Hammerstone’s Early Look

|


Tuesday, January 14, 2020

FuturesUp/Down%Last
DJ Industrials-41.000.14%28,830
S&P 500-5.500.17%3,284
Nasdaq-17.500.20%9,070

 

 

Stock futures are edging lower, pulling back after the S&P 500 and Nasdaq Composite set fresh closing records on Monday as markets await the planned signing of a “phase one” U.S.-China trade deal and ahead of fourth-quarter earnings season which starts unofficially today as big banks Citigroup, JPMorgan and Wells Fargo are expected to report. The Dow Jones Industrial Average posted its second-highest close on record. China has pledged to buy almost $80 billion of additional manufactured goods from the United States over the next two years as part of a trade war truce, according to reports, plus over $50 billion more in energy supplies. The Phase 1 agreement calls for Chinese purchases of U.S. agricultural goods to increase by some $32 billion over two years, or roughly $16 billion a year, and when combined with the $24 billion U.S. agricultural export baseline in 2017, the total gets close to the $40 billion annual goal by President Trump. In Asian markets, The Nikkei Index gained 174 points to 24,025, the Shanghai Index dipped -8 points to 3,106 and the Hang Seng Index fell -69 points to 28,885. In Europe, the German DAX is flat at 13,450, while the FTSE 100 is up a few points to 7,625.

Market Closing Prices Yesterday

  • The S&P 500 Index gained 22.78 points, or 0.70%, to 3,288.13
  • The Dow Jones Industrial Average rose 83.28 points, or 0.29%, to 28,907.05
  • The Nasdaq Composite spiked 95.07 points, or 1.04%, to 9,273.93
  • The Russell 2000 Index advanced 95.07 points, or 0.72% to 1,669.61

 

Events Calendar for Today

  • 7:45 AM EST       ICSC Weekly Retail Sales
  • 8:30 AM EST       Consumer Price Index (CPI) MoM for December
  • 8:30 AM EST       CPI (CPI) core (ex: food & energy) MoM for December
  • 8:30 AM EST       Consumer Price Index (CPI) YoY for December
  • 8:30 AM EST       CPI (CPI) core (ex: food & energy) YoY for December
  • 8:55 AM EST       Johnson/Redbook Weekly Sales
  • 4:30 PM EST        API Weekly Inventory Data

 

Earnings Calendar:

  • Earnings Before the Open: C, DAL, FRC, JPM, WFC
  • Earnings After the Close: BBCP

 

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
  • Needham Annual Growth Conference, 1/14-1/15, in New York
  • TD Securities London Energy Conference, 1/13-1/14, in England
  • UBS Midstream, MLP and Utility conference, 1/13-1/15, in Utah

 

 

MacroUp/DownLast
WTI Crude0.3264.66
Brent0.4658.40
Gold-4.601,546.00
EUR/USD-0.00021.1132
JPY/USD0.03109.98
10-Year Note-0.0141.831%

 

 

World News

  • The U.S. Treasury Department on Monday dropped its designation of China as a currency manipulator days before top officials of the world’s two largest economies were due to sign a preliminary trade agreement to ease an 18-month-old tariff war.
  • Iran said on Tuesday it had arrested an undisclosed number of suspects accused of a role in shooting down a Ukrainian airliner, as anti-government demonstrations triggered by the disaster entered a fourth day – Reuters
  • Russian hackers have successfully penetrated servers of the Ukrainian gas company at the center of President Donald Trump’s impeachment, the New York Times reported late Monday. Cybersecurity officials told the Times that Russian military hackers have breached Burisma in a campaign that started in November,

 

