Morning Preview: April 27th, 2017

eOptionDaily Market Report

Stock futures are trading sideways early, holding near record highs, as markets prepare for another earnings onslaught, highlighted by tech giants Amazon, Alphabet (GOOGL) and Microsoft after the close tonight, all of which are trading near record all-time levels. There are also a handful of economic data points that could move the needle today, with jobless claims, durable goods and pending home sales due out. U.S. stocks closed little-changed on Wednesday, slipping in the final minutes of the day following a highly-anticipated announcement of President Donald Trump’s tax proposal that had been one of a few catalysts recently (along with earnings) lifting stocks to record highs. The Nasdaq Composite Index had touched a fresh intraday record of 6,040.89 before retreating to around 6,025 (down a few points). Earnings have been stellar this week but the focus remained on Washington as Treasury Secretary Steven Mnuchin and National Economic Council Director Gary Cohn produced a one-page outline of the eagerly awaited tax plan, but the lack of details appeared to disappoint investors. Proposals to reduce the corporate tax rate to 15% from 35%, have boosted shares of small-cap stocks as the Russell 2000 index touched all-time highs yesterday as well and is up 2.9% for the week.

In Asian markets, Japanese shares pared losses Thursday after the Bank of Japan indicated that it is unlikely to move away from easy-money policies. The Nikkei Index fell -37 points to close at 19,251, the Shanghai Index gained 11 points to settle at 3,152, and the Hang Seng Index rose 120 points to finish at 24,698. In Europe, the German DAX is down over -30 points at 12,435, while the FTSE 100 is down around -0.6% at 7,240.

Market Closing Prices Yesterday

  • The S&P 500 Index slipped -1.16 points, or 0.05%, to 2,387.45
  • The Dow Jones Industrial Average fell -21.03 points, or 0.10%, to 20,975.09
  • The Nasdaq Composite dipped -0.27 points, or 0.00%, to 6,025.23
  • The Russell 2000 Index advanced 8.35 points, or 0.59% to 1,419.43

Events Calendar for Today

  • 8:30 AM ET          Weekly Jobless Claims…est. 245K
  • 8:30 AM ET          Continuing Claims…est. 2.007M
  • 8:30 AM ET          Advance Goods Trade Balance for March…est. (-$65.2B)
  • 8:30 AM ET          Wholesale Inventories MoM March-P…est. 0.2%
  • 8:30 AM ET          Durable Goods Orders for Mar-P…est. 1.3%
  • 9:45 AM ET          Bloomberg Consumer Comfort Index…prior 49.9
  • 10:00 AM ET       Pending Home Sales MoM for March…est. (-1.0%)
  • 10:30 AM ET       Weekly EIA Natural Gas Inventory Data
  • 11:00 AM ET       Kansas City Fed Manufacturing Activity for April…est. 17

Earnings Calendar:

  • Earnings Before the Open: ABBV, AEP, ALLE, ALLY, AMT, APD, BMY, BSX, BWA, CCMP, CBG, CELG, CMCSA, CME, DOW, EFX, EQT, F, GRUB, IP, IRM, IVZ, JCI, LAZ, LLL, LUV, MMC, MPC, NOV, OAK, POT, PX, RS, SIRI, SPG, STAY, UAA, UNP, UPS, USG, VC, WCC, XEL, ZBH
  • Earnings After the Close: AFL, AIV, AJG, AMZN, BIDU, CERN, DLR, EMN, ESS, EXPE, FLEX, FTNT, GIMO, GOOGL, GPRO, HIG, INTC, KLAC, LPLA, MAC, MHK, MLNX, MSFT, PFG, RSG, SBUX, SSNC, SWKS, SYNA, TRMB, VRSN, VRTX, WDC

World News

  • The Bank of Japan (BOJ), which concluded a two-day policy meeting Thursday, met market expectations in leaving its rates and pace of asset purchases unchanged. Though it offered a more upbeat tone on the economy, the central bank lowered its inflation forecast for this year to 1.4% from 1.5%
  • The Mexican peso and Canadian dollar advance against the U.S. dollar on Thursday, after the Trump administration backed away from threats to abandon the North American Free Trade Agreement.
Sector News Breakdown

