Your Daily Dose of Financial earthquakes

Every weekday, we send to our community a summary of the most impactful Business/Financial news of the day - the "Daily Dose".

American Airlines seeks $3.5B more financing to improve liquidity ahead of complicated months
Published by Terence Mahier | Source

American Airlines just announced it plans to secure $3.5 billion in new financing to improve its liquidity in the midst of travel restrictions caused by the coronavirus โœˆ๏ธ

The new financing would be a mix of shares, bonds & short-term loans. No need to say that this doesn't come as good news for investors who fear some airlines might not have enough cash to navigate through the crisis ๐Ÿ“‰

Air traffic numbers are improving every day, but there is still so much uncertainty around the future of air travel for the upcoming months, especially given the recent surge of covid-19 cases ๐Ÿ˜ท

The stock is down 8%, will it keep sinking?

McDonaldโ€™s U.S. sales fell just 5.1% in May compared to last year as dining rooms reopen
Published by Terence Mahier | Source

McDonald's U.S. same-store sales fell just 5.1% in May, showing signs of recovery in the U.S. compared to the 29.8% global fall from February to May ๐Ÿ’ช

This half-good news comes as a surprise since CEO Chris Kempczinski said at the end of April that same-store sales declines in the second quarter will be steeper than the previous quarterโ€™s ๐ŸŽข

In the U.S., only about 100 out of 14,000 restaurants are closed entirely ๐Ÿ”

Shares of McDonaldโ€™s have fallen 4% this year, quickly recovering in the past months after losing 40% of its value in March... Will investors believe in a full recovery ahead?

The FED gave a dark economic outlook, global stocks are sinking
Published by Terence Mahier | Source

Stocks around the world are sinking after the FED gave a dark economic forecast ๐Ÿ“‰

The U.S. Federal Reserve forecast a 6.5% contraction in U.S. GDP for 2020, with a 5% rebound in 2021 and 3.5% growth in 2022. So not quite the sharp V-recovery expected... ๐Ÿ˜…

To make things worst, the possibility of a 2nd wave has emerged as a genuine threat in recent days, with reports of spiking cases and hospitalizations in California, Arizona, Texas and Florida after they began lifting lockdown measures ๐Ÿ˜ท

The Dow Jones is set to open at -3% after a spectacular rally for the past weeks. Just a hiccup or are we heading back in bear territory? ๐Ÿป

Starbucks says it lost $3 billion in revenue in latest quarter due to pandemic
Published by Terence Mahier | Source

Starbucks said it lost as much as $3.2 billion in revenue during its fiscal third quarter due to the coronavirus pandemic ๐Ÿ˜ท

Starbucks was one of the first U.S. companies to withdraw its guidance for the year as it was hit first in its Chinese locations and then around the world โ˜•๏ธ
After losing close to half of its value between January and March 2020, the shares rebounded surprisingly fast, along with the rest of the market, down only 6% from its Jan. level ๐ŸŽข

About 95% of U.S. locations are open again, with the majority of closed locations located in the New York City area...
Will investors sell the bad news or look ahead? ๐Ÿ”ฎ

Boeing has skyrocketed 58% so far this month on hopes of a travel industry rebound
Published by Terence Mahier | Source

Boeing has skyrocketed 58% so far this month on hopes of a travel industry rebound โœˆ๏ธ

The sector has been shattered by the coronacrisis and Boeing lost more than half of its market capitalization since Feb due to successive airlines canceling their existing orders and showing no signs of making new ones ๐Ÿ“‰

Yet, the market "FOMO"' (Fear Of Missing Out) pushed the whole industry to rid ea wave of investor optimism on the reopening of the economy and a revival in air travel with American Airlines up 50% last week ๐Ÿ”ฅ

Some analysts are calling this rebound too precocious while others think the market is looking ahead - what about you?

Zuckerberg slightly changes his tone towards content moderation
Published by Terence Mahier | Source

Zuckerberg pledged to build products to โ€˜advance racial justiceโ€™ ๐Ÿค”

Trump threatened to close down Social Networks after Twitter fact-checked him and censored his infamous tweet "when the looting starts, the shooting starts". FB did not agree with Twitter's decision and decided not to take down Trump's post leading to angry employees walking out or resigning โœŠ๐Ÿพ

Zuckerberg said the company will eventually review existing policies on content related to civil unrest and violence, not giving further details ๐Ÿง

FB stock is at an all-time high but the lack of clarity on content might scare investors ahead of the general elections...

