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Terrie’s Test for Hammerstone

Scott Green — Thu, 19 Apr 2018 19:49:25 +0000

Early Look

Thursday, April 19, 2018

U.S. stock futures are struggling for direction, currently down slightly after ending mixed yesterday. The three gauges are showing YTD gains ranging from 0.1% to 5.7%, having recovered this month from their slump in March. Stocks ended Wednesday’s session mixed, with energy shares surging as oil prices topped its best levels in more than 3-years, and as transports jumped behind better-than-expected earnings from rail company CSX and airline UAL. The Dow Industrial Average slipped, led by a decline of over 7% in IBM after the company reported weaker gross margins for its most recent quarter. Industrials and materials were also strong, led by gains in metals (steel, aluminum, copper), while Consumer Staples were among the biggest sector decliners. The VIX index snapped its 6-day losing streak, rising just over 2%. The Fed’s Beige Book showed that economic activity remained at a modest to moderate pace, though nine of the 12 regional banks expressed concerns about trade tariffs. In Asian markets overnight, The Nikkei Index gained 32 points to settle at 22,191, the Shanghai Index advanced 25 points to end at 3,117 and the Hang Seng Index jumped 424 points to settle at 30,708. In Europe, the German DAX is down a few points at 12,575, while the FTSE 100 rose over 10 points at 7,330. U.K. stocks climb to 10-week high, as metals prices soar.

Market Closing Prices Yesterday

· The S&P 500 Index inched higher 2.25 points, or 0.08%, to 2,708.64

· The Dow Jones Industrial Average fell -38.56 points, or 0.16%, to 24,748.07

· The Nasdaq Composite gained 14.14 points, or 0.19%, to 7,295.24

· The Russell 2000 Index advanced 3.76 points, or 0.24% to 1,583.56

Events Calendar for Today

· 8:30 AM EST Weekly Jobless Claims…est. 230K

· 8:30 AM EST Continuing Claims…est. 1.845M

· 8:30 AM EST Philly Fed Business Outlook for April…est. 21.0

· 9:45 AM EST Bloomberg Consumer Comfort Index…prior 56.0

· 10:00 AM EST Leading Index for March…est. 0.3%

· 10:30 AM EST Weekly EIA Natural Gas Inventory Data

Earnings Calendar:

· Earnings Before the Open: ABB, BBT, BK, BX, DGX, DHR, GWW, HOMB, KEY, NUE, NVS, PBCT, PM, SNA, SON, UN, VMI, WBC, WBS

· Earnings After the Close: ASB, BDN, CHE, CLW, EGP, ETFC, IBKC, LLNW, WAL, WERN

World News

· The recent flattening yield curve is not a signal that the nine-year-long U.S. economic expansion is approaching its end, said Federal Reserve Gov. Randal Quarles. “I’m not viewing the current flattening of the yield curve as a particular signal towards a pending recession,” Quarles said

Sector News Breakdown
Consumer

· Pier 1 Imports (PIR) shares fell -15%; Q4 adjusted EPS 21c/$512.2M vs. est. 21c/%537.6M; Q4 comparable sales fell (-7.5%) vs. est. loss (2.6%); Q4 gross margin +37%; said to discontinues share repurchase program and dividends (watch WSM, BBBY, RH)

· Sleep Number (SNBR) shares fell -9%; Q1 EPS 52c/$389M vs. est. 56c/$396.69M; sees FY EPS $1.70-$2.00 vs. est. $1.86; Q1 comparable sales fell (-3%) vs. est. (-2%); sees 2018 capex about $50M (watch mattress stocks TPX, LEG)

· Bon-Ton Stores Inc. (BONT) will begin closing down its remaining stores and go out of business after a bankruptcy judge said she would approve the sale of the retailer’s assets. The judge cleared the way for a sale to a group of bondholders and a pair of liquidators, which will begin closing more than 250 stores across 23 states, putting about 24,000 employees out of work.

· Procter & Gamble Co (PG) has agreed to acquire Merck KGaA’s consumer health unit for 3.4 billion euros ($4.2 billion) https://reut.rs/2qHiWaO

Energy

· Kinder Morgan (KMI) Q1 EPS 22c/$3.42B vs. est. 21c/$3.65B; Q1 adjusted Ebitda $1.90B vs. est. $1.86B; still sees FY adjusted Ebitda about $7.5B

· Transocean (RIG) reports company’s contract backlog is $12.5B

· Dover (DOV) announced that its board of directors formally approved the separation of Apergy from Dover through a distribution of all of the common stock of Apergy held by Dover to Dover shareholders

· Xcel Energy (XEL) files automatic mixed securities shelf

· ConocoPhillips (COP) downgraded to Hold from Buy at Jefferies

· South Jersey Industries (SJI) 11.017M share Secondary priced at $29.50

Financials

· American Express (AXP) Q1 EPS $1.86/$9.7B vs. est. $1.71/$9.51B; sees FY18 EPS at high end of $6.90-$7.30 view vs. est. $7.12 and sees FY18 revenue growth 8%; Q1 total expenses $6.9B and Q1 provision for loan losses $775M

· The SEC proposed a rule to establish a standard of conduct for broker-dealers, which will require complying with obligations of disclosure, care and conflicts of interest. The new rules also will require registered investment advisers and broker-dealers to provide to retail investors a brief relationship summary that isn’t longer than four pages, with information on issues such as fees and conflicts of interest (watch shares of brokers and online brokers AMTD, ETFC, SCHW)

· BB&T (BBT) Q1 EPS 94c/$2.84B vs. est. 92c/$2.83B; Q1 CET1 capital ratio 10.2% and Q1 net charge-offs 0.41%

· BancorpSouth Bank (BXS) Q1 EPS 58c; Q1 net interest margin 3.67%, Q1 provision for credit losses $1M

· Cathay General (CATY) Q1 EPS 78c (in-line with est.); Q1 net interest margin 3.75% vs. Bloomberg estimate 3.67%

· Eagle Bancorp (EGBN) Q1 EPS $1.04 (in-line with est.); Q1 non-interest income $5.30M and Q1 provision for credit losses $1.97M

· RLI Corp. (RLI) Q1 operating EPS 60c vs. est. 53c; 1Q net premiums earned $190.0M and Q1 net premiums written $183.4M

· SL Green (SLG) Q1 FFO $1.66/$301.7M vs. est. $1.65/$346M

· Texas Capital (TCBI) Q1 EPS $1.38 vs. est. $1.34; 1Q net interest income $210.3M and Q1 provision for credit losses $12M

· Torchmark (TMK) Q1 EPS $1.47/$1.07B vs. est. $1.45/$1.07B; sees FY operating EPS $5.93-$6.07 vs. est. $6.03

· Umpqua (UMPQ) Q1 EPS 35c vs. est. 28c; 1Q net interest margin 3.96%, 1Q book value per share $18.21, 1Q tangible book value per share $9.97, 1Q net interest income $223.2M, 1Q total deposits $19.94B and Q1 provision for loan losses $13.7M

Healthcare

· Danaher (DHR) Q1 EPS 99c/$4.7B vs. est. 94c/$4.54B

· Surface Oncology (SURF) 7.2M share IPO priced at $15.00

· Bio-Path Holdings (BPTH) presented pre-clinical data from studies supporting prexigebersen in treating solid tumors in gynecologic malignancies at the annual meeting of the American Association for Cancer Research

· MorphoSys (MOR) 8.3M share IPO priced at $25.04

· Sientra (SIEN) reports FDA approval of the company’s PMA supplement allowing commercialization of its OPUS-branded breast implant products manufactured by Vesta; commercial sale of implants to begin immediately

· Flexion Therapeutics (FLXN) says key results from the previously completed pivotal Phase 3 study of Zilretta have been published in the Journal of Bone and Joint Surgery

· Paratek (PRTK) to sell $125M in convertible senior subordinated notes due 2024

Industrials & Materials

· Alcoa (AA) shares rose 8%; Q1 EPS 77c/$3.09B vs. est. 70c/$3.09B; raised its 2018 adjusted Ebitda ex. special items to $3.5B-$3.7B from prior view $2.6B-$2.8B; says due to delays in projects to expand smelters in China, global aluminum deficit to grow to between 600k metric tons and 1 million metric tons, up from last quarter’s deficit estimate of between 300k metric tons and 700k metric tons; (watch CSTM, KALU, ARNC)

· The U.S. Federal Aviation Administration will order inspections on engines like the one involved in the explosion on a Southwest Airlines (LUV) flight that killed a passenger earlier this week, after investigators said a broken fan blade touched off an engine explosion

· ABB Ltd. (ABB) shares jumped more than 5% after the engineer reported Q1 order growth across all units, as well as increased sales and stronger margins.

· BHP Billiton (BHP) cuts FY18 iron ore production view to 236-238Mt from 239-243Mt and narrows FY18 copper production range to 1.70-1.79t from 1.66-1.79t

· Steel Dynamics (STLD) Q1 EPS 96c/$2.60B vs. est. 92c/$2.58B; says saw improved demand and pricing across platform

· Crown Holdings (CCK) Q1 EPS 94c/$2.2B vs. est. 80c/$2.06B; FY18 EPS view to $5.35-$5.55 from $4.30-$4.50 (est. $4.42)

· Canadian Pacific (CP) Q1 EPS C$2.70/C$1.66B vs. est. C$2.71/C$1.68B; Q1 operating ratio 67.5% up 510 basis points and 190 basis points compared to last year’s operating ratio and adjusted operating ratio, respectively

· United Rental (URI) Q1 EPS $2.87/$1.734B vs. est. $2.43/$1.68B; rental revenue increased 25.1% YoY; Q1 adjusted Ebitda $780.0M and authorizes $1.25B share repurchase plan; Q1 operating income of $340M missed the $361M est.

· Universal Forest (UFPI) Q1 EPS 53c/$993M vs. est. 42c

· KapStone (KS) Q1 EPS 43c/$799M vs. est. 37c/$792.1M; Q1 adjusted Ebitda $115M vs. est. $109.3M

· Ship Finance (SFL) to sell $150M in convertible senior note due 2023

Technology, Media & Telecom

· 21st Century Fox Inc. (FOXA) rejected an acquisition offer for its entertainment assets from Comcast Corp. (CMCSA) largely over antitrust concerns, according to a regulatory filing, even though the bid was 16% higher on a per-share basis than what Walt Disney Co. (DIS) ultimately agreed to pay. https://on.mktw.net/2JSVpvD

· Amazon (AMZN) CEO Jeff Bezos disclosed in an annual letter to shareholders that the e-commerce juggernaut’s Amazon Prime subscription program has topped 100 million members worldwide.

