{"id":12793,"date":"2020-06-05T05:47:05","date_gmt":"2020-06-05T10:47:05","guid":{"rendered":"https:\/\/www.eoption.com\/2020\/06\/05\/morning-preview-june-05-2020\/"},"modified":"2020-06-05T05:47:05","modified_gmt":"2020-06-05T10:47:05","slug":"morning-preview-june-05-2020","status":"publish","type":"post","link":"https:\/\/www.eoption.com\/morning-preview-june-05-2020\/","title":{"rendered":"Morning Preview: June 05, 2020"},"content":{"rendered":"
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Early Look<\/o:p><\/span><\/b><\/p>\n

Friday, June 5, 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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289.00<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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1.10%<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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26,542<\/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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22.50<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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0.72%<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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3,132<\/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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32.50<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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0.34%<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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9,658<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

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After a brief decline lower late yesterday, sending the S&P 500 index down for the first time in 5-days, stock futures are pointing to a strong rebound ahead of the monthly jobs data at 8:30 AM EST. Markets remain in the enviable position of win-win into the numbers as an improvement from the weak data (nonfarm payrolls expected to show -7.5M lost jobs in May and -6.75M lost jobs in the private sector – with unemployment surging to over 19%) will be seen as the economy having troughed last month and recovery has begun. At the same point, a weaker than expected data will likely raise expectations that additional stimulus may be added to help the recovery – a no-lose situation at this point for stock markets, which is how we have gotten to the levels we are at so quickly. Good is good and bad is good, with more retailers, restaurants and travel improving and reopening daily, raising market optimism and lifting beaten up sectors (airlines massive surge on Thursday). Treasury prices slide further with stocks jumping and as yields recover, with the 10-year yield rising 2 bps to 0.85% after breaking out to its highest level since the end of March. The Nasdaq joined the S&P 500 in negative territory on Thursday while the Dow posted a nominal gain helped by another jump in Boeing (BA<\/span>) shares on increased air travel demand. Oil prices jumping to fresh 3-month highs, with Brent topping the $41 per barrel level and WTI<\/span> crude approaching the $39 per barrel mark. In Asian markets, The Nikkei Index gained 167 points to 22,863, the Shanghai Index rose 11 points to 2,930 and the Hang Seng Index rose 404 points to settle at 24,770. In Europe, the German DAX<\/span> is surging another 200 points around 12,650, while the FTSE 100 is up about 70 points to move back above the 6,400 level. Major averages looking to end the week on a strong note as cruise lines, airlines and financials among names rising early. <\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>The S&P 500 Index<\/b> slipped -10.52 points<\/span>, or 0.34%, to 3,112.35<\/o:p><\/p>\n

·     <\/span><\/span><\/span>The Dow Jones Industrial Average<\/b> rose 11.93 points<\/span>, or 0.05%, to 26,281.82<\/o:p><\/p>\n

·     <\/span><\/span><\/span>The Nasdaq Composite <\/b>dropped -67.10 points<\/span>,<\/span> or 0.69%, to 9,615.81<\/o:p><\/p>\n

·     <\/span><\/span><\/span>The Russell 2000 Index<\/b> little changed down -0.03 points<\/span>, or 0.00% to 1,452.06<\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>8:30 AM EST      Change in Nonfarm Payrolls for May…est. -7.5Mm<\/o:p><\/p>\n

·     <\/span><\/span><\/span>8:30 AM EST      Change in Private Payrolls for May…est. -6.75Mm<\/o:p><\/p>\n

·     <\/span><\/span><\/span>8:30 AM EST      Change in Manufacturing Payrolls for May…est. -400K<\/o:p><\/p>\n

·     <\/span><\/span><\/span>8:30 AM EST      Unemployment Rate for May…est. 19.1%<\/o:p><\/p>\n

·     <\/span><\/span><\/span>8:30 AM EST      Average Hourly Earnings MoM for May…est. 1.0%<\/o:p><\/p>\n

·     <\/span><\/span><\/span>1:00 PM EST       Baker Hughes Weekly Rig Count…<\/o:p><\/p>\n

·     <\/span><\/span><\/span>3:00 PM EST       Consumer Credit for April…est. (-$20.0B)<\/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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0.94<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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38.35<\/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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1.25<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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41.24<\/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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-20.60<\/span><\/o:p><\/span><\/b><\/p>\n<\/td>\n

