{"id":12670,"date":"2020-05-11T09:43:46","date_gmt":"2020-05-11T14:43:46","guid":{"rendered":"https:\/\/www.eoption.com\/2020\/05\/11\/mid-morning-look-may-11-2020\/"},"modified":"2020-05-11T09:43:46","modified_gmt":"2020-05-11T14:43:46","slug":"mid-morning-look-may-11-2020","status":"publish","type":"post","link":"https:\/\/www.eoption.com\/mid-morning-look-may-11-2020\/","title":{"rendered":"Mid-Morning Look: May 11, 2020"},"content":{"rendered":"
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Mid-Morning Look<\/o:p><\/span><\/b><\/p>\n

Monday, May 11, 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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-206.57<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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0.85%<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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24,124<\/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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-15.55<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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0.53%<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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2,914<\/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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12.46<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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0.14%<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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9,133<\/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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-25.68<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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1.93%<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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1,304<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n<\/tr>\n

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U.S. equities open mixed after strong results last week, as the Nasdaq Composite extends its outperformance after software, semiconductors and Internet names led markets higher last week, while the S&P 500 and Dow Jones Industrials open weaker led by declines in financials. Coming into today, the Dow is up +33.6% from its March low, the S&P 500 is up +33.7% from its March low and the Nasdaq Comp is up +37.5% from its March low (and is now up nearly 2% YTD<\/span>). Oil prices are holding up well after Saudi Arabia said it will voluntarily deepen oil output cuts from June as low oil prices are causing huge pain to the kingdom’s budget and global demand remains weak due to lockdowns. Investors continue to weigh the benefits of reviving economic activity against the cost of a potential resurgence in infections that could lead to renewed lockdowns (follows pockets of some clusters announced this weekend in parts of the globe for rising cases). Handful of names moving on earnings with CAH<\/span>, AN<\/span> were among gainers and UAA<\/span> declines in retail after its miss, while dozens of companies announcing stock or notes offerings in an effort to raise cash. <\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>In currency markets, the U.S. dollar with early gains vs. most major currencies, rising against the yen, pound and euro, while commodity prices are mixed given the bounce in the buck, with gold prices sliding back to the $1,700 level and oil prices mixed. Treasury markets are steady after jumping last week, pushing the yields on the 2 and 5-year yields to record lows before paring losses. No major US economic data to move the needle today after the plunge in jobs losses late last week that weighed on market sentiment.<\/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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0.42<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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25.16<\/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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-0.40<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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30.57<\/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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-10.90<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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1,703.00<\/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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-0.0011<\/o:p><\/span><\/p>\n<\/td>\n

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1.0828<\/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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0.92<\/o:p><\/span><\/p>\n<\/td>\n

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107.57<\/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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-0.006<\/o:p><\/span><\/p>\n<\/td>\n

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0.676%<\/o:p><\/span><\/p>\n<\/td>\n<\/tr>\n

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

·     <\/span><\/span><\/span>Casino & Leisure movers; in lodging; CHH<\/span><\/b> reported a slight beat for Q1 earnings and in-line revs; MAR<\/span><\/b> reports comparable system RevPAR fell -22.5% in Q1, with a -30.5% drop for the international business and -19.5% decline in North America and adjusted EBITDA of $442Mwith up to 25% of hotels closed vs. $821M a year ago due to stay-at-home orders across the U.S.; in gaming; BYD<\/span><\/b> mentioned positively in Barron’s noting the Las Vegas Strip has essentially been shut down since mid-march but casino operators are not all created equal, and investors looking to bet on a recovery in gambling in the age of COVID-19 should look at regional casinos; PENN<\/span><\/b> announces $250M offering of stock and $250M of convertible senior notes due 2026<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Retailers; UAA<\/span><\/b> reported a larger Q1 EPS loss of (34c) on revs $930.2M (a fall of 23%) vs. est. loss (19c) and $933.6M as the coronavirus outbreak forces retailers across the world to remain shut; COTY <\/span><\/b>agrees to sell a majority of its professional beauty and retail hair businesses, including Wella and Clairol brands, to investment firm KKR in a deal valued at $4.3B; under the deal, the businesses will become a standalone company, with KKR acquiring a 60% stake; VRA<\/span><\/b> it plans to have reopened more than half of its 149 Full Line and Factory stores by the end of this month and nearly the entire store base by the end of June; SSI<\/span><\/b> files for bankruptcy protection; YETI<\/span><\/b> 15M secondary offering priced at $28.20<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Transports; Dow Transports started the day weaker, led by more weakness in airlines which fail to rally with broader markets over the last few weeks; SALT<\/span><\/b> cuts dividend by 75% to 5c from 20c in tanker space after posting Q1 loss (-$124.7M); the Baltic Dry Index fell 7.78% to 474 points to mark the 14th straight day of a decline (DSX<\/span>, STNG<\/span>, NAT<\/span>, EURN<\/span><\/b>) – the Index bottomed out at 411 on February 10 and traded as high as 2,518 last September (Capesize rates fell back 20.9% and Panamax rates were down 1.6%)<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Chemicals, Metals & Materials; CLF <\/span><\/b>shares slide falling as Q1 EPS and revenue miss, as its loss widened and profit fell as the pandemic slowed production, despite a growth in sales driven by a recent acquisition with AK Steel Holding Corp.; CF<\/span>, CTVA<\/span>, MOS<\/span>, NTR<\/span><\/b> all downgraded to underperform at Bank America stating that while 2020 had an optimistic start for agricultural chemicals, the trend has reversed significantly and notes that record corn acres, lower fuel ethanol consumption, and record soybean production in Brazil could lead to the lowest cash prices for corn and soybeans in 14 years<\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>AMC<\/span><\/b> +44%; after the Daily Mail reported that e-commerce giant AMZN<\/span><\/b> had expressed interested in acquiring the struggling movie theater chain https:\/\/on.mktw.net\/3cpMnUP<\/a><\/o:p><\/p>\n

