>>> US Gapping up

Gapping up
In reaction to strong earnings/guidance:

  • LPSN +20.7%, CARS +19.5%, MELI +16.4%, PERI +16.2%, ODP +13.5%, SUPN +11.6%, BYND +9.5%, HEP +9.1%, AXNX +8.9%, NEX +8.8%, WEN +7.9%, HZNP +7%, ORCC +6.7%, GM +6.7%, TMHC +6.5%, CAMP +6.3%, OSPN +6.3%, EVBG +6.1%, GSX +6.1%, SRC +6%, MEOH +6%, INMD +5.8%, ATVI +5.6%, STNG +5.4%, RSG +5.2%, ATSG +5.1%, DVN +5%, ENPH +4.8%, OXY +4.7%, RGEN +4.6%, DK +4.5%, CAKE +4%, BGS +3.9%, CVS +3.9%, SBH +3.7%, SPR +3.4%, SNN +3.2%, ONTO +3.1%, EXEL +2.8%, GEL +2.8%, DVA +2.7%, WES +2.7%, CC +2.7%, SMG +2.7%, DOOR +2.6%, AQUA +2.4%, MODN +2.3%, CGEN +2.3%, WM +2%, FLIR +2%, SHOP +1.9%, BTG +1.8%, BLDP +1.8%, DHT +1.8%, HTA +1.8%, ALXN +1.8%, IMOS +1.7%, STOR +1.6%, PSN +1.6%, HA +1.5%, GNL +1.4%, BWA +1.3%, ATGE +1.2%, NVTA +1.2%, MTCH +1.1%, TXMD +1.1%, DISCA +1.1%, WING +1.1%

Other news:

  • CDTX +5% (announces new clinical and preclinical data on Cloudbreak antiviral program)
  • NIO +4% (reports April deliveries increased 180.7% growth yr/yr)
  • BHC +1.9% (Bausch Health and Alfasigma SpA reach resolution for XIFAXAN IP litigation)
  • ABBV +1.5% (AGN and ABBV receive FTC clearance for pending acquisition)
  • AGN +1.3% (AGN and ABBV receive FTC clearance for pending acquisition)
  • PEP +1.2% (increases quarterly dividend)

Analyst comments:

  • AEO +3.6% (upgraded to Outperform from Mkt Perform at Raymond James)
  • PPG +2.1% (upgraded to Overweight from Neutral at JP Morgan)
  • ADNT +1.3% (upgraded to Outperform from Sector Perform at RBC Capital Mkts)

>>> US Early premarket gappers

Early premarket gappers

  • Gapping up:
    • LPSN +20.7%, MELI +14.8%, SUPN +11.6%, NEX +9.2%, BYND +7.6%, AXNX +7.4%, ORCC +6.7%, CC +6.7%, GSX +6.4%, CAMP +6.3%, OSPN +6.3%, SRC +6%, MEOH +6%, DVN +5.9%, OXY +5.6%, RSG +5.2%, ATSG +5.1%, NIO +4.6%, ENPH +4.6%, DVA +4.6%, EVBG +4.6%, DK +4.5%, ATVI +4.3%, BGS +3.9%, CDTX +3.7%, NCLH +3.2%, ONTO +3.1%, BTG +3%, WES +2.7%, DOOR +2.6%, SNN +2.5%, BLDP +2.4%, MODN +2.3%, NVTA +2.3%, GEL +2.2%, HTA +1.8%, IMOS +1.7%, STOR +1.6%, HA +1.5%, GNL +1.4%, PEP +1.2%, ATGE +1.2%, EXEL +1.2%, MTCH +1.1%, KGC +1.1%
  • Gapping down:
    • PINS -16.6%, INGN -11.3%, NCMI -8.3%, SILK -6.8%, JAZZ -5.9%, MYGN -5.5%, VRT -5.5%, MAT -5.3%, PAGP -5.3%, ANET -4%, INSP -3.6%, EA -3.2%, PRU -3%, COHU -2.7%, ALL -2.6%, APTO -1.8%, ENBL -1.7%, DIS -1.6%, PAA -1.5%, LC -1.3%

