Hammerstone Market’s Early Look

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Tuesday, January 7, 2020

FuturesUp/Down%Last
DJ Industrials14.000.05%28,656
S&P 5001.500.05%3,245
Nasdaq22.000.25%8,869

 

 

U.S. stock futures are edging higher, building on yesterday’s strong rebound which saw the Dow Jones Industrial Average stage a 300-point recovery off its morning lows, as investors took advantage of a small market decline following increased geopolitical tensions between the U.S. and Iran. In Asian markets, The Nikkei Index jumped 370 points to 23,575, the Shanghai Index rose 21 points to 3,104 and the Hang Seng Index gained 95 points to settle at 28,322. In Europe, stocks rise for the first time in three sessions as the German DAX is higher by 150 points to 13,275, while the FTSE 100 is up about 15 points to 7,590. China’s currency strengthened to its highest level in five months as risk sentiment returned to global markets on Tuesday. U.S. stocks closed Monday firmly higher, with gains gathering steam in the final minutes of trade, as investors gauged brewing tensions in the Mideast as insufficient to derail the economy and a bull run for stocks. While the situation between Iran and the U.S. are likely to ease in the near-term, attention for investors will also turn to fundamentals shortly with the start of earnings season right around the corner starting late next week,

Market Closing Prices Yesterday

  • The S&P 500 Index gained 11.43 points, or 0.35%, to 3,246.28
  • The Dow Jones Industrial Average rose 68.50 points, or 0.24%, to 28,703.38
  • The Nasdaq Composite jumped 50.70 points, or 0.56%, to 9,071.46
  • The Russell 2000 Index advanced 2.39 points, or 0.14% to 1,663.26

 

Events Calendar for Today

  • 7:45 AM EST       ICSC Weekly Retail Sales
  • 8:30 AM EST       Trade Balance for November
  • 8:55 AM EST       Johnson/Redbook Weekly Sales
  • 10:00 AM EST     ISM Non-Manufacturing Index for December
  • 10:00 AM EST     Factory Orders for November
  • 10:00 AM EST     Durable Goods Orders, Nov-F
  • 1:00 PM EST        US Treasury will auction $38 billion new 3-years
  • 4:30 PM EST        API Weekly Inventory Data

 

Earnings Calendar:

  • Earnings Before the Open: ANGO, NTIC
  • Earnings After the Close: PCYO

 

Other Key Events:

  • Consumer Electronics Show, 1/6-1/10, in Las Vegas
  • Citigroup Global Tech, Media, Telco West Conference, 1/7-1/8, in Las Vegas
  • Credit Suisse Aircraft Leasing Conference (1-day) in New York

 

 

MacroUp/DownLast
WTI Crude-0.3662.91
Brent-0.4468.47
Gold-0.501,568.30
EUR/USD-0.00191.1178
JPY/USD0.04108.41
10-Year Note-0.0051.803%

 

 

World News

  • Top Pentagon leaders said Monday that the United States has no plans to withdraw troops from Iraq, despite a draft letter from a senior military officer that appeared to suggest plans for withdrawal were underway.
  • EuroZone spiked to a six-month high in December due to steady and widespread price increases. Despite the rise in the annual rate to 1.3% from the previous month’s 1%, inflation remains way below the European Central Bank’s goal of just below 2%.

 

Sector News Breakdown

Consumer

  • Gap (GPS) and Kohl’s (KSS) both downgraded to Hold from Buy at Jefferies
  • Pier 1 (PIR) reported comparable sales for the third quarter of -11.4% vs. -10.5% YoY and 3Q net sales $358.4M; said to close 450 locations and cut jobs
  • Summit Materials (SUM) files to sell 3.25M shares of Class A common stock
  • ADT Inc. (ADT) announced it has acquired Defenders, its largest independent dealer and only Authorized Premier Provider, for a purchase price of approximately $381M
  • Tesla (TSLA) launches Model Y electric sports utility vehicle program at its new Shanghai factory; the Shanghai factory also delivered its first cars built outside the U.S. to public on Tuesday
  • General Motors (GM) warned it will suffer a prolonged sales slowdown this year in China amid heightened competition in its key mid-priced SUV segment and trade war fallout; said vehicle sales in China fell 15% to 3.09M in 2019 for a second straight annual decline
  • Burger King will test a new Impossible Croissan’wich sandwich starting in late January in select test markets across the U.S.
  • Azul (AZUL) reports passenger traffic rose 27.2% in December to 2.96B revenue passenger kilometers, led by 31.1% growth in international traffic; Capacity grew 26.5% to 3.54B available seat kilometers, led by 32.8% rise in international capacity
  • Volaris (VLRS) reports revenue passenger miles rose 15.5% to 1.95B in December; domestic RPMs expanded 12.5% Y/Y and international RPMs increased 22.7% for the month; capacity advanced 12.3% to 2.21B available seat miles

