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End of Day Briefing - Monday June 29, 2020

Stocks rebound to start the week

Dow +580.25 at 25595.82, Nasdaq +116.93 at 9874.16, S&P +44.19 at 3053.11

[BRIEFING.COM] The S&P 500 increased 1.5% on Monday in a broad-based advance to recoup some of last week's decline. The Dow Jones Industrial Average (+2.3%) and Russell 2000 (+3.1%) outperformed the benchmark index, while the Nasdaq Composite (+1.2%) underperformed.

All 11 S&P 500 sectors finished in positive territory, led by the industrials sector (+3.2%) amid leadership from Boeing ($BA 194.49, +24.48, +14.4%), which resumed 737 MAX flights for certification. The health care sector (+0.9%) was the lone sector that rose less than 1.0%.

Value-oriented stocks edged out growth stocks today after data showed pending home sales rebound 44.3% m/m in May (Briefing.com consensus +18.0%), which extended a trend of data depicting a rebound in the economy. The market pushed toward session highs after its 10:00 a.m. ET release and proceeded to drift higher the rest of the session.

In other corporate news, more companies halted ad spending from Facebook ($FB 220.64, +4.56, +2.1%) due to concerns about insufficient efforts to police misinformation and hateful content. FB shares still finished higher after being down as much as 4.2% early in the session.

Microsoft ($MSFT 198.44, +2.11, 1.0%) and PepsiCo ($PEP 131.08, +2.15, +1.7%) reportedly targeted only Facebook's platforms, while Starbucks ($SBUX 73.48, +1.91, +2.7%) and Coca-Cola ($KO 44.36, +0.79, +1.8%) paused all social media spending.

Given the positive bias in stocks, the coronavirus resurgence was less in focus today even as New Jersey and parts of California scaled back reopening efforts. The Treasury market appeared more in tune with the threat of reduced economic activity, as bonds held firm throughout the session.

The 2-yr yield was unchanged at 0.16%, and the 10-yr yield was unchanged at 0.64%. The U.S. Dollar Index increased 0.1% to 97.51. WTI crude rose 3.1%, or $1.18, to $39.67/BBL.

Looking ahead to Tuesday's economic calendar, investors will receive the Conference Board's Consumer Confidence Index for June, the Chicago PMI for June, and the S&P Case-Shiller Home Price Index for April.

  • Nasdaq Composite +10.1% YTD
  • S&P 500 -5.5% YTD
  • Dow Jones Industrial Average -10.3% YTD
  • Russell 2000 -14.8% YTD

Market Snapshot

Dow25595.82+580.25(2.32%)
Nasdaq9874.16+116.93(1.20%)
SP 5003053.11+44.19(1.47%)
10-yr Note +1/320.633
NYSEAdv 2227 Dec 711 Vol 965.2 mln
NasdaqAdv 2235 Dec 1147 Vol 4.3 bln


Industry Watch

Strong: Industrials, Communication Services, Materials
Weak: Health Care


Moving the Market

-- Stocks close at session highs, recoup some of last week's decline

-- Boeing (BA) shares rose 14% on news that it resumed 737 MAX flights for certification

-- Pending home sales rebound 44.3% m/m in May (Briefing.com consensus +18.0%)


Stocks end higher following better than expected U.S. housing data

Stocks saw a rebound from last week's downbeat trading after an index of pending home sales notched a record gain. Investors may also be positioning ahead of the impending end of the month and the upcoming long holiday weekend. The market had an up day, and while Facebook ($FB) shares participated with a 2.1% gain, the company is seeing more and more brands pause spending or even quit its platform as part of a push to see the social media giant do more to combat hate speech.

ECONOMIC EVENTS: In U.S. data, the pending home sales index jumped a record 44.3% to 99.6 in May. The Dallas Fed's manufacturing index climbed another 43.1 points to -6.1 in June, though that marks a fourth straight month of contraction.

