Morning Preview: November 17, 2017

Scott GreenDaily Market Report

Early Look
Friday, November 17, 17
Stock futures are mixed, with the S&P and Dow futures slightly lower, though the NASDAQ is pushing slightly higher following a busy night of earnings and as markets assess the latest development regarding an investigation into Russia’s meddling during the election. Overnight, it was reported that Special counsel Robert Mueller’s team in mid-October issued a subpoena to President Donald Trump’s campaign requesting Russia-related documents from more than a dozen top officials, according to reports. The subpoena news has not weighed on futures to this point. Outside of that, the prospects for tax reform (the focus is now on the Senate, after the House of Representatives passed a sweeping bill to overhaul the tax code on Thursday) and a few economic data points are key points today. There were also a bevy of IPO pricings overnight (BXG, SAIL, SBT, SCPH and SFIX), along with some M&A news (that CMCSA had approached FOXA about buying a substantial part of its assets), while TSLA revealed an energy efficient big rig last night. In Asian markets, The Nikkei Index gained 45 points to settle at 22,396, the Shanghai Index dropped -16 points to settle at 3,382 and the Hang Seng Index rose 180 points to finish at 29,199. In Europe, markets are mixed as the German DAX is up a few points while the FTSE 100 is down only a couple of points. Oil prices are sharply higher, with WTI crude back near $56 per barrel.
U.S. benchmark equities ended higher on Thursday, extending gains after the House passed its version of the tax bill. All three major stock indexes rebounded after sustaining two straight losing sessions. Cisco and Walmart surged after Q3 earnings beat analysts’ expectations while the tech-heavy Nasdaq closed at all-time records. After a rally on Thursday, the S&P 500 and Dow average were on track for weekly gains between 0.13% and 0.15% while the Nasdaq Composite Index is up 0.6% for the week coming into today’s action.
Market Closing Prices Yesterday
·      The S&P 500 Index jumped 21.02 points, or 0.82%, to 2,585.64
·      The Dow Jones Industrial Average rose 187.08 points, or 0.80%, to 23,458.36
·      The Nasdaq Composite spiked 87.08 points, or 1.30%, to 6,793.29
·      The Russell 2000 Index advanced 22.79 points, or 1.56% to 1,486.88
Events Calendar for Today
·      8:30 AM EST       Housing Starts MoM for October…est. 1.19K
·      8:30 AM EST       Building Permits MoM for October…est. 1.25K
·      11:00 AM EST     Kansas City Fed Manufacturing Activity for November…est. 21
·      1:00 PM EST        Baker Hughes Weekly Rig Count
Sector News Breakdown
·      Gap Stores (GPS) shares up 9%; Q3 EPS 58c/$3.84B vs. est. 54c/$3.76B; Q3 total comparable sales +3%, vs. estimate +1.3%; sees FY adjusted EPS $2.08-$2.12, up from prior view $1.95-$2.05 (est. $2.05); now expects comparable sales for FY to be up low-single-digits and effective tax rate to be about 38%; Q3 comp breakdown: Old Navy +4%, Banana Republic -2% and Gap Global +1%
·      Williams-Sonoma (WSM) shares down -11%; Q3 EPS 84c/$1.3B vs. est. 84c/$1.29B; Q3 comparable brand revenue growth +4.3%; sees Q4 EPS $1.49-$1.64 on revs $1.61B-$1.68B vs. est. $1.65/$1.63B and sees comparable brand revenue growth 2%-6%; boosted its revenue forecast for the full year
·      Ross Stores (ROST) Q3 EPS 72c/$3.3B vs. est. 67c/$3.26B; Q3 comp sales up 4% vs. est. 2%; raises FY17 EPS view to $3.24-$3.28 from $3.16-$3.23 (est. $3.23); raises Q4 comp sales growth view to 2%-3% from 1%-2%
·      Sportsman’s Warehouse (SPWH) Q3 EPS 23c/$218.1M vs. est. 23c/$223.2M; sees Q4 EPS 26c-29c on revs $240M-$245M vs. est. 32c/$255.2M; sees FY17 EPS 56c-59c on revs $807M-$817M vs. est. 63c/$826.4M and sees year comp sales decline in the range of (6.0%-7.0%)
·      Shoe Carnival (SCVL) shares up 16%; Q3 EPS 66c/$287.5M vs. est. 62c/$286.06M; Q3 comp sales up 4.4%; raises FY17 EPS view to $1.42-$1.49 from $1.35-$1.45 (est. $1.43) and raises FY17 revenue view to $1.02B-$1.025B from $1.006B-$1.019B