· PTC Inc. (PTC) Q2 EPS 34c/$308M vs. est. 31c/$302.84M; Q2 license and subscription bookings were $99M and subscription mix was 78%; sees Q3 adjusted EPS 30c-34c on revs $310M-$315M vs. est. 34c/$308.16M; raises FY18 EPS view to $1.31-$1.41 from $1.29-$1.39 and revs view to $1.25B-$1.26B from $1.235B-$1.25B

· Crown Castle (CCI) Q1 revs $1.30B vs. est. $1.31B; sees 2Q adjusted Ebitda $757M-$767M and FY AFFO $2.26B-$2.3B

· Helios and Matheson (HMNY) files to sell common stock, warrants on ‘best efforts’ basis

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Market commentary provided by Hammerstone Markets, a division The Hammerstone Group, a firm separate from and not affiliated with Regal Securities L.P. Regal Securities L.P. has not participated in the creation of the content, and does not explicitly or implicitly endorse the content.

The post Terrie’s Test for Hammerstone first appeared on eOption.

Market Review: November 2, 2017

Regal Helpdesk — Thu, 02 Nov 2017 20:25:19 +0000

Closing Recap

Thursday, November 2, 17

Equity Market Recap

· U.S. stock markets closed mixed following several moving parts for investors to keep tabs on. Outside of the obvious earnings barrage (which dominated the action in several names both good and bad – details below), the Republican tax bill proposal dominated the headlines. The next question is whether it can be passed in both houses of Congress before the end of the year. The dollar turned lower, while Treasuries advanced as investors reacted to details of the plan. Homebuilders and private equity sectors were active following the tax plan details (full bullet points below) on margins interest concerns and limits to interest deductions. Also late day, after being well telegraphed the last two weeks, President Trump nominated current Fed Governor Jerome Powell to replace Yellen as Fed chairman next year. Also today, the British pound fell after the Bank of England offered a “dovish” rate hike, raising rates for the first time in a decade, but saying no further hikes appear imminent. Next up, another round of earnings tonight, highlighted by Dow component and tech giant Apple and the monthly nonfarm payroll report tomorrow. Today’s top S&P gainers included ANSS, LB, BDX, YUM, and NRG on earnings with the top decliners from NWL, FLS, DISCA, SYMC, and HBI all on earnings).

Bullet Points from US House of Representatives Tax Bill

· Bill called the TAX CUTS and JOBS ACT

· For individuals and families

· Lowers individual tax rates for low- and middle-income Americans to Zero, 12%, 25%, and 35% so people can keep more of the money they earn throughout their lives, and continues to maintain 39.6% for high-income Americans.

· Significantly increases the standard deduction to protect roughly double the amount of what you earn each year from taxes – from $6,350 to $12,000 for individuals and $12,700 to $24,000 for married couples.

· Eliminates special-interest deductions that increase rates and complicate Americans’ taxes – so an individual or family can file their taxes on a form as simple as a postcard.

· Takes action to support American families by:

· Establishing a new Family Credit, which includes expanding the Child Tax Credit from $1,000 to $1,600 to help parents with the cost of raising children, and providing a credit of $300 for each parent and non-child dependent to help all families with their everyday expenses.

· Preserving the Child and Dependent Care Tax Credit to help families care for their children and older dependents such as a disabled grandparent who may need additional support.

· Preserves the Earned Income Tax Credit to provide important tax relief for low-income Americans working to build better lives for themselves.

· Streamlines higher education benefits to help families save for and better afford college tuition and other education expenses.

· Continues the deduction for charitable contributions so people can continue to donate to their local church, charity, or community organization.

· Preserves the home mortgage interest deduction for existing mortgages and maintains the home mortgage interest deduction for newly purchased homes up to $500,000 – providing tax relief to current and aspiring homeowners.

· Continues to allow people to write off the cost of state and local property taxes up to $10,000.

· Retains popular retirement savings options such as 401(k)s and Individual Retirement Accounts so Americans can continue to save for their future.

· Repeals the Alternative Minimum Tax so millions of individuals and families will no longer have to worry about calculating their taxes twice each year and pay the higher amount.

· Provides immediate relief from the Death Tax by doubling the exemption and repealing the Death Tax after six years. Family-owned farms and businesses will no longer have to worry about double or triple taxation from Washington when they pass down their life’s work to the next generation

Job/Corporate part of tax plan

· Lowers the corporate tax rate to 20% – down from 35%, which today is the highest in the industrialized world – the largest reduction in the U.S. corporate tax rate in our nation’s history.

· Reduces the tax rate on the hard-earned business income of Main Street job creators to no more than 25% – the lowest tax rate on small business income since World War II.

· Establishes strong safeguards to distinguish between individual wage income and “pass-through” business income so Main Street tax relief goes to the local job creators it was designed to help most.

· Allows businesses to immediately write off the full cost of new equipment to improve operations and enhance the skills of their workers – unleashing the growth of jobs, productivity, and paychecks.

· Protects the ability of small businesses to write off the interest on loans that help these Main Street entrepreneurs start or expand a business, hire workers, and increase paychecks.

· Retains the low-income housing tax credit that encourages businesses to invest in affordable housing so families, individuals, and seniors can find a safe and comfortable place to call home.

· Preserves the Research & Development Tax Credit – encouraging our businesses and workers to develop cutting-edge “Made in America” products and services.

· Strengthens accountability rules for tax-exempt organizations to ensure the churches, charities, foundations, and other organizations receiving tax-exempt status are focused on helping people and communities in need.

· Modernizes our international tax system so America’s global businesses will no longer be held back by an outdated “worldwide” tax system that results in double taxation for many of our nation’s job creators.

· Makes it easier and far less costly for American businesses to bring home foreign earnings to invest in creating jobs and increasing paychecks in our local communities.

· Prevents American jobs, headquarters, and research from moving overseas by eliminating incentives that now reward companies for shifting jobs, profits, and manufacturing plants abroad

Commodities

· Energy futures manage a small gain, with WTI crude rising 24c or 0.4% to settle at $54.54 per barrel, bouncing back after snapping its 4-day win streak yesterday on profit taking. Inventory data was bullish on Wednesday, but prices managed to close lower. Saudi Arabian Energy Minister Khalid Al-Falih may meet his Russian counterpart Alexander Novak in Tashkent, Uzbekistan, on Friday to discuss oil-output cuts, an official said, Bloomberg reported.

· Gold prices inched higher Thursday, rising 80c to finish at $1,278.10 an ounce, reversing from earlier losses (but well off best levels) on the back of the Bank of England’s first interest-rate increase in a decade. There was also apprehension ahead of tomorrow’s jobs report.

Currencies & Bond Market

· The U.S. dollar ended slightly lower overall (dollar index around 94.70) falling after the details of the tax plan from the Republicans caused doubt the bill could pass in its current form. The dollar slipped slightly against the yen, while the euro rose around 0.3%. The pound slumped against the dollar to 1.3043 (lowest since Oct 9) after the Bank of England raised interest rates for the first time in a decade (bringing rates up to 0.5% from a record-low of 0.25%), yet showed concern for Britain’s Brexit-dented economy by indicating that another increase isn’t imminent. Bitcoin prices jumped more than 10% early on to highs of $7,392 (off low $6,573), but finished under $7,000 as the cryptocurrency got a boost this week after CME Group Inc. said it plans to introduce bitcoin futures by the end of the year. Bonds gained as yields slipped following details of the tax plan, better economic data ahead of nonfarm payrolls – 10-yr yield dipped over 2 bps to under 2.35%.

Economic Data

· Q3 Nonfarm Productivity rose 3.0%, topping expectations of 2.6% while unit labor costs rose 0.5% in 3Q vs. up 0.3% prior quarter; Output rose 3.8% in 3Q vs. up 3.9% prior quarter; Employee hours rose 0.8% in 3Q vs. up 2.4% prior quarter; compensation per hour rose 3.5% in 3Q vs. up 1.8% prior quarter and real compensation rose 1.5% in 3Q vs. up 2.1% prior quarter

· Weekly Jobless Claims fell 5K to 229K, below the estimate of 235K while prior week was revised to 234K from 233K; the 4-week moving average stood at 232.5K, the lowest since April 1973; continuing claims fell 15k to 1.884m in the week ending Oct. 21; lowest since Dec. 1973

Sector News Breakdown

Consumer

· Retailers; RL quarterly revenue, profit beat estimates and sees 2H gross margins up at least 150 bps; LB guided to the top end of guidance for next quarter EPS; FOXF dropped after a strong run in shares as Q3 results topped views; FNKO IPO opened at $8,00 per share, 33% below its $12 pricing; HBI shares fall after guidance falls short of estimates; in mattresses, TPX shares plunge after the loss of a contract with retailer Mattress Firm Inc. weighed on sales last quarter

· Restaurants; YUM got strong results from its Taco Bell and KFC divisions as earnings results lifted shares; BOJA EPS in-line, announces stock buyback and, though rev guidance misses; SHAK forecasted a narrower decline in its year comparable sales and raising the low end of its year revenue outlook after Q3 beat; CAKE reported Q3 revenue which missed estimates and lowered its full-year profit guidance; DPZ upgraded to buy at Maxim; PZZA downgraded to neutral at BTIG; HABT downgraded by two analysts following the company’s disappointing 3Q results noting comps have dipped into negative territory; SBUX reports earnings tonight

· Autos; TSLA slides after hours after warning it will take months longer than expected to reach its goal of making 5,000 Model 3 sedans a week, this after posting a larger-than-expected quarterly loss; ADNT falls early on mixed outlook for 2018; AN rises as reached an agreement to maintain and help manage fleets for Waymo, the self-driving car unit of Alphabet Inc.

