Morning Preview: March 30th, 2017

eOptionDaily Market Report

Stock futures are down near the overnight lows, losing some steam after a mixed session on Wednesday and ahead of another expected quiet day on Wall Street. A busy economic calendar early (GDP, jobless claims data at 8:30 AM EST) also includes a handful of Federal Reserve speakers throughout the day. U.S. stocks mostly edged higher (the Dow Industrials only major index to decline) on Wednesday, its third slowest trading day of the year as investors assessed economic data and continued to weigh the likelihood of legislative reform in the Trump administration. The Nasdaq Comp closed higher for a 4thtrading session yesterday, led by tech names, while defensive sectors were mixed. Financial shares lost 0.5% for biggest decline in market after rallying Tuesday. Oil prices extended Tuesday’s gain as an unexpected disruption in Libyan crude output overshadowed record U.S. stockpiles. But markets remain stagnant and complacent, as the Volatility Index (VIX) closed down for 4th session to 11.4. Wall Street stocks have largely recovered from the selloff that followed Republican leaders’ failure to push through a health care bill last Friday.

In Asian markets, The Nikkei Index fell -154 points to 19,063, the Shanghai Index dropped -31 points to 3,210 and the Hang Seng Index fell -90 points to 24,301. In Europe, the German DAX is up around 0.1% at 12,215 (around its highest close in around 2-years), while the FTSE 100 is down a few points around 7,365. Investors largely ignored the U.K. officially kicking off the Brexit process by invoking Article 50 of the Treaty of Lisbon.

Market Closing Prices Yesterday

  • The S&P 500 Index climbed 2.56 points
    , or 0.11%, to 2,361.13
  • The Dow Jones Industrial Average fell -42.18 points
    , or 0.20%, to 20,659.32
  • The Nasdaq Composite gained 22.41 points
    , or 0.38%, to 5,879.55
  • The Russell 2000 Index advanced 4.38 points
    , or 0.32% to 1,371.64

Events Calendar for Today

  • 8:30 AM ET GDP Annualized QoQ, Q4-T…est. 2.0%
  • 8:30 AM ET Personal Consumption for Q4…est. 3.0%
  • 8:30 AM ET GDP Price Index QoQ, for Q4…est. 2.0%
  • 8:30 AM ET Core PCE QoQ, Q4-T…est. 1.2%
  • 8:30 AM ET Weekly Jobless Claims…est. 247K
  • 8:30 AM ET Continuing Claims…est. 2.031M
  • 9:45 AM ET Bloomberg Consumer Comfort Index…prior 51.3
  • 9:45 AM ET Fed’s Mester speaks in Chicago on Payment System Improvement
  • 10:30 AM ET Weekly EIA Natural Gas Inventory Data
  • 11:00 AM ET Fed’s Kaplan speaks in Washington

World News

  • Reuters reported that the European Central Bank is reluctant to make any changes to its policy statement at its April meeting, because the market misinterpreted the message from its March meeting.
Sector News Breakdown

Consumer

  • lululemon (LULU) Q4 EPS $1.00/$789.9M vs. est. $1.01/$783.56M; said Q4 total comparable sales, which includes comparable store sales and direct to consumer, increased 8%, or by 7% on a constant dollar basis (vs. est. 5.3%); sees Q1 EPS 25c-27c on revs $510M-$515M, below est. 39c/$552.35M; sees total comparable sales decrease in the low-single digits on a constant dollar basis; sees year EPS  $2.26-$2.36 on revs $2.55B-$2.6B below est. $2.56/$2.62B
  • Toyota (TM) said it was recalling approximately 2.9M vehicles in Japan, China, Oceania and other regions including its Corolla Axio sedan and RAV4 SUV crossover due to potentially faulty airbag inflators – Reuters
  • Camping World (CWH) files to sell 7M shares of Class A common stock for holders
  • e.l.f. Beauty (ELF) files to sell 7M shares of common stock for holders

