Morning Wrap

eOptionDaily Market Report

Stock futures are sliding lower as investors prepare for day one of the two-day FOMC meeting (results on interest rates tomorrow), and as a winter blizzard slams into the Northeast, likely hurting trading volumes throughout the day. The storm has already had a major impact on the airline industry, with thousands of flights already canceled across parts of the East Coast and a state of emergency declared for New York city itself. Stocks closed mostly higher on Monday, but moves were limited as investors took to the sidelines ahead of the coming Federal Reserve decision. Tuesday’s blizzard isn’t expected to delay the release of the Fed’s decision. In Asian markets, The Nikkei Index slipped -24 points to 19,609, the Shanghai Index inched higher 2 points to 3,239 and the Hang Seng Index was little changed, down -1 point at 23,827. In Europe, the German DAX is down only a few points while the FTSE 100 was up around 10 points at 7,380. U.K. pound slides to 10-week lows after lawmakers clear a path for Brexit.

Market Closing Prices Yesterday

·      The S&P 500 Index inched higher 0.87 points, or 0.04%, to 2,373.47

·      The Dow Jones Industrial Average fell -21.50 points, or 0.10%, to 20,881.48

·      The Nasdaq Composite climbed 14.06 points, or 0.24%, to 5,875.78

·      The Russell 2000 Index advanced 5.02 points, or 0.37% to 1,370.28

Events Calendar for Today

·      6:00 AM ET          NFIB Small Business Optimism Index for February…est. 105.6

·      7:45 AM ET          ICSC Weekly Retail Sales

·      8:30 AM ET          Producer Price Index MoM for February…est. 0.1%

·      8:30 AM ET          PPI Ex: Food & Energy MoM for Feb…est. 0.2%

·      8:55 AM ET          Johnson/Redbook Weekly Sales

·      4:30 PM ET          API Weekly Inventory Data

Earnings Calendar:

·      Earnings Before the Open: ALSK, BONT, CIE, DSW, ENOC, HDS, RDNT

·      Earnings After the Close: AKAO, ARNA, CCXI, CLDX, FOGO, FTD, NPTN, PTCT, RUBI

World News

·      Small-business owner optimism dipped in February but stayed near long-time highs, as the sentiment gauge from the National Federation of Independent Business fell 0.6 points to 105.3, a smaller decline than the 0.9 points forecast by economists.

·      Federal government will open on a 3-hour delay Tuesday because of inclement weather, U.S. Office of Personnel Management says on website

Sector News Breakdown

·      Ruby Tuesday (RT) announced it will explore strategic alternatives in order to maximize shareholder value and position the business for long-term success; the Board said it will consider all strategic alternatives including, but not limited to a potential sale or merger of the Company; sees Q3 revenue roughly $225.7M and sees Q3 same restaurant sales down roughly 4%.

·      Inter Parfums (IPAR) Q4 EPS 13c/$134.8M vs. est. 12c/$131.6M; backs FY17 EPS view of $1.20-$1.24 (est. $1.25) and backs FY17 revenue view of $550M-$560M (est. $560.5M)

·      Tilly’s (TLYS) Q1 EPS 22c/$160.2M vs. est. 21c/$159.8M; sees 1Q EPS loss (7c-15c vs. est. loss 4c); 4Q comp. sales +0.1% and sees 1Q comp sales down low-to-mid single-digit %

·      Limoneira (LMNR) Q1 EPS loss (16c)/$28.1M vs. est. loss (18c)/$24.65M; Q4 Agribusiness revenue $26.8M vs $23.6M last year; raises FY17 EPS view to 48c-52c from 38c-42c and year EBITDA view to $21.5M-$22M from $18.3M-$18.8M

·      Coca-Cola Bottling Co. (COKE) will replace The GEO Group in the S&P SmallCap 600

·      Copa Holdings (CPA) released preliminary passenger traffic statistics for February 2017. RPMs for February were up 6.9% year-over-year, while ASMs were up 1.2%. Load factor increased by 4.3 percentage points


·      Resolute Energy (REN) reports Q4 adjusted EBITDA $49M vs. $27.8M YoY


·      FXCM (FXCM) Feb. retail customer trading volume $201B, down 33% YoY; avg customer trading vol./day $10.1B, down 16% MoM and down 29% YoY; avg client trades per day 408.4k, down 16% MoM, down 29% YoY
·      S&P SmallCap 600 constituent The GEO Group (GEO) to replace Synopsys in the S&P MidCap 400

·      Walter Investment (WAC) Q4 EPS loss (1.10) vs. est. loss (49c); 4Q revs $444.1M; received subpoena January 12th related to certain specified loans

·      Investors Real Estate (IRET) Q3 FFO 9c vs. est. 13c; cuts year FFO view to 41c-43c from prior 48c-52c

·      Physicians Realty Trust (DOC) announces offering of 15M common shares


·      The Congressional Budget Office’s report on the American Health Care Act estimates that 14 million people would be without health insurance in 2018 versus under the plan, while 24 million people would be uninsured in 2026 than under the current plan
·      Pershing Square’s Bill Ackman has sold out of Valeant (VRX), selling 27.2M shares at $11 per share, and will step off the company’s board

·      Bellicum Pharma (BLCM) expects its current cash resources will be sufficient to meet operating requirements through at least 1Q 2018; had $113.4m in cash, restricted cash and investments as of Dec. 31 and borrowed final $10m tranche under agreement with Hercules Capital this month

·      Lantheus (LNTH) files to sell 3M shares of common stock for holders

Industrials & Materials

·      Volkswagen AG (VLKAY) forecast higher sales and earnings in 2017 as it provided details on its return to profit last year following its worst-ever loss in the wake of the diesel crisis

·      Emerson Electric (EMR) Feb trailing 3-month orders were up 2%; Feb. underlying orders rose 1%, ex: favorable currency translation

·      Ryerson (RYI) Q4 EPS loss (19c)/$682.2M vs. est. loss (10c)/$687.17M

·      Genesee & Wyoming (GWR) reported traffic volumes for February 2017. G&W’s traffic in February 2017 was 252,228 carloads, an increase of 27,572 carloads, or 12.3%, compared with February 2016. G&W’s same-railroad traffic in February 2017 was 223,365 carloads, a decrease of 1,291 carloads, or 0.6%, compared with February 2016

·      KMG Chemicals (KMG) Q2 EPS 57c/$79.1M; raises year sales view to $315M-$320M from prior $300M-$305M (est. $307) and Ebitda $51M-53M from $47M-49M

Technology, Media & Telecom

·      Citrix Systems Inc. (CTXS) is working with advisers to seek potential suitors for the $12.4B cloud-services company Bloomberg reported, saying they hired Goldman Sachs Group Inc. to sound out buyers including private equity firms (shares of NOW, FFIV, RHT, SPLK, ZEN moved in reaction to the late day report yesterday

·      ON Semiconductor (ON) announces offering of $500M of convertible senior notes

·      Coupa Software (COUP) Q4 EPS loss (5c)/$38M vs. est. loss (17c)/$35.9M; sees Q1 EPS loss (12c-17c) on revs $38.0M-$38.5M vs. est. loss (18c)/$37.6M; sees FY revs $167M-$170M vs. est. $165.1M

·      S&P MidCap 400 constituent Synopsys (SNPS) will replace Harman International Industries (HAR) in the S&P 500

·      Disney (DIS) upgraded to Buy from Neutral at Guggenheim

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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