{"id":12720,"date":"2020-05-19T09:50:22","date_gmt":"2020-05-19T14:50:22","guid":{"rendered":"https:\/\/www.eoption.com\/2020\/05\/19\/mid-morning-look-may-19-2020\/"},"modified":"2020-05-19T09:50:22","modified_gmt":"2020-05-19T14:50:22","slug":"mid-morning-look-may-19-2020","status":"publish","type":"post","link":"https:\/\/www.eoption.com\/mid-morning-look-may-19-2020\/","title":{"rendered":"Mid-Morning Look: May 19, 2020"},"content":{"rendered":"
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Mid-Morning Look<\/o:p><\/span><\/b><\/p>\n

Tuesday, May 19, 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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 <\/o:p><\/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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-182.79<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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0.74%<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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24,414<\/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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-8.91<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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0.30%<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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2,945<\/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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32.17<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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0.35%<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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9,267<\/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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-3.16<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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0.24%<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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1,330<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

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U.S. equities are mixed as the Nasdaq Composite outperforms behind strength in technology shares while mixed earnings in the retail sector (better WMT<\/span> results and a miss by HD<\/span> falling from 52-week highs) push <\/span>the S&P and Dow lower. The Nasdaq Comp touched the 9,300 level for the first time since late February (record highs on 2\/19 stands at 9,838 – and now well off the 3\/23 lows of 6,631) ahead of a few software\/semi earnings this week (NVDA<\/span>, SPLK<\/span>, TTWO<\/span>, PANW<\/span>). Stocks are looking to build on yesterday’s impressive gains that saw major averages surge amid signs of progress toward making a vaccine for the coronavirus. The Dow jumped 3.9% Monday in its biggest advance since April 6. Today, markets closely watch Fed Chairman Powell and Treasury Secretary Mnuchin who ae testifying before the Senate Banking Committee regarding the Cares Act (Coronavirus Aid, Relief, and Economic Security Act) – virtually. In Europe, bond investors cheered signals that there might be momentum building among leaders to back a sweeping economic recovery plan. German Chancellor Angela Merkel and French President Emmanuel Macron late Monday proposed establishing a EUR500 billion ($546 billion) recovery fund to support regions worst hit by the coronavirus pandemic. The dollar slides against most currencies while Treasury yields remain steady after jumping on Monday. Treasury Secretary Steven Mnuchin said he expected economic conditions to improve in the second half of the year in his prepared testimony, which was released Monday afternoon. There was also a blitz of biotech companies selling shares overnight to raise cash (BLPH<\/span>, BLUE<\/span>, CLVS<\/span>, GMDA<\/span>, GOSS<\/span>, KRYS<\/span>, MRNA<\/span>, and TPTX<\/span>).<\/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 extends losses from yesterday, with the dollar index around the 99.50 level (down about 100 bps from last week), as the euro extends gains, and Mexican peso gains more than 1% early. Commodity prices rising given the weakness in the dollar as oil prices extend gains as WTI crude tops $32 per barrel while gold rebounds. Treasury prices little changed after sliding yesterday, pushing yields up across the board.<\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>Housing data showed<\/b> housing starts MoM for April fell -30.2% to 891K vs. est. -26% to 900K and building permits MoM for April reported down -20.8% at 1.074M vs. est -25.9% to 1.0M vs. March 1.356 mln unit rate (prev 1.350 mln units)<\/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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 <\/o:p><\/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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0.83<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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32.65<\/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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0.22<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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35.03<\/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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13.40<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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1,747.80<\/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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0.0022<\/o:p><\/span><\/p>\n<\/td>\n

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1.0935<\/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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0.62<\/o:p><\/span><\/p>\n<\/td>\n

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107.95<\/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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-0.009<\/o:p><\/span><\/p>\n<\/td>\n

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0.715%<\/o:p><\/span><\/p>\n<\/td>\n<\/tr>\n

