Morning Preview: June 6th, 2017

eOptionDaily Market Report

Stock futures are trading lower, edging down after a small decline across the board yesterday amid upcoming geopolitical worries. There are no major economic data points today, and only a handful of earnings, as attention turns to a raft of worries, including former FBI boss James Comey’s testimony to a Senate panel later this week. Defensive assets such as gold futures are higher by over $10 to 7-week highs (nears $1,300 an ounce), bonds are jumping as yields fall (10-yr to 2.15%) and the Japanese yen is rising, in part to concerns about a spat between Qatar and other Middle Eastern nations. U.S. stocks closed lower Monday, slightly below record levels, as investors dealt with a variety of geopolitical issues, such as terrorist attacks in London ahead of the U.K. election and the scheduled public testimony of fired Federal Bureau of Investigation Director James Comey, this upcoming Thursday. Also Thursday, a European Central Bank announcement. Seven of the eleven sectors in the S&P 500 ended lower, with utilities, materials and industrials leading decliners. In Asian markets, The Nikkei Index dropped -190 points to trade back under 20K with a close of 19,979, the Shanghai Index rose 10 points to close at 3,102 and the Hang Seng Index rose 134 points to close at 25,997. In Europe, the German DAX is down over -70 points at 12,750, while the FTSE 100 is trading flat at around 7,520.
Market Closing Prices Yesterday
·      The S&P 500 Index slipped -2.97 points, or 0.12%, to 2,436.10
·      The Dow Jones Industrial Average fell -22.25 points, or 0.10%, to 21,184.04
·      The Nasdaq Composite dropped -10.11 points, or 0.16%, to 6,295.68
·      The Russell 2000 Index declined -8.94 points, or 0.64% to 1,396.45
 
Events Calendar for Today
·      7:45 AM ET          ICSC Weekly Retail Sales
·      8:55 AM ET          Johnson/Redbook Weekly Sales
·      10:00 AM ET       JOLTs Job Openings, for April…est. 5750
·      4:30 PM ET          API Weekly Inventory Data
 
Earnings Calendar:
·      Earnings Before the Open: CONN, CSIQ, FRAN, FRED, GIII, HDS, HOFT, LE, MIK, SCWX
·      Earnings After the Close: ALOG, AMBA, BV, CVNA, DLTH, HQY, IDT, KEYS, NCS, OXM, PLAY, SEAC, SIGM, UNFI
Other Key Events:
·      Apple (AAPL) Worldwide Developers Conference, 6/5-6/9, in San Jose
·      Stifel 2017 Technology conference, 6/5-6/6, in San Francisco
·      Bank of America Merrill Lynch 2017 Global Technology Conference, 6/6-6/7, in San Francisco
·      Jefferies Global Healthcare Conference, 6/6-6/9, in NYC
·      RBC Capital Markets Global Energy Conference, 6/6-6/7, in NYC
·      REITWeek: NAREIT Investor Forum, 6/6-6/8, in NYC
·      Wells Fargo Financial Services Investor Forum, 6/6-6/7, in San Francisco
 
   
World News
·      Russian military hackers targeted a voting software company and more than 100 U.S. local election officials in a massive cyberattack days before the presidential election, according to a secret National Security Agency report
·      The Department of Justice charged a federal contractor with sending classified material about U.S. election hacking to a news organization, marking one of the first concrete efforts by the Trump administration to crack down on leaks to the media
 
Sector News Breakdown
Consumer
·      Casey’s (CASY) Q4 EPS 76c/$1.85B below est. 85c/$1.88B; Q4 same store gallons -0.5% vs. Bloomberg est. +1.4%, Q4 Same-store grocery sales +1.5%, vs. est. +2.7% and Q4 Same-store prepared food sales +3.2% vs. est. +4.9%; sees FY18 same-store grocery, other merchandise sales growth 2%-4%
·      HD Supply (HDS) shares fell -5%; Q1 EPS 63c/$1.9B vs. est. 66c/$1.86B; 1Q gross margin 33.7%, est. 34.08%; to sell HD Supply Waterworks to Clayton, Dubilier for $2.5B in cash; announces $500M share repurchase program
·      Conn’s (CONN) shares fell -9%; Q1 EPS loss (5c)/$279.4M vs. est. loss (22c)/$358.71M; 1Q comparable sales -15.2% vs. est. -14.2%; sees Q2 comp sales down 12%-15% from Q1
·      LGI Homes (LGIH) yesterday announced record high home closings for a single month in May 2017 of 523, up from 432 homes closed in May 2016; up 21.1% y/y
·      Thor Industries (THO) shares up 9%; Q3 EPS $2.11/$2.02B vs. est. $1.88/$1.96B; 3Q Consolidated RV backlog $2.36B and Q3 gross margin 14.6%
·      Signet Jewelers Ltd. (SIG) said in a filing its Chief Operations Officer Bryan Morgan has resigned due to violations of company policy “unrelated to financial matters.”
·      J. Crew Group Inc. said that James Brett will become its CEO; Brett arrives at J. Crew from Williams-Sonoma Inc. (WSM)
 
