Morning Preview: September 19, 2017

Regal HelpdeskDaily Market Report

Early Look
Tuesday, September 19, 17
Stock futures are pointing to a higher open, pushing further into record territory as the FOMC kicks off its two-day policy meeting later this morning, with expectations for a balance sheet reduction, but keeping interest rates unchanged. The FOMC is widely expected to say it will start reducing its $4.5 trillion portfolio of government securities when it releases its policy update on Wednesday. The dollar gave up some of its recent gains ahead of the Fed meeting. There are a few data points ahead of tomorrow’s meeting results, with monthly housing starts/building permits at 8:30 AM EST, along with import prices and the current account balance.
 
Stocks made new record highs again on Monday, with the Dow Industrials outperforming and postedits 40th record close of the year (and advanced a 7th-straight session). Stocks ended off their intraday highs as technology and biotech shares came under pressure, paring the Nasdaq Comp gains. The dollar advanced to an 8-week high against the yen as concerns over North Korea abate and traders look ahead to this week’s Federal Reserve meeting. Oil prices ended steady after surging 5% last week. Oil prices traded close to five-month highs on Tuesday after fresh data showed key Middle Eastern producers continued to cut supply in line with an OPEC-led deal aimed at ending a crude glut.
 
In Asian markets, The Nikkei Index jumped 389 points (1.96%) to settle at 20,299, the Shanghai Index fell -6 points to end at 3,356 and the Hang Seng Index fell -108 points to end at 28,051. In Europe, the German DAX is down a few points around 12,550, while the FTSE 100 is up over 20 points at 7,275
Market Closing Prices Yesterday
·      The S&P 500 Index climbed 3.64 points, or 0.15%, to 2,503.87
·      The Dow Jones Industrial Average rose 63.01 points, or 0.28%, to 22,331.35
·      The Nasdaq Composite inched higher 6.17 points, or 0.10%, to 6,454.64
·      The Russell 2000 Index advanced 9.37 points, or 0.65% to 1,441.08
 
Events Calendar for Today
·      7:45 AM EST       ICSC Weekly Retail Sales
·      8:30 AM EST       Housing Starts for August…est. 1.174M
·      8:30 AM EST       Building Permits for August…est. 1.22M
·      8:30 AM EST       Current Account Balance for Q2…est. (-$116.0B)
·      8:30 AM EST       Import Prices for August…est. 0.4%
·      8:55 AM EST       Johnson/Redbook Weekly Sales
·      4:30 PM EST        API Weekly Inventory Data
 
Earnings Calendar:
·      Earnings Before the Open: APOG, AZO, NEOG
·      Earnings After the Close: ADBE, AIR, ALOG, BBBY, FDX, KOOL
World News
·      Former Trump campaign chairman Paul Manafort was secretly wiretapped by the FBI before and after the presidential election, CNN reported. The report said the surveillance continued until early this year, a time period when Manafort and President Donald Trump were still communicating, though it was not immediately clear if his conversations had been captured
·      U.S. Total Cross-Border Investment (TIC) outflow $7.3B in July; U.S. net long-term portfolio securities inflows at $1.3B in July; China holds $1.17t of U.S. Treasuries, an increase of $19.5B from last month while Japan holds $1.11t, an increase of $22.3B from last month
·      Germany’s ZEW current conditions 87.9 in Sept. vs. 86.7 in Aug
·      Germany’s ZEW economic expectations 17.0 in Sept. vs. 12.7 forecast
 
Sector News Breakdown
Consumer
·      Apogee Enterprises (APOG) Q2 EPS 75c/$343.9M vs. est. 71c/$349.97M; backs FY18 adjusted EPS view $3.40-$3-60 vs. est. $3.11 and still sees FY18 revenue growth 24%-26% vs. est. $1.39B
·      Michael Kors (KORS) upgraded to outperform vs market perform by Oppenheimer
·      Steelcase (SCS) Q2 EPS 31c/$775.6M vs. est. 23c/$759.83M; sees Q3 EPS 21c-25c on revs $785M-$810M vs. est. 28c/$800.63M
·      Macy’s (M) said to hire 80,000 seasonal associates in 2017
·      Beacon Roofing (BECN) files to sell $300M in common stock
·      Big Lots (BIG) backs Q3 EPS view 1c-5c vs. est. 4c and backs Q3 guidance for comparable store sales increase in the low single digits.
·      Toys ‘R’ Us Inc, the largest U.S. toy store chain, filed for bankruptcy protection late Monday. The Chapter 11 filing is among the largest ever by a specialty retailer and casts doubt over the future of its about 1,600 stores and 64,000 employees. It comes just as Toys ‘R’ Us is gearing up for the holiday shopping season
 
