Morning Preview: September 26, 2017

Regal HelpdeskDaily Market Report

Early Look
Tuesday, September 26, 17
 Stock futures are little changed after major U.S. averages closed down slightly on Monday, though the tech heavy Nasdaq Composite underperformed, led by a decline in Internet and semiconductor stocks, while Apple shares fell a 4th straight session. Energy was among the biggest gainers on Monday, as oil prices jumped a 4th straight session with Brent prices closing at more than 2-year highs. A fresh flare up in tensions between the U.S. and North Korea kept markets in check. North Korean foreign minister Ri Yong Ho, speaking in New York on Monday, described President Donald Trump’s recent comments about North Korea as “clearly a declaration of war,” and said Pyongyang has the right to shoot down U.S. bombers. The main indexes added to losses immediately after the foreign minister’s comments. This morning, oil prices are paring recent gains while defensive assets such as gold are paring their gains from yesterday. The euro extended its fall against the dollar to a one-month low, after its worst day of the year. In Asian markets, The Nikkei Index fell -67 points to settle at 20,330, the Shanghai Index gained 2 points to close at 3,343 and the Hang Seng Index rose 12 points to settle at 27,513. In Europe, the German DAX is up around 25 points at 12,620, while the FTSE 100 is flat around 7,300.
Market Closing Prices Yesterday
·      The S&P 500 Index dropped -5.56 points, or 0.22%, to 2,496.66
·      The Dow Jones Industrial Average fell -53.50 points, or 0.24%, t0 22,296.09
·      The Nasdaq Composite plunged -56.33 points, or 0.88%, to 6,370.59
·      The Russell 2000 Index advanced 1.18 points, or 0.08% to 1,451.96
Events Calendar for Today
·      7:45 AM EST       ICSC Weekly Retail Sales
·      8:55 AM EST       Johnson/Redbook Weekly Sales
·      9:00 AM EST       S&P CoreLogic’s 20-City Month Index MoM for July…est. 0.2%
·      10:00 AM EST     New Home Sales MoM for August…est. 585K
·      10:00 AM EST     Consumer Confidence for September…est. 120.0
·      10:00 AMEST      Richmond Fed Index for September…est. 13
·      12:00 PM EST     Fed’s Yellen delivers keynote at NABE Conference
·      12:30 PM EST     Fed’s Bostic speaks to the Atlanta Press club
·      4:30 PM EST        API Weekly Inventory Data
Earnings Calendar:
·      Earnings Before the Open: DRI, FDS, INFO
·      Earnings After the Close: CTAS, LNDC, MU, NKE
World News
·      Federal Reserve Bank of Minneapolis President Neel Kashkari reiterated Monday that he believes raising rates right now is a bad idea. “The Fed should be under no pressure to raise rates. We have time to let inflation climb back to target,” Kashkari said. Kashkari spoke during an appearance at the University of North Dakota
·      At least six top advisers to President Donald Trump have used private email to discuss White House matters, the New York Times reported Monday. In addition to Trump’s son-in-law, Jared Kushner, the list includes former top aides Steve Bannon and Reince Priebus
·      A last-ditch Republican effort to replace Obamacare would cut federal deficits by $133 billion over 10 years but reduce coverage for millions of Americans, according to an independent review of the proposal by the Congressional Budget Office (CBO).
Sector News Breakdown
·      Ascena Retail (ASNA) shares up 16%; Q4 EPS 5c/$1.658B vs. est. loss (3c)/$1.57B; Q4 total company comp sales fell (-4%) YoY vs. est. (-8.6%); sees Q1 comp sales down (4%-5%); sees Q1 EPS 8c-13c on revs $1.58B-$1.62B vs. est. 21c/$1.56B
·      Nestle SA (NRSGY) said it will accelerate its share buyback plan and confirmed its 2020 organic growth target; said it will spread the buybacks evenly over the next three years, having allocated 20 billion Swiss francs ($20.62 billion) for mergers, acquisitions and buybacks in June.
·      RH upgraded to buy from hold at Deutsche Bank and raise tgt to $84 from $80 as believes RH can stabilize gross margins in 36%-37% range, above previous estimate, given historical results, and especially with company’s inventory optimization work, supply chain initiatives
·      Boston Beer (SAM) upgraded to Neutral from Underperform at Credit Suisse
·      Altria Group (MO) upgraded to Outperform from Market Perform at Cowen
·      QEP Resources (QEP) reduced its oil production guidance to a midpoint of 19.75 MMbbl, natural gas production guidance to a midpoint of 167.5 Bcf and NGL production guidance to a midpoint of 5.5 MMbbl
·      JP Morgan (JPM) and PNC Bank (PNC) both cut to hold from buy at Deutsche Bank and recommends reducing exposure to traditional banks while noting preference for banks with a turnaround angle, such as Goldman (GS) and Wells Fargo (WFC)
·      IHS Markit (INFO) Q3 EPS 57c/$904.7M vs. est. 53c/$891M; 3Q financial services segment revenue +5%; Q3 adjusted Ebitda $350.8M
·      Wex (WEX) announces $150M share repurchase program
·      CoStar Group (CSGP) files $750M stocks shelf registration
·      Maine Republican Sen. Susan Collins said late Monday she is opposed to the latest bid to repeal Obamacare, likely dooming the legislation
·      ProQR Therapeutics (PRQR) announced positive preliminary top-line results from a Phase 1b safety and tolerability clinical trial. Full data from the trial will be presented at the North American CF Conference on November 2-4
·      Genocea Biosciences, Inc. (GNCA) announced a strategic shift to immuno-oncology and a focus on the development of neoantigen cancer vaccines, including GEN-009, its lead candidate for which it expects to file an Investigational New Drug (IND) application by early 2018; said it was shifting its drug development focus and cutting staff by 40%
·      Catalent (CTLT) files to sell $250M in common stock
·      Kadmon (KDMN) files to sell common stock and warrants
Technology, Media & Telecom
·      Red Hat (RHT) rises 4%; Q2 EPS 77c/$723M vs. est. 67c/$699.3M; Q2 subscription revs $637.6M; sees Q3 revs $730M-$737M vs. est. $710.6M; raises FY18 adjusted EPS view to $2.77-$2.79 from $2.66-$2.70 and FY18 revenue view to $2.88B-$2.895B from $2.785B-$2.825B
·      SYNNEX (SNX) shares up 10%; Q3 EPS $2.16/$4.28B vs. est. $1.97/$4.0B; sees Q4 EPS $2.63-$2.73 on revs $4.75B-$4.95B vs. est. $2.52/$4.47B; raises quarterly dividend 20% to 30c per share
·      Western Digital (WDC) is planning to seek an injunction to block the $18B sale of Toshiba’s (TOSBF, TOSYY) semiconductor unit to a consortium led by Bain Capital, arguing Toshiba, its joint venture partner, cannot make a deal without its consent, Reuters reports
·      Donnelley Financial Solutions (DFIN) announced that Impinj (PI) has added the capabilities of SOXHUB to its ActiveDisclosure compliance reporting platform
·      Actua Corporation (ACTA) announced that it has entered into separate agreements to sell its three majority-owned businesses for an aggregate of $549M in cash
·      Shutterfly, Inc. (SFLY) announced an integration with the Apple Photos app for macOS High Sierra. The new Shutterfly extension for Photos allows users to create, customize and purchase Shutterfly photo books without leaving the application.
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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