Thursday Morning Reads

Thursday Morning Reads



Open Interest Changes:


Some of todays analyst changes:

  • Upgrades:
    • Ashland (ASH) upgraded to Neutral from Underweight at JP Morgan; tgt lowered to $62
    • CAI Intl (CAI) upgraded to Outperform from Mkt Perform at Keefe Bruyette; tgt raised to $21
    • General Motors (GM) upgraded to Buy from Hold at Deutsche Bank; tgt $30
    • Natera (NTRA) upgraded to Overweight from Neutral at JP Morgan; tgt raised to $45
    • National Fuel Gas (NFG) upgraded to Outperform from Mkt Perform at Raymond James; tgt $48
    • National Fuel Gas (NFG) upgraded to Sector Outperform from Sector Perform at Scotiabank; tgt $44
    • Occidental Petro (OXY) upgraded to Hold from Sell at SunTrust; tgt $13
    • Tapestry (TPR) upgraded to Buy from Hold at HSBC Securities; tgt $20
  • Downgrades:
    • Alnylam Pharma (ALNY) downgraded to Neutral from Overweight at JP Morgan; tgt raised to $137
    • AxoGen (AXGN) downgraded to Hold from Buy at Canaccord Genuity; tgt $12
    • Community Healthcare Trust (CHCT) downgraded to Neutral from Buy at B. Riley FBR; tgt $40
    • Compass Minerals (CMP) downgraded to Neutral from Overweight at JP Morgan; tgt $45
    • Deciphera Pharmaceuticals (DCPH) downgraded to Neutral from Buy at Nomura; tgt lowered to $60
    • Lyft (LYFT) downgraded to Neutral from Overweight at Piper Sandler; tgt lowered to $31
    • Ralph Lauren (RL) downgraded to Market Perform from Outperform at Cowen; tgt lowered to $76
    • Shopify (SHOP) downgraded to Equal Weight from Overweight at Wells Fargo; tgt raised to $700
    • Simon Properties (SPG) downgraded to Equal Weight from Overweight at Wells Fargo; tgt lowered to $60
    • SolarEdge Technologies (SEDG) downgraded to Hold from Buy at Canaccord Genuity; tgt $128
  • Others:
    • GAN Limited (GAN) initiated with a Buy at B. Riley FBR; tgt $16.50
    • Magnolia Oil & Gas (MGY) initiated with a Sector Outperform at Scotiabank; tgt $7.50



Effects of the coronavirus pandemic are being clearly seen as earnings season goes into overdrive, with Corporate America adjusting to different consumer habits, trends and economies still struggling to reopen. Predicting fewer passengers for the foreseeable future, UBER slashed 14% of its workforce (LYFT cut 17% of its staff last week), while Costco's (NASDAQ:COST) sales fell for the first time in over a decade as shoppers stayed home. Peloton's (NASDAQ:PTON) shares are meanwhile up 15% premarket, thanks to a revenue surge from stay-at-home policies, while Beyond Meat (NASDAQ:BYNDskyrocketed 26% on Wednesday as the company looked to "win consumers" amid soaring meat prices.

Jobs? Economy? Future of trade?

These are some of the questions on traders' minds as they gauge market sentiment, with the Dow and S&P 500 dipping on Wednesday, only to rebound by 1.5% overnight along with the Nasdaq. Figures due later today are likely to show that another 3M Americans are out of work, adding to the 30M figure that has already been racked up over the past two months. The latest ADP data on Wednesday showed private payrolls were cut by 20.2M last month, while Friday's payrolls report is expected to show an unemployment rate of 16% or higher.

Stampede into online brokerage accounts

TD Ameritrade (NASDAQ:AMTD) disclosed a record 608K new funded accounts for Q1, as well as more than 3x the number of users in March Y/Y, while brokerages like Schwab (NYSE:SCHW), Fidelity and E*Trade (NASDAQ:ETFC) also reported record new users. Earlier this week, millennial-focused trading app Robinhood also closed a $280M Series F funding at an $8.3B valuation. In fact, finance apps have seen 55% growth in usage time from the end of 2019 to the week ended April 18, according to data from App Annie.

Battle over stock data feeds

For the first time in years, the SEC is forcing the NYSE (NYSE:ICE), Nasdaq (NASDAQ:NDAQ) and Cboe Global Markets (NYSE:CBOE) to revamp the management of public data feeds that provide real-time stock prices. Two-tiered market? Exchanges are currently required to publicly transmit a consolidated view of all stock trades and best prices, but also sell more robust data feeds to sophisticated traders and investors. With the new system, the SEC hopes to increase transparency and richer content, though exchanges caution the move could shift the balance of power to brokers and prop traders, and hurt revenues that allow them to remain competitive.

