Q2<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Restaurants; BLMN<\/span><\/b> 1Q adj EPS $0.14 misses est. $0.21 while revs $1.01B beat est. $981.2Mm, 1Q US co-owned comps -10.4% vs +2.4%\/suspended strategic review process including suspending discussions with interested parties re: Brazil business; QSR<\/span><\/b> downgraded to hold at Argus as like most restaurant chains, the company is facing pressure from stay-at-home restrictions<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Housing & Building Products; ZG<\/span><\/b> reported a beat in Q1 and better than feared Q2 guidance helped by Premier Agent, which reported 11% PA revenue growth in Q1, 1% above consensus and accelerating to double digits despite a 460 bps headwind from Flex Pricing<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Retailers; HEAR <\/span><\/b>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; several retailers saw strength over the last two sessions (SIG<\/span><\/b> was speculated by analyst at Gordon Haskett), helped after reports yesterday that Brookfield asset mgmt aims to spend $5B shoring up struggling retailers, launching program to take minority stakes in some retailers <\/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

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

·     <\/span><\/span><\/span>Energy stocks were mixed; the weekly Baker Hughes (BKR) total rig count falls another -34 rigs to 374 as the oil rig count fell for an8th straight week, down -33 to 292 and gas rigs down -1 to 80; in earnings news, NBL <\/span><\/b>shares jumped despite a larger Q1 loss, slower production and a dividend cut; MUR <\/span><\/b>was downgraded at Wells Fargo on limited risk\/reward; refiners outperformed led by gains in HFX<\/span>, PBF<\/span>, MPC<\/span><\/b>; NBLX <\/span><\/b>topped Q1 earnings expectations as revenue was up 17% sequentially to $224M, driven by the Q4 2019\/cuts its 2020 capex to a range of $60M-$80M, as well as tightened equity investment capital to $240M-$260M<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Utilities & Solar; in solar, SPWR<\/span><\/b> 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 while shares of FSLR declined following its earnings results; coal names higher (ARCH<\/span>, BTU<\/span>, HCC<\/span><\/b>) as seaborne prices reportedly rebound on Chinese buying. Metal Bulletin says seaborne prices for premium hard coking coal rebounded today, partly attributed to active trading in China amid a wider rally in the commodities market<\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>Bank movers; weakness over the last week for banks and insurance companies, but a little bounce back today overall. The central bank said in a report issued Friday that it plans to proceed with its 2020 stress tests and also do further analysis via "alternative scenarios and certain adjustment to portfolios to credibly reflect current economic and banking conditions." <\/o:p><\/p>\n

·     <\/span><\/span><\/span>REITs, Mortgage finance; MITT <\/span><\/b>shares fall 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; debt collector PRAA<\/span><\/b> shares jumped over 30% after reported a sharp increase in quarterly earnings as COVID-19 related lockdowns caused job losses\/Q1 global cash collections rose to $494.6 million from Q1 2019, an increase of 7%, or 9% on a currency-adjusted basis; CLNY <\/span><\/b>suspended its Q2 dividend and defers declaring a dividend on its preferred stock until June 30 and drew $600M from its revolving credit facility as a precautionary measure<\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>Pharma & Biotech movers; RDHL<\/span><\/b> said 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\/primary endpoint is the reduction in total oxygen requirement up to day 14; FBIO<\/span><\/b> said its Biopharm unit Oncogenuity Inc. inked deal with Columbia University to develop novel oligonucleotides platform for the treatment of genetically driven cancers; PBYI<\/span><\/b> shares advance after improvement in revs and Nerlynx revs from prior quarter<\/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

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

·     <\/span><\/span><\/span>Industrial & Machinery; FLR <\/span><\/b>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; MTW<\/span><\/b> suspends buyback plan after posting Q1 EPS loss missing estimates and also revenue; in materials; SXC<\/span><\/b> shares bounced despite Q1 EPS miss and withdrawn guidance; UFS<\/span><\/b> Q1 results top estimates and gets term loan for $300M, helping boost shares; CARR <\/span><\/b>one of top gainers in the S&P despite Q1 eps and sales sliding (though topped views); BA <\/span><\/b>CEO says sees 737 max factory coming back on line this month according to report made on Fox Business<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Transports; Dow Transports around highs up 2.75% at 8,275, as all 20 components higher, paced by gains in CAR<\/span>, JBLU<\/span><\/b> and R<\/span><\/b>; there wasn’t much in way of individual news other that rallying with the broader market on reopen hopes; SAVE <\/span><\/b>17.5M share secondary priced at $10.00<\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>Internet; in online travel BKNG<\/span><\/b> 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); SHOP<\/span><\/b> 1.85M share Spot Secondary priced at $700.00; YELP<\/span><\/b> weak after showing deteriorating Q1 sales trends; RVLV<\/span>, REAL<\/span>, FVRR<\/span>, FTCH<\/span>, QRTEA<\/span>, W<\/span>, ETSY<\/span><\/b> all higher as online retailers continue to benefit as consumers shift their buying habits, perhaps for the long term<\/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

·     <\/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>Media & Telecom movers; DIS <\/span><\/b>rises after the website for Shanghai Disneyland showed tickets for the earliest days of its re-opening sold out rapidly\/the park is set to reopen on May 11 after being shuttered since Jan 25 in response the coronavirus pandemic; LYV <\/span><\/b>posted a larger quarterly loss for quarter but noted 90% of fans holding onto tickets for rescheduled shows; GTT<\/span><\/b> shares dropped after larger Q1 EPS loss widens and posts revenue decline<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Hardware & Component news; DBX <\/span><\/b>reported 1Q rev ahead of expectations as net new paid user adds was flat Q\/Q, but DBX reported better than expected cash flows and bottom line numbers; ROKU<\/span><\/b> shares fall after results and said sees 2020 ad sales to grow at a slower pace; MSI <\/span><\/b>falls as forecasts Q2 sales below views\/says review of its prior period reporting by special committee of board is ongoing<\/p>\n<\/div>\n

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