Hammerstone’s Early Look

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Wednesday, January 8, 2020

FuturesUp/Down%Last
DJ Industrials20.000.07%28,546
S&P 5009.500.29%3,244
Nasdaq24.500.28%8,877

 

 

U.S. stock futures have turned narrowly higher, reversing heavy losses overnight earlier when Iran launched missiles at two U.S. bases in Iraq. The lack of American casualties and Iran’s foreign minister stating that was the extent of the country’s retaliation for the killing of top general Qassem Soleimani has helped drive the reversal. Crude oil prices surged after Iran fired multiple missiles at air bases in Iraq housing U.S. troops, raising fears of a wider Middle East conflict. In Asian markets, The Nikkei Index dropped -370 points to 23,204, the Shanghai Index dropped -37 points to 3,066 and the Hang Seng Index fell -234 points to 28,087. In Europe, the German DAX is up a few points at 13,240, while the FTSE 100 is flat at 7,575. The attack last night will be addressed by President Trump later this afternoon. In corporate news, Boeing (BA) shares slide after a Ukrainian Boeing 737-800 airplane carrying 176 people crashed on Wednesday shortly after takeoff from Tehran’s main airport, killing all onboard.

Market Closing Prices Yesterday

  • The S&P 500 Index dropped -9.10 points, or 0.28%, to 3,237.18
  • The Dow Jones Industrial Average fell -119.70 points, or 0.42%, to 28,583.68
  • The Nasdaq Composite dropped -2.88 points, or 0.03%, to 9,068.58
  • The Russell 2000 Index declined -4.95 points, or 0.30% to 1,658.31

 

Events Calendar for Today

  • 7:00 AM EST       MBA Mortgage Applications Data
  • 8:15 AM EST       ADP Employment Change for December…est. 160K
  • 10:30 AM EST     Weekly DOE Inventory Data
  • 1:00 PM EST        US Treasury will auction $24 billion reopened 10-year notes
  • 3:00 PM EST        Consumer Credit for November…est. $16.0B

 

Earnings Calendar:

  • Earnings Before the Open: GBX, LEN, RPW, SCHN, STZ, UNFI, WBA
  • Earnings After the Close: BBBY, HELE, KRUS, SAR, STRM

 

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
  • Goldman Sachs Annual Healthcare CEO Conference, 1/8-1/9, in New York

 

 

MacroUp/DownLast
WTI Crude0.2562.95
Brent0.5568.82
Gold7.401,581.70
EUR/USD-0.00261.1127
JPY/USD0.23108.67
10-Year Note-0.0951.812%

 

 

World News

  • At least 10 rockets hit al-Asad air base in Iraq where U.S. troops are located in the Middle Eastern country, CNN’s reported last night. Iran’s Islamic Revolutionary Guard Corp has claimed credit for the attack, which followed a vow by the IRGC to retaliate “the US assassination of top Iranian anti-terror commander, Lt. Gen. Qassem Soleimani

 

Sector News Breakdown

Consumer

  • Lennar (LEN) Q4 EPS $2.13/$7.00B vs. est. $1.90/$6.55B; Q4 new orders up 23% to 13,089 homes; Q4 backlog -4% vs. +75% YoY, Q4 new home deliveries +16% vs. +64% YoY and Q4 Gross Margin on Home Sales 21.5% vs. 21.4% YoY
  • Luckin Coffee (LK) files to sell $400M of convertible senior notes due 2025
  • McDonald’s (MCD) is expanding its pilot of Beyond Meat (BYND) burgers to 52 restaurants across Canada after rolling out the plant-based meat burgers in 28 local outlets in October; the news comes after rival Impossible Foods said it won’t be able to partner with the company until it can ramp production
  • Wynn Resorts (WYNN) downgraded to neutral from buy at Citigroup with $140 tgt
  • Daniel Loeb’s hedge fund Third Point Capital sold off about 2.1M shares of Campbell Soup Co. (CPB) according to an SEC filing

 

Energy, Industrials and Materials

  • Crude oil prices surged more than 4% and U.S. stock market futures tumbled late Tuesday after Iran fired multiple missiles at air bases in Iraq housing U.S. troops, raising fears of a wider Middle East conflict
  • The American Petroleum Institute (API) reported that U.S. crude supplies fell by 5.95M barrels for the week ended Jan. 3, showed a stockpile climb of 6.7M barrels for gasoline, while distillate stocks rose by 6.4M barrels

 

