{"id":12734,"date":"2020-05-21T09:50:52","date_gmt":"2020-05-21T14:50:52","guid":{"rendered":"https:\/\/www.eoption.com\/2020\/05\/21\/mid-morning-look-may-21-2020\/"},"modified":"2020-05-21T09:50:52","modified_gmt":"2020-05-21T14:50:52","slug":"mid-morning-look-may-21-2020","status":"publish","type":"post","link":"https:\/\/www.eoption.com\/mid-morning-look-may-21-2020\/","title":{"rendered":"Mid-Morning Look: May 21, 2020"},"content":{"rendered":"
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Mid-Morning Look<\/o:p><\/span><\/b><\/p>\n

Thursday, May 21, 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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-8.79<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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0.04%<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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24,567<\/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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-13.25<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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0.45%<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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2,958<\/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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-65.41<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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0.69%<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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9,310<\/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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4.53<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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0.34%<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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1,351<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n<\/tr>\n

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U.S. equities are mixed, with the Nasdaq Composite pulling back after recent outperformance ahead of several tech earnings tonight (NVDA<\/span>, HPE<\/span>, INTU<\/span>, PANW<\/span>) while retailers also mixed following a handful of earnings results in that sector (BJ<\/span>, LB<\/span>, BBY<\/span>, TJX<\/span>). Economic data (a lot of it) was a half glass full or empty take, as figures were once again dismal (jobless claims 2.4Mm, LEI<\/span> -4.4%, Existing Home Sales down over 17%), but in many cases, the figures came in better than the prior month and vs. expectations. The yield on 10-year US<\/span> government debt declined slightly to 0.667% from 0.679% on Wednesday. Weekly jobless claims rose by 2.4 million last week, bringing the total to about 38M since mid-March. Markets dealing with positive sentiment of all 50-states, at least in part, reopening their economies and a strong bounce in oil prices, but China tensions with the U.S., the weaker economic data are having an impact this morning as stocks pull back from earlier gains. <\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>In currency markets, Euro briefly tops the 1.10 level vs. the buck, up 0.15% near highs, the South African Rand rose over 2% while the Mexican peso has been stronger the last few days; Canadian dollar has rallied given the surge in oil prices but off recent best levels. Commodity prices mixed as oil rises back to 10-week highs following yesterday’s bullish weekly inventory data that showed a draw of 5M barrels, also supported by OPEC-led supply cuts and recovering demand as governments ease restrictions imposed due to the coronavirus crisis. Treasury market’s rally as yields slip (10-yr down 1 bps to 0.66%) after the weaker economic data on the session.<\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>Weekly jobless claims<\/b> reported at 2.438M vs. est. 2.4M (prior week unrevised down to 2.687M from 2.981M) as continuing claims jump to 25.07M vs. est. 24.5M (prior week to 22.54M from 22.83M; 4-wk avg fell to 3,042,000 may 16 week from 3,543,000 prior week (previous 3,616,500) <\/o:p><\/p>\n

·     <\/span><\/span><\/span>Philly Fed Manufacturing for May<\/b> reported at down (-43.1) vs. est. down (-40) and compared to down (-56.6) prior month; six-month outlook rose to 49.7 vs 43.0<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Markit US Manufacturing PMI<\/b>, May-P flash composite PMI at 36.4 (vs 27.0 in April), May flash services PMI at 36.9 (vs. 26.7 in April); flash composite new orders index for May at 36.1 vs final April 26.4 and flash new orders index for May at 34.2 vs. final April 27.7<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Leading Index for April dropped<\/b> (-4.4%) which was better than the expected decline of (-5.4%), while the prior month was revised to down (-7.4%) from (-6.7%)<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Existing Home Sales for April fell<\/b> -17.8% to 4.33M (after falling -8.5% last month), slightly above the 4.22M estimate while March was unrevised from 5.27M; there was 4.1 months’ supply in April vs. 3.4 in March (housing inventories down -19.7% from year ago); median home price rose 7.4% from last year to $286,800<\/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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0.95<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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34.44<\/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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1.09<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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36.84<\/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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-18.30<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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1,733.80<\/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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0.0006<\/o:p><\/span><\/p>\n<\/td>\n