Sector News Breakdown

Consumer

  • Big 5 Sporting (BGFV) shares rose 24%; reports Q4 revenue $244.1M vs. est. $265.99M; raises Q4 EPS guidance to 2c-4c from (16c)-(4c); said pricing and promotions over the holiday period resulted in a 4.7% increase in same-store gross margin dollars
  • Ethan Allen (ETH) sees preliminary Q2 EPS 25c-27c below consensus 40c and reports preliminary Q2 revenue $175M vs. est. $181.73M; boosts share buyback authorization to 3M shares
  • GameStop (GME) shares fell -8%; reported sales results for the nine-week holiday period ended January 4. Total global sales from continuing operations for the holiday period were $1.83B, a 27.5% decrease compared to the 2018 nine-week holiday period ended January 5, 2019. Total comparable store sales for the nine-week period decreased 24.7%; now sees FY19 comparable store sales down 19%-21%
  • Credit cards will banned from use in gambling from April, according to rules announced by the UK’s industry regulator on Tuesday in response to calls for greater protection of problem gamblers
  • Limoneira (LMNR) Q4 adjusted EPS loss (24c)/$36.48M vs. est. loss (24c)/$31.47M; backs FY20 adjusted EBITDA view $22M-$26M
  • Toyota (TM) is recalling nearly 700,000 vehicles in the U.S. because the fuel pumps can fail and cause engines to stall. That can increase the risk of a crash.
  • Zumiez (ZUMZ) announced that the company’s comparable sales increased 6.8% for the nine-week period ended January 4, 2020 compared to the nine-week period ended January 5, 2019; see Q4 comp sales up 6% vs. prior view 2%-4% ad raises Q4 EPS to $1.34-$1.38 from prior $1.26-$1.32

 

Energy, Industrials & Materials

  • Alaska Air (ALK) reports combined December traffic up 9.4%, Air Group reported a 9.4% increase in traffic on a 4.7% increase in capacity compared to December 2018 and load factor increased 3.7 points to 85.9%
  • JetBlue (JLBU) sees Q4 RASM -2.7% compared to prior -1.50% to -3.50% and December capacity +4.4%, traffic +5.7% and load factor for December 2019 was 82.4%
  • Copa Holdings (CPA) reports December traffic down 2.2% YoY, capacity decreased 5.9%, while system-wide passenger traffic decreased only 2.2% year over year
  • Lithium producers (ALB, SQM) look to rally as investors bet on a rebound in electric car sales in China after government assurances its subsidies for buyers won’t be cut any further – FT
  • Top copper miner Codelco may not renew an agreement to supply copper concentrate to China’s Shandong Fangyuan for 2020 because of financial problems at the private smelter – Reuters

 

Financials

  • AllianceBernstein (AB) reports preliminary AUM $623B as of December 31, 2019, up from $611B at the end of November as the 2.0% increase was due to market appreciation, as well as total firm wide net inflows
  • Invesco (IVZ) reports preliminary AUM $1.226T as of December 31, 2019, an increase of 2.0% versus previous month-end. The increase was driven by reinvested distributions, favorable market returns, foreign exchange, and net inflows in money market and non-management fee earning AUM, partially offset by net long-term outflows
  • Visa (V) announced it has signed a definitive agreement to acquire Plaid, a “network that makes it easy for people to securely connect their financial accounts to the apps they use to manage their financial lives”. Visa will pay total purchase consideration of $5.3B to acquire Plaid https://on.mktw.net/2NnqcnM
  • STAG Industrial (STAG)75M share Spot Secondary priced at $31.40
  • BlackRock (BLK) Chief Executive Larry Fink has warned company boards to step up efforts to tackle climate change
  • IHS Markit (INFO) Q4 adjusted EPS 65c/$1.12B vs. est. 61c/$1.12B; backs FY20 adjusted EPS view $2.82-$2.88 and also backs FY20 revenue view $4.52B-$4.59B

 