Financials

  • Square (SQ) will start charging a 1.5% per transfer fee for instant and same-day transfers from a customer’s Square balance to their bank account; the change goes into effect for all sellers new to instant transfers and on Feb. 7, 202 to all existing instant transfer users.
  • Pzena Investment (PZN) reports preliminary AUM $41.2B at December 31, 2019, which compared to $33.4B as of December 31, 2018
  • New York Mortgage (NYMT) 30M share Spot Secondary priced at $6.09

 

Healthcare

  • Intra-Cellular (ITCI) 10M share Secondary priced at $29.50
  • SeaSpine (SPNE)8M share Spot Secondary priced at $12.50
  • Apellis (APLS) files to sell 7M shares of common stock
  • Palomar (PLMR) files to sell 5M shares of common stock
  • Collegium Pharmaceutical (COLL) said it sees FY20 Nucynta franchise revenue $170M-$180M, sees FY20 Xtampza ER revenue $150M-$160M and sees FY20 total operating expenses $130M-$140M
  • SeaSpine (SPNE) sees Q4 revenue $43.4M-$43.8M vs. est. $42.16M while sees Q4 U.S. revenue expected to be in the range of $39.1M-$39.4M, reflecting 15%-16% growth compared to Q4 of 2018; sees FY20 revenue $177M-$188M vs. est. $174.21M saying growth in the U.S. Spinal Implants portfolio for FY20 is expected to exceed 15%; files to sell common stock

 

Industrials & Materials

  • Boeing (BA) shares down over 2% after a Boeing passenger plane operated by Ukraine International Airline crashed minutes after takeoff from Tehran killing all 176 people on board, according to Iranian news agencies, which blamed the crash on technical problems. The 737-800 was three years old and is a predecessor of the 737 MAX
  • Boeing (BA) downgraded to Market Perform from Outperform at Cowen
  • Livent Corp. (LTHM) shares fell -15% after the lithium-products producer cut its outlook as it sees Q4 EPS 4c-6c on revs $75M-$80M down from prior view 8c-11c and revs $90M-$100M; also lowered year view to 40c-42c on sales $385M-$390M from estimates 46c and $405.8M (watch shares of ALB, SQB in reaction to guidance)
  • Royal Gold (RGLD) announced that its wholly owned subsidiary, RGLD Gold AG, sold approximately 60,000 gold equivalent ounces comprised of approximately 47,000 gold ounces, 514,000 silver ounces and 2,000 tonnes of copper
  • Greenbrier (GBX) Q1 EPS 30c/$769.36M vs. est. 43c/$748.17M; said new railcar deliveries totaled 6,200 units for the quarter while raises dividend to 27c; backs year EPS and revenue outlook
  • MSC Industrial (MSM) Q1 EPS $1.21/$823.6M vs. est. $1.17/$818.98M; sees Q2 EPS 97c-$1.03 on revs $781M-$798M vs. est. $1.14/$812.99M; at the midpoint, average daily sales are expected to decrease roughly 2.5% compared to last year’s second quarter
  • Spirit AeroSystems (SPR) and Allegheny Technologies (ATI) both downgraded to Equal Weight from Overweight at Barclays
  • Cemex (CX) announced that one of its subsidiaries has signed an agreement for the sale of certain assets in the United Kingdom to Breedon Group, for a total consideration of approximately $235M

 

Technology, Media & Telecom

  • A10 Networks (ATEN) said it expects to report revenue results for the fourth quarter of 2019 between $59M-$60M, above the previous guidance range of $55M-$59M
  • Cisco (CSCO) downgraded to Neutral at BofA on lack of catalysts in 2020
  • Ciena (CIEN) upgraded to overweight from equal-weight at Morgan Stanley,
  • ChipMOS TECHNOLOGIES (IMOS) reports 4Q19 revenue of NT$5.57B, up 3.2% Q/Q and 12.1% Y/Y, led by demand strength in its core business, and the addition of new NAND flash business
  • BT Group rises after U.K. telecom regulator Ofcom’s proposals to upgrade the country’s broadband by encouraging competition to the telecom giant’s network-infrastructure arm Openreach
  • EXFO (EXFO) Q1 EPS flat on sales $73.6M vs. est. $72.9M; sees Q2 revenue $66.0M-$71.0M vs. est. $75.25M and sees Q1 IFRS net loss is expected to range between (9c)-(5c) per share which includes 5c per share in after-tax amortization of intangible assets, stock-based compensation costs and anticipated foreign exchange loss
  • Synopsys (SNPS) announced that it has signed a definitive agreement to acquire certain IP assets of INVECAS

 

 

 

 

 

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