>>> What to look at today - 20th of May 2020

Stocks in Asia were mixed as reports on Moderna Inc.’s coronavirus vaccine added to concern that a successful way to beat the pandemic remains a long way off, offsetting calls to stick with bets on more equity gains. Treasuries held an overnight advance.
Japan and India saw the bulk of gains, with an advance more modest in Sydney and Seoul. Shares dropped in China and Hong Kong. U.S. futures nudged up, while European contracts dropped. The S&P 500 lost ground in the final hour of trading, and closed down. Riskier assets had started the week on the front foot after Moderna had fueled hopes for a coronavirus vaccine, but investors are struggling to maintain the optimism. Crude oil slipped below $32 a barrel in New York.
“We are being fairly cautious,” Shawn Matthews, founder and chief investment officer at Hondius Capital Management LP, said on Bloomberg TV. “If you look at the economy, it feels like it’s the summer of hope right now, where everyone is hoping it’s going to turn around.”
US After Hours  KRNT +15.6% up big on earnings; URBN -5.4% weak on earnings; PAE +8.2% up on contract win

Nikkei +1.08% Hang Seng -0.05% CSI -0.17% Shanghai -0.21% Shenzen -0.45%

Eur$ 1.0946 CNH 7.1156 CNY 7.1032 JPY 107.73 GBP 1.2263 CHF 0.9695 RUB 72.6426 WTI$ 32.09

S&P +0.51% Nasdaq +0.49% EuroStoxx -0.49% FTSE -0.42% Dax -0.37% SMI


Macro :
- Brexit Talks Sour With U.K. Slamming EU’s ‘Unworthy’ Offer
- Trump Considers Brazil Travel Ban in Latest Sign of Virus Woes

Keep an eye on :
- ACK BB : Ackermans Sees Significant Drop in FY Net; 1Q Cash EU245.6m
- AED BB : Aedifica Nine Month Net Rental Income EU117.2 Mln, +40% Y/y
- AF FP : KLM Starts Voluntary Leave Program for All Staff June 1
- ASRNL NA : ASR Nederland Has Limited Impact of Covid-19 in 1Q
- ATC NA : Altice lance un premier plan social dans les médias
- AAPL US : Apple has been acquiring some older shows to help bulk up Apple TV+ library: report
- BIM FP : Biomérieux to Recommend Reducing 2019 Div to €0.19/Shr
- BMPS IM : Monte Paschi Says Guido Bastianini Appointed CEO
- CTM SS : Catena Media 1Q Adjusted Ebitda EU12.9 Mln, +15% Y/y
- CFEB BB : CFE First Quarter Revenue EU760.9 Mln, -9.2% Y/y
- CIBUS SS : Cibus Nordic Real Estate Holder to Offer Up to 3.7m Shrs, Cibus Nordic Real Estate Offering by Holder Prices at SEK128/Shr
- CINE LN : Cineworld Finding the Canada Cineplex Review Challenging: CTFN
- CPG LN : Compass Group Placing Priced at GBP10.25 Per Share
- CSGN SW : Swiss Finma Extends Eased Leverage Ratio Rules for Banks to Jan.
- BN FP : Danone Adds Social, Environment Goals to Bylaws Amid Pandemic
- EDF FP : RTE Says French Electricity Consumption Progressively Resuming
- EDP PL : EDP Says Paul Elliott Singer Reduced Holding to 1.91%
- ELI BB : Elia Group Maintains Full Year Adjusted ROE +6.5% to +7.5%
- FRA GY : Frankfurt Airport Passenger Count Could Fall 60% This Year
- GIMB BB : Gimv Full Year Loss EU151.6 Mln
- HAL NA : HAL 1Q Net Asset Value Per Share EU149.63 Vs. EU164.20 Q/q
- HEX NO : Hexagon Composites First Quarter Ebitda NOK37 Mln, -75% Y/y
- IDIA SW : Idorsia 10M Share Placement to Fund Growth Is Oversubscribed, Idorsia Places 11m New Shares at CHF30 Apiece
- LONN SW : Lonza Expects to Name New Chief in Late May or Early June: T-A
- LHA GY : Lufthansa Says State Aid Is Getting Increasingly Urgent: Reuters
- MDGS IT : Medigus Offering Prices 3.33m Units at $1.50/Unit
- MBTN SW : Meyer Burger: Investor Group Around Sentis Has Been Terminated
- ML FP : Michelin Says Car, Light Truck Tire Markets Slumped in April
- RECIB SS : Recipharm Issued 4.5m Shares at SEK110.50 a Share
- RNO FP : Renault Reaches Deal With Banks on EU5b State-Backed Loan: Rtrs
- RNO FP : Renault May Close 4 French Sites As Seeks To Save EU2B: Canard
- RENX LN : Bio-Techne, Kantaro to Produce Covid-19 Serology Test
- ROG SW : Roche Covid-19 Antibody Test Goes Live at First U.S. Lab Sites
- SANN SW : Santhera Considering Interim Analysis Potential of Sideros Study
- SAP GY : Plattner Mulls Serving as Chairman Beyond 2022: Handelsblatt
- TKWY NA : Just Eat Takeaway.com Holders SM Trust to Offer 5.6m Shrs
- TIT IM : Italy’s Open Fiber Seeks $490 Million to Redouble Fiber Push
- VALN SW : Valora Sales Trend Probably Past Trough, Raise to Add: Baader
- VOW3 GY : VW CEO Diess, Chairman Poetsch Settle Market-Manipulation Case
- XBRANE SS : Xbrane Biopharma to Offer Up to 3.85m Shrs via Vator Securities

