Market Review: Stocks Close Flat Before Apple Earnings

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Equity Market Recap

  • Stocks meandered between gains and losses, as the tech heavy Nasdaq Composite touched a new all-time high early in the session of 6,102.72 before fading ahead of the highly-anticipated earnings report out of tech giant Apple (AAPL) tonight. Stocks appeared to be in a “holding pattern” ahead of the FOMC meeting results tomorrow and jobs data later this week (though no changes are expected on rates by the FOMC). There were no major economic data points today as the focus was on earnings and monthly auto sales (which disappointed for a second straight month). Oil was the other big story as WTI crude dropped below technical levels to close at its lowest price in six-weeks. Semiconductors dropped on back of weaker sales and margins from AMD, while transports got a lift on airline strength (DAL, UAL). Small Caps underperformed as the Russell 200 index fell around -0.6% thought the broader narrative remains unchanged from earlier in the week – light volumes, no fear in the market, markets await policy changes from Trump administration, and earnings have been strong.


  • WTI crude oil prices dropped sharply late day, breaking below key technical levels, as crude ended lower by -$1.18, or 2.42% to settle at $47.66 per barrel (lowest levels since late march). Market focus for oil hopefully shifts from rising U.S. shale supply to potential for OPEC to extend output cuts later this month (OPEC meeting 4th week of May). But to this point, the oversupply in markets and rising rig counts/inventories are weighing on prices. Weekly API inventory data tonight for crude and DOE tomorrow morning.
  • Gold futures edged higher by $1.50, or 0.1%, to settle at $1,257 an ounce, coming a day after settling at the lowest level in three weeks. Investors await the outcome of the two-day FOMC meeting (started today concludes tomorrow 2:00 PM EST), though no changes are expected at this time regarding interest rates. Gold fell 1% Monday as the dollar bounce and investors rotated into risker assets/out of defensive safe-havens

Currencies & Bonds

  • The U.S. dollar opened higher but lost ground throughout the session, as the euro touched highs of day late at 1.093 (0.25% rise) vs. the dollar, off lows 1.0888 around 10:00 this morning. There were no major economic data today to influence currencies, while all eyes on FOMC meeting tomorrow. The Canadian dollar dropped to a fresh 14-month low versus its U.S. counterpart, driven partly by a decline in crude oil prices. The dollar gained vs. the yen.
  • Bonds gained, moving higher late day as yields declined, as stock tired and slipped into the close. The yield on the benchmark 10-year touched morning highs of 2.34% a day after Treasury Secretary Steven Mnuchin reiterated the possibility of issuing ultra-long bonds…but yields slipped to lows around 2.29% late day ahead of tomorrow’s FOMC meeting.
Sector News Breakdown


  • Auto’s; monthly April auto sales data out today and weak once again (after a dreadful March last month): 1) Ford (F) April U.S. light vehicle sales fell (-7.1%) vs. est. down (-4.7%); 2) GM April vehicle sales fell (-5.8%) vs. est. down (-2.0%), 3) TM April auto sales were down (-4.4%) vs. est. (-4.2%); 4) FCAU April U.S. auto sales fell (-7.0%) vs. est. (-5.9%), 5) NSANY April U.S. auto sales fell (-1.5%) vs. est. of up 1.5%; 6) VLKAY April sales up 1.6% to 27,557 units; shares of auto suppliers (DLPH, BWA, AXL, LEA weaker in sympathy)
  • Retailers; COH quarterly results top consensus and maintains guidance for year (helping lift high-end retailers KORS); PBI shares jumped after Q1 results topped estimates; NLS Q1 revs top views; SMG shares slipped after Q2 EPS missed by 12c and lower revs as well
  • Consumer Staples/Restaurants; in tobacco, MO Q1 EPS missed estimates saying quarter was hurt by lower cigarette shipment volume; KR1M share Block Trade priced at $28.50; 52-week lows for food stocks GIS and K as defensive sectors remain weak; ADM Q1 EPS missed estimates; FDP falls as Q1 EPS missed by wide margin on lower revs; TXRH posted a marked improvement in same-store sales trends from the depressed level seen late last year
  • Housing & Building Products; TMHC 10M share Spot Secondary priced at $23.35; flooring company LL posted a Q1 loss wider than estimated and 1Q liquidity narrowed QoQ; building material names advanced after MLM Q1 top and bottom line results beat (VMC higher)
  • Casino, Lodging & Leisure; lodging sector in focus today after HLT Q1 profit topped consensus and boosted its year EPS outlook as hotel occupancy climbs


  • Oil companies with earnings as COP Q1 EPS missed estimates, while BP results lift shares; COG 1Q17 volumetric beat, raised annual production guidance, and expanded exploratory emphasis; NBL reports a 1Q17 EBITDA beat on stronger US realizations and higher production and raised 2Q production guidance; in sand frac, HCLP with wider EPS loss; other movers on earnings RDC, FI
  • Solar, Utilities, Coal; FSLR to report earnings after the close; ARCH better than expected plus announce capital return strategy; FE trades 52-week low in utility space; PCG, NRG, PNW among names moving in utility sector on earnings today; in MLPs, TRGP was upgraded to buy from neutral at Seaport Global as they believe that the recent underperformance offers investors an attractive entry point to this increasingly Permian-focused infrastructure player


