Hammerstone’s Early Look

By admin | 09/17/2019


Tuesday, September 17, 2019

Futures Up/Down % Last
DJ Industrials -45.00 0.17% 27,035
S&P 500 -3.50 0.12% 2,998
Nasdaq -13.50 0.17% 7,866

U.S. stocks are pointing to a modestly lower open, adding to yesterday’s pullback (which snapped the Dow Industrial Average 8-day win streak), as geopolitical macro fears weighed heavily on sentiment. Stocks ended lower on Monday as weekend attacks on Saudi oil facilities boosted oil prices (WTI jumped 15% for its biggest one-day gain in a decade) and increased concerns about rising tensions with Iran. The S&P energy index gained more than 3% to notch its second-best daily performance of the year, while Brent settled with its largest one-day percentage gain since at least 1988. The attacks on the crude facilities in Saudi Arabia cut the kingdom’s production in half (and represents about 5% of global output) and sparked worries over the impact of an oil shock on economic growth. Increased demand for safe-haven U.S. debt pushed Treasury yields lower and the price of gold rose. Market attention may turn to the Fed as they convene for a 2-day meeting that will wrap up tomorrow afternoon with expectations for a rate cut highly anticipated. Oil prices are giving back some of its gains this morning. In Asian markets, The Nikkei Index rose 13 points to 22,001, the Shanghai Index dropped -52 points (1.74%) to settle at 2,978 and the Hang Seng Index fell -334 points to 26,790. In Europe, the German DAX is down -30 points to 12,350, while the FTSE 100 is up a few points to 7,330. All eyes on the Fed and Saudi Arabia to see how long it takes to get production up and running.

Market Closing Prices Yesterday

  • The S&P 500 Index dropped -9.43 points, or 0.31%, to 2,997.96
  • The Dow Jones Industrial Average fell -142.70 points, or 0.52%, to 27,076.82
  • The Nasdaq Composite slipped -23.17 points, or 0.28%, to 8,153.54
  • The Russell 2000 Index advanced 6.46 points, or 0.41% to 1,584.60

Events Calendar for Today

  • 7:45 AM EST       ICSC Weekly Retail Sales
  • 8:55 AM EST       Johnson/Redbook Weekly Sales
  • 9:15 AM EST       Industrial Production MoM for August…est. 0.2%
  • 9:15 AM EST       Capacity Utilization for August…est. 77.6%
  • 10:00 AM EST     NAHB Housing Market Index for Sept…est. 66
  • 4:00 PM EST        Net Long-term TIC flows for July…prior $99.1B
  • 4:30 PM EST        API Weekly Inventory Data

Earnings Calendar:

  • Earnings Before the Open: APOG, CBRL
  • Earnings After the Close: ADBE, CHWY, FDX

Other Key Events:

  • Goldman Sachs 28th Annual Communaacopia Conference, 9/17-9/19, in New York
  • BMO Capital 14th Annual Real Estate Conference, 9/17-9/18
  • FDA Joint Regulatory Conference, 9/16-9/18, in Washington DC
Macro Up/Down Last
WTI Crude -1.06 61.84
Brent -1.12 67.90
Gold -6.20 1,505.30
EUR/USD 0.0015 1.1016
JPY/USD 0.05 108.17
10-Year Note -0.027 1.818%

World News

  • The German ZEW Indicator of Economic Sentiment rose 21.6 points to a -22.5 reading in September, weak but better than the reading of -37.9 that was expected as per FactSet
  • Today the U.K.’s Supreme Court starts three days of hearings over Prime Minister Boris Johnson’s decision to suspend Parliament. The court has not given a date for when it will rule on the case but it is expected within a week

