Morning Wrap

eOptionDaily Market Report

 Stock futures remain little changed overnight, trading in a very narrow range (high 2369.25 and low 2364.75), with little market reaction expected ahead of the two-day FOMC policy meeting this Tuesday and Wednesday, while the Northeast also prepares for a frigid winter storm over the next 48-hours that could lighten trading desks over that period.

The euro is down slightly ahead of a Dutch election seen as a possible risk to the shared currency, while the British pound strengthened as the U.K. government looked poised to trigger Brexit. The euro touched the $1.07 level earlier in Asia and into Europe’s morning, its highest level since Feb. 9, but has since fallen to lows of the session around 1.0665. Oil prices slide to lowest in four months as U.S. rig count rises again, trading under $48 per barrel earlier.

In Asian markets, The Nikkei Index rose 29 points to 19,633, the Shanghai Index climbed 24 points to 3,237 and the Hang Seng Index gained 261 points to 23,829. In Europe, the German DAX is little changed at 11,975 and the FTSE 100 also up a few points at around 7,350.

Market Closing Prices Yesterday

·      The S&P 500 Index gained 7.73 points, or 0.33%, to 2,372.60

·      The Dow Jones Industrial Average rose 44.79 points, or 0.21%, to 20,902.98

·      The Nasdaq Composite climbed 22.92 points, or 0.39%, to 5,861.73

·      The Russell 2000 Index advanced 5.15 points, or 0.38% to 1,365.26

Events Calendar for Today

·      10:00 AM ET       Labor Market Conditions for Feb…est. 2.5

Earnings Calendar:

·      Earnings Before the Open: AR, ENV, KOPN, LCUT, NERV, REN, TACO

·      Earnings After the Close: BLCM, CHRS, CIUP, IPAR, KMG, RYI, TLYS, TPVG, XOG

World News

·      The SEC rejected a proposed rule change that would’ve allowed for the creation of the first bitcoin exchange-traded fund—a decision that has followers of the world’s largest cryptocurrency wondering what happens next.

·      Japanese core machinery orders fell in January, slipping (-3.2%) from the previous month, following a revised increase of 2.1% in December. The result compares with an expected decline of 0.5%. On a year-on-year basis, core orders fell 8.2%.

·      S&P announces rebalancing to S&P 400, 500, 600 indices at open on March 20:

·      S&P MidCap 400 constituents Advanced Micro Devices (AMD), Raymond James Financial (RJF) and Alexandria Real Estate Equities (ARE) will replace Urban Outfitters (URBN), Frontier Communications (FTR) and First Solar (FSLR) respectively in the S&P 500

·      S&P SmallCap 600 constituents Take-Two Interactive Software (TTWO), Masimo (MASI) and Coherent (COHR) will replace Fossil Group (FOSL), Denbury Resources (DNR) and Vista Outdoor (VSTO) respectively in the S&P MidCap 400

·      Of the 500 stocks that make up the large-cap index, a little over 400 stocks have doubled in value since 2009. Among those, 40 have surged 1,000%

Sector News Breakdown

·      PICO Holdings (PICO) shares remains attractive according to Barron’s noting activist pressure last year and the subsequent removal of veteran CEO John Hart have made the stock more attractive

·      Norwegian Cruise Line (NCLH) shares could rise 20% and rebound to $63 according to Barron’s said as the company’s outlook is “improving” after last year’s terrorism-driven European cruise slump, and Norwegian is seeing “encouraging” 2017 booking trends


·      Front-month NYMEX crude has is down for a fourth session, though has recovered most of earlier losses that left a low at $47.92, the first print below $48.0 since late November

·      British energy firm SSE PLC (SSE.LN) said it will increase domestic electricity prices an average 14.9%, but hold gas prices at their current level, blaming the increasing cost of supplying electricity


·      Blackstone (BX) mentioned positively in Barron’s saying shares could rally to $40; said company’s cash payouts “could soon grow too large to ignore,” with yield expected to top 8% this year. Said its leadership in raising new funds bodes well for its ability to boost distributions in the future

·      Medical Properties Trust (MPW) mentioned favorably in Barron’s noting shares have been hit by turmoil at tenant Adeptus Health (ADPT), but the selloff looks to be an overreaction. Notes that ADPT comprises just 7% of Medical Properties’ revenue

·      Leju Holdings (LEJU) Q4 EPS loss (17c)/$104.9M vs. est. loss (12c)/$69.4M; names Keyi Chen COO; sees 1Q revs $59M-$64M vs. est. $70.9M


·      Gilead (GILD) mentioned cautiously in Barron’s saying its cheap valuation and significant cash hoard “might look tempting,” but investors should resist the urge to buy noting that the company’s hepatitis C drug is a cure rather than a continuous treatment, which limits ongoing revenue potential

·      Incyte (INCY) files to sell 34.03M shares of common stock for holders

Industrials & Materials

·      Ball Corp. (BLL) mentioned positively in Barron’s saying shares could gain 25% in a year as the company begins delivering on the targets of its Rexam acquisition. Said shares have been beaten down by doubts over the company’s Rexam acquisition, though they could advance on $300 million of cost savings and a doubling of free cash flow

·      Westlake Chemical Partners (WLKP) files $500M mixed securities shelf

·      Kronos Worldwide (KRO) Q4 EPS 20c/$333.7M vs. est. 6c/$316M

·      BHP Billiton (BHP) is preparing a more generous offer for striking Escondida miners, including improvements in several areas that the union has said are essential to resume negotiations, Bloomberg reports

·      Johnson Controls (JCI) downgraded to Neutral from Buy at Goldman

·      Boeing (BA) downgraded to Equal Weight from Overweight at Morgan Stanley

Technology, Media & Telecom

·      Chipmaker Intel (INTC) has agreed to buy Israeli technology firm Mobileye (MBLY) for $14-$15 billion dollars, according to TheMarker, one of Israel’s leading financial newspapers.

·      The recent IPO of Snap (SNAP) may suffer a similar fate as GoPro (GPRO), which has fallen more than 90% since its October 2014 high, Barron’s said. Neither company wants to be too reliant on “one fancy gadget” that fueled their growth.

·      Arista Networks (ANET) mentioned positively in Barron’s saying it still has upside even after an 83% surge since July. CEO Ullal said the networking-equipment maker has prospered with a strong operating system and ties to Microsoft (MSFT).

·      NCR Corp. (NCR) announces new $300M stock buy back

Market commentary provided by Hammerstone Markets, a division The Hammerstone Group, a firm separate from and not affiliated with Regal Securities L.P.  Regal Securities L.P. has not participated in the creation of the content, and does not explicitly or implicitly endorse the content.

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