{"id":12785,"date":"2020-06-04T05:55:20","date_gmt":"2020-06-04T10:55:20","guid":{"rendered":"https:\/\/www.eoption.com\/2020\/06\/04\/morning-preview-june-04-2020\/"},"modified":"2020-06-04T05:55:20","modified_gmt":"2020-06-04T10:55:20","slug":"morning-preview-june-04-2020","status":"publish","type":"post","link":"https:\/\/www.eoption.com\/morning-preview-june-04-2020\/","title":{"rendered":"Morning Preview: June 04, 2020"},"content":{"rendered":"
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Early Look<\/o:p><\/span><\/b><\/p>\n

Thursday, June 4, 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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-140.00<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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0.53%<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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26,088<\/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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-17.50<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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0.56%<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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3,100<\/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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-30.50<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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0.32%<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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9,654<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

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Stock markets are pointing to a lower open, something not seen since late last week, and following European markets lower in a bout of profit taking ahead of the ECB meeting later this morning (7:45 AM EST). Market expectations are high for the bank to add to the EU750B Pandemic Emergency Purchase Program. Data today in the U.S. plentiful with weekly jobless claims (at 8:30 AM<\/span>) is expected to show another 1.8Mm people file for first time unemployment claims with the figure topping 40Mm since the coronavirus pandemic began. In Asian markets, The Nikkei Index gained 81 points to settle at 22,695, the Shanghai Index dipped 4 points to 2,919 and the Hang Seng Index rose 40 points to 24,366. In Europe, the German DAX<\/span> is down -100 points to 12,380, while the FTSE 100 is down roughly 30 points to 6,352.The Dow Jones Industrial jumped over 500 points or 2% on Wednesday and the S&P 500 jumped 1.4%, to end at 3,112.87, the highest finish for both benchmarks since March 4, while the Nasdaq Composite Index ended at 9,682.91, or 1.4% away from its all-time closing high of 9,817.18 in February. Major averages have fought off social unrest, protests and demonstrations in major cities (forcing many retailers to close stores to prevent looting), increasing tensions daily between the U.S. and China and the economic carnage the pandemic created. Despite the weak economic data over the last two-weeks, the numbers have come in “less-worse” than feared, giving the impression that the economy has seen the trough as it relates to the economic impact. The 10-year Treasury note yield climbed 8.2 basis points to 0.761%, its highest since April 8. <\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>The S&P 500 Index<\/b> gained 42.05 points<\/span>, or 1.36%, to 3,122.87<\/o:p><\/p>\n

·     <\/span><\/span><\/span>The Dow Jones Industrial Average<\/b> rose 527.24 points<\/span>, or 2.05%, to 26,269.89<\/o:p><\/p>\n

·     <\/span><\/span><\/span>The Nasdaq Composite <\/b>jumped 74.54 points<\/span>,<\/span> or 0.78%, to 9,682.91<\/o:p><\/p>\n

·     <\/span><\/span><\/span>The Russell 2000 Index<\/b> advanced 33.88 points<\/span>, or 2.39% to 1,452.09<\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>7:30 AM EST      Challenger Job Cuts YoY for May<\/o:p><\/p>\n

·     <\/span><\/span><\/span>8:30 AM EST      Weekly Jobless Claims…est. 1.843M<\/o:p><\/p>\n

·     <\/span><\/span><\/span>8:30 AM EST      Continuing Claims…est. 20.05M<\/o:p><\/p>\n

·     <\/span><\/span><\/span>8:30 AM EST      Trade Balance for April…est. (-$49.2B)<\/o:p><\/p>\n

·     <\/span><\/span><\/span>8:30 AM EST      Nonfarm Productivity, Q1-F…est. (-2.7%)<\/o:p><\/p>\n

·     <\/span><\/span><\/span>8:30 AM EST      Unit Labor Costs, Q1-F…est. 5.0%<\/o:p><\/p>\n

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

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

·     <\/span><\/span><\/span>Earnings Before the Open: CIEN<\/span>, CMD<\/span>, DLTH<\/span>, HOV<\/span>, KIRK<\/span>, MIK<\/span>, NAV<\/span>, OESX<\/span>, SCWX<\/span>, SPWH<\/span>, TTC<\/span>, UNFI<\/span><\/o:p><\/p>\n