>>> Europe : Brokers Upgrades & Downgrades - 6th of May 2020 V2(+)

>>> Up
* Assura Raised to Add at Peel Hunt
* Bakkafrost Raised to Buy at Nordea; PT 595 kroner (+)
* BB Biotech Raised to Add at Baader Helvea; PT 68 Swiss francs
* British Land Raised to Buy at Peel Hunt
* CLS Holdings Raised to Buy at Peel Hunt
* Eurofins Scientific Raised to Neutral at Exane; PT 490 euros
* Hiscox Raised to Buy at Jefferies; PT 850 pence
* Land Sec. Raised to Add at Peel Hunt
* LondonMetric Raised to Add at Peel Hunt
* Michelin Raised to Add at AlphaValue
* Raysearch Raised to Buy at Carnegie; PT 85 kronor (+)
* Scout24 Cut to Equal-Weight at Morgan Stanley; PT 62 euros
* Stroeer Raised to Overweight at Morgan Stanley; PT 69 euros
* ThyssenKrupp Raised to Buy at Baader Helvea; PT 7.50 euros
* Wacker Chemie Raised to Buy at MainFirst; PT 73 euros

>>> Down
* Ambu Cut to Neutral at JPMorgan; PT 219 kroner
* Campari PT Cut to 6.50 euros from 8.70 euros at Bryan Garnier (+)
* Capital & Counties Cut to Add at Peel Hunt
* Capital & Regional Cut to Reduce at Peel Hunt
* Derwent London Cut to Hold at Peel Hunt
* Elior Group Cut to Add at AlphaValue
* Grainger Cut to Add at Peel Hunt
* Great Portland Cut to Reduce at Peel Hunt
* Hammerson Cut to Reduce at Peel Hunt
* Helical Cut to Add at Peel Hunt
* Hugo Boss PT Cut to 52 euros from 64 euros at Bryan Garnier (+)
* Intu Cut to Sell at Peel Hunt
* Kering Cut to Hold at Jefferies; PT 505 euros
* NewRiver Cut to Hold at Peel Hunt
* Nordic Mining Cut to Neutral at Clarksons Platou
* Richemont Cut to Add at AlphaValue
* Safestore Cut to Hold at Peel Hunt
* Segro Cut to Reduce at Peel Hunt
* Shaftesbury Cut to Reduce at Peel Hunt
* Stroeer Cut to Neutral at UBS; PT 60 euros (+)
* Tate & Lyle Cut to Sell at Investec; PT 600 pence (+)
* TOMRA Cut to Sell at SEB Equities; PT 270 kroner
* Town Centre Securities Cut to Add at Peel Hunt
* UniCredit Cut to Neutral at Banca Akros (ESN)
* Unite Group Cut to Hold at Peel Hunt
* Wirecard Cut to Equal-Weight at Barclays; PT 200 euros
* Workspace Cut to Reduce at Peel Hunt

>>> Initiation
* Encavis Rated New Buy at MainFirst; PT 14.30 euros
* Flatex AG Rated New Buy at Jefferies; PT 43 euros
* Neoen Rated New Hold at MainFirst; PT 33.30 euros

>>> Call
* Buy the Dips as Equities Are Past the Worst, Barclays Says (+)
* Kering Cut at Jefferies on Limited Upside and Tough Months Ahead
* Landis + Gyr’s FY Order Intake Is ‘Surprisingly Weak,’ MS Says (+)
* Hugo Boss Still ‘Looks Cheap,’ Online Business Strong: Jefferies (+)
* Qiagen Sees Tailwind From Coronavirus-Related Demand: Analysts
* Stroeer Will Profit From German Outdoor Advertising Growth: MS (+)
* Thyssenkrupp a ‘Risky Deep Value Play,’ Raised to Buy: Baader
* U.K. Real Estate Faces Choppy Waters, Retail Most Hit: Peel Hunt
* Wirecard Gets Another Downgrade as Barclays Cuts to Equal-Weight

FT : What next in Karlsruhe vs ECB?

