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Early Look: Tuesday, May 26, 2020

DJ Industrials522.002.14%24,946
S&P 50058.501.99%3,011

U.S. stock futures are soaring as markets bounce globally amid further moves to ease coronavirus lockdowns in major economies outweighing concerns over escalating geopolitical tensions. Markets rally with people drawn to restaurants (take-out), beaches and parks this Memorial Day holiday weekend as economies reopen and businesses try and get “back to normal” while biotech company Novavax (NVAX) shares rise around 20% after starting the first human study of its experimental coronavirus vaccine.

In Asian markets, The Nikkei Index jumped 529 points to 21,271, the Shanghai Index gained 28 points to 2,846 and the Hang Seng Index gained 432 points to 23,384. In Europe, the German DAX is up over 60 points to 11,450, while the FTSE 100 is higher by about 80 points to 6,075. S&P futures are pointing to a start above the 3,000 level, moving above its 200-day moving average to its highest level since March 6, after Japan ended its state of emergency everywhere in the country.

European markets jumped, with travel stocks surging on reports that Germany plans to lift travel warnings for 31 European countries. The New York Stock Exchange will reopen today with only a quarter of its usual population of traders on the floor tomorrow following a two-month closure prompted by the COVID-19 pandemic. Traders who return must wear masks, avoid taking public transportation and follow social-distancing rules, with newly erected Plexiglas barriers to help them stay apart. Liability waivers must also be signed that prevents them from suing the NYSE if they get infected at the exchange.

Oil prices are higher, sentiment is positive and markets are looking to extend their bounce as the world tries to put the coronavirus impact behind them and focus on a bright the future.

Market Closing Prices Yesterday

  • The S&P 500 Index gained 6.94 points, or 0.24%, to 2,955.45
  • The Dow Jones Industrial Average fell -8.94 points, or 0.04%, to 24,465.16
  • The Nasdaq Composite climbed 39.71 points, or 0.43%, to 9,324.59
  • The Russell 2000 Index advanced 7.97 points, or 0.59% to 1,355.53

Economic Calendar for Today

  • 7:45 AM EST       ICSC Weekly Retail Sales
  • 8:30 AM EST       Chicago Fed Nat Activity Index for April
  • 8:55 AM EST       Johnson/Redbook Weekly Sales
  • 9:00 AM EST       FHFA House Price Index MoM for March…est. 0.5%
  • 9:00 AM EST       S&P CoreLogic CaseShiller for March…est. 0.3%
  • 10:00 AM EST     Consumer Confidence for May…est. 87.0
  • 10:00 AM EST     New Home Sales for April…est. (-23.4%) to 480K
  • 10:30 AM EST     Dallas Fed Manufacturing Activity for May…est. (-62.0)
  • 4:30 PM EST        API Weekly Inventory Data

Earnings Calendar:

  • Earnings Before the Open: AMWD, AZO, BAH, HIBB, PLAN
  • Earnings After the Close: CVCO, HEI, KEYS, OOMA, VSAT

Other Key Events:

  • Fed’s Kashkari speaks in virtual panel on COVID
  • KeyBanc Industrials and Materials Virtual Conference, 5/26-5/29
  • Deutsche Bank Global Financial Services Conference,5/26-5/27
WTI Crude0.8334.08
10-Year Note+0.0340.693%

World News

  • If China imposes national security laws on Hong Kong, the U.S. might impose sanctions on Hong Kong and China, White House National Security Adviser Robert O’Brien said Sunday on NBC’s “Meet the Press.”
  • The White House suspends entry of non-U.S. citizens traveling from Brazil, due to the spread of the coronavirus in Latin America’s largest and hardest-hit country. The ban applies to foreign nationals who have been in Brazil in the 14 days before they seek to enter the U.S.
  • The German economy posted its largest decline in output since the financial crisis in the first quarter as GDP contracted 2.2% compared with the previous quarter.
  • German business sentiment rose in May, as the Ifo business-climate index came in at 79.5 points in May from a downwardly revised 74.2 points in April vs. est. 76.8 points. The increase is primarily due to a sharp rise in expectations to 80.1 points in May from 69.4 points in April.

Sector News Breakdown


  • Hertz Global (HTZ) announced that it and certain of its U.S. and Canadian subsidiaries have filed voluntary petitions for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the District of Delaware.
  • American Woodmark (AMWD) Q4 EPS 77c vs. est. $1.51 and net sales $399.2M, vs. est. $388.2M; 4Q operating income $26.9M, -30% y/y
  • Molson Coors (TAP) suspends quarterly dividend, furloughs employees

Energy, Industrials & Materials

  • Halliburton (HAL) downgraded to Sell from Neutral at UBS
  • LyondellBasell (LYB) upgraded to Buy from Hold at Deutsche Bank
  • German government and Lufthansa (DLKAY) have agreed on a $9.81B bailout deal-one of the biggest aid packages by a single country hatched so far in the pandemic-hit air travel sector


  • Bank of Nova Scotia (BNS) reported Q2 adjusted earnings of C$1.04 vs. C$1.70 YoY and estimate C$0.96; 2Q common equity Tier 1 ratio 10.9% vs. 11.1% y/y, estimate 11.0% (range 10.6% to 11.3%)


  • Sanofi (SNY) is selling a stake in Regeneron Pharmaceuticals Inc. (REGN) valued at about $13 billion, giving the French drug giant more firepower to invest in fast-growing fields such as cancer. Regeneron has agreed to repurchase $5 billion of its stock from Sanofi. said that the French company also plans to sell approximately 12.8 million shares
  • Bayer (BAYRY) reached verbal agreements to resolve a significant amount of U.S. cancer lawsuits over use of its Roundup weed killer, according to Bloomberg as the deal covers an estimated 50K to 85K suits (of a total 125K), part of a $10B plan to end a costly legal battle
  • Novavax (NVAX) shares up 18%; said it has started a phase 1 clinical trial of its coronavirus vaccine candidate code-named NVX-CoV2373, and expects to issue preliminary immunogenicity and safety results in July; says it plans to enroll ~130 healthy people ages 18-59 at two sites in Australia for the phase 1 study
  • Gilead (GILD) upgraded to Hold from Sell at SunTrust
  • The World Health Organization said that it will temporarily drop hydroxychloroquine — the malaria drug U.S. President Trump has said he is taking — from its global study into experimental COVID-19 treatments, saying that its experts need to review all available evidence to date

Technology, Media & Telecom

  • Barron’s positive on DropBox (DBX) saying with shares trading around $22, is just 4x enterprise value to estimated 2021 sales, while Zoom (ZM) trades at 46x EV to sales, Slack (WORK) goes for 18x and Atlassian (TEAM) trades at 20x. It is becoming an increasingly profitable business: Adjusted operating margins last year were 12%, while net income is forecast to rise 48% this year
  • Warner Music to sell 70M shares pursuant to a registration statement on Form S-1 filed with SEC in IPO between $23-$26
  • Sony Mobile Communications (SNE) saw its quarterly smartphone shipments hit a 10-year low of 400,000 units in Q1 despite strong sales of new models, including Xperia 1 II and Xperia 10 II, in Japan, DigiTimes reports
  • Take-Two (TTWO) upgraded to Outperform from Market Perform at BMO Capital
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The content of this post was created by the Hammerstone Group. The Hammerstone Institutional Forum, a chat-based platform for traders, provides subscribers with up-to-the-minute breaking news headlines and instant analysis that drive the market. For more information please visit For more information on the stocks mentioned in the Hammerstone Recap, please contact Brian Ducey at

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