Hammerstone’s Early Look
By admin |
09/12/2019
Thursday,
September 12, 2019
Futures
|
Up/Down
|
%
|
Last
|
DJ Industrials
|
43.00
|
0.16%
|
27,170
|
S&P 500
|
3.50
|
0.12%
|
3,007
|
Nasdaq
|
22.50
|
0.28%
|
7,933
|
U.S. futures edge higher,
adding to the strong gains generated on Wednesday, as President Trump agreed to
delay the $250B China tariff increase to October 15th from October 1st
saying in a tweet last night “at the request of the Vice Premier of China, Liu He,
and due to the fact that the People’s Republic of China will be celebrating
their 70th Anniversary on October 1st, we have agreed, as a gesture of good
will, to move the increased tariffs on 250 Billion Dollars’ worth of goods (25%
to 30%), from October 1st to October 15th.” The news is helping sentiment
early ahead of a few potential catalysts today, including the European Central
Bank policy meeting at 7:30 AM EST where additional easing measures are
expected and then later tonight the third democratic debate. Stocks jumped
yesterday led by trade sensitive sectors (materials, tech and industrials)
along with defensive as well (utilities) after China unveiled a list of
products it will exempt from higher tariffs ahead of key talks set for next
month, although key farm products were not included. The S&P and Dow both
closed within 0.8% of their all-time highs reached in July, but the blue-chip
benchmarks continue to be eclipsed by small caps, as the Russell 2000 climbed
another 2% today to extend its gain for the week to 4.7%. Apple shares rose 3%,
helping pace the gains but market strength was broad based. Energy stocks
erased early market gains, tumbling from its highs as October WTI crude sank
2.9% to $55.75/bbl on reports that President Trump may want to ease sanctions
on Iran. In Asian markets, The Nikkei Index gained 161 points to 21,759, the
Shanghai Index jumped 22 points to 3,031 and the Hang Seng Index fell -71
points to settle at 27,087. In Europe, the German DAX is up a few points at
12,375, while the FTSE 100 is little changed at 7,335.
Market Closing Prices Yesterday
- The S&P 500 Index gained 21.54 points, or 0.72%, to 3,000.93
- The Dow Jones Industrial Average rose 227.61 points, or 0.85%, to 27,137.04
- The Nasdaq Composite surged 85.52 points,
or 1.06%, to 8,169.68
- The Russell 2000 Index advanced 32.72 points, or 2.12% to 1,575.71
Events Calendar for Today
- 8:30 AM EST
Weekly Jobless Claims…est. 215K
- 8:30 AM EST
Continuing Claims…est. 1.675M
- 8:30 AM EST
Consumer Price Index (CPI) MoM for August…est. 0.1%
- 8:30 AM EST
CPI Ex: Food & Energy (core) MoM for August…est. 0.2%
- 8:30 AM EST
CPI Final Demand YoY for August…est. 1.8%
- 8:30 AM EST
CPI (core) Ex: Food & Energy YoY for August…est. 2.3%
- 10:30 AM EST Weekly EIA
Natural Gas Inventory Data
- 2:00 PM
EST Monthly Budget Statement for
August…est. (-$197.5B)
Earnings Calendar:
- Earnings Before the Open: DLTH, KR, MCFT
- Earnings After the Close: AVGO, LPTH, ORCL,
PCYG, VNCE
Other Key Events:
- Democratic debate (3rd one) in Houston
- Morgan Stanley 7th Annual Laguna Conference,
9/11-9/13, in California
Macro
|
Up/Down
|
Last
|
WTI Crude
|
-0.50
|
55.25
|
Brent
|
-0.73
|
60.08
|
Gold
|
7.30
|
1,510.50
|
EUR/USD
|
0.0011
|
1.1021
|
JPY/USD
|
0.06
|
107.88
|
10-Year Note
|
-0.012
|
1.726%
|
World News
- Germany’s Ifo Institute said that
recession is likely in Europe’s biggest economy as the Ifo now expects growth
of 0.5% compared with a previous forecast of 0.6%. For 2020, the economic
institute slashed its growth forecast to 1.2% from 1.7%. The German economy
shrank by 0.1% percent in the second quarter and Ifo expects another 0.1%
decline in the third quarter.
