After Hours Summary: FSLY +26.8%, TWLO +24.3%, LYFT +16.7%, NUS +16.2% are the earnings winners; SAVE -12.1%, SEDG -11.7%, AYX -10.8%, GRUB -5%, SQ -4.8% are lower on earningsAfter Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: FSLY +26.8%, TWLO +24.3%, LYFT +16.7%, NUS +16.2%, LNC +12.4%, ANGI +11.7%, NMIH +10.3%, NTRA +9.5%, PTON +9.3%, BNFT +9.1%, PPD +8.5%, FORM +8.1%, PYPL +8% (on call co refers to April as probably its best month since its IPO), TIVO +7.6%, TLND +7.4%, FTNT +7%, XEC +6.8%, GDDY +6.7%, WPX +6.2%, CDAY +4.7% (also announces it will acquire Excelity Global Solutions), LVGO +4.6%, FOXA +4.4%, CUB +2.9%, TWO +2.9%, CF +2.6%, H +2.4%, CXW +2.2%, ZIXI +2.1%, ESPR +2%, TROX +2%, AMED +1.9%, PXD +1.7%, MET +1.6%, EPAY +1.1%, TRMB +0.9%, HUBS +0.8%, QGEN +0.7%, UGI +0.7%, RGLD +0.6%, DHR +0.6% (also names new CEO), CHEF +0.5%, REAL +0.5%, BIO +0.4%, NTR +0.4%, UDR +0.4%, WTRG +0.4%, WTS +0.4%, INVH +0.3%, RNR +0.3%, BFAM +0.2%, DAR +0.2%, ESE +0.2%, GBT +0.2%, AEL +0.1%, ATO +0.1%, KRO +0.1%, MAA +0.1%, MX +0.1%, SRI +0.1%, VIAV +0.1%
Companies trading higher in after hours in reaction to news: TVTY +6.7% (to explore strategic alternatives for its Nutrition business), DXCM +4.5% (to join S&P 500), STOR +3.7% (to join S&P MidCap 400), CEMI +3.3% (announces public offering), CDXS +2.4% (announces technology transfer milestone with NVS), CPRI +2.2% (to join S&P SmallCap 600), CSL +1.6% (names new chairman of the board), CRM +1.1% (to join S&P 100), GNMK +0.4% (commences stock offering)
After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: SAVE -12.1% (also commences stock offering), SEDG -11.7%, AYX -10.8%, RUN -9.9%, LCI -9.4%, SONO -9.2% (also introduces premium smart soundbar product, Sonos Arc), CVNA -8.7%, PING -8.4%, EPR -7.1%, LGND -6.4%, PAAS -6.2%, ETSY -6.1%, GRUB -5%, SRPT -4.9%, DDD -4.8%, NDLS -4.8%, SQ -4.8%, APA -4.3%, DCP -4.3%, EXAS -4.3%, RNG -3.9%, ZNGA -3.9%, MUR -3.6% (also relocates corporate HQ to Houston, consolidating activities amid industry oil price collapse), QTWO -3.3%, WELL -3.1%, BRKR -2.8%, ALB -2.5%, INSG -2.1%, CTL -1.7%, WYNN -1.7%, CCMP -1.6%, STAY -1.5%, EQIX -1.3%, HR -1%, IMMU -0.6%, TMUS -0.6%, ES -0.4%, MRO -0.4%, UPWK -0.4%, WPM -0.4%, RMAX -0.3%, BEAT -0.2%, FCPT -0.2%, FG -0.2%, HI -0.2%, MFC -0.2%, REZI -0.2%, STAA -0.2%, CTVA -0.2%, AMP -0.1%, AVB -0.1%, CLI -0.1%, CPA -0.1%, CW -0.1%, EVRG -0.1%, FOXF -0.1%, OSUR -0.1%, RDN -0.1%, RE -0.1%, VVV -0.1%, WCN -0.1%
Companies trading lower in after hours in reaction to news: VAPO -3.4% (commences public offering of $75 mln of its common shares), CCL -2.3% (Princess Cruises extends pause of global ship ops thru 2020 summer season), EAT -1.5% (commences $125 mln stock offering), COST -0.9% (reports April comps -4.7% ), DPZ -0.3% (to join S&P 500), STAA -0.2% (files for $200 mln mixed securities shelf offering)
Closing Stock Market SummaryMega-cap technology stocks carried the Nasdaq Composite to a 0.5% gain on Wednesday, but another late fade in the market left the S&P 500 (-0.7%), Dow Jones Industrial Average (-0.9%), and Russell 2000 (-0.8%) in negative territory.
For most of the day, money continued to flow into Apple (AAPL 300.63, +3.07, +1.0%), Microsoft (MSFT 182.54, +1.78, +1.0%), Amazon (AMZN 2351.26, +33.46, +1.4%), Facebook (FB 208.47, +1.40, +0.7%), and Alphabet (GOOG 1347.30, -3.81, -0.3%). Typically, wherever these stocks move, the broader market follows.