·     <\/span><\/span><\/span>Earnings After the Close: AVGO<\/span>, CAL<\/span>, COO<\/span>, DOCU<\/span>, DOMO<\/span>, GPS<\/span>, MDB<\/span>, MTN<\/span>, NX<\/span>, PD<\/span>, SAIC<\/span>, WORK<\/span>, YEXT<\/span>, ZUMZ<\/span><\/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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-0.50<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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36.79<\/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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-0.21<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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39.58<\/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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7.90<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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1,712.70<\/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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-0.0032<\/o:p><\/span><\/p>\n<\/td>\n

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1.120<\/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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0.00<\/o:p><\/span><\/p>\n<\/td>\n

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108.90<\/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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-0.003<\/span><\/o:p><\/span><\/p>\n<\/td>\n

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0.742%<\/span><\/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>The Senate passed a bill<\/b> easing conditions for small businesses tapping the government’s Paycheck Protection Program. The Paycheck Protection Program Flexibility Act makes changes to the PPP that include extending the period for using loans to 24 weeks from eight weeks. It also would let borrowers spend just 60%, rather than 75%, of their loan proceeds on paying workers and still be eligible for loan forgiveness<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Hong Kong’s legislature approved<\/b> a bill Thursday that makes it illegal to insult the Chinese national anthem. The legislation was approved after pro-democracy opposition lawmakers tried to disrupt the vote. It passed with 41 lawmakers voting for it and just one voting against. Most of the pro-democracy lawmakers boycotted the vote out of protest.<\/o:p><\/p>\n

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

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

·     <\/span><\/span><\/span>Costco (COST<\/span>)<\/b> May total comp store sales rose 5.4% vs. est. 1.6%; said May U.S. comparable sales excluding fuel, currencies +9.7% vs. estimate +4.5%; reports May net sales of $12.55B, up 7.5% from $11.67B last year<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Fitbit (FIT<\/span>)<\/b> said the low-cost emergency ventilator, called Fitbit Flow, has obtained emergency use authorization from the FDA for use during the pandemic.<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Fossil (FOSL<\/span>)<\/b> Q1 EPS loss ($1.69) and worldwide net sales totaled $390.7M, down -16% on a reported basis and 15% in constant currency compared to $465.3M in Q1; said the decline was primarily due to the impact of COVID-19; global retail comparable sales in constant currency decreased 14% on a 14-week calendar basis and were trending up 1% prior to COVID-19 store closings<\/o:p><\/p>\n

·     <\/span><\/span><\/span>General Motors (GM<\/span>)<\/b> will work very closely with Chinese electric vehicle battery producer Contemporary Amperex Technology as it accelerates electric production in the world’s largest auto market – Reuters<\/o:p><\/p>\n

·     <\/span><\/span><\/span>NMI Holdings (NMIH<\/span>) <\/b>13.8M share Spot Secondary priced at $14.50<\/o:p><\/p>\n

·     <\/span><\/span><\/span>NIO (NIO<\/span>)<\/b> said it delivered 3,436 vehicles in May, +215.5% YoY; company to increase production capacity and expand sales network to support future growth.<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Tilly’s (TLYS<\/span>)<\/b> Q1 EPS loss (59c) on revs $77.3M vs. est. loss (36c)\/$78.27M; noted Q1 was severely impacted by the COVID-19 pandemic<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Wolverine Worldwide (WWW<\/span>)<\/b> still sees 2Q as most challenging qtr, says expects about $1B of liquidity end 2Q, says plans to open about 70 stores by mid-June, indicated 9-wks into 2Q owned e-comm up more than 90% (accounting for more than 40% of total revs), on-line sell-thru of US wholesale was +double-digits thru 9-wks<\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>Helmerich & Payne (HP<\/span>)<\/b> cuts quarterly dividend to 25c from 71c<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Greif (GEF<\/span>)<\/b> Q2 adj EPS 95c vs. est. 75c; Q2 sales down -4.5% YoY to $1.16B vs. est. $1.15B and adj Ebitda +12% YoY to $181.3M; withdraws guidance for year EPS and free cash flow<\/o:p><\/p>\n