Consumer

  • Las Vegas Sands (LVS) Q1 EPS 66c/$3.11B vs. est. 61c/$3.1B; Q1 Venetian Macao adjusted property EBITDA up 7.8%. Reports Sands Cotai net revenue down 11.9% to $467M. Reports Sands Cotai adjusted property EBITDA down 12.3%
  • O’Reilly Auto (ORLY) Q1 EPS $2.83/$2.16B vs. est. $2.88/$2.22B; sees FY EPS $12.05-$12.15 on revs $9.1B-$9.3B vs. est. $12.36/$9.21B; Q1 comp. sales +0.8% vs. est. +3.3%; lowers Q2 comp sales up 3%-5%
  • Floor & Decor Holdings (FND)824M share IPO priced at $21.00
  • Asbury Auto (ABG) Q1 EPS $1.58/$1.55B vs. est. $1.48/$1.57B; 1Q new vehicle same-store revs +1% and 1Q used vehicle same-store revs +4%
  • Buffalo Wild Wings (BWLD) Q1 EPS $1.44/$534.8M vs. est. $1.68/$535.35M; reports same-store sales increased 0.5% at company-owned restaurants
  • Tractor Supply (TSCO) Q1 EPS 46c/$1.56B vs. est. 47c/$1.57B; 1Q comp sales down 2.2% (same as prior); has not updated guidance for 2017
  • NutriSystem (NTRI) Q1 EPS 25c/$212.7M vs. est. 17c/$202.87M; Q1 EBITDA up 94% to $15.5M; report another strong Diet Season resulting in our 15th consecutive quarter of YoY rev growth; sees Q2 EPS 58c-63c on revs $178M-$183M vs. est. 61c/$175.2M
  • Weight Watchers International Inc. (WTW) shares rise over 10% overnight after announced Mindy Grossman will become CEO in July (Grossman is currently CEO of home-shopping network and online retail company HSNI)
  • Fortune Brands (FBHS) Q1 EPS 53c/$1.2B vs. est. 47c/$1.18B; sees FY EPS $3.00-$3.12 vs. est. $3.03 and sales growth 6% to 8%
  • Boston Beer (SAM) Q1 EPS 45c/$161.7M vs. est. 32c/$170.4M; sees FY EPS $4.20-$6.20, vs. est. $5.53; sees FY gross margin 51%-52%
  • Ethan Allen (ETH) Q3 EPS 23c/$180.5M vs. est. 28c/$186.57M
  • Regal Entertainment (RGC) Q1 EPS 32c/$821.2M vs. est. 30c/$801.66M
  • Churchill Downs (CHDN) Q1 EPS 44c/$279.5M vs. est. 58c/$283.3M

Energy

  • Whiting Petroleum (WLL) Q1 EPS loss (15c)/$371.32M vs. est. loss (21c)/$365.48M; reports average production 117,360 BOED, at high end of guidance; sees Q2 production 10.2-10.8 MBOE
  • National Oilwell (NOV) Q1 EPS loss (17c)/$1.74B vs. est. loss (21c)/$1.67B; Backlog for capital equipment orders for Rig Systems at March 31 was $2.32B; new orders during the quarter were $118M
  • QEP Resources (QEP) Q1 EPS loss (14c)/$420.1M vs. est. loss (21c)/$406.32M
  • Ocean’s Engineering (OII) Q1 EPS loss (4c)/$446.2M vs. est. loss (10c)/$458.3M

