Morning Preview: May 30th, 2017

eOptionDaily Market Report

Stock futures are slightly lower as investors return from the three-day holiday break, as stocks look to extend their recent record run higher. On Friday, the S&P and Nasdaq Composite inched higher to all-time closing highs and weekly gains of 1.4% and 2.1%, respectively, while the Dow edged down for the session, but still tacked on 1.3% for the week. Friday’s action was boring as major averages ended little changed as the Nasdaq Comp finished higher for the 17th time out of 20 trading days this month (the best pace since September 1996 according to Bespoke. Oil prices are lower early, extending their recent drop, and gold futures also lost ground. There is a busy day of economic data ahead (consumer spending, core inflation and consumer confidence among them).
 
In Asian markets, The Nikkei Index slipped -4 points to settle at 19,677, the Shanghai Index and the Hang Seng Index remain closed for holiday. In Europe, the German DAX is down a few points around the 12,615 level, while the FTSE 100 is lower by around -30 points at 7,515. European stocks dropped on Tuesday, with banks leading the charge lower amid concerns over a potential early election in Italy, while renewed concerns that Greece may not make its next debt repayment also hit investor sentiment in Europe
Events Calendar for Today
·      7:45 AM ET          ICSC Weekly Retail Sales
·      8:30 AM ET          Personal Income for April…est. 0.4%
·      8:30 AM ET          Personal Spending for April…est. 0.4%
·      8:30 AM ET          PCE Deflator MoM for April…est. 0.2%
·      8:30 AM ET          PCE Core MoM for April…est. 0.1%
·      8:30 AM ET          PCE Core YoY for April…est. 1.5%
·      8:55 AM ET          Johnson/Redbook Weekly Sales
·      9:00 AM ET          S&P CaseShiller 20-city index for March
·      10:00 AM ET       Consumer Confidence for May…est. 120.0
·      10:30 AM ET       Dallas Fed Manufacturing Activity for May…est. 15.0
·      4:30 PM ET          API Weekly Inventory Data       
 
Market Closing Prices Yesterday
·      The S&P 500 Index gained 0.75 points, or 0.03%, to 2,415.82
·      The Dow Jones Industrial Average slid -2.67 points, or 0.01%, to 21,080.28
·      The Nasdaq Composite climbed 4.94 points, or 0.08%, to 6,210.19
·      The Russell 2000 Index declined -1.14 points, or 0.08% to 1,382.24
 
   
World News
·      Jared Kushner, President Donald Trump’s son-in-law and a senior adviser, told friends that he and his wife Ivanka made no long-term commitment to stay on at the White House and would review their situation every six months, the New York Times reported. Kushner has no plans to step down as adviser or curtail his duties, the paper said,
·      Federal Reserve Bank of San Francisco President John Williams said “the U.S. economy is about as close to the Fed’s dual mandate goals as we’ve ever been.”
·      The French economy expanded faster than initially forecast in the first quarter of the year, but still logged slower growth than its eurozone counterparts. France’s gross domestic product grew 0.4% in the first three months of the year, better than the 0.3% forecast by analysts
 
Sector News Breakdown
Consumer
·      Ford Motor Co.’s (F) shareholders could make 30% in a year, including dividends according to Barron’s, on the “inspired choice” of Jim Hackett as new CEO. With an accelerated self-driving car effort, Ford stock has an excellent chance of outperforming Tesla (TSLA) over the next five years
·      American Woodmark (AMWD) Q4 EPS $1.06/$258.7M vs. est. $1.01/$264.67M
·      Buffalo Wild Wings (BWLD) downgraded to underperform at Wedbush
·      PepsiCo Inc (PEP) is in talks to acquire All Market Inc, the owner of coconut water brand Vita Coco – Reuters https://goo.gl/2uubZZ
·      Digimarc (DMRC) files $100M mixed securities shelf
 
Energy
·      U.S. initiated a safeguard investigation on crystalline silicon photovoltaic cells on May 17 pursuant to a petition filed by domestic CSPV cells and CSPV modules producer Suniva, according to filing on WTO website – Bloomberg
·      Earthstone Energy (ESTE) files 36.1M share offering
·      Denbury Resources (DNR) to buy Linn Energy’s 23% non-operated working interest in Salt Creek Field in Wyoming for $71.5M
 
Financials
·      First Data (FDC) to buy CardConnect (CCN) for $15 a share in cash; total transaction value ~$750M, including repayment of CardConnect’s outstanding debt and redemption of CardConnect’s preferred stock https://goo.gl/lVgZcV
·      London Stock Exchange (LSE.LN) has agreed to buy The Yield Book, Citigroup’s (C) fixed-income analytics service and also its related indexing business, for $685 million in cash, the companies said https://goo.gl/dBMVLC
 
Healthcare
·      Endocyte (ECYT) said it will announce updated data on EC1456 and EC1169 at at the 2017 American Society of Clinical Oncology Annual Meeting
·      Anavex (AVXL) files to sell 5M share of common stock for holders
·      TG Therapeutics (TGTX) files $300M mixed securities shelf
·      Sangamo (SGMO) files $200M mixed securities shelf
·      Rexahn (RNN) files $150M mixed securities shelf
·      Imprimis Pharma (IMMY) files $75M mixed securities shelf
 
Industrials & Materials
·      A Dutch court on Monday rejected a request by Akzo Nobel (AKZOY) investors for it to take immediate action against the company over its rejection of a takeover bid by U.S. rival PPG Industries (PPG), handing the Dutch company a victory in its efforts to repel the U.S. firm’s 25 billion euro ($28 billion) proposed offer. https://goo.gl/bmzJ0t
·      Lanxess disclosed that Berkshire Hathaway, the conglomerate run by billionaire Warren Buffett, had acquired a 3% stake in the German chemicals maker
·      International Paper’s (IP) mentioned positively in Barron’s saying the stock has a 25% upside plus a healthy dividend, as online retailing growth spurs demand for cardboard boxes from the world’s biggest producer of containerboard and corrugated packaging
·      KBR reaffirms 2017 earnings forecast $1.10-$1.40 (Street est. $1.30) ahead of KeyBanc conference, though projects EPS above midpoint of range due to resolution of Pemex settlement.
·      Frontline (FRO) Q1 EPS 16c on net income $27M
·      BWX Technologies JV (BWXT) awarded $1.5B environmental management contract over 10-years
·      Barrick (ABX) said one of several unions representing employees at Veladero mine in San Juan province, Argentina, started an unplanned work stoppage.
·      Sterling Construction (STRL) files $100M mixed securities shelf
 
Technology, Media & Telecom
·      Western Digital Corp (WDC) may join a consortium of Japanese government money and KKR & Co LP (KKR) to bid for Toshiba Corp’s chip unit, backing away from an earlier demand for an immediate majority stake, two sources familiar with the matter said. https://goo.gl/TT7MYn
·      Yahoo! Inc. (YHOO) shares continue to trade at a relative discount with the $4.4 billion sale of its core internet operations to Verizon Inc. (VZ) expected to close in June – Barron’s
·      Disney (DIS) “Pirates of the Caribbean: Dead Men Tell No Tales” had $62.2M 3-Day weekend sales
·      BlackBerry (BBRY) downgraded to Market Perform from Outperform at Raymond James citing run-up in shares
·      Zynga (ZNGA) upgraded to overweight at Piper and boosts price target to $4.00

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.

 

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