·      Hibbett Sports (HIBB) Q3 EPS 37c/$237.8M vs. est. 22c/$220.3M; raises year EPS view to $1.42-$1.50 from prior $1.25-$1.35 (est. $1.31); sees FY comp sales down mid-single digits from prior down mid to high
·      Natural Grocers (NGVC) Q4 EPS 6c/$198.5M vs. est. 5c/$193.82M; Q4 daily average comparable store sales increased 2.1%; Sees FY EPS 21c-31c vs. est. 24c
·      Nike (NKE) raises quarterly dividend 11% to 20c per share
·      Bridgepoint Education (BPI) files to sell 7.56M shares of common stock for holders
·      Caesars Entertainment Corp. (CZR) agreed to acquire Centaur Holdings, LLC for $1.7 billion in cash, including $1.625 billion at closing and $75 million in deferred consideration
·      Bluegreen Vacations (BXG) 6.5M share IPO priced at $14.00
·      Rowan (RDC) said it received notice of early termination from Anadarko (APC) and expects to get lump sum payment from Anadarko for remainder of drilling contract term at $418,400/day.; said termination to become effective on June 1, 2018
·      TransCanada Corp.’s (TRP) Keystone pipeline leaked roughly 5,000 barrels of oil in South Dakota, the company announced Thursday. Sections of the pipeline that runs from Canada’s Alberta province to Illinois will be shut, although parts of the southern leg to Texas will stay open
·      Sterling Bancorp (SBT) 15M share IPO priced at $12.00
·      KeyCorp (KEY) raises quarterly dividend to 10.5c
·      scPharmaceuticals (SCPH) 6.4M share IPO priced at $14.00
·      Milacron (MCRN) files to sell 13.09M shares of common stock for holders
·      VBL Therapeutics (VBLT) files to sell 2.5M ordinary shares
·      Roche AG (RHHBY) said that it will acquire California-based Viewics Inc., a software company that focuses on laboratory business analytics.
Industrials & Materials
·      Elon Musk showed off Tesla Inc.’s (TSLA) highly anticipated Semi — a semi-autonomous electric big rig — Thursday night, promising revolutionary speed, reliability and cost efficiencies. The trucks, on tap for production in 2019, will carry a maximum of 80,000 lbs, the maximum load for U.S. highways, and have a range of 500 miles per charge.
·      Haynes (HAYN) Q4 EPS loss (30c)/$100.8M vs. est. loss (24c)/$100.2M; backlog was $177.3 million at September 30, 2017
Technology, Media & Telecom
·      Comcast Corp. (CMCSA) has approached 21st Century Fox (FOXA) to express interest in buying a substantial piece of the company’s business, according to reports last night. CMCSA is interested in assets like those Walt Disney Co. (DIS) pursued when it recently held talks with FOX and said Verizon (VZ) is also is kicking the tires on the Fox assets
·      Applied Materials (AMAT) shares up 2%; Q4 EPS 93c/$3.97B vs. est. 90c/$3.93B; sees Q1 EPS 94c-$1.02 on revs $4.00B-$4.20B vs. est. 91c/$3.97B; 4Q adjusted gross margin 46.2%
·      Splunk (SPLK) shares up 14%; Q3 adjusted EPS 17c/$328.7M vs. est. 14c/$309.19M; Q3 billings $381.6M, up 38% YoY; sees Q4 revenue $388M-$390M above consensus $383.6M; Q3 gross margin 80.5%; sees FY total billings about $1.485B vs. prior view $1.45B
·      Baidu Inc. (BIDU) said at its annual Baidu World Conference it is entering the market for “smart home” products with an intelligent speaker and a personal robot; two home assistants — like Inc.’s Echo that can execute commands
·      Electronic Arts Inc. (EA) suspended micropayments on its highly anticipated new video game “Star Wars: Battlefront II,” just hours before the game’s Friday launch. The move was made to appease fans, who had revolted online in the days leading up to the game’s release.
·      SailPoint Technologies (SAIL) 20M share IPO priced at $12.00
·      Stitch Fix (SFIX) 8M share IPO priced at $15 per share, lower than the $18 to $20 range that the company originally expected
·      Presidio (PSDO) 8M share Secondary priced at $14.25


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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