Monday Morning Reads

Monday Morning Reads



Open Interest Changes:




The earnings season ramps up next week with reports due out from tech heavyweights Amazon (NASDAQ:AMZN), Apple (NASDAQ:AAPL), Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL), Facebook (NASDAQ:FB) and Microsoft (NASDAQ:MSFT). While the powerhouses themselves have benefited in different ways from the work-at-home theme, the Street is prepping for a brutal tech earning season in general. Wedbush's Dan Ives says getting enterprise deals over the goal line amid procurement logjams, no face to face meetings, a recessionary environment and budget-minding IT departments have created major deal slippage for tech vendors of all shapes and sizes. On the economic front, strap in for the Commerce Department's first crack at reporting Q1 GDP. Economists on average expect GDP to have dropped 4% during the quarter after the pandemic played into March activity. Those same economists don't have much of a handle on the current quarter, with Q2 estimates ranging from -40% to -1%. Finally, the FOMC has a two-day meeting set for April 28-29. After firing some bazookas already as part of the central bank's pandemic response, Chairman Jerome Powell's presser will be the highlight.

Earnings spotlight: Keurig Dr Pepper (NYSE:KDP) and F5 Networks (NASDAQ:FFIV) on April 27; UPS (NYSE:UPS), 3M (NYSE:MMM), Alphabet, Southwest Airlines (NYSE:LUV), Ford (NYSE:F), Caterpillar (NYSE:CAT), AMD (NASDAQ:AMD), PepsiCo (NASDAQ:PEP), Starbucks (NASDAQ:SBUX) and Merck (NYSE:MRK) on April 28; Microsoft (MSFT), eBay (NASDAQ:EBAY), Facebook, Yum Brands (NYSE:YUM), Boeing (NYSE:BA), Mastercard (NYSE:MA), General Electric (NYSE:GE) and Tesla (NASDAQ:TSLA) on April 29; Amazon, Apple, Dunkin' Brands (NASDAQ:DNKN), Gilead Sciences (NASDAQ:GILD), Dow (NYSE:DOW), Cigna (NYSE:CI), McDonald's (NYSE:MCD), Altria (NYSE:MO), Twitter (NYSE:TWTR), Kraft Heinz (NASDAQ:KHC) and Visa (NYSE:V) on April 30; Apollo Global Management (NYSE:APO), Chevron (NYSE:CVX), Clorox (NYSE:CLX), Exxon Mobil (NYSE:XOM), Phillips 66 (NYSE:PSX) and AbbVie (NYSE:ABBV) on May 1.

Go deeper: See Seeking Alpha's complete list of earnings reporters

IPO watch: Analyst quiet periods expire on WiMi Hologram Cloud (NASDAQ:WIMI) on April 27 and Zentalis Pharma (NASDAQ:ZNTL) on April 28. IPO share lockups end on Oyster Point (NASDAQ:OYST) and RAPT Therapeutics (NASDAQ:RAPT) on April 28. Amid the lack of new IPOs, the Renaissance IPO ETF (NYSEARCA:IPO) is still chugging along and is down only 3% YTD compared to a 12% decline in the S&P 500. Top performers for the ETF include Moderna (NASDAQ:MRNA), Zoom Video (NASDAQ:ZM) and Chewy (NYSE:CHWY).
Go deeper: Catch up on all the latest IPO news.

M&A tidbits: The Nvidia (NASDAQ:NVDA)-Mellanox Technologies (NASDAQ:MLNX) deal is expected to close on April 27 and the Carolina Financial (NASDAQ:CARO)-United Bankshares (NASDAQ:UBSI) merger is scheduled to close on May 1.

AACR meetings: The American Association for Cancer Research AACR Virtual Annual Meeting will take place next week. The program will include a number of clinical trial plenary sessions featuring more than 30 oral presentations along with perspectives on the science behind the clinical trials by expert discussants. Trial data is anticipated from Roche (OTCQX:RHHBY)/Exelixis (NASDAQ:EXEL) on Tecentriq/Cotellic/Zelbora, Moderna on mRNA-2416, Incyte (NASDAQ:INCY)-Novartis (NYSE:NVS) on Capmatinib, Pfizer (NYSE:PFE) on Talzenna, Syndax Pharmaceuticals (NASDAQ:SNDX) on SNDX-6352, Gilead Sciences (GILD)/Roche on Yescarta/Tecentriq combo and Iovance Biotherapeutics (NASDAQ:IOVA) LN-145/lifileucel. Other companies due to report data or update on programs include Idera Pharmaceuticals (NASDAQ:IDRA), Chi-Med (NASDAQ:HCM), privately-held iTeos Therapeutics, Theratechnologies (NASDAQ:THTX), BioLife Solutions (NASDAQ:BLFS), Innate Pharma (NASDAQ:IPHA), Sutro Biopharma (NASDAQ:STRO), Compugen (NASDAQ:CGEN), Syndax Pharmaceuticals (SNDX), Alpine Immune Sciences (NASDAQ:ALPN), Spectrum Pharmaceuticals (NASDAQ:SPPI), Verastem (NASDAQ:VSTM), aTyr Pharma (NASDAQ:LIFE), Bio-Path Holdings (NASDAQ:BPTH), Iovance Biotherapeutics (IOVA) and Briacell Therapeutics (OTCQB:BCTXF).

