Hammerstone’s Early Look

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Friday, January 10, 2020

FuturesUp/Down%Last
DJ Industrials66.000.23%28,995
S&P 5009.500.28%3,285
Nasdaq40.500.45%9,049

 

 

U.S. equity futures are looking at a higher open, rising ahead of key monthly jobs data later this morning (est. for 160K nonfarm payroll additions and unemployment rate to hold steady at 3.5%), a day after all three major averages traded to new all-time highs. U.S. equities rose on Thursday after the U.S. and Iran avoided further conflict, though questions were raised about the recent downing of a Ukrainian plane that crashed two minutes after take-off earlier this week in Baghdad that killed all 176 passengers on board, with officials claiming it was taken down by a rocket. In Asian markets, The Nikkei Index rose 110 points to 23,850, the Shanghai Index slipped -2 points to 3,092 and the Hang Seng Index gained 77 points to settle at 28,638. In Europe, the German DAX is higher by about 30 points to 13,530, while the FTSE 100 is up a few points around the 7,600 level. Iran said it wanted to download black box recordings itself from the Ukrainian airliner that crashed after Canada and others said the plane was brought down by an Iranian missile, probably by mistake. Today marks the last day before earnings season kicks into gear next week, starting with big bank earnings.

Market Closing Prices Yesterday

The S&P 500 Index gained 21.65 points, or 0.67%, to 3,274.70

  • The Dow Jones Industrial Average rose 211.81 points, or 0.74%, to 28,956.90
  • The Nasdaq Composite jumped 74.18 points, or 0.81%, to 9,203.43
  • The Russell 2000 Index advanced 1.40 points, or 0.08% to 1,664.99

 

Events Calendar for Today

  • 8:30 AM EST       Change in Nonfarm Payrolls for December…est. 160K
  • 8:30 AM EST       Change in Private Payrolls for December…est. 153K
  • 8:30 AM EST       Change in Manufacturing Payrolls for December…est. 5K
  • 8:30 AM EST       Unemployment Rate for December…est. 3.5%
  • 8:30 AM EST       Average Hourly Earnings MoM for December…est. 0.3%
  • 10:00 AM EST     Wholesale Inventories MoM for Nov-F
  • 12:00 PM EST     Monthly WASDE ag report
  • 1:00 PM EST        Baker Hughes Weekly Rig Count

 

Other Key Events:

  • Consumer Electronics Show, 1/6-1/10, in Las Vegas
  • Monthly WASDE ag report

 

 

MacroUp/DownLast
WTI Crude0.1159.67
Brent0.1565.52
Gold-3.501,550.80
EUR/USD-0.00111.1095
JPY/USD0.09109.61
10-Year Note-0.0171.852%

 

 

Sector News Breakdown

Consumer

  • KB Home (KBH) Q4 EPS $1.31/$1.56B vs. est. $1.30/$1.61B; said Q4 net orders rose 38% vs. est. up about 22%; 4Q deliveries 3,929, +16% YoY and 4Q backlog 5,078 vs. estimate 4,730
  • Ryanair Holdings PLC (RYAAY) raised its full-year guidance for fiscal 2020 on the back of stronger trading over the Christmas period, as now expects its profit after tax for its fiscal year ending March 31 to be in the range of 950 million to 1.05 billion euros ($1.05 billion-$1.17 billion). Its previous guidance was EUR800 million to EUR900 million.
  • PriceSmart (PSMT) Q1 EPS 64c vs. est. 63c and reports Q1 revenue $811.9M up 4.1% YoY; said had 45 clubs in operation as of November 30, 2019, compared to 41 warehouse clubs in operation as of November 30, 2018
  • Franklin Covey (FC) Q1 EPS loss (4c)/$58.6M vs. est. loss (2c)/$57.57M; achieved a 57% increase in Adjusted EBITDA for the quarter
  • Sportsman Warehouse (SPWH) guides lower as sees Q4 EPS 17c-21c below prior 29c-35c and sales $250M-$254M below the $274.3M est.; sees Q4 comp sales growth down (-6%-7%)
  • Urban Outfitters (URBN) said total Company net sales for the two months ended December 31, 2019, increased 2.9% YoY; comparable Retail segment net sales increased 3%, driven by growth in the digital channel, partially offset by negative retail store sales. By brand, comparable Retail segment net sales increased 8% at Free People and 5% at the Anthropologie Group and decreased 1% at Urban Outfitters
  • WD-40 (WDFC) Q1 EPS 88c/$98.6M vs. est. 98c/$103.97M; backs FY20 EPS view $4.74-$4.83 vs. est. $4.79 and also backs FY20 revenue view $436M-$453M, vs. consensus $444.08M
  • Luckin Coffee (LK)8M share Secondary priced at $42
  • JD Sports Fashion said it expects profit for the year to February to be “within the top quartile” of forecasts but that the ultimate result will depend on trading in overseas markets
  • Norton LifeLock (NLOK) declares special dividend $12 per share

 

