Hammerstone’s Early Look
By admin |
09/18/2019
Wednesday,
September 18, 2019
Futures
|
Up/Down
|
%
|
Last
|
DJ Industrials
|
-24.00
|
0.09%
|
27,086
|
S&P 500
|
-4.00
|
0.13%
|
3,004
|
Nasdaq
|
-10.50
|
0.13%
|
7,904
|
Stock futures in the U.S.
point to a slightly lower open as Fed day is finally here! Stocks nudged higher
late day Tuesday as investors await a widely expected interest rate cut on
Wednesday from the Federal Reserve. The day was slow moving as a pullback in
crude oil prices a day after posting its best day in over a decade (WTI rose
15% on Monday) was the big story with WTI October crude settling -5.7% to
$59.34 per barrel after Saudi Arabia said it soon would restore most of its oil
production from the recent attack and fully recover within weeks. Energy stocks
were the biggest drag in the S&P while most sectors finished higher.
Treasuries also rallied ahead of the FOMC meeting along with gold prices amid a
weaker dollar. A quiet story thus far, but definitely worth keeping an eye on
remains liquidity concerns as the New York Federal Reserve announced after the
close last night, it would carry out its second repurchasing operation of the
week today, after it conducted $53 billion of repos on Tuesday morning. The
central bank pledged to carry out up to $75 billion of repos on Wednesday. As
part of the repurchasing operations, the central bank buys Treasuries and other
highly rated debt from dealers in order to inject liquidity into the system.
The decision comes in the wake of a recent spike in repurchasing rates, a
short-term borrowing rate utilized by hedge funds and banks. In Asian markets,
The Nikkei Index fell -40 points to 21,960, the Shanghai Index rose 7 points to
2,985 and the Hang Seng Index slipped -36 points to 26,754. In Europe, the
German DAX is up a few points to 12,380, while the FTSE 100 is also up a few
points around 7,325.
Market Closing Prices Yesterday
- The S&P 500 Index gained 7.74 points, or 0.26%, to 3,005.70
- The Dow Jones Industrial Average rose 33.98 points, or 0.173, to 27,110.80
- The Nasdaq Composite climbed 32.47 points,
or 0.40%, to 8,186.02
- The Russell 2000 Index declined -6.31 points, or 0.40% to 1,578.29
Events Calendar for Today
- 7:00 AM EST
MBA Mortgage Applications Data
- 8:30 AM EST
Building Permits MoM for August…est. up 5% to 1.25M
- 8:30 AM EST
Housing Starts MoM for August…est. down -1.3% to 1.30M
- 10:30 AM EST Weekly DOE
Inventory Data
- 2:00 PM
EST FOMC Rate Decision on Interest
Rates…25 bps cuts expected
Earnings Calendar:
- Earnings Before the Open: GIS, SANW
- Earnings After the Close: MLHR
Other Key Events:
- FOMC Rate Decision on Interest Rates at 2:00 PM
EST with press conference at 2:30 PM
- Goldman Sachs 28th Annual Communaacopia
Conference, 9/17-9/19, in New York
- BMO Capital 14th Annual Real Estate Conference,
9/17-9/18
- Davidson Annual Diversified Industrial &
Services Conference, 9/18-9/19, in Chicago
- FDA Joint Regulatory Conference, 9/16-9/18, in
Washington DC
- Facebook, Twitter and Google to testify before
the Senate
Macro
|
Up/Down
|
Last
|
WTI Crude
|
-0.44
|
58.90
|
Brent
|
-0.18
|
64.37
|
Gold
|
-4.30
|
1,509.10
|
EUR/USD
|
-0.0026
|
1.1047
|
JPY/USD
|
0.07
|
108.20
|
10-Year Note
|
-0.031
|
1.77%
|
World News
- U.S. total cross-border investment (TIC)
inflows at $43.8B in July while U.S. net long-term portfolio securities inflows
at $84.3B in July; Japan holds $1.13T, an increase of $7.9B from last month;
moving farther ahead of China as top foreign holder of U.S. Treasuries which
showed $1.11T of U.S. Treasuries, a decrease of $2.2B from last month
- Investor Intelligence Poll shows equity
newsletter writers considered bullish climbs a third week to 53.8% vs 50.0%
last week, while those considered bearish fall to 17.0% from 17.9%, lowest
since July 24 and those expecting a correction slips to 29.2% vs 32.1% last
week
- Japanese exports fell for the ninth
straight month in August, data showed on Wednesday, as shipments from the
world’s number three economy flail amid a global slowdown and trade tensions
Sector News Breakdown
Consumer
- Chewy (CHWY) Q1 EPS loss (21c)/$1.15B vs.
