>>> US After Hours Summary: SNAP +20.1% and CMG +6.5% up big on ea

After Hours Summary: SNAP +20.1% and CMG +6.5% up big on earnings; IBKR -5.2% weak on earnings

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: SNAP +20.1%, TER +10%, USNA +9.1%, CMG +6.5%, TXN +2.2%, MANH +1.9%, EXAS +1.8% (sees Q1 revs above consensus), UCBI +1%, NFLX +0.5%, FULT +0.2%

Companies trading higher in after hours in reaction to news: IMUX +56.5% (its lead asset, IMU-838, has successfully demonstrated preclinical activity against COVID-19), DKL +22.5% (this high yield stock reiterates expectation to raise distribution by 5% in 2020; also increases distribution slightly today), EXPE +10% (WSJ report that co is in advanced talks to sell a stake to private-equity firms), MYOV +7.6% (to discuss results from Ph 3 SPIRIT 2 study), GME +6.9% (provides COVID update, reports comps), ANH +6.6% (reduces quarterly dividend), QTNT +4.3% (reports positive performance data for its SARS-CoV-2 antibody test), FCAU +3.6% (announces drawdown of €6.25 bln revolving credit facility), DCP +3% (reduces quarterly distribution), USFD +2.6% (awarded $480 mln Defense Logistics Agency contract), IGT +2.3% (expands partnership with Virginia lottery), BG +1.8% (to sell 35 U.S. grain elevators), BRT +1% (provides business update), BA +0.9% (announces organization changes), GILD +0.6% (announces immunotherapy research collaboration)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: IBKR -5.2%, NAVI -1.2%, HCSG -0.6%, CB -0.1%, ENS -0.1% (sees Q4 revs above consensus, withdraws guidance)

Companies trading lower in after hours in reaction to news: VBIV -28.2% (stock offering), IBKR -5.2% (issues statement regarding crude oil contracts and margin loss), AAWW -2.5% (files mixed securities shelf offering), CSPR -2.4% (CFO to depart; expects to wind down European ops by end of 2020, proivides guidance), UAL -1.6% (announces 39.25 mln share offering), LC -0.9% (approves restructuring, to reduce workforce by 460)

>>> Boeing announces newly formed group, other changes

Boeing announces newly formed group, other changes

A newly formed group — Enterprise Operations, Finance & Strategy — will consolidate several important areas, bringing together teams responsible for manufacturing, supply chain and operations, finance, enterprise performance, strategy, enterprise services and administration. Led by Greg Smith, executive vice president, Enterprise Operations, and chief financial officer, this new global organization will embed operational excellence and consistent lean principles across Boeing and its supply chain, and restore production and supply chain health as Boeing and the broader aerospace industry recover from the COVID-19 pandemic.
The company also is combining its legal and core compliance programs, including global trade controls, ethics and business conduct, into a single organization led by Brett Gerry, chief legal officer and executive vice president of Global Compliance. This approach will enhance Boeing's compliance and internal governance program through focused accountability for, and a more integrated approach to, Boeing compliance responsibilities. It also will help the company proactively address new legal and compliance obligations arising from an increasingly complex global regulatory environment.
Boeing Government Operations, led by Executive Vice President Tim Keating, will assume responsibility for the company's Global Spectrum Management activities, which ensure the safe, efficient and compliant use of radio frequency spectrum in Boeing products and operations.
Boeing soon will name a chief compliance officer who will be responsible for leading the company's compliance, ethics and trade control activities. This person will report to Gerry, with a direct reporting line to Calhoun and the board's Audit Committee on compliance and ethics issues.

>>> US After Hours Movers

Notable earnings/guidance movers: NAP +17.5%, USNA +8.3%, CMG +4.8%, IBKR -5.1%

Earnings/guidance gainers: SNAP +17.5%, USNA +8.3%, CMG +4.8%, TXN +2.1%, TER +1.7%, NFLX +1.4%, CP +0.6%,
Earnings/guidance losers: IBKR -5.1%, NAVI -2.6%, MANH -1.9%,

>>> US Close Dow -2.67% S&P -3.07% Nasdaq -3.48% Russell -2.33%

Closing Stock Market Summary

The S&P 500 fell 3.1% on Tuesday, closing near session lows for its second straight decline, as risk sentiment remained suppressed by the ongoing turmoil in the oil futures market. The Dow Jones Industrial Average declined 2.7%, the Nasdaq Composite declined 3.5%, and the Russell 2000 declined 2.3%. 

The May WTI contract officially expired at $10.01/bbl after falling negative yesterday, but the fundamental problems that drove the contract into negative territory continued to plague the rest of the WTI futures curve. The June WTI contract plunged 43.0%, or $8.70, to $11.57/bbl, although it did touch $6.50/bbl at its low. 

Remarkably, the S&P 500 energy sector (-1.7%) performed relatively well despite the risking risks of credit defaults, dividend cuts, and job losses facing many of its components. President Trump may have alleviated some worries on the jobs front after vowing to protect energy companies with appropriate funding. 

As for the broader market, there might have been a general sense that it was due for a breather following the incredible rally from the March 23 lows, with the angst in the oil market allowing for some rethinking about the economic outlook.

The information technology sector (-4.1%) underperformed in a rare outing amid broad-based selling, which included an earnings-related decline in IBM (IBM 116.76, -3.65, -3.0%). The utilities (-1.6%) and real estate (-1.6%) sectors declined the least today. 