What next in Karlsruhe vs ECB?
German constitutional court blows open questions about ECB independence and the supremacy of EU law

For once, Karlsruhe lived up to the hype. The German Constitutional Court on Tuesday issued an explosive judgment on the legality of European Central Bank bond-buying, calling into question Germany’s participation in eurozone monetary policy and setting off what could be years of legal challenges against the EU’s highest court.

The ruling is worth reading in full. In short, the Karlsruhe court said the European Court of Justice acted outside its mandate (ultra vires) in greenlighting ECB quantitative easing measures. German judges have now given the ECB an effective three-month deadline to produce a proportionality assessment that justifies its €2tn bond-buying to keep Germany’s central bank participating. Here’s the FT’s take on the latest twist in Karlsruhe versus Frankfurt.

The ruling has provoked caustic commentary from economists on the judges’ grasp of monetary policy — including from a former ECB vice-president who slammed the contentions of the court as “nonsensical”. Germany's central bank chief Jens Weidmann on the other hand seems to side with the red-robed judges over Frankfurt.

The decision has the potential to unleash a constitutional crisis in the EU’s biggest member state and with it the entire eurozone. It raises questions about the ECB’s sacrosanct independence and the credibility of the rulings of the EU’s highest court in Luxembourg. Here are some of the issues that have been blown open by Germany’s judges:

What happens now on monetary policy?

For now the ECB has no need to stop any of its bond-buying, but will it heed the German court’s demands to produce a “proportionality” assessment on the impact of QE within three months?

Should the deadline lapse with nothing to satisfy Karlsruhe, the Bundesbank will be required to stop its purchases — an order it will surely have to comply with. If the ECB does produce an assessment by August, who decides whether the proportionality test is up to scratch? There is some suggestion the ECJ would have to get involved again.

The ECB responded to the ruling saying only that it “took note” of the judgment with no hint at what it plans to do next.

Is EU law still supreme over member states?

In challenging the hegemony of the ECJ and dubbing its “incomprehensible” rulings as ultra vires, German judges have opened the door for national courts to undermine the writ of the Luxembourg-based court. For some, this is a slippery slope that threatens to erode the legal foundations on which the union is built.

“If every constitutional court of every member state starts giving its own interpretation of what Europe can and cannot do, it’s the beginning of the end,” said Guy Verhofstadt, MEP and former Belgian prime minister. Observers also fear that recalcitrant governments in Poland and Hungary now have legal cover to ignore the jurisdiction of the ECJ. Warsaw’s deputy justice minister on Tuesday shot an early warning at Brussels in this direction.

For Karlsruhe’s supporters, the intervention is a much-needed corrective in the relationship between Europe’s national and supranational courts. Reinhard Müller, columnist at FAZ, thinks the judgment marks the end of a “distant and autocratic” EU legal order whose judges treat domestic courts with disdain. “The EU as a group of states is bound by the principle of democracy and it is a legal community. This is not the end of the EU,” writes Müller.

Does this mean fiscal policy has to step up?

Don’t hold your breath. Since 2015, the ECB has provided political cover for eurozone governments that have failed to grasp the fiscal implications of monetary union.

The Karlsruhe intervention has exposed the political limits of stealth central bank action in the middle of a punishing economic and health crisis. In theory, this should spur democratically elected governments to ramp up their joint fiscal response to compensate. In practice, the stubborn politics of the eurozone will remain unmoved by Tuesday’s ruling.

Southern and northern eurozone capitals will probably remain at loggerheads over the size of the next EU budget and an accompanying recovery fund in the coming weeks and months.

In many ways, Germany’s judges have only voiced the deep frustration of some German voters that they are unjustly underwriting the debts of other countries. That argument has been strengthened rather than undermined by the ECB’s Karlsruhe moment.