Energy
·      OPEC’s second-biggest producer Iraq said on Tuesday it had cut output by about 260,000 barrels per day (bpd), exceeding cuts agreed under the OPEC-led pact
·      Total SA FP (TOT) has agreed to acquire an indirect interest of 23% in Eren Renewable Energy S.A. in an effort to accelerate growth in its production of power from renewable sources. Total will subscribe to Eren’s capital increase for 237.5 million euros ($284.8 million)
·      Rex Energy (REXX) said on target to meet 3Q production guidance; said placed six-well Shields pad into sales, consisting of five Marcellus wells and one Upper Devonian Burkett well.; remains on target to meet its full-year 2017 exit rate production growth rate guidance
·      Valero Energy Corp. (VLO) and Plains All American Pipeline LP (PAA) said they will drop a deal for Valero to acquire two California distribution terminals after interference from the state’s attorney general
·      Jagged Peak (JAG) cuts 3Q output view to 19,150-19,350 Boe/d from prior view 20,000-20,800 Boe/d; Updates 2017 est. production range to 17,500 to 18,000 Boe/d
 
Healthcare
·      Supernus (SUPN) says based on the predefined criteria for dropping a dose arm, the lower dose of 18 mg will be eliminated; believes dropping 18-mg dose will maximize the probability of reaching a statistically significant outcome for the 36-mg dose
·      Envision Healthcare (EVHC) announces $250M stock repurchase
·      Nabriva Therapeutics (NBRV) files to sell $80M in common stock
·      MediWound (MDWD) filed to sell $20M of stock
·      Juniper Pharmaceuticals (JNP) announces strategic reprioritization; said it will now focus its resources on Crinone® progesterone gel and Juniper Pharma Services businesses; to cut about 8% of workforce
 
Industrials & Materials
·      Bayer AG (BAYRY) said that it submitted an application on Monday to extend the European Commission review deadline for its planned acquisition of Monsanto (MON) and that it now expects the deal to close in early 2018. https://goo.gl/WkN8hQ
·      A group of U.S. activist investors threatened to vote against the proposed merger between Swiss chemicals company Clariant AG and U.S.-based Huntsman Corp. (HUN) unless alternatives are explored, jeopardizing a deal that would create a $14B chemicals giant. https://goo.gl/jM3S7K
·      FedEx Express, FedEx Ground and FedEx Freight, subsidiaries of FedEx Corp. (FDX), will increase shipping rates effective January 1, 2018. FedEx Express will increase shipping rates by an average of 4.9% for U.S. domestic, U.S. export and U.S. import services. FedEx One Rate pricing will increase by an average of 3.5%
·      BASF SE (BASFY) said it would buy Solvay SA’s polyamides business for 1.6 billion euros ($1.92 billion), in a move to bolster its engineering plastics portfolio and improve access to growth markets https://goo.gl/tej2gQ
 
Technology, Media & Telecom
·      Apple (AAPL) tgt raised to $194 from $182 by Morgan Stanley citing higher estimates for FY18 average selling prices (ASPs) after Apple’s introduction of new devices last week; says iPhone X starting price of $999 came in $50 above Morgan Stanley’s expectation and, along with higher iPhone 8 and 8 Plus starting prices, pushes FY18 iPhone ASP estimate 5% higher to $784
·      NetApp (NTAP) upgraded to Buy at UBS and raised price target for the shares to $45 from $42
·      Wisconsin Gov. Scott Walker signed a bill Monday that would give Taiwan’s Foxconn Technology Group $3 billion in economic incentives to open a mega-plant in the state. Foxconn plans to invest $10 billion to build a 20 million square-foot campus in southeastern Wisconsin that could employ up to 13,000 workers over a period of six years.
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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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