The bronze statue “Fearless Girl” on Wall Street wears a respirator mask.
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9:20 am: Dollar Tree, Dollar General jump as Goldman initiates coverage at buy
Shares of Dollar Tree and Dollar General gained roughly 2% during Monday’s premarket trading after Goldman Sachs initiated coverage on the stocks with a buy rating. “We see the dollar stores as well positioned in this uncertain macro economic backdrop,” the firm’s analysts led by Kate McShane said. “The dollar stores bring a powerful combination of value and convenience to the cash-strapped consumer. Add elements of unit growth, counter-cyclicality and supportive demographics to this mix, and you get attractive business models slated to perform well in the face of a recession.” The firm has a 12-month price target of $202 on shares of Dollar General, which is 11% above where the stock currently trades. Shares have gained roughly 16% this year. When it comes to Dollar Tree, Goldman sees the stock hitting $89 in the next 12 months, which implies an 18% upside. Shares have shed 20% this year. – Stevens
8:40 am: Goldman adjusts second, third and fourth quarter EPS estimates
Goldman Sachs still sees 2020 S&P 500 earnings coming in at $110 and $170 in 2021, but following first quarter earnings results, the firm adjusted its breakdown for how it sees each quarter performing. “We now forecast S&P 500 year/year EPS growth of -70% in 2Q (from -123% previously), -30% in 3Q (from -21%), and -17% in 4Q (from +27%),” the Goldman strategists led by David Kostin said in a recent note to clients. The new forecast is based on four takeaways from Q1 results, including the index’s partial insulation relative to the economy due to its large-cap tilt, as well as companies shifting business models to capitalize on strength in digital. The upward revision for Q2 is based on the health of companies that account for 20% of the index, while the downward revision for the second half of the year reflects “a more gradual recovery.” Looking ahead, Goldman said the recovery will be uneven, with “EPS in cyclical sectors unlikely to recover to 2019 levels by 2021.” – Stevens
8:35 am: Banks bounce big in early trading
Bank stocks were up sharply ahead of the open, after Fed Chairman Jerome Powell assured the market the Fed is not out of bullets and that it can and will do more. Citigroup, PNC, USB and Wells were all up more than 4%. JPMorgan was up 3.5%. Goldman Sachs was also higher, gaining 2.5% even though Warren Buffett’s Berkshire Hathaway disclosed it sold of most of its long held stake. Banks rallied last week before losing steam with the broader market Friday. Buffett’s Berkshire did raise its stake in PNC, and trimmed JPMorgan. “It’s the group that’s been the second or third worst performing throughout the cycle, and for obvious reasons, low interest rates, a flattish curve. They were due for an oversold bounce. It started last week,” said Art Hogan of National Securities. —Domm
8:10 am: Oil prices jump nearly 10% as contract nears expiration
U.S. oil benchmark West Texas Intermediate jumped on Monday, one day ahead of the contract’s expiration date. The contract for June delivery gained $2.78, or 9.45%, to trade at $32.21 per barrel. International benchmark Brent crude jumped 6.4% to $34.58 per barrel. Each contract is coming off its third straight week of gains, as production cuts as well as an uptick in demand have supported prices. The longer-term and more actively traded WTI contracts also moved higher. Oil for July delivery jumped 8% to trade at $31.89, while the contract for August delivery traded 7.4% higher at $32.33. – Stevens
8:00 am: BMO goes all in on Nvidia
Wall Street firm BMO Capital Markets upgraded shares of Nvidia to outperform from market perform on Monday morning, sending shares of the chip stock up nearly 3% in premarket trading. BMO also hiked its price target to $425 per share from $285 per share, implying a 20% rally from Friday’s closing price of $339.63 per share. “We have stayed on the sidelines long enough on the NVDA shares,” BMO analyst Ambrish Srivastava said in a note to clients title “entering beat mode.” “While there is no one single event we can point to which has led us to change our thinking, the continued execution on the data center side, along with the latest product rollout, has helped. We believe NVIDIA is uniquely positioned to continue to benefit from a massive shift in the compute landscape,” added Srivastava. – Fitzgerald
7:56 am: Futures gain steam on Moderna vaccine optimism
Futures accelerated gains, implying a steep rally at the open on Monday following positive news about a Moderna covid-19 vaccine. Dow futures popped 550 points. The S&P 500 futures pointed to gains of 65 points and the Nasdaq futures were up 166 points. —Fitzgerald
7:45 am: Moderna pops on positive covid-19 vaccine trials
Shares of Moderna rose nearly 20% in premarket trading on Monday after the drug maker reported “positive data” for its coronavirus vaccine. The early-stage human trial showed the vaccine produced Covid-19 antibodies in all 45 participants, the biotech company announced Monday. At day 43, about two weeks after the second dose was given to participants, levels of antibodies were at the levels generally seen in blood samples from people who recovered from the disease, the company said. “These interim Phase 1 data, while early, demonstrate that vaccination with mRNA-1273 elicits an immune response of the magnitude caused by natural infection starting with a dose as low as 25 µg,” Tal Zaks, the chief medical officer at Moderna, said in a statement. Shares of Moderna are up more than 240% this year. –Fitzgerald
7:36 am: Reopening stocks rise
Stocks poised to benefit from a reopening of the economies stifled by the coronavirus pandemic rose in premarket trading on Monday. Cruise lines, airlines and retailers are some of the industries jumping, as hopes of reopening kindles cautious risk appetite about the beaten down stocks. Delta Air Lines rose 4.3% in extended trading before the bell on Monday. United Airlines and Southwest Airlines both rose more than 5%. American Airlines gained 3.5%. Cruise lines Carnival and Norwegian Cruise Line rose 5.3% and 4.3%, respectively. Retails also got a lift on Monday with Kohl’s and Nordstrom jumping more than 3%. TJX Companies rose 2.5%. —Fitzgerald
7:27 am: Powell says ‘there’s a lot more’ the Fed can do to help
Even after the Federal Reserve has unloaded an unprecedented level of help for markets and the economy, Chairman Jerome Powell said there are still more weapons available. “Well, there’s a lot more we can do,” Powell said during a “60 Minutes” interview aired Sunday evening on CBS. “But I will say that we’re not out of ammunition by a long shot. No, there’s really no limit to what we can do with these lending programs that we have. So there’s a lot more we can do to support the economy, and we’re committed to doing everything we can as long as we need to.” Powell also said he sees GDP potentially falling by more than 30% but he does not foresee another Depression. – Cox
7:17 am: Dow futures surge as Wall Street tries to recover from last week’s decline
U.S. stock futures traded sharply higher on Monday morning as investors aimed to claw back some of last week’s losses amid optimism around the economy reopening. Dow futures traded 400 points higher, or 1.7%. S&P 500 and Nasdaq 100 futures gained 1.6% and 1.4%, respectively. The S&P 500 fell 2.2% last week, notching its worst week since March. The Dow industrials finished the week down 2.65%, its worst week since April 3. —Imbert
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