Projected dividend changes (quarterly): Fresh Del Monte (NYSE:FDP) to $0.12 from $0.10, Tetra Tech (NASDAQ:TTEK) to $0.17 from $0.15, Ameriprise (NYSE:AMP) to $1.04 from $0.97, Apple (AAPL) to $0.82 from $0.77, IBM (NYSE:IBM) to $1.67 from $1.62, Cullen/Frost (NYSE:CFR) to $0.72 from $0.71, Community Healthcare Trust (NYSE:CHCT) to $0.42 from $0.4175, Core Laboratories (NYSE:CLB) to $0.01 from $0.25, Simon Property Group (NYSE:SPG) to $1.05 from $2.10, Raytheon Technologies (NYSE:RTX) to $0.40.

Tech earnings tidbits: Analysts will be digging hard into the comments on business activity from tech majors next week as a myriad of unexpected factors come into play. Amazon is likely to take a hit on profit as higher costs ramped up to meet the surge in demand. JPMorgan sees Amazon growing into the new operating paradigm and believe some physical stores will simply not re-open following COVID-19 to the benefit of the e-commerce giant. "Importantly, AMZN is accelerating online adoption in key categories like grocery and household items, and we believe much of this behavior will continue post-crisis," updates JP. For Apple, Evercore ISI analyst Amit Daryanani says while most of the focus will be on the company’s supply-chain and consumer-demand issues connected with the COVID-19 pandemic, Apple's plans for its cash pile are no small matter for long-term investors. Goldman Sachs is modeling for a deeper reduction in iPhone unit demand through mid-2020 and then a shallower recovery into early 2021. The firm assumes some lingering average selling price weakness as consumers look to economize similar to what was seen in prior downturns. In its update on Alphabet, Bank of America said while user activity is likely higher across Google platforms, pressure on ad spending across several verticals reflecting large GDP declines is anticipated. On the margin side, Google has started slowing investment spend & hiring in Q2, but BofA expects material pressure in Q1-Q2 as adjustments won't fully kick in until Q3. The main focus on Microsoft is pretty clear as the remote work from home theme plays out to the company's strategic benefit. Wedbush's Dan Ives says the Street is focused on cloud growth heading into earnings, Office 365 success, and the Azure growth trajectory. Analysts have been dropping estimates and price targets on Facebook ahead of its earnings report due to concerns on advertising revenue amid a recessionary backdrop. Mizuho Securities believes the stock will likely remain under pressure in the near-term due to negative Street revisions but recommends buying shares on any post-earnings weakness post the quarter.

U.S. auto sales: Hard hats will be needed in the auto sector when April sales reports start to drop on April 1. TrueCar forecasts total new vehicle sales will fall 54% Y/Y to 638,092 units in April when adjusted for the same number of selling days. "Although most automakers saw big declines in sales, the domestic brands such as GM and Ford had a smaller percentage of loss than imported brands when compared year-over-year. Some of that is attributable to the generous incentive offerings from the domestics, and some of it is due to the higher mix of imports in the states that were initially hit hardest compared with the states that were impacted later," updates the firm. TrueCar's April forecast by manufacturer - BMW (OTCPK:BMWYY) -69.0% to 8,213 units, Daimler (OTCPK:DDAIF) -66.2% to 8,693 units, Fiat Chrysler Automobiles (NYSE:FCAU) -58.2% to 72,393 units, Ford (F) -47.3% to 102,447 units, General Motors (NYSE:GM) -39.3% to 141,874 units, Honda (NYSE:HMC) -56.1% to 55,249 units, Hyundai (OTCPK:HYMLF) -49.8% to 28,655 units, Kia (OTCPK:HYMLF) -40.6% to 30,538 units, Nissan (OTCPK:NSANY) -69.9% to 28,814 units, Subaru (OTCPK:FUJHY) -57.2% to 24,500 units, Tesla (TSLA) -64.0% to 3,816 units, Toyota (NYSE:TM) -52.9% to 86,603 units, and Volkswagen -45.1% to 28,391 units.

Nielsen data: Food and beverage stocks will be on watch at the tail end of next week when Nielsen numbers indicate to what degree the pantry-loading effect in the U.S. has tapered off. Companies that posted strong growth numbers a few weeks ago included Campbell Soup (NYSE:CPB), B&G Foods (NYSE:BGS), McCormick (NYSE:MKC), General Mills (NYSE:GIS) +63%, Kraft Heinz, Flower Foods (NYSE:FLO), Post Holdings (NYSE:POST), Conagra (NYSE:CAG), Mondelez International (NASDAQ:MDLZ), Kellogg (NYSE:K), Nestle (OTCPK:NSRGY), Danone N.A. (OTCQX:DANOY), Boston Beer (NYSE:SAM), Diageo (NYSE:DEO), Constellation Brands (NYSE:STZ), Anheuser-Busch InBev (NYSE:BUD), Molson Coors (NYSE:TAP), J.M. Smucker (NYSE:SJM), and Keurig Dr Pepper. If the new food purchasing habits prove to be sticky, retailers like Kroger (NYSE:KR), Costco (NASDAQ:COST), Walmart (NYSE:WMT) and Target (NYSE:TGT) could also gain off the Nielsen data.

