Markets pause awaiting better signals on the direction of the recovery and stimulus plans

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Weekly Market Update: Markets pause awaiting better signals on the direction of the recovery and stimulus plans

2020-08-14T16:05:53.3

US stock markets pushed higher this week and the move included a welcomed expansion of leadership. The gains came despite rising concerns about the resurgence of Covid-19 infections globally and a hardening of the Washington stalemate over new financial stimulus. The Senate went on recess after President Trump passed executive orders that are expected to result in a deferral of payroll tax withholdings, and both sides spent the week outlining a significant gulf in demands that has only widened. The S&P neared its mid-February all-time highs while the Transports and small caps rode extended winning streets. The NASDSAQ took a step back, especially early in the week, as money appeared to rotate away from large cap tech/growth into areas more traditionally deemed as value like banks and other more deep cyclical sectors. Treasury yields backed up and the curve steepened alongside that rotation spurred by hotter than expected US July inflation readings and a deluge of UST supply which culminated in a very poorly received 30-year bond auction on Thursday. The US dollar was unable to garner any momentum as the discord in DC likely served as a headwind. Hopes that a Sino-US teleconference this weekend might ease tensions over sharping White House rhetoric on the virus origins and Chinese social media firms’ position in the US market were dashed after the meeting was postponed indefinitely on Friday. For the week, the S&P gained 0.6%, the DJIA added 1.8%, and the Nasdaq edged up 0.1%.

In corporate news this week, 3M shares rose after posting solid July numbers, noting ‘broad-based improvements’ in sales trends. Cisco stock slid after reporting a drop in revenue and offering downbeat guidance for next quarter amid caution from enterprise customers. Tesla followed Apple’s lead and announced a 5-for-1 stock split, effective at the end of August. Epic Games filed antitrust suits against Apple and Google after both banned the ‘Fortnite’ game from their app stores because of unsanctioned in-game payments. After its recent IPO, Rocket Companies’ shares surged after reporting jaw-dropping growth in preliminary earnings as the company said it was positioned to capture further market share. Simon Property was said to be in talks with Amazon over turning certain department store spaces into Amazon fulfillment centers. Twitter reportedly held preliminary talks about taking over TikTok, after Microsoft confirmed last week it had held discussions about acquiring the controversial social media company. Barry Diller’s IAC announced it invested $1B to take a 12% stake in gaming giant MGM, adding it is particularly interested in online gaming. The White House announced it had reached a $1.5B supply agreement with Moderna for an initial 100M doses of their COVID-19 vaccine, while Novavax announced a more modest vaccine collaboration with the UK government.


MON 8/10
*(US) JUN JOLTS JOB OPENINGS: 5.889M V 5.300ME
(US) FCC plans auction for 100 megahertz of spectrum that had been previously reserved for military radar; sale could begin in Dec 2021 - press

TUES 8/11
*(DE) GERMANY AUG ZEW CURRENT SITUATION SURVEY: -81.3 V -69.5E; EXPECTATIONS SURVEY: 71.5 V 55.8E
MSTR Adopts 21.5K Bitcoin (~$250M) as primary treasury reserve asset
*(US) JULY PPI FINAL DEMAND M/M: 0.6% V 0.3%E; Y/Y: -0.4% V -0.7%E
TSLA Announces a 5-for-1 stock split, effective Aug 31st
(US) Fed to modify pricing for Municipal Liquidity Facility (MLF); cuts interest rate spread on tax-exempt notes by 50bps
*(NZ) NEW ZEALAND CENTRAL BANK (RBNZ) LEAVES OFFICIAL CASH RATE (OCR) UNCHANGED AT 0.25%; (AS EXPECTED) EXPANDS QE BOND BUYING PROGRAM

WEDS 8/12
*(UK) Q2 PRELIMINARY GDP Q/Q: -20.4% V -20.7%E; Y/Y: % V -22.3%E
700.HK Reports Q2 (CNY) Net 30.2B v 29.2Be, Rev 114.9B v 88.8B y/y; does not provide interim dividend
*(US) JULY CPI M/M: 0.6% V 0.3%E; CPI (EX-FOOD/ENERGY) M/M: 0.6% V 0.2%E; CPI NSA: 259.101 V 258.543E
*(US) DOE CRUDE: -4.5M V -2ME; GASOLINE: -0.7M V -1ME; DISTILLATE: -2.3M V +0.5ME
(US) House Speaker Pelosi: we are still 'miles apart' from any deal on coronavirus aid; there's no use in continuing talks if Republicans don't come to the table - MSNBC interview
(US) NJ Gov Murphy: signing Executive Order officially clearing both our public and nonpublic pre-K through 12 schools and our colleges and universities to reopen for upcoming academic year in New Jersey
*(US) JULY MONTHLY BUDGET STATEMENT: -$63B V -$137.5BE

THURS 8/13
MMM Reports July Rev $2.8B +6% y/y
*(US) INITIAL JOBLESS CLAIMS: 963K V 1.10ME (lowest level since mid-Mar); CONTINUING CLAIMS: 15.49M V 15.80ME
*(US) TREASURY $26B 30-YEAR BOND AUCTION DRAWS 1.406%; BID TO COVER 2.14 V 2.30 PRIOR AND 2.30 OVER LAST 4 AUCTIONS
AAPL Epic Games files civil antitrust suit against Apple after Fortnite removal from the App Store - press
BIDU Reports Q2 $1.46 v $1.39e, Rev $3.69B v $3.66Be

FRI 8/14
*(EU) EURO ZONE Q2 PRELIMINARY GDP Q/Q: -12.1% V -12.1%E V -12.1% ADVANCE; Y/Y: -15.0% V -15.0%E
RKT Reports Prelim Q2 adj Net $2.8B +995% y/y; Rev $5.0B, +437% y/y
*(US) Q2 PRELIMINARY NONFARM PRODUCTIVITY: 7.3% V 1.5%E; UNIT LABOR COSTS: 12.2% V 6.9%E
*(US) JULY ADVANCE RETAIL SALES M/M: 1.2% V 2.1%E; RETAIL SALES (EX-AUTO) M/M: 1.9% V 1.3%E
(CN) US-China six-month review of trade agreement reportedly postponed due to a scheduling issue; had been planned for tomorrow; parties have not set new date yet - press

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 Strong tech earnings stoke optimism despite slow-moving US stimulus talks and COVID flare ups

2020-07-31T16:06:57.227

Investors had a litany of potential catalysts to navigate this week. Earnings season surged, while four high-profile US tech executives testified in front of a Senate panel the day before their firms reported astonishing quarterly numbers. The FOMC meeting concluded without and changes to policy, as expected. Chairman Powell explicitly expressed yet again that officials had no intention of even entertaining a discussion on raising rates anytime soon. There were some signs that US hotspots were seeing coronavirus infection rates start to slow, while other parts of the country, and various pockets outside the US were forced to confront resurgent Covid-19 numbers. Interest rates moved lower globally exacerbated by benign inflation readings in Europe and continued worries about the trajectory of the US economy. Adding to the unease was continued bickering in Washington D.C. Republican and Democratic leaders showed little inclination to find middle ground in the ongoing coronavirus stimulus talks. The US dollar continued to break lower while metals and bitcoin made new cycle highs. For the week, the S&P gained 1.7%, the DJIA lost 0.2%, and the Nasdaq surged 3.7%.

In corporate news this week, earnings season ramped into overdrive as reports from the big tech firms and over a third of the S&P 500 came in. Amazon blew away estimates again, guiding well above top-line consensus with improving margins, as spending flooded in from pandemic online shopping. Apple soared higher after posting its own monster third quarter and announcing a 4-for-1 stock split. Google shares fell after posting a decline in ad business and operating margin. Facebook advertising revenue topped expectations, as the social media giant continued to grow amid the pandemic and despite a boycott by many large advertisers. EBay beat on the top and bottom line and guided ahead of consensus as volumes spiked amid the pandemic spending influx. AMD posted an earnings beat and raised its revenue forecast as it gained semiconductor market share at the expense of Intel. Starbucks posted further coronavirus-induced losses but the coffee chain noted positive US SSS in July. McDonalds reported a weak quarter, posting a miss on EPS, though it, too, saw positive US comps in July. UPS notched a big beat on both its top and bottom line though it said it expects US Q3 demand growth to be lower sequentially. Exxon and Chevron results were disappointing, highlighting current difficulties in the oil patch environment. Enova announced it would acquire online lender OnDeck in a $90M deal, about 94% below its peak market valuation in 2015. Reports late in the week indicated Nvidia is in advanced talks to acquire Softbank’s semiconductor design company Arm for over $32B. On the regulatory front, a bipartisan duo of congressmen, Senators Blumenthal (D-CT) and Hawley (R-MO), called on the Department of Justice to probe Zoom and TikTok. And on Friday, the Trump administration was said to be preparing to order China’s ByteDance to sell its US TikTok operations.


