Morning Preview: April 7th, 2017

eOptionDaily Market Report

U.S. futures have erased overnight declines, (S&P futures low 2,336.75) despite falling after reports that the U.S. military launched cruise missile strikes ordered by President Donald Trump against a Syrian airbase controlled by President Bashar al-Assad’s forces in response to a deadly chemical attack in a rebel-held area. Perceived safe-haven assets such as gold and bonds advanced given the attack as it also raises the risk of confrontation with Russia and Iran, Assad’s two main military backers. Gold for June delivery rose $13, or 1%, to $1,266.30 an ounce. (nearing 5-month highs). The news out of Syria is currently overshadowing the U.S. jobs report at 8:30 AM ET this morning and the President Trump/Xi Jinping meeting. President Donald Trump hosted his Chinese counterpart Xi Jinping for their first official meeting as markets watch for how they will tackle trade and geopolitical issues. However, stock futures are once again showing their resiliency, bouncing into positive territory.

Stocks closed higher on Thursday, erasing some of the prior day’s losses, led by gains in consumer discretionary (retail big bounce), energy stocks as oil advanced for 7th time in 8 sessions and as financials pushed higher ahead of today’s non-farm payroll report. Defensive sectors such as Utility and Telecom stocks were down the most.

In Asian markets, The Nikkei Index gained 67 points to settle at 18,664, the Shanghai Index inched higher 5 points to finish at 3,286 and the Hang Seng Index slipped -6 points to close at 24,267. In Europe, the German DAX is down around -60 points at 12,170, while the FTSE 100 is up a few points around 7,315.

Market Closing Prices Yesterday

  • The S&P 500 Index gained 4.54 points, or 0.19%, to 2,357.49
  • The Dow Jones Industrial Average rose 14.80 points, or 0.07%, to 20,662.95
  • The Nasdaq Composite jumped 14.47 points, or 0.25%, to 5,878.95
  • The Russell 2000 Index advanced 12.28 points, or 0.91% to 1,364.43

Events Calendar for Today

  • 8:30 AM ET          Change in Non-Farm Payrolls for March…est. 180K
  • 8:30 AM ET          Change in Private Payrolls for March…est. 170K
  • 8:30 AM ET          Unemployment Rate for March…est. 4.7%
  • 8:30 AM ET          Average Hourly Earnings MoM for March…est. 0.2%
  • 8:30 AM ET          Average Weekly Hours for March…est. 34.4 hours
  • 10:00 AM ET       Wholesale Inventories MoM for Feb-F…est. 0.4%
  • 1:00 PM ET          Baker Hughes Weekly Rig Count
  • 3:00 PM ET          Consumer Credit for February…est. $15.0B

World News

  • The U.S. Navy launched dozens of cruise missiles against targets in Syria on Thursday night, according to NBC News. Reportedly, more than 50 Tomahawk missiles were launched, and at least one airfield was hit. The attack comes days after the Syrian regime used chemical weapons against an opposition-held town https://goo.gl/f53tvh
  • German industrial output rose2% from the month before, adjusted for seasonal swings and calendar effects, topping a forecast for a 0.3% decline
  • K. trade deficit widens to £3.7 billion in February vs. revised deficit of £3 billion in January
  • K. construction output falls 1.7% in February month-over-month
  • K. industrial production falls 0.7% in February vs. expected 0.2% rise
Sector News Breakdown

Consumer

  • Ruby Tuesday (RT) Q3 EPS loss (6c) with revs $225.7M and Q3 comp restaurant sales down (-4%) both the same as previously reported
  • PriceSmart (PSMT) Q2 EPS 90c/$793.3M vs. est. 90c/$791.5M; 2Q net warehouse club sales $772.3M and March net Warehouse Club sales Increased 5.3%
  • WD-40 (WDFC) Q2 EPS 87c/$96.5M vs. est. 90c/$99.79M; sees FY EPS $3.64-$3.71 vs. est. $3.65 and lowers year sales view to $390M-$395M from prior $395M-$404M
  • Southwest Airlines (LUV) March Traffic up 3.9%, Capacity up 4.5%; still sees 1Q RASM down in 2-3% range; March load factor 84.1% vs 84.6% y/y
  • Havertys (HVT) 1Q prelim sales $200.4M while comps rose 1.6%.

Energy

  • Oil futures jumped overnight on the news of the attack on Syria bases by the U.S., with WTI touching a high of $52.94 before paring gains
  • Williams (WMB) upgraded to Buy from Neutral at Citi
  • Williams Partners (WPZ) upgraded to Buy from Neutral at Citi
  • C&J Energy Services (CJ) 7M share secondary offering priced at $32.50

Financials

  • S&P SmallCap 600 constituent United Bankshares (UBSI) will replace The WhiteWave Foods Co. (WWAV) in the S&P MidCap 400 April 12th
  • Triangle Capital (TCAP) files $1B mixed securities shelf

Healthcare

  • AngioDynamics (ANGO)35M share Spot Secondary priced at $16.20
  • Codexis (CDXS) files to sell common stock, no amount given
  • Syndax Pharmaceuticals (SNDX) files $200M mixed securities shelf
  • Incyte (INCY) tgt raised to $185 from $135 by Barclays citing increasing confidence ahead of an FDA regulatory decision for Lilly-partnered drug, Olumiant (baricitinib).

Industrials & Materials

  • Ryerson (RYI) said it sees first Q1 revs to be higher than in Q4 and Q1’16
  • Silver Wheaton (SLW) files $2B mixed securities shelf
  • Eagle Bulk Shipping (EGLE) files to sell 34.28M shares of common stock for holders
  • HB Fuller (FUL) reports $200M share buyback and raised dividend
  • DryShips (DRYS) announces a 1-for-4 reverse stock split
  • Mercury Systems (MRCY) announced it received a $15.6M follow-on order from a leading defense prime contractor for integrated radio frequency and digital subsystems for an electronic warfare application

Technology, Media & Telecom

  • Samsung Electronics Co Ltd forecast its best quarterly profit in more than three years in the January-March period, beating expectations on the back of robust demand for memory chips; said Q1 operating profit was likely 9.9 trillion won ($8.8 billion), vs. est. of 9.4 trillion won
  • Okta (OKTA) 11M share IPO priced at $17.00
  • Oclaro (OCLR) will replace United Bankshares in the S&P SmallCap 600 effective prior to the open on Wednesday, April 12

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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