Financials

  • PayPal (PYPL) Q1 EPS 44c/$2.98B vs. est. 41c/$2.94B; Q1 had 6.0M active customer accounts added, ended the quarter with 203M active customer accounts, including 16M merchant accounts; reports 1.7B payment transactions, up 23%; raises FY17 EPS view to $1.74-$1.79 from $1.69-$1.74 (est. $1.72) and revs to $12.52B-$12.72B from $12.45B-$12.65B (est. $12.6B); announces $5B stock repurchase authorization
  • Fiserv (FISV) Q1 EPS $1.25/$1.39B vs. est. $1.19/$1.40B; reaffirms 2017 adjusted EPS outlook $5.03-$5.17 vs. est. $5.11
  • Intuit (INTU) backs FY17 adjusted EPS view $4.30-$4.40 vs. est. $4.34; backs FY17 revenue view $5B-$5.1B vs. est. $5.07B; reports FY17 TurboTax units up 2%
  • Blackhawk (HAWK) Q1 EPS 2c/$212.8M vs. est. loss (4c)/$188.89M; sees FY17 EPS $1.56-$1.70, on revs $1.03B-$1.14B vs. est. $1.63/$1.07B
  • Unum Group (UNM) Q1 EPS $1.02/$2.81B vs. est. $1.00/$2.81B; backs FY17 after-tax operating EPS up 3%-6%
  • XL Group (XL) Q1 operating EPS 50c vs. est. 44c; 1Q net premiums written $2.98B, 1Q net investment income $200.5M and 1Q P&C combined ratio 94.3%
  • AvalonBay (AVB) Q1 FFO $2.09/$522.3M vs. est. $2.11/$524.8M; sees 2Q core FFO/share $2.07-$2.13 vs. est. $2.15
  • Kimco Realty (KIM) FFO 37c on revs $293.6M, rental revenue $289.4M; says grew same-property NOI 2.2% over the same period in 2016
  • Duke Realty (DRE) Q1 FFO 32c vs. est. 29c; sees FY core FFO/share $1.24-$1.30 vs. est. $1.24
  • Equinix (EFX) Q1 EPS 57c/$950M vs. est. 83c/$946.15M; sees Q2 revenue $976M-$982M vs. est. $985.7M and Q2 cash gross margins 67-68%.
  • AGNC Investment (AGNC) Q1 EPS 35c; tangible net book value per common share of $19.31 as of March 31; reports $20.98 net book value per common share as of March 31, 2017
  • Validus (VR) Q1 EPS $1.17/$635.9M vs. est. $1.18/$598.6M; book value per common share at March 31, 2017 was $47.54, compared to $46.61 at December 31, 2016
  • Capstead Mortgage (CMO) Q1 EPS 20c vs. est. 18c; book value increased by 1.2% or $0.13 per common share, ending the quarter at $10.98 per common share, the
  • Brookline Bancorp (BRKL) files to sell common stock

Healthcare

  • Amgen (AMGN) Q1 EPS $3.15/$5.5B vs. est. $3.00/$5.61B; raises FY17 adjusted EPS view to $12.00-$12.60 from $11.80-$12.60 (est. $12.33); reported $49M in 1Q sales for its new cholesterol drug Repatha, missing Bloomberg estimates of $71.6M (watch MDCO, ALNY, ESPR, which have competing treatments being developed and REGN with its Praulent); Enbrel sales $1.18B well below consensus of $1.38B, down 15% YoY
  • Varian (VAR) Q2 EPS 89c/$655M vs. est. 90c/$644.1M; sees Q3 EPS 92c-96c vs. est. 97c and Q3 rev growth up +3%
  • Chemed (CHE) Q1 EPS $1.82/$406M vs. est. $1.79/$405.79M; backs FY17 adjusted EPS view $7.80-$8.00 and revenue growth view 3%-4% vs. est. $7.90/$1.64B
  • CONMED (CNMD) Q1 EPS 38c/$186.6M vs. est. 35c/$181.38M; reaffirms 2017 adjusted EPS outlook $1.85-$1.95
  • Verona Pharma (VRNA)77M share Secondary priced at $13.50