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

·     <\/span><\/span><\/span>Retailers; WMT <\/span><\/b>Q1 profit beats estimates saying Q1 U.S. comp sales rose 10% and online revenue jumped 74% on stockpiling of groceries and other staples during coronavirus-related lockdowns (TGT<\/span><\/b> shares active ahead of earnings tomorrow morning); KSS <\/span><\/b>said net sales declined 43.5% in Q1 while said was not reporting comparable sales due to store closures\/decreased planned capital expenditures by ~$500M, and suspended its dividend and share repurchase program; GME <\/span><\/b>released a letter to shareholders, offering an update on its Reboot Plan to reduce costs and debt amid criticism from shareholder activists\/said it exited FY2019 with approximately $500M in cash after generating $62.3M in adjusted operating income, despite a challenging sales environment (specialty fall on KSS<\/span><\/b> results and PVH<\/span><\/b> saying it is being cautious with pace of store re-openings)<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Housing & Building Products; HD<\/span><\/b> with mixed Q1, as EPS of $2.08 on sales $28.26B compared to est. $2.27\/$27.63B while Q1 U.S. comp sales rose 7.5% vs. est. 5.8% and overall Q1 comp sales rose 6.4% topped the est. 4.5% (HD<\/span> touched all-time high yesterday); BZH<\/span><\/b> files up to $500M mixed securities shelf; EXP<\/span><\/b> rises after big quarterly beat as adjusted net earnings per diluted share of $1.28, up 45% from a year earlier, and easily topped estimates as sales by segment: Heavy Materials +17%; Light Materials -4%; Oil and Gas Proppants -44%; PIRRQ <\/span><\/b>says it’s looking for approval from the bankruptcy court to begin an orderly wind-down of its operations as soon as possible after its roughly 540 stores reopen; SWK <\/span><\/b>said it sees Q2 organic revs down 20%-30%, better than prior view for 35%-45% rev organic decline<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Software movers; AYX<\/span><\/b> upgraded to Overweight at Piper on hiring activity, new products, and secular tailwinds and raised tgt to $160 from $90; TTWO <\/span><\/b>tgt raised to $149 from $142 as expects to deliver better-than-expected Q4 results on franchise games such as Grand Theft Auto and Red Dead Redemption and also anticipates co to give strong Q1 forecast; still a busy week ahead for earnings with PANW<\/span>, SPLK<\/span>, TTWO<\/span><\/b> the next two nights; SE <\/span><\/b>upgraded to outperform at CLSA with $74 tgt saying key businesses are showing strength in the face of the global pandemic<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Media & Telecom movers; DIS <\/span><\/b>was downgraded to hold from buy at Loop Capital stating that the Street is overestimating the speed of recovery from the pandemic, while the loss of the company’s Streaming business head Kevin Mayer announced yesterday adds to the uncertainty; CMCSA<\/span><\/b> downgraded to neutral from buy at Guggenheim saying there is a slow recovery ahead with “depressed” growth and profitability as the media-exposed elements of Comcast are “likely to experience virus headwinds for a while; TMUS<\/span><\/b> falls after the WSJ reported that SoftBank Group plans to seek buyers for about $20 billion of its shares in the mobile-phone company; AT<\/span><\/b>said it closed its DirecTV operations in Venezuela, due to U.S. sanctions on the country; CABO<\/span><\/b> a $400M common stock offering with an option representing $60M of additional shares<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Casino & Leisure movers; PTON<\/span><\/b> estimates raised and tgt to $60 from $52 as remain constructive as PTON continues to be a net beneficiary of greater adoption of in-home fitness, caused by the pandemic; MGM<\/span><\/b> announced the completion of $700M in OP unit redemptions (half of the $1.4B agreement); WYND <\/span><\/b>upgraded to overweight from neutral and raise tgt to $35 from $25 at JPMorgan saying it offers a low risk way to play a potential recovery of the U.S travel consumer<\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>AAP<\/span><\/b> +3%; rises despite a miss for Q1 top\/bottom line while Q1 comp store sales fell (9.3%) vs. est. (-8.8%) – helped by upbeat guidance saying through first four weeks of Q2, comp store sales improved significantly each week<\/o:p><\/p>\n