Energy, Industrials & Materials

  • Newly released internal emails from Boeing Co. (BA) paint a disturbing picture of its 737 Max programs, with employees bragging about fooling FAA regulators and ridiculing its safety. The emails were part of more than 100 pages of documents sent Thursday by Boeing to House and Senate committees that have been investigating the aircraft maker in the wake of two crashes in 2018 and 2019 that killed a combined 346 people
  • Marathon Oil (MRO) files automatic mixed securities shelf

 

Financials

  • Cohen & Steers (CNS) preliminary AUM $72.2B as of December 31, 2019, an increase of $1B from assets under management at November 30, 2019; net inflows of $639M and market appreciation of $818M were partially offset by distributions of $443M
  • Essential Properties Realty Trust (EPRT)9M share Spot Secondary priced at $25.20
  • Kimbell Royalty Partners (KRP) 5M share Spot Secondary priced at $15.50
  • Square (SQ) upgraded to Overweight from Equal Weight at Stephens

 

Healthcare

  • Eli Lilly (LLY) agrees to acquire Dermira (DERM) for $18.75 per share in deal valued at about $1.1B https://on.mktw.net/39XdXIg
  • Mirati Therapeutics (MRTX)08M share Secondary priced at $97.50
  • Palomar (PLMR) 5M share Secondary priced at $49.00
  • Quidel (QDEL) sees Q4 revenue $151M-$152M above consensus $139.17M
  • Intuitive Surgical (ISRG) Q4 revenue $1.28B vs. est. $1.22B; Q4 worldwide da Vinci procedures increased approximately 19% compared with the fourth quarter of 2018. Full year 2019 worldwide da Vinci procedures increased approximately 18% compared with 2018; shipped 336 da Vinci Surgical Systems in the fourth quarter of 2019 compared with 290 Q4’18
  • Aduro Biotech, Inc. (ADRO) announced a restructuring plan to further extend the company’s operating capital and align personnel towards executing its clinical development strategy; to reduce its current workforce by 51 employees, or approximately 59%
  • Moderna, Inc. (MRNA) announced positive seven-month interim safety and immunogenicity data after the third and final vaccination in the Phase 1 study of its investigational cytomegalovirus (CMV) vaccine (mRNA-1647)
  • Portola Pharmaceuticals (PTLA) said it sees Q4 Andexxa global net revenues ~ $28M; for the full year 2019, the company expects Andexxa global net revenues to be approximately $111M; during Q4, approximately 90 new accounts, and over 425 new accounts in 2019, ordered Andexxa in the U.S and brings the total number of accounts now ordering Andexxa to approximately 640 at the end of 2019
  • T2 Biosystems (TTOO) said prelim Q4 revs were $3.0M vs. est. $3.69M; entered into an exclusive distribution agreement that allows it to introduce the T2Resistance, T2Bacteria, and T2Candida Panels
  • Ultragenyx Pharmaceutical (RARE) announces positive results from cohort 3 and longer-term data from cohort 2 in an ongoing Phase 1/2 clinical trial evaluating gene therapy DTX301 in patients with ornithine transcarbamylase deficiency
  • Matinas BioPharma (MTNB) announces common stock offering

 

Technology, Media & Telecom

  • GrubHub (GRUB) shares down -9%; said that the company is not running a sale process, denying reports that sent its stock upward, according to Bloomberg as a rep for the company said “we felt it was important to clarify that there is unequivocally no process in place to sell the company and there are currently no plans to do so”
  • Qorvo Inc. (QRVO) and Skyworks Solutions (SWKS), two suppliers of radio frequency chips to Apple Inc. (AAPL) were upgraded to buy at Mizuho as sees upside from launch of 5G handsets that will require 50% to 60% more radio frequency content compared to 4G; expects radio frequency market to benefit from 2-3 Apple iPhone models that will support 5G and potential for Huawei settlement in H2 as tensions between U.S.- China cools down
  • Infosys Ltd. (INFY) rises 3%; said its Q3 net profit rose 25% from a year earlier due to the strong performance of its manufacturing and life-sciences segments; reports Q3 revs of $3.24B vs. est. $3.21B; raised its revenue guidance for the fiscal year ending March, projecting growth of 10.0% to 10.5% on a constant-currency basis, compared with an earlier estimate of 9%-10%.
  • Super Micro Computer (SMCI) said it now expects Q2 revenues in range of $850M-$880M, compared to its previously announced guidance range of $810M-$870M; said will provide additional commentary when it reports earnings in early February.
  • SYNNEX Corporation (SNX) said it plans to separate into two publicly traded companies: comprising of SYNNEX Technology Solutions, a leading IT distribution, services and integrated solutions company, and Concentrix, a leading global CX solutions company; 4Q EPS $4.26 vs. est. $3.61 on revs $6.58B vs. est. $5.99B; sees 1Q adj EPS $3.03-3.22 vs. est. $2.94 on revs $5.24-5.54B vs. est. $5.37B
  • Tegna (TGNA) forecast capital expenditure for 2020 of $62 million to $70 million; growth in 2020 full year EBITDA and free cash flow will also continue to reflect year-over-year expense improvements resulting from significant cost reduction initiatives that have been underway for the past 24 months

 

 

 

 

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