>>> Europe : Brokers Upgrades & Downgrades -20th of May 2020

>>> Up
* AB InBev Raised to Neutral at JPMorgan; PT 36 euros
* AB InBev ADRs Raised to Neutral at JPMorgan; PT $39
* BioPharma Credit Raised to Buy at Jefferies
* BT Raised to Hold at Deutsche Bank; PT 125 pence
* Compass Raised to Buy at Deutsche Bank; PT 1,420 pence
* Covestro Raised to Neutral at BofA; PT 34 euros
* Fresenius SE Raised to Overweight at Morgan Stanley
* Fresenius Medical Raised to Equal-Weight at Morgan Stanley
* RDI REIT Raised to Buy at Berenberg; PT 80 pence
* Salmar Raised to Buy at Arctic Securities; PT 500 kroner
* Valora Raised to Add at Baader Helvea; PT 200 Swiss francs


>>> Down
* 3i Cut to Neutral at Citi; PT 974 pence
* Applus Cut to Neutral at JPMorgan; PT 5.80 euros
* Burberry PT Cut to 1,550 pence at Morgan Stanley
* GEA Group Cut to Hold at HSBC; PT 24 euros
* Konecranes Oyj Cut to Sell at Goldman; PT 15 euros
* Pandora Cut to Hold at Handelsbanken; PT 300 kroner
* Shelf Drilling Cut to Sell at SpareBank; PT 3 kroner
* Vallourec Cut to Sell at Goldman; PT 85 euro cents

>>> Initiation
* Altice Europe Resumed Equal-Weight at Morgan Stanley
* Kamux Rated New Buy at Handelsbanken; PT 8.50 euros
* Medios Rated New Hold at Jefferies; PT 41 euros
* Suess MicroTec Rated New Buy at MainFirst; PT 15 euros
* Zur Rose Rated New Buy at Jefferies; PT 300 Swiss francs

>>> Call
* Fresenius SE, Fresenius Medical Both Upgraded at Morgan Stanley

Electrek ; Tesla quietly adds bidirectional charging capability for game-changin





180 Comments
Electrek has learned that Tesla has quietly made Model 3, and likely Model Y, ready for bidirectional charging, which should enable some game-changing features in the near future.