· Consumer Staples; health and beauty got a boost recently on better EL results, though AVP posts Q3 EPS miss and CHD Q4 organic revs were a bit on the light side; in food, KHC reported a broadly in line set of results for Q3; APRN initially higher on rev beat but said Q4 sales slowdown to be driven by cuts in marketing; THS plunges after cutting its 2017 adj. EPS forecast and announcing that President Robert Aiken resigned

· Housing & Building Products; Homebuilder shares slide after the Republican tax plan lowers mortgage interest deduction; the plan proposes capping the tax deduction on new mortgages of $500,000 or less. Presently, Americans can deduct interest on mortgages of up to $1M from their income (shares of MTH, TOL, KBH, LEN, PHM declined on the news); building products makers VMC and MLM reported weak 3Q numbers and lackluster outlooks; both said the Hurricanes Harvey and Irma hurt results (VMC cut forecasts); NWL cut FY17 EPS guidance to $2.80 to $2.85 from $2.95 to $3.05

· Casino, Lodging & Leisure; gaming related stocks CZR and MLCO active on earnings; in lodging space, earnings from HGV, LQ, H; cruise lines (RCL, CCL, NCLH) active as the House Republican tax bill won’t include measures to increase taxes on the cruise line industry, Nomura said; in leisure, LCII shares plunged after missing estimates (WGO, THO, BC lower today)

Energy

· Another busy day of earnings in the energy sector, with results from MRO, OXY sending shares higher, while PXD and TUSKdropped on results; other movers included MUR, SGY, FMSA; CHK Q3 revenue misses estimates and EPS beat estimates by 1c as results hurt by decline in revenue from oil, natural gas and natural gas liquids

· Solar/Utilities; solar gets a boost after SPWR strong beat on top and bottom line quarterly results; utility stocks reversed lower midday as the UTY index turned negative after touching all-time highs earlier of 703.72;

Financials

· Insurance; several carriers report overnight with ALL Q3 results topped views as car insurance gains offset hurricanes; LNC EPS and revs beat; PRU also topped estimates while MET with EPS beat as well and announced a stock buyback of $2B; RNRupgraded to buy at Citigroup; BHF posted Q3 loss that included a $1.07 billion expense tied to its spinoff from MetLife; WLTWEPS missed but better organic growth & margin

· Private equity names tumbled late day as tax plan details are digested – reports indicated the GOP tax plan would limit interest deductions of many companies to just 30% of EBITDA (shares of APO, BX, KKR, CG, OAK were among the names falling on the news).

· Consumer finance and lending; FLT quarterly beat while analysts note the outlook for organic sales growth continues to be healthy in the 8-9% range/macro and business trends are improving across the board; CATM fell after SunTrust said the U.K.’s free ATMs may be at risk given recent proposals seeking to change how the ATM network operates

· Brokers & investment movers; TCAP falls after 3Q NOI per share missed estimates as they trimmed its dividend and announced plans to explore strategic alternatives

Healthcare

· Large Cap Pharma/Specialty; TEVA shares drop, weighing on the generic sector after warning on the ongoing price erosion for U.S. generics as well as its specialty business being hurt by several products, after Q3 results (VRX, MYL, ENDP active); NBIX 3Q results well above views driven by a massive beat on Ingrezza revenues of $46M; EXEL another gainer on earnings; IONS slips and ALNY rises after presenting detailed study results at a meeting in Paris; OMER falls on Cowen downgrade citing CMS final update to proposed hospital payments for 2018

· CAR-T stock movers; CLVS shares slid early as RBC noted patient assistance programs hampered 3Q Rubraca sales; JUNOupgraded to buy at SunTrust as analysts generally positive after ASH abstract showed JCAR017 demonstrating best-in-class safety and efficacy in NHL; BLUE was upgraded to buy at BTIG

· Healthcare services/facilities; CYH shares plunge after results as hospital operators continue to publish weaker than expected earnings and outlooks; AAC shares jumped on Q3 EPS beat and midpoint of year EPS topping views; CSU another gainer on mixed earnings (EPS beat); shares of AMED and HLS were both upgraded to buy at Mizuho; in managed care, CI touched 52-week high before paring gains post earnings

· Medical devices & Equipment; MYGN slipped early after a study of its GeneSight Psychotropic test on psychiatric treatment response in patients with major depressive disorder missed its primary endpoint; DXCM Q3 EPS beat though guides year revs to low end of view; ZBH downgraded at Piper after lowering yearly outlook yesterday; OSUR plunged on big volume following loss of a large government contract for hep C testing announced on its 3Q earnings call, which prompted a downgrade at Jefferies

Industrials & Materials

· Transports; most big earnings in airlines, rails and truckers have already been reported; XPO delivered strong 3Q17 overall results, outperforming consensus top to bottom in a hurricane-impacted quarter; broader index down with markets in general as

· Chemicals; Lithium companies (ALB, FMC, SQM) underperformed after house tax bill is said to repeal electric vehicle (EV) tax credit, which provides $7,500/EV tax credit to purchasers of electric vehicles

· Forest & Paper products; The U.S. Department of Commerce has reduced softwood lumber duties for all Canadian producers except Resolute Forest Products. In its final determination released today, the Commerce Department says most Canadian producers will pay a combined rate of 20.83%, down from 26.75% in the preliminary determinations.

Technology, Media & Telecom

· Internet; FB reported a very strong Q3, with results coming in well ahead of expectations and growth trends remaining very impressive – though warns expenses may jump; BABA trades to record highs as raised its outlook for full-year revenue growth after reporting sales that beat analysts’ estimates; YELP beat 3Q expectations, as salesforce initiatives lifted retention rates and local ad sales, which contributed to top and bottom line beats/guidance weaker; Wayfair (W) shares fall on earnings miss; CTRPa mover on earnings

· Semiconductors; AVGO said it sees Q4 revs at higher end of prior forecast; QCOM posted strong Q4 results but clouded by ongoing chip dispute with AAPL; QRVO downgraded by a few analysts after Q2 beat but Q3 sales view missed views; CAVMposted a modest beat and raise quarter/guidance; ESIO shares surge as EPS and revs top the highest estimates and blowout guidance; KEM plunges as Q2 gross margins of 28.2% fall short of forecast/in-line Q2 revs; MX rises as posts higher Q3 profit

· Hardware; AAPL reports earnings tonight after the close; GPRO shares slumped after weaker-than-expected Q4 guidance (sees Q4 EPS 37c-47c on revs $470M, plus or minus $10M below est.56c/$521.4M)

· Optical stocks; OCLR shares drop sharply as reported a Q1 beat on both revenue and earnings, however guidance was well below expectations leading to aggressive negative estimate revisions (the optical sector remain pressured on the OCLR guidance with FNSR, ACIA, NPTN, CIEN lower)

· Software movers; PI plunges as guides to an unexpected loss for Q4 on weaker rev view; HUBS another beat and raise quarter, with the company demonstrating strong traction with new customer adds; ZEN reported a very strong 3Q beat with all key metrics re-accelerating; ACXM top and bottom line beat with boosted guidance; ANSS & ULTI jumps on earnings

· Internet security; sector weak as SYMC shares dropped after missing top/bottom line Q2 results, guided next quarter and year below forecasts; FEYE top and bottom line beat for Q3 and raised year outlook but its Q4 billings forecast of $210M-$230M missed estimates of $237M; CYBR with a Q3 EPS/rev beat and guidance just above consensus views

· Media & Telecom; The Department of Justice has not made a final decision but is preparing for litigation in case it decides to go to court in an effort to block the proposed merger of AT&T (T) with Time Warner (TWX), reported The Wall Street Journalhttps://goo.gl/MjrjMk ; DISCA shares fell after Q3 EPS missed lowest estimates on the Street with subscriber declines; AMCXweak as profits overshadowed by revenue decline.

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The post Market Review: November 2, 2017 first appeared on eOption.

Market Review: October 10, 2017

Regal Helpdesk — Tue, 10 Oct 2017 20:12:48 +0000

Closing Recap

Tuesday, October 10, 17

Equity Market Recap

· U.S. stocks post gains on Tuesday, erasing yesterday’s modest losses as the Dow Industrials, S&P 500, and Nasdaq Composite all trade to fresh intraday record highs, led by energy and financial sectors and as the IMF raised its outlook for global growth. The Dow Industrials remain about 200 points away from 23K, but if it manages to clear it within the next 14 trading sessions, it would notch its third fastest climb to 1,000-point milestone since mid-July. The Dow was led by gains in WMT after the company reaffirmed guidance and announced a sizeable stock buyback, while PG shares fell after winning a proxy fight against activist Nelson Peltz. The tech heavy Nasdaq Composite traded above 6,600 for the first time (high of 6,608), as semiconductors (SOX) top fresh 17-year highs, though tech underperformed late day. Transports jumped, approaching the 10K level again amid gains in airlines and truckers, while rails lag (note Delta reports tomorrow morning). Financials rally heading into earnings season (JPM, BLK, PNC, BAC, C report this week) as tax reform/deregulation/rising rates trump fears of slowing trading volumes. The dollar fell, helping boost commodity prices as gold and oil end higher. There remain several macro factors that have failed to dent investor optimism including the political turmoil in Spain (Catalan crisis) and UK (UK Prime Minister May) or the Turkey standoff, while North Korea fears have abated (for now). California Wildfires another story with 15 active fires, 11 dead, over 100 missing and over 119,000 acres burned according to reports earlier. Meanwhile parts of Texas, Florida, Louisiana, Mexico, Puerto Rico and the Caribbean are still trying to recover from recent natural disasters.

· European markets ended mixed amid lingering worries over the Catalan crisis, which dragged Spanish stocks lower ahead of a closely watched address by the Catalan separatist leader. Catalan President Puigdemont later said in his address before the regional parliament in Barcelona, he was “accepting the mandate” of the chaotic Oct. 1 referendum on Catalonia’s secession from Spain but would suspend the prospect of declaring independence in favor of dialogue with the central government in Madrid. In the Dow there were 52-week highs for eight components including AXP, BA, CAT, CVX, INTC, MSFT, PFE, WMT, while GE bounces off 52-week lows.