SUN 7/26
TSM Receives order from Intel for 180K units with 7nm optimized version of the 6nm process; AMD also increased its 7nm order with TSMC to 200K units - Taiwanese press

MON 7/27
SAP.DE Reports final Q2 Non-IFRS Op €1.96B v €1.96B prelim, Rev €6.74B v €6.74B prelim; Affirms FY20 Rev outlook and Raises FCF
Morgan Stanley Cuts U.S. Software Industry View to In-Line from Attractive
(CN) China Foreign Ministry: reiterates US allegations of Houston spying are groundless
*(DE) GERMANY JULY IFO BUSINESS CLIMATE SURVEY: 90.5 V 89.3E
*(US) JUN PRELIMINARY DURABLE GOODS ORDERS: 7.3% V 7.0%E; DURABLES (EX-TRANSPORTATION): 3.3% V 3.6%E
GOOGL Reportedly Google extends its work from home order to Summer 2021 - press
LECO Reports Jul MTD order rates trending down high-teens to low 20% - earnings slides
TUES 7/28
MMM Reports Q2 $1.78 v $1.77e, Rev $7.18B v $7.27Be; On track for ~2B global respirators production
(US) Fed extends emergency lending programs by 3 months through Dec 31st to provide certainty to borrowers
*(US) JUL RICHMOND FED MANUFACTURING INDEX: 10 V 5E
*(US) JULY CONSUMER CONFIDENCE: 92.6 V 95.0E
(US) Dallas Fed July Texas Service Sector Outlook Survey: General Business Activity: -26.7 v +2.1 prior
EBAY Reports Q2 $1.08 v $1.06e, Rev $2.87B v $2.80Be
ONDK Enova to acquire OnDeck in $90M deal for $1.38/shr ($8M to be paid in cash)
SHOP Files $7.5B mixed securities shelf (7% of market cap)
LB Confirms to cut home office headcount by 15%; updates on progress in executing go-forward strategy; most Bath & Body Works and Victoria’s Secret stores in North America have reopened

WEDS 7/29
DBK.DE Reports Q2 Net -€77M v -€3.2B y/y, Pretax +€158M v -€946M y/y, Net Rev €6.29B v €6.20B y/y; Transformation is fully on track, raises FY20 Rev guidance
SAN.FR Reports Q2 Business EPS €1.28 v €1.31 y/y, Business Net €1.60B v €1.64B y/y, Rev €8.21B v €8.4Be; Raises Business EPS guidance
RIO.AU Reports H1 Underlying Net $4.75B v $4.3Be; underlying EBITDA $9.64B v $9.14Be; Rev $19.4B (consolidated sales) v $20.7B y/y; Affirms FY20 output guidance
RIO.AU CFO: China's recovery is amazing, elsewhere is very weak - post earnings comments
GE Reports Q2 -$0.15 v -$0.14e, Rev $17.8B v $17.0Be; Sees positive Industrial FCF in FY21
SMG Reports Q3 $3.80 v $3.35e, Rev $1.49B v $1.32Be; Consumer purchases entering August are up 23% at our largest four retail partners and we’ve seen increases in every product category
BA Reports Q2 -$4.79 v -$2.93e, Rev $11.8B v $12.6Be; has close to $10B untapped credit
GM Reports Q2 -$0.50 v -$1.72e, Rev $16.8B v $20.5Be
R Reports Q2 -$0.95 v -$1.44e, Rev $1.90B v $2.00Be; now expects the recovery in the used vehicle market will be delayed beyond the company's prior expectation of mid-2021
INTU Introduces QuickBooks Cash & Payments, a New Business Bank Account With a 1% Rate (Using GDOT Banking Lic)
(US) Nevada reports June casino gaming Rev $567M, -45.6% y/y; Las Vegas strip Rev $238.3M, -31.4% y/y
*(US) DOE CRUDE: -10.6M V -0.5ME; GASOLINE: +0.7M V -1.5ME; DISTILLATE: +0.5M V +0.5ME
DB1.DE Reports Q2 Net €288M v €288M y/y, adj EBITDA €483.1M v €482Me, Rev €778M v €724.8M y/y
005930.KR Reports Q2 Final (KRW) Net 5.5T v 5.18T y/y; Op 8.15T v 6.6T y/y (vs 8.10T prelim); Rev 52.97T v 56.13T y/y (vs 52.0T prelim)
*(US) FOMC LEAVES TARGET RANGE UNCHANGED BETWEEN 0.00-0.25%; AS EXPECTED; economy has picked up in recent months but still below pre-pandemic levels

THURS 7/30
AIR.FR Reports H1 Net -€1.9B v +€1.2B y/y, Adj EBIT -€945M* v +€2.5B y/y; Rev €18.9B v €20.27Be
RDSA.NL Reports Q2 -$2.33* v -$0.31e, Rev $32.5B v $91.8B y/y; Affirms dividend cut to $0.16/share [in line with announcement from April 30th]
BA.UK Reports H1 adj EPS 16.7p v 25.0p y/y, adj EBITA £895M v £999M y/y, Rev £9.87B v £9.42B y/y
066570.KR Reports final Q2 (KRW) Net 65.6B v 106B y/y; Op 495.4B v 652B y/y (493B prelim), Rev 12.8T v 15.6T y/y (12.8T prelim)
AZN.UK Reports Q2 Core EPS $0.96 v $0.93e, Rev $6.28B v $6.3Be
*(DE) GERMANY JULY NET UNEMPLOYMENT CHANGE: -18.0K V +41.0KE (1st decline in 4 months); UNEMPLOYMENT CLAIMS RATE: 6.4% V 6.5%E
*(DE) GERMANY Q2 PRELIMINARY GDP Q/Q: -10.1% V -9.0%E; Y/Y: -11.7% V -11.5%E (largest contraction since 1970)
*(EU) EURO ZONE JULY ECONOMIC CONFIDENCE: 82.3 V 81.4E
*(EU) EURO ZONE JUN UNEMPLOYMENT RATE: 7.8% V 7.7%E
JNJ Single dose of Johnson & Johnson COVID-19 vaccine candidate demonstrates robust protection in pre-clinical studies on non-human primates (NHPs) as demonstrated by 'neutralizing antibodies'; Ad26.COV2.S Phase 3 trial to start in Sept to evaluate both one- and two-dose regimens of Ad26.COV2.S in parallel studies
UPS Reports Q2 $2.13 v $1.06e, Rev $20.5B v $17.3Be
PG Reports Q4 $1.16 v $1.01e, Rev $17.7B v $17.0Be
*(DE) GERMANY JULY PRELIMINARY CPI M/M: -0.5% V -0.3%E; Y/Y: -0.1% V +0.1%E
Z Launches nationwide strategic existing home selling partnership with D.R. Horton
*(US) Q2 ADVANCE GDP ANNUALIZED Q/Q: -32.9% (record decline) V -34.5%E; PERSONAL CONSUMPTION: -34.6% V -34.5%E
*(US) INITIAL JOBLESS CLAIMS: 1.43M V 1.45ME; CONTINUING CLAIMS: 17.02M V 16.20ME
*(US) Q2 ADVANCE GDP PRICE INDEX: -1.8% V 0.0%E; CORE PCE Q/Q: -1.1% V -0.9%E
(US) Pres Trump questions whether the election should be delayed until it can be done 'properly, securely and safely'
ZM Sen Blumenthal (D-CT) and Sen Hawley (R-MO) call on Dept of Justice to probe Zoom and Tiktok - press
AMZN Reports Q2 $10.30 v $1.74e, Rev $88.9B v $81.6Be
GOOGL Reports Q2 $10.13 v $8.43e, Rev $31.6B (ex $6.7B of TAC) v $30.6Be
*(CN) CHINA JULY MANUFACTURING PMI (GOVT OFFICIAL): 51.1 V 50.8E (5th straight expansion)

FRI
NOKIA.FI Reports Q2 non- IFRS Net €316M v €258M y/y, Rev €5.1B v €5.24Be
*(FR) FRANCE Q2 PRELIMINARY GDP Q/Q: -13.8% V -15.2%E; Y/Y: -19.0% V -20.0%E
*(EU) EURO ZONE Q2 ADVANCE GDP Q/Q: -12.1% V -12.1%E; Y/Y: -15.0% V -14.5%E
*(EU) EURO ZONE JULY ADVANCE CPI ESTIMATE Y/Y: 0.4% V 0.2%E; CPI CORE Y/Y: 1.2% V 0.8%E
NVDA Reportedly in advanced talks to acquire Softbank chip company arm - press
CAT Reports Q2 $1.03 v $0.66e, Rev $10.0B v $9.20Be; Not providing FY20 outlook
*(US) JUN PERSONAL INCOME: -1.1% V -0.6%E; PERSONAL SPENDING: 5.6% V 5.2%E
*(US) JULY FINAL UNIVERSITY OF MICHIGAN CONFIDENCE: 72.5 V 72.9E
(US) Atlanta Fed GDPNow forecasts initial Q3 GDP growth at +11.9%
(US) NJ Gov Murphy: New Jersey transmission rate rises to 1.35; these numbers are 'setting off alarms'
KSU PE firms reportedly discussing bid for KSU, could fetch $21B with debt - press

Realities of earnings reports and dollar weakness drive divergences in markets this week

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Weekly Market Update: Realities of earnings reports and dollar weakness drive divergences in markets this week

2020-07-24T16:04:12.353

It was another busy week with earnings season shifting into a higher gear and rising US China tensions exhibited in a series of tit for tat announcements by each side. Several high profile, high-flying technology names moved lower despite delivering strong quarterly results. Weekly US Initial jobless claims climbed for the first time since March, with another staggering 1.4M people filing for the first time. A theme of a softening US dollar and firming commodity prices gained momentum as the week progressed with chartists highlighting significant breakouts in the Euro, gold and silver. European data surpassed expectations, potentially highlighting diverging prospects to that of the US economy as it deals with continued rising infection rates in the South and West. Those varying potential pathways were further illustrated by EU leaders ability to reach an agreement on the €750B recovery fund while Republicans in Washington were unable to produce a formal relief package for debate, delaying their opening proposal to next week with just days left until the prior stimulus package expires. Interest rates continued to drift lower amid the murky US economic landscape and the prospect of this ‘fiscal cliff’ at the end of the month. For the week the S&P slipped 0.3%, the DJIA dropped 0.8%, and the Nasdaq was down 1.3%.

