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Dow Jones Futures: Breakouts Slowing In Coronavirus Stock Market Rally, But These Five Titans Are Near Buy Points
Dow Jones futures: The coronavirust stock market rally is roaring on, but breakouts are slowing. Apple, Tesla, Microsoft, Google and AMD are near buy points though.
Reuters
In China's auto market, worries grow that cashback deals and gifts presage damaging price war
HANGZHOU, China/SHANGHAI, May 25 (Reuters) - Cashback offers, up to 10 free oil changes, generous prepaid gasoline cards - these are just some of the giveaways China's auto dealerships are using to woo customers out and about after spending much of February and March in lockdown. Cui Peng, a Geely sales manager in the eastern city of Hangzhou, says unit sales at his dealership jumped 30% in April from March and they are hoping for 25% growth in May.
Bloomberg
U.S. Stock Futures Open Flat as Tensions Mount: Markets Wrap
(Bloomberg) -- Currency markets and U.S. equity futures saw a placid start to trading early on Monday as traders monitored more signs of economies reopening around the world against a deepening of tensions between the U.S. and China.The Australian dollar and the offshore yuan edged lower, though trading will be light with holidays in the U.S., U.K. and Singapore. The U.S. should give up its “wishful thinking” of changing China, Chinese Foreign Minister Wang Yi said, warning that American leaders are potentially pushing toward a new Cold War. All eyes will be on equities in Hong Kong, where riot police clashed with protesters marching against China’s move to crack down on dissent. Stocks there fell more than 5% Friday. S&P 500 futures were flat after U.S. shares rallied into Friday’s close, when Asia equity futures climbed. Oil dipped.On the virus front, Japan’s government will lift the state of emergency in Tokyo and its surrounding regions along with Hokkaido on Monday, NHK reported. The U.S. is considering restricting travel from Brazil, which now has the second-highest number of cases.Fresh turmoil in Hong Kong that spilled over into street protests this weekend is threatening to damage an already souring Sino-U.S. relationship. It risks hurting sentiment and choking a rally that’s left global equities about 30% higher than the March lows, spurred by stimulus measures and optimism for a swift rebound from the virus.“One big threat to the recovery in markets is the escalating war of words between the U.S. and China,” said Shane Oliver, head of investment strategy at AMP Capital Investors Ltd. in Sydney. “The main focus will likely remain on continuing evidence that the number of new Covid-19 cases is slowing in developed countries, progress towards medical solutions, the reopening of economies and signs that economic activity is picking up.”Here are some key events coming up:U.S. markets are closed Monday for Memorial Day holiday, while the U.K. is shut for the Spring bank holiday.Earnings continue with companies including Nissan Motor, British Land, Royal Bank of Canada and HP Inc.Singapore’s parliament on Tuesday is expected to announce another stimulus package.Thursday brings the U.S. jobless claims reading for the week ended May 23.Federal Reserve Chairman Jerome Powell participates in a virtual discussion on Friday.These are the main moves in markets:StocksFutures on the S&P 500 were little changed as of 7:03 a.m. in Tokyo. The gauge rose 0.2% on Friday.Futures on Japan’s Nikkei 225 advanced 0.2%.Hang Seng futures climbed 0.4% on Friday, when futures on Australia’s S&P/ASX 200 Index added 1.2%.CurrenciesThe yen was at 107.63 per dollar.The offshore yuan dipped 0.1% to 7.1537 per dollar.The euro bought $1.0897.The Aussie slid 0.1% to 65.32 U.S. cents.BondsThe yield on 10-year Treasuries fell one basis point to 0.66% on Friday.CommoditiesWest Texas Intermediate crude fell 0.8% to $33.01 a barrel.Gold dipped 0.1% to $1,732.59 an ounce.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Bloomberg
Vaccine Progress Spurs Optimism in Emerging Markets
(Bloomberg) -- Emerging-market stocks and currencies gained last week amid optimism progress is being made toward developing coronavirus vaccines, and as more nations roll back lockdowns. Sentiment was tempered as the week progressed by signs U.S.-China tensions are increasing once again, including escalating rhetoric from President Donald Trump and Senate legislation that may lead to delisting of Chinese companies from American stock exchanges. China announced plans to impose a national security law on Hong Kong, further adding to geopolitical frictions.The following is a roundup of emerging-market news and highlights for this week through May 22:Highlights:The U.S. threw its weight behind one of the fastest-moving experimental solutions to the coronavirus pandemic, pledging as much as $1.2 billion to AstraZeneca Plc to help make the University of Oxford’s Covid vaccineAn experimental vaccine from the U.S. biotechnology company Moderna Inc. showed signs it can create an immune-system response to fend off the coronavirusRead: U.S. Raises Ante in Vaccine Race With $1.2 Billion for Astra (2)Leading Chinese vaccine developer CanSino Biologics Inc. has signed a deal to test and sell a separate Canadian vaccine candidateFederal Reserve Chairman Jerome Powell said the central bank is prepared to use its full range of tools and leave the benchmark lending rate near zero until the economy is back on track; he reiterated that more fiscal aid may be neededFed policy makers saw the coronavirus posing a severe threat to the economy when they met last month and were also concerned by the risks to financial stabilityChina has abandoned its usual practice of setting a numerical target for economic growth this year due to the turmoil caused by the coronavirus; it reiterated a pledge to implement the first phase of its trade deal with the U.S.China projected