- U.S. expansion, plus big gains from Norway and
Brazil, is set to boost non-OPEC supply growth in 2020 to 2.3 million barrels a
day from 1.9 million barrels a day this year, the International Energy
Agency said in its monthly outlook. The non-OPEC surge will cut the need
for OPEC crude to 28.3 million barrels a day, which is 1.4 million barrels a
day below its August output
Sector News Breakdown
Consumer
- SmileDirectClub (SDC) 58.54M share IPO
priced at $23.00 (above expected range $19-$22)
- Walmart (WMT) is rolling out an unlimited
grocery delivery subscription service this fall, as the service will charge an
annual membership fee of $98 for subscribers to access unlimited same-day
delivery, which will be offered in 1,400 stores in 200 markets (watch shares of
KR)
- Oxford Industries (OXM) Q2 adj EPS
$1.84/$302M vs. est. $1.86/$307M; lowers year EPS $4.25-$4.45, down from prior
view of $4.45-$4.65 while still sees year sales $1.14B-$1.16B vs. est. $1.14B;
Q2 comp sales were unchanged; guides Q3 EPS 1c-11c vs. est. 14c
- Tailored Brands (TLRD) shares fell over
-30%; Q2 retail comps fell -3.6% vs. 1.7% YoY; suspends quarterly dividend
starting in Q4; Q2 adj EPS 82c vs. est. 74c and guides Q3 EPS 40c-45c below the
est. 74c
- Activist investor ValueAct Capital has taken a
5.2% stake in LKQ Corp. (LKQ), the auto parts company, according to a
Securities and Exchange Commission filing.
- Wolverine World Wide (WWW) approves new
$400M share repurchase program
Energy, Industrials & Materials
- Landstar (LSTR) issues warning saying it
won’t meet the bottom end of its EPS forecast range (on July 24th had guided Q3
EPS $1.48-$1.54 vs. est. $1.55)
- Emerson (EMR) says trailing three-month
orders rose 2%; underlying orders rose 3%, excluding a 1% unfavorable currency
impact; Automation Solutions, orders rose 4% (up 5% underlying and unfavorable
currency impact of 1%), in line with management expectations
- Baker Hughes (BHGE) 115M share Secondary
priced at $21.50
- Caterpillar (CAT) downgraded to market
perform with $143 tgt from $150
Financials
- US Bancorp (USB) revises its long-term
EPS growth view to 7%-10%, down from prior view of 8%-10% and sees long-term
revenue growth 5%-7%, down from 6%-8% prior
- AllianceBernstein (AB) says preliminary
AUM $587B as of August 31, up from $585B at the end of July. The 0.3% increase
was due to total firm-wide net inflows, partially offset by market depreciation
- Asset Management (APAM) assets under
management as of August 31 totaled $111.5B. Separate accounts accounted for
$58.4B of total firm AUM, while Artisan Funds and Artisan Global Funds
accounted for $53.1B.
- Invesco (IVZ) reported preliminary
month-end assets under management, or AUM, of $1,175.1B, a decrease of 2.0%
- International Money Express (IMXI) 5.22M
share Secondary price at $12.75
Healthcare
- Aurora Cannabis Inc. (ACB) shares fell
after the pot company missed revenue expectations even after dropping its
forecast; reported Q4 adjusted Ebitda loss of C$11.7 million ($8.9M) on net
revenue of $98.94M vs. est. adjusted losses of C$0.06 a share on revenue of C$108
million
- Fate Therapeutics (FATE) $150M Spot
Secondary re-offered at $17.50
- Ligand Pharmaceuticals (LGND) sets new
$500 mln stock repurchase program
Technology, Media & Telecom
- Oracle Corp. (ORCL) reports earnings a
day earlier than expected – Q1 EPS 81c/$9.22B vs. est. 81c/$9.29B; boosts share
repurchase authorization by $15B; 1Q service revenue fell -3.3% YoY to $786M,
1Q hardware revenue down -9.8% YoY to $815M and 1Q Cloud services and license
support revenue $6.81B; CEO Mark Hurd to take leave of absences for health
related reasons
- Yelp Inc. (YELP) shares edge higher after
a report that Groupon Inc. (GRPN) could attempt to acquire the company.
The Wall Street Journal reported that Groupon is seeking a large acquisition
amid unrest from some prominent investors. Two anonymous sources told the
Journal that Yelp could be the target, even though Yelp is worth substantially
more than Groupon. https://on.mktw.net/2lSs0dp
- Yahoo Japan Corp. intends to buy a majority
stake in Japanese online fashion retailer Zozo Inc. for about $3.7B,
according to multiple reports Wednesday. Nikkei Asian Review reported Yahoo
Japan plans to purchase 50.1% of Zozo and make it a subsidiary. https://on.mktw.net/2md3VOS
- DXC Technology Co. (DXC) said Mike Lawrie
retired as president and chief executive and was succeeded by Mike Salvino, but
will remain on as chairman until the end of the year.
- Ansys (ANSS) agreed to acquire Livermore
Software Technology, a provider of explicit dynamics and other advanced finite
element analysis technology, for $775 million.
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