Energy

  • Cenovus Energy (CVE) to acquire ConocoPhillips’s (COP) 50% interest in the FCCL Partnership, their oil sands Joint venture for a total consideration of C$17.7B, including C$14.1B in cash and 208M Cenovus common shares
  • ConocoPhillips (COP) to double existing buyback plan to $6B
  • Cenovus (CVE) reports related C$3B bought-deal offering
  • Range Resources (RRC), EOG Resources (EOG) and Conoco (COP) upgraded to buy at UBS
  • Gevo (GEVO) Q4 EPS loss ($1.14) on revs $5.84M and Q4 cash & cash equivalents $27.9M

Financials

  • Synovus (SNV) is in talks to buy the financial arm of Cabela’s (CAB), reports Dow Jones, citing sources. Synovus would resell the credit card unit to Capital One (COF) and keep deposits, the sources added https://goo.gl/dHKoEE
  • BGC Partners (BGCP) said it now expects both its Q1 revenues and its pre-tax distributable earnings for the period to be around the high-end of the range of its previously stated guidance
  • OFS Capital (OFS) announces offering of 3.5M shares of common stock

Healthcare

  • Cara Therapeutics (CARA) plans $80M stock offering to fund CR845 trials
  • Novartis (NVS) says its BLA for CTL019 was granted priority review in the U.S. for relapsed and refractory (r/r) pediatric and young adult patients with B-cell acute lymphoblastic leukemia (ALL)
  • Amgen (AMGN) announced that the U.S. FDA has accepted for priority review the supplemental Biologics License Application for BLINCYTO to include overall survival data from the Phase 3 TOWER study
  • Diplomat Pharmacy, Inc. (DPLO) has been selected to the panel for the limited-distribution drug OCREVUS™ (ocrelizumab). OCREVUS was approved by the FDA for the treatment of relapsing multiple sclerosis (RMS) and primary progressive multiple sclerosis (PPMS).
  • Boston Scientific (BSX) in pact to acquire closely-held Symetis SA, a trans catheter aortic valve implantation (TAVI) device-maker, for $435M upfront cash.
  • Progenics (PGNX) registrational Phase 2b trial of radiotherapeutic candidate Azedra (iobenguane I 131) injection met primary endpoint evaluating patients who achieved 50% or more reduction of all antihypertensive medication for at least 6 months
  • Blueprint Medicines (BPMC) 5M share Secondary priced at $40.00

Industrials & Materials

  • Worthington Industries (WOR) Q3 EPS 55c/$703.4M vs. est. 64c/$717.3M
  • Lindsay (LNN) Q2 EPS 47c/$124.1M vs. est. 36c/$119M; Q2 gross margin 26.5%
  • H.B. Fuller (FUL) Q1 EPS 48c/$503.3M vs. est. 45c/$486.75M; backs FY17 adj. EPS view of $2.57-$2.77
  • Grainger (GWW) downgraded to Market Perform from Outperform at BMO Capital
  • Raytheon (RTN) boosts quarterly dividend to 79.75c from 73.25c

Technology, Media & Telecom

  • Coming a day after Westinghouse filed for bankruptcy, Toshiba Corp shareholders agreed to split off its prized NAND flash memory unit on Thursday, paving the way for a sale to raise at least $9 billion
  • Progress Software (PRGS) Q1 EPS 34c/$91.2M vs. est. 26c/$87.5M; sees Q2 EPS 35c-37c on revs $89M-$92M vs. est. 37c/$93.07M
  • Sigma Designs (SIGM) Q4 EPS loss (16c)/$42.7M vs. est. loss (16c)/$43.27M; sees Q1 revenue $38M-$41M, consensus $47.47M
  • SAIC Q4 EPS 79c/$1.03B vs. est. 78c/$1.09B; Q4 new bookings $800M
  • Gartner (IT) to replace Dun & Bradstreet in S&P 500 at open on April 5
  • Akamai Technologies (AKAM) announced the company has entered into an agreement to acquire SOASTA, a leader in Digital Performance Management in an all-cash deal that is expected to be dilutive to adj. EPS in FY2017 by 6c-7c
  • Extreme Networks (EXTR) to acquire Broadcom’s (AVGO) data center networking business for $55M
  • EXFO Inc. (EXFO) Q2 EPS 2c/$60.0M vs. est. 6c/$60.56M

 

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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