defense spending growth of 6.6% this year, the slowest increase since at least 1991; the nation is pushing ahead with major investment in new infrastructure, assigning it top importance this yearChina announced plans to rein in dissent by writing a new national security law into Hong Kong’s charter, prompting democracy advocates to call for protestsPresident Donald Trump escalated his rhetoric against China, suggesting that leader Xi Jinping is behind a “disinformation and propaganda attack on the United States and Europe”The U.S. Senate overwhelmingly approved legislation that could lead to Chinese companies such as Alibaba Group Holding Ltd. and Baidu Inc. being barred from listing on U.S. stock exchangesU.S. Secretary of State Michael Pompeo broke with past U.S. practice and issued a statement congratulating Taiwan President Tsai Ing-wen ahead of her inauguration. China denounced the message as “wrong and very dangerous”Tsai urged China’s Xi Jinping to “find a way to co-exist” with the island’s democratic government as she started her second termArgentina will improve the terms of its offer to restructure $65 billion of overseas bonds after sinking into default when it failed to make an interest paymentSouth Africa’s Reserve Bank cut its benchmark rate for the fourth time in four months to support an economy forecast to slump deeper into recession; Turkey’s central bank delivered a ninth straight rate cut in less than a year after measures to prop up the lira drove out foreign investors; Indonesia’s central bank unexpectedly left its benchmark unchanged to bolster the currency; Bank of Thailand cut its key rate to a record and said it was ready to use additional policy tools if neededIndia’s central bank cut interest rates in an unscheduled announcement, ramping up support for an economy it expects will contract for the first time in more than four decadesBrazil overtook the U.K. to become the world’s third most-infected nation and reported record daily deaths; government still hasn’t picked a new health minister following Nelson Teich’s resignationRussia sees its economy contracting 5% this year, according to updated forecast from Russian Economy MinistryPresident Vladimir Putin may announce a snap ballot within weeks on proposed changes to the constitution that allow him to sidestep term limits, said people familiar the matterAsia:Chinese President Xi Jinping pledged to make any coronavirus vaccine universally available once it’s developed, part of an effort to defuse criticism of his government’s response to a pandemicChina’s regulator and some lenders have discussed extending loan relief beyond a June 30 deadline for corporates hurt by the virus outbreakChina is considering targeting more Australian exports including wine and dairy, according to people familiar with the matterShanghai Stock Exchange has started a trial program to allow companies to issue short-term local bondsChina’s house-price growth accelerated in April as the central bank’s credit easing gave the property market a lift out of the coronavirus shutdownBank of Korea said it will provide 80% of a special purpose vehicle’s 10 trillion won ($8.1 billion) of funds to buy corporate debt including lower-rated bonds and commercial paperSouth Korean students are returning to their classrooms after a five-month break as government health officials declared the country may have avoided a second wave of infectionsInitial South Korea trade figures for May signaled deep global trade weakness as the coronavirus smothers global economic activity. Though the value of shipments to China fell 1.7%, this was far less than in previous monthsIndia’s coronavirus infections crossed the 100,000 mark and are escalating at the fastest pace in Asia, just as Prime Minister Narendra Modi further relaxed the country’s nationwide lockdownThe biggest cyclonic storm over the Bay of Bengal in two decades wreaked havoc along India’s east coast and in Bangladesh, flooding low-lying areas and affecting power supplyIndia’s capital market regulator has allowed some categories of debt mutual funds to invest more in government bonds and treasury billsIndia’s government said the central bank will increase support for troubled shadow lenders, to stave off defaults as record repayments come due next monthIndonesian President Joko Widodo ruled out an immediate easing of social distancing rules and ordered officials to strictly enforce a ban on travel during the busy holiday season to prevent a spike in new coronavirus casesIndonesia will extend $10 billion in financial support to a dozen state-owned companies to tide over the impact of the coronavirus, Finance Minister Sri Mulyani Indrawati saidThailand sees its economy contracting as much as 6% this year as the coronavirus outbreak cuts travel to the tourism-reliant nation and shutters commerceGovernment agreed to extend state of emergency as suggested by National Security Council, Deputy Prime Minister Somkid Jatusripitak saidThe Philippine central bank sees “no apparent and immediate” need to avail itself of the new short-term liquidity line being offered by IMF to members as part of pandemic response, according to Governor Benjamin Diokno; policy space is still sufficient, he said separatelyThe Philippines is considering downsizing lockdowns to villages from regions, as it balances further reopening its economy with stemming the virus outbreakMalaysia’s king warned lawmakers against resorting to hostility and slander, as he spoke at the country’s first parliament sitting since its chaotic change of government two-and-a-half months agoThe trial of Malaysia’s former leader Najib Razak resumed on Tuesday, as a settlement deal by his stepson spurred concern over how the new government is handling the 1MDB casesTaiwan’s unemployment rate has reached the highest level in more than 6 years, according to government data released today. The coronavirus