Morning Preview: September 21, 2017

Regal HelpdeskDaily Market Report

Early Look
Thursday, September 21, 17
Stock futures are trading lower, slipping a day after the Dow Industrials and S&P 500 ended at record closing highs yet again, after the Federal Reserve outlined plans to shrink its balance sheet yesterday during its Federal Reserve meeting. Investors now turn their focus to European Central Bank officials’ speeches for clues on the future of Europe’s stimulus. Gold prices drop around 1.5%, falling below the $1,300 an ounce level, on track for the lowest settlement in almost a month after the hawkish interest rate outlook by the Fed (dot plots see one more rate hike this year and three next year). Markets also await a trio of economic data releases, including weekly jobless claims. In Asian markets, The Nikkei Index gained 32 points to end at 20,347, the Shanghai Index dropped -8 points to settle at 3,357 and the Hang Seng Index slid -17 points to close at 28,110. In Europe, the German DAX is higher by about 40 points above 12,600, while the FTSE 100 is flat around 7,273. U.S. stocks fought back late Wednesday after Federal Reserve set an October start for shrinking the balance sheet (by $10B a month), while keeping rates unchanged, though the tech heavy Nasdaq Composite slipped following cautious analyst comments on Apple’s iPhone pre-orders being light. The S&P 500 and Dow Industrials each closed at fresh highs, with the Dow posting its 8th straight gain.
Market Closing Prices Yesterday
·      The S&P 500 Index inched higher 1.59 points, or 0.06%, to 2,508.24
·      The Dow Jones Industrial Average rose 41.79 points, or 0.19%, to 22,412.59
·      The Nasdaq Composite slipped -5.28 points, or 0.08%, to 6,456.04
·      The Russell 2000 Index advanced 5.02 points, or 0.35% to 1,445.42
 
Events Calendar for Today
·      8:30 AM EST       Weekly Jobless Claims…est. 300K
·      8:30 AM EST       Continuing Claims…est. 1.975M
·      8:30 AM EST       Philly Fed Business Survey for Sept…est. 17.1
·      9:00 AM EST       FHFA House Price Index MoM for July…est. 0.4%
·      9:45 AM EST       Bloomberg Consumer Comfort Index…prior 51.9
·      10:00 AM EST     Leading Index for August…est. 0.3%
·      10:30 AM EST     Weekly EIA Natural Gas Inventory Data
·      12:00 PM EST     Household Change in Net Worth for Q2
World News
·      The island of Puerto Rico has been “destroyed” after Hurricane Maria made landfall there as a Category 4 storm Wednesday morning, according to emergency officials. Puerto Rico’s office of emergency management confirmed that 100% of the U.S. territory had lost power, noting that anyone with electricity was using a generator.
·      S&P Global Ratings downgraded China’s long-term sovereign credit rating by one notch on Thursday to A+ from AA-, citing increasing risks from the country’s rapid build-up of credit.
·      The Bank of Japan (BOJ) opted to hold interest rates steady as a new board member dissented in favor of further monetary easing
 
Sector News Breakdown
Consumer
·      Dr. Pepper Snapple (DPS) cuts FY17 EPS view to $4.53-$4.63 from $4.56-$4.66 (est. $4.63); said updated guidance for the anticipated effects of a default by a supplier of resin to our operations in Mexico/default has occurred at their resin plant
·      Herman Miller (MLHR) Q1 EPS 57c/$580.3M vs. est. 57c/$578.27M; sees Q2 EPS 55c-61c on revs $590M-$620M vs. est. 56c/$591.77M; said on an organic basis, adjusted for the impact of a dealer divestiture and foreign currency translation, this forecast implies organic sales growth of 6% vs. Q2 YoY at the mid-point of the range
·      Albertsons Cos Inc. said it would buy meal-kit delivery service Plated, as it looks to attract more customers to its stores amid increased competition (watch shares of APRN)
·      Sanderson Farms (SAFM) will replace Cabela’s (CAB) in the S&P MidCap 400
·      Beacon Roofing (BECN) 6.325M share Secondary priced at $47.50
·      Daimler AG plans to invest $1 billion in its Alabama manufacturing operations and start production of a fully electric sport-utility vehicle
 
Energy
·      Anadarko Petroleum Corporation (APC) authorized a $2.5 billion share-repurchase program; reaffirms outlook for Gulf of Mexico and Delaware Basin
·      Oasis Midstream Partners (OMP) 7.5M share IPO priced at $17.00
 
Financials
·      Raymond James (RJF) August Financial AUM $93.9B vs. $74.4B YoY; Aug. client assets under administration $681.0B vs. $556.2B YoY; Aug. securities commissions, fees $353.5M vs. $306.6M YoY and Aug. private client group assets under administration $647.7B vs. $526.9B YoY
·      LPL Financial (LPLA) Aug activity report showed total brokerage and advisory assets served at the end of August were approximately $551B, a 0.3% increase compared to the end of July. Total Net New Assets for August were $1.1B. Total client cash sweep balances at the end of August were $28.3B, a 3.7% increase compared to July
·      Third Point Reinsurance (TPRE) will replace Sanderson Farms (SAFM) in the S&P SmallCap 600 effective prior to the open on Tuesday, September 26.
 
Healthcare
·      Aerie Pharmaceuticals (AERI) said the FDA Dermatologic and Ophthalmic Drugs Advisory Committee has scheduled a meeting for October 13, 2017 to review the company’s new drug application for Rhopressa
·      Juno Therapeutics (JUNO) filed $225M common stock shelf
·      Amphastar Pharmaceuticals (AMPH) received FDA approval for sodium bicarbonate injection
·      BioCryst (BCRX) says FDA approves supplemental New Drug Application for RAPIVAB
·      Acceleron (XLRN) 5.405M share Secondary priced at $37.00
·      Iovance Biotherapeutics (IOVA) 7.69M share Secondary priced at $6.50
·      Biogen (BIIB) downgraded to Market Perform from Outperform at Raymond James
 
Industrials & Materials
·      Japanese chemical manufacturer Kuraray Co Ltd will buy U.S. firm Calgon Carbon Corp (CCC) for $1.107B, paying $21.50 per share, a premium of about 63% of the company’s share price on Wednesday https://goo.gl/8z6irb
 
Technology, Media & Telecom
·      Tesla (TSLA) is using AMD (AMD) intellectual property as it progresses toward developing its own Artificial Intelligence chip for autonomous driving in its cars, according to CNBC late day yesterday. More than 50 people within Tesla are working on the initiative, which will likely reduce its reliance on Nvidia (NVDA) products, the report added
·      The European Union’s executive arm said that it is ready to propose new tax taxes on digital companies like Facebook Inc. (FB) and Alphabet Inc.’s (GOOGL) Google by next spring if there isn’t “adequate global progress” toward a rewrite of corporate tax rules at an international level.
·      Alphabet Inc.’s (GOOGL) Google said it would pay $1.1 billion for the division at Taiwan’s HTC Corp that develops the U.S. firm’s Pixel smartphones https://goo.gl/cMi7vH 
·      Baidu Inc. (BIDU) announced a 10 billion yuan ($1.52B) autonomous driving fund on Thursday as part of a wider plan to speed up its technical development and compete with U.S. rivals.
·      Veon (VEON) 90M share Spot Secondary priced at $4.15
·      Quad/Graphics (QUAD) announced that it has extended and expanded its relationship with Bluestem Brands under a newly signed multi-year contract valued at more than $450M over the term
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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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