Wednesday, September 13, 17
A day after closing at record levels, major U.S. index futures are pulling back slightly to trade lower with few catalysts on the horizon over the next two-weeks. The FOMC meeting takes place next Wednesday, but there are no expectations for a rate hike. Markets have rebounded since last week’s decline after Hurricane Irma turned out to be less devastating than forecast and North Korean tensions eased. Bonds and gold have trimmed recent gains as investors have piled back into riskier stocks. Markets expect inflation reports the next two days, with PPI expected out at 8:30 AM EST and CPI tomorrow morning, which will be closely watched. Shares of AAPL are slightly lower after releasing three new iPhones yesterday, including its premier iPhone X valued at over $1,000. Oil prices are higher after an IEA report aid there are signs the oil market is tightening.
Stocks surged on Tuesday as all three major U.S. stock indexes booked record-closing highs, though pared gains late. It marked the first time all three benchmarks finished at records on the same day since July 26, underlining a resurgence in equity buying. The day was highlighted by Apple’s new iPhones revealed, but slipped late day amid a delay for one of its key products. The Dow Industrial Average was buoyed by financials with strong gains in Goldman Sachs following a jump in yields, while a sharp decline in shares of McDonald’s offset the strength. Risk improved across asset classes after President Trump was said to be planning an aggressive travel schedule to sell the idea of a tax overhaul.
In Asian markets, The Nikkei Index rose 89 points to end at 19,865, the Shanghai Index gained 4 points to close a 3,384 and the Hang Seng Index fell -78 points to settle at 27,894. In Europe, the German DAX is up a few points at 12,530, while the FTSE 100 is down around -25 points at 7,375. Bitcoin prices drop to a 3-week low, down over -5% and back below $4,000 after negative comments by JPM CEO Jamie Dimon yesterday. The British Pound extends its recent rally against the dollar following a rise in CPI the other night.
Market Closing Prices Yesterday
· The S&P 500 Index gained 8.37 points, or 0.34%, to 2,496.48
· The Dow Jones Industrial Average rose 61.49 points, or 0.28%, to 22,118.86
· The Nasdaq Composite climbed 22.02 points, or 0.34%, to 6,454.28
· The Russell 2000 Index advanced 8.64 points, or 0.61% to 1,423.46
· 7:00 AM EST MBA Mortgage Applications Data
· 8:30 AM EST Producer Price Index (PPI) MoM for August…est. 0.3%
· 8:30 AM EST PPI Ex: Food & Energy MoM for Aug…est. 0.2%
· 10:30 AM EST Weekly DOE Inventory Data
· 2:00 PM EST Monthly Budget Statement for August…est. (-$119.0B)
Other Key Events:
· Barclays Global Financial Services Conference, 9/11-9/13, in NYC
· Morgan Stanley Global Healthcare Conference, 9/11-9/13, in NYC
· Deutsche Bank Technology Conference, 9/12-9/13, in Las Vegas
· RBC Global Industrials Conference, 9/13-9/14, in Las Vegas
· The unemployment rate in the U.K. fell in July to its lowest level in more than four decades, as the Office for National Statistics said the jobless rate in the U.K. declined to 4.3% in the three months through July, its lowest level since early 1975. The number of people in work hit a fresh record high of 32.1 million.
· German consumer prices fell in August from July, but increased slightly from a year earlier. Consumer prices fell by 0.1% in August from the previous month and rose by 0.3% from August 2016.
