Morning Preview: June 7th, 2017

eOptionDaily Market Report

Stock futures are very quiet (and have been so the last two days), with major averages still awaiting tomorrow’s raft of news as investors prepare for former FBI head James Comey’s testimony, results of the UK election, and commentary from the ECB regarding rates and its asset purchases. U.S. stocks closed lower Tuesday for a second session as investors exercised caution ahead of political uncertainties. It’s a quiet day for U.S. data, with just April consumer credit figures for March. Markets are quiet across the board, as bonds are little changed as the 10-year remains down around 2.15%, the dollar is mixed, while commodity prices gold and oil are both trading lower. The Organization for Economic Cooperation and Development has cut its economic growth forecasts for the U.S. this year and next, saying stimulative measures it had expected from the Trump administration would now likely be implemented later (cut to 2.1% from 2.4% this year and lowered next year to 2.4% from 2.8%). In Asian markets, The Nikkei Index rose 4 points to 19,984, the Shanghai Index jumped 38 points to close at 3,140, and the Hang Seng Index slipped -22 points to 25,974. In Europe, the German DAX is higher by around 30 points at 12,720, while the FTSE 100 is up around 20 points at 7,550 (ahead of the election tomorrow). Volumes and trading ranges have been tight the last two days…expect more of the same today given lack of news and earnings overnight.
Market Closing Prices Yesterday
·      The S&P 500 Index dropped -6.77 points, or 0.28%, to 2,429.33
·      The Dow Jones Industrial Average fell -47.81 points, or 0.23%, to 21,136.23
·      The Nasdaq Composite dropped -20.63 points, or 0.33%, to 6,275.06
·      The Russell 2000 Index declined -1.55 points, or 0.11% to 1,394.90
Events Calendar for Today
·      7:00 AM ET          MBA Mortgage Applications Data
·      10:30 AM ET       Weekly DOE Inventory Data
·      3:00 PM ET          Consumer Credit for April…est. $15.0B
Earnings Calendar:
·      Earnings Before the Open: BF/B, HOME, NAV
·      Earnings After the Close: ABM, GEF, MIND, ODC, ONVO, TLRD, VRNT
Other Key Events:
·      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
·      Investor Intelligence poll shows bullish sentiment breaks 3-week losing streak, rebound to 55.8% from 50.0% last week, while Bears slip to 18.3% after reaching 19.2% last week, the highest since Dec. 21; those expecting a correction slips to 25.9% after rising to 9-week high of 30.8% last week
·      Gunmen in Iran killed at least one person in twin attacks that targeted both the country’s parliament and a shrine dedicated to the Islamic Republic’s founder, state media reported.
·      German Manufacturing orders fell by 2.1% compared with March, the economics ministry said, referring to data adjusted for seasonal swings and calendar effects; estimates were for a 0.5% decline.
Sector News Breakdown
·      United Foods (UNFI) Q3 EPS 77c/$2.37B vs. est. 76c/$2.42B; sees added restructuring charges $3M-$4M in Q4; reaffirms year EPS view but lowers year revs to $9.29B-$9.34B from prior $9.38B-$9.46B (est. $9.36B)
·      NCI Building (NCS) Q1 EPS 16c/$420.46M vs. est. 12c/$409.5M; sees Q3 revenue $480M-$505M vs. est. $492.2M and sees Q3 adjusted EBITDA $48M-$58M; raises FY17 revenue view to $1.80B-$1.86B from $1.75B-$1.85B
·      Dave & Buster’s (PLAY) shares -4%; Q1 EPS 94c/$304.1M vs. est. 81c/$299.85M; reports Q1 comparable store sales increase of 2.2% vs. est. 2.7%; increases stock repurchase program by $100M; sees FY revenue $1.16B-$1.17B vs. est. $1.17B; raises year net to $107M-$111M from $101M-$105M
·      Duluth Holdings (DLTH) Q1 EPS 1c/$83.69M vs. est. 6c/$82.94M
·      Oxford Industries (OXM) Q1 EPS $1.12/$272.4M vs. est. $1.04/$273.4M; sees Q2 EPS $1.35-$1.45 on sales $285M-$295M vs. est. $1.54/$296.43M
·      Bebe Stores (BEBE) has been able to reach deals with its many landlords whilst also avoiding a bankruptcy filing, the Wall Street Journal reports
·      Columbia Sportswear (COLM) announced a strategic realignment of its corporate leadership team as part of the on-going organizational assessment launched by the company in the first quarter of 2017
·      Lodging and Leisure stocks have slipped over the last two weeks (MAR, HLT, STAY) following recent terror attacks and travel ban tweets
·      The American Petroleum Institute (API) reported a decline of -4.6M barrels in U.S. crude supplies for the week ended June 2, but showed a climb of 4.1M barrels in gasoline supplies, while inventories of distillates were up 1.8M barrels (EIA data at 10:30 AM this morning)
·      U.S. security agencies believe Russian hackers helped stoke the current crisis in Qatar, planting a fake news story that led to four Arab nations cutting off diplomatic relations, according to a report late Tuesday
·      Germany’s highest court effectively rolled back a tax on nuclear energy Wednesday, deeming the fees the government has collected from utility companies as unconstitutional and “void;E.ON, and RWE shares rise after German court ruling
·      Banco Santander SA agreed to buy Banco Popular Espanol SA for a nominal 1 euro ($1.13), after European regulators determined that the troubled lender was likely to fail and ordered it to be sold. All of Popular’s junior bonds will be wiped out as part of the deal, including its additional Tier 1 notes.