Slack grew revenue 50% during the quarter but shares fall by 17%
Published by Terence Mahier | Source

Slack just reported revenue growth of 50% during the quarter but expectations were so high that the shares fell 17% in after-hours trading ๐Ÿ“‰

Slack reported steady revenue growth during a quarter that brought in more customers, as companies sought to keep communications going with their remote employees during the pandemic ๐Ÿ’ช
Yet, the company failed to deliver the sort of blowout that video-calling service Zoom did earlier in the week by reporting 170% revenue growth ๐Ÿ”ฅ
The market expectations were high and the number is barely a move from the growth of 49% in the previous quarter...

Will it keep sinking?

Lyft said rides booked through its platform jumped 26% in May
Published by Terence Mahier | Source

Lyft issued a more optimistic forecast for Q2 after saying rides on its platform rose 26% in May from the previous month ๐Ÿš•

The company says rides have increased week-over-week for 7 straight weeks since April, even though the May figure was still 70% below last year levels ๐Ÿ˜…

As the market is betting on economies reopening, Lyft is a good proxy for evaluating if things are coming back to "normal". The stock is up 100% since its lowest point during the pandemic but yet -25% compared to Jan. ๐Ÿค”

Markets have proven to be disconnected from the present reality and focused on the future. Will Lyft come back to its pre-COVID level? ๐Ÿ”ฅ

Zoom is set to report earnings for the 1st time since the lockdowns
Published by Terence Mahier | Source

Tonight, Zoom will report its fiscal Q1 Earnings ending in April, a moment of truth for the "plague" stock that has seen its valuation tripled since Jan. ($56B) with its shares rising +200% ๐Ÿš€

Zoom is the king of the stay-at-home stock and investors have put a lot of hope on its ability to become the leader in video-conferencing amid a generalization of home office ๐Ÿ‘‘

The company has seen usage surge, although many people are relying on free versions of the software. Zoom also continues to combat concerns about the security of its platform ๐Ÿง

Zoom seems unstoppable, but tonight, all investors' eyes will be on monetization KPIs ๐Ÿ’ธ

Dell surged after earnings, benefiting from home-office trend
Published by Terence Mahier | Source

Dell surged +6% after reporting better-than-expected results for Q1, riding the wave of the new home-office trend ๐Ÿ’ป

Dell witnessed a 15 to 20% rise in orders from banking, financial services, government, healthcare, and life sciences - mostly workstation purchases by companies moving more employees to home-based work ๐Ÿก

Dell has strongly recovered from its market drop in March following the global bear market but is still down 11% from Jan 2020 ๐Ÿ“ˆ

Will Dell become part of the "plague stocks" group that benefits from the pandemic and keep rising?

Trump threatens to close down Social Networks after Twitter fact-checks Trump
Published by Terence Mahier | Source

Trumpโ€™s favorite social media platform, Twitter, yesterday began fact-checking his posts, applying warning labels to two of his tweets that made misleading claims about mail-in voting ๐Ÿ˜ฎ

Trump answered (on Twitter) saying that "Republicans feel that Social Media Platforms totally silence conservatives voices. We will strongly regulate, or close them down, before we can ever allow this to happen" ๐Ÿ’ฅ

Twitter as a private company gets to set its own rules for what happens on its platform. Last October, it banned all political ads from the platform ๐Ÿ˜‡

Shares of Twitter are down 2% in pre-market - will investors fear retaliation?

Boeing is surging amid hopes of a Coronavirus Vaccine
Published by Terence Mahier | Source

Boeing rose 6% in pre-market trading after Novavax began its Phase 1 trial of its coronavirus vaccine candidate ๐Ÿ’‰

A successful vaccine would allow individuals to travel safely and could lead to a rebound in air travel demand, still down 90% in the U.S. โœˆ๏ธ

The sector has been shattered by the coronacrisis and Boeing lost more than half of its market capitalization since Feb due to successive airlines canceling their existing orders and showing no signs of making new ones ๐Ÿ“‰

Novavax announcement comes a couple of days after Moderna also reported positive developments on its vaccine trial.

Will Boeing keep flying high on the news?