Facebook names members to oversight board

Labeled by some as Facebook's (NASDAQ:FB) "Supreme Court," the independent board will be able to overturn decisions by the company and CEO Mark Zuckerberg on whether individual pieces of content should be allowed on Facebook and Instagram. The project could turn into a new standard for the industry, with some seeing the experiment expanding to YouTube (GOOGGOOGL), Twitter (NYSE:TWTR) or other platforms that make content moderation decisions. "We are basically building a new model for platform governance," said Helle Thorning-Schmidt, former prime minister of Denmark and one of the board's four co-chairs.

Norway cuts rates to zero

Marking its third cut in less than two months, Norway's central bank has reduced its key interest rate to zero for the first time and said rates are likely to stay there for the next several years. "The activity in the Norwegian economy has fallen abruptly as a result of the coronavirus pandemic... amplified by the severe impact of a sharp fall in oil prices," Norges Bank said in a statement. The twin shocks are also forcing the government to make record withdrawals from Norway's $1T Sovereign Wealth Fund, which recorded a return of -11.7% in Q1.
Go deeper: BOE holds rates, signals more stimulus.

'Made in India'

India is seeking to lure U.S. business out of China as tensions ramp up over Beijing's role in the coronavirus pandemic, Bloomberg reports. The government reached out to more than 1,000 companies in April, including Abbott Laboratories (NYSE:ABT) and Medtronic (NYSE:MDT), to offer incentives for manufacturers of medical equipment, food processing units, textiles, leather and auto part makers. Japan has also earmarked $2.2B to help shift factories from its neighbor, while EU members plan to cut dependence on Chinese suppliers.

Virgin Media, O2 take on BT

It's the biggest shakeup in the British telecoms market in five years. Liberty Global (NASDAQ:LBTYA) and Telefonica (NYSE:TEF) have agreed to merge their U.K. businesses in a $38B deal that will challenge market leader BT (OTCPK:BTGOF) in mobile and broadband. The transaction will bring together Virgin Media, the largest cable TV provider, and O2, the second-biggest mobile operator, and allow debt-laden Telefonica to extract some cash from the business while keeping a presence in Britain.

Future of 5G wireless standards

The U.S. Commerce Department is close to allowing American companies to work with China's Huawei Technologies on setting standards for next generation 5G networks, Reuters reports, after U.S. engineers took a backseat in the discussions following the firm's blacklisting in May 2019. It's a big deal. 5G wireless networks are expected to power the industry of the future, like high-speed video and self-driving cars, while patented technology for the standards could boost a company's bottom line by billions of dollars.

What else is happening...

World's biggest pork processor to restart South Dakota plant.

FLIR's fever scanners coming to GM factories.

Domino's Pizza (NYSE:DPZ) to join the S&P 500.

Sinclair Broadcast (NASDAQ:SBGI) agrees to pay record FCC fine.

Oilfield firm Halliburton (NYSE:HALcuts 22% of HQ staff.

Wednesday's Key Earnings
CVS Health (NYSE:CVS-1.3% despite solid earnings, cash flow.
General Motors (NYSE:GM+3% on post-pandemic confidence.
Lyft (NASDAQ:LYFT+16.4% AH amid strong sales, narrower losses.
PayPal (NASDAQ:PYPL+8.5% AH following Q1 credit loss charges.
Shopify (NYSE:SHOP+6.9% posting revenue growth of 47%.
Square (NYSE:SQ-4.2% AH with payment volume shy of consensus.
T-Mobile (NASDAQ:TMUS+1.1% AH after record Q1 figures.
Wynn Resorts (NASDAQ:WYNN-2.8% AH on EBITDA loss, dividend suspension.

Today's Markets
In Asia, Japan +0.3%. Hong Kong -0.7%. China -0.2%. India -0.8%.
In Europe, at midday, London +0.7%. Paris +0.8%. Frankfurt +0.9%.
Futures at 6:20, Dow +1.4%. S&P +1.5%. Nasdaq +1.6%. Crude +6.2% to $25.47. Gold +0.5% to $1697.40. Bitcoin +2.4% to $9315.
Ten-year Treasury Yield flat at 0.71%

Today's Economic Calendar
7:30 Challenger Job-Cut Report
8:30 Initial Jobless Claims
8:30 Productivity and Costs
8:30 Fed's Bostic: “Financial Impacts of the COVID-19 Pandemic”
10:30 EIA Natural Gas Inventory
12:00 PM Fed's Kashkari Speech
3:00 PM Consumer Credit
4:00 PM Fed's Harker: “Federal Reserve's Response to COVID-19”
4:30 PM Money Supply
4:30 PM Fed Balance Sheet

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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