Hammerstone’s Early Look
By admin |
09/19/2019
Thursday,
September 19, 2019
Futures
|
Up/Down
|
%
|
Last
|
DJ Industrials
|
-70.00
|
0.26%
|
27,073
|
S&P 500
|
-7.50
|
0.26%
|
3,000
|
Nasdaq
|
-32.50
|
0.41%
|
7,885
|
U.S. stock futures are lower
as investors digest the moves and commentary from the Fed yesterday, while also
watching several other central banks in action (BOJ, SNB, Brazil) overnight
(and upcoming later this morning with the Bank of England due). U.S. stocks
slipped Wednesday after the Fed announced it would cut its benchmark federal
funds by 25-bps, in line with market expectations, but also revealed economic
projections that called into question whether there will be another rate cut
this year or next as five FOMC members saw no change in rates by the end of the
year, five wanting one more cut and seven expecting two cuts. But stocks pushed
back into positive territory by days end (for the S&P and Dow) after
Chairman Jerome Powell suggested during his press conference that the Fed may
need to expand its balance sheet in order to combat a liquidity shortage that
has weighed on money markets in recent days. Last night, the NY Fed said it
will conduct a third straight day of Repo operations as it aims “to help
maintain the Federal Funds rate within the target range” of 1.75%-2.00% –
said repo operation will be conducted with primary dealers for up to an
aggregate amount of $75B. The New York Fed held a second repurchasing auction
early Wednesday, injecting another $75 billion which followed its first
overnight repurchase auction in a decade Monday to bring the benchmark
federal-funds rate, which jumped to a high around 9%, back into a desired
2%-2.25% range by purchasing repos worth $53 billion. In Asian markets, The
Nikkei Index rose 83 points to 22,044, the Shanghai Index rose 13 points to
settle at 2,999, and the Hang Seng Index fell -285 points to 26,468. In Europe,
the German DAX is higher by about 25 points to 12,415, while the FTSE 100 is up
about 50 points to 7,360. While the Fed did deliver a cut and was positive on
the economy, markets were hoping for more. In market news today, CNBC holding
its annual Delivering Alpha Conference today in New York with speakers such as
VP Pence, Chanos, Peltz, Schwarzman, and Cooperman on the agenda.
Market Closing Prices Yesterday
- The S&P 500 Index gained 1.03 points, or 0.03%, to 3,006.73
- The Dow Jones Industrial Average rose 36.28 points, or 0.13%, to 27,147.08
- The Nasdaq Composite dipped -8.62 points,
or 0.11%, to 8,177.39
- The Russell 2000 Index declined -9.95 points, or 0.63% to 1,568.34
Events Calendar for Today
- 8:30 AM EST
Weekly Jobless Claims…est. 213K
- 8:30 AM EST
Continuing Claims…est. 1.672M
- 8:30 AM EST
Philly Fed Survey Outlook for Sept…est. 10.5
- 10:00 AM EST Existing
Home Sales MoM for August…est. (-0.1%) to 5.38M
- 10:00 AM EST Leading
Index for August…est. (-0.1%)
- 10:30 AM EST Weekly EIA
Natural Gas Inventory Data
Earnings Calendar:
- Earnings Before the Open: DRI
- Earnings After the Close: SCHL, SCS
Other Key Events:
- Goldman Sachs 28th Annual Communaacopia
Conference, 9/17-9/19, in New York
- Davidson Annual Diversified Industrial & Services
Conference, 9/18-9/19, in Chicago
Macro
|
Up/Down
|
Last
|
WTI Crude
|
1.16
|
59.27
|
Brent
|
1.66
|
65.26
|
Gold
|
-12.40
|
1,503.40
|
EUR/USD
|
0.0032
|
1.1062
|
JPY/USD
|
-0.47
|
107.98
|
10-Year Note
|
-0.006
|
1.789%
|
World News
- The Organization for Economic Cooperation and
Development (OECD) downgraded its assessment of the global economy to the
worst growth rate since the financial crisis. They cut its global GDP view to
2.9% this year, a downgrade of 0.3% points in its interim report, and its
growth view for 2020 was reduced by 0.4% points to 3%. The OECD cut its view of
U.S. growth by 0.4% in 2019 to 2.4% and by 0.3% in 2020 to 2%.
