BUY, SELL, HOLD (2)

Stocks Eye Weekly Gains Despite Mounting China Tensions

U.S.-China tensions continue to weigh on the market

Deputy Editor
May 22, 2020 at 12:11 PM
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Though all three indexes remain in the black for the week, the Dow Jones Industrial Average (DJI) is down over 100 points midday, as U.S.-China tensions mount, outweighing the positive sentiment from Director of the National Institute of Allergy and Infectious Diseases, Dr. Anthony Fauci, that a coronavirus vaccine could be available in the U.S. by December. The S&P 500 Index (SPX) and Nasdaq Composite (IXIC) are also trading in the red ahead of the long weekend, as investors remain wary of the pandemic's potential second wave. 

Continue reading for more on today's market, including: 

  • UGG parent pushes higher after earnings.
  • The tractor giant seeing a post-earnings pop.
  • Plus, PDD sees a surge in options volume; the cosmetics name seeing price-target hikes; and the pharma stock dropping on a failed trial.

mmc may 22

One stock seeing unusual options activity today is Pinduoduo Inc (NASDAQ:PDD), up 7.8% at $64.69 at last check. The China-based e-commerce company has seen 26,000 calls cross the tape so far -- eight times what's typically seen. Most popular today is the weekly 5/29 70-strike call. This rise in volume comes after the company beat its first-quarter revenue estimates as online shopping sales surged during lockdowns. Year-to-date, the equity has surged over 74%.

Scaling the New York Stock Exchange (NYSE) today is cosmetic company e.l.f. Beauty Inc (NYSE:ELF), up 8.5% at $15.66 at last check. This rises comes after a fiscal fourth-quarter earnings beat, followed by no fewer than six price-target hikes, including two to $20 from Suntrust Robinson and Piper Sandler. Today's bull gap has found new support at the 200-day moving average, of which, the equity hasn't closed above since early March, and now has ELF back above its year-to-date breakeven point.

mmc Elf May 22

On the other hand, near the bottom of the Nasdaq is Syndax Pharmaceuticals Inc (NASDAQ:SNDX), down 19.7% at $16.47 at last check. The company's phase three trial of a breast cancer drug did not achieve the desired results. In response, both BTIG and Baird cut their price targets to $26 and $27, respectively. Despite today's drop, SNDX is still up around 85% year-to-date. 

 

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