Sector News Breakdown

Consumer

  • Apogee Enterprises (APOG) Q2 adjusted EPS 72c/$357.1M vs. est. 65c/$352.7M; still sees year EPS $3.00-$3.20 vs. est. $3.05 and still sees year capex $60M-$65M
  • Veoneer Inc. (VNE) received a production contract to make thermal cameras for fully autonomous vehicles to handle conditions of low visibility such as those during darkness, smoke, sun and headlight glare
  • Home Depot (HD) downgraded to Neutral from Buy at Guggenheim
  • Stage Stores (SSI) announced plans to convert substantially all its stores to off-price
  • Funko (FNKO) files to sell 4M shares for holders
  • SeaWorld (SEAS) CEO Gustavo Antorcha resigns, names current CFO Swanson interim CEO, and names Castro Gulacsy (current CAO) as interim CFO

Energy

  • Dril-Quip Inc. (DRQ) said its contract with Repsol for supply of drilling systems for its project located offshore Vietnam has been terminated; firm estimates $82 mln in contract value will be removed from backlog (had reported backlog of $322M at the end of its latest quarter)
  • EOG Resources Inc. (EOG) agreed to sell natural gas to Cheniere Energy Inc. (LNG) for about 15 years, beginning in early 2020; quantity starts at 140,000 MMBtu per day and increases to 440,000 MMBtu per day under the long-term gas supply agreements
  • Concrete Pumping (BBCP) Q3 EPS 5c/$78.7M vs. est. 6c/$84.45M; said 18% rev driven largely by the contribution from our successful Capital Pumping acquisition, as well as broad end-market strength in the U.S. and growth in Eco-Pan; sees FY19 revenue to be approximately $284M and adjusted EBITDA to be approximately $95M

Healthcare

  • Aclaris Therapeutics, Inc. (ACRS) announced positive results from its Phase 3 clinical trial, THWART-2 (WART-302), of A-101 45% Topical Solution (A-101 45% Topical Solution), an investigational new drug for the treatment of common warts; says its topical solution for common warts met the primary and secondary efficacy endpoints
  • Champions Oncology (CSBR) reports Q1 adjusted EPS loss of (5c) on revs $6.7M (vs. 5c profit a year ago for EPS) vs. est. revs $7.5M; said slightly weaker revs the cause was mainly due to the timing of study completions and revenue recognition
  • Kitov Pharmaceuticals (KTOV) files to sell 2.81M ADSs for holders

Industrials & Materials

  • FedEx Express (FDX) said shipping rates will increase by an average of 4.9% for U.S. domestic, U.S. export and U.S. import services; FedEx Ground and FedEx Home Delivery shipping rates will increase by an average of 4.9%. FedEx SmartPost shipping rates will also increase; FedEx Freight shipping rates will increase by an average of 5.9% for shipments within the U.S. and between the contiguous U.S. and Canada
  • Circor (CIR) upgraded to Overweight from Sector Weight at KeyBanc while the firm downgraded Actuant (ATU) to Sector Weight from Overweight

Technology, Media & Telecom

  • Corning Inc. (GLW) lowers display volume forecast to a sequential decline of a high-single digit percentage in Q3; says continues to expect Q3 prices to be flat with Q2; now expects Q3 optical communications sales to decline YoY by a low-teen % vs. prior expectation of low-single digit % decline; for FY 2019, company now forecasts optical communications sales will decline by 3% to 5% vs prior expectation of a low-to-mid-single digit % increase
  • KLAC Corp (KLAC) raises quarterly dividend to 85c from 75c and adds $1B share buyback authorization; guides Q3 EPS $2.04-$2.34 on revs $1.31B-$1.39B below est. $2.39 and revs $1.38B
  • Sony Corp (SNE) said it was rejecting a call by Daniel Loeb’s activist hedge fund Third Point LLC to spin-off its chips business, saying that the business is a “crucial growth driver” for them
  • Shopify (SHOP) 1.9M share Spot Secondary priced at $317.50
  • WeWork Company’s (WE) IPO is likely delayed until October at the earliest – WSJ reported
  • Shopify (SHOP) files to sell 1.9M Class A subordinate voting shares

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