{"id":12757,"date":"2020-05-28T09:40:43","date_gmt":"2020-05-28T14:40:43","guid":{"rendered":"https:\/\/www.eoption.com\/2020\/05\/28\/mid-morning-look-may-28-2020\/"},"modified":"2020-05-28T09:40:43","modified_gmt":"2020-05-28T14:40:43","slug":"mid-morning-look-may-28-2020","status":"publish","type":"post","link":"https:\/\/www.eoption.com\/mid-morning-look-may-28-2020\/","title":{"rendered":"Mid-Morning Look: May 28, 2020"},"content":{"rendered":"
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Mid-Morning Look<\/o:p><\/span><\/b><\/p>\n

Thursday, May 28, 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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41.76<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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0.16%<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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25,590<\/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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7.59<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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0.25%<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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3,043<\/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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27.86<\/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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9,440<\/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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-1.18<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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0.08%<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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1,435<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n<\/tr>\n

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U.S. equities waver between gains and losses early after solid returns the last 2-trading days (where the Dow jumped over 500 points back-to-back days), dealing with another round of weak economic data as the second estimate for Q1 GDP fell a greater than expected 5%, while the jobless situation remains dire with over 40M individuals filing for claims since the pandemic began. On the flip side, durable and capital goods orders came in better than expected (data again was “less bad”). In Asia overnight, Chinese lawmakers approved a proposal for sweeping new national security legislation in Hong Kong, a move that is expected to garner a response by the U.S. potentially. In stock news, social media stocks a focus of President Trump this morning, while the aerospace sector bounces on news Boeing is slowly starting production for 737 Max. Healthcare stocks lead with Dow component UNH<\/span> touching record highs while financials are mixed after surging the last two sessions. Software and Storage related stocks after a busy night of earnings results (ADSK<\/span>, WDAY<\/span>, BOX<\/span>, NTNX<\/span>, HPQ<\/span>, and NTAP<\/span>) while leisure and travel stocks also pare recent gains after spiking as casinos, theme parks announced reopen plans. Treasury prices again little changed while gold bounces back, and oil is little changed after falling 4% prior. <\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>U.S. GDP second estimate for Q1 fell<\/b> (-5%) vs. est. decline of (-4.8%) after GDP rose 2.1% in prior quarter; personal consumption fell 6.8% in 1Q after rising 1.8% prior quarter (est. -7.5%) and GDP price index rose 1.4% in 1Q after rising 1.3% prior quarter (est. +1.3%); core PCE q\/q rose 1.6% in 1Q after rising 1.3% prior quarter (est. +1.6%). Nonresidential fixed investment, or spending on equipment, structures and intellectual property fell 7.9% in 1Q after falling 2.4% prior quarter<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Weekly jobless claims fell<\/b> to 2,123,000 may 23 week (consensus 2,100,000) from 2,446,000 prior week (previous 2,438,000) while US continued claims fell to 21.052 mln may 16 week (con. 25.750 mln) from 24.912 mln prior week (prev 25.073 mln); insured unemployment rate fell to 14.5% from 17.1% prior week<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Durable Goods Orders for April fell<\/b> a smaller than expected (-17.2%) vs. est. down (-19%) while Durable goods new orders revised down to -16.6% for March from -15.3%; new orders ex-trans. fell 7.4% in April after 1.7% fall; new orders ex-defense fell 16.2% in April after 17.4% fall; non-defense capital goods orders ex-aircraft fell 5.8% in April after falling 1.1% in March<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Pending Home Sales fell<\/b> (-21.8%) in April more than the (-17.3%) decline estimate MoM, while YoY sales fell (-33.8%)<\/o:p><\/p>\n

·     <\/span><\/span><\/span>The 30-year fixed mortgage rate<\/b> for week ended today fell to 3.15% from 3.24%, lowest rate in survey records going back to 1971, Freddie Mac said; the 15-year rate avg 2.62%, down from 2.70% a week earlier<\/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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-0.15<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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32.66<\/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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-0.15<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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34.59<\/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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11.50<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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1,738.30<\/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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0.0043<\/o:p><\/span><\/p>\n<\/td>\n

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1.1048<\/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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-0.03<\/o:p><\/span><\/p>\n<\/td>\n

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107.69<\/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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0.688%<\/o:p><\/span><\/p>\n<\/td>\n<\/tr>\n