Energy
·      Tesla (TSLA), Sunrun (RUN) would resume selling rooftop panels in Nevada because legislators passed a bill reinstating a policy the state abandoned 18 months ago, Reuters reports
·      Energy Department has no plans at this time to reconsider or revoke authorization for exports from Golden Pass LNG terminal in Texas proposed by Qatar Petroleum and Exxon, agency spokeswoman said
 
Financials
·      Agree Realty Corporation (ADC) boosted its 2017 acquisition guidance to a range of $250M-$275M of high-quality retail net lease properties (up from prior view of $200M-$225M)
·      Colony Starwood Homes (SFR) filed to sell 19.9M shares of stock, consisting of 8.5M offered by the Company and 11.43M shares offered by certain selling shareholders
·      First Horizon (FHN) targets long-term fee income/rev. growth 30%-40%, had targeted 40%-50%
 
Healthcare
·      Perrigo Co. Plc. (PRGO) said CEO John T. Hendrickson will retire and a search committee has been created to conduct a “thorough process” to identify Hendrickson’s replacement
·      Acorda Therapeutics (ACOR) said that its Phase 3 SPAN-PD trial of CVT-301 met its primary endpoint
·      Alere (ALR) files 10-K for 2016 after months of delay
·      TRACON Pharmaceuticals (TCON) reported positive clinical results from multiple studies with TRC105 and TRC102 at ASCO
·      Flex Pharma (FLKS) says CEO Christoph Westphal will step down as CEO and remain as chair of the board, effective July 3.
·      Athene Holding (ATH) files to sell 16.2M shares of stock
·      Novartis (NVS) announced it has entered into a clinical research collaboration in which Bristol-Myers Squibb (BMY) will investigate the safety, tolerability, and efficacy of Mekinist in combination with Opdivo and Opdivo + Yervoy regimen as a potential treatment option for metastatic colorectal cancer in patients with microsatellite stable tumors where the tumors are proficient in mismatch repair
·      Boston Scientific (BSX) gets CE mark for Vercise Gevia Deep Brain Stimulation indicated for treatment of movement disorder symptoms in patients with Parkinson’s disease, dystonia and essential tremor
 
Industrials & Materials
·      CNHI Industrial (CNHI) to buy back up to $300M in shares
·      Paccar (PCAR) upgraded to buy from neutral at UBS and raise tgt to $75 from $50
·      SAIC (SAIC) gets indefinite-delivery, indefinite-quantity contract of $620M to provide engineering support services to Goddard Space Flight Center in Greenbelt, Md
 
Technology, Media & Telecom
·      Microchip Technology (MCHP) narrows Q1 EPS and sales view to $1.22-$1.26 from prior $1.17-$1.27 (est. $1.22) and sales up 4.5%-6% from prior 2%-7%
·      Coupa Software (COUP) Q1 revs $41.1M vs. est. $38.33M; sees 2Q revenue $41.3M-$41.8M vs. est. $39.72M; sees 2Q EPS loss (18c-20c) vs. est. loss (20c); sees FY revenue $172M-$175M vs. est. $168.71M
·      Covisint (COVS) to be acquired OpenText for $2.45 per share/deal valued at $103M https://goo.gl/xVbPNX
·      21st Century Fox (FOXA) is getting into the mobile videogame business, acquiring a company that is currently working on an adaptation of the movie “Avatar.” Fox is purchasing the game studio Aftershock according to reports https://goo.gl/VmfK7W
·      Amazon (AMZN) is dropping its Prime membership price for people on low-incomes, taking direct aim at Wal-Mart (WMT)
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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