{"id":12770,"date":"2020-06-01T06:02:20","date_gmt":"2020-06-01T11:02:20","guid":{"rendered":"https:\/\/www.eoption.com\/2020\/06\/01\/morning-preview-june-01-2020\/"},"modified":"2020-06-01T06:02:20","modified_gmt":"2020-06-01T11:02:20","slug":"morning-preview-june-01-2020","status":"publish","type":"post","link":"https:\/\/www.eoption.com\/morning-preview-june-01-2020\/","title":{"rendered":"Morning Preview: June 01, 2020"},"content":{"rendered":"
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Early Look<\/o:p><\/span><\/b><\/p>\n

Monday, June 1, 2020<\/span><\/b><\/o:p><\/span><\/b><\/p>\n\n\n\n\n\n\n
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Futures<\/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<\/tr>\n

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DJ Industrials<\/span><\/b><\/o:p><\/span><\/p>\n<\/td>\n

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-25.00<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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0.10%<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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25,353<\/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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-5.50<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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0.17%<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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3,036<\/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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-43.50<\/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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9,517<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

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Stock futures are pointing to a slightly lower open, as a weekend of escalating violence across U.S. cities following the death of George Floyd, the black Minneapolis man killed by police last week has forced several retail closures for companies (WMT<\/span>, TGT<\/span>, AAPL<\/span>). Also not helping sentiment, a report that China told state-run companies to pause purchases of U.S. products including soybeans, as pork products orders also were cancelled. Stock markets enter June with a 36% rally from its March lows having weathered a pandemic, a global shutdown\/lockdown of economies and tens of millions of lost jobs. Along with Fed central bank support, prospects of a speedy reopening to the U.S. economy and the avoidance of a second virus wave fueled the comeback. The S&P 500 rallied on Friday even as a report showed U.S. consumer spending plunged a record 13.6% in April after President Trump’s China actions fell short of the harsh sanctions the market had feared. On the week, the Dow jumped 3.7% and the S&P surged 3%, while the Nasdaq added 1.7%. Overnight in Asian markets, The Nikkei Index gained 184 points to 22,062, the Shanghai Index gained 63 points (over 2%) to settle at 2,915 and the Hang Seng Index surged 771 points to 23,732. In Europe, the German DAX<\/span> was closed, while the FTSE 100 is up over 60 points to 6,140.<\/o:p><\/p>\n

Market Closing Prices Yesterday<\/o:p><\/p>\n

·     <\/span><\/span><\/span>The S&P 500 Index<\/b> gained 14.58 points<\/span>, or 0.48%, to 3,044.31<\/o:p><\/p>\n

·     <\/span><\/span><\/span>The Dow Jones Industrial Average<\/b> fell -17.53 points<\/span>, or 0.07%, to 25,383.11<\/o:p><\/p>\n

·     <\/span><\/span><\/span>The Nasdaq Composite <\/b>jumped 120.88 points<\/span>,<\/span> or 1.29%, to 9,489.87<\/o:p><\/p>\n

·     <\/span><\/span><\/span>The Russell 2000 Index<\/b> declined -6.64 points<\/span>, or 0.47% to 1,394.04<\/o:p><\/p>\n

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<\/a><\/a><\/a>Economic Calendar for Today<\/o:p><\/a><\/p>\n

·     <\/span><\/span><\/span>9:45 AM EST      Markit US Manufacturing PMI, May-F<\/o:p><\/p>\n

·     <\/span><\/span><\/span>10:00 AM EST    Construction Spending MoM for April<\/o:p><\/p>\n

·     <\/span><\/span><\/span>10:00 AM EST    ISM Manufacturing Index for May<\/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<\/tr>\n

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WTI Crude<\/span><\/b><\/o:p><\/span><\/p>\n<\/td>\n

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

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35.19<\/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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-0.02<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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37.82<\/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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-4.80<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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1,746.90<\/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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0.0014<\/span><\/o:p><\/span><\/p>\n<\/td>\n

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1.1115<\/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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-0.16<\/span><\/o:p><\/span><\/p>\n<\/td>\n

