Friday, September 15, 17
U.S. stock futures are slightly lower, but have pared overnight losses despite news North Korea fired another missile over Japan and after an explosion in London underground train in London failed to scare investors. Markets await another round of U.S. economic data this morning, including figures for retail sales, industrial production and consumer sentiment. The dip in stock futures trading comes after the Dow Industrials closed at a record for a third session in a row in regular trading Thursday, while the broader market sagged on the back of weak retail shares. Last night, North Korea fired a missile over Japan for the second time in less than a month, defying rising international efforts to force it to abandon course. In a rare move, South Korea responded by immediately conducting a simulated strike of the North Korean launch site. Stock have held steady, all at or near record highs, while the three equity gauges are up between 1.1% and 1.9% for the week, as of Thursday’s close.
In Asian markets, The Nikkei Index gained 102 points to settle at 19,909, the Shanghai Index fell -17 points to close at 3,353 and the Hang Seng Index rose 30 points to finish at 27,807. In Europe, the German DAX is down about -20 points at 12,215, while the FTSE 100 falls more than -80 points to 7,210. The British Sterling breaks above $1.35 after the Bank of England’s biggest dove turned hawkish and said an interest rate rise could be imminent (weighing on UK stocks). Bitcoin prices drop another 9% down to $3,000 after touching all-time highs above $4,900 just two weeks ago (as JPM CEO Dimon called it a fraud and China said to shut down some markets).
· 8:30 AM EST Empire Manufacturing Index for September…est. 18.0
· 8:30 AM EST Retail Sales MoM for August…est. 0.1%
· 8:30 AM EST Retail Sales – Less Autos for Aug…est. 0.5%
· 9:15 AM EST Industrial Production MoM for August…est. 0.1%
· 9:15 AM EST Capacity Utilization for August…est. 76.7%
· 10:00 AM EST University of Michigan Confidence, Sept-P…est. 95.0
· 10:00 AM EST Business Inventories for July…est. 0.2%
· 1:00 PM EST Baker Hughes Weekly Rig Count
Market Closing Prices Yesterday
· The S&P 500 Index dropped -2.75 points, or 0.11%, to 2,495.62
· The Dow Jones Industrial Average rose 45.30 points, or 0.20%, to22,203.48
· The Nasdaq Composite sunk -31.10 points, or 0.48%, to 6,429.08
· The Russell 2000 Index declined-1.87 points, or 0.13% to 1,425.02
· Japan issued a temporary shelter-in-place alert following a North Korean ballistic missile firing, according to Japanese and South Korean news reports
· Eurozone wages rose at the fastest pace in more than two years during the three months to June. Eurostat said wages were 2.0% higher in the three months through June than a year earlier, the fastest rise since the first quarter of 2015 and up from 1.3% in the previous three-month period.
· An explosion on a London underground train Friday leaves over 18 passengers injured, and is declared a terrorist incident by British authorities
Sector News Breakdown
· Airlines: JPMorgan upgraded Southwest Airlines (LUV) to Overweight and raised price target for the shares to $66 from $60 and also downgraded American Airlines (AAL), United Continental (UAL) and Spirit Airlines (SAVE) to Neutral.
· Azul (AZUL) 13.543M share Secondary priced at $26.75
· iRobot (IRBT) has reached a confidential agreement with Micro-Star International Co. As part of the agreement, MSI agreed to exit the robotic cleaning industry worldwide and will compensate iRobot with a confidential monetary payment
· Resolute Energy (REN) agreed to sell its interests in Aneth Field to Elk Petroleum for up to $195M
· Sen. Elizabeth Warren to introduce legislation Friday targeting Equifax Inc. (EFX) and giving consumers more control over the data credit companies collect, according to statement
· Capital One (COF) reports August net charge-offs 4.75% vs. 4.79% last month and said delinquencies were 3.97% vs. 3.81% last month
· Synchrony (SYF) reports August net charge-off rate 4.86% vs. 4.73% last month and said the delinquency rate was 2.94% vs. 2.90% last month
· JPMorgan (JPM) reports August net credit losses 2.41% vs. 2.36% last month and said delinquencies were 1.16% vs. 1.15% last month
· Ashford Hospitality (AHT) files $500M mixed securities shelf
· First Internet Bancorp (INBK) files to sell $40M in common stock
· Array Pharma (ARRY) 20.9M share secondary priced at $10.75
· T2 Biosystems (TTOO) files to sell common stock, no amount given
· Quintiles IMS (Q) 9M share Secondary priced at $95.25
Industrials & Materials
· Spirit Airlines (SAVE) August traffic up 20.6% and capacity up 21.9%; said Hurricane Irma to be significant impact to Q3 and Q4
· The Manitowoc Company (MTW) announced that it plans to undertake a reverse stock split of Manitowoc’s common stock at a ratio of 1-for-4 and a reduction in the number of authorized shares of its common stock from 300,000,000 shares to 75,000,000 shares
· Covanta (CVA) files mixed securities shelf
· S&W Seed (SANW) Q4 non-GAAP EPS loss (8c)/$17.89M vs. est. loss (5c)/$20.67M; sees FY18 revenue $75M-$80M vs. consensus $93.73M and expects FY18 adjusted EBITDA $4.0M-$5.5M
Technology, Media & Telecom
· Oracle (ORCL) Q1 EPS 62c/$9.21B vs. est. 60c/$9.03B; Q1 adjusted operating margin 41% and Q1 cloud revs $1.47B; 1Q service revs $860N, hardware revenue $943M and short-term deferred revenue $10.3B; sees Q2 EPS 64c-68c vs. est. 68c and Q2 revenue growth of 2%-4% vs. est. $9.49B; sees Cloud revenue growth of 39%-43%
· Total video game spending in August 2017, including hardware, software and accessories, fell 2% to $568m, according to NPD reports; August video game, PC game software sales down 3% to $282M while video game accessories, game cards sales grew 10% to $118M (watch shares of ATVI, EA, GME, TTWO)
· Nvidia PT (NVDA) tgt raised to Street-High $250 From $180 at Evercore ISI
· KeyBanc recommends buying Criteo (CRTO) after the company at an event yesterday detailed its Commerce Marketing Platform, which aggregates online and offline data across partners to create a “Shopper Graph
· Pixelworks, Inc. (PXLW) announced actions to streamline the organization as part of planned integration efforts following its acquisition of ViXS Systems Inc. in August; to cut about 15% of workforce
· Global Eagle (ENT) expects to report revenue of $157M, net loss of $88M and adjusted EBITDA of $18.7M. This compares to revenue of $113M, net loss of $4.8M and adjusted EBITDA of $15.5M in Q4 of 2015.
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.