  • Large Cap banks underperform broader markets, led by weakness in banks (perhaps on concerns from yesterday after President Trump said he’s “actively considering breaking up big-banks”); in cards & Services, MA Q1 EPS beat by 6c on higher revs as profit up over 12%; investment advisors/brokers SF, WDR, OZM also active on earnings
  • Consumer Finance and lending; FLT upgraded to strong buy after earnings beat on revs/EPS for the Q and raised FY17 guidance and announced Cambridge B2B acquisition (shares reversed to the downside); OCN downgraded at Compass Point after shares rose +40% following the announcement of a planned strategic deal between NRZ and OCN; AGNC5M share Spot Secondary priced at $20.70; CACC rises on earnings beat (though revs missed)


  • Large Cap Pharma; earnings from two Dow components out as PFE reported a second-straight drop in quarterly revenue YoY ($12.78B was down 2% YoY missing est.); MRK Q1 EPS of 88c topped views by 5c helped by cost cuts, new drug sales and also raises forecast; VRX said it has cut about $3.6B of debt since the end of Q1’16; ITCI extends losses after FDA info request/seeks more toxicity information on schizo drug Lumateperone (shares fell -24% yesterday)
  • Biotech movers; AMAG raises FY17 revenue view to $625M-$685M from $620M-$670M/said Phase 3 Feraheme study met all primary, secondary endpoints; SNSS shares decline after withdrawing leukemia drug marketing application; RDUS slides on Tymlos launch concerns; BLUE in global license accords with NVS and GSK for its lentiviral vector platform; the IBB lower for the first time in seven days, after trading high of 300.87 earlier (1st above 300 since mid-March)
  • Managed care; AET boosted its year operating EPS view after Q1 top/bottom line results beat consensus expectations after exiting Obamacare exchanges; 52-week highs in healthcare: managed care names: HUM, CNC, AET; MOH CEO and CFO stepped down
  • Life science equipment, tools, devices; LMNX shares jump as 12c EPS beat/higher revs and upbeat year rev outlook guidance; 52-week highs in equipment names WAT, PKI, DGX, MTD, BSX
  • Hospitals/facilities/services; CYH put up an in-line with consensus EBITDA quarter and CFFO that is below the trend it needs to make its full-year guide; THC outperforms in hospital space after selling its Houston Hospitals to HCA and sees $725M net proceeds (raises year Ebitda outlook after reporting mixed Q1 results); HCA also reported earnings; HLTH jumps on earnings

Industrials & Materials

  • Industrial & Machinery; heavy duty truck maker CMI shares rise after it beat earnings forecasts for Q1 and raised its full-year outlook; ETN Q1 EPS and sales top consensus and guides year $4.45-$4.75, above consensus of $4.46; CMI strength was helped by stronger demand from construction and mining customers and higher sales from a distributor acquisition in 4Q (positive for construction and mining equipment names; CAT, MTW, OSK, TEX, ASTE, WCC as well as truck-parts making peers NAV, PCAR, ALSN, WNC, WBC); WCC also upgraded at Morgan Stanley today; EMR shares slipped early despite sales beat and raised guidance
  • Transports; airlines outperformed, led by shares or DAL as April Prasm was up 1% YoY while total system traffic up 1.6% (UAL, AAL, LUV others gained); in rail cars, ARII Q1 EPS missed by wide margin though revs topped consensus; index was higher as EXPD only real weak name on earnings
  • Chemicals; LYB2M share Block Trade priced at $82.70; CC Q1 EPS beat by 25c on better sales/Ebitda and boosted year forecast view; KWR Q1 profit tops consensus; MON said it’s no longer pursuing a deal to acquire a crop-planting equipment business from; in ag chemicals earnings: 1) MOS profit misses on lower potash, phosphate prices, 2) IPI reports larger Q1 EPS loss, 3) AGU swings to Q1 loss as revs miss views on higher costs, lower phosphate prices

Technology, Media & Telecom

  • Hardware & Equipment; all about AAPL after the close tonight when they report earnings; stock came into the day trading at all-time record highs; HLIT shares decline as Q1 EPS loss and revs missed consensus and guided Q2 below views
  • Internet; ANGI agreed to be acquired by IAC in deal valued at about $500M/gets $8.50 per share; FB to report earnings tomorrow night after the close; CHGG shares rally on analyst upgrade after Q2 revenue topped consensus
  • Semiconductors; AMD Q1 revs miss/EPS in-line with consensus and guided to an above-consensus JunQ: rev/EPS/GM at $1.15B/~$0.00/33% with gaming console and DT ramps; weakness weighed on shares of NVDA (another gaming/auto chip maker); IDTI slipped on earnings; overall semi index was lower on the day on AMD
  • Media & Telecom movers; cable company CHTR Q1 revs miss consensus and posts wider loss of TV customers amid merger integration; tower stocks were active after SBAC earnings (CCI underperformed in the group)

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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