In corporate news this week, amid tensions between China and the European Union, Beijing said it may consider export controls on Nokia and Ericsson products if the EU takes action against Chinese suppliers. The much-ballyhooed release of coronavirus vaccine data from AstraZeneca in The Lancet disappointed the street despite showing ‘robust immune responses in all participants’ in its Phase I/II trial. IBM posted an earnings beat in Q2 as cloud revenues rose though analysts pointed to underperformance in some high-margin areas. Microsoft profits came ahead of consensus but a perceived slowdown in Azure growth worried some on the Street. Intel shares plummeted despite reporting Q2 above consensus after disclosing production issues would delay its next-generation 7-nanometer product launch. The FAA released an emergency directive about Boeing 737s in storage after inspectors found compromised air check valves, a discovery which could affect over 2,000 aircraft. Chevron announced the takeover of Houston-based independent driller Noble Energy for $13B, a move that could portend a wave of consolidations amid a volatile oil market.

7/19 SUN
(CN) China Banking and Insurance Regulatory Commission (CBIRC) raised the equity investment cap for insurance cos to 45% of total assets from 30% currently; Regulator also pledged to offer more support to areas impacted by floods - financial press

7/20 MON
NBL Confirms to be acquired by Chevron for $10.38/shr in all stock transaction valued at ~$5B
ERICB.SE Reportedly China could consider export controls on Nokia, Ericsson products; China to only follow through if EU members take action against Chinese suppliers - press
AZN.UK AstraZeneca-Oxford coronavirus vaccine study of AZD1222 shows good antibody, T-cell response; not anticipated to impact the Company's FY20 financial guidance
IBM Reports Q2 $2.18 v $2.14e, Rev $18.1B v $17.7Be
BHP.AU Reports Q4 Waio Iron Ore Production: 75.6Mt v 71.0Mt y/y, Attributable Iron Ore Production: 66.7Mt v 62.6Mt y/y
*(EU) EU LEADER SUMMIT REACHES AGREEMENT ON €750B RECOVERY FUND

7/21 TUES
UBSG.CH Reports Q2 Net $1.2B v $1.3B y/y, Adj Pretax $1.6B v $1.8B y/y; Rev $7.4B v $7.53B y/y; Premature to issue FY20 guidance; may resume share repurchases in Q4
KO Reports Q2 $0.42 v $0.40e, Rev $7.26B v $7.15Be
FE Ohio Speaker of the House arrested on bribery charges; probe said to focus on bailout of FirstEnergy nuclear plants - press
EUR/USD Pair trades through March 9th high to levels not seen since Jan 2019 (approaching 1.15)
Gold probes higher to levels not seen since Dec 2012; silver posting multiyear highs
TXN Reports Q2 $1.48 v $0.88e, Rev $3.24B v $2.96Be
UAL Reports Q2 -$9.31 v -$9.13e, Rev $1.48B v $1.22Be; Will materially reduce cash burn in Q3
FE Received subpoenas in connection with Ohio House Bill 6 investigation: reviewing details of probe and intend to fully cooperate
(US) EPA to propose carbon dioxide limits on airplanes for first time - press
(US) President Trump: virus will probably get worse before it gets better; outbreak seems to be largely in the Sun Belt, but it could spread - coronavirus briefing
(US) China extends anti dumping probe into certain US chemicals for an additional 6 months, probe relates to n-Propanol; cites the 'complexity' of the case - Press

7/22 WEDS
CP Reports Q2 C$4.07 v C$3.64e, Rev C$1.79B v C$1.73Be
*(US) DOE CRUDE: +4.9M V -1ME; GASOLINE: -1.8M V -2ME; DISTILLATE: +1.1M V 0ME
MSFT Reports Q4 $1.46 v $1.38e, Rev $38.0B v $36.6Be

7/23 THURS
ROG.CH Reports H1 (CHF) Core EPS 10.44 v 10.72e y/y, Core Op 11.8B v 12.4B y/y, Rev 29.3B v 30.5B y/y
UNA.NL Reports H1 Net €3.5B v €3.2B y/y; Rev €25.7B v €26.1B y/y; Confirms plan to unify Group's legal structure under a single parent company
(UK) EU Brexit Negotiator Barnier: Remain far apart from any agreement with UK over the future relationship with the bloc; time is running out
*(US) INITIAL JOBLESS CLAIMS: 1.416M V 1.30ME (1st rise in 16 weeks, since March); CONTINUING CLAIMS: 16.20M V 17.10ME
INTC Reports Q2 $1.23 v $1.11e, Rev $19.7B v $18.5Be; 7nm product launch delayed approx 12 months
(US) Pres Trump: to cancel GOP convention in Jacksonville, FL; timing of a big GOP convention in Florida is not right; I have to protect the American people
(CN) China Foreign Ministry confirms it will ask the US to close Chengdu (China) consulate in 72 hours - US financial press [as speculated]

7/24 FRIDAY
*(UK) JUN RETAIL SALES (ex-auto/fuel) M/M: 13.5% V 7.9%E; Y/Y: +1.7% V -3.7%E
VOD.UK Reports Q1 Rev €10.5B v €10.7B y/y; Service Organic Rev -1.3% v -2.1%e; Tower unit on track for IPO early 2021 in Germany
*(FR) FRANCE JULY PRELIMINARY PMI MANUFACTURING: 52.0 V 53.0E (2nd straight expansion)
*(DE) GERMANY JULY PRELIMINARY PMI MANUFACTURING: 50.0 V 48.0E (1st non-contraction in 19 months and highest reading since Dec 2018)
*(EU) EURO ZONE JULY PRELIMINARY PMI MANUFACTURING: 51.1 V 50.1E (1st expansion in 18 months)
*(UK) JULY PRELIMINARY PMI MANUFACTURING: 53.6 V 52.0E (2nd straight expansion)
VZ Reports Q2 $1.18 v $1.16e, Rev $30.4B v $29.9Be
XOM Collaborates with UCal on discovery of new material to enhance carbon capture technology
BA FAA releases emergency directive related to 737s in storage; inspectors found compromised air check valves; could affect 2K aircraft - press
(US) JULY MARKIT PRELIMINARY PMI MANUFACTURING: 51.3 V 52.0E
(US) JUN NEW HOME SALES: 776K V 700KE

Markets vacillate between fears of COVID spread and hopes for a vaccine

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Weekly Market Update: markets vacillate between fears of COVID spread and hopes for a vaccine

2020-07-17T16:04:19.71

Equity markets started the week off on continued solid footing, helped by rising hopes for a coronavirus vaccine before year end. A push and pull between concerning headlines surrounding Covid-19 hotspots and incremental developments from vaccine trials was evident in modest intraday markets swings. Earnings season kicked off led by the banks as usual. Generally encouraging reports for several of the large US financial institutions did little to alter the share price trajectory of most. Economic data continued to show improvement from the April pandemic shutdown lows while stock markets forged higher. But the impending expiry of current US government pandemic measures has created a looming fiscal cliff that has many investors concerned that trend can hold. To that end, by Friday much of the focus pivoted to Washington as well as Brussels as leaders there tried to find common ground on what the next round coronavirus fiscal stimulus should look like. Rates stayed very subdued, illustrated by a new record low in 30-year mortgage rates. The US dollar remained on softer footing as evident against the Euro which touched it highest level since March. For the week, the S&P gained 1.2% and the DJIA added 2.3%, while profit taking in the tech megacaps took the Nasdaq down 1.1%.

As earnings season kicked off this week, Netflix reported a historic Q2 subscriber gain, but posted an earnings miss and its guidance disappointed the street. Kansas City Southern missed expectations, noting weakness in its auto and intermodal sectors. Major banks began releasing quarterly results, as well: JPMorgan beat on its top and bottom line, while Wells Fargo disappointed investors and slashed its dividend. Bank of America shares were hit after notching a nearly 50% drop in earnings year on year. Goldman’s Q2 earnings came in higher than anticipated on strong FICC results, and Morgan Stanley posted a profit beat, as well, amid strong trading results. On the M&A front, Analog Devices bought rival Maxim Integrated Products to create a $68B chipmaker. Dell shares lifted after it confirmed it is exploring a spinoff of its 81% stake in VMWare.

MON 7/13
MXIM Confirms to be acquired by Analog Devices in all stock transaction; Combined EV >$68B
(US) Jun Monthly Budget Statement: -$864.1B v -$398.9B prior
(US) California Gov Newsom: closes indoor activities in bars and restaurants

TUES 7/14
*(UK) MAY MONTHLY GDP M/M: 1.8% V 5.5%E
*(DE) GERMANY JULY ZEW CURRENT SITUATION SURVEY: -80.9 V -65.0BE; EXPECTATIONS SURVEY: 59.3 V 60.0E
JPM Reports Q2 $1.38 v $1.34e, Managed Rev $33.8B v $30.7Be
FAST Reports Q2 $0.42 v $0.35e, Rev $1.51B v $1.44Be
JPM CFO Piepszak: expects economic "damage" visibility in "coming months"; Investment banking rev declining q/q and y/y in Q3 - media call comments
*(US) JUN CPI M/M: 0.6% V 0.5%E; CPI (EX-FOOD/ENERGY) M/M: 0.2% V 0.1%E; CPI NSA: 257.797 V 257.706E
MRNA NEJM reports trial data shows mRNA-1273 COVID-19 vaccine has produced antibodies in all patients tested during initial Phase 1 study - press
(US) Pres Trump: China sanctions legislation will hold China accountable for its actions in Hong Kong; also signs executive order ending preferential treatment for Hong Kong - comments at 'Hong Kong Autonomy Act' signing ceremony
*(JP) BANK OF JAPAN (BOJ) LEAVES INTEREST RATE ON EXCESS RESERVES (IOER) UNCHANGED AT -0.10%, AS EXPECTED