Commodities

· Oil prices close higher, rising $1.34, or 2.7% to $50.92 per barrel (hi $51.06 and low $49.54), ending at 2-week highs in a strong showing for commodity prices in general, helped by a softening dollar. A pledge from Saudi Arabia to reduce monthly crude exports and talk of progress toward a balanced market from OPEC helped to set U.S. prices on track to notch a second straight gain according to various reports. WTI crude posted its first back-to-back gains since the period ended Sept. 25 after falling over 4.5% last week. OPEC’s Secretary-General Mohammed Barkindo on Tuesday called on U.S. shale producers to take responsibility and help curb the global supply glut in the oil market that has kept a lid on prices.

· Gold prices advanced on Tuesday, rising $8.80, or 0.7% to settle at $1,293.80 an ounce, its third straight day of gains (longest string of gains in about 5-weeks for gold) and marked its highest finish in 2-weeks as the dollar softened (hasn’t closed above $1,300 an ounce since September 26^th). Gold has been pressured by expectations of rising interest rates.

Currencies

· The U.S. dollar extended its recent weakness, falling amid a resurgence of geopolitical tensions, as well as advances by the British pound and euro. The dollar index (DXY) fell for a third straight session after hitting a 10-week high late last week as the September U.S. jobs report was seen as strengthening the case for the Federal Reserve to raise interest rates in December. The euro climbed to an intraday high of $1.1820 before pulling back, while the greenback slipped against the Japanese yen. Meanwhile the British pound topped the $1.32 level vs. $1.3141 Monday. The Turkish lira bounced after falling to a six-month low Monday after Turkey and the U.S. stopped issuing nonimmigrant visas to each other’s citizens.

Bond Market

· Bond markets reopened after being closed for Columbus Day holiday Monday, ending higher with yields dropping as the 10-yr slips about 2 bps to 2.34%, while the shorter term 2-yr yield bounced back over 1.5%. There were no major economic data today to move markets as investors await the Fed minutes from September’s policy meeting on Wednesday.

Other Interesting tidbits

· The International Monetary Fund (IMF) raised its 2017 and 2018 GDP growth forecast for the U.S., China, Euro area and Japan in its October World Economic Outlook. Global GDP to expand 3.6% in 2017 and 3.7% in 2018, up from July estimates for 3.5% this year and 3.6% next. U.S. to grow 2.2% this year, up from July est. of 2.1% U.S. to grow 2.3% in 2018, up from July est. of 2.1%

Sector News Breakdown

Consumer

· Retailers; WMT (held investor meeting today) reaffirms FY2018 adj. EPS $4.30-$4.40, vs estimate $4.38 while the Dow component said it would buy back up to $20B in shares over two-year period to replace existing authorization/sees FY19 consolidated net sales growth at or above 3% (shares of TGT and COST rallied with WMT); luxury retailers (TIF, COH, RL) active after LVMH tops estimates with its Q3 report as organic sales were up 12% during the quarter to sail past the 9% growth expected by analysts; FBR Capital is incrementally negative on GPS short term given in-store promotional activity last week

· Consumer Staples & Restaurants; BWLD downgraded to negative at OTR Global; tobacco stocks (PM, MO) outperform early after Wells Fargo recommends buying ahead of Q3 results as expects strong iQOS performance, resilience in key combustible cigarette markets; DPZ rises as CEO said the company may buy back more shares in November; PG declared victory in proxy fight with Trian’s Nelson Peltz in board vote (not elected to board); CMG outperformed

Energy

· Energy stocks led gains early on rebound in oil prices. OPEC’s Secretary-General Mohammed Barkindo on Tuesday called on U.S. shale producers to take responsibility and help curb the global supply glut in the oil market that has kept a lid on prices, helping bolster optimism that more efforts would be taken to keep supplies in check

· E&P sector; APA reduced its Q3 and Q4 production guidance by 2.2% and 4.1%, respectively as now expects 3Q17 and 4Q17 production at 354 MBoe/d and 374 MBoe/d vs. previous guidance of 362 MBoe/d and 390 MBoe/d; in research, Jefferies initiated coverage on 10 E&Ps, assumed coverage of 12, with top picks: CXO, FANG, RSPP, CPE, CNX; they upgraded CXO, DVN to buy from hold and cut NBL, CRZO to hold from buy and CHK cut to underperform vs hold

· MLPs; Citigroup said they continue to be bullish on the midstream group because of the positive tailwinds of higher commodity prices, record export volumes and solid domestic production growth, but downgrade TRGP and AMID largely on valuation, while have a strong preference for Buy rated ETP, MPLX, EPD, WMB and WPZ;

· Refiners; Piper on ANDV, PSX, MPC, HFC & PBF, saying they expect this to be a generally strong quarter for the group for well-known reasons/refining fundamentals have improved, leaving them more optimistic on 2018 earnings

Financials

· Large Cap banks bounced off earlier lows ahead of busy week of earnings; earnings later this week from BLK on 10/11, C andJPM 10/12, BAC, PNC, WFC, FHN on 10/13; STI and RF downgraded at FBR Capital in regional bank sector saying they expect fairly muted results out of the large caps, and favor high-quality small cap banks such as BOFI, FFWM, PFBC, and SBCF; in insurance, FBR upgraded PRU to buy and cut MET to neutral ; tax reform, deregulation and a rising rate environment continue to buoy stocks ahead of an earnings season that is likely to see softer trading and investment banking revs

· Asset managers; BEN preliminary month-end assets under management of $753.2B at the end of September 30, vs. $747.4B MoM; PZN preliminary AUM $35.4B as of September 30, up from $34.1B as of August 31, and $27.4B as of September 30, 2016

· Mortgage finance and lending; RLGY downgraded to Market Perform at KBW citing valuation ahead of the Q3 reporting season, while the firm also cut PRAA and PMT ahead of Q3 results

· REITs; VNO upgraded to overweight at Morgan Stanley saying that e-commerce isn’t hurting New York street retail as much as some think, and its dramatic rent increases that have driven store vacancies.

Healthcare

· Large Cap Pharma; LLY said its Phase III JUNIPER on Verzenio didn’t meet its primary endpoint; was also downgraded to neutral at Credit Suisse; MNKD initiated buy and $7 tgt at HC Wainright citing the combination of Afrezza’s potential and its strong underlying technology platform; PFE said it is reviewing options for Consumer Healthcare business (unit has $3.4B in revs); KALVjumps after signs deal with MRK to lead diabetic macular edema (DME) candidate KVD001 and future oral DME compounds based on plasma kallikrein inhibition ($37M upfront and up to $715M in potential milestones)

· Biotech movers; ANAB surges following positive results from a Phase 2 clinical trial assessing lead candidate ANB020 for the treatment of adults with moderate-to-severe atopic dermatitis (AD); ONCE Luxturna (potentially the first U.S.-approved gene therapy for an inherited eye disease) briefing documents posted by FDA

· Healthcare services and suppliers; ESRX agreed to buy privately-held medical benefit management company eviCore healthcare for $3.6 billion https://goo.gl/B9WmsS; MDXG guided Q3 revenue $84.6M, above estimates of $79.3M (but received negative mention at Grant’s conference today; in medical devices, SNN shares jumped midday on Bloomberg report that Singer’s Elliott is said to build a stake in the company

· Drug distributors; Cowen upgraded ABC and MCK to outperform as favors the two drug distribution companies over peer CAHas the business model for the sector transitions toward pricing specialty drugs separately from branded drugs (group has been pressured of late fearing entrance by AMZN into the space)

Industrials & Materials

· Industrials & Machinery; HON issues prelim Q3 EPS and sales above consensus ($1.75/$10.1B) and raised the low-end of its FY17 EPS guidance by 5c while announcing to spin Homes and DI Global Distribution Business and Transportation Systems into two publicly traded companies by end of 2018; ICHR entered into an agreement to produced liquid delivery systems for a “key customer”; in research, CAT tgt raised to street high $158 at Goldman Sachs, while JP Morgan upgraded ITW to neutral saying organic growth is likely to be better than forecast in Q3, while the firm downgraded AGCO to underweight on limited visibility

· Transports; airlines higher on better monthly metrics as AAL sees Q3 TRASM up 0.5%-1.5%, from prior view unchanged-to up 1%; UAL said Sept. traffic fell (-1.6%) and now sees 3Q Prasm down (-3.5%-4.0%) – had seen Prasm down (-3%-5%); DAL reports earnings tomorrow morning

· In rails, UNP was downgraded to hold at Aegis based on valuation but lower estimates for rails following storm impact; KSU was upgraded to buy at Bank America on valuation as the shares have been impacted by a trend of negative news (Luminent shutting its largest coal plant on KSU’s network, ongoing NAFTA negotiations, and recent Hurricane impacts)

· In truckers, Bank America downgraded WERN and ODFL to Underperform from Neutral given view of their relatively higher valuations, while double upgraded CHRW to buy from underperform as they increase focus on spot market beneficiaries in the rapidly rising truck pricing market

· Chemicals sector; EMN downgraded to neutral from Buy at Nomura as stock nears their $91 target and said top picks in chemicals in the medium to long run are OLN, DWDP and HUN/in terms of chemical markets, they prefer exposure to chlor-alkali, titanium dioxide (TiO2) and MDI/also have buys on ALB, VNTR, WLK and PAH offer more upside but also more risk/seeFMC as a lower risk play on ag/lithium growth; AXTA was downgraded to sell at Citigroup

Technology, Media & Telecom

· Internet; general softness in Internet names today; JD launches a new online shopping platform connecting high-end global brands with Chinese customers; BABA shares rose for an 8^th straight session (market cap overtook that of AMZN midday)

· Semiconductors; semiconductors (SOX) trades to fresh 17-year highs above 1,210 before sliding midday to turn negative and below the 1,200 level; NVDA rises as it introduced a new AI computer for fully autonomous vehicles and a new VR tool for those who design them

· Internet Security; CUDA reports earnings tonight after the close; Morgan Stanley with a few changes saying they continue to see vulnerability management as an attractive and increasingly strategic market, with QLYS as best positioned given its cloud-based mode (but downgraded QLYS after a 65% move in the stock YTD). Morgan also downgraded SYMC based on valuation (follows 35% YTD advance), while upgraded PANW to overweight as views it as one of the best positioned vendors to execute on an integrated security platform story

· Hardware and Software; TECD shares active after issuing FY18 EPS and revenue guidance that came in above consensus views ($8.75-$9.25 on revs $3B-$37B vs. est. $8.79/$36.1B); JBL was downgraded to sell at Goldman Sachs citing overly optimistic Street estimates; NTNX shares outperform on positive William Blair comments saying checks indicate a strong early read on October quarter for large orders.

