Hammerstone’s Early Look
January 13, 2020|
Monday, January 13, 2020
U.S. stock futures pointing to a strong start for the week, as the Dow Jones Industrial Average, which briefly topped the 29,000 level for the first-time last Friday, appears on track to reclaim those levels along with gains for the S&P 500 and Nasdaq Composite as earnings season kicks off with major Wall Street banks, and markets will get details of the “Phase One” trade agreement with China. In Asian markets, The Nikkei Index rose 110 points to 23,850, the Shanghai Index rose 23 points to settle at 3,115 and the Hang Seng Index gained 316 points to 28,954. In Europe, the German DAX is up a few points trading just under 13,500, while the FTSE 100 is up about 40 points to 7,625. A busy day for retailers and healthcare names, with several companies giving guidance ahead of conferences.
Market Closing Prices Yesterday
- The S&P 500 Index dropped -9.35 points, or 0.29%, to 3,265.35
- The Dow Jones Industrial Average fell -133.13 points, or 0.46%, to 28,823.77
- The Nasdaq Composite dropped -24.57 points, or 0.27%, to 9,178.86
- The Russell 2000 Index declined -7.35 points, or 0.44% to 1,657.64
Events Calendar for Today
- 2:00 PM EST Monthly Budget Statement for December
- Earnings Before the Open: none
- Earnings After the Close: LMNR
Other Key Events:
- ICR Annual Xchange Conference, 1/13-1/15, in Orlando, FL
- JPMorgan Healthcare Conference, 1/13-1/16, in San Francisco, CA
- TD Securities London Energy Conference, 1/13-1/14, in England
- UBS Midstream, MLP and Utility conference, 1/13-1/15, in Utah
- The U.S. has “reached out” to North Korea in an effort to restart denuclearization negotiations, Axios reported Sunday. In an exclusive interview, White House national security adviser Robert O’Brien told Axios that the U.S. has used back channels to let North Korea know that “we would like to get those [negotiations] back on track.
Sector News Breakdown
- Lululemon Athletica Inc. (LULU) said it was lifting its earnings and revenue guidance for the fourth quarter after what it said was momentum over the holiday period. It’s now forecasting earnings between $2.22 and $2.25 a share on revenue of $1.37 billion to $1.38 billion, vs. prior guidance of earnings between $2.10 and $2.13 on revenue of $1.315 billion to $1.33 billion
- At Home Group (HOME) sees 4Q and FY20 sales and comp store sales toward the high end of previous outlook; sees Q4 comp sales high end of (-4%-6% view)
- Advance Auto Parts (AAP) downgraded to Neutral from Overweight at JPMorgan
- Tilly’s (TLYS) Total net sales of $143.9 million increased by 1.1% for the holiday period compared to $142.4 million for last year’s comparable nine-week holiday period ended January 5, 2019. Comparable store net sales, including e-commerce, decreased by 2.0% for the holiday period compared to an increase of 5.8% for last year’s holiday period; guides Q4 EPS 18c-20c below the prior 29c-32c view
- Texas Roadhouse (TXRH) upgraded to Strong Buy from Outperform at Raymond James
Energy, Industrials & Materials
- Exxon Mobil (XOM) is in talks to sell its oil assets in Equatorial Guinea, WSJ reported, citing the country’s oil minister Gabriel Obiang Lima
- Woodward (WWD) agrees to combine with Hexcel (HXL) in an all-stock merger, creating an aerospace and defense supplier with more than $5B in revenue; Hexcel shareholders will get 0.625 share of Woodward common stock which values HXL at $76.23 per share https://on.mktw.net/3a03JqJ
- Boeing Co.’s (BA) woes are expected to knock half a percentage point off U.S. economic growth in 2020, Treasury Secretary Steve Mnuchin said Sunday.
