{"id":12780,"date":"2020-06-03T05:53:00","date_gmt":"2020-06-03T10:53:00","guid":{"rendered":"https:\/\/www.eoption.com\/2020\/06\/03\/morning-preview-june-03-2020\/"},"modified":"2020-06-03T05:53:00","modified_gmt":"2020-06-03T10:53:00","slug":"morning-preview-june-03-2020","status":"publish","type":"post","link":"https:\/\/www.eoption.com\/morning-preview-june-03-2020\/","title":{"rendered":"Morning Preview: June 03, 2020"},"content":{"rendered":"
\n
\n

Early Look<\/o:p><\/span><\/b><\/p>\n

Wednesday, June 3, 2020<\/span><\/b><\/o:p><\/span><\/b><\/p>\n\n\n\n\n\n\n
\n

Futures<\/o:p><\/span><\/p>\n<\/td>\n

\n

Up\/Down<\/o:p><\/span><\/p>\n<\/td>\n

\n

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

\n

Last<\/o:p><\/span><\/p>\n<\/td>\n<\/tr>\n

\n

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

\n

177.00<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

\n

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

\n

25,878<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n<\/tr>\n

\n

S&P 500<\/span><\/b><\/o:p><\/span><\/p>\n<\/td>\n

\n

14.50<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

\n

0.46%<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

\n

3,091<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n<\/tr>\n

\n

Nasdaq<\/span><\/b><\/o:p><\/span><\/p>\n<\/td>\n

\n

34.50<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

\n

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

\n

9,681<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

 <\/o:p><\/span><\/p>\n

 <\/o:p><\/p>\n

U.S. stock markets remain in cruise control, eclipsing new 3-month highs daily as major averages inch ever closer to their record highs from February (Nasdaq now less than 3% from its all-time best, and about 40% off its March lows) as market participants continue to bet on a global market recovery following the pandemic lockdown that has occurred the last two months. Technology names get another round of solid earnings reports in the software space as Zoom Video (ZM<\/span>) posted quarterly results that far surpassed even the most bullish of estimates, benefitting from increased subscribership due to the “stay-at-home” lockdown, while internet security name CrowdStrike (CRWD<\/span>) also posts solid results and guidance. The stock market has so far ignored civil unrest playing out across America as attention turns to monthly private payroll data later this morning from ADP<\/span>. Stocks rose for a third straight session on Tuesday as investors focused on the easing of coronavirus lockdowns and overlooked continued protests and riots throughout the country. Stocks were led by gains in energy as crude oil rallied to 3-month highs amid reports OPEC<\/span>+ is seeking to extend its production cuts by a month while also rallying on increasing demand expectations as lockdowns ease. However, gains were broad based as all 11 S<\/span>&P sectors finished higher. In Asian markets overnight, The Nikkei Index rose 288 points to 22,613, the Shanghai Index was up slightly to 2,923 and the Hang Seng Index jumped 329 points to 24,325. In Europe, the German DAX<\/span> surges nearly 300 points (2.4%) to move above 12,300, while the FTSE 100 gains about 80 points to trade above the 6,300 level. Strong manufacturing data in China and Europe are helping boost economic recovery hopes. Markets have climbed a virtual wall of worry over the last 2-months in a “V<\/span>” formation, heading sharply higher over the past several sessions, shrugging of social unrest and violent demonstrations in major cities, increased tensions between the U.S. and China and the economic damage wrought by a viral pandemic.<\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>The S&P 500 Index<\/b> gained 25.09 points<\/span>, or 0.82%, to 3,080.82<\/o:p><\/p>\n

·     <\/span><\/span><\/span>The Dow Jones Industrial Average<\/b> rose 267.63 points<\/span>, or 1.05%, to 25,742.65<\/o:p><\/p>\n

·     <\/span><\/span><\/span>The Nasdaq Composite <\/b>jumped 56.33 points<\/span>,<\/span> or 0.59%, to 9,608.38<\/o:p><\/p>\n

·     <\/span><\/span><\/span>The Russell 2000 Index<\/b> advanced 12.84 points<\/span>, or 0.91% to 1,418.21<\/o:p><\/p>\n

 <\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>7:00 AM EST      MBA Mortgage Applications Data<\/o:p><\/p>\n

·     <\/span><\/span><\/span>8:15 AM EST      ADP Employment Change for May…est. (-9,000)<\/o:p><\/p>\n

·     <\/span><\/span><\/span>9:45 AM EST      Markit US Services PMI, May-F…est. 37.3 (prior 36.9)<\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>10:00 AM EST    Factory Orders for April…est. (-13.4%)<\/o:p><\/p>\n

·     <\/span><\/span><\/span>10:00 AM EST    ISM Non-Manufacturing Index for May…est. 44.4 (prior 41.8)<\/o:p><\/p>\n

·     <\/span><\/span><\/span>10:00 AM EST    Durable Goods Orders, May-F…est. (-17.2%)<\/o:p><\/p>\n

·     <\/span><\/span><\/span>10:30 AM EST    Weekly DOE Inventory Data<\/o:p><\/p>\n

