Stock futures slide more than 100 points for the Dow, adding on to last week’s losses, as Wall Street reassessed President Donald Trump’s ambitious pro-growth agenda after his failure to push through a health-care bill last week. The U.S. dollar falls to lowest level in 4 months after health bill is pulled; Gold futures jump Monday, building on their two-week advance and touching their highest level in a month. Major indexes closed mostly weaker on Friday, posting the biggest weekly losses in months after Trump and Republican leaders pulled their health-care plan from a vote. That withdrawal triggered doubts about the rest of the administration’s policy push. For the week, the S&P 500 index fell 1.4% for the week, the biggest stumble since November, while the Dow industrials dropped 1.5%, the largest fall since September. The Nasdaq Composite posted its biggest weekly loss since December, falling 1.2%. Also of note, the CBOE Volatility index (VIX), a fear indicator, shot above 14 for the first time this year on Friday. There are no economic updates on tap for Monday, but a few Federal Reserve speakers will be on tap. Uncertainty over the U.S. has spread to other markets.
In Asian markets, The Nikkei Index fell -276 points to 18,985, the Shanghai Index slipped -2 points to 3,266 and the Hang Seng Index fell -164 points to 24,193. In Europe, the German DAX is down around -100 points to 11,964, while the FTSE 100 is lower by about -50 points to 7,280. Overall, the FTSE 100 falls to 1-month low as fading ‘Trump trade’ hits banks. Note On Wednesday U.K. Prime Minister Theresa May will write to EU President Donald Tusk to officially trigger Article 50 of the Lisbon Treaty, which will start the two-year countdown to Britain leaving the European Union.
Market Closing Prices Yesterday
- The S&P 500 Index slipped -1.98 points, or 0.08%, to 2,343.98
- The Dow Jones Industrial Average fell -59.86 points, or 0.29%, to 20,596.72
- The Nasdaq Composite gained 11.04 points, or 0.19%, to 5,828.74
- The Russell 2000 Index advanced 1.22 points, or 0.09% to 1,354.64
Events Calendar for Today
- 10:30 AM ET Dallas Fed Manufacturing Activity, for March…est. 22.0
- 1:15 PM ET Fed’s Evans speaks on Economy and Policy in Madrid
- 6:30 PM ET Fed’s Kaplan speaks in Texas
- Earnings Before the Open: CALM, GIII, GMRE, ONTX, PFIN, ZYNE
- Earnings After the Close: DGLY, FBM, RAVN, RHT, SNX, ZDPY
- German business sentiment rises more than forecast, with Ifo index up to 112.30 in March
- The ECB showed lending to households increased by 2.3% on the year in February, following a 2.2% rise in the previous month. Lending to firms grew by 2.0% after expanding 2.3% in January.
- The ECB’s broad monetary indicator, M3, grew by 4.7% on the year in February, versus 4.8% in January. Economists polled by The Wall Street Journal had expected growth of 4.9%.
Sector News Breakdown
- GameStop (GME) still has strengths according to Barron’s saying the transition to digital game downloads “is admittedly accelerating” but GameStop shares are also being hit by weakening sentiment among Wall Street adding that the company’s “well-regarded” management needs time to transition the business and diversify sales.