WEDS 7/15
*(UK) JUN CPI M/M: 0.1% V 0.0%E; Y/Y: 0.6% V 0.4%
*(US) JULY EMPIRE MANUFACTURING: 17.2 V 10.0E (first positive reading since Feb 2020)
*(US) JUN INDUSTRIAL PRODUCTION M/M: 5.4% V 4.3%E; CAPACITY UTILIZATION: 68.6% V 67.8%E
*(US) DOE CRUDE: -7.5M V -1.5ME; GASOLINE: -3.1M V -1ME; DISTILLATE: -0.5M V +1.5ME
AA Reports Q2 -$0.02 v -$0.01 y/y, Rev $2.15B v $2.71B y/y
TWTR Several high profile Twitter accounts, including those of Barack Obama, Elon Musk, and Bill Gates, have been hacked
AZN.UK UK's Telegraph: Oxford scientists may have a 'breakthrough' on COVID-19 vaccine; drug triggers response that may offer 'double defense' against the virus
VMW Dell confirms explores VMware spin-off; intends to negotiate terms consistent with an investment grade rating for both companies
*(CN) CHINA Q2 GDP Q/Q: 11.5% V 9.6%E; Y/Y: 3.2% V 2.4%E

THURS 7/16
TSM Reports Q2 (NT$) Net 120.8B v 66.8B y/y, Op 131.1B v 73.3B y/y; US Chip plant production to begin in 2024
BAC Reports Q2 $0.37 v $0.28e, Rev $22.3B v $21.8Be
*(EU) ECB LEAVES MAIN 7-DAY REFINANCING RATE UNCHANGED AT 0.00%; AS EXPECTED; maintains forward guidance and path of bond-buying program
*(US) JUN ADVANCE RETAIL SALES M/M: 7.5% V 5.0%E; RETAIL SALES (EX-AUTO) M/M: 7.3% V 5.0%E
*(US) INITIAL JOBLESS CLAIMS: 1.30M V 1.25ME; CONTINUING CLAIMS: 17.3M V 17.5ME
*(US) JULY PHILADELPHIA FED BUSINESS OUTLOOK: 24.1 V 20.0E
JBLU JetBlue and American Airlines announce strategic 7-yr partnership to create more competitive options and choice for customers in the Northeast
(EU) ECB chief Lagarde: Outlook remains highly uncertain, reiterates stance that will do everything within its mandate - Prepared Remarks
(EU) ECB chief Lagarde: Have made full use of Pandemic bond fund flexibility - Q&A
DAI.DE Reports prelim Q2 adj EBIT -€708M v -€1.72Be, industrial FCF €685M v -€2.11Be; better than expected market recovery and a strong June performance
(US) Pres Trump tells associates he will not sign next COVID relief bill without a payroll tax cut - Politico
MSFT Reportedly cut <1K jobs this week; the cuts were said to target areas including MSN.com and Azure cloud unit - Financial Press

FRI 7/17
*(EU) EURO ZONE JUN FINAL CPI Y/Y: 0.3% V 0.3%E; CPI CORE Y/Y: 0.8% V 0.8%E
KSU Daily volumes are recovering across key strategic growth areas - earnings slides
STT Reports Q2 $1.86 v $1.63e, Rev $2.94B v $2.87Be
(US) JULY PRELIMINARY UNIVERSITY OF MICHIGAN CONFIDENCE: 73.2 V 79.0E

Stock markets show no let-up despite rising US virus cases

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Weekly Market Update: Stock markets show no let-up despite rising US virus cases

Fri, 10 Jul 04:06 PM EST/09:06 PM GMT

US stock markets continued to push higher this week, once again largely led by technology stocks and the NASDAQ. Though valuations are hard, if not impossible to justify for some of the mega-cap darlings, money continued to pour into that select group of names, driving the overall indices higher. The week opened with animal spirits percolating after a couple of significant M&A announcements. The economic data generally surpassed expectations, led by a 4-month high in the June ISM services data. A significant jump in JOLTS jobs openings offset another stubbornly high print (1.3M) in weekly initial jobless claims. Treasury yields moved to the lowest levels since the pandemic lockdown measures were eased, amid robust foreign demand seen in the weekly coupon sales. Covid-19 infections continued to jump in the US, led by the hotspots in the Sunbelt, which may have also buoyed demand for the relative safety of government securities. For the week, the S&P rose 1.8%, the Dow gained 1%, and the NASDAQ jumped another 4%.

In corporate news, some major M&A stories led off the week. Berkshire Hathaway’s Energy Company acquired Dominion Energy’s natural gas pipeline and storage assets for $9.7 billion. Uber confirmed plans to buy Postmates for $2.7B in an all-stock transaction as the ride-sharing giant moves further into the food delivery space. Alcoa released preliminary Q2 numbers, reporting a stronger than expected top and bottom line amid rising productivity and cost cuts, despite coronavirus headwinds. Walgreens shares fell after posting an earnings miss in Q2 as COVID-19 costs and a sales shift to low-margin items weighed on profits. Bed, Bath and Beyond plummeted after announcing a plan to close 200 stores over the next 2 years amid wider-than-expected losses and a sharp drop in Q1 revenue. In the social media world, reports circulated that Twitter is working on a subscription service, code named ‘Gryphon,’ but Twitter sources said any effort on that front remains in its early stages. TikTok was said to be considering changing its corporate structure in order to distance the app from China amid reports that the White House was considering banning the video sharing app.

SUN 7/5
D Berkshire Hathaway Inc.’s Energy Company to acquire Gas Transmission and Storage Business for $9.7B (includes the assumption of $5.7B of existing debt); agreement does not include acquisition of the Atlantic Coast Pipeline; Cuts FY20 Op EPS guidance to $3.37-3.63 v $4.33e, cites transaction (guided $4.25-4.60 prior); to use proceeds of transaction to buy back stock

MON 7/6
UBER Confirms to acquire Postmates for $2.65B in all-stock deal
(US) Boston Fed: Main Street Lending Facility is now fully operational; can now purchase participations in eligible loans from registered lenders
*(US) JUN FINAL MARKIT SERVICES PMI: 47.9 V 47.0E
*(US) JUN ISM NON-MANUFACTURING INDEX: 57.1 V 50.0E (four-month high)
005935.KR Reports Prelim Q2 (KRW) Op 8.10T v 6.21Te (6.6T y/y); Rev 52.0T v 50.7Te (56.1T y/y)

TUES 7/7
*(US) MAY JOLTS JOB OPENINGS: 5.397M V 4.500ME
(BR) Brazil Pres Bolsonaro: confirms personal coronavirus test has come back positive; I'm taking chloroquine and feeling perfectly well
WMT Reportedly plans to launch $98/yr competitor to Amazon Prime this month - Recode

WEDS 7/8
*(US) DOE CRUDE: +5.7M V -3ME; GASOLINE: -4.8M V -0.5ME; DISTILLATE: +3.1M V 0ME
*(US) MAY CONSUMER CREDIT: -$18.3B V -$15.0BE
COST Reports June SSS (ex gasoline) +14.4%

THURS 7/9
(CN) Reportedly China state lenders revamping contingency plans in anticipation of US legislation which may penalize banks for serving officials who implement new HK security laws - press
*SUPREME COURT BLOCKS HOUSE ACCESS TO TRUMP RECORDS, RULES LOWER COURTS MUST RECONSIDER HOUSE EFFORT TO SUBPOENA TRUMP TAX RECORDS
*(US) TREASURY $19B 30-YEAR BOND REOPENING DRAWS 1.330%; BID TO COVER 2.50 V 2.30 PRIOR AND 2.33 OF THE LAST 8 REOPENINGS
*(CN) China PBOC Macroprudential Policy Bureau Vice Head Zhou: YUAN TO BE TRADED DIRECTLY WITH MORE CURRENCIES (Currencies not disclosed immediately after PBoC comments)

FRI 7/10
(EU) EU Council President Michel on compromise proposal on recovery plan Proposes 2021-27 budget at €1.074T; maintains recovery fund proposal of €750B
Various govt bond yield hitting record lows in session on safe-haven flows
GILD Presents additional data on investigational antiviral remdesivir for the treatment of COVID-19; remdesivir was associated with an improvement in clinical recovery and a 62% reduction in the risk of mortality
*(US) JUN PPI FINAL DEMAND M/M: -0.2% V +0.4%E; Y/Y: -0.8% V -0.2%E

Second half kicks off to strong start despite coronavirus outbreaks

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Weekly Market Update: Second half kicks off to strong start despite coronavirus outbreaks

2020-07-02T16:11:20.167

US stock markets finished out the first half and commenced Q3 on a decidedly positive note this week. Encouraging data from Pfizer in an early-stage Covid-19 vaccine candidate helped to offset a drumbeat of discouraging data from the US Sunbelt and rising coronavirus infections. June ISM data topped expectations, registering its best reading in about a year, and Friday’s June employment report easily surpassed expectations across the board. The NASDAQ led by megacap FANGM names continued driving the gains for the major indices overall. Gold moved up, briefly pushing back above $1,800 before backing off post the June jobs report, and WTI crude moved back above $40. For the week, the Dow gained 3.3%, S&P rose 4%, and the NASDAQ added 4.6%.
In corporate news this week, better-than-expected earnings and guidance from Micron sparked a bid in the semis. Xilinx raised its Q1 guidance, noting stronger than expected revenues in its wired and wireless group and data center divisions which offset consumer-oriented end market weakness. Facebook saw an exodus of advertisers who are calling for the social media giant to limit hateful content shared on its platform. Tesla beat Q2 vehicle delivery projections despite coronavirus-related plant shutdowns and also overtook Toyota as the world’s most valuable automaker earlier this week. FedEx shares soared after posting solid Q4 earnings, sending UPS up in sympathy along with the transports. Google said it will raise YouTubeTV membership prices by 30% to $64.99/mo effective immediately, making cord-cutting a less financially attractive endeavor for some.
MON 6/29
*(EU) EURO ZONE JUN ECONOMIC CONFIDENCE: 75.7 V 80.0E
*(DE) GERMANY JUN PRELIMINARY CPI M/M: 0.6% V 0.3%E; Y/Y: 0.9% V 0.6%E
(US) Supreme Court rules in favor of Trump Admin, backing the President's power to fire the CFPB director
MU Reports Q3 $0.82 v $0.78e, Rev $5.44B v $5.32Be
*(CN) CHINA JUN MANUFACTURING PMI (GOVT OFFICIAL): 50.9 V 50.5E (4th straight month of expansion, 3-month high)

