{"id":12773,"date":"2020-06-01T09:49:08","date_gmt":"2020-06-01T14:49:08","guid":{"rendered":"https:\/\/www.eoption.com\/2020\/06\/01\/mid-morning-look-june-01-2020\/"},"modified":"2020-06-01T09:49:08","modified_gmt":"2020-06-01T14:49:08","slug":"mid-morning-look-june-01-2020","status":"publish","type":"post","link":"https:\/\/www.eoption.com\/mid-morning-look-june-01-2020\/","title":{"rendered":"Mid-Morning Look: June 01, 2020"},"content":{"rendered":"
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Mid-Morning Look<\/o:p><\/span><\/b><\/p>\n

Monday, June 01, 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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60.80<\/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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25,443<\/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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7.02<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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0.23%<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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3,051<\/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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41.15<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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0.43%<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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9,532<\/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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14.79<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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1.06%<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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1,408<\/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 bounce off the lows to trade higher, showing incredible resiliency once again in the face of violent protests this weekend in cities across the U.S. in response to the death of a black Minneapolis man at the hands of a white police officer forcing shutdowns for several large cap retailers (WMT<\/span>, TGT<\/span>) which is already dealing with a global pandemic that has crippled small businesses. Trade disputes with China also a factor in overnight weakness after reports that China reportedly told major state-run agricultural companies to pause purchases of U.S. soybeans and some other farm goods in an escalation of the geopolitical dispute over Hong Kong’s autonomy. Despite these three factors, stock markets are bouncing off lows as travel and financials are among the early gainers, while industrials lagged broader markets. A handful of healthcare and biotech companies active following results\/data at the American Society of Clinical Oncology (ASCO<\/span>) virtual meeting this weekend. Defensive and safe-haven assets under pressure early given the bounce in global stock markets as gold and Treasury prices dip and the U.S. dollar dips to the lowest levels since mid-March after mixed economic data. A strong start to the month with major averages all firmly higher, paced by gains in SmallCap stocks. <\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>U.S. May Manufacturing PMI<\/b> 39.8 vs Flash Reading 39.8; Index rises to 39.8 from 36.1 in April; Year ago 50.5; Stocks of finished goods fall to 37.1 vs 38.8 in April<\/o:p><\/p>\n

·     <\/span><\/span><\/span>ISM U.S. manufacturing rises<\/b> to 43.1 in May from 41.5 in April and above the 43.8 estimate as the employment index 32.1 in May vs. 27.5 in April, new orders index 31.8 in May vs. 27.1 in April and the prices paid index 40.8 in May vs. 35.3 in April<\/o:p><\/p>\n

·     <\/span><\/span><\/span>April Construction Spending fell<\/b> (-2.9%) vs. est. down (-7.0%) while March revised to unchanged from 0.9%; Private construction fell 3.0% in April, Private residential construction fell 4.5%, Private nonresidential construction fell 1.3% and Public construction fell 2.5% in April<\/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<\/span>) eased to 50.6 in May from 50.8 in April<\/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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-0.73<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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34.76<\/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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-0.04<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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37.80<\/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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-12.00<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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1,739.70<\/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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0.0028<\/o:p><\/span><\/p>\n<\/td>\n

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1.113<\/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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-0.18<\/o:p><\/span><\/p>\n<\/td>\n

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107.65<\/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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0.022<\/o:p><\/span><\/p>\n<\/td>\n

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0.675%<\/o:p><\/span><\/p>\n<\/td>\n<\/tr>\n