U.S.-China tensions are ramping up on multiple dimensions
Published by Terence Mahier | Source

U.S.-China tensions are ramping up as if the World needed another trade war โš”๏ธ

As the Coronacrisis draws on, the relationship between the 2 countries keep worsening with each blaming the other about the true extent and origin of the coronavirus outbreak ๐Ÿ˜ท

In the latest move, the U.S. passed legislation that could restrict Chinese companies from raising money from U.S. investors, unless they abide by Washingtonโ€™s regulatory and audit standards ๐Ÿง
The U.S. also warned China of retaliation after China imposed stronger security law over Hong Kong ๐Ÿ”ฅ

How will the Dow Jones, which has been the mirror of this trade war, will react?

Johnson & Johnson discontinues talc baby powder in US and Canada
Published by Terence Mahier | Source

Johnson & Johnson, the giant Pharmaceutical company, is withdrawing its iconic talc-based baby powder in the US & Canada ๐Ÿ‘ถ

Sales of the talc product were sharply declining for years because of what the company attributed โ€œin large part to changes in consumer habits and fueled by misinformation around the safety of the product and a constant barrage of litigation advertising.โ€ ๐Ÿค”

Indeed, J&J had to pay billions to settle lawsuits from mothers around the world accusing the talc to be at the origin of their Ovarian cancer. No studies have been able to prove this link so far.

Will investors worry about a declining brand image? ๐Ÿ“‰

TikTok takes over Disney+ boss to be its new CEO
Published by Terence Mahier | Source

Disneyโ€™s Head of Streaming, Kevin Mayer, is set to become TikTokโ€™s CEO ๐Ÿ“น

Mayer earned a reputation as one of Disneyโ€™s best deal makers and worked on the companyโ€™s acquisitions of Pixar, Lucasfilm, Marvel, and online video company BAMTech. Losing the mastermind behind the largely successful launch of Disney+ is not good news for Disney & the stock was down 1.5% in pre-market trading ๐Ÿง

Disney was up 8% yesterday amid hopes that Parks will reopen soon thanks to a breakthrough in the conception of a vaccine against COVID-19 ๐Ÿฆ 

Rebecca Campbell, president of Disneyland Resort, will take over his position.
"No one is irreplaceable"?

US-China tensions rise as Trump bans chipmakers like Qualcomm to supply Huawei
Published by Terence Mahier | Source

The Trump administration just announced a blockage of shipments of semiconductors to Huawei in an action that could ramp up tensions with China ๐Ÿ‡จ๐Ÿ‡ณ

Qualcomm, a wireless technology company developing the chips behind the 5G technology would end up cut-off from one of its major clients ๐ŸŒ
The U.S. is trying to convince allies to exclude Huawei products from 5G networks on grounds its equipment could be used by China for spying ๐Ÿ•ต๏ธโ€โ™‚๏ธ

Whether or not you believe Trump, analysts agree that this "blame game" could lead to a full-scale trade war with consequences worst than the Coronacrisis ๐Ÿ˜ฑ

Qualcomm is down 5%, will it keep sinking?

Uber aims at the top of the podium in a move to acquire GrubHub
Published by Terence Mahier | Source

Yesterday, Uber made an offer to buy food delivery company & competitor Grubhub in an effort to consolidate a booming market ๐Ÿšดโ€โ™€๏ธ๐Ÿ”

This move would bring together two of the largest food delivery companies. However, both sides have yet to agree on a deal. Rumors said Uber offered as much as 2.15 shares of Uber for each share of GrubHub in an all-stock deal.
So far, GrubHub said "no, thanks" ๐Ÿ”ฅ

Go big or go home. Uber's strategy of being #1 in each of its markets has paid off so far and investors are excited about the potential merger. Uber stock is up +2.5% as investors are monitoring the deal.

Will Uber raise its bid? ๐Ÿค‘

Elon Musk practically dares authorities to arrest him
Published by Terence Mahier | Source

After weeks battling with California, calling the lockdown measures "fascism", Elon Musk just tweeted: โ€œTesla is restarting production today against Alameda County rules. I will be on the line with everyone else. If anyone is arrested, I ask that it only be me.โ€ ๐Ÿค 

Musk received support from the U.S. Treasury Secretary Steven Mnuchin, urging California to help Tesla reopen. Musk also threatened to move the whole production line in Texas โš”๏ธ

Tesla released a very complete playbook of guidelines to ensure a safe return to operations, but it still goes against national health guidelines...