Sector News Breakdown
· Nordstrom (JWN) jumped after 10% after hours on reports the Nordstrom family is leaning toward a partnership with private equity firm Leonard Green to assist its bid to take the department store private https://goo.gl/xKPwKU
· Amplify Snack Brands (BETR) announced the appointments of two consumer packaged goods industry veterans with proven track records of growth. Greg Christenson joins Amplify as Executive Vice President and CFO and Craig Shiesley joins as COO and President, North America, effective September 12, 2017
· Inventure Foods, Inc. (SNAK) shares gained over 20% after announced it has entered into a definitive asset purchase agreement for the sale of its frozen business including the Rader Farms® and Willamette Valley Fruit Company™ brands as well as certain assets for total cash consideration of $50.0 million
· Farmer Bros. (FARM) Q4 EPS 7c/$133.8M vs. est. 15c/$135.72M
· The American Petroleum Institute (API) reported that U.S. crude supplies climbed by 6.2 million barrels for the week ended Sept. 8, while gasoline stockpiles dropped 7.9 million barrels, and distillates edged down by 1.8 million barrels
· Global oil supply fell in August for the first time in four months, a result of Hurricane Harvey. In its closely watched monthly report, the IEA said oil supply had come down by 720,000 barrels a day last month from July, to 97.7 million barrels a day. However, that was still 1.2 million barrels a day more than during the same period a year prior
· Seadrill Ltd. (SDRL) said it is has filed for bankruptcy protection and agreed to a major restructuring plan with its senior lenders. Under the plan, the company’s lenders will extend the maturity on $5.7 billion in debt until 2020. The restructuring agreement also delivers $1.06 billion in new capital, comprised of $860 million in secured notes and $200 million of equity
· Legg Mason, Inc. (LM) reported preliminary assets under management (AUM) of approximately $752.4B as of August 31, 2017. This month’s AUM included long-term outflows of $1.5B, consisting of net outflows in equity of $0.8B, fixed income of $0.5B and alternative of $0.2B
· Invesco Ltd. (IVZ) preliminary month-end assets under management (AUM) of $906.7B, an increase of 3.4% MoM, driven by the Source acquisition, net long-term inflows, PowerShares QQQs inflows, favorable market returns, and higher money market AUM; partially offset by foreign exchange
· AGNC Investment (AGNC) files to sell 24.5M shares of common stock
· Centene (CNC) signed an agreement in which Fidelis Care will become Centene’s health plan in the state of New York. Under the terms of deal, Centene will acquire all assets of Fidelis Care for $3.75 billion, subject to adjustments https://goo.gl/wHeJrG
· Tactile Systems (TCMD) files to sell 2.75M shares of selling stockholders
· Akcea (AKCA) and Ionis (IONS) granted priority review for Volanesorsen NDS
· Inotek Pharmaceuticals (ITEK) announced merger with Rocket Pharma and is reducing its workforce by approximately 60% to a total of 7 full-time employees, which is expected to be completed in the third quarter
Industrials & Materials
· American Airlines Group’s (AAL) said total revenue passenger miles (RPMs) were a record 21.2 billion, up 3.7% YoY while total capacity was 25.5 billion available seat miles (ASMs), up 3.2% YoY; total passenger load factor was 83.3%, up 0.4% YoY; after impact of storms, expects Q3 TRASM to be approximately flat to up 1% YoY and sees Q3 pre-tax margin excluding special items to be between 8.5%-10.5% vs. the company’s previous guidance of between 10%-12%
· SkyWest (SKYW) August block hours down 4.5% y/y; says the decrease was consistent with the carrier’s fleet transition plan to improve the mix of aircraft by adding new E175 aircraft, while reducing 50-seat jets
· Radiant Logistics (RLGT) Q4 EPS 7c/$194.6M vs. est. 3c/$187.91M
· Azul (AZUL) files to sell 40.63M preferred shares for holders
Technology, Media & Telecom
· A group including private-equity firm Bain Capital and technology giant Apple Inc. (AAPL) signed a letter of intent to buy Toshiba Corp.’s chip business for more than $18 billion, according to people familiar with the matter. An agreement with the group, which also includes Seagate Technology PLC (STX) and Dell Inc., could be announced later https://goo.gl/LwFyKm
· Apple (AAPL) shares slipped late yesterday after revealing its latest iPhones; the launch event was largely in-line with recent reports following a massive leak late Friday that essentially spilled most of the juicy product-related details: However, shares slipped as its new $1,000 smartphone, the iPhone X, is set for release on Nov. 3, well after the fiscal year closes at the end of September
· Micron (MU) upgraded to buy from neutral at Goldman Sachs and raised tgt to $40 from $33 saying DRAM pricing could rise in Q4 and the cycle could remain tight in 2018; believes upside to consensus earnings estimates and the stock’s “discount” multiple could drive 20% share appreciation.
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.