Hammerstone’s Early Look

By admin | 03/25/2020

Wednesday, March 25, 2020

Stock futures are higher (but well off their best levels), rallying alongside massive gains in Asia and Europe overnight as lawmakers and members of the Trump administration agreed on a massive $2 trillion stimulus plan to help American citizens as the economy remains shuts down due to the coronavirus impact. The package includes direct deposits for all Americans, $367 billion for loans to small businesses and a program that will allocate $500 billion to the Treasury Department. Some of that money will be used to guarantee a Federal Reserve loan program for small and medium-size businesses. Most adults would receive direct payments of $1,200, while children would see $500 checks. Hospitals would receive some $150 billion under the deal and small businesses would get $367 billion in aid. The measure also includes a major boost to unemployment insurance, allowing workers who are furloughed but not laid off to be paid their regular salaries for up to four months. The much-needed move comes after President Trump expressed his desire to reopen the economy by Easter (April 12^th). In Asian markets, The Nikkei Index jumped 1,454 points (another 8%) to 19,546, the Shanghai Index rose 59 points (2.1%) to 2,781 and the Hang Seng Index advanced 863 points (or 3.8%) to 23,537. In Europe, the German DAX is higher by nearly 200 points (2%) around the 9,900 level while the FTSE 100 is higher by around 140 points nearing the 5,600 level. The bounce in global stocks comes a day after U.S. stocks stormed higher on Tuesday, as the Dow Jones Industrial Average advanced over 11% or 2,100 points, posting its best day since 1933, as investors bet that Washington would finalize its $2 trillion stimulus package to combat the effects of the coronavirus. The S&P 500 Index had its strongest session since 2008, while the Nasdaq turned in its best performance in 7 days. Negotiations over the package, meant to backstop reeling consumers forced to stay home from work and throw financial lifelines to key industries, helped major benchmarks reverse its recent declines.

Market Closing Prices Yesterday

• The S&P 500 Index surged 209.93 points, or 9.38%, to 2,447.33
• The Dow Jones Industrial Average rose 2,113.01 points, or 11.37%, to 20,74.91
• The Nasdaq Composite spiked 557.19 points, or 8.12%, to 7,417.86
• The Russell 2000 Index advanced 94.14 points, or 9.39% to 1,096.56

Economic Calendar for Today

• 7:00 AM EST       MBA Mortgage Applications Data
• 8:30 AM EST       Durable Goods Orders, Feb-P…est. (-1.0%)
• 8:30 AM EST       Durable Goods Ex: Transportation, Feb-P…est. (-0.4%)
• 9:00 AM EST       FHFA House Price Index for January…est. 0.4%
• 10:30 AM EST     Weekly DOE Inventory Data

Earnings Calendar:

• Earnings Before the Open: PAYX, WGO
• Earnings After the Close: FUL, MU, PAYS, SCVL

Sector News Breakdown

Consumer

• Nike (NKE) Q3 EPS 53c (in-line) on sales $10.1B vs. es.t $9.57B; Q3 gross margin 44.3% vs. est. 44.2%; 3Q North America rev. $3.98B, +4.4% YoY while 3Q Greater China rev. $1.51 billion, -5.2% YoY; revs driven by 13% currency-neutral growth in NIKE Direct with digital growth of 36% and strong growth across EMEA, APLA and North America
• Yum Brands (YUM) said it currently estimate same-store sales for Q1 will decline in a range of mid to high single digits and Q2 comp sales will be impacted more significantly; decided to suspend its previously announced share repurchase program; has seen early signs of sales recovery in markets that were first impacted by covid-19
• Church & Dwight (CHD) said it is experiencing a significant increase in consumer demand” for many of its products and also sees that demand continuing in the second quarter
• Grocery Outlet (GO) posted Q4 adj EPS of 21c on sales $655.5M and adjusted Ebitda $41.5M; comp sales rose by 5.1% over a 4.1% increase YoY; not providing formal 2020 earnings guidance due to the unpredictable impact of the coronavirus, but said the company is encouraged by its liquidity position and the “unique advantages of our business
• Steelcase (SCS) Q4 EPS 39c on revs $946.2M vs. est. 32c/$914.8M; said backlog at the end of the quarter was up 17% compared to the prior year
• At Home Group (HOME) Q4 adj. EPS 37c on revs $397.7M vs. est. 36c/$397.7M. Comparable store sales decreased 3.1% compared to an increase of 2.1% in the fourth quarter of fiscal 2019; not providing Q1, FY21 guidance
• Target (TGT) ditches 2020 guidance, halts buybacks amid uncertainty; says March comparable sales to date up 20% as shoppers stockpile