Casino revenue: Macau authorities could post April gaming revenue numbers as early as May 1. Let's just say the numbers won't be great, with Bernstein warning of a gaming revenue drop of as much as 90% compared to a year ago. Visa restrictions are severely limiting traffic to the gambling mecca, but the end could be in sight. "Although there is no definitive timeline, rumors on the ground in Macau suggest that some travel and entry restrictions could be relaxed by the end of May. This would imply the worst is almost over," notes Union Gaming analyst John DeCree. Any news on that front would supersede the dismal April revenue report. Names to watch for another round of volatility include Wynn Macau (OTCPK:WYNMF), Wynn Resorts (NASDAQ:WYNN), Sands China (OTCPK:SCHYY), Las Vegas Sands (NYSE:LVS), MGM China (OTCPK:MCHVF), MGM Resorts (NYSE:MGM), Galaxy Entertainment (OTCPK:GXYEF), SJM Holdings (OTCPK:SJMHF), Melco Resorts & Entertainment (NASDAQ:MLCO) and Studio City International (NYSE:MSC). In Nevada, the same type of focus is on limited casino re-openings and the pace of initial traffic. The Nevada operators are looking to turn the lights back on early as May 15 if the governor makes a move. News on that front next week could lift Caesars Entertainment (NASDAQ:CZR), MGM Resorts, Boyd Gaming (NYSE:BYD), Wynn Resorts, Las Vegas Sands, Eldorado Resorts (NASDAQ:ERI) Full House Resorts (NASDAQ:FLL) and Red Rock Resorts (NASDAQ:RRR).

Upcoming stock splits: United States Oil ETF (NYSEARCA:USO) will execute a 1-for-8 reverse share split on April 29. Also within the energy sector, Tortoise Energy Infrastructure (NYSE:TYG) will fire off a 1-for-4 reverse split, Tortoise MLP Fund (NYSE:TG) will split 1-for-10, Tortoise Pipeline & Energy Fund (NYSE:TTP) will split 1-for-4 and Tortoise Energy Independence Fund (NYSE:NDP) will split 1-for-8.

Buyback blues: Corporate share buybacks are going to be significantly lower as cash is hoarded to ride out the pandemic and with government restrictions in place for loan recipients. Amid that tough backdrop, Jefferies compiled a list of companies seen at risk after previously boosting earnings per share growth through buybacks powered by leverage. Dunkin' Brands, Hilton Worldwide (NYSE:HLT), Marriott International (NASDAQ:MAR), Yum Brands, Ross Stores (NASDAQ:ROST), Booking Holdings (NASDAQ:BKNG), Waste Management (NYSE:WM), Citrix Systems (NASDAQ:CTXS), Waters Co. (NYSE:WAT) and IHS Markit (NYSE:INFO) all landed a spot on the Jefferies watch list.

Notable annual meeting: Boeing's (BA) board meets on April 27 in a virtual format. Proxy firms Glass Lewis and Institutional Shareholder Services recommend shareholders vote against key board members in a protest against the company's handling of the 737 MAX debacle. Glass Lewis recommends voting against Chairman Larry Kellner, a former airline executive who previously oversaw the board's audit committee. ISS recommends a no vote on four longtime board members, including Edmund Giambastiani Jr., a retired Navy admiral who leads a post-crash safety committee. Longtime Boeing directors Edward Liddy and Mike Zafirovski already stepped down earlier this year.

Barron's mentions: The publication thinks a handful of oil stocks could be in a better position to benefit after a wave of bankruptcies and mergers sweeps over the industry. While Chevron (CVX), ConocoPhillips (NYSE:COP), Schlumberger (NYSE:SLB), and Phillips 66 (PSX) could still go lower, investors willing to hold them for the longer term could see a payoff. In a look at the food delivery space, the crucial services being offered by Grubhub (NYSE:GRUB), Uber Eats (NYSE:UBER), DoorDash (DOORD) and Postmates (POSTM) are noted as is their lack of profitability growth. The story is a little different with restaurants as the winning streak is expected to go on for Wingstop (NASDAQ:WING), Domino's Pizza (NYSE:DPZ) and Papa John’s International (NASDAQ:PZZA). The cover story this week dissects what could be the next flashpoint for the markets. Junk bonds, food shortages, a wave of small-business bankruptcies and collapses in emerging markets are all the doomsday list.

Known to most as Uranium Pinto Beans, Jason has more than 15 years under his belt of trading stocks, options and currencies. His expertise primarily lies in chart analysis, and he has a strong eye for undervalued stock. Because he’s got the ability to identify great risk/reward trades he usually enjoys taking the path less traveled and reaping the benefits from the adventure.

He is a co-founder of Option Millionaires, and he is best known for his weekly webinars with Scott, as well as his high level training webinars and charts found in the forums.

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