Martin Wolf on how the debt-reliant world economy has forced governments into a pernicious choice between higher unemployment or even more debt. (FT)

>>> US After Hours Summary: MELI +15.9%, BYND +6%, ATVI +5.4% up o

After Hours Summary: MELI +15.9%, BYND +6%, ATVI +5.4% up on earnings; PINS -16.5%, MAT -9.4%, EA -4.3%, DIS -2.8% are weaker on earnings

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: MELI +15.9%, ATSG +12.7%, LPSN +11.2%, AXNX +7.4%, CC +7.2%, ORCC +6.7%, OSPN +6.3%, BYND +6%, NEX +5.9%, EVBG +5.8%, STOR +5.8%, ATVI +5.4%, DVN +5%, CAMP +4.8%, BGS +4.4%, SRC +4%, WES +4%, OXY +3.6%, DVA +3.1%, HA +3.1%, SU +2.5%, ENPH +2.4%, MODN +2.3%, NVTA +2.3%, KGC +2.2%, EXEL +2.1%, SFM +1.9%, KLAC +1.5%, ATGE +1.2%, DHT +1.2%, BLDP +1.1%, MTCH +1.1%, BCO +0.5%, PEAK +0.5%, AIZ +0.4%, EQR +0.4%, TSLX +0.3%, BTG +0.2%, INSP +0.2%, NVRO +0.2%, ONTO +0.2%, VOYA +0.2%, Y +0.2%, LC +0.1%, PKI +0.1%, RSG +0.1%

Companies trading higher in after hours in reaction to news: CDTX +5.7% (announces new clinical and preclinical data on Cloudbreak antiviral program), ABBV +1.3% (AGN and ABBV receive FTC clearance for pending acquisition), AGN +1.1% (AGN and ABBV receive FTC clearance for pending acquisition), FSM +0.5% (provides update on discussions with senior lenders), PEP +0.3% (increases quarterly dividend)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: PINS -16.5%, INGN -10.2%, MAT -9.4%, NCMI -9.2%, PAGP -8.1%, JAZZ -6.3%, MYGN -5.5%, EA -4.3%, ANET -3.8%, PLNT -3.8%, PRU -3.1%, DIS -2.8%, ALL -2.6%, PAA -2.3%, COHU -2.1%, CDK -0.7%, WU -0.7%, GTES -0.5%, CAKE -0.4%, CMP -0.2%, DOOR -0.2%, ASH -0.1%, RGA -0.1%

Companies trading lower in after hours in reaction to news: NCMI -9.2% (stock offering), SILK -4.9% (stock offering), APTO -1.8% (enters into equity distribution agreement with Piper Sandler and Canaccord Genuity), CHUY -0.3% (files for $100 mln mixed securities shelf offering)

>>> Alexion Pharma beats by $0.51, beats on revs; lowers FY20 EPS below consens

Alexion Pharma beats by $0.51, beats on revs; lowers FY20 EPS below consensus, revs below consensus
  • Reports Q1 (Mar) earnings of $3.22 per share, $0.51 better than the S&P Capital IQ Consensus of $2.71; revenues rose 26.7% year/year to $1.44 bln vs the $1.36 bln S&P Capital IQ Consensus.
  • Clinical Trials: ALXN is committed to continuing clinical trials with as little interruption as possible, while also being sensitive to the local dynamics and pressures in many countries and locations where these trials are being conducted. While the COVID-19 impact varies by study and program, generally, ALXN expects there will be little timing impact on fully-enrolled trials and a timing shift of at least three months on trials that are enrolling patients and activating sites, or have not yet started to do so. In addition, all healthy volunteer studies have been temporarily paused.
  • COVID-19 Development Program: ALXN is exploring the potential role of ULTOMIRIS and SOLIRIS for the treatment of severe COVID-19 and has recently initiated a Phase 3 randomized controlled trial of ULTOMIRIS in a subset of adults with COVID-19. ALXN has also donated supply of SOLIRIS for compassionate use and expanded access programs.
  • Co issues lowers guidance for FY20, sees EPS of $10.45-$10.75 vs. prior outlook of $10.65-$10.85 and vs the $10.96 S&P Capital IQ Consensus; sees FY20 revs of $5.23-$5.33 bln vs. prior outlook of $5.50-$5.56 bln and vs. $5.51 bln S&P Capital IQ Consensus.