Tesla and Bidirectional Charging
The advent of electric vehicles is expected to increase the demand for electricity, but electric cars can also offer some advantages by controlling the power load.
A study showed that electric vehicle fleets could save billions of dollars with controllable load and vehicle-to-grid features, and it would enable the grid to optimize its use of renewable energy.
Controllable load, the ability to control when an EV is charging, is possible with any electric vehicle as long as it is connected to a smart charging station or the vehicle itself has an internet connection.
On its own, it can have a massive impact on the grid by reducing peak demand and charging only when demand is lower, but the study shows that vehicle-to-grid technology, which also enables a vehicle to send power back into the grid with a bidirectional charger, would have an even greater impact.
Several automakers, like Honda and Nissan, have been openly exploring the technology, but Tesla, who is arguably the leader in electric vehicles, has been reticent about deploying bidirectional charging in the past.
Both CEO Elon Musk and cofounder and former CTO JB Straubel have expressed concerns about enabling bidirectional charging in Tesla vehicles due to the potential of accelerated battery degradation and also the moderate value with a relatively small fleet.
In a recent filing with the Texas electric utility commission in which Tesla was responding to questions about how electric utilities should approach electric vehicles, the automaker summarized its view of vehicle to grid technology:
Vehicle to grid benefits can be recognized much more efficiently when EV deployment is at scale rather than in the early adopter phase. At the same time, any discussion regarding the capabilities of EV related technologies must recognize as a first principle that customer experience and willingness for participation is key. There certainly may be an opportunity for future projects and programs that focus on advanced technological integration, such as the eventual aggregation of EVs in the future to provide grid services in wholesale markets. In any setting, it is important to remember that EVs are modes of transportation first and foremost for customers. There is also an opportunity to evaluate stationary storage assets first to provide similar grid services capabilities from a wholesale electricity market perspective.
While those comments are not too encouraging, they do note that there’s value in vehicle to grid once the EV fleet becomes large enough, which is starting to become the case.
Straubel noted in a presentation in 2015 that once Tesla’s fleet reaches 1 million vehicles, it would have a significant controllable load capacity:
At the time, Straubel estimated that Tesla would hit a million cars in 2019, and he wasn’t too far off, since Tesla produced its 1 millionth electric car in March 2020.
In a clearer indication that Tesla is not completely overlooking vehicle to grid, Musk stated that Tesla could “revisit” vehicle-to-grid technology in 2018.
Tesla Built-in Bidirectional Charging in its Vehicles
Electrek has learned that Tesla has already prepared its onboard vehicle charger for bidirectional charging.
Marco Gaxiola, an electrical engineer who participated in a Model 3 teardown for a Tesla competitor, reverse engineered the electric car’s charger and found it to be ready for bidirectional charging.
He told Electrek:
What I learned on reverse engineering the Model 3 charger, was that the design is fully bidirectional. This means power can be converted from AC to DC the same way as the previous example, but also power can flow in reverse direction, coming from the battery and ending up on the AC side. This is known as DC to AC inverter, and when this technology is present in a vehicle, it is known as V2G (Vehicle to Grid).
Here’s a schematic of the charger that Gaxiola produced as part of the reverse-engineering of the vehicle:
The engineer added about the design of Tesla’s onboard charger:
To complement this, the bidirectional design is replicated 3 times across the same PCB on the Model 3 charger. Another example of redundant design that assures a working process even if one of the circuits fails. Additionally, it is 3 phase design, so it can be used worldwide.
Here’s the Model 3 charger that Gaxiola reverse-engineered:


