Morning Preview: March 28th, 2017

eOptionDaily Market Report

Stock futures are pointing to a slightly higher open as the Down Industrials look to snap its longest losing streak in 6-years. The Dow Industrial Average fell for an 8th straight day yesterday (longest streak since 2011), though the Nasdaq Composite outperformed, rising 0.2%, as stocks finished well off the lows yesterday after President Trump and House Republicans failed to pass his health-care bill, on Friday, which carried over to Monday undermining optimism he can enact his promised growth policies. Financial and industrial shares fell the most, though pared steep declines in early trading. With the drama over the Republican effort to repeal and replace former “Obamacare”, President Trump said he’s ready to move on to tax reform. After a quiet day of economic data, the calendar is fairly full today with advance goods trade, homebuilding data and consumer confidence, along with a few Fed speakers. In Asian markets, The Nikkei Index rose 217 points to 19,202, the Shanghai Index fell -14 points to 3,252 and the Hang Seng Index rose 152 points to 24,345. In Europe, the German DAX is higher by over 70 points to 12,070, while the FTSE 100 is flattish just under 7,300. U.K. stocks struggled to push higher Tuesday ahead of a key Brexit step.

Events Calendar for Today

  • 7:45 AM ET          ICSC Weekly Retail Sales
  • 8:30 AM ET          Advance Goods Trade Balance, for February…est. (-$66.4B)
  • 8:30 AM ET          Wholesale Inventories MoM for Feb-P…est. 0.2%
  • 8:55 AM ET          Johnson/Redbook Weekly Sales
  • 9:00 AM ET          S&P CaseShiller 20-city MoM for January…est. 0.70%
  • 10:00 AM ET       Consumer Confidence, for March…est. 114.0
  • 10:00 AM ET       Richmond Fed Manufacturing for March…est. 15
  • 12:45 PM ET        Fed’s George speaks in Midwest City, OK
  • 1:00 PM ET          Fed’s Kaplan speaks in Dallas
  • 4:30 PM ET          API Weekly Inventory Data

Market Closing Prices Yesterday

  • The S&P 500 Index slipped -2.39 points, or 0.10%, to 2,341.59
  • The Dow Jones Industrial Average fell -45.74 points, or 0.22%, to 20,550.98
  • The Nasdaq Composite gained 11.64 points, or 0.20%, to 5,840.37
  • The Russell 2000 Index advanced 2.68 points, or 0.20% to 1,357.32

Earnings Calendar:

  • Earnings Before the Open: CCL, DRI, FDS, GALT, HOME, MKC, OREX, SCON
  • Earnings After the Close: AST, CYCC, EVOL, LAUR, OLLI, PLAY, PTX, RH, SONC, VRNT, WLB
Sector News Breakdown

Consumer

  • Darden Restaurants (DRI) Q3 EPS $1.32/$1.88B vs. est. $1.27/$1.86B; Q3 comp sales rose 0.9% vs. est. 0.3% (Olive Garden comps up 1.4%, Longhorn +0.2%); sees FY17 comp sales up 1.5%; sees year EPS $3.95-$4.00 from $3.87-$3.97 vs. est. $3.94; to acquire Cheddar’s Scratch Kitchen for $780M in cash
  • McCormick (MKC) Q1 EPS 76c/$1.04B vs. est. 74c/$1.06B; sees FY17 EPS $4.05-$4.13 vs. est. $4.09
  • Tesla (TSLA) deliveries for the first quarter, which Goldman Sachs expects to be announced shortly after quarter end, may miss expectations from the Street
  • Red Mountain Capital (3.3% holder) sent a letter to Decker’s Outdoor (DECK) asking it to explore a sale after communications over the past 2 years with management
  • Foundation Building Materials (FBM) Q4 EPS loss (29c)/$462.2M vs. est. loss (11c)/$466.07M

