Live Markets U.s.: Warner Music, ZoomInfo headline busiest IPO week of 2020

Applied Molecular Transport.

05/06/2020 18:42

* Major U.S. stock indexes surge, small caps outperform
    * All major S&P sectors rise; energy leads
    * U.S. 10-Yr T-Note yield ~0.93%; dollar, crude up; gold
falls

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    WARNER MUSIC, ZOOMINFO HEADLINE BUSIEST IPO WEEK OF 2020
(1333EDT/1733 GMT)
    Warner Music Group Corp  WMG.O  and ZoomInfo Technologies
 ZI.O  led the charge in a week that saw eight companies go
public, easily the busiest week for IPOs this year.
    In fact, this week's activity already matches the entire
deal count for May and represents nearly a fifth of the 43 IPOs
priced-to-date.
    WMG was a hit with investors on Wednesday after the world's
third largest recording label priced a $1.93 billion IPO, 2020's
biggest  urn:newsml:reuters.com:*:nL1N2DG1JE. ZI doubled on Thursday as the
marketing-data company became the largest tech listing this year
 urn:newsml:reuters.com:*:nL1N2DH127.
    Friday is chock full of debuts after five firms priced their
respective IPOs.
    Shift4 Payments Inc  FOUR.N  surges nearly 50% after the
payments processor sold 15 million shares at $23, well above the
$19-$21 range  urn:newsml:reuters.com:*:nL4N2DI3AS.
    Chinese online grocery company Dada Nexus  DADA.O  hit a
high of $18.50 after it priced an upsized offering at $16, but
was last down about 3%. Existing investors JD.Com  JD.O  and
Walmart Inc  WMT.N  had indicated interest in buying up to $60
million and $30 million, respectively, in the IPO  urn:newsml:reuters.com:*:nL4N2DI3DN
 urn:newsml:reuters.com:*:nL1N2DH2QH.
    And three more IPOs come from the ever-present biotech
space: China's Legend Biotech  LEGN.O  opens at $37 vs $23 IPO
price  urn:newsml:reuters.com:*:nBw2nxK4Ca, Swiss biotech Calliditas Therapeutics
 CALT.O  opens just above the IPO price of $19.50  urn:newsml:reuters.com:*:nFWN2DI0PB
and Applied Molecular Transport Inc  AMTI.O  jumped as much as
85.7% in its debut  urn:newsml:reuters.com:*:nFWN2DI0K5  urn:newsml:reuters.com:*:nGNXXPjvm.
    Next week, online used-car seller Vroom Inc  VRM.O  is
currently the only IPO on the calendar, but that is expected to
change soon given the strong deal outcomes and improved market
sentiment.
           
    (Lance Tupper)
    *****
    
    
    SURGING (1206 EDT/1606 GMT)
    Major averages continue to hold onto the bulk of their gains
in the wake of the better than expected May payrolls report.
Around the midpoint of the session, the S&P 500  .SPX  is
trading just off recent session highs. 
    The Nasdaq  .IXIC  was briefly on track to end the session
above its Feb. 19 closing high, and now sits about 0.1% below
that mark. Each of the three major averages are on track to
notch their biggest daily percentage gain since May 18, as well
as the Russell 2000  .RUT  index of small cap stocks. 
    Cyclical sectors are once again pacing the gains, with
energy  .SPNY , financials  .SPSY  and industrials  .SPLRCI  the
best performers, with energy jumping nearly 7% as crude prices
jumped nearly 5%, sending Brent  LCOcv1  above $40 a barrel. 
    Gains are broad, with advancing issues outnumbering
declining ones on the NYSE by a 6.44-to-1 ratio; on Nasdaq, a
3.45-to-1 ratio is favoring advancers. 
    Below is your market snapshot:
    
 
 
 
    (Chuck Mikolajczak)
    *****
    
    INDIVIDUAL INVESTOR BEARISHNESS CONTINUES TO EBB (1101
EDT/1501 GMT)
    The percentage of individual investors describing their
short-term outlook for the stock market as "bearish" is at its
lowest level in nearly four months according to the latest
American Association of Individual Investors (AAII) Sentiment
Survey.
    AAII reported that bearish sentiment, or expectations that
stock prices will fall over the next six months, declined 3.3
percentage points to 38.9%. Pessimism was last lower on February
19, 2020 (28.7%). Even with the decrease, bearish sentiment is
above its historical average of 30.5% for the 15th consecutive
week. 
    Bullish sentiment rose 1.5 percentage points to 34.6%,
putting it at a 7-week high. Nevertheless, optimism is below its
historical average of 38.0% for the 13th consecutive week and
the 18th week this year. 
    Neutral sentiment rebounded by 1.8 percentage points to
26.6%. Neutral sentiment is below its historical average of
31.5% for the 16th consecutive week and the 20th time in 21
weeks. 
    With these changes the bull-bear spread rose to minus 4.32
from minus 9.06 last week  urn:newsml:reuters.com:*:nL1N2DB1P7:
 
