Mid-Day Outlook: May 10th, 2017

eOptionDaily Market Report

Equities sliding amid market uncertainty and mixed earnings overnight (Dow component DIS). Donald Trump’s abrupt firing of FBI Director James Comey is also raising questions about whether the president’s pro-growth/tax-cutting agenda will stall as the focus shifts to why Comey was dismissed amid probes into possible Russian ties to Trump’s campaign. Also late yesterday, markets slid after a report from Sky News said North Korea will go ahead with its sixth nuclear test, citing North Korean ambassador Choe Il. So between those factors, markets holding not far from record highs, and oil prices weakening over the last few weeks, market seeing a bout of profit taking early on. Commodities catching a small bid (have underperformed) after Chinese factory-gate inflation slowed in April, as the slowing economic momentum may signal the PBOC to back off from further tightening. Semiconductors leading the tech heavy NASDAQ, as the SOX trades back to 17-year highs, led by gains in NVDA and MCHP after stronger earnings results. Disney shares weigh on the Dow after mixed earnings.
Now that Apple has exceeded $800 billion in market value, what’s the next threshold to look out for? How about $3 trillion? That isn’t just for the iPhone maker, as you might imagine. It’s the combined market cap of NASDAQ’s “big five” – Alphabet, Amazon, Apple, Facebook and Microsoft — which ended yesterday’s trading at $2.88 trillion. – Bloomberg LP
Treasuries, Currencies and Commodities
·      In currency markets, the dollar pares some of yesterday’s gains, but overall mixed vs. counterpart rivals; the euro and yen are little changed in the early going
·      Precious metals are higher, rising about $7, or 0.5% at $1,223 an ounce as defensive assets pick up steam this morning; gold mining stock outperform gold prices early
·      Energy futures gain after bullish inventory data; as API and Doe report bigger than expected draws in U.S. crude stockpiles than forecast; the API said weekly crude inventories fell -5.79M barrels in the latest week, while gasoline stockpiles rose +3.17M barrels and distillates fell -1.17M. The DOE crude draw -5.247M barrels, gasoline: -150K and distillate -1.587M
·      Treasury markets gain ground early as stocks waver, pulling back from near-all-time highs on FBI news last night/macro concerns; the yield on the 10-yr drops about 3 bps to 2.37% and 2-yr pulls back after 5-straight days of gains, now at 1.335%
Economic Data
·      Import Prices for April rose 0.5% MoM, above estimates for a 0.1% gains and after rising 0.1% in March – thanks in part to higher fuel costs, while export prices rose more modestly.; import prices ex-fuels rose 0.3% after rising 0.2% in March; Export prices rose 0.2% after rising 0.1% in March; Prices for imports were 4.1% higher than a year ago in April. Yearly gains have recently edged back above 4% for the first time since 2012
Sector Movers Today
·      Semiconductors rise – SOX index 17-year highs; NVDA shares jumped over 10% after Q1 results topped consensus on better revs/ its data center business nearly tripled YoY for the 3rd consecutive quarter; TSM (NVDA’s foundry partner) lowered its 2017 global foundry forecast to 5% from 7% on high supply chain inventory (kept the rest of its 2017 guide intact); other semi makers which reported included LSCC, DIOD, MXWL and EXAR; 52-week highs for AMAT, AVGO, MCHP, LRCX in semi space; MCHP jumps on earnings and guidance
·      Energy stocks outperform on the day, recovering after recent losses, as oil prices rebound on bullish weekly inventory data; oil drillers (ESV, NE), services (HAL), E&P names (EOG, APA) rise early; EOG was upgraded to outperform at Raymond James on the back of strong Whirling Wind well results/more aggressive activity pace in 2017; OXY was upgraded to neutral at JP Morgan
·      Online travel; PCLN shares fall overnight after Q1 revs missed and guided next quarter EPS below views (sees 2Q EPS $13.30-$14.00 vs. est. $14.99) though Q1 EPS beat, driven by robust growth in room nights and lower-than-expected opex; TRIP reported a top and bottom line miss, but shares bounced as revenue per hotel shopper finally returned to growth at 2% and the 2017 profit outlook was maintained
·      Optical names lower after ACIA forecast 2Q revenue that fell short of the lowest analyst estimate (Q2 EPS 22c-35c on revs $85.0M-$95.0M below est. 74c/$130.8M); shares of LITE, OCLR, FNSR, INFN were under pressure
·      Asset managers; AB April Prelim AUM $504B vs. $498B MoM citing market appreciation and slightly positive firm wide net flows for the 1.2% increase in assets under management MoM; LMreports preliminary AUM approximately $731B as of April 30 vs. $728,4B MoM; APAM April AUM $106.6B vs. $103.8B MoM; says separate accounts totaled $52.9B of AUM; IVZ April $841.4B at the end of April; rose 0.8% MoM on favorable market returns, foreign exchange, and inflows into PowerShares QQQs
·      ANF +12%; is working with an investment bank to field takeover interest from other retailers, Reuters reported https://goo.gl/UCdeO7
·      ARRY +26%;  after reporting that its binimetinib/encorafenib treatment improved survival of patients with BRAF-mutant melanoma
·      COTY +12%; as quarterly results top highest consensus
·      EA +7%; better than expected Q4 earnings and initial EPS guidance for FY18 which proved better than feared/robust digital growth around Battlefield and FIFA
·      ICON +9%; after earnings beat, sale of Peanuts and Strawberry Shortcake brands
·      INCR +17%; said it would buy privately held inVentiv Health Inc. in a deal valued at about $4.6 billion. https://goo.gl/TTEpgk
·      LL +9%; upgraded to outperform at Wedbush
·      NVDA +12%; Q1 results topped consensus on better revs/ its data center business nearly tripled YoY for the 3rd consecutive quarter
·      WWW +8%; after Q1 EPS and revs beat estimates, while trimming year EPS/maintain revs
·      ACIA -9%; Q2 guidance well below views citing issues with China demand
·      DIS -2%; mixed results as rev miss due to Consumer Products & Cable/cautious commentary on pay TV subs and advertising trends follows other media names/Broadcast, Studio, and Parks beat
·      FOSL -21%; as Q1 misses on double-digit sales decline and guidance was cut
·      FUEL -30%; after Q1 revenue missed expectations and analyst downgrade
·      PCLN -4%; Q1 results topped expectations, driven by robust growth in room nights and lower-than-expected opex, but Q2 outlook is below consensus
·      TIME -8%; on surprise dividend cut and discontinuation of providing annual rev guidance
·      VSI –21%; as Q1 EPS missed by 20c on weaker comp sales (-6.3%) and lower guidance
·      WSTC -4%; to be acquired by APO for $23.50 per share/$2B deal https://goo.gl/9vRnjJ
·      YELP -19% Q1 missed & lowered its ’17 outlook, due to rising churn issues among its Advertising customers
·      ZAYO -8%; downgraded by two analysts after earnings
·      Accelerate Diagnostics (AXDX) 2.75M share Spot Secondary priced at $28.85
·      Ellington Residential (EARN) 3M share Spot Secondary priced at $14.55
·      First BanCorp (FBP) 10.3M share Block Trade priced at $5.70
·      Five Point Holdings (FPH) 21M share IPO priced at $14.00
·      Summit Hotel Properties (INN) 9M share Spot Secondary priced at $16.50
·      Veritone (VERI) 2.875M share IPO priced at $16.00

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

Live Trading

Open an Account

Paper Trading