Industrials & Materials

  • Allison Transmission (ALSN) Q1 EPS 52c/$499M vs. est. 34c/$461.21M; raises FY17 revenue growth view to 7.5%-10.5% from 1.5-4.5% and raises FY17 Adjusted EBITDA margin view to 34%-36% from 33.5%-35.5%
  • Potash (POT) Q1 EPS 18c/$1.11B vs. est. 11c/$1.03B; lifts FY17 EPS view to 45c-65c vs. est. 52c
  • Hub Group (HUBG) Q1 EPS 31c/$893.4M vs. est.34c/$890.1M; reaffirms year forecast
  • Echo Global (ECHO) Q1 EPS 9c/$415.8M vs. est. 10c/$416.7M
  • Knight Transportation (KNX) Q1 EPS 18c/$271.2M vs. est. 19c/$277M
  • Waste Connections (WCN) Q1 EPS 74c/$1.091B vs. est. 69c/$1.08B; proposes 3 for 2 stock split
  • Ball Board (BLL) declares 2-for-1 stock-split and boosts dividend
  • Landstar System (LSTR) Q1 EPS 77c/$781M vs. est. 74c/$757.09M; sees Q2 EPS 84c-89c, on revenue $820M-$870M vs. est. 87c/$832.11M
  • Forward Air (FWRD) Q1 EPS 57c/$247M vs. est. 40c/$239.47M; sees Q2 EPS 57c vs. est. 58c
  • Coeur (CDE) Q1 EPS 4c/$206.1M vs. est. 8c/$204.4M; backs FY17 silver production outlook 16.4M-18M ounces and backs FY17 gold production 362,000-387,000 ounces
  • OSI Systems (OSIS) Q3 EPS 85c/$245M vs. est. 80c/$244.35M; cuts FY17 adjusted EPS to $2.85-$3.05 from $2.80-$3.20 (est. $2.87); cuts FY17 revenue to $950M-$970M from $955M-$990M
  • Scorpio Tankers (STNG) Q1 EPS loss (7c)/$122.8M vs. est. loss (10c)/$119.86M

Technology, Media & Telecom

  • Xilinx (XLNX) Q4 EPS 57c/$609M vs. est. 54c/$605.24M; raises quarterly dividend to 35c from 33c per share; sees Q1 revenue approximately $600M-$630M vs. est. $612.94M; Q1 Gross margin is expected to be 68% to 70%
  • Citrix (CTXS) Q1 EPS 97c/$663M vs. est. 95c/$664.42M; sees Q2 EPS 97c-$1.00 on revs $685M-$695M below est. $1.10/$695.2M
  • Cavium (CAVM) Q1 EPS 58c/$229.6M vs. est. 56c/$227.3M; Q1 gross margin 65.7%
  • ServiceNow (NOW) Q1 EPS 25c/$424M vs. est. 17c/$409.07M; sees Q2 revenue $458M-$463M vs. est. $450.8M and subscription revenues $400M-$404M; raises FY17 revenue view to $1.86B-$1.88B from $1.82B-$1.85B; 1Q billings growth +40%
  • F5 Networks (FFIV) Q2 EPS $1.95/$518.2M vs. est. $1.97/$522.88M; sees 3Q EPS $2.01-$2.04, on revs $520M-$530M vs. est. $2.09/$537.4M
  • Teradyne (TER) Q1 EPS 44c/$456.9M vs. est. 38c/$441.2M; sees Q2 EPS 81c-90c vs. est. 60c
  • Ultra-Clean (UCTT) Q1 EPS 47c/$204.6M vs. est. 42c/$192.61M; sees Q2 EPS 49c-55c on revs $210M-$220M vs. est. 33c/$183.29M
  • Monolithic Power (MPWR) Q1 EPS 58c/$100.4M vs. est. 57c/$100.0M; sees 2Q revs $109M-$113M vs. est. $108.9M
  • On Assignment (ASGN) Q1 EPS 42c/$626.5M vs. est. 57c/$619.83M; sees Q2 EPS 70c-73c on revs $650M-$660M vs. est. 73c/$648.46M
  • AMSC lowers Q4 revenue to $15M-$16M from $22M-$26M, consensus $24.62M; sees FY16 revenue $74M-$75M vs. consensus $83.62M
  • Netgear (NTGR) Q1 EPS 64c/$323.7M vs. est. 62c/$309.5M; sees Q2 revenue $315M-$330M, vs. est. $321M; sees Q2 GAAP operating margin of 5.3% to 6.3% and non-GAAP operating margin of 8.0% to 9.0%.
  • Knowles (KN) Q1 EPS 12c/$193.7M vs. est. 11c/$189.9M; sees Q2 EPS 8c-14c on revs $180M-$200M vs. est. 15c/$198.7M

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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