The Federal Reserve, which has begun buying individual corporate bonds outright for the first time, detailed its purchases of corporate bonds on Sunday. The purchases span a range of industries and included bonds from AT&T ($T), Berkshire Hathaway ($BRK.A), Boeing ($BA), CVS ($CVS), Caterpillar ($CAT), Chevron ($CVX), Coca-Cola ($KO), Dupont ($DD), Ford ($F), GM ($GM), HP ($HPQ), Home Depot ($HD), IBM ($IBM), Marriott ($MAR), Medtronic ($MDT), Paypal ($PYPL), Pepsico ($PEP), Philip Morris ($PM), UnitedHealth ($UNH) and Walmart ($WMT).

The latest data from the Johns Hopkins Whiting School of Engineering shows there are now 10.18M confirmed cases of COVID-19 worldwide, including 2.55M in the U.S., and 502,634 deaths due to the disease.

TOP NEWS: Starbucks ($SBUX) told CNBC in a statement this weekend that it will pause advertising on "all social media platforms" and have discussions internally and with media partners and civil rights organizations to stop the spread of hate speech, while Coca-Cola ($KO) CEO James Quincey also said his company will pause paid advertising on all social media platforms globally for at least 30 days, becoming the latest big brand to do so. Meanwhile, Reuters reported that Ford (F) said it would pause advertising on all social media platforms in the U.S. for the next 30 days, while CNBC reported that Adidas ($ADDYY) will pause advertising on Facebook and Instagram. In addition, Axios reported that Microsoft ($MSFT) has also been pausing Facebook ad spending globally while Bloomberg said that Best Buy ($BBY) will pause Facebook advertising for the month of July.

Gilead ($GILD) announced that it has set a price for governments of developed countries of $390 per vial for remdesivir, which has shown potential against COVID-19. The "vast majority of patients are expected to receive a 5-day treatment course using 6 vials of remdesivir, which equates to $2,340 per patient," the company said, adding that the pricing of remdesivir is set "to achieve the aim of providing immediate net savings for healthcare systems." However, "because of the way the U.S. system is set up and the discounts that government healthcare programs expect," the price for U.S. private insurance companies, will be $520 per vial, Gilead stated.Shares of Boeing ($BA) rose 14.4% following media reports indicating that the company has received Federal Aviation Administration approval to start test flights of its 737 Max to demonstrate that it can fly safely with new flight control software. CNBC's Phil LeBeau later reported that the company's first 737 MAX recertification flight had officially started.
Shares of Intercept Pharmaceuticals ($ICPT) plunged 39.7% after the company announced that the FDA has issued a Complete Response Letter regarding the New Drug Application for obeticholic acid for the treatment of fibrosis due to nonalcoholic steatohepatitis, or NASH. Similarly, Heron Therapeutics ($HRTX) announced that it received a Complete Response Letter from the FDA regarding its New Drug Application for HTX-011 for the management of postoperative pain, with both companies stating that the FDA has asked for additional information related to their drug approval applications. Heron shares fell 28.1% after the news.

Meanwhile, The Verge reported that Amazon's ($AMZN) Twitch has temporarily banned U.S. President Donald Trump for "hateful conduct" that was aired on stream. The move comes as Reddit reportedly banned r/The_Donald, an online community of 800,000 Trump supporters amid a major overhaul of the platform's hate speech and harassment policies.
In addition, AMC Entertainment ($AMC) shares were 6.2% higher after the company announced a new U.S. reopening date of July 30, when it will resume operations of 450 U.S. theaters as part of a new phased plan that is expected to bring over 600 U.S. theaters essentially to full operation by early August.

MAJOR MOVERS: Among the noteworthy gainers was Ideanomics ($IDEX), which rose 43.1% after responding to short-selling communications from J Capital and Hindenburg, rebuffing claims of not having sufficient cash to fund operations. Also higher was Kiniksa ($KNSA), which gained 12.9% after the company said its Phase 3 trial of rilonacept met its efficacy endpoints. Among the notable losers was Beyond Meat ($BYND), which slid 7.1% after Barclays analyst Benjamin Theurer double downgraded the stock to Underweight from Overweight.


Source: (Briefing.com)(theFly.com)

Disclosure: I may trade in the ticker symbols mentioned, both long or short. My articles represent my personal opinion and analysis and should not be taken as investment advice. Readers should do their own research before making decisions to buy or sell securities. Trading and investing include risks, including loss of principal.

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