Tesla is up 2% in pre-market trading ๐Ÿค”

Branson to sell up to $500M in Virgin Galactic shares to help his other businesses
Published by Terence Mahier | Source

Richard Branson is preparing to sell up to $500M of his stake in Virgin Galactic to help his other holiday & travel businesses that have been impacted greatly by the pandemic ๐Ÿš€๐Ÿ’ฅ

Virgin Galactic is developing commercial spacecraft for space tourists & space science missions ๐Ÿ‘ฝ
The company did not yet send anyone in space but has received non-refundable deposits from 400 clients, representing $100M of potential future revenue ๐Ÿ’ธ

The billionaire founder has been vocal about the financial struggle of the group Virgin, and he has even recently declared he would use his private island as collateral to obtain government loans ๐Ÿ˜…

Uber is taking heavy losses but investors seem to keep believing
Published by Terence Mahier | Source

Yesterday, Uber reported its Q1 results, including revenue of $3.54B and a net loss of $2.9B, its biggest loss in three quarters ๐Ÿ˜ฐ

Rides booking fell "only" 5% in Q1 & was down around 80% in April, though the CEO shed some optimism after mentioning that ride volume kept increasing in the past 3 weeks. On the other hand, Uber Eats saw a 50% year-over-year increase as more people ordered food for delivery at home ๐Ÿšดโ€โ™€๏ธ

This week, Uber laid off about 14% of its corporate employees to cut costs. Uber also withdrew its February claim to be profitable by the end of the year ๐Ÿคง

Sounds like bad news to you? Shares are up +6% ๐Ÿค”

Is Peloton the future of workout? Its share price says yes.
Published by Terence Mahier | Source

We introduced you to Peloton a month ago, the startup that sells connected cycles for home use, as well as subscriptions to stream workout classes ๐Ÿšดโ€โ™€๏ธ

Well, it appears it was a good bet. Pelotonโ€™s revenue surged 66% during Q1 to $524.6M, as more people purchased its fitness equipment and tuned into its live classes, to try to workout from home during the lockdowns ๐Ÿ 

The question is: will people go back to the Gym after the pandemic or will they stick to their new home workout habits? Investors seem to bet on the latter as the stock is up almost +20% overnight ๐Ÿ’ฅ

Shares are at an all-time high, but is the ride over?

Beyond Meat is navigating through the pandemic
Published by Terence Mahier | Source

Beyond Meat, the plant-based burger producer, posted better-than-expected earnings for Q1 ๐Ÿฅฆ

The young company reported a net income of $1.8M compared with a net loss of $6.6M last year, mainly thanks to a spike in sales for retailers, benefiting from consumers eating at home. Beyond Meat also announced plans to capitalize on potential meat supply chain issues as the price of Beef and Pork is skyrocketing in the U.S., pushing customers towards new options ๐Ÿฎ

However & given the lockdown uncertainty, the company withdrew its earnings forecast for the year as restaurants still represent 50% of its revenue ๐Ÿค”

Time to go vegetarian?

Is the Magic still at Disney?
Published by Terence Mahier | Source

Disney will report its Q1 Earnings tonight and it doesn't look good ๐Ÿคง

The Parks, Experiences, and Consumer Products segment was its fastest-growing profit driver, but it could now turn into the biggest drag. Disney has faced movie theater, film and TV production shutdowns as well as the closure of all of its theme parks ๐ŸŽข

Disney has not disclosed plans for any park reopening. Analysts do not see that happening soon as the need for social distancing & travel restrictions will remain until there is a widely available vaccine ๐Ÿ’‰

With low expectations from investors, will Disney be able to reassure with a new strategic outlook?

Is Elon Musk victim of a lockdown-breakdown?
Published by Terence Mahier | Source

Last Friday, Tesla's CEO Elon Musk went on a twitter rant starting with a claim that "Tesla stock price is too high imo" ๐Ÿค”

Musk has been vocal lately about his frustration of the Economic shutdown. Critics voiced their concerns that Elon Musk was prioritizing his business over the health of its workers. He answered "I am selling almost all physical possessions. Will own no house.", adding then "Now give people back their FREEDOM" ๐Ÿคฏ

Shares of Tesla immediately fell by 10% on worries that the CEO was kind of losing it, not mentioning his past issues with the SEC for alleged market manipulation ๐Ÿ‘ฝ

Will investors lose faith?