In other earnings news, Dow components Coca-Cola (KO 45.31, -1.22, -2.6%) and Travelers (TRV 101.78, unch) finished mixed following their earnings reports. 

Separately, news that Congressional leaders and the Trump administration reached a stimulus bill agreement, which reportedly includes $310 billion in small business funding, was encouraging but not market moving. The Senate and House will still need to vote on the bill. 

In the U.S. Treasury market, longer-dated tenors continued to exhibit strength in a safety trade. The 2-yr yield declined one basis point to 0.20%, and the 10-yr yield declined six basis points to 0.57%. The U.S. Dollar Index increased 0.2% to 100.17. 

Reviewing Tuesday's economic data:

  • Existing home sales declined 8.5% m/m in March to a seasonally adjusted annual rate of 5.27 million (consensus 5.35 million). Total sales were up 0.8% year-over-year, marking the ninth straight month that they have increased on a year-over-year basis.
    • The key takeaway from the report is that it showed existing home sales activity was relatively soft before the COVID-19 impact, with low inventory and high prices crimping sales. Existing home sales are counted when the deals are closed, so the sales activity for March is predicated mostly on contracts signed in January and February.

Looking ahead, investors will receive the weekly MBA Mortgage Applications Index and the FHFA Housing Market Index for April on Wednesday.

  • Nasdaq Composite -7.9% YTD
  • S&P 500 -15.3% YTD
  • Dow Jones Industrial Average -19.3% YTD
  • Russell 2000 -29.0% YTD

FT : US oil price takes new dive as market turmoil continues

US oil price takes new dive as market turmoil continues
WTI for June delivery nearly halves, a day after the May contract traded below $0

The price of US crude oil for June delivery almost halved on Tuesday and Brent, the international benchmark, dropped below $20 per barrel for the first time in 18 years, as global oil markets remained under intense pressure. 

The value of West Texas Intermediate for delivery in June — which had held above $20 a barrel on Monday even as the May contract traded at a historically unprecedented negative price — slumped to $6.50 at its worst, before recovering to settle at $11.57, down 43 per cent.

The move suggested the blowout in the May contract was more than just a technical blip, and reflected growing concern that US storage facilities will fill up unless energy demand quickly rebounds from its coronavirus-related collapse.

Brent crude, meanwhile, extended its fall in afternoon trading in New York, touching a fresh low of $17.51 a barrel before recovering slightly to settle at $19.33 a barrel, down 24 per cent on the day. 

“The car is speeding up and market forces will inflict further pain until either we hit rock bottom, or Covid clears, whichever comes first,” said Michael Tran, commodity strategist at RBC Capital Markets.

Coronavirus has sent the oil sector into a state of crisis, with lockdowns and travel bans implemented by authorities slashing global demand for crude by as much as a third this month from pre-crisis levels. 

The severe drop in demand coincides with levels of US production remaining robust despite oil storage tanks being just weeks away from reaching capacity. The plunge to below $0 was in part the result of traders seeking to offload any obligations to take on physical product ahead of the May contract’s expiry on Tuesday, as storage reached capacity at its delivery point in Cushing, Oklahoma. 

The May contracts tumbled as low as minus $40 a barrel on Monday, marking the first time it had fallen in to negative territory, where it remained on Tuesday before rising to settle at $10.01 a barrel.

“The contagion has spilled over to WTI June 2020 deliveries, which could also be well on their way into the red as we move towards physical delivery dates,” said Louise Dickson at Rystad Energy.


Plans for unprecedented supply cuts by some of the world’s biggest producers such as Saudi Arabia and Russia have so far failed to offset the tumble in oil demand.

Fatih Birol, head of the International Energy Agency, said on Tuesday that the reductions, set to begin to take effect next month, were “insufficient to rebalance the market immediately due to the scale of the drop in demand”. He called for countries that have committed to supply cuts to enact them as soon as possible and suggested they consider deepening them. 

Meanwhile, officials and Opec delegates sought to talk up the market. Saudi Arabia said on Tuesday it was prepared to take additional measures, alongside other producers that are part of the Opec+ alliance, to prop up the oil market and achieve market stability. SPA, Riyadh’s state news agency, cited a cabinet statement saying: “[The] Kingdom is committed with Russia to implement production cuts over next couple of years.”

Opec delegates were due to hold a conference call on Tuesday to discuss the WTI price plunge and potential next steps, said one person familiar with the matter. “The thing is, there is nothing anybody can do. Producers need to find a way to ride it out.”

For its part, Russia downplayed the collapse in crude prices, saying there was no need to view it as an “apocalyptic” event after its Ural blend, which is loosely based on Brent, fell to its lowest level since 2002.

“The chaos with futures is absolutely speculative, just a trading issue,” Kremlin spokesman Dmitry Peskov said. “Of course there is no need to give this an apocalyptic hue.”

The oil collapse has also underscored the powerlessness of Donald Trump, who had pressured Saudi Arabia and Russia to agree to supply curbs in a bid to support the domestic shale industry. 

On Tuesday the US president said on Twitter he had told the energy and Treasury secretaries to “formulate a plan” to make funds available to energy producers “so that these very important companies and jobs will be secured long into the future”.

US and European equities slid, partly dragged down by weakness in energy stocks. The S&P 500 dropped 2.7 per cent, while in Europe the continent-wide Stoxx 600 closed 3.4 per cent lower. 

In fixed income, the yield on the 10-year US Treasury fell 0.06 percentage points to 0.571 per cent as investors retreated to the safety of core government debt.