Gaxiola believes that the vehicle to grid capacity in the Model 3 could be enabled through an over-the-air software update.
Electrek’s Take
This has massive implications. It means that Tesla could eventually unlock a lot more value from its customer fleet, both for the vehicle owners and for Tesla itself.
In terms of practical features for owners, they could potentially power their house with their Tesla vehicle during a power outage or charge another electric vehicle with their own.
However, the real value of bidirectional capacity lies in grid services.
With the owners’ permission, Tesla could offer electric utilities the ability to access power from the vehicles on the network in other to offset electricity demand during peak hours.
Tesla already has the capacity to do that with its Autobidder product operating with virtual power plants consisting of Powerwalls in Australia and Vermont.
The only difference is that Tesla vehicles would be providing power instead of home battery packs, like Powerwalls.
While the concern of faster degradation due to the battery packs cycling more than by just driving on the roads is still there, it is becoming less of a concern as Tesla keeps improving battery longevity with new battery cells — leading to its “million-mile battery.”
Tesla owners would still have the option to opt in or out of the program, and they would also likely control when the electric utilities can access the energy in their vehicles.
As Straubel previously pointed out, with a million vehicles on the road, Tesla’s fleet has a theoretical 10GW demand offsetting capacity, which is extremely valuable to electric utilities.
Of course, this capacity is distributed around the world, but it is still significant in markets where Tesla vehicles are popular, and local utilities would be more than happy to pay to access that power.
Owners would be compensated for the utility using their vehicles, and Tesla would likely get a commission through its Autobidder platform.
It’s a win-win-win situation.
Now that we know that Tesla already has hundreds of thousands of Model 3 vehicles bidirectional-ready on the road, I think this new product could be released sooner than people think.
One of the most interesting features of Tesla’s implementation of bidirectional charging is that they don’t require an inverter outside the vehicle, like the Wallbox Quasar used on the Nissan Leaf.
It would work with Tesla’s own Wall Connector or potentially with any home charging station.
What do you think? Let us know in the comment section below.

>>> US After Hours Summary: KRNT +15.6% up big on earnings; URBN -5.4%

After Hours Summary: KRNT +15.6% up big on earnings; URBN -5.4% weak on earnings; PAE +8.2% up on contract win

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: KRNT +15.6%, CSV +6.4%

Companies trading higher in after hours in reaction to news: PAE +8.2% (wins 10-year contract to provide aircraft maintenance to US Customs and Border Protection Agency), ARR +5.1% (announces resumption of monthly dividends), FLR +2.1% (awarded front-end engineering and design for Minnkota Power deal), EIGR +1.3% (announces FDA acceptance of NDA for filing with priority review for Zokinvy), KWR +1.3% (files for 23,000 share common stock offering by selling shareholder)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: URBN -5.4%, RRR -4.7%, TARO -1.8%, SQM -0.4%

Companies trading lower in after hours in reaction to news: VNRX -8.3% (stock offering), OCUL -5.7% (stock offering), ALRM -3.4% (launches offering of 5.62 mln shares by selling stockholders), LMT -2.9% (to slow pace of production of F-35 jets, according to Reuters; adjusts workforce schedules), BDX -2.4% (commences offerings of $1.5 bln of common stock and $1.5 bln of depositary shares), FND -2.4% (announces 4.97 mln share offering by selling shareholders)

>>> US Close Dow -1.59% S&P -1.05% Nasdaq -0.54% Russell -1.95%

Closing Stock Market Summary

The S&P 500 pulled back 1.1% on Tuesday, as stocks succumbed to late-day selling following a negative-sounding vaccine headline. The Dow Jones Industrial Average (-1.6%) and Russell 2000 (-2.0%) declined more than the benchmark index, while the Nasdaq Composite (-0.5%) fared slightly better.  

For most of the session, the S&P 500 wavered around its flat line, supported by relative strength in the technology stocks. As the S&P 500 traded at session highs (+0.4%) late in the session, Stat News published a report in which vaccine experts cautioned about Moderna's (MRNA 71.67, -8.33, -10.4%) COVID-19 vaccine candidate due to a lack of critical data provided.

Recall, stocks rallied on Monday after the company said a Phase 1 trial yielded positive results. The negative-sounding headline, then, provided a good excuse for investors to take some profits given the uncertainty that remains. 

All 11 S&P 500 sectors finished in negative territory, most notably the financials (-2.5%) and energy (-2.9%) sectors. The consumer discretionary (-0.1%), information technology (-0.4%), and communication services (-0.4%) sectors gave up gains as selling accelerated into the close. 

In Washington, Fed Chair Powell and Treasury Secretary Mnuchin testified before the Senate Banking Committee regarding the government response to COVID-19. Mr. Powell reiterated the Fed's commitment to using its full range of tools to support the economy, and Mr. Mnuchin said he's prepared to increase risk and lend more money. 

The testimony was not a market-moving event, while several stocks did react to specific corporate news. For example, Dow components Walmart (WMT 124.95, -2.71, -2.1%) and Home Depot (HD 238.10, -7.25, -3.0%) finished lower following their earnings reports. 