pandemic sent April’s jobless rate to 4.1% leaving over 480,000 people unemployedEMEA:Russia sold the most debt on record in its weekly bond auctions, benefiting from low borrowing costs to fund stimulus plansRussia’s Finance Ministry placed 112 billion rubles ($1.6 billion) of bonds due in October 2027 at its first auction on Wednesday, the most ever for a single offeringTrump has decided to withdraw from the Open Skies treaty, an arms-control pact designed to promote transparency between U.S. and Russia, claiming Russian violationsTurkey secured a fresh source of foreign exchange from Qatar, leaning again on the gas-rich Gulf nation that’s consistently come to the rescue as part of an alliance born after a coup attempt against President Recep Tayyip ErdoganRomania’s surprise first-quarter economic growth may help the country avoid a credit-rating downgrade next month as investors rush to buy its debt, the finance minister saidAbu Dhabi raised more money from international debt markets just weeks after a $7 billion bond sale as it took advantage of a drop in borrowing costs to bolster its financesThe emirate sold an additional $3 billion of its three-tranche deal priced in April, according to people familiar with the matterEgypt may reduce financing in local markets over coming weeks as it tries to cut debt-service costs for one of the Middle East’s most indebted countries, the Finance Ministry saidEgypt raised $5 billion in its first sale on international bond markets since NovemberLebanese banks urged the government to sell state assets and defer maturities to avoid defaulting on its domestic debt and driving the country’s finances into an even deeper crisisSaudi Aramco became the first major global oil producer to see its stock recover to the level it traded at before the price war between Russia and Saudi ArabiaZambia is seeking to restructure its debt after years of “over-ambition” in borrowing to plug an infrastructure deficit, the Finance Minister saidBank of Zambia cut its key interest rate for the first time in more than two years to counter the impact of the coronavirus on the economy, even as inflation surged to a 43-month high in AprilMoeketsi Majoro became Lesotho’s new prime minister, a day after his predecessor resigned amid an investigation into the murder of his ex-wifeZimbabwe’s supply of foreign exchange has increased by 35% since restrictions on using the U.S. dollar for domestic payments were eased, the central bank Governor saidSouth African factory output contracted for the ninth month in February even before a nationwide lockdown aimed at limiting spread of the coronavirus pandemic shuttered all non-essential activityInvestors declined to take up all of the five-year bonds on offer at an auction in Kenya this weekRwanda plans to increase budget spending for the coming fiscal year by 8%, saying it needs more money to fend off the Covid-19 pandemic, the Finance Minister saidNigeria’s early move to tap cheap loans improved its risk perception among foreign investors, leading to a decline in the country’s borrowing costsLatin America:Argentina’s economic activity slid 9.8% in March, a record biggest monthly decline, amid a nationwide lockdownA video of a controversial meeting between Brazil’s Jair Bolsonaro and members of his cabinet became public on Friday, fueling a political crisis that embroils the president just as the coronavirus pandemic grips the countryBrazil overtook Russia and is now second in number of virus cases in the world, trailing only the U.S.Health Ministry loosened protocols for the use of chloroquine, under orders of the president, who ordered the military to ramp up production of the drugThe city of Sao Paulo brought forward holidays to increase social isolation rates, which are typically higher on weekends and holidaysBolsonaro asked for state governors and congress to support his veto on an increase in public servants wagesCentral bank President Roberto Campos Neto promised to step up currency intervention if neededInvestors holding debt protection for Ecuador are in line to share compensation of about $60 million after the nation struck a deal with creditors to suspend coupon payments on its foreign debtAshmore Group Plc and BlackRock Inc. are joining together to present a united front for restructuring talks in EcuadorIDB approved a $250 million loan to Ecuador and nation is launching a $1.2 billion program to revive the economyEcuador is launching a program with $1.15 billion of funding from international partners to support workers and entrepreneurs, the Finance Minister saidChile’s economy is bracing for a contraction even after activity unexpectedly grew in the first three months of the year during the onset of the coronavirus pandemicQuarantine in capital Santiago was extended for a weekMexico’s President Andres Manuel Lopez Obrador said he is working on a new indicator to measure growth and progress as the country’s economy heads to its biggest contraction in almost a centuryMexico’s interest rates will continue to be cut, central bank board member Jonathan Heath saidInflation quickened more than expected in early May as food prices jumpedPeru’s economy contracted in the first quarter as the country entered what may be its deepest slump since the 1880s. GDP fell 3.4% from a year earlierCountry extended its nationwide quarantine for five weeks, while the reopening of the economy will enter its second phase as plannedFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Bloomberg
Lockdown Hopes Meet Geopolitical Anxiety in Whiplashed Markets