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

·     <\/span><\/span><\/span>Semiconductors; index strong yesterday on raised guidance by MU<\/span><\/b> (shares slipped today following analyst downgrades); QCOM<\/span><\/b> was upgraded to overweight with a $105 price target at KeyBanc as they expect the Company to benefit from recent export restrictions targeted at HiSilicon. With Huawei unable to procure new silicon internally, we expect QCOM’s Snapdragon chipset will be designed into its flagship 2021 smartphones; COHR<\/span><\/b> reported mixed Q2 results with revenues well below consensus estimates but Non-GAAP EPS above consensus\/lower than expected revenue numbers came from a $30-$35M top line COVID impact during the quarter; SMTC<\/span><\/b> reported a solid beat and raise quarter, sending shares higher<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Software movers; WDAY<\/span><\/b> Q1 subs rev came in $11M ahead of consensus and total revs $17M better while non-GAAP EPS were 5c below while lowered its FY21 subs guide to 18.5%-19.2% from 21.3%-21.8% growth due to deal impact from COVID; BILL<\/span><\/b> upgraded to Overweight at Piper given the risk-reward has turned favorable; ADSK<\/span><\/b> reported better-than-expected F1Q results with good subscription revenue growth driven by resilient renewal activity though FY21 guidance was lowered more than expected; COUP<\/span><\/b> was downgraded at Wedbush; earnings tonight from CRM<\/span>, VEEV<\/span>, VMW<\/span>, ZS<\/span>, OKTA<\/span><\/b> in the software sector<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Retailers; specialty and dept stores giving back some of the prior two day gains (GPS<\/span>, JWN<\/span>, M<\/span>, KSS<\/span><\/b>); dollar stores a bright spot after earnings as investors flocked during the quarter to store up amid the coronavirus stay-at-home lockdowns; DLTR<\/span><\/b> reported 7% surge in Q1 same-store sales (vs. est. 5%) benefiting from consumers stockpiling on groceries and other essentials while withdraws FY forecast due to uncertainty caused by the pandemic; DG<\/span><\/b> similar with big comp beat of up 21.7% vs. est. around 4% on better sales and higher margins; ANF <\/span><\/b>reported Q1 earnings and sales that missed expectations as net losses totaled $244.1M (adj EPS loss was -$3.29 vs. est. loss -$1.39) while sales of $485.4M were down from $734.0M last year and below the $497M estimate\/Hollister sales fell 36% to $273.0M while Abercrombie & Fitch sales declined 30%<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Consumer Staples; TSN<\/span><\/b> was downgraded to hold from buy at Argus as expect Tyson’s FY20 results to be hurt by COVID-19\/will incur costs to reduce volumes, shutdown plants and protect its employees’ health and safety; SAM<\/span><\/b> was downgraded to neutral on valuation at Credit Suisse while remain positive on the growth outlook, but believe it reflected in today’s $6.5B valuation; SPTN<\/span><\/b> shares rallied following stronger Q1 results <\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>AEP <\/span><\/b>+3%; as utilities among top S&P 500 gainers (AEE<\/span>, ES<\/span>, WEC<\/span><\/b>)<\/o:p><\/p>\n

·     <\/span><\/span><\/span>ALXN<\/span><\/b> +8%; as reached a settlement in principle with AMGN<\/span><\/b> in the Soliris IPR challenge as Cowen noted most investors assumed ALXN’s patents would fall, but think an agreement that preserves some of the term is an upside surprise<\/o:p><\/p>\n

·     <\/span><\/span><\/span>BA<\/span><\/b> +4%; said it has resumed production of the 737 MAX at the Renton, Wash., factory and that the 737 program began building airplanes at a low rate; shares of aircraft supplier SPR<\/span><\/b> rises<\/o:p><\/p>\n

·     <\/span><\/span><\/span>DLTR<\/span><\/b> +13%; reported 7% surge in Q1 same-store sales (vs. est. 5%) benefiting from consumers stockpiling on groceries and other essentials<\/o:p><\/p>\n

·     <\/span><\/span><\/span>LL<\/span><\/b> +17%; after posting profit beat with adj profit of 44c well above the 3c estimate noting margin enhancement efforts, tariff exclusions and supply chain efficiency positively impacted results<\/o:p><\/p>\n

·     <\/span><\/span><\/span>PHAS<\/span><\/b> +48%; said the U.S. FDA has cleared a trial to test its experimental drug for hospitalized patients with COVID-19; the co’s drug PB1046 targets receptors in the cardiovascular, pulmonary and immune systems<\/o:p><\/p>\n

·     <\/span><\/span><\/span>TGI <\/span><\/b>+35%; posted Q4 EPS and revenue beats, sending shares higher along with positive news from Boeing about resuming production on 737 Max<\/o:p><\/p>\n

·     <\/span><\/span><\/span>TOL<\/span><\/b> ; leads homebuilders higher initially after reported Q2 EPS well ahead of consensus which included higher-than-expected homebuilding gross margin and a lower SG&A ratio while saying recent trends suggest the housing market is “more resilient” than it looked two months ago<\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>ANF<\/span><\/b> -8%; Q1 earnings and sales that missed expectations as net losses totaled $244.1M (adj EPS loss was -$3.29 vs. est. loss -$1.39) while sales of $485.4M were down from $734.0M last year and below the $497M estimate<\/o:p><\/p>\n

·     <\/span><\/span><\/span>GE<\/span><\/b> -2%; said that negative free ash flow was likely in 2020 and sees negative Q2 cash flow in the $3.5B-$4.5B range<\/o:p><\/p>\n

·     <\/span><\/span><\/span>HPQ<\/span><\/b> -11%; shares tumble as Q2 results were weaker than anticipated, guided Q3 EPS below consensus (midpoint of $0.42 vs. $0.47), and did not provide full-year guidance<\/o:p><\/p>\n

·     <\/span><\/span><\/span>JWN <\/span><\/b>-7%; as retailers take a breather after outperformance the last 2-days (PVH<\/span>, HBI<\/span>, GPS<\/span><\/b>)<\/o:p><\/p>\n

·     <\/span><\/span><\/span>NTAP<\/span><\/b> -4%; as posted F4Q20 report with sales near expectations, EPS a bit above, and coupled with a weaker than expected outlook<\/o:p><\/p>\n

·     <\/span><\/span><\/span>TWTR<\/span><\/b> -2%; and FB <\/span><\/b>pressured in social media sector on reports President Donald Trump will sign an executive order on social media companies today after he threatened to shut down websites he accused of stifling conservative voices<\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>Arena Pharmaceuticals (ARNA<\/span>) 5.5M share Secondary priced at $50.00<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Argenx (ARGX<\/span>) 2.584M share Secondary priced at $205.00<\/o:p><\/p>\n

·     <\/span><\/span><\/span>BioCryst (BCRX<\/span>) 18.711M share Spot Secondary priced at $4.50<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Penumbra (PEN<\/span>) 753K share Spot Secondary priced at $166.00<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Viela Bio (VIE<\/span>) 3.6M share Secondary priced at $47.00<\/p>\n<\/div>\n

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