 
    In this week's special question, AAII asked its members
which factors are most influencing their six-month outlook for
stocks. Two out of five (40%) respondents said the country’s
ability to manage the coronavirus pandemic and reopen businesses
are the biggest influential factors. Meanwhile, 30% of
respondents said that quarterly economic data and the
unemployment rate are the most influential factors.

    (Terence Gabriel)
    *****      
 
    MAY JOBS REPORT: PENNIES FROM HEAVEN (1005 EDT/1405 GMT)
The dreaded May jobs report delivered an unexpected positive
jolt as the feared doomsday data actually brought signs of
economic revival.    
    The U.S. economy added 2.5 million jobs in May  USNFAR=ECI ,
sending the unemployment rate  USUNR=ECI  down to 13.3%
according to the Labor Department, in an enormous surprise to
the upside.  urn:newsml:reuters.com:*:nL1N2DH2GS
    Economists expected a payrolls drop of 8 million and a
jobless rate soaring to a historic 19.8%.
    "Today was a shocking jobs number – and for the first time
this year it was a positive shock," writes Chris Zaccarelli,
chief investment officer for Independent Advisor Alliance. "It’s
very encouraging to see workers being recalled back by their
employers and the unemployment rate dropped back down in May."
    Digging deeper into the report, a spike in average hours
worked and a pull-back in average hourly wages suggest the
lowest earners, who bore the brunt of April's mass layoffs, are
quickly being rehired.
 
    But broken down by race/ethnicity, unemployment among black
and Asian Americans actually increased - from 16.7% to 16.8% and
from 14.3% to 14.8%, respectively, while white unemployment fell
the most, by far, from 14.2% to 12.4%.
 
    Labor market participation rate bounced back a bit, rising
60 basis points to 60.8% after having plunged to 60.2% in April,
and the underemployment rate edged lower as the number of
workers on part-time for economic reasons pulled back.
 
 
    One unsurprising development: Wall Street surged on the
news.
    (Stephen Culp)
    *****
    
    FUTURES SURGE AFTER PAYROLLS SURPRISE (0848 EDT/1248 GMT)
    Equity index futures were pointing to a strong open on Wall
Street to close out the trading week on Friday, after a much
better than anticipated unemployment report for May. 
    At one point, S&P e-mini futures  Escv1   more than doubled
their gains from levels prior to the release, which showed the
unemployment rate dropped to 13.3% last month, an improvement
from the 14.7% in April and much better than the 19.8% forecast,
giving further fuel to the view the worst of the economic pain
from coronavirus-induced lockdowns was in the past.  urn:newsml:reuters.com:*:nL1N2DH2GS
    "It’s amazing. Everyone is like why is the market coming
back so quickly and I think what we are seeing is the states
that are open, people have gotten back to work really, really
quickly," said JJ Kinahan, chief market strategist at TD
Ameritrade in Chicago.  
    Yield on the benchmark 10-year US Treasury  US10YT=TWEB 
note climbed as high as 0.96% after the report, the highest
level since March 20 and the dollar  =USD  strengthened against
a basket of major currencies, putting it on track for its first
advance in five sessions. 
    Below is your premarket snapshot:
    
 
 
    (Chuck Mikolajczak)
    *****
    
    

    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Premarket levels June 5    https://tmsnrt.rs/3gZF2Oi
wages and hours    https://tmsnrt.rs/30fPlrJ
Unemployment by race    https://tmsnrt.rs/2Y6wuN4
Labor market participation    https://tmsnrt.rs/3gZPx4a
Underemployment    https://tmsnrt.rs/3dCJvoe
AAII06052020TG    https://tmsnrt.rs/2ACbPZf
Midday levels June 5    https://tmsnrt.rs/2Y34Q3D
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Terence Gabriel is a Reuters market analyst. The views
expressed are his own
Lance Tuppper is a Reuters market analyst. The views expressed
are his own)