US OPEN: Wall Street Surge on Gilead Report

• Gilead (GILD.US) drug remdesivir shows improvement in treating COVID-19
• Investors  focus turned to the Federal Reserve press conference
• TESLA (TSLA.US) will present quarterly results today

US indices soared  at the open after Gilead Sciences (GILD.US) announced that positive data is emerging from the National Institute of Allergy and Infectious Diseases’ (NIAID) study of the investigational antiviral remdesivir for the treatment of COVID-19. Gilead shares jumped 9% after news, that the experimental drug remdesivir helped improve symptoms of at least 50% of patients treated with a 5-day dosage.  The trial was testing 397 patients of which more than half were discharged from the hospital within two weeks. According to Gilead’s study, 62% of patients treated early were discharged from the hospital, compared with 49% of patients who were treated late.
Recent data showed the US GDP shrinked by an annualized 4.8% in the first quarter, much worse than analysts expectations. Weak macroeconomic data is raising hopes of more stimulus measures from central bank. Therefore markets await now the Federal Reserve's monetary policy decision later in the day. Investors will be looking for any guidelines regarding central bank's next steps as well as a detailed forecast for the economy. On the earnings front, Tesla, Microsoft Corp, Facebook Inc, and General Electric will report their quarterly results later on today.

S&P 500 (US500) is testing major resistance at 2904 pts. If positive sentiment prevails then next resistance level at 3036 pts may come into play. In case of change in moods, local support is located at 2648.0 pts. Source: xStation5

TESLA (TSLA.US) will report its quarterly earnings today after market close.  Company's shares price has more than doubled from its March low. In January, before the coronavirus pandemic began, Tesla reported 367,500 2019 deliveries and announced that this year’s deliveries “should comfortably exceed 500,000". 

Electric car deliveries number will be the key figure which is a key gauge of Tesla's success. Previously Tesla struggled with profitability issues, so in order to maintain its high stock price, company need to report an increase in vehicle deliveries.  On 2nd of April Tesla revealed that it delivered 88,400 cars in the first quarter, with Model 3 and Y representing 76,200 deliveries, and the more expensive S and X models accounting for 12,200. This number is 40.3% higher comparing to the same quarter a year ago.
Tesla was forced to temporarily shut down its factory in California and New York due to spread of the corornavirus. Those shutdowns were implemented at the end of  March therefore had only a minor impact on the first quarter deliveries numbers. However 88,400 vehicles delivered in the first quarter amount to only about 18% of the company's target of 500,000 deliveries for the entire year. Therefore automaker need to deliver around 137,000 vehicles in each of the 3 remaining quarters in order achieve its objective. Therefore investors should look to see if management updates the company's full-year outlook for vehicle deliveries.

Investors will also try to assess how the pandemic affected Tesla's current results and outlook. Analysts estimate a strong increase in both revenues and deliveries, as well as a sharp reduction of annual losses measured by adjusted earnings per share.

Wall Street remains optimistic regarding first quarter figures. Analysts expect that EPS loss will be smaller in comparison with the first quarter of 2019, while revenue should increase significantly. Source: Bloomberg, XTB Research.

Investors will closely observe whether Tesla will generate positive free cash flow in the first quarter. In the last quarterly update company said that it expected to remain free cash flow positive with possible exceptions around the launch and ramp of new products. On one hand, Tesla started production of the new Model Y crossover during Q1, which could mean that company might not be able to breakeven on a free cash flow basis. On the other hand, automaker recorded 40% year-over-year increase in vehicle deliveries during the period.

When Tesla announces Q1 results, investors will watch closely if CEO Musk reins in Tesla's plans in the face of the global recession.

TESLA (TSLA.US) made up most of the losses form March and the share price are currently approaching local resistance at $813.60 per share. Tesla will report results for the first quarter today. Better than expected figures might provide fuel for further rally. Source: xStation5

Ford (F.US) reported loss of 23 cents per share for the first quarter, while analysts were expecting 12 cents a share loss. Revenue was also below forecasts. The automaker announced that its $2 billion loss would more than double in the second quarter. Ford confirmed that had sufficient funds to weather the pandemic through the end of 2020.

Alphabet (GOOGL.US) earned $9.87 per share for it's latest quarter, below analysts estimates of $10.33.  Revenue came above Wall Street forecasts. The company said the current quarter would be a difficult one for Google’s advertising business due to the impact of the coronavirus outbreak.

Yum Brands (YUM.US) –  operator of KFC, Taco Bell, and Pizza Hut profit reported 68% lower profits from a year earlier, falling one cent a share shy of estimates with profit of 64 cents per share. Global same-store sales declined 7% as company had to close many restaurants due to the pandemic.

Boeing ( BA.US) shares rose 10% in pre-market trade  despite the fact that company posted lower than expected quarterly results. Boeing reported net loss per share of $1.70 which is 20% wider than analysts’ estimates. Revenue also came below analysts’ projections. In order to secure liquidity company  took a string of cash conservation measures in recent weeks, namely a multi-billion credit facility, cuts to operating and capital spending; the suspension of buybacks and dividends, and annual suspension of salary payment's of CEO and Chairman.