Energy

  • Libyan output drops to 560k b/d after pipeline from nation’s biggest oil field closes – Bloomberg
  • Antero Resources Midstream (AM), which indirectly controls the incentive distribution rights and owns the general partner interest in Antero Midstream Partners, files S-1 for proposed IPO with initial amount $100M

Financials

  • STORE Capital (STOR) files to sell 7.6M shares of common stock
  • Square (SQ) boosts global payments ambitions with U.K. expansion
  • The Supreme Court on Monday declined an invitation to rescue a $7.25 billion antitrust settlement over fees between Visa Inc. (V) and MasterCard Inc. (MA) and retailers, effectively clearing the way for merchants to sue for additional charges incurred in recent years

Healthcare

  • Tesaro Inc. (TSRO) said late Monday its ovarian cancer drug Zejula, also called niraparib, had been approved by the FDA. Zejula was approved for maintenance treatment of women with several kinds of recurrent ovarian cancer, including epithelial ovarian, fallopian tube, or primary peritoneal cancer, who have undergone chemotherapy.
  • Tesaro’s (TSRO) Zejula is the first of a class of cancer drugs called PARP inhibitors to gain approval without being limited to patients with certain biomarkers, such as a BRCA mutation (MYGN shares fell late yesterday on that news)
  • Chardan Capital Markets initiated coverage on all public CRISPR companies: CRSP (Buy), EDIT (Buy), NTLA (Buy), and ToolGen (Buy). While broadly positive on the CRISPR sector, due to the technology’s vast potential utility to inactivate toxic genes or replace or repair non-functional genes, we see greater upside potential for Editas and ToolGen, and more modest upside potential for CRISPR Tx and Intellia
  • Michael Pearson, former chief executive of Valeant Pharmaceuticals International Inc., (VRX) is suing the embattled drugmaker for refusing to pay him more than 3 million company shares that he said he is owed

Industrials & Materials

  • Power Solutions International, Inc.(PSIX) announced a share purchase agreement with Weichai America Corp., who will invest $60 million in PSI through a combination of newly issued common equity and preferred shares
  • Commercial Metals (CMC) upgraded to Outperform at Credit Suisse

Technology, Media & Telecom

  • Red Hat (RHT) Q4 EPS 61c/$629M vs. est. 61c/$618.76M; sees Q1 EPS 52c-53c on revs $643M-$650M vs. est. 59c/$642.38M; sees FY18 adjusted EPS $2.60-$2.64 on revs $2.72B-$2.76B vs. est. $2.59/$2.71B
  • SYNNEX (SNX) Q1 EPS $1.82/$3.52B vs. est. $1.66/$3.48B; sees 2Q EPS $1.70-$1.78 on revs $3.57B-$3.77B vs. est. $1.74/$3.62B
  • Ericsson AB (ERIC) said it is taking charges of between $1.8 billion and $2.4 billion this year in its latest attempt to draw a line under a costly retooling of its telecoms-equipment business
  • Alibaba (BABA) cuts Momo (MOMO) stake to 14% from 20.2%
  • IMAX Corporation (IMAX) signs a deal with Majid Al Futtaim Cinemas for three IMAX theaters to be located in Bahrain and the United Arab Emirates.
  • TESSCO Technologies (TESS) announced a sales force reorganization, as well as cost reduction initiatives. The company’s sales force reorganization combines its commercial sales and product teams under one leader, and combines its retail sales and product teams under another
  • Cisco (CSCO) has continued to roll out new innovations for Cisco Spark, including new video conferencing solutions that are built to register to both Cisco Spark and on-premises deployments, advanced security options, the ability for any standards-based SIP endpoint to join a Cisco Spark Meeting and new customer care capabilities
  • Digital Ally (DGLY) Q4 adjusted EPS loss (63c)/$3.45M vs. est. $5.9M saying believe our revenues in Q4 continued to be negatively impacted by Taser’s (TASR) misleading press release, the reexamination of our patent commenced by Taser with the USPTO and our product quality control issues

 

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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