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The post Market Review: October 10, 2017 first appeared on eOption.

Mid-Day Outlook: September 28, 2017

Regal Helpdesk — Thu, 28 Sep 2017 15:05:36 +0000

Mid-Morning Look

Thursday, September 28, 17

U.S equities mixed as gains in energy shares were offset by lower technology and industrial shares. Financials and technology shares led yesterday’s gains, but renewed love with the “reflation trade” has the dollar, bond yields, and small-cap stocks have posted a strong month of returns thus far. Volatility remains non-existent as the CBOE Volatility index (VIX) is met with selling pressure every time it sees a little push higher, as traders/investors take any opportunity to pile back into stocks on any pullback (no matter how small). Dow Transports another record high, rising around 0.4% to 9,880, while the Russell 2000 Small caps slide after touching its best all-time level yesterday. Markets showing excitement over potential growth opportunities by new tax proposal plan, while showing no concern about the apparent increased rate hike cycle by the Fed after speakers this week/meeting last week point to one hike this year and three next. Updated GDP revisions come in slightly above consensus, rising 3.1% and topping last quarter’s 1.9% growth, while jobless claims jumped. Several stock movers on earnings, but heavy bulk of next quarter earnings don’t begin for another two-weeks.

Treasuries, Currencies and Commodities

· In currency markets, the dollar slides after several days of gains, falling from more than 1-month highs (traded as high as 93.66 before fading to the 93 level); the greenback has risen in anticipation of the tax reform proposal by the Trump administration, better economic data, and a perceived more hawkish view on interest rates from Fed members this week (Yellen)

· Precious metals little changed, down slightly after marking its lowest settlement since mid-August yesterday given the stronger dollar and rising interest rate hike expectations from the Fed; gold prices down around $1,285 an ounce

· Energy futures holding on to recent gains, with WTI crude holding above $52 per barrel, on track for a stellar month of returns; November natural gas trades at $3.076/mln Btu, up from $3.035 after the EIA reported a smaller weekly natural gas inventory build of 58 bcf vs. est. 67 mln bcf

· Treasury markets mark a third day of declines, with the yield on the 10-yr topping 2.34% earlier before paring gains to around 2.32%; GDP data this morning slightly above views (and better than prior month), raising expectations more for rate hike pace to intensify from the FOMC

Economic Data

· GDP slightly better; the U.S. economy’s pace of growth in Q2 was raised to 3.1% from 3% under the government’s latest revisions to GDP as the value of inventories rose by $5.5B; consumer spending was unchanged at 3.3% after rising 1.9% last quarter, while business investment in structures rose a stronger 7% instead of 6.2%; exports were revised to show a smaller 3.5% gain and imports advanced 1.5%; Core PCE q/q rose 0.9% in 2Q after rising 1.8% prior quarter

· Weekly Jobless Claims rose 12K to 272K (vs. est. 270K), while the 4-week moving average increased by 9,000 to 277,750, marking the highest level in a year and a half; continuing claims fell 45k to 1.934m in the latest week ending

· August advanced trade deficit of goods narrowed to (-$62.9B) from (-$63.9B) in prior month, the Commerce Department said; imports fell 0.3% in Aug. to $191.813B from $192.459B in July and exports rose 0.2% in Aug. to $128.870B from $128.601B in July

Sector Movers Today

· Consumer Staples; Kellogg (K) reaffirmed its 2017 financial guidance; FLO sees $27M-$30M 3Q charge on employee separations;HAIN shares active as reached an agreement with Activist Engaged Capital, and will explore strategic optionshttps://goo.gl/swx9Nh ; MKC Q3 EPS/sales top consensus and guidance comes in above estimates; CAG Q1 top and bottom line results top consensus and reaffirmed forecasts; in research, BF/B was upgraded to neutral at Goldman Sachs saying risk/reward more balanced, while firm added PM to its conviction buy list

· Casino, Lodging & Leisure; towables/RVs higher again after THO quarterly results beat handily as indicate heathy industry trends, a pick up after the hurricane, and tight supply at retail (shares of CWH and WGO also active) – group jumped yesterday behind CWH strength; MTN reports Q4 EPS loss (smaller than views) citing less favorable conditions in Colorado

· Healthcare services and facilities; EVH announced 3 new client relationships and 2 expanded client relationships (CountyCare & New Mexico Health) that SunTrust said will be incremental to 2018 revenue; pharmacy retailer RAD tumbles on weak Q2 sales and revenue and comp sales drop of (-3.4%); names like ABC active after Bernstein said in a note that he sees AMZN most likely to partner with a large pharmacy benefit manager or buy a small one

· Chemicals; SHW said the recent string of hurricanes has disrupted what were strong same-store sales in July and August, and issued a profit warning for Q3 (follows similar comments from PPG earlier in the week); Tudor Pickering said that Trump’s tax plan to provide a boost for chemical companies, but not as impactful as it could have been as it doesn’t include border tax (biggest winner would be WLK, LYB as it would boost NAV by 12% and 7% respectively); FUL EPS miss on hurricane impact, while guidance midpoint lowered; EMN upgraded to buy at Goldman Sachs

Stock GAINERS

· AAAP +11%; Bloomberg reported NVS has approached the company about a deal and held talks about a potential acquisitionhttps://goo.gl/MwYkb8

· ABBV +6%; and AMGN in settlement for commercialization of Amgevita

· BBRY +11%; after earnings and revenues top consensus after record software revenue

· EXA +42%; Dassault Systemes agreed to buy its U.S. peer in a deal valued at about $400M/paying $24.25 per sharehttps://goo.gl/bZKj8J

· HAIN +2%; reached an agreement with Activist Engaged Capital, and will explore strategic options

· MCD +2%; upgraded to buy at Longbow as believe comps trending above consensus

· MKC +5%; Q3 EPS/sales top consensus and guidance comes in above estimates

· SPPI +16%; Jefferies said data from an abstract of poziotinib in NSCLC were very encouraging

· THO +1%; quarterly results beat handily as indicate heathy industry trends

· ZYNE +64%; Fragile X study meets primary endpoint

Stock LAGGARDS

· ANGO -14%; reported a slight miss on revenues and much weaker than expected gross margins which caused a large miss on EPS

· DM -3%; cut to underweight at Morgan as fundamentals largely unchanged yet valuations high

· DXCM -36%; after the FDA announced the approval of ABT’s FreeStyle Libre with a better than expected label and arrived earlier than expected (three analyst downgrades)

· ENDP -9%; as Goldman Sachs initiates as new sell citing long turnaround story

· MTN -3%; reports Q4 EPS loss (smaller than views) citing less favorable conditions in Colorado

· PIR -13%; reported 2Q EPS/revs above consensus on better comps but Q3 guidance is below consensus on negative comps and cut year forecast

· RAD -10%; tumbles on weak Q2 sales and revenue and comp sales drop of (-3.4%)

Syndicate

· Cloudera (CLDR) 13.432M share Secondary priced at $16.45

· Deciphera (DCPH) 7.5M share IPO priced at $17.00

· Intra-Cellular (ITCI) 9.677M share Secondary priced at $15.50

· Nightstar Therapeutics (NITE) 5.36M share IPO priced at $14.00

· NuCana (NCNA) 6.667M share IPO price $15.00

· Roku (ROKU) 15.668M share IPO priced at $14.00

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The post Mid-Day Outlook: September 28, 2017 first appeared on eOption.

Morning Preview: September 28, 2017

Regal Helpdesk — Thu, 28 Sep 2017 11:50:01 +0000

Early Look

Thursday, September 28, 17

Stock futures are slightly lower, barely pulling back from record levels achieved yesterday in several major indices, as investors await an update on gross domestic product data and speeches from more Federal Reserve officials. It was another record setting day on Wall Street as major averages closed higher on Wednesday with the financial and technology sectors driving the gains (Nasdaq Comp jumped over 1%). The S&P 500 closed just a point below the record level set last week after hitting an intraday record high, while the Russell 2000 index closed at records, after rising nearly 2% to 1,484.65, its best one-day gain since November. The Dow Transports also boasted a new record closing higher, while the Dow Industrials snapped its 4-day win streak. Among the best performers, Micron Technology Inc. led semiconductors higher after a strong quarterly earnings beat/raised guidance, while Dow component Nike lagged after a cautious outlook. Bonds retreated further, driving yields higher, after the White House unveiled further details of its plan to overhaul the tax code. The move was an extension of Tuesday’s decline after Fed Chairwoman Janet Yellen outlined the Fed’s reasoning for an additional rate increase this year. The yield on the benchmark 10-year rose over 8 bps topping 2.30% (and is up another 3 bps this morning around 2.34%). Gold fell to a six-week low on Thursday, fading after the stronger dollar. In Asian markets, The Nikkei Index rose 96 points to settle at 20,363, the Shanghai Index fell -5 points to 3,339 and the Hang Seng Index fell -220 points to end at 26,421. In Europe, the German DAX is higher by about 40 points at 12,700, while the FTSE 100 is up a few points around 7,315.