TUES 6/30
*(FR) FRANCE JUN PRELIMINARY CPI M/M: -0.1% V +0.3%E; Y/Y: 0.1% V 0.4%E
*(EU) EURO ZONE JUN ADVANCE CPI ESTIMATE Y/Y: 0.3% V 0.2%E; CPI CORE Y/Y: 0.8% V 0.8%E
(US) Nevada reports May casino gaming Rev $5.8M, -99.4% y/y; Las Vegas strip Rev $3.8M, -99.3% y/y
EU confirms lifting travel restrictions on 15 countries, includes China on the condition of reciprocity; travel ban for US residents remains in place (as expected)
*(US) JUN CONSUMER CONFIDENCE: 98.1 V 91.4E
(US) Dallas Fed June Texas Service Sector Outlook Survey: General Business Activity: +2.1 v -41.7 prior
(HK) China announces details of new Hong Kong security law: Crime of secession punishable by up to life in prison; Crime of subversion punishable by up to life in prison
GOOGL To raise YouTubeTV membership price to $64.99/mo, effective today (prior $50/month)
FDX Reports Q4 $2.53 v $1.42e, Rev $17.4B v $16.1Be

WEDS 7/1
(CN) China announces retaliation for US curbs on state media (in line with earlier speculation)
*(SE) SWEDEN CENTRAL BANK (RIKSBANK) LEAVES REPO RATE UNCHANGED AT 0.00%; AS EXPECTED; expands QE bond buying from SEK300B to SEK500B
*(IT) ITALY JUN MANUFACTURING PMI: 47.5 V 47.8E (20th month of contraction)
*(FR) FRANCE JUN FINAL MANUFACTURING PMI: 52.3 V 52.1E (confirms 1st expansion in 5 months and highest reading since Sept 2018)
*(DE) GERMANY JUN FINAL MANUFACTURING PMI: 45.2 V 44.6E (confirms 18th straight contraction)
*(DE) GERMANY JUN UNEMPLOYMENT CHANGE: +69.0K V +120.0KE (3rd straight monthly rise); UNEMPLOYMENT CLAIMS RATE: 6.4% V 6.5%E
*(EU) EURO ZONE JUN FINAL MANUFACTURING PMI: 47.4 V 46.9E (confirms 17th straight contraction but highest reading since Feb 2020)
M Reports Q1 -$2.03 v -$2.03 prelim, Rev $3.02B v $3.02B prelim; not currently providing outlook; nearly all stores have reopened
(DE) German Chancellor Merkel: EU members remain far apart on issues of Recovery Fund and 7-year budget - Bundestag comments
*(US) JUN ADP EMPLOYMENT CHANGE: +2.37M V +2.90ME
*(US) JUN FINAL MARKIT MANUFACTURING PMI: 49.8 V 49.6E
*(US) DOE CRUDE: -7.2M V -0.5ME; GASOLINE: +1.2M V -1.5ME; DISTILLATE: -0.6M V 0ME
GM Reports Q2 deliveries 492.5K v 618.3K q/q; -34% y/y v -35%e

THRS 7/2
AZN.UK Oxford potential vaccine's scientist: the team has seen the right sort of immune response in AZD1222 trials; entered the Phase III clinical stage
*(EU) EURO ZONE MAY UNEMPLOYMENT RATE: 7.4% V 7.7%E
TSLA Reports Q2 vehicle production 82.3K v 102.7K q/q; deliveries 90.7K v 88.4K q/q
(US) JUN CHANGE IN NONFARM PAYROLLS: +4.767M V +3.058ME
(US) JUN UNEMPLOYMENT RATE: 11.1% V 12.5%E
(US) JUN AVERAGE HOURLY EARNINGS M/M: -1.2% V -0.7%E; Y/Y: 5.0% V 5.3%E; AVERAGE WEEKLY HOURS: 34.5 V 34.5E
(US) June ISM New York: 39.5 v 19.5 prior

Resurgence in virus cases and trade rhetoric dampen market mood, even as some data improves

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Weekly Market Update: Resurgence in virus cases and trade rhetoric dampen market mood, even as some data improves

2020-06-26T16:06:49.48

Investors were unable to look past surging Covid-19 infections in portions of the US Sunbelt this week. Early on, weakness in overall equity markets was masked by continued buying in select mega-cap technology stocks. June PMI readings provided some fodder for the bulls, especially in Europe where key markets registered readings not seen since before the pandemic induced shutdowns. Those numbers were tempered though by reports of rising tensions on the trade front between the US and Europe and China. As the week progressed US coronavirus cases mounted and investors’ willingness to offload risk rose. Some analysts also noted that Joe Biden’s lead in the polls has extended as virus cases have risen. The IMF further reduced its outlook for world growth this year, cutting the 2020 global GDP forecast to -4.9% due to extended uncertainty around the epidemic. By Friday, the S&P 500 was testing the 200-day moving average after Texas and Florida were forced to roll back some reopening measures, including closing bars and pulling back restaurant capacity. US Treasury yields moved lower and the US dollar firmed. For the week, the S&P fell 2.9%, the DJIA lost 3.3%, and the Nasdaq declined 1.9%.

In corporate news this week, Nike reported a surprise miss on earnings for just the second time in eight years as sales tumbled, but management was more upbeat on its conference call, pointing to positive e-commerce sales trends and improving digital engagement. La-Z-Boy posted an earnings beat but missed on revenues, though the furniture maker noted it has been seeing strong early demand as its galleries have begun to reopen. MasterCard acquired data aggregator Finicity for $825M in order to advance its open banking strategy. Dell reportedly hired advisers to explore options for its 81% VMware stake, which is valued at around $50B. Gap shares looked stronger on Friday morning after it announced a new fashion line partnership with Kanye West to be launched next year.


MON 6/22
(US) Trump administration confirms new employment visa restrictions; will extend halt on new green cards through end of 2020; action will affect H-1B, H4, some H-2B, J, and L visa types - press

TUES 6/23
*(FR) FRANCE JUN PRELIMINARY MANUFACTURING PMI: 52.1 V 46.0E (1st expansion in 5 months and highest reading since Sept 2018)
*(DE) GERMANY JUN PRELIMINARY MANUFACTURING PMI: 44.6 V 42.5E (18th straight contraction)
*(EU) EURO ZONE JUN PRELIMINARY MANUFACTURING PMI: 46.9 V 45.0E (17th straight contraction but highest reading since Feb 2020)
*(UK) PMI JUN PRELIMINARY MANUFACTURING: 50.1 V 45.0E (1st expansion in 4 months)
MA To acquire Finicity to advance open banking strategy for $825M
*(US) JUN PRELIMINARY MARKIT MANUFACTURING PMI: 49.6 V 50.0E
*(US) JUN RICHMOND FED MANUFACTURING: 0 V -2E
*(US) MAY NEW HOME SALES: 676K V 640KE
(MX) Reports of strong earthquake in Mexico City; preliminary magnitude 7.1 - press
VMW *DELL EXPLORING OPTIONS FOR 81% VMWARE STAKE, VALUED AT $50B - PRESS

WEDS 6/24
(IE) ECB’s Lane (Ireland, chief economist): Sees some signs of initial recovery but the process likely to be gradual
*(DE) GERMANY JUN IFO BUSINESS CLIMATE SURVEY: 86.2 V 85.0E; CURRENT ASSESSMENT: 81.3 V 84.0E
(US) USTR said to target $3.2B in new tariff targets on exports from France, Germany, Spain and the UK
IMF TO UPDATE ITS WORLD ECONOMIC OUTLOOK (WEO): CUTS 2020 GLOBAL GDP FORECAST FROM -3.0% TO -4.9%
*(US) DOE CRUDE: +1.4M V +0.5ME; GASOLINE: -1.7M V -1.5ME; DISTILLATE: +0.2M V -0.5ME
*(CA) FITCH DOWNGRADES CANADA SOVEREIGN RATING ONE NOTCH TO AA+ FROM AAA; OUTLOOK STABLE

THURS 6/25
*(DE) GERMANY JULY GFK CONSUMER CONFIDENCE: -9.6 V -12.0E
BA.UK Issues H1 Trading statement:Guides H1 Rev to be 'broadly stable' and Profit 'lower y/y; productivity levels in June have improved within our defence businesses (which account for around 90% of the Group's revenues)
*(US) INITIAL JOBLESS CLAIMS: 1.48M V 1.32ME; CONTINUING CLAIMS: 19.5M V 20.00ME
*(US) MAY PRELIMINARY DURABLE GOODS ORDERS: 15.8% V 10.5%E; DURABLES (EX-TRANSPORTATION): 4.0% V 2.1%E
*(US) Q1 FINAL GDP ANNUALIZED Q/Q: -5.0% V -5.0%E; PERSONAL CONSUMPTION: -6.8% V -6.8%E
*(US) Q1 FINAL GDP PRICE INDEX: 1.4% V 1.4%E; CORE PCE Q/Q: 1.7% V 1.6%E
(US) Texas Gov Abbott issues order to suspend elective surgeries at hospitals in Bexar, Dallas, Harris, and Travis counties as COVID-19 infections rise
NKE Reports Q4 -$0.51 v +$0.02e, Rev $6.31B v $7.26Be
*FED BANK STRESS TEST RESULTS: FED TO LIMIT BIG BANK DIVIDEND PAYOUTS AND BUYBACKS TO PRESERVE CAPITAL DURING DOWNTURN; BANKS WILL HAVE TO RESUBMIT CAPITAL PLANS LATER THIS YEAR