That wasn't the case today, but the S&P 500 sectors that house these companies -- information technology (+0.7%), consumer discretionary (+0.3%), and communication services (-0.4%) -- had done a good job in offsetting the losses in the other eight sectors, including utilities (-3.5%), energy (-2.6%), and financials (-2.3%).
The late fade, reminiscent of the one from yesterday, took down shares of Alphabet, the communication services sector, and the S&P 500, which had been hovering near its flat line for most of the afternoon.
The lack of conviction prior to the decline might have stemmed from the ADP Employment Change Report estimating 20.236 million job lost in the private sector in April (Briefing.com consensus -21.500 million). The market hasn't been bothered by bad data as of late, but it has been stuck at these levels for a few weeks now, showing signs of exhaustion.
Separately, earnings standouts today included General Motors (GM 21.89, +0.63, +3.0%), Activision Blizzard (ATVI 72.87, +4.34, +6.3%), and Beyond Meat (BYND 126.21, +26.04, +26.0%). Walt Disney (DIS 100.88, -0.18, -0.2%) declined less than the broad market despite suspending its semi-annual dividend.
In the Treasury market, some investors were caught off guard by the amount of longer-dated maturities the Treasury Department planned to issue for COVID-19 relief. The 2-yr yield was unchanged at 0.17%, while the 10-yr yield increased five basis points to 0.71%. The U.S. Dollar Index increased 0.5% to 100.18. WTI crude lost 2.4%, or $0.58, to $23.95/bbl.
Reviewing Wednesday's economic data:
- The ADP Employment Change report pointed to a net loss of 20.236 million nonfarm payrolls in April (consensus -21.5 million) while the March reading was revised down to -149,000 from -27,000.
- The weekly MBA Mortgage Applications Index increased 0.1% following a 3.3% decline in the prior week.
Looking ahead, investors will receive the weekly Initial and Continuing Claims report, preliminary Q1 readings for Productivity and Unit Labor Costs, and the March Consumer Credit Report on Thursday.
- Nasdaq Composite -1.3% YTD
- S&P 500 -11.8% YTD
- Dow Jones Industrial Average -17.1% YTD
- Russell 2000 -24.3% YTD
London Gatwick under a cloud as carriers threaten to quit airport
Virgin Atlantic could be followed by British Airways in abandoning UK’s second-biggest gateway
Less than two weeks ago, Gatwick’s chief executive was talking about flights restarting by the end of this month as the UK’s second biggest airport plotted its recovery from the pandemic that has hit the aviation industry hard.
Stewart Wingate said that, based on what he had seen as some countries eased the lockdown in Asia, he was hoping for “some meaningful volume coming through the airport by the end of May and start to ramp up volumes in June and then July.”
But the mood has darkened at the airport — located 30 miles south of London — in the past week. Virgin Atlantic, one of its longest-standing airline customers, said it was closing its operations just days after British Airways, Gatwick’s second biggest carrier, also threatened to walk away.
Between them the two airlines serve more than 70 routes, ranging from European cities and resorts to popular, long-haul holiday destinations, chiefly in the Caribbean and the US.
Such a dramatic loss of services raises the prospect of higher fares for consumers — 46m used the airport last year — pushing up the costs of holidays.
“One of the main reasons that UK air ticket prices are so keen is the intense competition in the industry and any reduction in competition will not work in the favour of the customer, impacting on both prices and choice,” said Luke Petherbridge, head of public affairs at ABTA, which represents UK travel agents.
Iata, the global airline trade body, warned this week that air fares could rise by as much as 54 per cent compared to 2019, if airlines were told to introduce social distancing measures on aircraft.
Virgin Atlantic, the sixth-largest airline by capacity, will abandon the airport it has used as its headquarters for the past 35 years and move what are primarily leisure routes to its operations at London Heathrow.
But BA’s threat to leave would have a much bigger impact on Gatwick. The UK flag carrier accounts for 17 per cent of capacity, according to OAG data.
The coronavirus shutdown has hit airlines around the world hard, including Gatwick’s third biggest customer Norwegian Air Shuttle. The struggling carrier has warned it could stay grounded for 12 months and, after securing a rescue package this week, said it was preparing to restart as a smaller operation.
Iata, the global airline trade body, warned this week that air fares could rise by as much as 54 per cent compared to 2019, if airlines were told to introduce social distancing measures on aircraft.
Virgin Atlantic, the sixth-largest airline by capacity, will abandon the airport it has used as its headquarters for the past 35 years and move what are primarily leisure routes to its operations at London Heathrow.
But BA’s threat to leave would have a much bigger impact on Gatwick. The UK flag carrier accounts for 17 per cent of capacity, according to OAG data.
The coronavirus shutdown has hit airlines around the world hard, including Gatwick’s third biggest customer Norwegian Air Shuttle. The struggling carrier has warned it could stay grounded for 12 months and, after securing a rescue package this week, said it was preparing to restart as a smaller operation.
