May 08, 2020
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About this Deal
BY THE NUMBERS
Dow futures were pointing to a 250-point gain at Friday’s open despite what’s expected to be the worst monthly unemployment rate since the tail end of the Great Depression. Traders, at least early Friday, seem to be focusing on more states reopening parts of their economies closed by coronavirus mitigation orders and new promises from U.S. and China trade negotiators. (CNBC)
Nasdaq futures were also pointing to a continued rally on Wall Street. Tech stocks propelled the Nasdaq higher for the fourth straight session on Thursday. The index rose 1.4%, clawing back its steep losses for the year and turning slightly positive for 2020. The Nasdaq had plunged 32% from its February record high to its March coronavirus low. Since its March low, the Nasdaq has gained 35%. (CNBC)
When the Labor Department releases its April employment report at 8:30 a.m. ET, the nation’s jobless rate is expected to skyrocket from 4.4% in March to 16%. Economists also expect a record 21.5 million jobs were lost last month, a collapse telegraphed week after week in unprecedented first-time filings for unemployment benefits due to the coronavirus economic halt. (CNBC)
IN THE NEWS TODAY
Starting Friday, California is allowing retailers, like those that sell clothing, books and sporting goods, to begin offering curbside pickup as the state moves deeper into stage two of its coronavirus reopening plan. California’s total of 62,360 Covid-19 cases is the fifth highest of any state in the U.S., which overall has tallied over 1.2 million infections. (CNBC)
* California identifies a nail salon as source of coronavirus community spread (CNBC)
Tesla told employees in an e-mails sent overnight that the electric vehicle maker would attempt to restart “limited operations” at its U.S. car plant in Fremont, California, on Friday afternoon, bringing back around 30% of the employees normally working on a shift. (CNBC)
In Michigan, Gov. Gretchen Whitmer said the state will allow manufacturing plants, including those that make cars and trucks, to begin reopening Monday. General Motors and Fiat Chrysler plan to begin reopening their Michigan assembly plants a week from Monday. Ford is also targeting May 18 as the planned restart date for its North American operations. (CNBC)
Shanghai Disneyland reopens Monday, offering the theme park industry a glimpse of what operations will look like in a coronavirus world. Disney will be implementing occupancy caps and social distancing measures as well as new sanitation policies. The company said it sold out all tickets for Monday. (CNBC)
In Florida, Disney will begin a phased reopening of its Disney Springs shopping, dining and entertainment complex, on May 20 in accordance with guidance from government and health officials. The rest of the Walt Disney World Resort will remain closed, including theme parks and resort hotels.
Norwegian Cruise Line hopes to resume trips this year, despite the global coronavirus pandemic, which has rocked the industry. CEO Frank Del Rio told CNBC’s Jim Cramer on Thursday the cruise company is consulting with government officials and public health experts to ensure its fleet is safe for crew and passengers to board.
Booking Holdings earned an adjusted $3.77 per share for the first quarter, below the consensus estimate of $5.64, although the travel services company’s revenue did beat analyst projections. Overall, the parent of Priceline and other travel websites saw adjusted profit fall 69 percent as virus-related lockdowns took hold.
TripAdvisor reported adjusted quarterly profit of 7 cents per share, 12 cents shy of estimates, with the travel review website operator’s revenue also missing Wall Street forecasts. The company expects little to no revenue this quarter due to the Covid-19 pandemic.
Uber Technologies reported a quarterly loss of $1.70 per share, wider than the anticipated loss of 88 cents per share, although the ride-hailing company’s revenue did exceed Wall Street forecasts. Uber saw a 5% drop in ridership during the quarter, but orders placed on its Uber Eats service jumped 52%. (CNBC)
President Donald Trump said coronavirus testing is “somewhat overrated.” However, after an aide described as a personal valet for Trump tested positive for Covid-19, the president said Thursday that he will be tested every single day. Vice President Mike Pence said that he, too, will be tested daily, along with “everyone that comes into contact with the president.” (CNBC)
The seafood market in Wuhan, China, played a role in the coronavirus outbreak, but more research is needed to determine whether it’s the source of the virus or was an “amplifying setting,” the World Health Organization said. The WHO is in talks with China to send a follow-up mission to the country to investigate the animal source of the virus. (Reuters)
STOCKS TO WATCH
Macy’s (M) said it would delay its first quarter earnings report until July 1, due to virus-related business disruptions which have also delayed preparation of its financial statements. The retailer usually reports its first quarter numbers in mid-May.
SeaWorld Entertainment reported a quarterly loss of 72 cents per share, 2 cents wider than expected, while revenue fell below estimates. SeaWorld closed its parks in mid-March due to the coronavirus outbreak, but said it remains confident in the resiliency of its business.
Hostess Brands, the maker of Twinkies and other snack foods beat, estimates by a penny with adjusted quarterly profit of 14 cents per share, with revenue also beating Wall Street forecasts. Hostess said it had seen stronger-than-expected results before the coronavirus outbreak, but said its biggest uncertainty is the pandemic’s impact on business and its supply chain. The company has withdrawn its 2020 outlook.
Ruth’s Hospitality, the parent of the Ruth’s Chris Steak House chain reported an adjusted quarterly profit of 9 cents per share, missing the consensus estimate of 29 cents, with revenue also missing estimates. A decline in sales hit the company in mid-March as restaurants either closed or switched to a takeout-only model due to the virus outbreak.
Clorox told the Wall Street Journal it does not expect to catch up to demand for its disinfectant wipes until the summer. Reckitt Benckiser, parent company of the Lysol brand, told the Journal it is not sure when it will be able to fully replenish supplies of its wipes.
Live Nation lost 94 cents per share during its most recent quarter, 2 cents wider than analysts had anticipated, while revenue was essentially in line with forecasts. The live event promoter saw concert revenue fall 25% this quarter and expects the impact to be greater for the second quarter amid cancellations prompted by nationwide lockdowns.
Zillow Group lost an adjusted 26 cents per share for its latest quarter, 9 cents smaller than Street projections. The real estate website operator’s revenue was well above estimates, but it is withholding full-year guidance due to pandemic-related uncertainty.
Roku lost 45 cents per share for its latest quarter, matching estimates, while the streaming device maker’s revenue was above expectations. Average revenue per user jumped 28% from a year earlier.
Dropbox came in 3 cents ahead of estimates with adjusted quarterly profit of 17 cents per share, and the file storage service’s revenue also beat forecasts. Dropbox signed up more customers during the quarter as more companies shifted to remote work.
Yelp lost 22 cents per share during the first quarter, doubling the loss that Wall Street had expected, although the review website operator’s revenue did beat estimates. Yelp also said it saw signs of stabilization during the second half of April.
After weeks of waiting, the National Football League finally released the details of its 2020 regular-season. It’s the clearest signal yet that the NFL fully intends to start its next season, despite much of the country still under lockdown orders and other professional leagues still suspended. (CNBC)