FRI 6/26
*(US) MAY PERSONAL INCOME: -4.2% V -6.0%E; PERSONAL SPENDING: 8.2% V 9.2%E
*(US) JUN FINAL UNIVERSITY OF MICHIGAN CONFIDENCE: 78.1 V 79.2E
(CN) Chinese diplomatic and trade officials have warned the US that meddling in Chinese domestic affairs could jeopardize purchases of US exports under Phase I trade deal – press
(US) New York Fed Nowcast: raises Q2 forecast to -16.3% from -19.0%; raises Q3 forecast to 1.5% from -1.9%

Animal spirits unleashed by optimism, cemented by surprisingly strong US jobs report

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Weekly Market Update: Animal spirits unleashed by optimism, cemented by surprisingly strong US jobs report

2020-06-05T16:04:26.803

Markets began the week under the specter mass protests and sporadic urban looting following the murder George Floyd while in Minneapolis police custody. But neither the outbreak of civil unrest, nor the continued festering of US/China tensions could derail stock markets. Chinese officials appeared intentionally measured in their response to Friday’s press conference from President Trump, while the White House’s rhetoric largely covered the same ground as the week progressed. Positive commentary from a host US corporations along with both Germany and ECB’s willingness to press further on the stimulus pedal emboldened investors to search our risk assets. Those investors were rewarded on Friday when May non-farm payrolls expanded by more than 2.5M jobs, shocking nearly everyone. The surprise positive print reinforced the growing investor momentum around reopening the economy and a potential V-shaped recovery. Interest rates surged as money was allocated away from Treasury markets, pushing the spread between US 2- and 10-year notes to its widest level since early 2018. For the week, the S&P rose 4.9%, the DJIA surged 6.8%, and the Nasdaq climbed 3.4% to new all-time highs, surpassing the high water mark for the tech-heavy index set in February.

In corporate news this week, US airlines soared following constructive comments from American Airlines, with the company pointing to a ‘steady demand increase’ in May. Starbucks said it sees lower sales at US stores until at least autumn and plans to cut worker hours. eBay’s stock jumped after the online marketplace raised its Q2 outlook as it has seen orders surge amid the pandemic. Zoom reported blowout numbers and doubled its revenue outlook for the fiscal year as virtual meetings more broadly become the norm. Western Union reportedly made an offer for MoneyGram to unite two of the largest remittance firms in the world. FedEx said it would add new fees beginning June 8th for frequent shippers as well as oversized packages amid a recent flood of online shipments. The US Justice Department indicted current and former execs at Pilgrim's Pride and Claxton, including Pilgrim's CEO, in the first charges stemming from a DOJ probe into broiler chicken pricing.


SUN 5/31
05/31 (US) Unrest continues all over the US (incl fires, looting, riots, and peaceful protests) over the police killing of George Floyd, many cities are under curfew; President Trump has put military on alert for possible deployment to back up local police forces - press

MON 6/1
V Reports May total U.S. payments volume -5% y/y, global processed transactions -12% y/y
(US) Atlanta Fed cuts Q2 GDP growth to -52.8% from -51.2%
*(US) MAY FINAL MARKIT PMI MANUFACTURING 39.8 V 40.0E
(CN) China said to have halted some US agricultural imports due to rising tensions between the countries - financial press

TUES 6/2
(US) May ISM New York: 19.5 v 4.3 prior
(HK) US State Dept posts new travel advisory for travel to Hong Kong due to China Security Law; Increases advisory level to 2; comments on HK national security legislation

WED 6/3
*(DE) GERMANY MAY NET UNEMPLOYMENT CHANGE: +238K V +190.0KE; UNEMPLOYMENT RATE: 6.3% V 6.2%
*(EU) EURO ZONE APR UNEMPLOYMENT RATE: 7.3% V 8.2%E
(RU) Saudi, Russia said to be reluctant to extend production cuts without more compliance; planned meeting could be in doubt due to cheating - financial press
*(US) MAY ADP UNEMPLOYMENT CHANGE: -2.76M V -9.00ME
*(US) DOE CRUDE: -2.1M V +3ME; GASOLINE: +2.8M V -0.5ME; DISTILLATE: +9.9M V +3ME
PPC Justice Dept indicts current and former execs at Pilgrim's Pride and Claxton over price fixing, including Pilgrim's CEO - press
(US) Pres Trump chooses five virus vaccine candidates as 'finalists'; to announce decision in next few weeks; five companies mentioned are Moderna, AstraZeneca, J&J, Merck, and Pfizer; no mention in article of Inovio, Dynavax, or Novavax - NY Times
(DE) German Chancellor Merkel coalition reaches deal on Germany stimulus package - press

THURS 6/4
*(EU) ECB LEAVES MAIN 7-DAY REFINANCING RATE UNCHANGED AT 0.00%; AS EXPECTED
*(EU) ECB INCREASES SIZE OF ITS PANDEMIC BOND BUYING FUND (PEPP) FROM €750B TO €1.35T
*(US) Q1 FINAL NONFARM PRODUCTIVITY: -0.9% V -2.7%E; UNIT LABOR COSTS: 5.1% V 5.0%E
*(US) INITIAL JOBLESS CLAIMS: 1.88M V 1.84ME; CONTINUING CLAIMS: 21.5M V 20.00ME
(EU) ECB chief Lagarde: Economy showing signs that economy is bottoming out; improvement to be tepid - prepared remarks
(US) Atlanta Fed cuts Q2 GDP growth to -53.8% from -52.8%
AVGO Reports Q2 $5.14 v $5.13e, Rev $5.74B v $5.70Be
NVAX Receives US Department of Defense contract for coronavirus vaccine; DOD to provide $60M for funding for research, production of vaccine, first deliveries in 2020

FRI 6/5
*(US) MAY UNEMPLOYMENT RATE: 13.3% V 19.1%E
*(US) APR CHANGE IN NONFARM PAYROLLS: +2.51M V -7.50ME
*(US) MAY AVERAGE HOURLY EARNINGS M/M: -1.0% V 1.0%E; Y/Y: 6.7% V 8.5%E
(US) New York Fed Nowcast: raises Q2 forecast to -25.5% from -35.5%; raises Q3 forecast to -12.0% from 36.5%
(US) APR CONSUMER CREDIT: -$68.8B V -$20.0BE

War of words over Hong Kong doesn’t dampen optimism about reopening economies

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Weekly Market Update: War of words over Hong Kong doesn’t dampen optimism about reopening economies

2020-05-29T16:06:14.75

Coming out of the holiday break, equity markets roared. US indices reached levels not seen since early March and late February while the S&P pushed up through its 200-day moving average. Positive developments on the coronavirus treatment front combined with incremental headlines surrounding the pullback of various lockdown measures aided risk appetite broadly. Japan raised expected bond issuance to fund a second budget to provide stimulus, while EU officials unveiled details of an ambitious €750B recovery fund that favors grants over loans and would be funded by joint debt. US stock markets experienced a notable rotation away from the perceived pandemic winners into banks and other beaten-down groups including small caps in general, which affirmed a welcomed sense of widening breadth in the stock market’s rebound.

Late in Thursday’s session concerns about the rising tensions over China’s move to crimp Hong Kong’s autonomy seemed to finally put a cap on risk exuberance. After a week of increasingly harsh rhetoric from the White House, on Friday President Trump announced some visa restrictions and a ‘working group’ to examine the differing financial practices of Chinese firms listed in the US. Separately, Trump also signed an executive order aimed at social media companies after one of his tweets criticizing mail-in ballots was ‘fact checked’ by Twitter. The dollar continued to lose ground this week with the very notable exception against the Yuan; The Chinese currency fell to its weakest level against the dollar since early 2008. Meanwhile, crude futures continued to rebound, ending the month of May with a record 80% gain. For the week, the S&P gained 3%, the DJIA rose 3.9%, and the Nasdaq added 1.8% to come within just a few percent of all time highs.

In corporate news this week, Boeing shares rose after it said it would resume 737 MAX production at its Renton, WA facility, and forecast output to gradually ramp up this year. Disney announced plans to start a phased reopening for its Magic Kingdom and Animal Kingdom parks on July 11th, while Six Flags is set to reopen its first park in Oklahoma on June 5th. UPS said it would add a peak surcharge and an oversize package surcharge for ground shipments beginning May 31st amid an influx of e-commerce orders. Tesla reduced prices on certain vehicles by as much as $5,000 in North American markets as well as imported Model S and X vehicles in China. Costco saw a sales bounce early in Q3 on a burst of coronavirus-related spending, but the numbers did not sustain as shopping frequency decreased over the quarter. Toll Brothers Q2 earnings beat street estimates, and while the CEO said net signed contracts in the first four weeks of May were down 37% year-over-year, they remain ‘very encouraged’ by recent deposit activity.


