Mid-Day Outlook: March 24th, 2017

eOptionDaily Market Report

Equities pushing higher ahead of the key healthcare bill vote in the House today as the Trump agenda remains in the spotlight. Prices slipped Thursday after House Republican leaders delayed the vote on fear of not enough votes to pass the legislation. Hospitals among early gainers (CYH, THC) after Mizuho says they have the most to gain if the Healthcare Bill fails. However, the broader market may take a hit initially on failure to pass the bill as it is seen as a barometer for other bills (tax reform, etc.). Concern if the Republican health-care legislation fails to pass could lead to a final flush in reflation trades (Trump trades since election have lifted industrials/materials on infrastructure spending and tax reform), as well as financials (de-regulation hopes). Bonds, currencies and commodities little changed ahead of the vote. European data came in strong, as PMIs topped consensus views as the Eurozone’s economy grew at the fastest pace in six years during the first three months of 2017.

Treasuries, Currencies and Commodities

  • In currency markets, markets are in “wait and see” mode ahead of the Healthcare Bill vote in the House today; dollar index (DXY) little changed around 99.77; dollar up slightly vs. the yen above 111, while the euro slightly higher above 1.08 and British Pound down slightly
  • Commodity prices; gold back above the $1,250 an ounce level amid fears the Healthcare bill won’t pass/lead to rotation into defensive assets; oil prices also little changed, with WTI crude just above the $47.50 per barrel level
  • Treasury markets holding steady ahead of Healthcare bill vote on the House floor…expected later this morning after being delayed yesterday; 10-year yield around 2.42% (down over 18 bps since the FOMC announcement last week)

Economic Data

  • U.S. durable goods increased more than forecast in February, up 1.7% vs. est. up 1.4%; Durable goods new orders revised up to 2.3% for Jan. from 2% as previously reported; New orders ex-trans. rose 0.4% in Feb. after 0.2% rise; New orders ex-defense rose 2.1% in Feb. after 2.1% rise

Sector Movers Today

  • Refiners downgraded at Credit Suisse; the firm downgraded shares of DK, ALJ, TSO and WNR to neutral and CLMT cut to underperform having updated their mid-cycle margins, lowered the RIN burden and adjusted stock specific capture rates…says this leads to ~1% lower mid-cycle EBITDA but not the collapse in EBITDA that bears argue for (also cut tgts HFC, VLO, PSX)
  • Real Estate services; William Blair upgraded JLL to Outperform citing belief that secular drivers like outsourcing and corporate services will produce faster earnings growth than the cyclical service offerings in years ahead; downgraded MMI and HF to market perform
  • Oil services; HAL provided a Q1 operational update saying sees Q2 N.A. sales higher vs. Q1/some int’l pricing pressure greater than expected/sees Q1 EPS in low single digits/sees margins accelerating towards end of 2017; Frac sand stocks (SLCA, HCLP, EMES, FMSA) active after HAL said sand is biggest source of cost inflation/sand accounts for $50m in inflationary 1Q costs/reactivating twice as much frack gear as expected
  • Auto’s; ALV was upgraded to sector perform at RBC saying has a better appreciation for ALV’s passive safety ramp and the potential for stronger passive safety margins; Susquehanna defended KMX shares saying Q4 likely seen easing concerns (auto industry has been hit the last few days on Ford lower earnings guidance & auto lender ALLY warning on lower used car prices); TSLA CEO Elon musk tweeted Model 3 is just a smaller, more affordable version of Model S w less range & power & fewer features. Model S has more advanced technology


  • AYA +2% after CEO said is open to acquisitions
  • HTGM +198%; announced that its HTG EdgeSeq technology has been successfully adapted for use with the QIAGEN GeneReader NGS System based on the results of initial technical feasibility tests.
  • MU +9%; after strong Q2 results and an above consensus Q3 outlook
  • QTNT +1%; says the FDA licenses eight new Reagent products for sale in U.S.
  • SEAS +5%; after announcing a long-term investment by Zhonghong Group
  • TRP +1% received State Department approval for Keystone XL pipeline
  • UAA +3%; upgraded to buy at Jefferies
  • WDC +4%; benefits from MU commentary after earnings


  • DNKN -3%; after announces CFO leadership change
  • FINL -19%; Q4 EPS missed by 20c, and comp sales fell more than expected (-4.5%)
  • GME -11%; Q4 sales miss and guidance for year below forecasts ($3.10-$3.40 vs. est. $3.70
  • MYL -1%; Abbott sells 44M shares of Mylan at $40.00
  • OXM -4%; Q4 EPS missed by 30c on light revs and guided Q1 results below estimates
  • SPWH -14%; quarterly sales miss (downgraded at Piper)
  • TDG -1%; falls to 52-week low/more analyst concerns on possible DoD probe
  • USCR -8%; after CFO Tusa resigns
  • XENE -53%; plunges after its acne drug misses efficacy endpoints in phase II trial


  • Alteryx (AYX) 9M share IPO priced at $14.00
  • Bellicum Pharmaceuticals (BLCM) 5M share Secondary priced at $12.00
  • Cherry Hill Mortgage (CHMI) 4.5M share Secondary priced at $16.50
  • Condor Hospitality Trust (CDOR) 4.15M share Secondary priced at $10.50


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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