Will Amazon meet the market's high expectations for its Q1 Results?
Published by Terence Mahier | Source

Amazon, besides being one of the highest valued company in the world (a little less than half the GDP of France), has also been under the spotlight during the pandemic, with its core businesses potentially benefiting from the situation ๐Ÿ˜ท

Amazon stock surged by +28% since Jan. on speculation that the lockdowns created a boom in e-commerce (Amazon Fresh) and cloud services use (AWS) ๐Ÿ›’โ˜๏ธ
As a matter of fact, Amazon declared a couple of weeks ago that they would hire 175K additional workers, meanwhile, unemployment in the U.S. is reaching new records ๐Ÿ”ฅ

The earning report is set for tonight after the bell. Is Amazon unstoppable?

Facebook Q1 Earnings: A question mark on Ad Revenue
Published by Terence Mahier | Source

Google shares soared 7.7% this morning after reporting a decline in Ad Revenue less steep than expected ๐Ÿ“ˆ

Tonight, it's up to Facebook to report its Q1 Earnings, and all eyes will be on the potentially declining Ad revenue which accounts for 98.5% of Facebook revenue ๐Ÿ’ฅ

During the pandemic, the world seems to be aggressively turning to FB and other social media platforms for information and entertainment. That's good for the key metric of FB which is the Monthly Active Users ๐Ÿ‘จโ€๐Ÿ’ป
On the other hand, the traditional advertising FB has had for travel, shopping & small businesses might not be in its best shape ๐Ÿ“‰

What's your take?

U.S. set to reopen the Economy, maybe too soon?
Published by Terence Mahier | Source

With just a couple of days left in April, the Dow Jones is up over 10%, on its way to break a 3-month losing streak with its best monthly performance since Oct. 2002 ๐ŸŽข

Traders are increasingly betting on the reopening of the U.S. economy, which, according to experts, is not even โ€œremotely preparedโ€ to re-open ๐Ÿค”

Earnings reports are showing a crashing impact of the outbreak on the Economy, and Companies are pulling out their guidance for the rest of the year amid uncertainties due to the evolution of the pandemic.

Despite a poor outlook, the market is rallying as it seems that the situation cannot get worse. What's your take? ๏ฟฝ

Tesla has asked workers to return to work as soon as this week
Published by Terence Mahier | Source

Tesla has asked dozens of workers to return to work at its California vehicle assembly plant on Wednesday, according to internal memos, even though the lockdown is enforced until next Monday at least ๐Ÿค”

Tesla clashed with the County officials last month over whether its factory was an essential business but was not permitted to remain open.
Since the beginning of the crisis, Elon Musk has been quite vocal that the panic over the pandemic was "dumb" and he seemed eager to resume production of its electric vehicles ๐Ÿš—

Will the market appreciate the business-first approach of Musk ahead of its Q1 earnings report on Wednesday? ๐Ÿค‘

Google is cutting its marketing budget by half
Published by Terence Mahier | Source

Alphabet (the holding of Google), is planning to slash its marketing budgets by half meanwhile freezing hiring due to the global economic slowdown ๐Ÿ’ฅ

The move comes as a surprise as Sundar Pichai announced last week "some recalibration", but did not mention such drastic measures. We also discovered that the company withdrew access to skills training resources for its contractors ๐Ÿง

Prior to the pandemic, Google expected to increase marketing spending (~$18.5B in 2019)
Google is down 2% today and will report its Q1 Earnings next Tuesday. The question is whether Google's clients also cut their advertisement spending by half ย ๐Ÿ˜

Las Vegas Sands surge on optimism around the lift of lockdowns in Asia
Published by Terence Mahier | Source

Las Vegas Sands is a chain of Hotels and Casinos in the U.S. and South-East Asia (Macao & Singapore). It was one of the 1st U.S. company badly hit by the pandemic since it generates the majority of its income in Asia and its Casinos were shut down as soon as Jan. ๐Ÿ˜ท

LVS surged by +10% in pre-market today after publishing Q1 results not as bad as expected. The chain also painted a brighter future announcing that demand in Asia is likely to rebound more quickly than the U.S. as Asia has dealt with deadly pandemics in the past... ๐Ÿ’ช

LVS is down 40% since the beginning of the year - but isn't it too soon for optimism? ๐Ÿง