(Bloomberg) -- The competing themes of U.S.-China tensions and the reopening of virus-battered economies will probably ensure a mixed and tentative start to the week for global markets.With the open in Sydney muted, markets looks set to maintain that holding pattern until the U.S. and other markets return from their holiday-extended weekends the next day. But the chance of conflict between Washington and Beijing won’t be far away, with renewed clashes on Sunday between police and protesters in Hong Kong only adding to the sense of discord. The offshore yuan’s record low is now on traders’ radars. Though the S&P 500 Index eked out a 0.2% gain Friday, it capped a week in which the gauge failed to hold an advance or decline for more than a day. The Bloomberg Dollar Index rose and U.S. 10-year Treasury yields extended their longest losing run since February to a fourth day. Hong Kong’s Hang Seng Index fell 5.6%.The verbal battle between the U.S. and China is deepening at a time when investors are starting to take heart from the easing of Covid-19 lockdown restrictions in many countries. Chinese Foreign Minister Wang Yi said Sunday that some in America are pushing relations toward a “new Cold War.” Meantime, Japan decided to lift the country’s state of emergency as new virus cases continue to fall, according to public broadcaster NHK.“Intensifying China-U.S. tensions have increased geopolitical uncertainty just as concerns over the health pandemic have started to ebb,” Barclays Bank Plc’s London-based head of economic research, Christian Keller, and Michael Gapen, the bank’s chief U.S. economist in New York, wrote in a report Friday. “Improving data and the gradual reopening of economies seem to confirm April as the likely global activity trough, even if the outlook for recovery remains patchy.”The following are comments looking ahead to a week in markets:Joyce Chang, chair of global research at JPMorgan Chase & Co.:“As long as the next quarters bring some sort of expansion alongside record-low policy rates and massive central bank asset purchases, the medium-term direction for asset prices still looks higher. However, about 40% of S&P 500 companies have withdrawn 2020 earnings guidance. The Covid-19 shock is accelerating the winner-take-all phenomenon (U.S. mega-caps, secular growth and high profit margin), while economically sensitive companies (cyclicals and small-caps) play defense.“High-beta emerging-market currencies are one of the last asset classes to see meaningful retracement from the February-March sell-off, and we see no reason to reverse course on fading near-term strength yet. However, we added an overweight in LatAm FX (via overweight Mexican peso) versus an underweight in Asia, where the potential for extension (or) reintroduction of restrictions remains a risk for India and a number of ASEAN countries.”Neil McLeish, a London-based managing director at Morgan Stanley:“As economies start to open up around the world, we are all hopeful but inevitably still cautious -– who wouldn’t be? The good news for investors is that cyclicality, in all its forms, remains attractively priced as this caution still pervades global markets. Policy makers continue to provide incremental support, even as we get incrementally more confident in the path of the recovery.“Many investors I speak to concede the point about highly dispersed valuations but lack the confidence to move far beyond ‘safer’ asset classes, given a deep-seated lack of conviction in how the cycle will play out -– especially in the case of laggard regions such as Europe and parts of emerging markets.“How to position from here? Tactically, it’s obvious that markets have moved a long way quickly. Market consolidations like the one witnessed in the first half of May are possible at any time –- as no doubt at some point is a proper correction.With Europe embracing a “more credible polic mix” and “China continuing to add fiscal stimulus, I expect FX to be the next market that embraces positive global cyclicality, with a marked weakening of the U.S. dollar.”Stephen Innes, chief global market strategist at AxiCorp:“There have been plenty of dissenting voices regarding the level of equity markets in the last few weeks. Ahead of a long weekend, you would not expect dip buyers to emerge, but then if anything the last few weeks have taught us is not to underestimate the amount of interest in buying the dip.“Central banks are heralding a deflationary world in the chorus. And with the heat in and around China continuing to build up, it is incredibly challenging to jump back on the reflationary trade. But the market will keep pressing that envelope.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Investopedia
What to Expect in the Markets This Week
This week, pay attention to two indicators the Fed uses to help determine monetary policy, the Beige Book and the PCE Price Index.
TheStreet.com
Bearish Bets: 3 Stocks You Should Consider Shorting This Week
At the very least, based on technical and quantitative analysis, it looks like several individual stocks are vulnerable to further declines. Using recent actions and grades from TheStreet's Quant Ratings and layering on technical analysis of the charts of those stocks, Trifecta Stocks identifies five names each week that look bearish. While we will not be weighing in with fundamental analysis we hope this piece will give investors interested in stocks on the way down a good starting point to do further homework on the names.
Barrons.com
All the Reasons the Stock Market’s Gains Are Not to be Trusted
When the S&P 500 remains between the two moving averages for at least 20 days, there’s a 72% chance that the next move is down.
Barrons.com
Americans Are Buying Bikes, Kayaks, and Hammocks as Lockdowns Ease. These Stocks Will Benefit.
Americans began the lockdown by hoarding toilet paper, sweat pants, and puzzles. Now, with Memorial Day around the corner, it’s bicycles, boats, and inflatable pools.
MarketWatch
‘It’s time for China to blink first,’ says Rep. Sherman, who leads the drive to delist China stocks
Sherman says that the time has long passed for Washington to force Chinese companies to provide the same investor protections that U.S. companies have for decades.
