Just a day after U.S. stocks posted their worst closing totals since October of last year, futures are pointing to a lower open as financials fall globally with bonds rallying. The S&P 500 and Dow industrials dropped over 1%, posting their biggest one-day losses since Oct. 11, 2016 as investors turned risk averse after the first hour of trading and financials and industrials sold off sharply. 10-year Treasury yield hits 3-week low as stocks suffer. There wasn’t one big story to account for the precipitous drop in stocks, other than perhaps it was time. It was the first 1% lower move for the S&P and Dow in 110 sessions, led by the biggest drop in financials (KBW Bank index) since June 27, the Monday after Brexit. Small Caps underperformed as the Russell 2000 dropped (-2.7%) for its worst return since Sept. 9. The weakness was broad based, while the dollar index dropped, and energy prices closed at lowest levels since November. Retailers continued their recent strong of weakness yesterday, with no help from Dow component Nike overnight, as shares decline following weaker futures orders. In Asian markets, The Nikkei Index plunged -414 points (2.13%) to settle at 19,042, the Shanghai Index slipped -16 points to 3,245 and the Hang Seng Index dropped -272 points to 24,320. In Europe, the German DAX is down over -80 points at 11,880, while the FTSE 100 is down over -0.9% to just over 7,300.
Market Closing Prices Yesterday
- The S&P 500 Index dropped -29.45 points, or 1.24%, to 2,344.02
- The Dow Jones Industrial Average fell -237.85 points, or 1.14%, to 20,668.01
- The Nasdaq Composite plunged -107.70 points, or 1.83%, to 5,793.83
- The Russell 2000 Index declined -37.55 points, or 2.71% to 1,346.55
Events Calendar for Today
- 7:00 AM ET MBA Mortgage Applications Data
- 9:00 AM ET FHFA House Price Index MoM for January…est. 0.4%
- 10:00 AM ET Existing Home Sales MoM for February…est. 5.55M
- 10:30 AM ET Weekly DOE Inventory Data
- The Eurozone’s current account surplus narrowed in January from the previous month, as the surplus fell to 24.1 billion euros ($26 billion) in January from a revised EUR30.8 billion in December.
- Some of China’s largest food suppliers have pulled Brazilian beef and poultry from their shelves in the first concrete sign that a deepening scandal over Brazil’s meat processing industry is hitting business in its top export market
Sector News Breakdown
- Nike (NKE) Q3 EPS 68c/$8.43B vs. est. 53c/$8.47B; Q3 inventory +7%; 3Q gross margin 44.5%, vs. est. 44.9% and effective tax rate 13.8%; said worldwide futures orders ex-currency down (-1%) vs. et. up 3.4%; said sees 150-170 basis points gross margin contraction in 4Q
- Sears Holdings Corp. (SHLD) acknowledged “substantial doubt” about its ability to keep operating, raising fresh concerns about a company that has lost more than $10B in recent years.
- Steelcase (SCS) Q4 EPS 22c/$769.1M vs. est. 23c/$752M; sees 1Q EPS 13c-17c on revs $725M-$750M vs. est. $748M; raises quarterly dividend to 12.75c
- Duluth Holdings (DLTH) Q4 EPS 37c/$174.7M vs. est. 34c/$163.1M; sees year EOS 66c-71c vs. est. 69c
- The global art market contracted for the second straight year in 2016, falling to the lowest level since the financial crisis as sales of art and antiques dropped 11% to $56.6B, according to a report released on Wednesday by UBS Group AG and Art Basel – Bloomberg (watch shares of BID)
- The American Petroleum Institute (API) reported a climb of 4.5 million barrels in U.S. crude supplies for the week ended March 17. The API data also showed a fall of 4.9 million barrels in gasoline supplies and a decline of 833,000 barrels in distillates
- Dutch bank ING disclosed in its annual report published last week that it is a target of a criminal investigation into money laundering and corruption that could result in significant fines.
- JP Morgan (JPM) boosts quarterly dividend to 50c from 48c
- PennantPark (PNNT) files $750M mixed securities shelf
- Easterly Government Properties (DEA) files to sell 4.3M shares of common stock; raises FY17 FFO view to $1.25-$1.29
- An overhaul of Fannie Mae and Freddie Mac is highly unlikely to make it into this year’s legislative calendar, Congressional staffers say, possibly shifting the new administration’s immediate focus to allowing the mortgage financing institutions to rebuild depleted capital – Reuters
- HealthEquity (HQY) Q4 EPS 7c/$46.8M vs. est. 7c/$45.6M; sees FY revs $220.0M-$225.0M vs. est. $222.3M; sees FY EPS 50c-55c vs. est. 64c
- Therapix Biosciences (TRPX) 2M share IPO priced at $6.00
- REGENXBIO (RGNX)75M share Spot Secondary priced at $20.50
- Calithera Biosciences (CALA)83M share Secondary priced at $10.25
- Cooper Cos. (COO) boosts share buyback program by $500M
Industrials & Materials
- FedEx (FDX) Q3 EPS $2.35/$15B vs. est. $2.62/$14.99B; 3Q Ground segment operating margin 11.0%; backs FY17 adjusted EPS $11.85-$12.35 vs. consensus $12.00, while cuts FY17 capex to $5.3B from $5.6B; Q3 Express adjusted operating income down 2% to $586M, Ground revenue up 6% to $4.69 and Ground operating income down 8% to $515M
- Dutch paint and chemicals firm Akzo Nobel NV said it had rejected a sweetened EUR22.37 billion ($24.19 billion) takeover proposal from rival PPG Industries Inc. (PPG). Akzo said PPG’s revised offer worth EUR88.72 a share, which comes just weeks after its initial EUR83-a-share offer was rebuffed, undervalues the company and doesn’t warrant engaging with its U.S. suitor https://goo.gl/WmKLMt
- AAR (AIR) Q3 EPS 38c/$446.7M vs. est. 36c/$418.38M; sees Cofc decision no later than Aug. 2017
- Silver Wheaton (SLW) Q4 EPS 19c/$258M vs. est. 16c/$244.54M
Technology, Media & Telecom
- Meredith (MDP) raises FY17 EPS ex-items view to $3.85-$3.90 from $3.50-$3.80 (est. $3.76); raises Q3 EPS view to 85c-87c from 75c-80c (est. 78c)
- Atento (ATTO) Q4 EPS 19c/$442.0M vs. est. 18c/$450.37M; sees FY17 revenue up 1%-5%
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.