·     <\/span><\/span><\/span>ABUS <\/span><\/b>+28%; as Wedbush upgraded it to outperform from neutral and raised tgt to $4 from $2 following positive data from an early-stage hepatitis B drug trial<\/o:p><\/p>\n

·     <\/span><\/span><\/span>BIDU<\/span><\/b> +7%; following Q1 results and as forecasts Q2 revenue above expectations, as businesses reopen after strict lockdowns to curb the spread of the coronavirus<\/o:p><\/p>\n

·     <\/span><\/span><\/span>DVAX <\/span><\/b>+25%; after saying it expects one or more of its collaboration partners in the development of a COVID-19 vaccine will begin a Phase 1 clinical trial as soon as July\/said it plans to provide an update on its early-stage collaborations in meetings with analysts and investors tomorrow<\/o:p><\/p>\n

·     <\/span><\/span><\/span>DY <\/span><\/b>+20%; after Q1 results handily topped views as adj EPS 36c\/$814.3M vs. est. 6c\/$753.2M; had cash and equivalents of $643.9m at April 25; is not providing guidance at this time<\/o:p><\/p>\n

·     <\/span><\/span><\/span>NVDA<\/span><\/b> +2%; as tgt raised by more analysts ahead of its earnings Thursday night (RBC<\/span> to $385, and upped to $425 yesterday at BMO Capital on expected data center strength)<\/o:p><\/p>\n

·     <\/span><\/span><\/span>WMT <\/span><\/b>+1%; Q1 profit beats estimates saying Q1 U.S. comp sales rose 10% and online revenue jumped 74% on stockpiling of groceries and other staples during coronavirus lockdowns<\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>CMCSA<\/span><\/b> -1%; downgraded to neutral from buy at Guggenheim saying there is a slow recovery ahead with “depressed” growth and profitability as the media-exposed elements of Comcast are “likely to experience virus headwinds for a while<\/o:p><\/p>\n

·     <\/span><\/span><\/span>KSS<\/span><\/b> -8%; said net sales declined 43.5% in Q1 while said was not reporting comparable sales due to store closures\/decreased planned capital expenditures by ~$500M, and suspended its dividend and share repurchase program (retail weak JWN<\/span>, M<\/span>, UAA<\/span>, GPS<\/span><\/b>)<\/o:p><\/p>\n

·     <\/span><\/span><\/span>MRO<\/span><\/b> -4%; downgraded at Morgan Stanley along with pullback in energy stocks<\/o:p><\/p>\n

·     <\/span><\/span><\/span>SLG<\/span><\/b> -5%; as REITs give up some of Monday’s gains along with weakness in retail today<\/o:p><\/p>\n

·     <\/span><\/span><\/span>TMUS <\/span><\/b>-3%; after the WSJ reported that SoftBank Group plans to seek buyers for about $20 billion of its shares in the mobile-phone company<\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>Bellerophon (BLPH<\/span>) 3.077M share Secondary priced at $13.00<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Bluebird Bio (BLUE<\/span>) 9.09M share Secondary priced at $55.00<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Carvana (CVNA<\/span>) 5M share Spot Secondary priced at $93.00<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Clovis (CLVS<\/span>) 11.09M share Spot Secondary priced at $8.05<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Gamida Cell (GMDA<\/span>) 13.333M share Secondary priced at $4.50<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Gossamer Bio (GOSS<\/span>) 9.434M share Spot Secondary priced at $13.25<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Houlihan Lokey (HLI<\/span>) 3M share Spot Secondary priced at $63.50<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Krystal Biotech (KRYS<\/span>) 2.3M share Secondary priced at $55.00<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Moderna (MRNA<\/span>) 17.6M share Spot Secondary priced at $76.00<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Turning Point Therapeutics (TPTX<\/span>) 5.42M share Secondary priced at $60.00<\/p>\n<\/div>\n

<\/p>\n