Barrons.com
A Top Pension Manager Sold Apple, Amazon, and Disney Stock. Here’s What It Bought.
The Tennessee Department of Treasury, which oversees the state’s pension, sold all its Apple and Amazon stock in the first quarter. It also slashed the investment in Disney, and bought up embattled GE stock.
Kiplinger
Does the Stock Market Close Early for Memorial Day?
The stock market gets a full day off for Memorial Day. The bond market gets Monday off too, not to mention an early close ahead of the holiday weekend.
TipRanks
3 “Strong Buy” Healthcare Stocks That Could Double in the Next Year
Out on Wall Street, stocks were able to pull out a major win. Despite being a more volatile week of trading, the three major U.S. stock indexes were each able to notch a more than 3% weekly-gain, with the Dow Jones exhibiting its best weekly performance since April 9. The surge came as investors applauded progress related to a COVID-19 vaccine and the reopening of the U.S. economy. Against this backdrop, investor focus has locked in on one area of the market in particular: the healthcare sector. Amid the COVID-19 pandemic, the space has held up strong, broadly outperforming the rest of the market. Not to mention return-minded investors tend to flock to these names thanks to the possibility of sky-high rewards. What’s the secret to their huge return potential? The nature of the industry itself. Many healthcare companies only rely on a few key indicators such as study results or regulatory approvals to determine if there’s a clear path forward, and thus, a single piece of good news can launch it on an upward trajectory. However, the opposite also holds true, so these tickers are notoriously risky. Understanding the volatile nature of the industry, we used TipRanks’ database to pinpoint compelling plays within the healthcare space. The platform helped us track down three that have received overwhelmingly bullish support from analysts, enough to earn a “Strong Buy” consensus rating. The cherry on top? Each could double in the twelve months ahead. NuCana PLC (NCNA) Using its ProTide technology to turn some of the most widely prescribed chemotherapy agents, nucleoside analogs, into more effective and safer medicines, NuCana hopes to improve treatment outcomes for cancer patients. With the company gearing up for a jam-packed year of potential catalysts, several members of the Street believe that now is the time to snap up shares. At the beginning of May, NCNA announced that it had restarted enrollment for its Phase 3 NuTide:121 trial, which is examining Acelarin and cisplatin in front-line biliary tract cancer (BTC) patients. Weighing in on the good news for H.C. Wainwright is five-star analyst Robert Burns. He reminds clients that the initial data from the Phase 1 ABC-08 front-line locally advanced or metastatic BTC trial, which was presented at ASCO 2019, demonstrated that within the intent-to-treat (ITT) population, the therapy produced a 50% unconfirmed objective response rate (ORR) and 7% complete response (CR) rate. “We believe this compares favorably to results that Valle and colleagues presented in their 2010 New England Journal of Medicine paper examining gemcitabine plus cisplatin (n=204) in a front-line BTC Phase 3 trial,” Burns commented. As a result, he thinks data from the trial could fuel significant upside. If that wasn’t enough, a few weeks later, NCNA revealed that enrollment for the Phase 1 and Phase 1b trials of its NUC-3373 candidate in metastatic colorectal cancer (mCRC) and in advanced solid tumors, respectively, were resumed. Enrollment for the Phase 1 NuTide:701 trial evaluating NUC-7738 in patients with advanced solid tumors also kicked off again. Early data from these trials is slated for release later this year. Burns points out that there are several other key catalysts on the horizon including the readout of data from the Phase 1b ABC-08 trial of Aclearin and cisplatin in first-line BTC, an update regarding the enrollment status for the Phase 3 trial of Acelarin and gemcitabine in first-line BTC as well as the initiation of a Phase 2/3 trial of NUC-3373 in conjunction with other agents in mCRC. Based on all of the above, Burns stayed with the bulls. Along with a Buy rating, the $16 price target remains unchanged. Should this target be met, a twelve-month gain of 173% could be in store. (To watch Burns’ track record, click here) Do other analysts agree with Burns? As it turns out, they do. With 100% Street support, or 3 Buy ratings to be exact, the message is clear: NCNA is a Strong Buy. At $16, the average price target matches Burns’. (See NuCana stock analysis on TipRanks) Celyad (CYAD) Moving right along, we come across Celyad, which is developing innovative CAR-T NK cell-based immunotherapies that could potentially treat cancer. As the second half of 2020 will feature major catalysts, it’s no wonder the analyst community is excited about this name. In the near-term, Celyad will present updated data from the Phase I alloSHRINK study of CYAD-101, its therapy designed as a treatment for mCRC, at the virtual ASCO conference on May 29 through 31. Using non-gene editing technology, the therapy has already shown anti-tumor activity in two out of twelve patients with a partial response and five patients with stable disease with a minimum of three months of duration. Representing H.C. Wainwright, five-star analyst Edward White is optimistic that the outcome will be favorable. He explained, “To date, CYAD-101 alloSHRINK has not demonstrated clinical evidence of GvHD or dose limiting toxicities.” Looking forward, CYAD will read out preliminary data from the Phase 1 THINK trial involving its candidate, CYAD-01, a CAR-T that uses natural killer cell specificity to target T-cells against a broad range of tumors, without