Stock futures are pointing to a lower open, tracking both European and Asian markets overnight, ahead of expected weak jobless claims data (another 2.5M are expected to file for first time unemployment claims) the emergence of new coronavirus cases in China and increased China/U.S. tensions. Stocks jumped on Wednesday, reversing the prior day’s selloff, as investors looked past rising U.S. tensions with China and Fed worries about the economic effects of the coronavirus, focusing instead on the positives such as the reopening of the U.S. as all 50-states have now begun initial stages.
Stocks recovered from a brief fade after the U.S. Senate passed legislation that could ban some Chinese companies from being listed on U.S. stock exchanges, and Secretary of State Pompeo offended China over relations with Taiwan. Meanwhile, the latest FOMC minutes reflected the Fed’s concerns stemming from the virus and risks to financial stability. Gains were once again broad based as all eleven S&P sectors advanced led by energy, financials and industrials. Oil added to its recent rally, rising nearly 5% to a 10-week high around $33.50 per barrel while Treasury yields fell following solid demand in the U.S. Treasury’s first 20-year bond auction since 1986.
In Asian markets, The Nikkei Index fell -42 points to 20,552, the Shanghai Index fell -15 points to 2,867 and the Hang Seng Index dropped -119 points to 24,280. In Europe, the German DAX is down about -150 points to 11,075, while the FTSE 100 is down about -50 points to 6,020.
Market Closing Prices Yesterday
- The S&P 500 Index gained 48.67 points, or 1.67%, to 2,971.61
- The Dow Jones Industrial Average rose 369.04 points, or 1.52%, to 24,575.90
- The Nasdaq Composite jumped 190.67 points, or 2.08%, to 9,375.78
- The Russell 2000 Index advanced 39.21 points, or 3.00% to 1,346.93
Economic Calendar for Today
- 8:30 AM EST Weekly Jobless Claims…est. 2.4M
- 8:30 AM EST Continuing Claims…est. 23.5M
- 8:30 AM EST Philly Fed Survey for May…est. (-40.0)
- 9:45 AM EST Markit US Manufacturing PMI, May-P…est. 39.5
- 9:45 AM EST Markit US Services PMI, May-P…est. 32.3
- 10:00 AM EST Leading Index for April…est. (-5.4%)
- 10:00 AM EST Existing Home Sales MoM for April…est. (-19.9%) to 4.22M
- 10:30 AM EST Weekly EIA Natural Gas Inventory Data
- Earnings Before the Open: AINV, BJ, BRC, HRL, LCUT, TJX, USPH, WMS
- Earnings After the Close: A, AGYS, CRMT, DECK, ELF, HPE, INTU, NVDA, NYMT, PANW, PLT, ROST, SPLK
- The IHS Markit flash eurozone composite purchasing managers index rose to a reading of 30.5 in May from 13.6 in April. Economists in a FactSet-compiled poll expected a 27.0 reading
- The flash France purchasing managers index rose to 30.5 in May from 11.1 in April, the flash Germany PMI composite index rose to 31.4 from 17.4, and the flash U.K. composite index rose to 28.9 from 13.8 in April
- The global case tally for the coronavirus that causes COVID-19 climbed above 5 million on Thursday, according to data by Johns Hopkins University. The death toll rose to 328,462. More than 1.9 million people have recovered. The U.S. has the highest case toll at 1.55 million and the highest death toll at 93,439
Sector News Breakdown
- Boot Barn (BOOT) 4Q adj EPS $0.18 vs. est. $0.27 on sales $188.6Mm vs. est. $193.1Mm, comps -4.7% vs. est. -5.2%; comps turned negative, declining 8% in third week of March and more than 50% last two weeks of qtr; not providing guidance for 1Q or FY21 at this time
- Churchill Downs (CHDN) plans to reopen Harlow’s Casino Resort & Spa in Greenville and Riverwalk Casino Hotel in Vicksburg in Mississippi today
- Expedia (EXPE) 1Q adj loss/share $1.83 vs est loss/share $1.23 on revs $2.2Mm vs est $2.2Mm, qtrly gross bookings -39% yr/yr, percentage of cancellation inquiries for air travel managed without an agent rose from about 65% in Feb to over 95% in April
- L Brands (LB) Q1 EPS loss ($1.07)/$1.65B vs. est. loss (66c)/$1.82B; not providing Q2 or year guidance; stores and direct comps +4% (BBW +41%, vs. -13%); stores only comps -5% (BBW +20%, vs. -15%)
- Shoe Carnival (SCVL) Q1 EPS loss ($1.16)/$147.5M vs. est. loss (97c)/$164.63M; Q1 comp store sales increased 3.9% through March 12, 2020 prior to when the company began experiencing the effects of COVID-19, but decreased (-42.3%) for rest of the quarter; suspends share buyback
- Skyline Champion (SKY) Q4 adjusted EPS 14c/$301.1M vs. est. 22c/$312.39M; entered the pandemic from a position of strength as we grew fourth quarter sales orders by 14% through the first eleven weeks of the quarter, even as the geographies we serve were softer
- Tempur Sealy Inc. (TPX) said it is starting to reopen its U.S. Tempur-Pedic and Sleep Outfitters retail stores in a phased approach that complies with local, state and CDC recommendations. The Lexington, Ky.-based company is expecting all 160 U.S. outlets to be open by end May
- Hormel Foods (HRL) Q2 adj. EPS 42c/$2.4B vs. est. 42c/$2.37B; 2Q Grocery Products operating profit $127.8 million, +22% YoY and 2Q Refrigerated Foods operating profit $131.4 million, -17% YoY
- Staffing stocks ManpowerGroup (MAN), Robert Half International (RHI) and Korn/Ferry (KFY) all upgraded to Neutral from Underperform on valuation at Credit Suisse
- ePlus (PLUS) announces 500,000 share stock repurchase plan
Energy, Industrials and Materials
- Schlumberger (SLB) said it will reshuffle top executives and operations in the coming months to forge “a leaner, simplified and more responsive organization.”
