{"id":12702,"date":"2020-05-14T09:50:05","date_gmt":"2020-05-14T14:50:05","guid":{"rendered":"https:\/\/www.eoption.com\/2020\/05\/14\/mid-morning-look-may-14-2020\/"},"modified":"2020-05-14T09:50:05","modified_gmt":"2020-05-14T14:50:05","slug":"mid-morning-look-may-14-2020","status":"publish","type":"post","link":"https:\/\/www.eoption.com\/mid-morning-look-may-14-2020\/","title":{"rendered":"Mid-Morning Look: May 14, 2020"},"content":{"rendered":"
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Mid-Morning Look<\/o:p><\/span><\/b><\/p>\n

Thursday, May 14, 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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-237.41<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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1.02%<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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23,010<\/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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-30.45<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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1.08%<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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2,789<\/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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-100.06<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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1.13%<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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8,763<\/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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-42.35<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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3.43%<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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1,190<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n<\/tr>\n

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U.S. equities tumble for a third straight day as a confluence of factors including another weak jobless claims reading (nearly 3M more file for 1st<\/sup> time unemployment), several bearish comments about markets\/valuations (Tepper\/Druckenmiller yesterday), a somber outlook from Fed Chairman Powell yesterday indicating more stimulus will likely be needed and geopolitical tension with China all pushing stocks lower in broad fashion. This all stemming from the ongoing daily impact of the global shutdown in an effort to stem the spread of the coronavirus pandemic which has crippled economies. President Donald Trump said overnight he is “looking at” Chinese companies that trade on the NYSE and NASDAQ<\/span> stock exchanges, but don’t follow U.S. accounting rules. Airlines and cruise lines under significant pressure once again, and remain among the most battered stocks this year, falling on fears of a prolonged economic downturn (as hotels, retailers and casino stocks still suffering as well). Initial Jobless Claims fell -195K to 2.981M vs. 3.176M prior (revised from 3.169M), but still came in above the 2.5M estimate as total job losses over past seven weeks are now over 36M, or more than 20% of the U.S. workforce. Regional banks continue to stumble as Treasury yields remain not far from record lows and while energy stocks give back mush of its recent bounce. Fear index has been rising as the VIX moves higher for a 3rd<\/sup> straight session (hasn’t happened since early March). A rough start to the day with several healthcare\/biotech names in focus after abstracts released for many ahead of the upcoming ASCO<\/span> conference at the end of the month. Financials bouncing helping pare market losses.<\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>In currency markets, the dollar outperforms vs. most rival currencies despite another negative economic data point in the U.S. Commodity prices rise with oil gaining after a drop in U.S. crude stocks on Wednesday and an IEA forecast for lower global stockpiles in the second half though the Brent benchmark was still hovering around $30 a barrel as a weak demand picture curbed gains. Gold prices another boost as investors rotate back into safe haven assets as stocks slide. Treasury market’s rally as stocks slip, as the yield on the 10-yr down 3.5bps to 0.615%; 2-yr little changed at 0.155% and 5-yr yield down 1 bps to 0.30%<\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>Weekly jobless claims<\/b> showed another 2.981M filing for first time unemployment claims which compared to estimates of 2.5M, while continuing claims rose to 22.83M below the est. 25.12M (and vs. 22.67M prior week); 4-week avg fell to 3,616,500 may 9 week from 4,180,500 prior week (previous 4,173,500)<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Import prices<\/b> MoM for April falls (-26%) vs. expected decline of (-3.2%) while export prices MoM were down (-3.3%) vs. est. down (-2.3%) <\/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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0.66<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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25.95<\/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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0.81<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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30.00<\/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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21.00<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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1,737.40<\/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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-0.0007<\/o:p><\/span><\/p>\n<\/td>\n

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1.0811<\/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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-0.12<\/o:p><\/span><\/p>\n<\/td>\n

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106.91<\/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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-0.035<\/o:p><\/span><\/p>\n<\/td>\n

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0.615%<\/o:p><\/span><\/p>\n<\/td>\n<\/tr>\n

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

·     <\/span><\/span><\/span>Industrial & Machinery; HON<\/span><\/b> files prospectus supplement related to a potential three-part senior notes offering; in research, KeyBanc downgraded ETN<\/span>, TT<\/span><\/b> to sector weight while upgraded RBC<\/span><\/b> in diversified industrials as recommend increasing exposure to short-cycle industrial and reducing exposure to nonresidential (i.e., longer-cycle); Cowen also downgraded TT<\/span><\/b> to market perform given narrowing valuation upside in the face of a tough C20-21 transition while upgraded JCI <\/span><\/b>to outperform given its relative margin resilience vs. peers through the COVID-19 recession; MMM<\/span><\/b> said monthly sales declines as a result of the COVID-19 pandemic were in line with the trends discussed prior\/said April sales fell 11% from a year ago to $2.3 billion; URI<\/span><\/b> upgraded to Buy from Neutral with $136 tgt at as believe rental metrics are poised to inflect positively, compared to the shutdown impacted March-April time period, as construction activity resumes in several cities.<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Transports; airlines sinking again with AAL<\/span>, DAL<\/span>, LUV<\/span><\/b> touching 52-week lows; DAL <\/span><\/b>authorized plan to remove Boeing 777 aircraft from service by end-2020 and also previously decided to accelerate retirement of MD-90 aircraft by June which they expect the aggregate non-cash impairment charges to range from $1.4 billion to $1.7 billion before tax; FDX<\/span><\/b> has limited the number of items that KSS<\/span><\/b> and about two dozen other retailers can ship from certain locations, as the delivery company tries to prevent its network from being overwhelmed during the coronavirus pandemic.<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Biotech movers; ALLO <\/span><\/b>rises after announced the release of the abstract related to upcoming oral presentation at ASCO which will be the first data from Allogene’s Phase 1 dose escalation study of ALLO-501 in relapsed\/refractory non-Hodgkin lymphoma; TRIL <\/span><\/b>sinks after Phase 1 data on its TTI-622 medicine were posted with abstracts for the ASCO meeting\/among 19 patients with advanced relapsed or refractory lymphoma, 1 patient with stage 4 non-GCB DLBCL (5 prior therapies) initially achieved partial response by week 8 and complete response by week 36, with response ongoing\/two patients saw grade 3 or worse neutropenia and other patients; IMUX<\/span><\/b> rises as gets first approval from German regulatory health authority, BfArM, to begin a mid-stage clinical trial of IMU-838 to treat COVID-19 patients; MGNX <\/span><\/b>slides after clinical data from two investigational pipeline molecules MGD013 and MGC018; CTMX <\/span><\/b>announces clinical presentations for CX-072 (Abstract 3005), CX-2009 (Abstract 526) as well as CX-2029 (Abstract 3502) developed in partnership with ABBV<\/span><\/b><\/o:p><\/p>\n