preconditioning in patients with r/r AML and MDS, and the DEPLETHINK trial utilizing preconditioning with Cy/Flu. Both of these trials use the OptimAb manufacturing process, but White points out that the company will decide which protocol to proceed with based on the data. Some investors expressed concern after COVID-19 forced the company to push back the previously expected timing for the THINK and DEPLETHINK trial readouts, but White was unphased by the delay. “THINK data presented at the American Society of Hematology (ASH) Annual Meeting 2019 showed that 53% (8/15) of evaluable patients demonstrated anti-leukemic activity with bone marrow blasts decrease, including five patients with objective responses and one patient with stable disease (SD) for at least three months,” he stated. The analyst added, “No objective responses had been shown at the time of presentation, but safety data demonstrated that CYAD-01 manufactured with OptimAb was well tolerated following preconditioning chemotherapy.” With a decision on which protocol CYAD will pursue expected by year end 2020, the deal is sealed for White. In addition to reiterating his Buy recommendation, he kept the $37 price target as is. This target conveys his confidence in CYAD’s ability to soar 339% in the next year. (To watch White’s track record, click here) All in all, other analysts echo White’s sentiment. 4 Buys and no Holds or Sells add up to a Strong Buy consensus rating. Based on the $27.33 average price target, the upside potential comes in at 224%. (See Celyad stock analysis on TipRanks) IDEAYA Biosciences Inc. (IDYA) Last but not least we have IDEAYA, which is developing targeted oncology drugs including the PKC inhibitor, IDE196, for the treatment of metastatic uveal melanoma (MUM) as well as a portfolio of synthetic lethality drug candidates. On the heels of the acceptance of four abstracts for presentation at the American Association for Cancer Research (AACR) Virtual Annual Meeting II, which will be held on June 22-24, many Wall Street analysts have been impressed. Among the bulls is Oppenheimer’s Kevin DeGeeter. He tells investors that he sees two abstracts as being especially promising as both have the potential “to inform clinical studies to start within the next twelve months.” Specifically looking at abstract 1956, “In vitro and in vivo characterization of novel MAT2A allosteric inhibitors”, the five-star analyst believes it is a “placeholder and most likely potential source of upside for IDYA shares.” DeGeeter added, “Specifically, we are cautiously optimistic abstract 1956 may more fully describe the cellular anti-proliferation activity and PK profile from a scaffold of IDYA's lead synthetic lethality program, a small molecule allosteric inhibitor of MAT2A... If management opts to disclose cellular anti-proliferation activity or cellular SAM modulation data. In the absence of efficacy data, we would view clean liver tox profile as a material finding.” In addition, DeGeeter pointed out, “Our investment thesis for shares of IDYA is based in large measure on the potential of the company’s broad pipeline of synthetic lethality programs.” As a result, he argues that the selection of a development candidate for lead synthetic lethality program, MAT2A, which is slated for Q2 2020, and the IND filing expected in Q4 2020, represent key catalysts. He also thinks AACR is a “logical” timeframe to confirm selection. It should be noted previous studies have demonstrated that MAT2A regulates PMRT5 expression. To top it all off, DeGeeter believes abstract 5337 will provide more clarity regarding the magnitude of a potential synergy of IDE196 with a MEK inhibitor. The results could help IDYA select patients for a basket study of IDE196. To this end, DeGeeter left an Outperform rating and $17 price target on the stock. Given this target, shares could skyrocket 143% in the next twelve months. (To watch DeGeeter’s track record, click here) Turning now to the rest of the Street, other analysts also like what they’re seeing. 3 Buys and no Holds or Sells have been assigned in the last three months, making the consensus rating a Strong Buy. While less aggressive than DeGeeter’s, the $15 average price target still leaves room for 115% upside potential. (See IDEAYA stock analysis on TipRanks)
Bloomberg
The Dow Is Getting Crushed in the Recovery Trade
(Bloomberg) -- This week marks a milestone for the Dow Jones Industrial Average: its 124th birthday. Not that anyone watching markets needs a reminder it’s getting old.Wrinkles show in the gaping divide between the venerable gauge and its younger brethren. Like many grandparents, it’s struggling to keep up with tech. Plunges in Boeing Co. -- its biggest member at the start of February -- were very costly, and some wonder if the benchmark represents the 21st century economy at all, especially in the coronavirus age.“The Dow has been on its way out for years,” said John Ham, associate adviser at New England Investment and Retirement Group. “Obviously it’s going to stick around just because so many people are familiar with it. But as far as relevancy goes, it’s your grandfather’s index.”Rarely have differences among indexes been more stark than they are now, in a market where the outbreak has made heroes of New Economy firms. Deprived of their benefits, the Dow remains down 14% in 2020 and was off 35% at its worst point. Meanwhile, the Nasdaq 100 has gained more than 7% this year, and the S&P 500 is 9% away from a positive return.Of course, the Dow has been consigned to history before, and survived. While it might be showing its age now, brief divergences among broad indexes are extremely common, and over long enough intervals they tend to even out.