- United States Steel Corporation (X) to issue $700M of senior secured notes due 2025
- Nordson (NDSN) Q2 adj EPS $1.58 on sales $529.5M vs. est. $1.26 and $496.4M; suspends guidance for the year; backlog for quarter was approximately $456 mln, an increase of 6% compared to same period a year ago
- CoStar Group (CSGP) 2.3M share Secondary priced at $655
- SelectQuote (SLQT) 28.5M share IPO priced at $20.00
- Square (SQ) downgraded to sell from neutral at UBS
- Mastercard (MA) will not ask staff to return to its corporate offices until a COVID-19 vaccine is available, Chief People Officer Michael Fraccaro told Reuters.
- Raymond James Financials’ (RJF) client assets under administration of $827.7B for April, increased 1% from April 2019 and 7% from March 2020; financial assets under management of $137.2B fell 3% Y/Y and rose 7% M/M, primarily due to the appreciation of equity markets.
- Avantor (AVTR) 45M share Secondary priced at $16.25
- Becton Dickinson (BDX) 62.5M share Secondary priced at $240.00
- Inari Medical (NARI) IPO price range raised to $17.00-$18.00
- scPharmaceuticals (SCPH) 5.781M share Secondary priced at $8.65
- AstraZeneca (AZN) has received more than $1B in U.S. funding to develop a COVID-19 vaccine with the University of Oxford and said it has supply agreements for 400M doses.
- Galapagos NV (GLPG) and collaboration partner Gilead Sciences (GILD) Phase 2b/3 clinical trial evaluating filgotinib in 1,348 biologic-naïve or biologic-experienced adult patients with moderately to severely active ulcerative colitis (UC) met the two primary endpoints demonstrating statistically significant proportions of treated patients achieving remission at week 10 and maintaining remission at week 58, both compared to placebo.
- Aurora Cannabis (ACB) and Reliva announced that they have entered into an agreement pursuant to which Aurora will acquire all of the issued and outstanding membership interests of Reliva. Under the terms of the agreement, members of Reliva will receive approximately $40M of Aurora common shares
- Flexion (FLXN) files to sell $75M in common stock
- Synlogic (SYBX) announces the termination of its collaboration with AbbVie (ABBV) for the development of Synthetic Biotic medicines for the potential treatment of inflammatory bowel disease (IBD).
Technology, Media & Telecom
- Synopsys (SNPS) Q2 adjusted EPS $1.22/$861.3M vs. est. 98c/$837.28M; sees Q3 adjusted EPS $1.33-$1.38 on revs $875M-$905M vs. est. $1.47/$948.71M; raises year EPS view to $5.21-$5.28 from prior $5.18-$5.25
- Take-Two Interactive (TTWO) 4Q EPS $1.07 vs. est. $$0.89 on adj revs $729.4Mm vs. est. $584Mm; sees 1Q adj revs $800-850MM vs. est. $506.4Mm, sees 1Q EPS $0.90-1.00 vs. est. $0.50; guides FY21 adj revs $2.55-2.65B vs. est. $2.66B, sees FY21 EPS $2.60-2.85 vs. est. $4.34
- Fastly (FSLY) 6M share Secondary priced at $41.50
- Ceridian (CDAY) 1.9M share Block Trade priced at $64.40
- Huya (HUYA) Q1 EPS 10c/$340.6M vs. est. 13c/$337.2M; reports Q1 average mobile MAUs of Huya Live 74.7M, up 38.6% from last year; average MAUs of Huya Live reached 151.3M, up 22.2% from last year; total number of paying users of Huya Live reached 6.1M, up 13.0%
- Intel (INTC) announces that the company is acquiring Rivet Networks, which it calls “a leader in software and cloud-based technologies for networking connectivity”
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