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

·     <\/span><\/span><\/span>Retailers; gun-related stocks (RGR<\/span>, SWBC<\/span><\/b>) and sporting goods retailers (SPWH<\/span>, VSTO<\/span><\/b>) that sell weapons rose early after a weekend of protests across the country following the death of George Floyd, a black Minneapolis man who died after a white police officer pressed a knee into his neck for more than eight minutes (shares of ADT<\/span>, DGLY<\/span>, AAXN<\/span><\/b> that make body cameras, as well as home security systems also rise); TGT<\/span><\/b> slipped after closing more than one hundred stores over the weekend on a temporary basis and reducing hours at other locations due to riots\/looting from the George Floyd death on Memorial Day; GPS<\/span><\/b> upgraded to neutral from underweight at JPM as thinks Old Navy stands well-positioned to benefit from disproportionate growth of value retail as a recession-resistant concept; COTY<\/span><\/b> announced an agreement to sell a majority interest in its retail hair business, which includes Wella and Clairol, to KKR & Co. for $4.3 billion<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Consumer Staples; SAM<\/span><\/b> tgt raised from $570 to $650 and STZ <\/span><\/b>from $160 to $205 at Cowen in beverages calling them best positioned in the beer category relative to larger competitors given their below-average exposure to the on-premise channel; MNST<\/span><\/b> tgt raised to $78 at Goldman Sachs following the firm’s Memorial Day weekend convenience store retailer survey, which showed that the energy drink category is rebounding; in beauty sector, Piper upgraded shares of EL<\/span><\/b> to buy as think will be durable consumer behaviors on the other side and upped ULTA <\/span><\/b>to buy noting while Q1 results were worse vs. expectations (particularly on gross margins), they see green shoots for the industry; in food, TWNK<\/span><\/b> was upgraded at SunTrust calling it a unique way to play both the reopening of America and the Summer Road Trip 2020 while SYY <\/span><\/b>was upgraded to buy at Piper; BYND<\/span><\/b> active after YUMC<\/span><\/b> will introduce Beyond Meat’s plant-based burgers for a limited period at select KFC, Pizza Hut and Taco Bell outlets in mainland China; KDP<\/span><\/b> was upgraded to outperform and $35 tgt at Evercore ISI<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Energy movers on research; HES<\/span><\/b> was upgraded to overweight from neutral at JPMorgan and raises PT by $16 to $53 saying it has unique long-term cash flow growth profile given declining break-even profile in current environment; in the E&P sector, Stifel downgraded shares of CNX<\/span><\/b> from Buy to Hold, and COG<\/span><\/b> and EQT<\/span><\/b> from Hold to Sell on valuation saying while they like all these stocks in terms of acreage quality, management teams, execution, FCF and leverage profile, they struggle to justify the valuation<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Pharma movers; PFE<\/span><\/b> falls 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; TEVA<\/span><\/b> upgraded to buy at SunTrust saying call is not without risk, but timing feels right for contrarian call; LLY<\/span><\/b> starts an early-stage trial for its potential COVID-19 treatment as study will assess safety and tolerability in patients hospitalized with COVID-19; CGEN<\/span><\/b> said the FDA cleared its iNDA application for Phase 1\/2 study evaluating the triple combination of its COM701, an anti-PVRIG antibody, and BMY’s<\/b> Opdivo<\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>AAXN<\/span><\/b> +15%; shares of ADT<\/span>, DGLY<\/span>, AAXN<\/span><\/b> higher as names that make body cameras, as well as home security systems also rise on riots<\/o:p><\/p>\n

·     <\/span><\/span><\/span>BYND<\/span><\/b> +3%; active after YUMC will introduce Beyond Meat’s plant-based burgers for a limited period at select KFC, Pizza Hut and Taco Bell outlets in mainland China<\/o:p><\/p>\n

·     <\/span><\/span><\/span>COTY<\/span><\/b> +20%; announced an agreement to sell a majority interest in its retail hair business, which includes Wella and Clairol, to KKR & Co. for $4.3 billion<\/o:p><\/p>\n

·     <\/span><\/span><\/span>GPS<\/span><\/b> +13%; upgraded to neutral from underweight at JPM as thinks Old Navy stands well-positioned to benefit from disproportionate growth of value retail as a recession-resistant concept<\/o:p><\/p>\n

·     <\/span><\/span><\/span>NCLH<\/span><\/b> +8%; amid strength in cruise lines, airlines to start the week<\/o:p><\/p>\n

·     <\/span><\/span><\/span>NTLA <\/span><\/b>+15%; after expanded their 2016 collaboration agreement with REGN<\/span><\/b> to include five additional liver targets (from 10 to 15) and candidates for the treatment of hemophilia A and B<\/o:p><\/p>\n

·     <\/span><\/span><\/span>ZM<\/span><\/b> +5%; making new record highs ahead of earnings expected tomorrow night (6\/2)<\/o:p><\/p>\n

·     <\/span><\/span><\/span>ZNGA<\/span><\/b> +5%; agreed to acquire Turkish mobile gaming company Peak for $1.8 billion in cash and stock\/Peak is the owner of Toon Blast and Toy Blast<\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>ABT <\/span><\/b>-2%; was downgraded from Neutral to Sell at Goldman Sachs as believe the stock has overreacted to the COVID testing opportunity, and now see ~10% downside to our target vs +1% average upside for our coverage<\/o:p><\/p>\n

·     <\/span><\/span><\/span>EVH<\/span><\/b> -29%; after its partner, Passport Health Plan, again wasn’t awarded a Kentucky Managed Care Organization contract delivering a blow to the company\/five managed care organizations will provide services to Medicaid members in the Kentucky state including HUM<\/span>, MOH<\/span><\/b><\/o:p><\/p>\n

·     <\/span><\/span><\/span>GILD<\/span><\/b> -3%; as results from a study of remdesivir in moderately ill Covid-19 patients showed odds of improvement in clinical status of Covid-19 patients with the 10-day treatment course of remdesivir versus standard of care did not reach statistical significance while the 5-day treatment regimen did show a benefit<\/o:p><\/p>\n

·     <\/span><\/span><\/span>ITRM <\/span><\/b>-60%; after saying its sulopenem didn’t achieve statistical non-inferiority relative to ertapenem in its Sulopenem for Resistant Enterobacteriaceae 2 clinical trial in complicated urinary tract infection<\/o:p><\/p>\n

·     <\/span><\/span><\/span>PFE <\/span><\/b>-7%; 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<\/o:p><\/p>\n

·     <\/span><\/span><\/span>TGT <\/span><\/b>-2%; after closing more than one hundred stores over the weekend on a temporary basis and reducing hours at other locations due to riots\/looting from the George Floyd death on Memorial Day<\/p>\n<\/div>\n

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