Market Closing Prices Yesterday

· The S&P 500 Index gained 10.20 points, or 0.41%, to 2,507.04

· The Dow Jones Industrial Average rose 56.39 points, or 0.25%, to 22,340.71

· The Nasdaq Composite spiked 73.10 points, or 1.15%, to 6,453.26

· The Russell 2000 Index surged 27.95 points, or 1.92% to 1,484.81

Events Calendar for Today

· 8:30 AM EST Gross Domestic Product (GDP) Annualized QoQ, Q2-T…est. 3.0%

· 8:30 AM EST Personal Consumption for Q2-T…est. 3.3%

· 8:30 AM EST GDP Price Index for Q2-T…est. 1.0%

· 8:30 AM EST Core PCE QoQ for Q2-T…est. 0.9%

· 8:30 AM EST Weekly Jobless Claims…est. 270K

· 8:30 AM EST Continuing Claims…est. 1.993M

· 8:30 AM EST Advance Goods Trade Balance for August…est. (-$65.1B)

· 8:30 AM EST Wholesale Inventories MoM for August…est. 0.4%

· 9:45 AM EST Bloomberg Consumer Comfort Index…prior 50.6

· 9:45 AM EST Fed’s George speaks on Economy and Monetary Policy

· 10:15 AM EST Fed’s Fischer speaks at BOE Independence Conference in London

· 11:00 AM EST Kansas City Fed Manufacturing Activity for September…est. 15

· 10:30 AM EST Weekly EIA Natural Gas Inventory Data

Earnings Calendar:

· Earnings Before the Open: CAN, ANGO, BBRY, CAG, CMD, MKC, MTN, OMN, RAD

· Earnings After the Close: AEHR, CAMP, KBH, SGH

World News

· Japan’s Prime Minister Shinzo Abe dissolved the country’s lower house of parliament on Thursday, with snap elections expected on Oct. 22, according to reports. Abe is looking to boost his support from voters as his popularity has increased amid the crisis with North Korea. Abe’s Liberal Democratic Party (LDP) currently has a two-thirds “super” majorityhttps://goo.gl/sc1RTf

· The European Commission said its Economic Sentiment Indicator, which aggregates business and consumer confidence, rose to 113.0 from 111.9 in August, its highest level since June 2007

Sector News Breakdown

Consumer

· Thor Industries (THO) shares up 3%; Q4 EPS $2.26/$1.93B vs. est. $1.96/$1.83B; Q4 Consolidated RV backlog $2.33B driven by continued strong consumer demand for Thor’s affordably-priced travel trailers and motorhomes, Q4 gross margin 15.6%

· Pier 1 Imports (PIR) shares down -7%; Q2 adjusted EPS loss (5c)/$407.6M vs. est. loss (6c)/$406.82M; 2Q comparable sales +1.8% vs. estimate +0.9%; cuts FY18 adjusted EPS view to 38c-48c from 46c-52c (est. 47c) and cuts FY18 net sales growth view to 0%-2% from 1.5%-2.5%; cuts comp sales growth view to (1%)-1% from 1%-2%; sees Q4 EPS 36c-46c vs. est. 37c

· McCormick (MKC) Q3 EPS $1.12/$1.19B vs. est. $1.03/$1.17B; sees FY adjusted EPS $4.20-$4.24 vs. est. $4.07; sees FY sales +9% to +10%

· Vail Resorts (MTN) Q4 EPS ($1.43)/$209.1M vs. est. $211M

· Mazda Motor Corporation (MDZAF), Denso Corporation (DNZOY), and Toyota Motor Corp. (TM) signed a contract to jointly develop basic structural technologies for electric vehicles

· Ford Motor Co. (F) and Lyft Inc. said they would develop self-driving vehicles for the ride-hailing service, adding to a growing number of alliances between auto makers

· Limoneira (LMNR) said CFO announced intention to resign from his position as the company’s CFO, Treasurer and Corporate Secretary, to pursue other opportunities

Energy

· SRC Energy (SRCI) boosts full-year production to be ~33-35 MBOE/D, compared with prior guidance of 32-34 MBOE/D; sees 3Q production volumes of ~40-41k MBOE/D and boosts borrowing base to $400M under its revolving credit facility from $225M

Financials

· Chubb (CB) reported preliminary loss estimates in Q3 attributable to Hurricanes Harvey and Irma at approximately $650M pre-tax, or $520M after tax. Losses for Hurricane Irma are currently estimated to range from $800M-$950M pre-tax, or $640M-$760M after tax

· Assured Guaranty Ltd. (AGO), which insures more than $300 million of Hartford, Connecticut debt, hired Lamont Financial Services Corporation to advise on strategies to help the city avert a default or bankruptcy, according to a person familiar with the matter – Bloomberg

· Equifax (EFX) is planning to launch a new service on January 31 that will permanently enable consumers to lock and unlock their credit for free, Bloomberg reports

Healthcare

· DexCom (DXCM) falls -18%; as the FDA, approved Abbott’s (ABT) continuous glucose monitoring system for adults not requiring blood sample calibration

· Deciphera (DCPH) 7.5M share IPO priced at $17.00

· Nightstar Therapeutics (NITE) 5.36M share IPO priced at $14.00

· NuCana (NCNA) 6.667M share IPO price $15.00

· AngioDynamics (ANGO) Q1 EPS 12c/$85.4M vs. est. 16c/$86.08M; backs FY18 adjusted EPS view 64c-68c and backs FY18 revenue view $352M-$359M

· Medtronic (MDT) says its HeartWare HVAD System got FDA approval as a destination therapy for patients with advanced heart failure who are not candidates for heart transplants

· Quest Diagnostics (DGX) cuts 3q revenue/EPS views citing storms and earthquake; sees Q3 revs cut by about 1.5%, EPS cut by about 10c

· Roche Holding AG (RHHBY) said it received approval from Swiss regulators for Ocrevus, a treatment for multiple sclerosis, or MS.

· Chiasma, Inc. (CHMA) provided an update on both of its international Phase 3 clinical trials of its octreotide capsules product candidate, conditionally trade-named Mycapssa®, for the maintenance therapy of adult patients with acromegaly

Industrials & Materials

· HB Fuller (FUL) Q3 EPS 65c/$562.9M vs. est. 67c/$554.6M; sees FY adjusted EPS $2.57-$2.62 vs. est. $2.60; sees FY adjusted Ebitda $290M

· Schnitzer Steel (SCHN) sees Q4 adjusted EPS 60c-63c vs. est. 61c; is expected to generate operating income of $23M-$24M and operating income per ferrous ton in the range of $27-$28 for Q4

· Eastman Chemical (EMN) upgraded to Buy from Neutral at Goldman Sachs

· Huntsman (HUN) upgraded to Outperform at Wells Fargo

Technology, Media & Telecom

· Toshiba Corp. said it reached a legally-binding agreement with a group led by U.S. private-equity firm Bain Capital LLC to sell its memory chip unit for ¥2 trillion ($17.7B). https://goo.gl/pmY2re

· Jabil Circuit (JBL) Q4 core EPS 64c/$5.02B vs. est. 61c/$4.9B; sees Q1 core EPS 65c-91c on revs $5.25B-$5.75B vs. est. 83c/$5.38B; backs FY18 core EPS view of $2.60 vs. consensus $2.58

· Roku (ROKU) 15.668M share IPO priced at $14.00

· Progress Software (PRGS) Q3 EPS 48c/$97.6M vs. est. 46c/$97.1M; sees FY adjusted EPS $1.82-$1.85 on revs $394M-$397M vs. est. $1.80/$396M

· Comtech Telecom (CMTL) Q4 EPS 31c/$147.8M vs. est. 29c/$150.8M

· DHX Media (DHXM) Q4 EPS C$0.03/C$87.7M vs. est. C$0.14/C$101.7M; Q4 adjusted Ebitda C$23.7M

· Cloudera (CLDR) 13.432M share Secondary priced at $16.45

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The post Morning Preview: September 28, 2017 first appeared on eOption.

Market Review: September 6, 2017

eOption — Wed, 06 Sep 2017 20:12:27 +0000

quity Market Recap

· U.S. stocks end higher, paring some of yesterday’s hefty losses (worst daily loss in 3-weeks) as a rebound in the energy sector and news that President Trump and Congressional leader’s ended immediate concerns about a debt default by agreeing to an extension until December 15^th helped prop markets higher. Markets also were unphased by news that Fed Vice Chairman Stanley Fischer announced plans to resign from the central bank in mid-October. Markets were flat to mixed earlier as investors closely watch Hurricane Irma, as it hit landfall in the Caribbean this morning and is expected to make landfall in Florida this week. However, as near-term debt default concerns were put to the backburner (for now) given the deal in Washington, bonds and gold prices slipped and stocks pushed higher.

· President Donald Trump and congressional leaders agreed to extend the debt limit and fund the government until Dec. 15, as well as approve aid for victims of Hurricane Harvey, Democratic leaders said today. Senate Democratic Leader Chuck Schumer and House Minority Leader Nancy Pelosi said “both sides have every intention of avoiding default in December.

· Macro stories: Economic data was mixed as the US services sector expanded in August to its highest level in two months according to the ISM, while the trade deficit widened. The Bank of Canada raised its benchmark interest rate by a quarter of a percentage point on Wednesday, adding to a rate increase in July amid robust growth (note the ECB holds its interest rate meeting tomorrow morning). Hurricane Irma is an absolute monster, and it’s starting to make landfall over islands in the Caribbean as it heads toward Florida. The House also passed the first tranche of Hurricane Harvey aid in the amount of $7.85B. In Fed news, well know “hawk” Federal Reserve Vice Chairman Stanley Fischer announced that he plans to resign around October 13^th citing “personal reasons.”

Economic Data

· ISM Non-Manufacturing (services) for August rises to 55.3, mostly in-line with the 55.6 estimate; and came in above 53.9 the prior month; Business activity rose to 57.5 vs 55.9 prior month; segment breakdown showed: new orders rose to 57.1 vs 55.1, employment rose to 56.2 vs 53.6, prices paid rose to 57.9 vs 55.7 and backlog of orders rose to 53.5 vs 52

· Trade Deficit for July widened to (-$43.7B) in July from (-$43.5B), but came in below estimates of (-$44.7B). The U.S. trade deficit is running almost 10% higher through the first seven months of 2017 compared to the same period in year before: $319.1 billion vs $291.2 billion. A bigger deficit subtracts from gross domestic product. Imports fell 0.2% in July to $238.07b from $238.49b in June and Exports fell 0.3% in July to $194.38b from $194.95b in June

Commodities

· Oil prices advanced for a 4^th straight session, as WTI crude rose 50c, or 1% to settle at $49.16 per barrel (high $49.42 and low $48.52). Prices have rebounded (after falling early last week) on hopes for renewed demand for crude from restarted refineries in the Gulf Coast. Brent crude trading up around its best level in a few months. The storm (Harvey) knocked out more than 20% of U.S. refining capacity, cutting demand for crude and weighing on prices. WTI ends near the highest in almost 4-week.s Next up, weekly inventory data from API tonight and EIA tomorrow.