Separately, Facebook (FB 216.88, +3.69, +1.7%) introduced "Facebook Shops" and "Instagram Shop" to help more businesses go online. Spotify (SPOT 175.03, +13.60, +8.4%) shares climbed 8% after the company reached a deal to exclusively host the Joe Rogan Experience podcast. 

U.S. Treasuries ended the session with small gains. The 2-yr yield declined one basis point to 0.18%, and the 10-yr yield declined three basis points to 0.71%. The U.S. Dollar Index declined 0.1% to 99.55. WTI crude rose another 1.5%, or $0.48, to $32.30/bbl. 

Reviewing Tuesday's economic data:

  • Housing starts fell 30.2% m/m in April to a seasonally adjusted annual rate of 891,000 (consensus 950,000). Building permits were down 20.8% m/m to a seasonally adjusted annual rate of 1.074 million (consensus 1.000 mln).
    • The key takeaway from the report is that while building permits exceeded expectations, permits for single-family dwellings decreased 24.3% m/m to 669,000, which points to a slowing market.

Looking ahead, investors will receive the weekly MBA Mortgage Applications Index on Wednesday.

  • Nasdaq Composite +2.4% YTD
  • S&P 500 -9.5% YTD
  • Dow Jones Industrial Average -15.2% YTD
  • Russell 2000 -21.6% YTD

(ZH) Morgan Stanley: Monday's Huge Stock Buying Was One Giant Hedge Fund Short S

Morgan Stanley: Monday's Huge Stock Buying Was One Giant Hedge Fund Short Squeeze

Yesterday morning, ahead of the torrid rally that sent the Dow Jones more than 1,000 points higher at one point, we warned that the "bulk of Wall Street institutions is once again positioned on the wrong side of today's rally."
As we showed last Friday using the latest Deutsche Bank flow data...
... both consolidated and systematic positioning was just off decade lows, while discretionary positioning - namely hedge funds and various other levered investors - continued to take down exposure going even further net short, and selling to retail investors all the way on the way up, assuming of course that Robin Hood is up on any given day.

In retrospect, it turns out that the surge higher was just too much for institutions, and as Morgan Stanley's prime brokerage desk writes today, "Monday was one of the largest days of buying we have seen in recent months, as HFs covered short positions as the market rallied higher. Equity L/S funds were the largest net buyer, with ~60% of the net activity coming from covers, and the remainder coming from long additions."
Yet while hedge funds scrambled to minimize the pain having been caught offside, the majority of the buying can be attributed to ETFs, which saw large amounts of covering as the S&P 500 closed over 3% higher DoD. Notably, HFs had added a sizable amount of ETF shorts last week as equities slid at the start of the week, but a good portion of this has now been undone when taking into account yesterday’s activity. Meanwhile, aAcross single-names, while flows were still positive, activity was slightly more divergent at the industry level.
As a result of yesterday's panicked HF activity, Equity L/S net leverage in the US increased by 3% to 45% (40th %-tile over last 12M; 14th %-tile since 2010), in line with the positive net activity / strong market performance but still relatively low considering where the market is. At the same time, weighted Equity L/S gross leverage also increased by ~2% to 189% (53rd %-tile over last 12M; 81st %-tile since 2010), and tracking the SPX tick for tick, though most of this can be attributed to MTM increases in the underlying positions.

Finally, and has been the case for much of the artificial Fed-driven rally of the past decade, hedge funds failed to capitalized on yesterday's rally, and while the broader S&P jumped over 3%, HF performance was not nearly as strong – for L/S funds in the Americas, with one-day returns up just ~70-75bps vs. the S&P 500 +3.2%. A main driver of
this was due to the Cyclical rally, in which HFs continue to have fairly light exposure to.
And in another echo from the sins of the past decade, crowding performance was particularly painful yesterday as the longs lagged the market by ~1% and the shorts rallied 80bps more than the market, resulting in a long vs. short spread of -1.8%.
In fact, yesterday was the worst 1D spread for the crowded stocks since Mar 16th. MTD and YTD crowding spread still remains positive, aided by the crowded longs.