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1,706.80<\/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<\/o:p><\/span><\/p>\n<\/td>\n

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1.1324<\/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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0.14<\/o:p><\/span><\/p>\n<\/td>\n

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109.29<\/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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+0.028<\/o:p><\/span><\/p>\n<\/td>\n

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0.851%<\/o:p><\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

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

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

·     <\/span><\/span><\/span>Gap Stores (GPS<\/span>)<\/b> Q1 EPS loss ($2.51)\/$2.11B compared to loss (60c) YoY and est. $2.30B; said saw 40% online sales growth in April, while net sales and stores sales continued to reflect material declines in May as a result of closures, saw over 100% growth in online sales during the month; said they have more than 1,500 stores open in North America, ahead of plan<\/o:p><\/p>\n

·     <\/span><\/span><\/span>GameStop (GME<\/span>)<\/b> said that U.S.-based stores conducting limited curbside offering were able to meet or exceed their sales plans during Q2; said in Australia, where all stores remained open during Q1, increased demand drove a ~35% comparable store sales increase; also expects Q1 revenue to decrease in the range of 33% to 35% from $1.5B in the prior year quarter<\/o:p><\/p>\n

·     <\/span><\/span><\/span>RH (RH<\/span>)<\/b> Q1 adjusted EPS $1.27 vs. est. 81c and revs $482.9M vs. est. $480.6M; says its business trends improved week over week from late March through the end of the quarter; revenue ended being flat in FQ1 compared to a year ago and adjusted gross margin rose to 41.8% of sales vs. 39.1% a year ago; sees Q2 rev growth lagging demand growth by 10-12 points<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Caleres (CAL<\/span>)<\/b> Q1 adj EPS loss ($1.30) on sales $397.2M vs. est. loss (85c) and $426.9M; Q1 comp sales +12.6% vs. -1% y\/y; 1Q adjusted operating margin -17.2%, 1Q adjusted gross margin 39.5% vs. 42.3% YoY<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Pilgrim’s Pride (PPC<\/span>)<\/b> CEO Jayson Penn has pleaded not guilty to federal charges that he conspired to fix chicken prices, WSJ reported https:\/\/on.wsj.com\/3cHi5fO<\/a> <\/o:p><\/p>\n

·     <\/span><\/span><\/span>Vail Resorts (MTN<\/span>)<\/b> Q3 EPS $3.74\/$694.09M vs. est. $3.28\/$678.3M; said as of March 18, we anticipated that our operating results in March and April would be negatively impacted by $180M-$200M compared to the Resort Reported EBITDA expectation we had on March 1<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Volaris (VLRS<\/span>)<\/b> reports revenue passenger miles squeezed 88.1% to 216M in May; domestic RPMs down 85.7% Y\/Y and international RPMs fell 94.3% for the month; capacity slipped 88.1% to 247M available seat miles. Domestic ASMs -84.8%; International ASMs -95.6%.<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Zumiez (ZUMZ<\/span>)<\/b> Q1 total net sales decreased 35.3% to $137.8 million from $212.9 million in the first quarter ended May 4, 2019 (13 weeks); net loss in Q1 was $21.1 million, or $(0.84) per diluted share, compared to net income of $0.8 million, or $0.03 per diluted share YoY<\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>OPEC+<\/b> is now set to extend production cuts through the end of July following a breakthrough in negotiations, and the cartel could meet as soon as this weekend to sign off on the deal – Bloomberg reported late yesterday<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Hexcel (HXL<\/span>)<\/b> upgraded to Outperform from Market Perform at BMO Capital and raised tgt to $55<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Navistar (NAV<\/span>)<\/b> upgraded to Outperform from Neutral at Baird while Loop Capital raised its rating to Buy from Hold<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Valvoline (VVV<\/span>)<\/b> mid-qtr update: says prelim May 2020 results expected to include significant sequential improvement MoM; prelim May results expected to includes sales gains of 38%; sees prelim May lubricant volume +33%; says prelim May results expected to include Quick Lube’s system-wide same-store sales improvement each week in May; sees system-wide comps -5.6% YoY for May with company-owned comps +2.4% last week of May<\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>Shift4 Payments (FOUR<\/span>)<\/b> 15M share IPO priced at $23.00, above prior range of $19-$20 range<\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>Novavax (NVAX<\/span>)<\/b> shares rise 13%; after saying it will receive up to $60M from U.S. Department of Defense to fund manufacturing of its COVID-19 vaccine candidate, NVX CoV2373; the vaccine is currently in early-stage trial with prelim immunogenicity and safety data expected in July<\/o:p><\/p>\n

