Stock futures are slightly lower to start the week, as investors return from the long three-day holiday weekend to face geopolitical tensions and economic data that plagued markets last week and the start of earnings season. Fresh tensions surrounding North Korea could weigh on investor sentiment this morning after the nation put on a massive military parade over the weekend, followed by a failed missile launch. Last week, news of a U.S. bombing mission over Afghanistan unsettled investors ahead of the long weekend break. European stocks were closed Monday for an extended Easter break, while much of Asia was also shut, so markets may be quiet today in the U.S. Gold inched higher, while crude oil prices slipped last Thursday after data showed the 13th weekly rise in a row in the number of active U.S. oil rigs. Tonight, after the close, results from Netflix is expected in the tech space, with a few economic data points, but no Fed speakers. In Asian markets, The Nikkei Index up 19 points to finish at 18,355, the Shanghai Index fell -23 points to settle at 3,222 and the Hang Seng Index was closed. In Europe, major averages are closed.
On Thursday, the Dow industrials closed down 138.61 points to its session low of 20,453.25, while the S&P 500 index dropped 15.98 points to a session low of 2,328.95. The Nasdaq Composite fell 31.01 points to close at a session low of 5,805.15. For the week, the Dow fell 1%, the S&P 500 dropped 1.1% and the Nasdaq fell 1.2%.
Market Closing Prices Yesterday
- The S&P 500 Index dropped -15.98 points, or 0.68%, to 2,328.95
- The Dow Jones Industrial Average fell -138.61 points, or 0.67%, to 20,435.25
- The Nasdaq Composite slipped -31.01 points, or 0.53%, to 5,805.15
- The Russell 2000 Index declined -13.96 points, or 1.03% to 1,345.24
Events Calendar for Today
- 8:30 AM ET Empire Manufacturing Index for April…est. 15.0
- 10:00 AM ET NAHB Housing Market Index for April…est. 70
- 4:00 PM ET Total New TIC flows for February…(prior $110.4B )
- Earnings Before the Open: JBHT, MTB
- Earnings After the Close: BRO, CTO, CUDA, ELS, NFLX, REED, SFBS
- Turkish President Recep Tayyip Erdogan declared victory in a referendum to increase his powers as opposition parties contested the result. With 98 percent of ballots counted, Turks approved the most radical constitutional overhaul since the republic was founded 93 years ago by 51.3% to 48.7%
- China reported growth of 6.9% in the first quarter, its fastest pace since the third quarter of 2015, fueled by credit and infrastructure spending as well as a stubbornly booming property market
- Industrial output in China expanded at a faster pace in March from a year earlier, as value-added industrial output expanded by 7.6% in March, compared with a 6.3% increase in the first two months of 2017.
Sector News Breakdown
- BJ’s Wholesale Club is putting itself on the auction block and Amazon (AMZN) has expressed “modest internal interest,” the New York Post reported. CVC Capital Partners and Leonard Green & Partners, the buyout firms that took BJ’s private for $2.8 billion six years ago, are pressing ahead for an outright sale that could fetch more than $4 billion https://goo.gl/dLps3Z
- Snyder’s-Lance (LNCE) lower year revs and Ebitda views based on YTD performance, expectations for rest of the year; cuts FY17 adjusted EPS view to $1.05-$1.20, consensus $1.38 and cuts FY17 revenue view to $2.2B-$2.25B vs. est. $2.27B (prior FY17 view was $1.32-$1.42 for EPS and $2.25B-$2.29B for revenue); guides Q1 below views as well
- US Foods (USFD) sees Q1 net income $24M-$26M; sees Q1 revenue $5.8B vs. est. $5.63B
- Hanesbrands (HBI) mentioned positively in Barron’s saying shares could offer total returns of roughly 25% over the next two years as retail inventories normalize and the company realizes cost benefits from debt cuts and recent acquisitions
- Ford (F) shares are “too cheap” according to Barron’s saying the car company is sitting on a great balance sheet and its dividend looks secure and could attract an activist investor
- Basic Energy Services (BAS) files to sell 9.5M shares of stock
- MoneyGram (MGI) and Alibaba (BABA) affiliate Ant Financial Services Group announced that the companies have entered into an amendment to their definitive merger agreement. Pursuant to the amendment, Ant Financial increased the offer price to acquire all outstanding shares of MoneyGram from $13.25 per share to $18.00 per share in cash https://goo.gl/6jQvc4
- Capital One (COF) March Credit-Card Net-Charge-Offs 5.44% vs. 5.09% MoM; delinquencies 3.71% vs 4.04% MoM
- JPMorgan (JPM) March Credit Card Net Charge-Offs (NCO) 2.47% vs. 2.28% MoM and March credit-card delinquencies 1.21% vs. 1.23% MoM
- Abbott Laboratories (ABT) agreed to buy Alere Inc (ALR) at a lower price than it had previously offered, after raising concerns about the accuracy of various representations, warranties and covenants made by Alere. The revised offer values ALR around $5.3 billion, down from the about $5.8 billion announced in February last year; ALR will receive $51 per share, down from $56
- Eli Lilly (LLY) and Incyte (INCY) said the FDA has issued a complete response letter for the New Drug Application of the investigational medicine baricitinib, a once-daily oral medication for the treatment of moderate-to-severe rheumatoid arthritis
- Barron’s said until recently, investors have fared well with shares of AbbVie (ABBV), Amgen (AMGN) and Biogen (BIIB). Now, they should consider companies like Regeneron Pharma (REGN) and Vertex Pharmaceuticals (VRTX) that are increasing revenue by launching new drugs and growing patient populations.
- S. buyout firm Leonard Green & Partners LP has prevailed in an auction to acquire Charter NEX Films Inc, a U.S. manufacturer of specialty films for the food and medical industries, for $1.5 billion, including debt https://goo.gl/RCsfGW
- CMS issues proposed rule to update 2018 Medicare payment, policies for patients admitted to hospitals in move it says would reduce regulatory burdens, promote flexibility, according to statement. Proposes one-year regulatory moratorium on payment policy threshold for admissions in long-term care hospitals
Industrials & Materials
- Wabtec (WAB) mentioned positively in Barron’s saying shares could return nearly 20% in a year, as the railroad equipment supplier seems poised to rebound as rail volumes stabilize and as governments spend on mass transit systems
Technology, Media & Telecom
- Apple (AAPL) is “actively” considering options for helping Toshiba (TOSBF) by investing in its chip unit, Bloomberg reported, citing sources. The iPhone maker is weighing a range of options from joining with Hon Hai Precision to partnering with Japanese investors on an offer https://goo.gl/oX2v7o
- Privately held Uber Technologies Inc generated $6.5 billion in revenue last year and its gross bookings doubled to $20 billion, the company said; its adjusted net loss was $2.8 billion, excluding the operation in China it sold last year
- Lamar Advertising (LAMR) and Outfront Media (OUT) mentioned in Barron’s as among the best-performing media stocks in the past year because of more income investors, according to Wells Fargo Securities media analyst, who said the outdoor-advertising REITs have over 4.5% dividend yields and potential for more share-price appreciation
- Universal Pictures’ (CMCSA) “The Fate of the Furious”, the eighth installment from the franchise, which stars Vin Diesel, placed first with an estimated $100 million over three days in theaters in the U.S. and Canada, ComScore Inc. said
- March NPD video game software sales were up 5% year-over-year, helped by the launch of Nintendo’s (NTDOY) Switch console. Top titles for the month included Nintendo’s The Legend of Zelda: Breadth of the Wild and Sony’s (SNE) Horizon Zero Dawn – Piper
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.