· Gold prices for December declined -$5.50, or 0.4%, to settle at $1,339 an ounce, slipping from one-year highs amid a rebound in stocks, and as the debt ceiling deadline was pushed back 3-months until December, and agreed to fund the government until then. Gold had rallied to start the holiday-shortened week amid fears over North Korea’s weekend nuclear display combined with weakness in the dollar and broad losses in U.S. equities. Orange juice prices jump as Irma approaches Florida

Currencies

· The U.S. dollar was little changed as the dollar index (DXY) bounced off afternoon lows of 92 to end back around 92.25 (little changed on day). The greenback fell to lows of 1.2146 against the Canadian dollar before paring losses, but still a 2-low after the Bank of Canada raised its key interest rate by 25 bps. The dollar slipped against the euro as questions about further tightening by the U.S. Federal Reserve lingered (euro back above 1.192), while the dollar trades higher vs. the yen; the British Pound to 1-month highs vs. dollar. Bitcoin rebounds over 3% to trade back above $4,600 after falling to lows of $4,100 yesterday (off record highs $4,921 last week). Earlier in the session, the dollar slipped against major rivals as Federal Reserve Vice Chairman Stanley Fischer announced his resignation.

Bond Market

· Bonds reversed part of yesterday’s gains as yields climbed higher; after settling around the 2.065% level late yesterday, the 10-yr bounced back around the 2.10% level after The President and Congress agreed to pass aid for Harvey, announce an extension of the debt limit, and a continuing resolution both to December 15 (removing n-t fear of a US debt default). They did not lift the debt ceiling limit and the ongoing problems with North Korea are largely unsolved, so a bid to bonds remains to some degree. Economic data today was mixed. Bond yields are coming off fresh 10-month lows on Tuesday on fears of unsettling developments from the North Korean regime’s nuclear capabilities and concerns about upcoming Hurricane Irma’s impact.

Sector News Breakdown

Consumer

· Retailers; apparel designers active after GIII reported better-than-expected 2Q and increased year forecasts (GIL, RL, PERYwere among movers); FRAN Q2 sales slightly better, but Q3 guidance of 0c-5c on revs $481M-$491M came in well below estimate 23c/$506.5M; FRED reported narrower than expected Q2 EPS loss though sales of $5-7M missed; DLTH with EPS beat driven by better-than-expected direct revenues/lower SG&A expenses; toy retailers slipped late day (HAS, MAT) after CNBC reported Toys R Us weighs a possible bankruptcy filing; department stores were also strong on the day (M, JCP, KSS); KSS higher after the company announced a partnership with AMZN, to roll out a “smart home experience” in 10 stores

· Restaurants; PLAY reported mixed results as EPS topped views but overall revs and comps missed; WING was added to focus list at Baird saying the l-t growth outlook for Wingstop remains healthy and the company maintains an attractive business model with solid comps and margins

· Housing & Building Products; RBC Capital said Homebuilders and building products 2H17 estimates are likely to move lower as near-term demand is delayed and management teams assess damage from Hurricane Harvey (USG, CBPX, FBM, GMS); JELDupgraded to overweight at JP Morgan as believe valuation more than discounts recent investor concerns regarding North American volume growth; NWL lowers year EPS view due to impact of Harvey storm citing disruption to a large part of their U.S. resin manufacturing supply chain that is resulting in higher delivered cost

· Casino, Lodging & Leisure; cruise lines in focus after impact of Hurricane Irma in Caribbean and Florida (RCL, CCL, NCLH); NY Times noted in article that vacation rentals turn into shelters in Harvey’s wake/said nearly 1,100 homes and rooms are being offered for free to evacuees of Hurricane Harvey through vacation rental sites

Energy

· Energy sector with a solid rally today, as E&P stocks outperformed, along with gains in drillers and services; refiners bounce after yesterday’s pullback as refineries come “back on line” after outage during flooding due to Harvey storm; WTI crude oil topped $49 per barrel; stocks leveraged to gas pared gains midday (SWN, CHK, RRC)

· Few headlines in energy; MPC announced the decision to maintain the Speedway retail network as a fully integrated business within MPC; XOM was upgraded to neutral from sell at UBS after underperformance in shares; Jefferies said land drillers appear poised to lead oil services; APA said it has taken steps to mitigate disruptions to Permian sales; DAVN update after Harvey saying producing assets/facilities had only minimal damage; WMB reports no major offshore damage from Harvey

Financials

· Large Cap banks rally in afternoon as yields bounce; banks seeing reversal higher as debt ceiling extension pushed out another three months, taking away temporary fears of a US default; MA holding analyst day tomorrow; insurance (P&C) sector remains in focus as Hurricane Irma reaches category 5 level and makes landfall in the Caribbean and Florida (UVE, HRTG, HCI, UIHC, FNHC, RE, RNR, XL, BRKA, PGR, ALL) and as loss estimates for Hurricane Harvey continue to rise. Morgan Stanley noted under coverage: BRKA (6.7% market share), PGR (6.0%), ALL (3.4%), and AIG (3.3%) have the most property exposure in Florida

Healthcare

· Large Cap Pharma; VYGR reported positive results from an ongoing phase 1b trial of BY-AADC01 for advanced Parkinson’s disease; VRTX announced that Tom Graney would be its new chief financial officer and senior vice president (coming fromIRWD), starting September 13; RXDX shares active following update on key candidate entrectinib/on track for 2H’18 NDA filing;PTLA now sees a launch in November at the soonest and possibly as late as 1Q of 2018 (had seen rollout of Bevyxxa as soon as this month)

· Biotech movers; VSTM shares soar after an experimental cancer drug met its main goal of extending patients’ lives without their disease progressing (also won fast track status for the same drug in a new setting); SRPT reports results on 4053-101 study as statistical significance met on all primary and secondary biological endpoints; INSM issues stock offering of $250M shares of common stock after drug soared yesterday on key study; BCRX was upgraded at both Jefferies and JP Morgan on encouraging HAE data results

· Healthcare facilities and services; RBC Capital said hospital companies including HCA, THC, CYH and UHS all have “significant exposure” to Florida and may seem some disruptions from Hurricane Irma; HQY shares advanced after quarterly results beat estimates on all key metrics in; MYGN announced riskScore, an enhancement to its myRisk hereditary cancer test that quantifies a woman’s risk of developing breast cancer.

Industrials & Materials

· Transports; Rails active after CSX lowered its 2017 EPS growth view to 20%-25%, down from prior view of around 25% (UNP, KSU, NSC among movers on guide) though shares moved higher; in car rental (CAR, HTZ), Bloomberg reports that rental rates in Houston have surged in the wake of Hurricane Harvey

· Airlines fall; JBLU lowers Q3 RASM growth to negative 1% to positive 1% vs. prior view of (0.5) to 2.5%; says the reduction in RASM guidance largely reflects the current competitive industry pricing environment (also lowers capacity growth); UAL lowers Q3 PRASM view to down (3%-5%), worse than prior view of down 1% to up 1%, while lowered pre-tax margin view to 8%-10% (from 12.5%-14.5%) and capacity; guidance follows lowered updates from DAL and SAVE yesterday)

· Multi-industry/industrial stocks; LDR to be acquired by FTV for $67.25 per share/$770M deal https://goo.gl/jHV7WK; CAT at lows in afternoon after earlier trading to fresh 52-week high; Preliminary Class 8 truck net orders for August were 20,700 units, up 14% m/m and 50% y/y, FTR reported saying it is the best August order performance since 2014 (CMI, PCAR, NAV)

· Metals & Mining; TECK raised its 3Q coal sales volume to 7.2m-7.5m vs their prior view of at least 7m tonnes, due to strong coal demand in the quarter; STLD announces $350M notes offering; gold miners give up recent gains as gold prices turn lower (NEM, ABX, AEM)

Technology, Media & Telecom

· Internet; TRVG lowered FY revenue growth view to around 40%, down from 50% growth projected previously, and said expects FY adjusted Ebitda lower than in 2016 while remaining positive (PCLN, EXPE fell initially); GDDY 20M share Spot Secondary priced at $44.00; NFLX shares jumped after TMUS said it will start including a NFLX subscription for certain customers

· Semiconductors; INTC helps lead the Dow after it won a round in its eight-year fight with the European Union over a 1.06 billion-euro ($1.26 billion) fine/EU’s top court ruled that Intel’s appeal had to be reexamined by a lower tribunal; NXPI/QCOM EU merger review was suspended again (EU earlier this month had restarted the process after a suspension to demand missing info about the $47 billion tie-up); MCHP shares slipped early after reaffirmed forecast for year; MXIM lowered long term revenue expectations and raised margin targets

· Software, Hardware & Storage movers; HPE reported strong Q3 results with both sales and EPS beating Street expectations, while the outlook is largely in line with estimates (though shares downgraded to underperform at Bank America); NTNXprovided restated financials last night post-close and updated guidance to reflect new accounting practices; COUP Q2 results beat as billings growth (up 45% YoY) reaccelerated, highlighted by large deal momentum

· Tech services; CSRA disclosed that Eagle Alliance signed a contract with an agency of the Department of Defense for enterprise IT services valued at $2.4B over 10-years; EFII rises after saying it does not currently expect to report any material error that would require a restatement of any of its previously-reported financial results for any period

· Media & Telecom; ad agencies IPG (upgraded to buy) and OMC (upgraded to neutral) raised at Citigroup as believe the recent slowdown is both cyclical and structural…but don’t expect weakness to persist indefinitely (calls risk/reward attractive); TMUSsaid it will start including a NFLX subscription for customers who have at least two lines on an unlimited data plan; Reuters reported that bankers are lining up $70B in debt financing to back a potential bid from Altice and its U.S. unit ATUS for CHTRhttps://goo.gl/PjVejL

The post Market Review: September 6, 2017 first appeared on eOption.