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1.0986<\/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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0.21<\/o:p><\/span><\/p>\n<\/td>\n

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107.75<\/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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0.67%<\/o:p><\/span><\/p>\n<\/td>\n<\/tr>\n

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

·     <\/span><\/span><\/span>Retailers; BBY<\/span><\/b> posted a Q1 EPS beat of 67c (vs. est. 45c) on sales $7.92B, down -6.6% YoY while Q1 comp sales fell (-5.3%) vs. est. (-10.8%)\/U.S. online sales up 155%; UAA<\/span><\/b> said it plans $400 mln convertible debt offering; BJ<\/span><\/b> reports higher-than-expected Q1 profit and revenue, as same-store sales jump 19.9% and rose 27%, excluding the impact of gasoline sales; Macy’s (M<\/span>)<\/b> said it expects Q1 sales $3.0B-$3.03B, down from $5.50B last year and below the $3.60B estimate while also said it expects an operating loss of $905M-$1.1B; BOOT<\/span><\/b> Q1 EPS and sales miss saying comps turned negative, declining 8% in third week of March and more than 50% last two weeks of qtr; TJX<\/span><\/b> active on earnings while saying is seeing very strong initial sales overall at stores across all states and countries that have been reopened at least a week; LB<\/span>, SCVL<\/span><\/b> also reported earnings<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Casino & Leisure movers; CHDN<\/span><\/b> said plans to reopen Harlow’s Casino Resort & Spa in Greenville and Riverwalk Casino Hotel in Vicksburg in Mississippi today; MGM<\/span><\/b> was downgraded to hold from buy at Jefferies driven by the absence of catalysts for MGM to rerate in the near term; Bank America also downgraded shares of MGM, while upgrading MGP to buy; Credit Suisse with several initiations in the casino, theme parks, cruise line, lodging sector today with outperform ratings on RCL<\/span>, NCLH<\/span>, FUN<\/span>, VAC<\/span>, HGV<\/span>, WYND<\/span><\/b>, LVS <\/span><\/b>and MTN<\/span><\/b> while cautious gaming technology (IGT<\/span>, AGS<\/span>, SGMS<\/span><\/b>)<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Internet; BIDU<\/span><\/b> shares slumped after Reuters reported the Chinese search engine giant is considering delisting from the U.S. Nasdaq and moving to an exchange closer to home to boost its valuation amid rising tension between the U.S. and China – the move followed news yesterday of the tighter U.S. scrutiny of Chinese companies listed in the country; BILI <\/span><\/b>was upgraded to overweight at JPMorgan; in online travel, EXPE<\/span><\/b> shares bounce after saying demand recovering in May as cancellation rates stabilize, overshadowing a bigger-than-expected quarterly loss in the face of the coronavirus crisis (posted 85% YoY decline for bookings in March)<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Pharma movers; AZN<\/span><\/b> has received more than $1B in U.S. funding to develop a COVID-19 vaccine with the University of Oxford and said it has supply agreements for 400M doses; AKRX<\/span><\/b> filed for voluntary protection under Chapter 11 of the U.S. Bankruptcy Code to execute an in‑<\/span>court sale of its business while addressing litigation-related overhangs; in cannabis sector, ACB<\/span><\/b> shares jump after buying U.S.-based Reliva LLC which sells CBD products for $40M in an all-stock deal and make additional payment of up to $45 mln based on future performance<\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>ACB<\/span><\/b> +30%; after buying U.S.-based Reliva LLC which sells CBD products for $40M in an all-stock deal and make additional payment of up to $45 mln based on future performance<\/o:p><\/p>\n

·     <\/span><\/span><\/span>AZN<\/span><\/b> +3%; received more than $1B in U.S. funding to develop a COVID-19 vaccine with the University of Oxford and said it has supply agreements for 400M doses<\/o:p><\/p>\n