MON 5/25
*(DE) GERMANY Q1 FINAL GDP Q/Q: -2.2% V -2.2%E; Y/Y: -2.3% V -2.3%E (confirms technical recession)
*(DE) GERMANY MAY IFO BUSINESS CLIMATE SURVEY: 79.5 V 78.5E; CURRENT ASSESSMENT SURVEY: 78.9 V 80.0E
REGN Sanofi to sell majority of its 20.6% stake; Regeneron announces $5B stock repurchase (8% of market cap); drug collaborations will not be impacted
NVAX Initiates Phase 1/2 clinical trial of COVID-19 vaccine NVX-CoV2373; result is expected in early July

TUES 5/26
*(DE) GERMANY JUN GFK CONSUMER CONFIDENCE: -18.9 V -18.0E
(DE) German govt said to be prepared to lift travel warnings on almost three dozen countries and replaced by more detailed travel advice - financial press
(UK) EU said to be prepared to drop maximalist approach to fisheries in next round of Brexit negotiations - financial press
(EU) ECB said to be working on a contingency plan if Bundesbank is forced to quit PSPP bond buying scheme - financial press
*(US) APR NEW HOME SALES: 623K V 480KE
*(US) MAY CONSUMER CONFIDENCE: 86.6 V 87.0E
*(US) MAY DALLAS FED MANUFACTURING ACTIVITY INDEX: -49.2 V -62.0E
MRK Merck CEO Frazier casts doubt over 12 to 18 month timeframe for development of a Covid-19 vaccine - FT
TWTR Twitter now includes a 'fact check' of Pres Trump tweets about mail-in ballots on his Twitter page
(US) White House econ adviser Kudlow: Trump is so 'miffed' with China on coronavirus and other matters that the trade deal is not as important to him as it once was; China trade deal is on for now - Fox interview

WED 5/27
(CN) China Foreign Ministry spokesperson Zhao Lijan: Will take countermeasures if others harm China
(EU) ECB chief Lagarde: Will not have a new Euro area debt crisis following the pandemic; not overly concerned about the high level of debt- online event
(EU) EU Commissions recovery fund proposal said to be comprised of €500B in grants and €250B in loans - German press
(EU) EU Commission President Von der Leyen: Dealing with pandemic is Europe's moment; total EU recovery effort stands at €2.4T
*(US) MAY RICHMOND FED MANUFACTURING INDEX: -27 V -40E
(US) Dallas Fed May Texas Service Sector Outlook Survey: General Business Activity: -41.7 v -83.9 prior
(US) Sec of State Pompeo: announces that US can no longer certify Hong Kong autonomy from China; says no reasonable person can assert today that Hong Kong maintains high degree of autonomy from China given facts on the ground
BA Resumes 737 MAX production at its Renton, WA facility; production to gradually ramp up this year - press
MU Raises Q3 $0.75-0.80 v $0.56e (prior $0.40-0.70), Rev $5.2-5.4B v $4.91Be (prior $4.6-5.2B), Gross margin 33-34% (prior 31.5% +/-1.5%) - filing

THRS 5/28
*(EU) EURO ZONE MAY ECONOMIC CONFIDENCE: 67.5 V 70.6E
*(DE) GERMANY MAY PRELIMINARY CPI M/M: -0.1% V -0.1%E; Y/Y: 0.6% V 0.6%E
*(US) APR PRELIMINARY DURABLE GOODS ORDERS: -17.2% V -19.0%E; DURABLES (EX-TRANSPORTATION): -7.4% V -15.0%E
*(US) INITIAL JOBLESS CLAIMS: 2.123M V 2.10ME; CONTINUING CLAIMS: 21.05M V 25.68ME
*(US) Q1 PRELIMINARY GDP ANNUALIZED Q/Q: -5.0% V -4.8%E; PERSONAL CONSUMPTION: -6.8% V -7.5%E
*(US) Q1 PRELIMINARY GDP PRICE INDEX: 1.4% V 1.3%E; CORE PCE Q/Q: 1.6% V 1.8%E
*(US) DOE CRUDE: +7.9M V -1.5ME; GASOLINE: -0.7M V -0.5ME; DISTILLATE: +5.5M V +2ME
(US) Atlanta Fed raises Q2 GDP growth to -40.4% from -41.9%
UPS To add peak surcharge for ground packages, to add oversize package surcharge beginning May 31st amid jump in e-commerce shipments - press
(US) Pres Trump: will sign executive order to 'uphold free speech'; social media companies will lose their liability shield; they are tantamount to a monopoly
COST Reports Q3 $1.89 v $1.91e, Rev $36.5B v $37.7Be

FRI 5/29
*(EU) EURO ZONE MAY ADVANCE CPI ESTIMATE Y/Y: 0.1% V 0.1%E; CPI CORE Y/Y: 0.9% V 0.8%E
(US) Nevada reports April casino gaming Rev $3.7M, -99.6% y/y; Las Vegas strip Rev $3.4M, -99.3% y/y
(US) Fed Chairman Powell: want to reiterate Fed is strongly committed to using all our tools to get to a robust recovery; acknowledging a lot of pain being felt out there - Princeton webcast
(US) New York Fed Nowcast: cuts Q2 forecast to -35.5% from -30.5%
(US) Atlanta Fed cuts Q2 GDP growth to -51.2% from -40.4%
(US) President Trump reportedly will NOT leave the phase one US/China trade deal over recent tensions - press
(US) Pres Trump: to launch working group to study differing practices of Chinese companies listed on US stock markets; will revoke Hong Kong's preferential treatment; Will take steps to sanction Hong Kong officials involved in eroding Hong Kong's autonomy - remarks at Rose Garden

Hopes surrounding vaccine progress outweigh renewed US/China tensions

TradeTheNews.com 

Weekly Market Update: Hopes surrounding vaccine progress outweigh renewed US/China tensions

2020-05-22T16:09:41.773

Stock markets rose further this week climbing a wall of worry surrounding rising US/China tensions. May economic data remained extremely soft, but the sequential improvement from last month’s nadirs supported the advancing narrative that April will likely be seen as the trough. Commentary from a host of major retailers pointed to signs of pent-up demand from US consumers as they emerge from stay-at-home directives. Larger swaths of the US economy continued to reopen without much handwringing while Covid-19 vaccine hopes received a boost from early positive Interim Phase 1 Data out of Moderna.

Heading into the long Memorial Day weekend deteriorating ties between Beijing and Washington began to exert a greater effect on sentiment. Wednesday, the Senate passed legislation that could have the effect of banning Chinese companies from listing on US exchanges resulting in speculation that major US listed Chinese companies were already preparing to move their listings to Hong Kong. Separately, US lawmakers also approved a bill aimed at censuring China's move to impose new national-security laws on Hong Kong. By Friday, President Trump warned that Washington would react "very strongly" if China follows through on its HK plans. Treasury yields moved up early in the week alongside stocks. Wednesday saw the first US 20-year bond auction since the mid 1980’s go off with solid demand. The upward momentum in oil largely continued until global growth concerns induced by the decision of Chinese officials to omit an annual GDP target resulted in some profit taking on Friday. The Russell 2000 and Dow Jones transports easily outpaced the overall market’s gains signaling to some increased bets on American reopening. For the week, the S&P gained 3.2%, the DJIA added 3.3%, and the Nasdaq rose 3.4%.

In corporate news this week, Target earnings and revenue were lifted by a 141% increase in its e-commerce sales, and the company saw ‘rapid increase in traffic and sales in stores, resulting in some of strongest comp sales growth in company history in mid-April. Walmart earnings jumped, also driven by both a boost in traffic and e-commerce. Lowe’s handily beat earnings forecasts as its same store sales surged, with May SSS running above +20%, as home improvement spending saw a pickup amid coronavirus shut-downs. Best Buy shares moved lower despite beats on both top and bottom line, though the tech retailer said it retained 81% of last year’s sales during the last six weeks of the quarter despite switching to curbside pickup. Home Depot missed its earnings target as coronavirus costs weighed on the retailer. Nvidia topped earnings estimates and shares hit all-time highs as the supply challenges it experienced were counterbalanced by a surge in e-commerce revenue amid work-from-home spending and gaming demand. Reports said GrubHub remains in discussions with Uber about a potential buyout, with CNBC’s Faber noting the two are fairly close to a deal.


SUN 5/17
005930.KR Reports Q1 semiconductor production 277.4B units, +57.4% y/y - Yonhap citing report

MON 5/18
(EU) EU said to borrow considerably more €320B for its recovery fund - FT
MRNA Announces early positive Interim Phase 1 Data for mRNA Vaccine (mRNA-1273) against Novel Coronavirus in first four of eight study participants; expects Phase 3 trial to start in July
BIDU Reports Q1 $1.25 v $0.64e, Rev $3.18B v $3.13Be
FNMA To Issue Request for Proposals to Hire Financial Advisor
(US) NASDAQ said to be tightening/restricting IPO and listing rules for companies from China - US financial press

TUES 5/19
*(DE) GERMANY MAY ZEW CURRENT SITUATION SURVEY: -93.5 V -86.6E; EXPECTATIONS SURVEY: 51.0 V 30.0E
HD Reports Q1 $2.08** v $2.27e, Rev $28.3B v $27.5Be; Suspends FY20 outlook
WMT Reports Q1 $1.18 v $1.12e, Rev $134.6B v $130.9Be; Withdrawing FY21 outlook; To discontinue Jet.com
(US) Atlanta Fed raises Q2 GDP growth to -41.9% from -42.8%
MRNA Vaccine experts say Moderna didn’t produce data critical to assessing Covid-19 vaccine - StatNews
992.HK Reports Q4 Net $43M v $118M y/y, Rev $10.6B v $11.7B y/y
(TW) Taiwan President Tsai: Reiterates will not accept China one country, two systems model; Coronavirus has changed world political and economic order, new opportunity for Taiwan - Inauguration speech