Healthcare

  • Amgen (AMGN) announced strategic collaborations with leading diagnostic companies Guardant Health (GH) and Qiagen (QGEN) to develop blood- and tissue-based companion diagnostics, or CDx, respectively, for investigational cancer treatment AMG 510
  • McKesson (MCK) raises FY20 EPS view to $14.60-$14.80 from $14.00-$14.60 (est. $14.37); said businesses are well positioned to continue to deliver growth and based on the continued momentum and trends in our business, we have narrowed and raised our Adjusted EPS guidance
  • Oklahoma Attorney General Mike Hunter brought a lawsuit against three distributors of opioids after winning a lawsuit against one drug manufacturer and reaching pretrial settlements in other cases. Hunter filed the lawsuit in Cleveland County District Court against Cardinal Health Inc. (CAH), McKesson Corp. (MCK) and AmerisourceBergen Corp. (ABC)
  • Adaptimmune Therapeutics (ADAP) shares rise as the company enters a partnership with Japan’s second-largest drugmaker Astellas Pharma to co-develop and market T-cell therapies for cancer patients
  • Aphria (APHA) cuts FY20 revenue view to C$575M-C$625M from C$650M-C$700 and sees FY20 adjusted EBITDA C$35M-C$42M after mixed quarterly results

 

Technology, Media & Telecom

  • Worldwide shipments of personal computers increased 2.3% in the fourth quarter from a year earlier, as Lenovo Group Ltd. held onto the top spot with almost 25% of the market. PC shipments climbed to 70.6 million units in the period that ended Dec. 31, researcher Gartner Inc. said. Competing firm IDC pegged the shipments at 71.8 million units, a 4.8% rise. For the year, the PC market grew for the first time since 2011, both firms said.
  • ACI Worldwide (ACIW) shares fell -9%; cuts FY19 revenue view to $1.255B-$1.265B from $1.315B-$1.345B (est. $1.32B); cuts FY19 adjusted EBITDA view to $300M-$310M from $360M-$350M – guidance cut due to expired large contract
  • Cloudera Inc. (CLDR) announced Robert Bearden, co-founder and CEO of Hortonworks, which Cloudera merged with in 2019, will replace Martin Cole, Cloudera’s chairman who has served as interim CEO
  • MagnaChip (MX) raises Q4 revenue view to $198M-$200M from $181M-$191M (est. $186M); now sees Q4 gross profit margin 24%-26% vs. previous revenue guidance provided on October 23, 2019, in conjunction with the public release of the financial results for Q3
  • Amazon (AMZN) will ask a judge to temporarily block Microsoft (MFT) from working on a $10B cloud contract from the Pentagon, Reuters reported

 

 

 

Want a free trial to The Hammerstone Report 4x Daily ? Sign-up for a trial today at https://www.hammerstonemarkets.com/

Please be sure to check out The Hammerstone Pro Feed; News and Analysis for the Informed Trader at https://www.hammerstonemarkets.com/pro-trader/#get-started

 

 

 

 

 

 

 

 

 

***DISCLAIMER/LIMITATION OF LIABILITY: Catena Media Financials US, Inc, (D.B.A. Hammerstone Markets) (the “Report”) provides information and data and does NOT provide any individual investment advice or money management assistance and does NOT attempt to influence the sale or purchase of securities. The Report is intended for informational purposes only and does not claim to be actionable for investment decisions. The information contained in the Report has been obtained from sources deemed to be reliable but is not represented to be complete, and it should not be relied upon as such. The Report does not purport to be a complete analysis of any security, issuer, or industry and is not an offer or a solicitation of an offer to buy or sell any securities. The Report is prepared for general information purposes only and does not consider the specific investment objectives, financial situation, and particular needs of any individual subscriber, person, or entity. This e-mail and any attachment(s) are believed to be free from virus. However it is the responsibility of the recipient to ensure that they are virus free. We do not accept any liability for any loss or damage arising in any way from the receipt, opening or use of this e-mail and any attachment(s). Nothing on the Hammerstone Platform is a recommendation that you purchase, sell or hold any security or other investment, or that you pursue any investment style or strategy.