Morning Preview: March 31st,2017

eOptionDaily Market Report

Stock futures are declining early on this final trading day of the month and year, but is headed for its best quarter since 2015 amid persistent economic and political uncertainty. Stocks ended higher on Thursday after Treasury yields rose and as the U.S. oil price moves back above $50 to trade at a three-week high. The dollar advanced and beaten up banks, Transports and Energy stocks all outperformed in an unwind of the weakness seen over the last week. The Nasdaq Comp made it five straight winning sessions and the Russell 2000 six- straight with yesterday’s gains. Stocks have been buoyed over the last few days on stronger economic data reports…with more in store today as we get personal income and spending, as well as the Chicago PMI, Michigan sentiment, and a several inflation reports.

Friday marks the end of the week, month and quarter. The Nasdaq is set to log the best performance of the major U.S. indexes in March — a 1.5% rise, with one more session to go. The S&P 500 is looking at a modest advance of 0.2%, while the Dow is set to lose around 0.4% for the month. For the first quarter, the Nasdaq is set to deliver the best return of the three main indexes, with a nearly 10% gain as of Thursday’s close. The S&P 500 is eyeing a 5.8% rise. The DJIA is poised to add nearly 5%, which would be its sixth-straight positive quarter and the longest winning streak since the fourth quarter of 2006.

In Asian markets, The Nikkei Index fell -153 points to 18,909, the Shanghai Index gained 12 points to settle at 3,222 and the Hang Seng Index dropped -189 points to 24,111. In Europe, the German DAX is down only a few points at 12,250 (after closing near two-year highs yesterday) and the FTSE 100 is down around -30 points to 7,336.

Market Closing Prices Yesterday

  • The S&P 500 Index gained 6.93 points, or 0.29%, to 2,368.06
  • The Dow Jones Industrial Average rose 69.17 points, or 0.33%, to 20,728.49
  • The Nasdaq Composite jumped 16.80 points, or 0.28%, to 5,914.34
  • The Russell 2000 Index advanced 10.70 points, or 0.78% to 1,382.35

Events Calendar for Today

  • 8:30 AM ET Personal Income for February…est. 0.4%
  • 8:30 AM ET Personal Spending for February…est. 0.2%
  • 8:30 AM ET PCE Deflator MoM for Feb…est. 0.1%
  • 8:30 AM ET PCE Core MoM for Feb…est. 0.2%
  • 8:30 AM ET PCE Core YoY for February…est. 1.7%
  • 9:45 AM ET Chicago PMI for March…est. 56.9
  • 10:00 AM ET University of Michigan Confidence, March-F…est. 97.6
  • 1:00 PM ET Baker Hughes Weekly Rig Count

World News

  • President Donald Trump’s former national security adviser Michael Flynn is reportedly willing to testify about the Trump team’s ties with Russia in exchange for immunity from prosecution
  • China’s manufacturing sector expanded at a faster pace than expected in March, as the official Purchasing Managers’ Index (PM) rose to 51.8 in March, compared with the previous month’s 51.6, which was also the estimate
  • Meanwhile, China’s government’s nonmanufacturing PMI, also released Friday, rose to 55.1 in March from 54.2 in February
  • Japanese industrial production rose 2.0% on month in February, the Ministry of Economy, Trade and Industry said Friday, as demand for Japanese goods overseas picked up. The rise was larger than the 1.2% increase forecast and came after a 0.4% fall in January
  • Senators Joe Manchin and Heidi Heitkamp on Thursday became the first Democrats to support the confirmation of President Donald Trump’sSupreme Court nominee Neil Gorsuch, giving Republicans two of Eight Democratic votes needed
  • Eurozone inflation falls to 1.5% in March from 2% in February
  • Germany’s national unemployment rate hit a record low and jobless claims dropped sharply. Jobless claims declined by 30,000 from February, which is the strongest monthly fall since September 2011. Economists expected a smaller drop in jobless claims of 10,000
Sector News Breakdown

Consumer

  • Walgreens (WBA) has set a deadline of “roughly three months” for the FTC approve the proposed $9.7B merger with Rite Aid (RAD) or block it, The New York Post reports https://goo.gl/WFzzm7
  • Rent-A-Center (RCII) said yesterday that Acceptance Now division (ANow) informed Conn Appliances (CONN) it won’t renew referral agreement between the parties upon expiration on June 6
  • Owens Corning (OC) upgraded to outperform from neutral at Wedbush and price target raised to $72 from $58 saying weather is normalizing, consumer confidence is rising, inflation is returning and the residential housing market is better than last year

Energy

  • Newfield Exploration (NFX) to build new water recycling facility in its STACK play in the Anadarko Basin in Kingfisher County, Oklahoma

Financials

  • Canadian Imperial Bank of Commerce (CM.TO) said it had raised its takeover offer for PrivateBancorp Inc. (PVTB) by 20% to about $4.9 billion, after some of the Chicago-based lender’s shareholders opposed an initial bid https://goo.gl/Php2q3

Healthcare

  • Akari Therapeutics Plc. (AKTX) said the FDA granted one of its drugs a “fast track” designation. Akari’s drug, Coversin, is aimed at treatment of paroxysmal nocturnal hemoglobinuria
  • Genmab declined overnight after partner Janssen Biotech said it won’t initiate stage 2 of Phase II study of daratumumab (Darzalex) non-Hodgkin’s lymphoma as some patients not evaluable.
  • Cara Therapeutics (CARA) 4.45M share Secondary priced at $18.00
  • Avadel Pharmaceuticals (AVDL) plans to cut headcount in France by ~50 people; sees related employee severance, benefits and other costs of ~$2.5M-$4.0M
  • Dicerna (DRNA) announces $70M convertible preferred stock financing
  • Tetraphase Pharmaceuticals’ (TTPH) pipeline candidate TP-6076 was selected to receive $4M in research funding from the Combating Antibiotic Resistant Bacteria Biopharmaceutical Accelerator (CARB-X).
  • Akers Biosciences (AKER) announces $2M private placement
  • Pluristem Therapeutics (PSTI) said it’s moving toward finalizing a new corporation with Sosei Corporate Venture Capital to pursue the development and commercialization of its PLX-PAD cell therapy product in Japan
  • DarioHealth (DRIO) announces offering of common stock

Industrials & Materials

  • DuPont (DD) and Dow (DOW) announced several amendments to the companies’ transaction agreement involving the proposed merger of equals and intended subsequent separation into three independent publicly traded companies
  • FMC Corporation (FMC) and DuPont (DD) announced the signing of a definitive agreement for FMC to acquire the portion of DuPont’s Crop Protection business it must divest to comply with the European Commission ruling related to its merger with Dow Chemical (DOW). Additionally, DuPont will acquire FMC Health and Nutrition and receive $1.2B in cash
  • Lockheed Martin (LMT) wins $1.59b U.S. Army contract

Technology, Media & Telecom

  • Aehr Test Systems (AEHR) Q3 revs $2.7M on EPS loss (16c); backlog was $11.8M at the end of the Q3
  • Uni-Pixel (UNXL) Q4 EPS loss (16c)/$4.1M vs. est. loss (11c)/$1.4M; sees deliveries “ramping up” in 1H17
  • ParkerVision (PRKR) Q4 EPS loss (23c) vs. (32c) loss in Q415
  • HubSpot (HUBS) upgraded to buy at BTIG
  • U.S. Bankruptcy Court in Manhattan said Westinghouse Electric can tap an $800M financing package designed to keep the business afloat as it attempts to restructure its debt in bankruptcy, the Wall Street Journal reports

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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