·     <\/span><\/span><\/span>AN<\/span><\/b> +4%; positive earnings results with a beat on EPS and revenue while same-store sales declined 4.9% in Q1, new vehicle revenue -8.6% to $2.28B, Used vehicle revenue -6.8% to $1.25B<\/o:p><\/p>\n

·     <\/span><\/span><\/span>AVYA <\/span><\/b>+22%; after Q1 results showed loss that included non-cash goodwill charge of $624Ml withdraws year guidance, but sees Q3 revs $675M-$705M vs. est. $611M<\/o:p><\/p>\n

·     <\/span><\/span><\/span>CAH<\/span><\/b> +8%; reports Q3 revenue of $39.2B topping the $36.95B estimate in strong EPS beat driven by acceleration in overall pharmaceutical sales in March due to the COVID-19 outbreak though expects significant net negative impact to Q4 results due to cancellation or deferral of elective medical procedures on account of virus outbreak<\/o:p><\/p>\n

·     <\/span><\/span><\/span>COTY<\/span><\/b> +10%; after agrees to sell a majority of its professional beauty and retail hair businesses, including Wella and Clairol brands, to investment firm KKR<\/span><\/b> in a deal valued at $4.3B; under the deal, the businesses will become a standalone company, with KKR acquiring a 60% stake<\/o:p><\/p>\n

·     <\/span><\/span><\/span>MYOK<\/span><\/b> +64%; after the company said it saw positive topline data from its Phase III clinical trial (EXPLORERS<\/span> Clinical trial) of mavacamten for the treatment of patients with symptomatic, obstructive hypertrophic cardiomyopathy<\/o:p><\/p>\n

·     <\/span><\/span><\/span>QDEL <\/span><\/b>+23%; after the FDA ranted emergency-use authorization to the company for the first antigen test for the Covid-19 virus<\/o:p><\/p>\n

·     <\/span><\/span><\/span>TWLO<\/span><\/b> +4%; adds to last week gains post positive earnings and guidance<\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>CLF<\/span><\/b> -7%; shares slide falling as Q1 EPS and revenue miss, as its loss widened and profit fell as the pandemic slowed production, despite a growth in sales driven by a recent acquisition with AK Steel Holding Corp.<\/o:p><\/p>\n

·     <\/span><\/span><\/span>MAR <\/span><\/b>-5%; reports comparable system RevPAR fell -22.5% in Q1, with a -30.5% drop for the international business and -19.5% decline in North America and adjusted EBITDA of $442Mwith up to 25% of hotels closed vs. $821M a year ago due to stay-at-home orders across the U.S.<\/o:p><\/p>\n

·     <\/span><\/span><\/span>ON<\/span><\/b> -5%; after reports FQ1 results that miss estimates on the top and bottom lines and weaker guidance for revs as sees $1.1B-$1.26B vs. est. $1.25B as well as significant declines in Auto due to US\/Europe softness<\/o:p><\/p>\n

·     <\/span><\/span><\/span>SALT<\/span><\/b> -14%; cuts dividend by 75% to 5c from 20c in tanker space after posting Q1 loss (-$124.7M)<\/o:p><\/p>\n

·     <\/span><\/span><\/span>TSLA <\/span><\/b>-2%; sales of Tesla’s Model 3 sedan in China fell more than 64% in April from March, according to the China Passenger Car Assn.\/sold 3,635 Model 3 cars in April vs. 10,160 in March<\/o:p><\/p>\n

·     <\/span><\/span><\/span>UAA<\/span><\/b> -10%; reported a larger Q1 EPS loss of (34c) on revs $930.2M (a fall of 23%) vs. est. loss (19c) and $933.6M as the coronavirus outbreak forces retailers across the world to remain shut<\/o:p><\/p>\n

·     <\/span><\/span><\/span>WFC<\/span><\/b> -2%; as financials fall, shares trade to 52-week lows<\/p>\n<\/div>\n

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