·     <\/span><\/span><\/span>Software movers; Jefferies downgraded shares of VMW<\/span>, SMAR<\/span><\/b> and ZUO<\/span><\/b> saying with VMW, the stock hit our $135 PT, and current valuation reflects a more balanced risk\/reward with potential near-term license pressure amid an accelerated shift to the cloud. SMAR achieved our PT (raise to $55) as well, and believe strong fundamentals are reflected in the multiple. With ZUO, they see short-term headwinds and elevated execution risk, as deployments are “heavier” in<\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>ALLO <\/span><\/b>+24%; after announced the release of the abstract related to upcoming oral presentation at ASCO which will be the first data from Allogene’s Phase 1 dose escalation study of ALLO-501 in relapsed\/refractory non-Hodgkin lymphoma<\/o:p><\/p>\n

·     <\/span><\/span><\/span>CSCO<\/span><\/b> +4%; reported revenue of $11.98B vs. consensus of $11.70B and guided F4Q20 in line at (8.5)-(11.5%) y\/y growth vs. est. at (12%) while order growth was down (5%) y\/y vs. (6%) in F2Q20<\/o:p><\/p>\n

·     <\/span><\/span><\/span>CTAS<\/span><\/b> +6%; RBC raised its price target to $250 after saying the uniform maker would be able to capitalize on a heightened focus on a sanitary, safe and healthy workplace<\/o:p><\/p>\n

·     <\/span><\/span><\/span>IMUX<\/span><\/b> +12%; as gets first approval from German regulatory health authority, BfArM, to begin a mid-stage clinical trial of IMU-838 to treat COVID-19 patients<\/o:p><\/p>\n

·     <\/span><\/span><\/span>WFC<\/span><\/b> +4%; follows speculation of deal with GS, as per Fox’s Gasparino yesterday, while JPMorgan today said any bank acquisition by Wells is “banned by law” as the bank already exceeds the 10% deposit market share limit.<\/o:p><\/p>\n

·     <\/span><\/span><\/span>WIX <\/span><\/b>+5%; posts Q1 EPS beat with COVID-19 tailwind as net premium subscription adds grew 207% in April, and Wix says the Q2 guidance is well ahead of what was originally expected (revs $231M-$233M vs. est. $227.2M)<\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>CTMX<\/span><\/b> -32%; announces clinical presentations for CX-072 (Abstract 3005), CX-2009 (Abstract 526) as well as CX-2029 (Abstract 3502) developed in partnership with ABBV<\/span><\/b><\/o:p><\/p>\n

·     <\/span><\/span><\/span>GRUB<\/span><\/b> -8%; after CNBC’s David Faber reported that recently disclosed merger talks with UBER<\/span><\/b> could end in the coming days if a deal isn’t struck<\/o:p><\/p>\n

·     <\/span><\/span><\/span>JACK <\/span><\/b>-1%; Q2 EPS was $0.50, below est. $0.63, largely driven by higher than expected SG&A expenses and a slightly lower restaurant level margin<\/o:p><\/p>\n

·     <\/span><\/span><\/span>MGNX <\/span><\/b>4%; after clinical data from two investigational pipeline molecules MGD013 and MGC018; prelim observations from Phase 1 MGD013 trial demonstrated response in ~40% of late-stage HER-2-positive tumors, compared to low response rates for HER-2-directed agents<\/o:p><\/p>\n

·     <\/span><\/span><\/span>ONEM<\/span><\/b> -2%; posted a larger Q1 EPS loss (40c)\/$78.8M vs. est. loss (17c)\/$75M but shares slide on weaker Q2 revs view of $56M-$66M vs. est. $64.3M<\/o:p><\/p>\n

·     <\/span><\/span><\/span>SDC<\/span><\/b> -11%; posted a larger than expected Q1 loss\/share 28c vs. est. loss\/share 20c on revs $197Mm below est. $209.9Mm and Q1 adj EBITDA loss $67Mm wider vs. est. loss $48.7Mm<\/o:p><\/p>\n

·     <\/span><\/span><\/span>USB<\/span><\/b> ; after Berkshire Hathaway said in a regulatory filing that it sold almost 498,000 shares of the regional bank, bringing the multinational conglomerate’s holdings to 150.5 million shares<\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>Axcella (AXLA<\/span>) 11M share Secondary priced at $4.75<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Comstock Resources (CRK<\/span>) 40M share Spot Secondary priced at $5.00<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Kiniksa (KNSA<\/span>) 2.4M share Spot Secondary priced at $18.25<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Ping Identity (PING<\/span>) 8.5M share Secondary priced at $24.00<\/p>\n<\/div>\n

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