“Yes it is old,” said Howard Silverblatt, senior index analyst at S&P Dow Jones Indices. “If you constructed something today, you would probably do it differently. But it’s worked for 124 years. Even currently. And it is a much smaller portfolio yet it does track over time to the broader S&P 500.”Judging an index by whether it rises more than another misconstrues the purpose of stock benchmarks, which is to measure the progress of a market. The S&P 500’s edge over the Dow in 2020 doesn’t make it a better or more useful tool. It does, however, shine a light on what in the economy is calling the shots during the lockdown -- online and automated companies like Amazon.com Inc. and Netflix Inc.Divergences among the gauges also matter to the masses of investors who invest in funds that track them. Roughly $11.2 trillion is indexed or benchmarked to the S&P 500, according to S&P Dow Jones Indices, and $4.6 trillion in passively managed assets are tied to it. About $31.5 billion is benchmarked to the Dow, with $28.2 billion of passively managed funds linked.Thanks to tech’s dominance, those divisions are getting especially pronounced. Less than halfway through the year, the Nasdaq has already outperformed the Dow by a full percentage point on 17 different days. That’s more than in any full year since 2009, data compiled by Bloomberg show.A lot of the discrepancy boils down to which companies don’t make the Dow’s cut. Take Amazon.com, for example, whose 35% gain this year has accounted for almost half of the Nasdaq’s advance and 10% of the S&P 500’s. Because of the stock’s $2,500 price tag, the Dow’s old-fashioned price-weighting system makes it impossible to let Amazon in.Other high-fliers that have proved themselves in a stay-at-home world also don’t appear in the Dow. Nvidia Corp., Netflix Inc. and PayPal Holdings Inc. -- all winners in the coronavirus age -- are each up at least 30% this year. The venerable Dow has gotten none of that boost.“If all you’re following is the Dow, you’re missing some big components,” said Ryan Detrick, senior market strategist for LPL Financial. “I hate to say it’s old, but there’s no question that it’s behind the times if you look at the way it’s broken down.”The Dow Jones Industrial Average, created on May 26, 1896, is different from other indexes. It’s weighted by share price rather than market cap, which is more commonly used today. Such methodology essentially rules out inclusion of several of the largest companies in the world, among them Google parent Alphabet Inc., whose shares trade above $1,000 and would likely take up too much of the index.A committee chooses members, not an objective, rules-based process. According to Dow Jones Averages methodology papers found on its website, the Dow seeks to maintain “adequate sector representation” and favors a company that “has an excellent reputation, demonstrates sustained growth and is of interest to a large number of investors.”As a result, a company like jet-maker Boeing Co., down 60% this year, is more influential on the Dow’s performance than even the fourth largest American company, Alphabet, is on the S&P 500’s returns. Industrial firms, as the name of the index suggests, make up a notable 13% of the Dow -- 5 percentage points more than the sector’s weight in the S&P 500 and 11 percentage points more than the Nasdaq.Such focus has hurt in a pandemic-arranged stock market, where closed factories and shuttered economies have left industrials as one of the worst performing groups. The emphasis on the old-age economy is all the more striking in a world where companies that can operate with little face-to-face contact excel and a technological shift is accelerated.“That’s the unique nature of this particular recession, and it’s coming from the virus,” said Luke Tilley, chief economist at Wilmington Trust Corp. “If you take those contours of both big companies tend to have a buffer because of their access to capital markets and then you compound what is expected to be a dramatic change to the economy, you can get that bifurcated performance.”That leaves another way to view the index gap: the Dow is perhaps the stock gauge that is most representative of the broad economy precisely because it’s not dominated by these megacap firms. Surging shares of Amazon or Netflix certainly don’t reflect an America with over 20 million people unemployed and a collapse in spending.While the S&P 500 and Nasdaq may be methodologically optimized for a stay-at-home world, the Dow is certainly not.“Covid is actually amplifying all types of inequalities in the economy but the inequality in the market in terms of market concentration is also being amplified,” said Nela Richardson, an investment strategist at Edward Jones. “That rally is highly concentrated in a handful of firms. Most firms are still in bear territory.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Investing.com
Watch Now: Here's What Will Move Markets This Week - May 24 (Video)
Investing.com - Our senior markets analyst Jesse Cohen gives us his top five things to know in financial markets in the week ahead, including:
Bloomberg
BlackRock Is About to Find Skeletons in $45 Billion Bond Market
