Mid-Day Outlook: May 12th, 2017

eOptionDaily Market Report

U.S. equities are lower, with the S&P 500 Index heading for its first weekly drop in four, as data on consumer prices and retail sales reinforced expectation for tepid economic growth while retailers such as JWN and JCP became the latest retailer to miss estimates (following weak reports from M, KSS, and DDS yesterday morning). Economic data was disappointing, as sales at U.S. retailers rose in April, and March sales were stronger than originally estimated, but came in below expectations. Meanwhile, consumer prices rebounded in April, bolstering the Federal Reserve’s case for continued interest rate increases, though the core reading was weaker than expected (follows strong PPI inflation data yesterday). Headlines out of Washington have also grabbed markets attention, specifically on the firing of FBI head Comey mid-week, and the subsequent aftermath since (which adds concerns over President Donald Trump’s ability to push through his pro-growth agenda). Earnings season is wrapping up with hardline retailers out the next two weeks (LOW, HD, TGT, and WMT) and then a pause. Coming into the day, the Dow was looking at a -0.4% drop and the S&P 500 at a -0.2% decline, each set to break a three-week string of weekly wins. The Nasdaq Composite is poised for a gain of 0.2%. That would mark the index’s fourth-straight weekly rise, albeit the smallest in the streak.
Treasuries, Currencies and Commodities
·      In currency markets, the U.S. dollar slumped after retail sales and inflation data came in slightly below expectations, closing out what will still likely be a winning week for the greenback’s performance. The dollar fell to lows of 113.23 against the yen (overnight high 113.95), while the euro bounced after 4-days of weakness, rising back above the 1.09 level
·      Precious metals look to make it three-straight days of gains, rising around the $1,230 an ounce level given a pullback in the dollar
·      Energy futures reverse lower, slipping after back-to-back daily gains on bullish inventory data, taking a breather ahead of the Baker Hughes weekly rig count data at 1:00 PM
·      Treasury market’s strong today, as yields fall broadly across the board, after mixed economic data, and as stocks extend recent declines (although modest); the yield on the 10-yr dropped over 5 bps to around 2.34%, while the 2-yr dropped under 1.30% (touched highs around 1.36% this week); the 30-yr yield falls under 3%
Economic Data
·      Retail sales for April rose 0.4%, below est. up 0.6% (though prior month upwardly revised to +0.1% from -0.2%); retail sales less autos rose 0.3% in April vs. est. 0.5% (prior up to 0.3% from 0%; overall, retail sales rose to $474.948B in April vs. $473.102B in March
·      Consumer Price Index (CPI) for April was reported higher 0.2%, in-line with consensus (vs. prior month drop of -0.3%), while core prices rose 0.1%, less than the 0.2% estimate. 
·      Business sales were unchanged in March after rising 0.2% the prior month; Manufacturers’ inventories were unchanged MoM in March after rising 0.2% prior month. Wholesaler’s inventories rose 0.2% MoM in March after rising 0.3% prior month. Retailers inventories rose 0.5% m/m in March after rising 0.3% prior month
·      The preliminary University of Michigan consumer sentiment survey for May rose to 97.7 vs. 97.0 prior month (which was also the estimate). Current economic conditions index unchanged from last month at 112.7, while expectations index rose to 88.1 vs. 87.0 last month.
Sector Movers Today
·      Software movers; CYBR shares under pressure after cutting forecasts/cut to underperform on decelerating licensing revs; CA Q4 EPS beat by 5c on higher revs; VERI 2.5M share IPO priced at $15.00; UPLD solid quarter that showed upside to metrics across the board, with a reiteration of 2017 guidance; FNJN reports Q1 revenue $24.7M vs. $2.3M YoY; TWLO CEO reported an open market purchase of shares; TLND Q1 mixed as EPS misses but revs top consensus
·      Retailers under pressure again; falling today on mixed JWN results and weaker JCP results; JWN declines after mixed results, as total company comp sales missed estimates by 80bps (-0.8%), smallest miss among peers, while though EPS/revs beat; JCP weak Q1 comp sales, falling (-3.5%) vs. est. (-0.7%), while EPS beat/revs missed (reaffirmed year view); TIF upgraded to buy at Goldman Sachs on accelerating luxury backdrop and opportunity to unlock free-cash flow, while raises tgt to $107 from $82; DKS said it overstated 2017 adjusted Ebitda by $23M
·      Banks under pressure given a decline in bond yields on mixed economic data reports (retail sales came in below consensus, while CPI core came in 0.1%, below the 0.2% estimate; banksJPM, C, WFC, BAC and others dropped on reports
·      Housing/home furnishing; group under pressure today after WSJ reported earlier that AMZN is making a major push into furniture and appliances, including building at least four warehouses focused on delivering bulky items (BBBY, W, HOME, WSM, PIR, HVT among the names moving)
·      AAPL +1%; trades at another all-time record high
·      AZN +7%; after a lung-cancer drug Imfinzi proved to be more effective than expected
·      CA +1%; Q4 EPS beat by 5c on higher revs
·      CC +2%; upgraded to overweight and Street high $50 tgt at JP Morgan
·      GLW +0.5%; $200M Apple Advanced Manufacturing Fund award
·      HAIN +7%; after saying its internal accounting review is nearing completion
·      TTD +24%; upgraded to overweight at Cantor after Q1 EPS/rev beat; raised guidance for the year
·      WYNN +3%; upgraded to overweight at Barclay’s, tgt upped to $144 (also upped LVS)
·      AKTX -21%; said its CEO has been placed on administrative leave while review on Edison Report, which contained “material inaccuracies,” is pending
·      ALR -4%; delays filing of Quarterly Report on Form 10-Q
·      CAPR -60%; stock tumbles toward record low after disappointing trial results for heart study
·      CYBR -7%; after cutting forecasts/cut to underperform on decelerating licensing revs
·      DKS -6%; said it overstated 2017 adjusted Ebitda by $23M
·      GE -2% downgraded to sell at Deutsche Bank and cut tgt to $24
·      VJET -6%; as Q1 revs drop
·      A.S.V., LLC (ASV) 3.8M share IPO priced at $7.00
·      Evolent Health (EVH) 1.3M share Block Trade priced at $24.05
·      Fogo De Chao (FOGO) 4.5M share Secondary priced at $14.00
·      Gardner Denver (GDI) 41.3M share IPO priced at $20.00
·      Kinsale Capital Group (KNSL) 4M share Spot Secondary priced at $33.00
·      Solaris Oilfield (SOI) 10.1M share IPO priced at $12.00
·      Spark Therapeutics (ONCE) 840K share Block Trade priced at $56.75
·      TPI Composites (TPIC) 4.5M share Secondary priced at $16.35
·      US Foods (USFD) 40M share Secondary priced at $28.25
·      Veritone (VERI) 2.5M share IPO priced at $15.00
·      Ziopharm (ZIOP) 9.71M share offering prices at $5.15

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