- Macy’s, Inc. (M) and G-III Apparel Group, Ltd. (GIII), a leading manufacturer and distributor of apparel and accessories under licensed brands, owned brands and private label brands, today announced an agreement under which Macy’s will serve, beginning February 2018, as the exclusive U.S. department store for sales of DKNY women’s apparel and accessories
- Cal-Maine (CALM) Q3 EPS 9c/$306.5M vs. est. 19c/$324.8M; 3Q dozen eggs sold 263.6M; 3Q net average selling price/dozen $1.13
- DSW (DSW) will replace Texas Capital Bancshares in the S&P SmallCap 600
- The Michaels Companies (MIK) will replace WisdomTree Investments in the S&P MidCap 400
- Copart (CPRT) announces 2-for-1 stock split
- Nissan (NSANY) is recalling certain model-year 2013-2014 Murano sport-utility vehicles because the power-steering hose clamp may not be tight enough, causing fluid to leak that could increase risk of a fire
- SolarEdge (SEDG) could rise 40% or more in a year according to Barron’s saying shares look appealing after selling off over the past year. Barron’s said SolarEdge, whose strong balance sheet should buoy it against the industry’s challenges, amounts to a low-expectation stock and could rally if it can hit its goal of sales growth this year
- At a meeting in Kuwait over the weekend oil producers said they would consider extending their output curbs beyond the current end-of-June deadline. The existing agreement has a compliance rate of 94 percent, according to Kuwait’s Oil Minister Issam Almarzooq
- Royal Dutch Shell (RDS.A) and Anadarko Petroleum (APC) could allow a 10-year joint venture in the Permian Basin of Texas to expire and split their properties, hoping to speed up development, Reuters reports
- SmallCap 600 constituent Texas Capital Bancshares (TCBI) will replace Endurance Specialty Holdings (ENH) in the S&P MidCap 400 (SOMPO Holdings is acquiring Endurance Specialty Holdings in a deal expected to be completed soon pending final conditions)
- S&P MidCap 400 constituent WisdomTree Investments (WETF) will replace Surgical Care Affiliates (SCAI) in the S&P SmallCap 600 (S&P 100 & 500 constituent UnitedHealth Group (UNH) acquired Surgical Care Affiliates in a deal completed March)
- Simon Property Group (SPG) and other mall REITs have tumbled almost 20% in the last seven months, and may not provide the safe, steady stream of income that investors have gotten used to, Barron’s reported. Brick and mortar stores, faced with online competition, have been closing “at an alarming pace,” a trend that’s expected to ding operators of the malls they do business in.
- SVB Financial (SIVB) shares could gain 25% in a year according to Barron’s saying the lender is uniquely exposed to venture capitalists and start-ups, and is “poised for several years of rapid earnings growth that dwarfs expectations for most banks
- BlackRock Capital Investment (BKCC) files $1.5B mixed securities shelf
- Bank of Commerce Holdings (BOCH) files $50M mixed securities shelf
- The failure of the health-care bill is seen by markets as a sign that President Donald Trump may have difficulty in passing the tax cuts promised by his administration. The president criticized Republicans in the House for defeat of the health-care bill in a posting on Twitter yesterday. House Speaker Paul Ryan warned that the failure of the bill “does make tax reform more difficult.”
- Alexion Pharmaceuticals (ALXN) announced that its Board of Directors has appointed Ludwig N. Hantson, Ph.D., as CEO and member of the Board of Directors, effective immediately
Industrials & Materials
- Dow Chemical (DOW) and DuPont (DD) win conditional antitrust approval from EU
- Illinois Tool Works (ITW) downgraded to Hold from Buy at Stifel
Technology, Media & Telecom
- Viacom (VIAB) mentioned positively in Barron’s saying shares could rise about 40% in a year to $43saying VIAB is trying to infuse franchises like Transformers and The Daily Show with new life and sales possibilities under its new CEO. That includes reviving reality TV, creating more music content for MTV, mending relationships w/distributors and replacing management at Paramount
- Shares of Yahoo (YHOO) now trade at a “comfortable discount” to the company’s likely asset value, and patient investors could reap 20% gains from sticking through its liquidation process over the next year, Barron’s reported
- The Disney (DIS) film featuring Emma Watson and Dan Stevens generated weekend sales of $88.3 million in U.S. and Canadian theaters, ComScore Inc. estimated, in first place a second week
- Apple (AAPL) may be active after a Chinese court overturned a ruling against the company over iPhone patents, a win for the tech giant in one of its toughest markets.
- Citigroup initiating coverage on IAC (Buy; $89 TP), MTCH (Buy; $22 TP), TRUE (Buy; $18 TP), WIX (Neutral; $68 TP), and GRPN (Neutral/High Risk; $5 TP).
- K. tells WhatsApp to open up to intelligence services
- Apple (AAPL) added to Analyst Focus List at JPMorgan, PT Upped to $165; FY18 unit forecast raised to 260m vs prior 245m due to likely high pent-up replacement demand heading into the 10th anniversary iPhone cycle this year
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.