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107.67<\/span><\/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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+0.00<\/o:p><\/span><\/p>\n<\/td>\n

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0.652%<\/o:p><\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

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World News<\/o:p><\/p>\n

·     <\/span><\/span><\/span>China’s factory activity grew at a slower pace in May<\/b> but momentum in the services and construction sectors quickened, as the official manufacturing Purchasing Manager’s Index (PMI) eased to 50.6 in May from 50.8 in April, National Bureau of Statistics data showed on Sunday, but held above the 50-point mark that separates expansion from contraction on a monthly basis.<\/o:p><\/p>\n

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Sector News Breakdown<\/o:p><\/span><\/p>\n

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

·     <\/span><\/span><\/span>Barron’s was positive on airlines this weekend, specifically Southwest Airlines (LUV<\/span>), Delta Airlines (DAL<\/span>)<\/b> and Spirit Airlines (SAVE<\/span>),<\/b> expecting consumers will be more likely to book domestic, short-haul leisure trips in the short term rather than business and international flights. Barron’s also likes on Extended Stay America (STAY<\/span>),<\/b> since it has not had to make major changes to its operations due to COVID-19, unlike other hard-hit hotel operators.<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Autohome (ATHM<\/span>)<\/b> guides Q2 revenue $313.5M-$327.6M below consensus $327.8M to reflect the company’s current and preliminary view on the market and its operating conditions, which are subject to change<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Coty (COTY<\/span>)<\/b> signs a definitive agreement with KKR as part of a previously announced $4.3 billion deal including debt that sells the Wella and Clairol brands to KKR.<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Wynn Resorts (WYNN<\/span>), MGM (MGM<\/span>)<\/b> and Las Vegas Sands (LVS<\/span>):<\/b> Gross gaming revenue in Macau fell 93.2% Y\/Y in May to a 1.76B patacas ($133.95M) amid heightened tensions in Hong Kong between pro-democracy legislators and Beijing; Macau GGR is down 73.7% YTD to 33B patacas ($4.13B)<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Beyond Meat (BYND<\/span>)<\/b> plans to expand its partnership with KFC in China and introduce a new partnership with Pizza Hut in the region. The Pizza Hut partnership begins on Monday and KFC will launch its new products in June.<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Hyundai (HYMLF<\/span>)<\/b> reports sales declined 39% YoY in May to 217,510 vehicles globally, due to COVID-19 impact; said sales grew ~30% MoM<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Macy’s (M<\/span>)<\/b> mentioned cautiously in Barron’s noting the stock just rallied sharply, but a complex debt deal poses new risks as it will leave lenders and bondholders with stronger claims on the company’s assets<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Pier 1 Imports (PIRRQ<\/span>)<\/b> received approval for its planned wind-down of operations, and intends to initiate store closing efforts and liquidation sales once store locations can reopen; plans to conclude its liquidation sales by the end of October.<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Target Corp. (TGT<\/span>)<\/b> said following two more nights of riots now taking place in numerous cities, that list has been expanded to 175 stores across the country.<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Red Robin Gourmet Burgers (RRGB<\/span>)<\/b> posted prelim Q1 total revenue of $306.1M (-25.3% YoY), said Q1 comp restaurant revenue decreased (-20.8%) with +3.7% in first eight weeks and (-43.2%) through last eight weeks; comp restaurant guest counts decreased 20.9%<\/o:p><\/p>\n

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Energy, Industrials & Materials<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Hess Corp. (HES<\/span>)<\/b> upgraded to overweight from neutral and raises PT by $16 to $53 saying Hess has unique long-term cash flow growth profile given declining break-even profile in current environment and expects the company’s Brent oil price break-evens to fall to $37 per barrel from $50 per barrel by 2025<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Russia has no objection<\/b> to the next OPEC and OPEC+ meeting being moved forward to June 4 from June 9-10, according to reports<\/o:p><\/p>\n

·     <\/span><\/span><\/span>General Dynamics (GD<\/span>)<\/b> was awarded a $3.42b U.S. Army contract for production and engineering services for Hydra-70 rocket systems<\/o:p><\/p>\n