·     <\/span><\/span><\/span>JinkoSolar (JKS<\/span>)<\/b> rises 12% as the U.S. International Trade Commission (ITC) issues favorable final determination concluding JinkoSolar’s products do not infringe a Hanwha Q CELLS patent<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Navistar (NAV<\/span>)<\/b> Q2 adj EPS loss (38c) vs. est. loss (27c) as sales fell -36% YoY to $1.93B and adj Ebitda fell -61% YoY to $88M; said implemented $300M of actions to conserve cash; says revenue decrease primarily driven by impact of COVID-19<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Amazon (AMZN<\/span>)<\/b> announced the lease of 12 Boeing (BA) 767-300 converted cargo aircraft from Air Transport Services Group (ATSG<\/span>);<\/b> these aircraft will join Amazon’s existing fleet of 70 aircraft to bring its total network to over 80 aircraft<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Werner (WERN<\/span>)<\/b> 12.85M share Secondary priced at $41.00<\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>Deutsche Bank downgraded Goldman Sachs (GS<\/span>)<\/b> to Hold from Buy and upgraded Wells Fargo (WFC<\/span>)<\/b> to Buy from Hold saying that the good news for Goldman Sachs seems to be baked in with the stock outperforming, while Wells Fargo has been the worst performer and the bar has been set low, with a plan of a turnaround coming<\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>Pfizer (PFE<\/span>)<\/b> said that the second Phase 3 monotherapy pivotal study of abrocitinib in patients aged 12 and older with moderate to severe atopic dermatitis showed the treatment met all co-primary and key secondary endpoints<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Change Healthcare (CHNG<\/span>)<\/b> shares fell -9%; Q4 adj EPS 42c on revs $843.4M vs. est. 37c and $834.82M; sees Q1 adjusted EPS 14c-18c and revs $595M-$620M well below est.35c\/$852.83M saying guidance reflects the company’s current expectation that the largest impact from the COVID-19<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Twist Bioscience (TWST<\/span>)<\/b> $100M Spot Secondary priced at $33.00<\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>Glu Mobile (GLUU<\/span>)<\/b> 15M share Secondary priced at $9.25<\/o:p><\/p>\n

·     <\/span><\/span><\/span>ZoomInfo (ZI<\/span>)<\/b> 44.5M share IPO priced at $21.00<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Cloudera (CLDR<\/span>)<\/b> Q1 adjusted EPS 5c\/$210.5M vs. est. 0c\/$204.62M; sees Q2 adjusted EPS 6c-7c on revs $206M-$209M vs. est. 5c\/$212.22M; lowers year rev outlook to $825M-$845M from prior $860M-$880M view<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Comtel (CMTL<\/span>)<\/b> 3Q adj EPS $0.05 vs. est. ($0.02) on net sales $135.1Mm vs. est. $146.5Mm; says UHP purchase price reduced to $38Mm from $50Mm; guides 4Q net sales, adj EBITDA somewhat better qtr\/qtr<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Elastic NV (ESTC<\/span>)<\/b> Q4 adj EPS loss (12c)\/$123.6M vs. est. loss (31c)\/$116.95M; guides Q1 adjusted EPS loss to (19c)-(17c) on revs $119M-$122M vs. est. loss (38c)\/$120.63M; Q4 SaaS revenue was $29.0M up 110% YoY or 120% on a constant currency basis; Q4 calculated billings was $175.1 million, an increase of 52% YoY or 55% on a constant currency basis.<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Guidewire (GWRE<\/span>)<\/b> Q3 adj EPS 9c\/$168.2M vs. est. loss (5c)\/$152.63M; said quarter was highlighted by 105% year-over-year growth in subscription revenue that, along with total revenue and profitability; narrows FY20 adj. EPS view to 84c-92c from 82c-94c and FY20 revenue view to $703.5M-$711.5M from $702M-$714M (est. $696.27M); says ARR year growth on a constant currency basis is now expected to be between 9%-11% from prior 11%-12%<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Smartsheet (SMAR<\/span>)<\/b> shares fall -19%; 1Q adj EPS ($0.11) vs. est. ($0.19) on revs $85.5Mm vs. est. $81.25Mm, 1Q subscription revs $77.2Mm, professional revs $8.3Mm; sees 2Q revs $86-87Mm vs. est. $88.2Mm, sees adj EPS ($0.18-0.16) vs. est. ($0.14), sees net FCF $9-11Mm<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Zuora Inc. (ZUO<\/span>)<\/b> shares rose 20%; Q1 EPS loss (6c) on revs $73.9M (up 15% YoY) vs. est. loss (10c) and $70.9M; 1Q negative free cash flow $2.17Mn, -43% YoY and 1Q cash and cash equivalents $84.7M, +35% YoY; sees Q2 revs $72.5M-$75M vs. est. $74.4M and EPS loss (7c-8c) vs. est. loss (8c); withdraws year guidance<\/p>\n<\/div>\n

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