(Bloomberg) -- As BlackRock starts to kick the tires of Sweden’s credit market at the behest of the Riksbank, a world of trouble is about to reveal itself.“This market seems completely dead,” said Hakan Karlsson, chief executive of MaxFastigheter i Sverige AB, a property firm with an unrated bond maturing in September. “If we want to retain the possibility of raising money through bonds, some kind of support is needed for it to function.”BlackRock Financial Markets Advisory, a unit of the world’s biggest asset manager, was just hired to help Sweden’s Riksbank figure out how to buy into an asset class that recently suffered its worst rout since the financial crisis. Against the backdrop of a dispute with parliament over the legality of such purchases, the Riksbank has pledged to acquire parts of Sweden’s $45 billion krona-denominated corporate bond market.Most corporate issuers are holding back until those purchases start. They “want to see the real effect” of the Riksbank’s promise, said Gustav Bjorck, who runs the bond syndication desk at Swedbank in Stockholm.For the CEO of another real-estate issuer the current market is simply too expensive. “Only those who really need to issue bonds go to the market right now,” FastPartner’s Sven-Olof Johansson said.The CrashBesides questions of legality and issuer angst, there are basic concerns about market dysfunction. Many issuers have started relying more on bank credit instead of bonds. And investors are wary of a market whose recent crash was in part caused by excess representation of some high-risk industries, such as real estate.Investors just want the dysfunction to end. “The secondary market for investment grade bonds is far from functioning well so I think the Riksbank’s program will lead to better liquidity,” said Karin Haraldsson, a portfolio manager at Lannebo Fonder.She says the Riksbank will probably buy investment grade bonds, allowing the primary market to “open up for that category.” If the Riksbank could buy newly issued notes, “that would help even more,” she said.Back in March, the failings of Sweden’s corporate bond market were forced into plain view as 35 credit funds resorted to gatings to halt a client exodus. Investors say the Riksbank’s presence in the market would make a repeat unlikely.Going for JunkMeanwhile, Sweden’s credit market is getting riskier. An increasingly large share is junk-rated or unrated, and these issuers have found it impossible to raise funds since March.“The high yield market in Sweden has not yet opened,” said Nordea’s head of debt capital markets, Antti Saha.Fredrik Tauson, who manages an alternative credit fund at Nordic Cross, says Sweden’s junk bond market “can from time to time be inefficient and dysfunctional.” But if the Riksbank were to buy higher rated notes, investors would be more inclined to go for riskier debt as they search for better returns, he said.That kind of change doesn’t happen overnight, but Tauson said it’s not clear the market can wait, “considering the depth of the current crisis.”For issuers like MaxFastigheter, time is running out. According to its CEO, “It’s almost impossible to place a bond today.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Financial Times
Companies line up to sell stock as US IPO market reopens
A burst of US stock market listings is expected in coming months after coronavirus forced a pause in new launches. While many companies have binged on debt to tide them through the coronavirus shock over the past two months, private companies put off plans for initial public offerings.
MarketWatch
These money and investing tips can help you navigate financial markets as economies reopen
MUTUAL FUNDS WEEKLY Don’t miss these top money and investing features: Your 401(k) won’t be enough for retirement Don’t even think of owning stocks unless you’re willing to buy and hold for at least 10 years Forget bonds — here are 5 safe tech stocks offering dividends and growth Scammers are also first responders to the coronavirus pandemic.
FX Empire
Predictive Modeling Suggests US Markets 12% Over Valued
It is very likely, based on this research, that a downside price move to levels just above recent lows will take place over the next 5+ weeks.
Barrons.com
TIAA Says Negative Yields Could Soon be a Possibility in Money-Market Products. Why That’s a ‘Horrible Deal’ for Investors.
In a notice to investors this week, TIAA said it plans to temporarily waive fees on certain products. But notably, the firm said it would not renew the waiver after the end of 2020. What’s more, it said it could recoup those waived fees as soon as next year, if U.S. interest rates rise far enough to provide a positive yield.
MarketWatch
Are stock investors too complacent about a full-scale blowup between China and the U.S.? Here’s what Wall Street experts say
China and the U.S. are back in the headlines — but are investors paying sufficient attention to the risks of a geopolitical clash?
MarketWatch
Stock-market traders brace for ‘dogfight’ as S&P 500 lingers below its 200-day moving average
This is the level everyone is watching — but getting above the 200-day moving average doesn’t mean the stock market will be zooming back to the highs, chart watchers say.
MarketWatch
Prepare for the post-coronavirus-vaccine world by selling stocks that are hot today but will lose earnings momentum
Now investors should look ahead to the post-vaccine world: Sell stocks that are hot today but will experience deteriorating earnings momentum after a vaccine comes out and buy quality stocks with good balance sheets that will experience positive earnings momentum in that new era. This chart compares the Dow Jones Industrial Average ETF (DIA) to seven stocks that I am using to illustrate shifts in money flows. • Zoom Video (ZM) has been one of the biggest beneficiaries of coronavirus.
Yahoo Finance
How a coronavirus team-up between Whirlpool, Dow and Reynolds may shake up PPEs
Whirlpool Corporation (WHR), Dow (DOW) and Reynolds Consumer Products (REYN) are teaming up to create PAPR, powered, air-purifying respirators.
MarketWatch
These 4 stocks are investment pros’ favorites — and not one is a ‘FAANG’ stock
It takes guts to be a value investor these days. According to a recent analysis from Research Affiliates, value has lagged growth now for more than 13 years — the longest stretch in recorded U.S. market history. This has led to a seemingly-endless series of pronouncements in recent years that value investing is dead.