Morning Wrap

eOptionDaily Market Report

Stock futures are pointing to a slightly higher open after major U.S. averages closed marginally lower on Monday in what was a range-bound trading session. Market news and volume was very quiet as investors appeared reluctant to make big bets without major economic or corporate news to support a move. In early trade, the Nasdaq Composite set an intraday all-time high, but settled within a few points of its previous closing record set earlier this month. Financials were the biggest decliners, putting pressure on the main index while energy stocks tracked volatile oil prices lower. In Europe, French stocks outperformed after respondents in a poll showed they favored center-right politician Emmanuel Macron in the first debate between the candidates running to become France’s next president. Talk about flat markets, the volatile Nasdaq Comp closed at 5,901 yesterday after closing at 5,900 the three sessions before that. And of course, the streak that continues as the S&P 500 and Dow have now gone 109 days without a 1% decline (one more day and ties the all-time longest streak).

In France, an Elabe poll showed 29% of viewers who watched Monday’s night debate thought Macron was the most convincing candidate to become the next president. Far-right National Front party leader Marine Le Pen was favored by 19% of viewers and conservative Francois Fillon landed 20% approval. Many investors are concerned about Le Pen as she wants France to leave the European Union and ditch the euro, according to reports. Note the euro jumped to a 6-week high following the results.

In Asian markets, The Nikkei Index fell -65 points to 19,455, the Shanghai Index gained 10 points to 3,261 and the Hang Seng Index rose 91 points to 24,593. In Europe, the German DAX is up a few points, while the FTSE 100 is down slightly around 7,415. Sterling on Monday rose above $1.24 (has since pulled back) the first time in three weeks, but was knocked down after the U.K. government said British Prime Minister Theresa May will trigger Article 50 on March 29 to begin the process of leaving the European Union.

 

Market Closing Prices Yesterday

  • The S&P 500 Index slipped -4.78 points, or 0.20%, to 2,373.47
  • The Dow Jones Industrial Average fell -8.76 points, or 0.04%, to 20,905.86
  • The Nasdaq Composite inched higher 0.53 points, or 0.01%, to 5,901.53
  • The Russell 2000 Index declined -7.43 points, or 0.53% to 1,384.10

Events Calendar for Today

  • 7:45 AM ET          ICSC Weekly Retail Sales
  • 8:30 AM ET          Current Account Balance for Q4…est. (-$129.0B)
  • 8:55 AM ET          Johnson/Redbook Weekly Sales
  • 12:00 PM ET        Fed’s George speaks in Washington on Economy and the Fed
  • 4:30 PM ET          API Weekly Inventory Data
  • 6:00 PM ET          Fed’s Mester speaks at University of Richmond

Earnings Calendar:

  • Earnings Before the Open: CMCM, FRAN, FSAM, GIS, LE, LEN, NEOG
  • Earnings After the Close: AIR, DLTH, FDX, HQY, NKE, SCS

 

World News

  • K. consumer prices rose at the fastest pace in nearly three and a half years in February, as Britain’s Office for National Statistics said the annual inflation in the U.K. accelerated to 2.3% in February from 1.8% the previous month. This was the first-time consumer price inflation came in above the Bank of England’s 2% target since November of that year.

 

Sector News Breakdown

Consumer

  • Lennar (LEN) Q1 EPS 56c/$2.34B vs. est. 55c/$2.22B; Q1 new orders up 12% to 6,483 homes; Q1 backlog up 18% to 9,017 homes; Q1 deliveries up 13% to 5,453 homes; said WCI Communities reduced the company’s Q1 net earnings by 3c per diluted share, primarily due to one-time transaction expenses
  • Food sector at Bernstein: several names downgraded to underperform from market perform including GIS (tgt cut to $52 from $61), K (tgt to $69 from $53), SJM (tgt cut to $130 from $147), CAG (tgt remains $36), and CPB (tgt to $54 from $61)
  • Land’s End (LE) Q4 EPS 41c vs. est. 35c; Q4 comp sales fell (-1.7%)
  • BMW AG predicted profit and revenue will rise slightly in 2017 as the luxury-car maker grapples with an aging lineup and rising investment in self-driving, electric autos

Energy

  • Marathon Oil (MRO) to buy ~21k net surface acres largely in the Permian’s Northern Delaware basin of New Mexico from Black Mountain Oil & Gas and other private sellers for $700M cash
  • Pioneer Natural (PXD) upgraded to Buy at Mizuho and raise tgt to $211 from $186
  • Genesis Energy (GEL) files to sell 4M common units for limited partners

Financials

  • S&P Global Ratings lowered Och-Ziff Capital Management LLC’s (OZM) credit rating to BB from BB+, pushing it deeper into junk territory.
  • Jefferies (LUK) Q1 net revs $796M; Q1 equity revs $157M, Q1 fixed income revs $222M up 48% QoQ
  • Golub Capital (GBDC) files to sell 1.75M shares of common stock

Healthcare

  • Esperion Therapeutics (ESPR) announced that the FDA recently confirmed that its LDL-C lowering program is adequate to support approval of an LDL-C lowering indication for bempedoic acid
  • Calithera Biosciences (CALA) files to sell 4.5M in common stock
  • T2 Biosystems (TTOO) files to sell 6.06M shares of common stock for Canon USA
  • La Jolla (LJPC) files to sell $100M of common stock
  • Merit Medical (MMSI) files to sell $125M in common stock
  • Axsome Therapeutics (AXSM) files to sell common stock, no amount given

Industrials & Materials

  • PPG Industries Inc. (PPG) is still eyeing a takeover of Akzo Nobel NV (AKZOY) preparing another bid for the Dutch paints and chemicals company after its first attempt failed earlier in March, according to Bloomberg. https://goo.gl/cui4U5
  • Mercury Systems (MRCY) reports five-year $153M sole source basic ordering agreement from the U.S. Navy to deliver advanced Digital RF Memory (DRFM) subsystems
  • Freeport (FCX) upgraded to Hold at Deutsche Bank

Technology, Media & Telecom

  • China Telecom Corp reported a 10.2% drop in net profit in 2016 because of the absence of a major one-off gain. The Chinese mobile and broadband service operator said its full-year net profit was 18.0 billion yuan ($2.6 billion), compared with a net profit of CNY20.05 billion it ‘15
  • Motorola Solutions (MSI) upgraded to Buy at Jefferies, PT $100
  • Keysight Technologies (KEYS) files to sell $400M of common stock

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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