US OPEN: Wall Street continues bullish run

US indices are trading slightly higher on Monday reversing earlier losses at the open, despite the fact that investors remain concern about the growing Beijing-Washington tensions after Bloomberg reported that China will stop importing some of American agricultural products. On Friday, President Trump hardened his rhetoric towards Beijing but refrained from imposing new tariffs on China. Meanwhile, protests across several US cities over police brutality and the death of unarmed civilian threaten the reopening of the economy and the coronavirus containment while the death toll in the country surpassed 106K.

Recent macroeconomic data also weighed on investors moods. The ISM Manufacturing PMI for the US rose to 43.1 last month from 41.5 in April which was the lowest reading since April of 2009. However, recent figure came below analysts’ estimates  of 43.6 and pointed to a sharp contraction in the manufacturing sector. "The coronavirus pandemic impacted all manufacturing sectors for the third straight month. May appears to be a transition month, as many panelists and their suppliers returned to work late in the month. However, demand remains uncertain, likely impacting inventories, customer inventories, employment, imports and backlog of orders. Among the six biggest industry sectors, Food, Beverage & Tobacco Products remains the only industry in expansion. Transportation Equipment; Petroleum & Coal Products; and Fabricated Metal Products continue to contract at strong levels,” says Fiore, Chair of the ISM.
Meanwhile  IHS Markit US Manufacturing PMI came in at 39.8 last month of 2020, in  line with expectations and above a record low of 36.1 in April. However today's data pointed to the second-steepest deterioration in manufacturing operating conditions since April of 2009, mostly caused by weak client demand and lower new order inflows from both domestic and foreign customers amid the coronavirus outbreak.

Coty (COTY.US) –  Peter Harf will be the new CEO, with Harf becoming the cosmetics maker’s fourth CEO in less than four years. The announcement comes as Coty and KKR (KKR.US) sign a definitive agreement to spin Coty’s haircare brands into a separate company that will be 60% owned by KKR and 40% by Coty, finalizing a deal first announced last month.

 

Eli Lilly (LLY.US) began the first study of a Covid-19 experimental treatment derived from the blood of a person which survived the infection. It is the first study involving this type of drug, and comes about a month earlier than expected and ahead of rival Regeneron (REGN.US), which expects to begin a similar study this month.

 

Amazon.com (AMZN.US) – Morgan Stanley changed its price target for Amazon  from $2,600 to $2,800, as it assumes that Amazon will report  faster growth even if overall consumer spending weakens. Morgan Stanley raised earnings estimates for Amazon while maintaining an “overweight” rating.

Zynga (ZNGA.US)  announced the acquisition of Turkey-based mobile game producer Peak for $1.8 billion. Peak is the maker of the popular Toy Blast and Toon Blast mobile games. Also the company announced guidance for the current quarter and full year, not including any possible contribution from the Peak deal.

Embraer (ERJ.US)  reported a quarterly loss of 57 cents per share, wider than the 33 cents a share loss anticipated by analysts. Revenue also came in below forecasts. The Brazilian jet maker  also announced that its financial and deliveries guidance for this year remains suspended due to ongoing pandemic.

Alphabet (GOOGL.US) has postponed the unveiling of the new Android 11 mobile operating system. This was originally scheduled for Wednesday, but amidst coronavirus epidemics and protests across the country, Google said "now is not the time to celebrate."