WEDS 5/20
(TW) China Taiwan Affair Office: Current situation with Taiwan, is complex and severe; China will never tolerate any act of separating the country - Xinhua
*(UK) APR CPI M/M: -0.2% v -0.1%e; Y/Y: 0.8% v 0.9%e (slowest annual pace since 2016)
*(EU) EURO ZONE APR FINAL CPI Y/Y: 0.3% V 0.4%E; CPI CORE Y/Y: 0.9% V 0.9%E
LOW Reports Q1 $1.77 v $1.29e, Rev $19.7B v $18.2Be; Withdraws FY20 outlook
INO COVID-19 DNA Vaccine INO-4800 Demonstrates Robust Neutralizing Antibody and T Cell Immune Responses in Preclinical Models
SHOP Announces strategic partnership with the World's Leading Crypto Payments Processor CoinPayments
*(US) DOE CRUDE: -5.0M V +1.5ME; GASOLINE: +2.8M V -2.5ME; DISTILLATE: +3.8M V +2.5ME
(US) Senate passes by unanimous consent Holding Foreign Companies Accountable Act that could delist Chinese companies from US stock exchanges - press
EKSO Announces CFIUS Determination Regarding China Joint Venture; prior national security concerns regarding the JV could not be mitigated, termination of the JV not have material impact on our operations during the remainder of 2020
(CN) China Customs administration revises iron ore import inspection rules, will examine iron ore imports only based on applications (prior selected quality checks for all imports); effective June 1st

THURS 5/21
(CN) China releases a new bill on Hong Kong National Security; Will strengthen Hong Kong enforcement capacity - Xinhua
(CN) China 13th National People's Congress (NPC): Affirms Monetary Policy stance [prudent monetary policy stance to be more flexible and appropriate]; Guiding money supply significantly higher y/y; Expanding 5G applications in 2020
*(CN) CHINA 13TH NATIONAL PEOPLE'S CONGRESS (NPC) OMITS 2020 GROWTH TARGETS - US FINANCIAL PRESS (as speculated)
NVDA Reports Q1 $1.80 v $1.69e, Rev $3.08B v $3.00Be
*(US) MAY MARKIT PRELIMINARY PMI MANUFACTURING: 39.8 V 39.5E
*(US) MAY PHILADELPHIA FED BUSINESS OUTLOOK: -43.1 V -40.0E
*(US) INITIAL JOBLESS CLAIMS: 2.44M V 2.40ME; CONTINUING CLAIMS: 25.07M V 24.25ME
BBY Reports Q1 $0.67 v $0.41e, Rev $8.56B v $8.15Be; Retained ~81% of y/y sales with curbside pickup model from mid-Q1 onward
(CN) Diplomatic backchannels between the US and China have dried up, some say the behind-the-scenes meetings and messages between gov't officials have 'ground to a halt' - SCMP
*(FR) FRANCE MAY PRELIMINARY PMI MANUFACTURING: 40.3 V 36.0E (4th straight contraction)
*(DE) GERMANY MAY PRELIMINARY PMI MANUFACTURING: 36.8 V 39.4E (17th month of contraction)
*(EU) EURO ZONE MAY PRELIMINARY PMI MANUFACTURING: 39.5 V 38.0E (16th straight contraction)
*(UK) MAY PRELIMINARY PMI MANUFACTURING: 40.6 V 37.2E (3rd straight contraction)

FRI 5/22
*(UK) APR RETAIL SALES (EX-AUTO/FUEL) M/M: -15.2% V -15.0%E; Y/Y: -18.4% V -18.6%E (record declines)
(HK) Hong Kong Chief Exec Lam: Will fully cooperate with China to enact National Security Law ASAP; Safeguarding national security is constitutional responsibility
(US) New York Fed Nowcast: raises Q2 forecast to -30.5% from -31.1%

Markets face a reality check

TradeTheNews.com 

Weekly Market Update: Markets face a reality check

2020-05-15T16:05:50.357

Stock indices rolled over this week as investor sentiment underwent somewhat of reality check. The economic data saw historic declines both in Europe and the US. The brutal numbers, though not unexpected, came alongside circumspect comments from Fed Chairman Powell as well as several legendary investors. The notion of any v-shaped economic recovery seemed to dissipate further after Powell warned of potential lasting economic damage from this crisis could very well mean additional measures will be needed. Treasury yields moved lower and the curve flattened despite a barrage of Fed commentary meant to push back on the notion that US rates could eventually find their way into negative territory. The week came to a close amid renewed concerns surrounding rising China tensions. President Trump and his administration repeatedly emphasized their dissatisfaction and distrust of China’s handling of the coronavirus crisis, going as far as to suggest he could consider cutting ties altogether. Friday the US Commerce Department announced rules aimed at cutting off Huawei's efforts to undermine US export controls, prompting swift reaction by Chinese state media. The VIX moved up and gold prices moved back to the highest levels in weeks. Oil prices continued to rebound to levels not seen since before the wild volatility of mid-April. For the week, the S&P slipped 2.3%, the DJIA fell 2.7%, and the Nasdaq lost 1.2%.

As the major thrust of earnings season winds down, some names still remained to report this week. Applied Materials reported a miss on its top and bottom line, but noted it sees evidence that the supply chain is recovering. Cisco shares rose on an earnings beat despite “manufacturing challenges and component constraints” amid the pandemic. United Natural Foods released preliminary Q3 numbers that smashed expectations, as demand surged for both its natural and conventional products and sales remain elevated. Word that Uber is in talks to acquire GrubHub in an all-stock deal surprised the Street this week, though follow-up reports indicate the companies remain at odds on price. Disney added its name to the list of corporations moving in to capital markets to shore up balance sheets, filing to offer $11B in notes.


MON 5/11
DIS Launches $11B six-tranche note offering
BA CEO: Likely that a US airline will shutdown by Sept, sees US air traffic levels at less than 25% by Sept

TUES 5/12
7203.JP Reports FY19/20 Net ¥2.08T v ¥1.88T y/y; Op ¥2.44T v ¥2.47T y/y; Rev ¥29.93T v ¥30.23T y/y
VOD.UK Reports FY20 adj 5.60p v 6.27p y/y, adj EBITDA €14.9B v €13.9B y/y, Rev €45.0B v €43.7B y/y; affirms FY19 dividend at 9c/shr v 9c/shr y/y
*(US) APR CPI M/M: -0.8% V -0.8%E; CPI (EX-FOOD/ENERGY) M/M: -0.4% V -0.2%E; CPI NSA: 256.389 V 256.489E (CORE INDEX FALLS BY MOST ON RECORD)
(IN) India PM Modi: announces economic package worth INR20T (10% of GDP)
GRUB Uber reportedly approached Grubhub with takeover offer - press
KSU Reports QTD volume -25% y/y, Rev -22% y/y - investor slides
*(US) APR MONTHLY BUDGET STATEMENT: -$737.9B V -$737.2BE
*(NZ) NEW ZEALAND CENTRAL BANK (RBNZ) LEAVES OFFICIAL CASH RATE (OCR) UNCHANGED AT 0.25%; AS EXPECTED; RAISES LARGE SCALE ASSET PURCHASE (LSAP) PROGRAM FROM NZ$33B TO NZ$60B

WEDS 5/13
*(UK) Q1 PRELIMINARY GDP Q/Q: -2.0% V -2.6%E; Y/Y: -1.6% V -2.2%E ((worst quarterly contraction since Q4 2008)
700.HK Reports Q1 (CNY) Net 28.9B v 27.2B y/y, Op 37.3B v 30.6Be, Rev 108.1B v 101.0Be
TMO Raises Q2 Organic Rev -10% to flat (prior -15% to flat) - filing
*(US) APR PPI FINAL DEMAND M/M: -1.3% V -0.5%E; Y/Y: -1.2% V -0.4%E
(US) Fed Chairman Powell: growing sense that recovery may be slower than we like; expect unemployment to peak in next month or so, but will likely to remain well above levels we saw in 2018 and 2019 - Q&A
(US) Fed Chairman Powell: Negative rates is NOT something we are looking at; our view has NOT changed
*(US) DOE CRUDE: -0.7M V +4.5ME; GASOLINE: -3.5M V -2.5ME; DISTILLATE: +3.5M V +3.5ME
ABT New York University data shows Abbott coronavirus test missed one-third of COVID cases in preliminary test; the 15-min test may yield false negatives - press
*(US) TREASURY $22B 30-YEAR BOND AUCTION DRAWS 1.342%; BID TO COVER 2.30 V 2.43 PRIOR AND 2.28 OVER LAST 4 AUCTIONS

THURS 5/14
*(EU) ECB ECONOMIC BULLETIN: To continue to support the euro area economy in the face of the current economic disruption and heightened uncertainty
LH Confirms launch of "return to work services" for employers with IgG test
MMM CFO: Expects to be producing Respirators at run rate of 2B/yr by end-2020 - investor conf comments
*(US) INITIAL JOBLESS CLAIMS: 2.98M V 2.50ME; CONTINUING CLAIMS: 22.83M V 25.12ME
AMAT Reports Q2 $0.89 v $0.91e, Rev $3.96B v $4.20Be; Supply chain is recovering

FRI 5/15
*(DE) GERMANY Q1 PRELIMINARY GDP Q/Q: -2.2% V -2.2%E ; Y/Y: -2.3% V -2.0%E (confirms technical recession and worst quarterly performance since financial crisis)
(EU) EURO ZONE Q1 PRELIMINARY GDP Q/Q: -3.8% V -3.8%E; Y/Y: -3.2% V -3.3%E
*(US) MAY EMPIRE MANUFACTURING: -48.5 V -60.0E
*(US) APR ADVANCE RETAIL SALES M/M: -16.4% V -12.0%E; RETAIL SALES (EX-AUTO) M/M: -17.2% V -8.5%E
(US) APR INDUSTRIAL PRODUCTION M/M: -11.2% V -12.0%E; CAPACITY UTILIZATION: 64.9% V 63.8%E
(US) MAR JOLTS JOB OPENINGS: 6.191M V 5.800ME
(US) Atlanta Fed cuts Q2 GDP growth to -42.8% from -34.9%