- Cott Corporation (COT) announced that it has entered into a definitive agreement pursuant to which Cott will acquire Primo Water (PRMW) for $14.00 per share payable in cash and stock at the election of Primo’s stockholders
- Cimarex Energy (XEC), Oasis Petroleum (OAS) and Range Resources (RRC) all downgraded to neutral from positive at Susquehanna
- Granite Construction (GVA) and Summit Materials (SUM) both downgraded to Sell from Neutral at Goldman Sachs
- Marathon Oil (MRO) downgraded to Market Perform from Outperform at BMO Capital citing a less competitive debt-adjusted growth outlook, relative inventory depth, and higher net asset value implied oil price
- Wesco (WCC) to buy Anixter Int’l (AXE) for $100 per share in a cash/stock deal valued at $4.5B
- Eaton (ETN) downgraded to Sector Weight from Overweight at KeyBanc
- Artisan Partners Asset Management Inc. (APAM) reported that its assets under management as of December 31, 2019 totaled $121.0 billion. Separate accounts accounted for $63.7 billion of total firm AUM, while Artisan Funds and Artisan Global Funds accounted for $57.3 billion
- Virtus Investment Partners, Inc. (VRTS) reported preliminary long-term and total assets under management (AUM) as of December 31, 2019 of $107.7 billion and $108.9 billion (including $1.2 billion of liquidity assets), respectively.
- Waddell & Reed Financial, Inc. (WDR) reported preliminary assets under management of $70.0 billion for the month ended December 31, 2019, compared to $69.4 billion on November 30, 2019
- Acasti Pharma (ACST) shares plunge 60% following unsuccessful results from a Phase 3 clinical trial, TRILOGY 1, evaluating lead candidate CaPre (omega-3 phospholipid) for the treatment of severe hypertriglyceridemia – shares of AMRN higher in reaction
- AstraZeneca (AZN) has said it will take a $100M write-down after trials of a heart disease drug showed it to be ineffective in treating a certain cardiovascular condition
- Invitae (NVTA) disclosed preliminary results for 2019 including revenue for the year of about $216 million, an increase of more than 45% from $147.7 million in 2018
- Forty-Seven (FTSV) files automatic mixed securities shelf
- Alnylam (ALNY) announced that the company has initiated a rolling submission of its New Drug Application to the U.S. FDA for lumasiran, an investigational RNAi therapeutic targeting glycolate oxidase for the treatment of primary hyperoxaluria type 1
- Quotient (QTNT) announced the commencement of the EU field trial activities for the extended Immunohematology, or IH, microarray. In addition, the company announced that the FDA has received its 510 submission for the initial SDS microarray and the MosaiQ system
- Alnylam Pharmaceuticals (ALNY) said prelim Q4 Onpattro sales were $56M topping estimates around $54.5M
- Exact Sciences (EXAS) reported prelim Q4 revs of $294M-$296M (est. $253.1M), prelim 4Q Cologuard tests completed 477,000 and prelim 4Q Screening Revenue $229M-$230M with total revs for the year $874.5M-$876.5M (est. $838.8M)
- Exelixis (EXEL) pre-announced product sales of $200M in Q4, totaling $765M for 2019, and provided down-to-flat 2020 product sales guidance of $725M-$775M, well below the Piper $919M estimate
- Hologic (HOLX) said it expects FQ1 revenues of ~$850.5M (+2%), breast health and Diagnostics should account for $331.1M (+2%) and $311.5M (+5%), respectively and board approves new $500M share buyback program.
- GW Pharmaceuticals (GWPH) reports preliminary Q4 revenue $108M (vs. est. $100.17M) and reports preliminary unaudited FY19 revenue of $309M.
- Neurocrine (NBIX) reports preliminary Q4 net product sales of $238M for INGREZZA and prelim unaudited INGREZZA net product sales for FY19 of approximately $753M
- Teladoc Health (TDOC) acquired InTouch Health for a purchase price of $600M that will consist of approximately $150M in cash and $450M of Teladoc Health common stock
- Adverum Biotechnologies (ADVM) announced clinical data for the first cohort of patients (n=6) in the OPTIC phase 1 clinical trial of ADVM-022, the company’s intravitreal injection gene therapy
- Verona Pharma (VRNA) surged 69% in London trade as the biopharma said a Phase 2b study evaluating a drug for chronic obstructive pulmonary disease met its primary endpoint of improved lung function.
Technology, Media & Telecom
- IBM (IBM) downgraded to In Line from Outperform at Evercore ISI
- New Relic (NEWR) upgraded to Buy from Neutral at UBS and raise tgt to $98 from $68
- Towers SBA Communications (SBAC) and American Tower (AMT) both upgraded to buy from neutral at Goldman Sachs as expects that rapidly expanding 5G coverage, increased availability of 5G devices and site densification around new mid-band spectrum will drive several years of strong tower leasing activity
- Arrow Electronics (ARW) downgraded to Equal Weight from Overweight and Avnet (AVT) downgraded to Underweight from Equal Weight at Wells Fargo
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