US OPEN: Wall Street opens in mixed mood

• President Trump announces 'big day' for social media
• Pompeo reports to Congress that Hong Kong is no longer autonomous
• US stocks lack direction after GDP revision

US indices opened mixed after today's data showed the US economy shrank an annualized 5% in the first quarter, more than analysts ’expectations of a 4.8% decline. It is the biggest drop in GDP since the last quarter of 2008. Meanwhile the number of Americans filling for unemployment benefits eased to 2.123 million in the week ended May 23rd, the lowest level since the coronavirus crisis began more than two months ago. Still, filings came in slightly above market expectations of 2.1 million. US manufactured durable goods fell 17.2% while market expected a 19% drop.

 

Investors continue to follow mounting tensions between US-China. Yesterday State Secretary Mike Pompeo reported to Congress that Hong Kong is no longer autonomous from China therefore can no longer qualifies for its special status under US law. Meanwhile China's National People’s Congress officially approved the new national security law for Hong Kong.

Twitter (TWTR.US) and Facebook (FB.US) are in the crosshairs of the Trump administration. US President tweeted today ”" This will be a Big Day for Social Media and FAIRNESS! " after accusing Twitter of "interfering" in the 2020 election and threatening to close social media platforms. It was earlier reported that President Trump would give an executive order on social media companies that could hold tech companies accountable for content posted by users on their platforms.

S&P 500 (US500) managed to stay above the 200-period moving average, which previously acted as a resistance. Should upbeat moods prevail, an upward impulse towards 3159.7 pts could be launched. On the other hand, once sellers regain control, the support at 2968.3 pts may be at risk. Source: xStation5

Workday (WDAY.US) shares rose 7% in extended trading after company announced its first-quarter earnings. The company earned earnings 44 cents per share while analysts expected earnings of 48 cents per share. Revenue came in above forecasts. The company also announced partnerships with Microsoft and Salesforce. Company's clients will be able to use Workday Adaptive Planning on the Microsoft Azure cloud, according to a company statement. Workday is also working with Salesforce to develop applications that will help businesses more easily return to work.

Workday (WDAY.US) launched today’s session with bullish price gap. Currently price is approaching major resistance at $ 183.12. Should a break above occur, upward move towards $ 202.35 may accelerate. However, if sentiment changes, then local support is located at $ 169.83 per share. Source: xStation5

Abercrombie & Fitch (ANF.US) reported a loss of $ 3.29 per share for its recent quarter, wider than the loss of $ 1.39 per share anticipated by analysts. The apparel retailer revenue also came in below expectations, as sales take a significant hit due to the pandemic.

 

Dollar General (DG.US) earned $ 2.56 per share, compared to the analysts expectations of $ 1.74 a share. Revenue exceeded forecasts as well, and a same-store sales surged of 21.7% was well above the 8.7% FactSet estimate. The discount retailer announced the pandemic had a significant positive impact on sales, and that it expects to exceed prior forecasts.

 

Dollar Tree (DLTR.US) earned $ 1.04 per share in the recent quarter, which came 85 cents above market expectations. Revenue also beat forecasts, and overall same-store sales jumped 7% compared to analysts expectations of 4.4%. Dollar Tree-branded stores recorded a 0.9% decline in comparable sales, compared to forecasts of a 1.2% increase. However the company recorded a 15.5% rise compared to the expectations 8.1%.

 

Burlington Stores (BURL.US) - reported a loss of $ 4.76 per share for its latest quarter, well above market expectations of $ 1.55. Revenue also came in well below estimates. The apparel retailer did not provide 2020 guidance. Company closed its stores on March 22 due to the pandemic. Business was closed through the end of the quarter. Some 332 stores have reopened since then, and the remainder are expected to open by the middle of June.

Virgin Galactic Holdings (SPCE.US) shares fell 3% in extended trading after other space travel company SpaceX had to cancel its historic astronaut launch with NASA because of bad weather. Virgin Galactic is planning to expand space travel to include tourists.

HP (HP.US) stock dropped 4% in extended trading after company posted its ed quarterly financial results. The technology company earned 51 cents per share excluding some items on revenue of $ 12.47 billion, while Wall Street estimated earnings of 44 cents per share with revenue of $ 12.93 billion. The company provided third-quarter guidance that is below market expectations.

 

Boeing (BA.US) stock jumped 4% in extended trading after the company announced it was resuming production of the 737 Max aircraft at its Washington factory. Production of the plane was suspended in January, but the 737 Max has been grounded since March 2019 after the model was involved in two crashes that killed 346 people.

Apple (AAPL.US) has landed director Martin Scorsese’s next film, “Killers of the Flower Moon” for its Apple TV service, according to The Wall Street Journal. It beat out competitors such as Netflix (NFLX.US), which had produced Scorsese’s last film, “The Irishman.”

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