 <\/o:p><\/p>\n

Earnings Calendar: <\/o:p><\/p>\n

·     <\/span><\/span><\/span>Earnings Before the Open: AEO<\/span>, CNK<\/span>, CPB<\/span>, EXPR<\/span>, VRA<\/span><\/o:p><\/p>\n

·     <\/span><\/span><\/span>Earnings After the Close: CHNG<\/span>, CLDR<\/span>, CMTL<\/span>, ESTC<\/span>, GEF<\/span>, GWRE<\/span>, SMAR<\/span>, TLYS<\/span>, ZUO<\/span><\/o:p><\/p>\n

 <\/o:p><\/span><\/p>\n

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

Macro<\/o:p><\/span><\/p>\n<\/td>\n

\n

Up\/Down<\/o:p><\/span><\/p>\n<\/td>\n

\n

Last<\/o:p><\/span><\/p>\n<\/td>\n<\/tr>\n

\n

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

\n

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

\n

36.85<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n<\/tr>\n

\n

Brent<\/span><\/b><\/o:p><\/span><\/p>\n<\/td>\n

\n

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

\n

39.35<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n<\/tr>\n

\n

Gold<\/span><\/b><\/o:p><\/span><\/p>\n<\/td>\n

\n

-9.00<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

\n

1,725.00<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n<\/tr>\n

\n

EUR\/USD<\/o:p><\/span><\/b><\/p>\n<\/td>\n

\n

0.0037<\/span><\/o:p><\/span><\/p>\n<\/td>\n

\n

1.1207<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n<\/tr>\n

\n

JPY\/USD<\/o:p><\/span><\/b><\/p>\n<\/td>\n

\n

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

\n

108.78<\/o:p><\/span><\/p>\n<\/td>\n<\/tr>\n

\n

10-Year Note<\/o:p><\/span><\/b><\/p>\n<\/td>\n

\n

+0.014<\/o:p><\/span><\/p>\n<\/td>\n

\n

0.6999%<\/o:p><\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

 <\/o:p><\/span><\/p>\n

 <\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>The Caixin China services purchasing managers index rose<\/b> to 55.0 in May from 44.4 in April, Caixin Media Co. and research firm Markit said Wednesday. The rebound was the steepest since October 2010, as service-providers said an easing of restrictions imposed to control Covid-19 had driven a renewed expansion of activity.<\/o:p><\/p>\n

·     <\/span><\/span><\/span>The eurozone services purchasing managers index rose<\/b> to 30.5 in May from 12 in April, IHS Markit said. That’s above the flash reading of 28.7 and a three-month high but still well below the 50 mark, indicating deteriorating conditions.<\/o:p><\/p>\n

 <\/o:p><\/p>\n

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

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

·     <\/span><\/span><\/span>Alaska Air (ALK<\/span>)<\/b> said April 2020 flown capacity approximately 78% below April 2019 levels, approximately 15% load factor; May 2020 flown capacity approximately 79% below may 2019 levels, approximately 40% load factor; reflecting modest week-over-week improvements in demand, plan to reduce June capacity 70% to 75% from prior-year levels<\/o:p><\/p>\n

·     <\/span><\/span><\/span>B&G Foods (BGS<\/span>)<\/b> reports preliminary May net sales $160.1M, up 50.5%; net sales for fiscal May 2020 were $160.1M, an increase of $53.7M or 50.5%; net sales for the first two months of the second quarter of 2020 were $349M, an increase of $127.5M or 57.6%<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Carnival (CCL<\/span>), Royal Caribbean (RCL<\/span>):<\/b> Two and a half months after the cruise industry shut down, the U.S. Centers for Disease Control and Prevention and the world’s largest cruise companies are nearly in agreement about how to limit COVID-19 outbreaks on ships while cruises remain banned, the agency told the Miami Herald Monday.<\/o:p><\/p>\n

·     <\/span><\/span><\/span>The Cheesecake Factory (CAKE<\/span>)<\/b> said began to reopen dining rooms across its concepts second week of May; as of today, approximately 25% of company’s restaurants across its concepts; said Q2 to-date through May 31, 2020 comparable sales at cheesecake factory restaurants are down approximately (-63%); reopened cheesecake factory restaurants have recaptured, on average, approximately 75% of prior year sales levels<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Lyft (LYFT<\/span>)<\/b> said rides on Lyft’s rideshare platform in month of May 2020 increased 26% versus April 2020; rideshare rides have increased week-over-week for 7 consecutive weeks since week ended April 12, 2020; expects that adj Ebitda loss for Q2 will not exceed $325 mln if average daily rideshare ride volume in June 2020 is unchanged versus may 2020; in week ended May 31, 2020 rideshare rides were down about 66% vs year ago period & increased 5.5% versus prior week<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Everi Holdings (EVRI<\/span>)<\/b> Q1 EPS loss (16c)\/$113.3M vs. est. loss (10c)\/$116.11M; said performance first 2-months of quarter included a 21% Yoy increase in the daily win per unit of our installed base and a 17% YoY increase in the total number of cash access transactions in our FinTech business for January and February, offers clear evidence of our operating momentum and contributed to the margin improvement we experienced<\/o:p><\/p>\n