·      Golub Capital (GBDC) files to sell 1.75M shares of common stock
·      Exact Sciences (EXAS) to sell 7M shares of common stock 
·      HealthEquity (HQY) Q1 EPS 23c/$55.4M vs. est. 16c/$54.77M
·      Leerink upgraded hospitals HCA Holdings (HCA), LifePoint (LPNT) and Tenet healthcare (THC) to Outperform from Market Perform, upping tgts for HCA to $100 from $90, for LifePoint to $74 from $73 and maintains a $27 price target for HCA – says Anthem’s (ANTM) announced exit yesterday from the key swing state of Ohio’s healthcare exchange could bring further attention to the need for stabilization funding through legislation
·      Athene Holding (ATH) 16.2M share Secondary priced at $49.00
Industrials & Materials
·      Southwest Airlines (LUV) May traffic up 3.4%, capacity up 4.0%; still sees 2Q Rasm up 1%-2%; said May load factor 85.4% vs 85.8% YoY
·      Carvana (CVNA) shares gained +9%; Q1 EPS loss (28c)/$159.1M vs. est. loss (29c)/$157.7M; sees Q2 revenue $193M-$203M vs. est. $184.28M and Q2 retail unit sales 10,000-10,500; 1Q retail units sold totaled 8,334, up 120% YoY
·      Navistar (NAV) shares down -6%; Q2 EPS loss (86c) on revs $2.1B vs. est. $2.07B; Q2 Ebitda $65M vs. Bloomberg est. $125.67M; said had impairment charge of $5M and restructuring charge of $2M
Technology, Media & Telecom
·      Ambarella (AMBA) shares -7%; Q1 EPS 39c/$64.1M vs. est. 36c/$63.48M; reports Q1 GAAP gross margin was 63.9%, compared with 64.2% for the same period in FY17; sees Q2 revenue $69M-$72M vs. est. $72.35M and margins between 62.0%-63.5%; announces $50M stock buy back
·      Analogic (ALOG) Q3 EPS 79c/$122.2M vs. est. 74c/$121.35M; sees FY17 EPS $2.40-$2.70 below est. $3.18 and sees FY17 revenue to be down low to mid-single digits compared with FY16
·      Sigma Designs (SIGM) Q1 EPS loss (25c)/$39.6M vs. est. loss (21c)/$39.4M; says FY18 will be a transition year in our business as we focus our investments in our IoT solutions, which we expect to be the future growth and profit drivers for the company
·      Keysight Technologies (KEYS) Q2 EPS 64c/$753M vs. est. 55c/$750.8M; sees Q3 adjusted EPS 51c-65c on revs $810M-$850M vs. est. 58c/$842.98M
·      SeaChange (SEAC) Q1 EPS loss (5c)/$16.67M vs. est. (15c)/$16.8M; sees Q2 EPS loss (9c)-(3c) on revs $17M-$20M vs. est. loss (8c)/$18.22M
·      Bazaarvoice (BV) Q4 EPS loss (2c)/$50.21M vs. est. loss (2c)/$49.99M; 4Q adjusted Ebitda $2.32M
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