Morning Preview: October 10, 2017

Regal HelpdeskDaily Market Report

Early Look
Tuesday, October 10, 17
Stock futures are pushing higher, erasing yesterday’s modest losses and moving back near record territory levels ahead of speeches by Fed Presidents and the minutes from the most recent Federal Reserve meeting due Wednesday. Investors also await the start of earnings season, kicking off later this week with results expected from JPM, C, WFC and BAC. The dollar sliding on tax reform concerns as not only does the Trump tax plan face possible resistance from Republican Senator Bob Corker, other lawmakers may not be on board too. Politico reports that Trump was said to have been told not to expect Senator Rand Paul’s support.
 
U.S. stocks closed lower in a thinly traded session Monday, with shares of Dow component General Electric (GE) falling to its lowest level in over 2-years following management changes, while a selloff in health-care, industrials and financials all weighed on the main indexes. The light volume came as the U.S. bond market was closed in observance of Columbus Day. Technology shares dipped late day as the Nasdaq Composite index snapped its nine-day winning streak.
 
In Asian markets, The Nikkei Index gained 132 points to settle at 20,823, the Shanghai Index gained 8 points to end at 3,382 and the Hang Seng Index rose 164 points to settle at 28,490. In Europe, the German DAX is down around -20 points at 12,950, while the FTSE 100 is higher by about 15 points at 7,525. European shares hold steady before a meeting of the Catalan regional parliament. Catalan President Puigdemont to hold press conference at 1:00 PM local time: Bloomberg reported
Market Closing Prices Yesterday
·      The S&P 500 Index slipped -4.60 points, or 0.18%, to 2,544.73
·      The Dow Jones Industrial Average fell -12.60 points, or 0.06%, to 22,761.07
·      The Nasdaq Composite dropped -10.45 points, or 0.16%, to 6,579.73
·      The Russell 2000 Index declined -6.66 points, or 0.44% to 1,503.56
 
Events Calendar for Today
·      6:00 AM EST       NFIB Small Business Optimism for Sept
·      7:45 AM EST       ICSC Weekly Retail Sales
·      8:55 AM EST       Johnson/Redbook Weekly Sales
 
World News
·      German exports surged in August due to strong demand from the eurozone, as the Federal Statistical Office of Germany said total goods exports in August rose 3.1% from July, taking account of seasonal swings and calendar effects. Exports leapt 7.2% from August 2016
·      French Industrial output fell 0.3% in August from July, statistics agency Insee said vs. forecast a 0.4% rise.
·      Small Business Optimism for September falls to 103.0 vs. est. 105; the index falls to a 10-month low as expected sales fall 12 percentage points; 17% of employers think it is a good time to expand; net percentage of employers anticipating job creation rises to 19%; net percentage of firms expecting a better economy falls to 31%
 
Sector News Breakdown
Energy
·      E&P rating changes at Jefferies: Chesapeake (CHK), Noble Energy (NBL), Carrizo Oil (CRZO) all downgraded to Underperform from Hold; the firm upgraded Devon Energy (DVN) and Concho Resources (CXO) to buy from hold
·      Apache (APA) said it now expects its North American production volumes to be in the range of 206 to 208 thousand barrels of oil equivalent per day for the 3rd quarter and 218 to 224 thousand barrels of oil equivalent per day for the 4th quarter
 
Financials
·      American International Group, Inc. (AIG) said it expects to report Q3 pre-tax catastrophe losses net of reinsurance of $2.9B-$3.1B ($1.9B-$2.0B after-tax); amount includes pre-tax estimated losses of $1.1B-$1.2B from Hurricane Harvey, $1.0B-$1.1B from Hurricane Irma, $600M-$700M from Hurricane Maria, and approximately $150M in additional catastrophe losses including Mexico earthquakes
·      Validus Holdings, Ltd. (VR) provided an initial estimate net loss from Q3 loss events; expects to record losses from these events, net of reinsurance, retrocessional recoveries, non-controlling interest and net impact on premiums earned, in the amount of $378.9M
·      Franklin Resources, Inc. (BEN) preliminary month-end assets under management of $753.2B at the end of September 30, vs. $747.4B MoM; said the increase in assets under management was due to net market gains that more than offset modest net outflows. Preliminary average assets under management for the quarter ended September 30, 2017 were $749.0 billion
·      Pzena Investment (PZN) preliminary AUM $35.4B as of September 30, up from $34.1B as of August 31, and $27.4B as of September 30, 2016
·      Three Spanish companies said they would join the exodus of companies moving their legal headquarters out of Catalonia due to unrest in the region (Abertis Infraestructuras SA (ABE.MC) along with Cellnex Telecom SA (CLNX.MC) and real-estate company Inmobiliaria Colonial SA)
 
Healthcare
·      Clovis (CLVS) submits U.S. marketing application for expanded use of Rubraca
·      Amgen (AMGN) reports FDA accepted Prolia for SBLA review; Prolia (denosumab) is for the treatment of patients with glucocorticoid-induced osteoporosis (GIOP); FDA set a PDUFA action date of May 28, 2018
·      QIAGEN (QGEN) and CENTOGENE AG today announced a collaboration and co-marketing agreement to provide customers more complete
·      MiMedx (MDXG) reported preliminary Q3 revs of $84.6M, saying it exceeded its guidance range of $79M-$80M (est. $79.3M)
·      President Donald Trump tweeted today “Since Congress can’t get its act together on HealthCare, I will be using the power of the pen to give great HealthCare to many people”
 
Industrials & Materials
·      Honeywell (HON) reports preliminary Q3 EPS $1.75/$10.1B vs. est. $1.73/$9.89B; raised the low-end of its FY17 EPS guidance by 5c to a new range of $7.05-$7.10; to spin Homes and DI Global Distribution Business and Transportation Systems into two publicly traded companies by end of 2018
·      Trucker rating changes: Bank America upgraded CH Robinson (CHRW) to buy from underperform, but downgraded Old Dominion (ODFL) and Werner (WERN) to underperform
·      Ichor Holdings (ICHR) rises after hours after it entered into an agreement to produced liquid delivery systems for a “key customer”
·      BAE Systems PLC (BAESY) said it would eliminate almost 2,000 jobs, slow production of Typhoon combat jets, and streamline operations
 
Technology, Media & Telecom
·      Nvidia Corp. (NVDA) unveiled license-plate-sized hardware Tuesday that harnesses the equivalent of 100 servers in a data center, which it hopes to use to advance self-driving taxis
·      Imperva (IMPV) names Aaron Kuan, VP of financial planning & analysis, as interim CFO, effective Nov
·      The CMA has set out more detail about what it intends to examine in its investigation into the proposed takeover of Sky Plc (SKYAY) by 21st Century Fox (FOXA).
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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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