Market Review: Chinese ADRs Held The ForeFront On USD Weakness

eOption — Fri, 17 Mar 2017 01:00:41 +0000

Equity Market Recap

· It was a relatively quiet session for U.S. stocks, opening near their best levels of the day before fading from near all-time highs on a bout of profit taking. Healthcare led the early declines, but pared losses. Global markets still remain strong after the Federal Reserve lifted benchmark interest rates on Wednesday, but remained vigilant that the pace of hikes would remain gradual. Economic data came in better-than-expected this morning, showing continued improvement. European stocks log highest close since 2015 as investors relieved from Dutch election outcome. Stock markets got first glimpse of policy last night (re healthcare/defense) but still await clarification and details regarding tax reforms and infrastructure spending. Bonds slipped, gold surged, the dollar was mixed and oil ended down slightly.

· The Bank of England kept rates unchanged at 0.25% by vote of 8-1 and Gilt purchase plan at 435B pounds. In the Netherlands, preliminary Dutch election results backed up the earlier exit polls, showing that Prime Minister Mark Rutte had likely held off the challenge of a far-right rival Geert Wilders, lowering the threat of a common currency breakup. Optimism over the Trump administration’s infrastructure spending and tax plans is “clearly fueling the markets,” IMF Managing Director Christine Lagarde said today. “On the other hand, the threat that could result from a significant change in trade policy is, for the moment as we see it, discounted and that could be one of the downside risks”: Lagarde.

Economic Data

· Weekly Jobless Claims fell 2K to 241K vs. est. 240K; Two weeks ago, new claims had fallen to the lowest level since early 1973. And they’ve come under the key 300,000 threshold for 106 straight weeks; four-week average of initial claims rose by 750 to 237,250; continuing claims fell 30K to 2.030M in the week ending March 4

· Housing Starts for Feb rose 3% to 1,288K annualized rate, above estimates for 1,264K (comes after starts fell -1.9% in prior month); single family starts rose to 872K and multifamily starts fell to 416K in Feb; building permits fell a greater -6.2% to 1,213K vs. 1,293K in Jan (est. 1,268K)

· Philly Fed index falls to 32.8 in March from 43.3 in February but above estimates for reading of 30.0; prices paid rose to 40.7 from 29.9 prior, while new orders inched higher to 38.6 from 38.0; the employment index rose to 17.5 from 11.1 while inventories rose to 11.8 vs -4.7 prior

Commodities

· Commodity prices: Precious metals gained, with gold and silver the top performers in the commodity complex on dollar weakness and comments from the Fed yesterday to raise rates at a gradual pace (taking time/not rushing). The commentary boosted gold prices to two-week highs, rising $26.40, or 2.2% to settle at $1,227.10 an ounce. Oil prices ended lower by a mere 11c to settle at $48.75 per barrel (high $49.62 and low $48.45). Not much in energy complex outside of a few comments by Saudi minister

Currencies & Bonds

· After plunging yesterday vs. most rival currencies, the U.S. dollar was lower most of Thursday, before managing to pare losses late day. The euro hit a 5-week high earlier today (high of 1.067) before fading to lose ground against the greenback. The euro was supported after exit polls suggested a pro-European Union winner in the Dutch election. The euro then spiked late day to around 1.075 vs. the dollar after ECB’s Nowotny said a rate increase may be on the way. The yen was little changed on the day after the dollar pared earlier losses (touched low of 112.91 vs. yen). The British Pound gained vs. the dollar, rising above 1.235. With today’s move, the dollar index posted its fifth daily decline of the past six sessions, despite rising rates. Treasury markets with a small pullback, as yields inch higher after 10-year Treasury yields fell the most in two months yesterday following the Fed moves; the 10-yr yield up around 2.53% and the 2-yr 1.32% (stayed there most of the day).

Sector News Breakdown

Consumer

· Retailers; dollar store DG Q4 EPS beat by 8c on higher sales and comps, while boosts dividend; GOOS 20M share IPO priced at C$17.00; CATO falls on Q4 earnings and said sees Q1 earnings significantly below last year; GES shares fall on Q4 miss, and lower Q1 and year EPS guidance; BKS announced a $50M share buyback plan; ICON disclosed material weakness in 10K filing; Macy’s (M) weak early after Reuters reported Starboard Value said to sell its stake
· Autos; TSLA announced $1.15B stock and convert offering ($250M stock and $750 convert notes with a 15% underwriter option, and Elon will purchase $25M of TSLA stock as part of the transaction); autos were mixed on the day

· Consumer Staples & Restaurants; in protein, TSN was downgraded at Argus citing the SEC probe of Tyson and other poultry producers, potential decelerating earnings in coming quarters, and a recent bird flu outbreak in two states; FRSH rises on better earnings results; BGS falls as CFO resigned/Credit Suisse lowered estimates

· Housing & Building Products; in home furnishing, WSM with mixed Q4 as EPS beat by 4c but revs missed estimates on weaker comp sales of (-0.9%)/guidance also missed consensus; homebuilders a nice rebound from yesterday after Single-family housing starts hit highest level since October 2007 (LEN, PHM, MTH, DHI active); 52-week highs for HD today

Energy

· Energy stocks were mostly lower, but some pared losses late day as oil prices ended little changed. Natural gas prices slid after weekly stockpiles fell less than expected (shares of RRC, SWN leveraged to natural gas) in other top news stories; DO received a favorable court ruling on Ocean Valor contract with PBR; Guggenheim upgraded AR and OAS to buy; not much else in way of news in the energy complex, though Saudi Arabia said it will review oil strategy in Q2 and that cuts may be extended if stocks still above average (citing Al-Falih)

Financials

· Large Cap banks; after a sharp reversal lower yesterday for banks, as bonds jumped and yields fell amid expectations the Fed will not raise rates at an accelerated rate, the group found footing today as investors stepped into some names; BAC was downgraded to sell at Compass Point

· Exchanges/Brokers/Asset managers; VIRT made an offer to buy KCG, with a bid with a price of over $18 per share, or at least $1.2B based on a recent share count https://goo.gl/mgSqld ; BEN was upgraded to buy at Bank America with $50 tgt

· Finance and Lending; CMO cuts quarterly dividend to 21c from 23c; LC was upgraded to buy at Guggenheim saying bank funding has returned to levels similar to those before it reported internal control failures in May, underscoring the “durability” of such funding and lowering the risk of liquidity-induced operating disruption

Healthcare

· Biotech movers; BIIB was downgraded at Leerink and Morgan Stanley citing slow start to Spinraza sales; INO downgraded at Piper saying a lack of focus and advancement for any one program poses execution risk to the broader platform (also posted wider quarterly loss); PTCT shares among biggest decliners in biotech index after earnings results and announcing a deal to buy Marathon Pharma’s Emflaza, which has been facing scrutiny over its $89,000 price tag

· Medical equipment and devices dropped; TROV downgraded at both Piper and Maxim after quarterly results; DGX was upgraded to buy at Bank America; MASI downgraded at Piper; life science tools fall early after Donald Trump’s budget proposal included deep cuts in spending on medical research and a reorganization at NIH institutes and centers (NSTG, FLDM, ILMN, TMO)

· Other movers on day; large cap pharma was broadly lower, with LLY, PFE, MRK, JNJ dropping; managed care also saw weakness; EGRX reported material weakness in 10-K; INSY delayed the filing of its 10K citing independent review

Industrials & Materials

· Industrial & Machinery; MMM to acquire Scott Safety from JCI for $2B; CAT was upgraded to neutral at Tigress Financial. In shipping space, broad strength on no particular news with TOPP, GLBS, DRYS, SBLK higher; the highlight of industrial sector remains Trump’s initial budget plan, which failed to lay out any details on infrastructure spending

· Transports; in rails, KSU declines after Mexico finds lack of competition in rail services network/KSU said disagrees with the Mexican Economic Competition Commission’s reasoning and preliminary conclusions; airlines were mixed after group slammed this week on winter storm (causing thousands of cancellations) and lower guidance from company updates (SAVE, UAL)

· Metals & Mining; steel producer NUE sees Q1 EPS $1.10-$1.15 with charges vs. est. 75c; Seaport global rating changes in steel space as upgraded CRS to buy with a $45 tgt as believe the recent pullback presents an attractive buying opportunity, and upgraded ATI to buy

Technology, Media & Telecom

· Semiconductors; sector slips from 17-year highs of 1,006 for SOX index; LRCX upgraded to overweight at Pacific Crest/KeyBanc saying expects a sharp spike in NAND supply by the end of 2017, but by the end of 2018, they expect shortages to resume and to be the norm; NVDA announced that it’s working with PCAR, a leading global truck manufacturer, on developing solutions for autonomous vehicles; AXTI cuts Q1 revenue view to $18M-$18.5M from $19.5M-$20.5M after fire at plant stopped production; SYNA upgraded at Northland to outperform given current valuation, strength in the TDDI and biometrics business, and the likelihood that Synaptics keeps the LCD versions of the upcoming iPhone’s in late CY17

· Software movers; ORCL shares jump after delivered strong results across the board, including Cloud ARR acceleration, upside to both GM’s and operating margins, and solid EPS growth (also upgraded at JP Morgan and JMP Securities); Internet security sector pocket of strength for market, CUDA outperforms but FEYE, FTNT, PFPT, CHKP all up over 1%

· Hardware movers; IBM tgt raised to $212 from $187 at Morgan Stanley saying IBM’s cloud strategy remains underappreciated, even under conservative DCF base case assumptions; NCR was upgraded to outperform at Oppenheimer on recent underperformance; GPRO rises as says jobs cuts (cut 270 jobs) may lead to profitability/sees Q1 revs high end of view (upgraded at Citigroup); JBL advances after earnings/guidance

· VR sector; the global market for augmented and virtual reality headsets is expected to spike nearly 10-fold, to 99.4 million units shipped through 2021 from 10.1 million in 2016, with the fastest growth in augmented reality headsets, according to market research firm International Data Corporation (IDC). That represents a compound annual growth rate (CAGR) of 58%. Revenue for VR headsets is expected to grow to $18.6 billion in 2021 from $2.1 billion in 2016

· Optical sector; Goldman Sachs upgraded INFN to conviction buy list, replacing CIEN which they downgraded to neutral citing upcoming new products which should drive revenue growth and margin expansion; also expects revenues to bottom in 1Q and to return to positive y/y growth in 2H; firm also upgraded LITE to neutral citing more upside optionality from the 3D-sensing oppty

The post Market Review: Chinese ADRs Held The ForeFront On USD Weakness first appeared on eOption.