 <\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>The American Petroleum Institute (API<\/span>)<\/b> shows a draw of 483K barrels of oil for the week ending May 29; gasoline inventories reportedly show a build of 1.71M barrels, distillate inventories show a build of 5.92M barrels, and Cushing inventories show a draw of 2.22M barrels.<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Ingevity (NGVT<\/span>)<\/b> says it will streamline manufacturing processes and furlough some production employees; will reduce spending on consultants, services; will reduce certain benefits for salaried employees, including suspension of 401(k) matches and deferred compensation programs<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Federal Aviation Administration chief Steve Dickson will testify June 17 before a U.S. Senate panel on certification of the Boeing (BA<\/span>)<\/b> 737 MAX. Dickson “will testify about issues associated with the design, development, certification, and operation” of the MAX<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Patterson-UTI (PTEN<\/span>)<\/b> reported an average of 80 drilling rigs operating for May 2020; for the two months ended May 31, 2020, the company had an average of 92 drilling rigs operating.<\/o:p><\/p>\n

 <\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>MarketAxess Holdings (MKTX<\/span>)<\/b> announced monthly trading volume for May 2020 of $519.7B consisting of $229.3B in credit volume and $290.5B in rates volume<\/o:p><\/p>\n

·     <\/span><\/span><\/span>RenaissanceRe (RNR<\/span>)<\/b> 5.5M share Spot Secondary priced at $166.00<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Reinsurance Group (RGA<\/span>)<\/b> 6.173M share Spot Secondary priced at $81.00<\/o:p><\/p>\n

 <\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>HealthEquity (HQY<\/span>)<\/b> Q1 EPS 43c on revs $190.01M vs. est. 44c\/$193.32; guides Q2 EPS 23c-30c on revs $168M-$173M below est. of 45c\/$191.45M; withdraws FY21 guidance<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Evofem (EVFM<\/span>)<\/b> 28.5M share Spot Secondary priced at $3.50<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Intellia Therapeutics (NTLA<\/span>)<\/b> 5.48M share Secondary priced at $18.25<\/o:p><\/p>\n

·     <\/span><\/span><\/span>OraSure (OSUR<\/span>)<\/b> 8M share Secondary priced at $11.00<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Pliant Therapeutics (PLRX<\/span>)<\/b> 9M share IPO priced at $16.00<\/o:p><\/p>\n

 <\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>Ambarella (AMBA<\/span>)<\/b> 1Q adj EPS $0.04 vs. est. ($0.01) on revs $54.6Mm vs. est. $54.3Mm; guides 2Q revs $50Mm plus\/minus 6% vs. est. $53.1Mm, sees 2Q adj gr margin 59-60.5% vs. est. $58.5%<\/o:p><\/p>\n

·     <\/span><\/span><\/span>CrowdStrike (CRWD<\/span>)<\/b> Q1 adj EPS 2c on revs $178.1M vs. est. loss (6c) and $165.4M; Q1 subscription revenue was $162.2 mln, an 89% increase; sees Q2 adjusted EPS (2c)-0c on revs $185.8M-$190.3M vs. est. loss (6c)\/$173.09M; sees FY21 adjusted EPS (8c)-(5c), consensus (12c); raises year EPS to $761.2M-$772.6M from prior $723.3M-$733.5M<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Microchip (MCHP<\/span>)<\/b> raises Q1 EPS view to $1.35-$1.53 from prior $1.25-$1.45 vs. est. $1.34; guides Q1 sales to $1.247B-$1.326B vs. est. $1.24B; said Covid-19 related supply chain disruptions which were primarily in Malaysia and Philippines have eased; has begun to make up for lost production and expect to continue to gain ground through end of this quarter<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Zoom Media (ZM<\/span>)<\/b> 1Q adj EPS $0.20 vs. est. $0.09 on revs $$328.2Mm vs. est. $202.72Mm; says approx 265,400 customers with more than 10 employees EOQ (+354% yr\/yr); sees 2Q adj EPS $0.44-0.46 vs. est. $0.11; guides FY21 revs $1.775-1.8B vs. est. $935Mm, sees FY adj EPS $1.21-1.29 vs. est. $0.45; 1Q cash and cash equivalents $488.7 million, -34% YoY<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Digital Turbine (APPS<\/span>)<\/b> Q4 EPS 5c\/$39.4M vs. est. 4c\/$38.45M; sees Q1 revenue $47M-$50M above est. $41.98M; said sees Q1 and Non-GAAP adjusted EBITDA $8M-$10M; for FY 21 says are highly confident given the strengthening momentum underlying our business today<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Alphabet Inc.’s (GOOGL<\/span>)<\/b> Google is facing a potential class-action lawsuit claiming illegal privacy infringements that seeks at least $5 billion, Reuters reported<\/p>\n<\/div>\n

<\/p>\n