- The Bank of England will release its
decision on interest rates later Thursday. U.K. retail sales data released
Thursday indicated modest growth in August
- The Bank of Japan left policy unchanged
but hinted at possible action at its next meeting, saying it believes momentum
toward achieving its inflation target may be falling short. The BOJ said that
it would take that sluggish momentum into account and re-examine economic and
price developments at its next regular two-day policy meeting Oct. 30-31.
- The Swiss National Bank has held interest
rates steady even as it slashed its growth forecast for the year amid rising
global headwinds
- Norway’s central bank boosted interest
rates again, going against the tide in monetary policy, as it decided to
increase rates by 25 basis points
- Taiwan’s central bank left its policy
rate unchanged on Thursday, as expected, and raised its 2019 growth forecast
amid signs the island’s export outlook may be slowly improving despite the
escalating U.S.-China trade war.
- The U.S. SEC has approved changes to
rules that limit banks’ ability to trade with their own funds (Volker rule).
SEC commissioners voted privately to approve rule; called off previously
scheduled public vote. Backers of changes say that new rule will simplify and
improve regulations; critics argue that amendments will allow banks to engage
in riskier behavior
Sector News Breakdown
Consumer
- Target (TGT) announces a new $5B share
buyback plan
- Overstock (OSTK) shares fell overnight as
founder Patrick Byrne, the largest shareholder exited his entire stake in the
company, according to a regulatory filing, selling almost 4.7 million shares at
a range of $16.32 to $21.84 from Monday to Wednesday
- Etsy (ETSY) announces $650M convertible
senior notes offering due 2026
- Costco (COST) downgraded to underperform
from market perform at Bernstein but up tgt to $230 from $220
- Herman Miller (MLHR) Q1 adjusted EPS
84c/$670.9M vs. est. 78c/$661.8M; sees Q2 EPS 85c-89c on revs $685M-$705M vs.
est. 85c/$684.83M
- RH Corp. (RH) raises FY19 guidance by 25c
to $10.78-$11.01 after announced the closing of the sale of $350 million
aggregate principal amount of its 0.00% convertible notes due 2024, including
the full exercise of the $50 million over-allotment option
- CBS (CBS), AT&T’s (T) WarnerMedia,
and Viacom (VIAB) have said that they will start pulling e-cigarette
advertising from their airways – CNBC reported
Healthcare
- China Biologic (CBPO) received a
preliminary non-binding go private proposal letter from Beachhead Holdings,
CITIC Capital China Partners IV, PW Medtech Group, Parfield International, HH
Sum-XXII Holdings and V-Sciences Investments to acquire shares not already
owned by the Buyer Group for $120 per share in cash https://yhoo.it/2kUjYRl
- Tandem Diabetes (TNDM) announces
publication of real-world basal-iq predictive low glucose suspend technology
data in diabetes technology and Therapeutics Journal
- Exagen (XGN) 3.6M share IPO priced at
$14.00
- Provention Bio (PRVB) 5M share Spot
Secondary priced at $8.00
Industrials & Materials
- United States Steel Corporation (X)
shares fell -11%; said it expects Q3 adjusted EBITDA to be approximately $115M
and sees Q3 EPS loss (35c) vs. est. loss (6c) citing fire impact; said the
positive flat-rolled steel market indicators experienced earlier this summer
have softened after a brief recovery in steel selling prices. The impact of
falling steel prices through Q2, combined with the impact of a larger than
expected drop in scrap prices on market sentiment, is expected to negatively impact
Flat-rolled earnings in 2H’19
Technology, Media & Telecom
- Cisco Systems Inc. (CSCO) approached
software company Datadog Inc. (DDOG) in recent weeks with a takeover
offer significantly higher than the $7 billion valuation it is aiming for in an
initial public offering, according to people familiar with the matter,
Bloomberg reported https://yhoo.it/2mlWlkV
- Microsoft (MSFT) announces $40B share
buyback and raises dividend to 51c from 46c
- Datadog (DDOG) 24M share IPO priced at
$27.00
- Ping Identity (PING) 12.5M share IPO
priced at $15.00
- AT&T (T) and Dish Network (DISH)
are not in talks over a deal with DirecTV due to regulatory issues, Reuters
reports. Report follows earlier story in the Wall Street Journal that AT&T
was exploring parting ways with its satellite TV unit DirecTV – https://on.mktw.net/2m1uZQQ
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