·     <\/span><\/span><\/span>PG&E (PCG<\/span>)<\/b> said it may offer and sell up to $25.675B securities in a mixed shelf offering<\/o:p><\/p>\n

·     <\/span><\/span><\/span>U.S. WTI crude oil ended Friday higher<\/b> by over 5% to settle at $35.49 per barrel, posting its best month in history with an 88% increase amid an uptick in demand and record production cuts. Prices jumped Friday after President Trump refrained from pulling the U.S. out of the phase one trade deal with China. The monthly gain follows the steepest downturn on record in April, and WTI is still 45% below its recent January high of $65.65 per barrel<\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>Hartford Financial Services (HIG<\/span>)<\/b> and Chubb (CB<\/span>)<\/b> mentioned positively in Barron’s noting shares of property and casualty companies typically rebound after catastrophes, as the industry raises rates and each look well-positioned with balance-sheet strength and demonstrated ability to compound value over time<\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>Pfizer (PFE<\/span>)<\/b> shares fell -6% after saying based on a futility analysis by the independent Data Monitoring Committee, evaluating Ibrance) and adjuvant endocrine therapy in patients with HR+\/HER2- breast cancer is unlikely to achieve the primary endpoint of a statistically significant effect on invasive disease-free survival compared to endocrine therapy alone.<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Evolent Health (EVH<\/span>)<\/b> shares fall over 20%; said the Kentucky Cabinet for Health and Family Services has notified Passport Health Plan, its community health plan that it co-owns with certain Kentucky-based providers, that it has not been awarded a contract to administer Medicaid services for the upcoming three-year contract period beginning January 1, 2021 <\/a>(main source of its business). The total value of the state’s Medicaid contract is north of $8B per year. <\/o:p><\/p>\n

·     <\/span><\/span><\/span>Five managed care organizations will provide services to Medicaid members in the Kentucky state including Humana (HUM<\/span>) <\/b>and Molina Healthcare (MOH<\/span>)<\/b> after Evolent (EVH<\/span>)<\/b> lost the upcoming three-year contract period beginning January 1, 2021<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Eli Lilly (LLY<\/span>)<\/b> said FDA approved Cyramza in combination with erlotinib, for the first-line treatment of people with metastatic non-small cell lung cancer with epidermal growth factor receptor exon 19 deletions or exon 21 mutations. With this approval, Cyramza has now received six FDA approvals to treat certain types of lung, liver, stomach and colorectal cancers<\/o:p><\/p>\n

·     <\/span><\/span><\/span>AbbVie (ABBV<\/span>)<\/b> said it will collaborate with Beijing-based Jacobio Pharmaceuticals on developing and commercializing novel cancer therapies based on the inhibition of a protein called Src homology region 2-containing protein tyrosine phosphatase 2 (SHP2)<\/o:p><\/p>\n

·     <\/span><\/span><\/span>BioMarin Pharmaceutical (BMRN<\/span>)<\/b> announces updated data from an open-label Phase 1\/2 clinical trial evaluating a single administration of gene therapy valoctocogene roxaparvovec in adults with severe hemophilia A. The results will be virtually presented at the World Federation of Hemophilia Summit June 14-19.<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Adaptimmune (ADAP<\/span>)<\/b> files to sell 12.5M American Depositary Shares<\/o:p><\/p>\n

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Technology, Media & Telecom<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Alphabet (GOOGL<\/span>)<\/b> postpones unveiling the beta version of its latest Android 11 mobile operating system that was originally scheduled on June 3 amid the protests in the United States following the death of George Floyd<\/o:p><\/p>\n

·     <\/span><\/span><\/span>The Semiconductor Industry Association<\/b> is lobbying for $37B in federal funding that would include subsidies for the construction of a new chip factory, aid for states trying to attract semiconductor investment, and an increase in research funding – WSJ<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Zynga Inc. (ZNGA<\/span>)<\/b> has agreed to buy Turkish mobile-game maker Peak for $1.8 billion<\/p>\n<\/div>\n

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