est. $1.13B; Q2 adjusted Ebitda loss $29.2M vs. est. loss $29.6M; sees FY net
sales $4.75B-$4.8B and Q3 sales $1.19B-$1.21B vs. est. $1.17B
- Altria (MO): Governor Andrew M. Cuomo
announced that New York State is the first state in the nation to implement a
ban on the sale of flavored electronic cigarettes and nicotine e-liquids,
following a vote on emergency regulations by the Public Health and Health
Planning Council
- New car registrations in the UK, a
reflection of sales, fell 8.4% on year in August across the EU to 1.04 million
vehicles, the European Automobile Manufacturers’ Association said
- Whirlpool (WHR) downgraded to sector
weight from overweight at KeyBanc, citing limited valuation upside as earnings
momentum weakens saying they are concerned that slowing GDP in Europe, China,
and now India may complicate existing plans to expand margins, while increasing
competition
- Construction Partners (ROAD) 5M share
Secondary priced at $14.25
- Invitation Homes (INVH) 44M share Spot
Secondary priced at $28.25
Energy
- The American Petroleum Institute (API)
reported that U.S. crude supplies rose by 592,000 barrels for the week ended
Sept. 13, showed a stockpile increase of 1.6 million barrels for gasoline,
while distillate inventories rose by 2 million barrels.
- Exxon Mobil (XOM) is looking to sell its
50% stake in the Gippsland Basin oil and gas development in Australia’s Bass
Strait as part of a broader review of its portfolio of assets around the world
– Reuters
- Electricite de France shares rose
overseas after saying faults found in nuclear reactor components made by its
mostly held Framatome unit do not adversely affect the components’ fitness for
service and do not require immediate action
Healthcare
- NewLink Genetics Corp. (NLNK) announced
the U.S. FDA accepted a partnered biologics license application and granted
priority review for the company’s V920 Ebola vaccine
- Acadia (ACAD) 6.25M share Spot Secondary
priced at $40.00
- IGM Biosciences (IGMS) 10.937M share IPO
priced at $16.00
- Zynerba (ZYNE) said Phase II trial of
Zygel showed 44% median seizure reduction in focal impaired awareness (FIAS)
and convulsive seizures in DEE patients by the second month/Zygel was well
tolerated, and the safety profile was consistent
- Johnson & Johnson’s (JNJ) Janssen
Pharmaceutical said FDA approved Erleada for the treatment of patients with
metastatic castration-sensitive prostate cancer
- Envista (NVST) 26.77M share IPO priced at
$22.00 (was a dental products company spun off from Danaher)
- Translate Bio (TBIO) 9M share Spot
Secondary priced at $10.00
- Acadia (ACAD) files to sell $250M in
common stock
- PTC Therapeutics (PTCT) files to sell
$100M in common stock and commences offering of $250M of convertible senior
notes
- Kadmon Holdings (KDMN) said the FDA
approved its generic trientine hydrochloride, a chelating agent for removing
excess copper from the body (Wilson’s disease). Bausch Health Companies markets
the branded version as Syprine
Industrials & Materials
- Fed-Ex (FDX) shares fell -8%; Q1 adjusted
EPS $3.05/$17.04B vs. est. $3.16/$17.06B; said results declined primarily due
to weakening global economic conditions, increased costs to expand service
offerings and continued mix shift to lower-yielding services; cuts FY20 adj EPS
$11-13 vs est. $14.73; still sees year cap-ex spending $5.9B
- Southwest (LUV) cuts Q3 CASM view to up
8%-10% vs. previous 9%-11% view and guides Q3 capacity down approximately 3%
vs. previous down 2%-3% view; said continues to expect its third quarter 2019
operating revenue per available seat mile to increase in the range of 3%-5% YoY
- Air Lease (AL) announced the delivery of
one new Boeing (BA) 787-9 aircraft on long-term lease to Neos. Featuring
Rolls-Royce Trent 1000 engines, this aircraft delivered from ALC’s order book
with Boeing
- Steel Dynamics (STLD) guided Q3 EPS
66c-70c, slightly below the consensus 71c saying reduced earnings are primarily
related to lower profitability from the company’s sheet steel operations, as
shipments and average steel pricing declined in the quarter, more than
offsetting lower scrap costs
Technology, Media & Telecom
- Adobe Systems (ADBE) Q3 EPS $2.05/$2.83B
vs. est. $1.97/$2.82B; sees Q4 EPS $2.25 on revs about $2.97B below est.
$2.30/$3.03B (pressured shares overnight); sees FY19 digital experience
bookings growth greater than 20%
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