·     <\/span><\/span><\/span>AstraZeneca (AZN<\/span>)<\/b> said s it signed new agreements aimed at broadening global distribution of a coronavirus vaccine being developed by Oxford University researchers. In one deal, it will receive $750M from the Coalition for Epidemic Preparedness Innovations to manufacture and allocate 300M doses on a “no-profit” basis for a global distribution system – the other, deal with the Serum Institute of India, they will supply 1B doses for low- and middle-income countries<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Applied Molecular Transport (AMTI<\/span>)<\/b> 11M share IPO priced at $14.00<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Cooper Companies (COO<\/span>)<\/b> Q2 EPS $1.51\/$524.9M vs. est. $2.53\/$591.6M<\/o:p><\/p>\n

·     <\/span><\/span><\/span>AbbVie (ABBV<\/span>),<\/b> Harbour BioMed, Utrecht University and Erasmus Medical Center have entered into a collaboration to develop a novel antibody therapeutic to prevent and treat COVID-19<\/o:p><\/p>\n

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

·     <\/span><\/span><\/span>Broadcom (AVGO<\/span>)<\/b> Q2 adjusted EPS $5.14\/$5.742B vs. est. $5.14\/$5.69B; guides Q3 revs $5.75B plus\/minus $150M vs. est. $5.77B; sees Q3 Ebitda $3.22B plus\/minus $75M; 2Q adjusted operating income $3.03B and 2Q adj. R&D expense $891M<\/o:p><\/p>\n

·     <\/span><\/span><\/span>DocuSign (DOCU<\/span>)<\/b> Q1 adj EPS 12c on revs $297M vs. est. 10c\/$281.12M; 1Q billings $342.1 million, +59% YoY and 1Q free cash flow $32.8 million, +7.8% YoY; guides Q2 revs $316M-$320M vs. est. $302.9M and year revs $1.31B-$1.317B vs. est. $1.26B<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Domo (DOMO<\/span>)<\/b> Q1 EPS loss (65c) vs. est. (91c) and revs $48.6M vs. est. $45.65M; Q1 subscription revenue was $42.4M up 23% YoY; guides Q2 EPS loss (52c)-(48c) on revs $48.5M-$49.5M vs. est. loss (60c) and $45.83M<\/o:p><\/p>\n

·     <\/span><\/span><\/span>MongoDB (MDB<\/span>)<\/b> Q1 EPS loss (13c) on revs $130.3M vs. est. loss (25c) and $119.6M; 1Q cash and cash equivalents $700.6 million vs. $158.1M YoY; 1Q subscription rev. $124.9M and 1Q service revenue $5.47M; guides year EPS loss ($1.34-$1.21) vs. est. loss ($1.34)<\/o:p><\/p>\n

·     <\/span><\/span><\/span>PagerDuty (PD<\/span>)<\/b> Q1 EPS loss (4c) on revs $49.8M vs. est. loss (9c) and $47.99M; sees Q2 EPS loss (7c)-(6c) vs. est. loss (8c) and revs $50M-$51M vs. est. $49.79M<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Slack (WORK<\/span>)<\/b> shares fell -11%; Q1 adjusted EPS loss (2c) on revs $201.7M vs. est. loss (6c) and $188.12M; announced addition of 12,000 net new Paid Customers and 50% revenue growth year-over-year; 1Q billings $206.0 million, +38% YoY; sees Q2 adjusted EPS loss (4c)-(3c) on revs $206M-$209M vs. est. loss (6c)\/$199.8M; raises year EPS and revenue outlook<\/o:p><\/p>\n

·     <\/span><\/span><\/span>Slack (WORK<\/span>)<\/b> pared losses after announcing a multiyear agreement with Amazon (AMZN) Web Services to deliver tightly integrated, enterprise-grade tools as Slack expands its use of AWS. Slack will migrate its Slack Calls capability for all voice and video calling to Amazon Chime<\/o:p><\/p>\n

·     <\/span><\/span><\/span>AudioCodes (AUDC<\/span>)<\/b> 2.6M share Secondary priced at $35.00<\/p>\n<\/div>\n

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