Gatwick already has easyJet as the dominant carrier with Europe’s second biggest budget airline accounting for 40 per cent share of capacity. The low-cost airline has built up its dominant position over almost two decades and John Grant of OAG said in terms of the pecking order of London’s airports, Gatwick was in a good position.
“It certainly reaffirms that London Heathrow has that number one position,” he said, adding: “There is a ‘waterfall’ effect in the London market. Heathrow always has first place and then Gatwick and then Stansted or Luton.”
The upheaval caused by the pandemic is the latest blow to Gatwick in recent years. Four years ago, it lost its long-running battle for government approval for a second runway — a long-term strategic objective to allow it to rival Heathrow.
Since then it has also lost two of it biggest airline customers with the collapse of Monarch in 2017 and Thomas Cook last year.
Vinci paid £2.9bn for its majority stake in Gatwick at the end of 2018. “One thing is for sure, Vinci never expected this for Gatwick when they paid a load of money,” said Mr Grant.
Its previous owner, GIP, a US-based infrastructure investment fund, turned the airport’s financial performance around after buying it for £1.5bn in 2009. Passenger numbers have jumped by almost 44 per cent from 32m a decade ago.
Last month, Gatwick warned that a return to pre-crisis traffic levels could take up to four years. The number of flights were down 98 per cent last week compared to a year ago.
Olivier Jankovec, director-general, ACI Europe, the trade body for airports, noted that the impact of the pandemic will be felt throughout the sector “Airlines will be risk averse, focusing as much as possible on protecting their yields and restoring their profitability. This means we will see degraded air connectivity and potentially higher air fares,” he said.
John Strickland, an aviation consultant, warned the outlook will be challenging for all airports and that any recovery will take time.
“I think the situation we’re in is temporary. Demand is going to come back but it’s still not going to come back to the level of using all the capacity that we’ve seen up to now at Heathrow and Gatwick,” he added.
Top investor calls for dismissal of Wirecard chief Markus Braun
Deka Investment urges chairman to act quickly to end crisis of confidence in payments group after special audit
Deka Investment, a top-10 shareholder in Wirecard, has called for the dismissal of chief executive Markus Braun, raising the pressure on chairman Thomas Eichelmann after shares in the German payments group collapsed 38 per cent in a week.
The sell-off, which has wiped more than €5bn from Wirecard’s stock market value, was triggered by the results of KPMG’s special audit into its accounting and business practices.
The Big Four accountancy firm said it could not verify that large parts of Wirecard’s reported revenue were real and disclosed it ran into obstacles during a six-month investigation.
Ingo Speich, Deka’s head of sustainability and corporate governance, told the Financial Times that he called for Mr Braun’s removal in a personal conversation with Mr Eichelmann earlier this week.
“The company owes [Mr Braun] a lot but we don’t think that he is the right person to stabilise Wirecard and overcome the current crisis,” said Mr Speich, adding that the chief executive was “primarily responsible for the massive loss in confidence”.
Deka Investment, a top-10 shareholder in Wirecard, has called for the dismissal of chief executive Markus Braun, raising the pressure on chairman Thomas Eichelmann after shares in the German payments group collapsed 38 per cent in a week.
The sell-off, which has wiped more than €5bn from Wirecard’s stock market value, was triggered by the results of KPMG’s special audit into its accounting and business practices.
The Big Four accountancy firm said it could not verify that large parts of Wirecard’s reported revenue were real and disclosed it ran into obstacles during a six-month investigation.
Ingo Speich, Deka’s head of sustainability and corporate governance, told the Financial Times that he called for Mr Braun’s removal in a personal conversation with Mr Eichelmann earlier this week.
“The company owes [Mr Braun] a lot but we don’t think that he is the right person to stabilise Wirecard and overcome the current crisis,” said Mr Speich, adding that the chief executive was “primarily responsible for the massive loss in confidence”.
Gapping down
In reaction to disappointing earnings/guidance:
- PINS -15.8%, BG -10.9%, INGN -10.3%, NCMI -8.3%, MYGN -8.2%, MAT -6.4%, JAZZ -5.9%, VRT -5.5%, ANET -4.3%, ZTS -3.8%, EA -3.6%, INSP -3.6%, BCRX -3.3%, PRU -2.7%, COHU -2.7%, ALL -2.1%, WYND -2.1%, DIS -1.6%, OMI -1.5%, IONS -1.3%, PAGP -0.9%, CDW -0.9%, WU -0.7%
Other news:
- NCMI -8.3% (stock offering)
- SILK -7.6% (prices offering of 6,808,154 shares of its common stock at $39.00 per share)
- TRIL -4.7% (establishes at-the-market equity program)
- APTO -1.8% (enters into equity distribution agreement with Piper Sandler and Canaccord Genuity)
Analyst comments:
- SNAP -2.7% (downgraded to Sell from Neutral at Citigroup)
- INCY -1.2% (downgraded to Neutral from Overweight at JP Morgan)
- VNO -1.1% (downgraded to Sell from Hold at Stifel)