·     <\/span><\/span><\/span>EXPE<\/span><\/b> +4%; said demand recovering in May as cancellation rates stabilize, overshadowing a bigger-than-expected quarterly loss in the face of the coronavirus crisis (posted 85% YoY decline for bookings in March)<\/o:p><\/p>\n

·     <\/span><\/span><\/span>LB<\/span><\/b> +14%; among top gainers in retail after better Bath & Body Works comps being a standout performer and said was committed to establish Bath, Body Works as pure-play company, as well as plan to close some Victoria Secret stores<\/o:p><\/p>\n

·     <\/span><\/span><\/span>RCL<\/span><\/b> +7%; positive initiations at Credit Suisse today helping boost shares of cruise lines RCL and NCLH<\/span><\/b>\/Stifel says continue to believe the current dislocation in the company’s share price\/valuation reflects under appreciation of the company<\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>BIDU<\/span><\/b> ; slumped initially after Reuters reported the Chinese search engine giant is considering delisting from the U.S. Nasdaq and moving to an exchange closer to home<\/o:p><\/p>\n

·     <\/span><\/span><\/span>GLPG<\/span><\/b> -5%; and partner GILD <\/span><\/b>reported topline Phase 3 SELECTION data for filgotinib in ulcerative colitis that came in slightly below fairly high expectations on efficacy<\/o:p><\/p>\n

·     <\/span><\/span><\/span>HUYA<\/span><\/b> -8%; downgraded to neutral at Credit Suisse post earnings saying the co may need to invest in revenue sharing\/sales and marketing to attract more users in order to compete with Bixin<\/o:p><\/p>\n

·     <\/span><\/span><\/span>NOV<\/span><\/b> -3%; suspended its dividend til further notice in effort to preserve the $77M per year of cashflow<\/o:p><\/p>\n

·     <\/span><\/span><\/span>SQ<\/span><\/b> -2%; downgraded to sell at UBS and reducing revs, adj. EBITDA and EPS estimates for 2020-21E primarily reflect the volume compression in Square Seller<\/o:p><\/p>\n

·     <\/span><\/span><\/span>SYBX<\/span><\/b> -25%; after announces the termination of its collaboration with ABBV<\/span><\/b> for the development of Synthetic Biotic medicines for the potential treatment of inflammatory bowel disease (IBD<\/span>).<\/o:p><\/p>\n

·     <\/span><\/span><\/span>UAA <\/span><\/b>-5%; said it plans $400 mln convertible debt offering<\/o:p><\/p>\n

·     <\/span><\/span><\/span>ZTO<\/span><\/b> -8%; posted weaker Q1 results as earnings and revs missed, prompting a downgrade to neutral from buy at Bank America<\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>Avantor (AVTR<\/span>) 45M share Secondary priced at $16.25<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Becton Dickinson (BDX<\/span>) 62.5M share Secondary priced at $240.00<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Ceridian (CDAY<\/span>) 1.9M share Block Trade priced at $64.40<\/o:p><\/p>\n

·     <\/span><\/span><\/span>CoStar Group (CSGP<\/span>) 2.3M share Secondary priced at $655<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Fastly (FSLY<\/span>) 6M share Secondary priced at $41.50<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Flexion (FLXN<\/span>) 9.2M share secondary priced at $9.75<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Keurig Dr. Pepper (KDP<\/span>) 40M share Secondary priced at $27.25<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Ruth’s Hospitality (RUTH<\/span>) 5.438M share Spot Secondary priced at $8.00<\/o:p><\/p>\n

·     <\/span><\/span><\/span>scPharmaceuticals (SCPH<\/span>) 5.781M share Spot Secondary priced at $8.65<\/o:p><\/p>\n

·     <\/span><\/span><\/span>SelectQuote (SLQT<\/span>) 28.5M share IPO priced at $20.00<\/p>\n<\/div>\n

<\/p>\n