 

Energy, Industrials and Materials

  • Range Resources (RRC) lowered cap-ex forecast for the full year to about $728M from $756M and said Q4 production is expected to be near the high end of the company’s prior 2.33 to 2.35 Bcfe per day guidance; decided to suspend its dividend to prioritize debt reduction
  • Premier Oil has agreed a $625m deal to buy two major UK North Sea assets from BP Plc (BP)
  • Precision (PDS) anticipates a reported 2019 year-end cash balance of approximately $75M and in the fourth quarter completed a one-year extension of its $500M revolving credit facility, now maturing November 2023; raises 2020 CapEx view to $85M-$105M from $60M-$80M
  • Viper Energy Partners LP (VNOM) announced that its average daily production for the Q4 2019 was 26.1 Mboe/d, or 16.5 Mbo/d, an increase of approximately 23% from Q3 2019 average daily production of 21.3 Mboe/d, or 13.7 Mbo/d. Average daily production for the full year 2019 was 21.5 Mboe/d, an increase of approximately 25% from FY18 average daily volumes of 17.3 Mboe/d
  • Boeing (BA) supplier Spirit Aerosystems (SPR) offers some workers voluntary layoffs amid “ongoing uncertainty regarding the 737 MAX” according to CNBC after the close yesterday

 

Healthcare

  • Intra-Cellular (ITCI) files to sell 10M shares of common stock
  • Amarin Corporation (AMRN) said it sees 2019 net total revenue at or potentially slightly above the upper-end of the company’s previously expressed guidance of $410M-$425M, according to preliminary results; said net total revenue consists predominantly of U.S. sales driven by increased prescriptions for Vascepa (icosapent ethyl) capsules
  • Incyte (INCY) announced the validation of the company’s Marketing Authorization Application for pemigatinib for the treatment of adults with locally advanced or metastatic cholangiocarcinoma with a fibroblast growth factor receptor 2 fusion or rearrangement that is relapsed or refractory after at least one line of systemic therapy
  • Merck (MRK) said phase III keynote-604 trial investigating Keytruda in combination with chemotherapy met one of dual primary endpoints of progression-free survival; the treatment with Keytruda in combination with chemotherapy resulted in statistically significant improvement in PFS vs chemotherapy alone; OS results did not meet statistical significance per pre-specified statistical plan
  • Rhythm Pharmaceuticals (RYTM) said Keith Gottesdiener, M.D., intends to step down as CEO, President and a member of the company’s Board of Director
  • Xeris Pharmaceuticals, Inc. (XERS) announced positive topline results from the in-clinic stage of a Phase 2 study of its developmental ready-to-use (RTU) glucagon for the prevention of hypoglycemia during and after moderate-to-high intensity aerobic exercise in adults with Type 1 diabetes mellitus (T1D)

 

Technology, Media & Telecom

  • Microchip (MCHP) guided Q3 sales of $1.28B-$1.29B vs. est. $1.27B saying they continued to experience strong bookings in December 2019 that resulted in better than expected billings for the December 2019 quarter and improved backlog for the March 2020 quarter; Microchip previously provided revised guidance on December 3, 2019 for consolidated net sales to be $1.244B-$1.298B, or down between 3% and 7%
  • Advanced Micro Devices Inc. (AMD) revealed plans for 2020 at the annual CES trade show, as it announced new third-generation Ryzen 4000 mobile processors for laptops, which its CEO claimed outperformed Intel’s rival, especially in graphics performance. AMD also announced a new graphic card, the Radeon RX 5600 XT
  • Intel (INTC) provided a brief glimpse at Tiger Lake, the company’s next generation of laptop processors, at a press conference at the Consumer Electronics Show. The company said that the new processor line will offer a “huge leap on graphics performance,” with double-digit computing performance over the current generation of processors, known as Ice Lake
  • Interdigital (IDCC) guides Q4 revs $92M-$100M vs. est. $88.3M and sees Q4 operating expenses roughly $11M-$14M higher QoQ
  • Emcore (EMKR) files $30M mixed securities shelf
  • Himax Technology (HIMX) guides Q4 prelim revenue $174.9M vs. est. $162.8M
  • PC Connection (CNXN) will replace Jagged Peak Energy (JAG) effective prior to the open of trading on Friday, January 10. Parsley Energy (PE) is acquiring Jagged Peak Energy

 

 

 

 

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