Energy

• The American Petroleum Institute (API) reported that U.S. crude supplies fell by -1.25M barrels for the week ended March 20, showed gasoline stockpiles down -2.6M barrels, while distillate inventories declined by -1.9M barrels.
• Sempra Energy (SRE) said it still sees FY adjusted EPS $6.70-$7.50 vs. est. $7.11 and reiterated its five-year capital plan of approximately $32 billion
• S. Silica Holdings, Inc. (SLCA) announced annualized SG&A cost reductions of approximately $20 million in response to the recent drop in oil prices and the expected decline in drilling and completion activity in North American shale over the coming quarters.
• Sunoco LP (SUN) revised capital guidance and an operational update in response to the COVID-19 pandemic as reduce full year 2020 growth capital expenditures to approximately $75M from its previous guidance of approximately $130M, a decrease of over 40%

Financials

• Square (SQ) said it is revising its growth expectations for the Q1 and now expects to report total net revenue in the range of $1.30 to $1.34 billion and gross profit in the range of $515 to $525 million; this range assumes a further deceleration in overall GPV through the last week of March, beyond the levels we have seen in recent days

Healthcare

• Allakos (ALLK) said Antolimab (AK002) reduced gastrointestinal symptoms by 64% in patients with mast cell gastrointestinal disease in Phase 1 study
• PRA Health Sciences (PRAH) announced the expansion of its industry-leading Mobile Health Platform for remote clinical monitoring, adding several new capabilities that address sponsor needs for COVID-19 virtual study support
• PerkinElmer Inc. (PKI) said it received an emergency use authorization from the Food and Drug Administration so labs can start using its test for SARS-CoV-2, the virus that causes COVID-19

Industrials & Materials

• Boeing Co (BA) plans to restart 737 MAX production by May, ending a months-long halt triggered by a safety ban on its best-selling jet after fatal crashes, Reuters reported citing people familiar with the matter said
• Thyssenkrupp will cut 3,000 jobs at its steel unit by 2026 as part of a wage deal it struck with powerful labor union IG Metall, it said
• AAR (AIR) Q3 adjusted EPS 67c vs. 64c estimate and sales $553.1M vs. est. $550.2M; to withdraw guidance for remainder of year; said it is reducing its headcount

Technology, Media & Telecom

• Facebook Inc. (FB) said it’s seeing a “weakening” in its advertising business for some key geographies as a result of the Covid-19 pandemic; said “our business is being adversely affected like so many others around the world”
• ON Semiconductor Corporation (ON) announced that it has drawn down approximately $1.17 billion from its revolving credit facility
• SYNNEX (SNX) 1Q adj EPS $3.26 vs. est. $3.10 on revs $5.26B vs. est. $5.35B; not providing guidance for 2Q; suspended dividend effective immediately
• Apple Inc (AAPL) could start re-opening some of its retail stores in the first half of April, Bloomberg reported on Tuesday, citing an internal memo

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.

Tags: breaking news, Business, equities, equity trading, finance, finance and economy, financial news, invest, investments, market strategy, markets, News, NYSE, stock market, Stocks, traders, trading, trial for free, Wall Street