Morning Preview: November 21, 2017

Scott GreenDaily Market Report

Early Look
Tuesday, November 21, 17
  
U.S. stock futures are pointing to a higher open, trading near the best levels of the overnight session and looking to extend its gains from Monday as major averages look to rebound from their first back-to-back weekly slide since August. The Russell 2000 of small caps beat the benchmark index for a fourth day on Monday as investors continued to watch the progress on tax legislation. Fear remain non-existents in U.S. stock markets, trading not far off record highs while the CBOE Volatility Index (VIX) declined for a third day, falling 7% to 10.62. Market sentiment has grown less positive in recent weeks, with investors more concerned about tax policy, fuller valuations and a sense of complacency, but that has not been enough to push markets decisively lower in this holiday abbreviated week of trading (markets closed Thursday for Thanksgiving and close early Friday at 1:00 PM EST). In Asian markets, The Nikkei Index gained 154 points to settle at 22,416, the Shanghai Index gained 18 points to close at 3,410 and the Hang Seng Index surged 557 points (1.91%) to end at 29,818. In Europe, the German DAX is higher by over 50 points at 13,115, while the FTSE 100 is up about 10 points at 7,400. The euro tumbled to $1.17 after German governmental coalition talks broke down on Sunday, keeping the country’s government in limbo and casting doubt over Chancellor Angela Merkel’s future as leader. There are a few economic data points and a handful of earnings that could move markets today (see all below).
 
Market Closing Prices Yesterday
·      The S&P 500 Index gained 3.29 points, or 0.13%, to 2,582.14
·      The Dow Jones Industrial Average rose 72.09 points, or 0.31%, to 23,430.33
·      The Nasdaq Composite climbed 7.92 points, or 0.12%, to 6,790.71
·      The Russell 2000 Index advanced 10.57 points, or 0.71% to 1,503.40
 
Events Calendar for Today
·      7:45 AM EST       ICSC Weekly Retail Sales
·      8:30 AM EST       Chicago Fed Nat Activity Index for October…est. 0.20
·      8:55 AM EST       Johnson/Redbook Weekly Sales
·      10:00 AM EST     Existing Home Sales MoM for October…est. 0.2% to 5.4M
·      4:30 PM EST        API Weekly Inventory Data
 
Earnings Calendar
·      Earnings Before the Open: ADI, BURL, CBRL, CHS, CPB, CTRN, DAKT, DLTR, DSW, DY, EV, HRL, JEC, KIRK, LOW, MDT, MOV, NJR, PDCO, SIG
·      Earnings After the Close: CAL, CPRT, CRM, GES, GME, HPE, HPQ
   
World News
·      The U.S. Department of Justice has opened an investigation into the use of race in Harvard University’s admissions practices and has accused the university of failing to cooperate with the probe, according to documents reviewed by The Wall Street Journal. The Justice Department is investigating complaints that formed the basis of a federal civil lawsuit filed in 2014 in Boston
·      Iranian President Hassan Rouhani has written an obituary for the Islamic State, declaring the terror group has been rooted out of Syriahttps://goo.gl/wP27BP
 
Sector News Breakdown
Consumer
·      Lowe’s (LOW) Q3 EPS $1.05/$16.77B vs. est. $1.03/$16.57B; Q3 comp sales rise 5.7% vs. est. 4.2%; said Q3 hurricane-related sales about $200M; reaffirms FY17 EPS $4.20-$4.30 vs. est. $4.50 and sees FY17 revenue up approximately 5% and comp sales up approximately 3.5% 
·      Urban Outfitters (URBN) shares up 3%; Q3 EPS 41c/$892.77M vs. est. 33c/$861.0M; Q3 comparable retail segment net sales, which include the comparable direct-to-consumer channel, increased 1% vs. est. (-2.2%); excluding the estimated impact of the North American hurricanes in Q3, comparable retail segment net sales increased 2%, and by brand, comparable retail segment net sales increased 5% at Free People, 2% at the Anthropologie Group and 1% at Urban Outfitters
·      Hormel Foods (HRL) Q4 EPS 41c/$2.49B vs. est. 40c/$2.43B; sees year EPS $1.60-$1.70 vs. est. $1.63 and year revs $9.5B-$9.8B vs. est. $9.65B
·      Burlington Stores (BURL) Q3 EPS 70c/$1.44B vs. est. 66c/$1.44B; Q3 comp sales 3.1% were in-line with views; sees Q4 EPS $2.02-$2.06 vs. est. $2.11 while boosts year outlook
·      Beacon Roofing (BECN) Q4 EPS 93c/$1.29B vs. est. 94c/$1.26B; sees FY18 adjusted EPS $2.95-$3.25 vs. est. $2.57 and sees FY18 revenue $6.6B-$6.9B
·      Stanley Furniture Co. Inc. (STLY) said it has agreed to sell virtually all of its assets to Churchill Downs LLC (CHDN) for $11.5M in cash, a $4.6M subordinated secured promissory note of the buyer, and a 5% equity interest in Churchill Downs’ post-closing parent company.
·      Performance Food Group (PFGC) announces 5M share common stock offering for holders
 
Energy
·      Bill Barrett Corporation (BBG) announced that it has entered into an agreement with unaffiliated third parties to sell its remaining non-core assets located in the Uinta Basin for cash proceeds of approximately $110M
 
Financials
·      Intuit (INTU) Q1 EPS 11c/$886M vs. est. 4c/$856.16M; reports online self-employed users to approximately 425,000 of total QuickBooks Online subscribers; sees Q2 adjusted EPS 31c-34c on revs $1.16B-$1.18B vs. est. 32c/$1.12B 
·      Golub Capital (GBDC) 4Q net investment income excluding capital gain incentive fee per share 32c (in-line); 4Q net investment income $18.2M and Q4 net asset value per share $16.08; declares special distribution 8c per share
·      Black Knight (BKI) files to sell 5M shares of common stock for holders
 
Healthcare
·      Agilent (A) Q4 EPS 67c/$1.19B vs. est. 62c/$1.17B; sees Q1 adjusted EPS 55c-57c on revs $1.145B-$1.165B vs. est. 60c/$1.15B; Sees FY adjusted EPS $2.50-$2.56 on revs $4.72B-$4.74B vs. est. $2.59/$4.73B
·      Medtronic (MDT) Q2 EPS $1.07/$7.05B vs. est. $1.02/$7.05B; reiterates full year EPS/revs view
·      AmerisourceBergen (ABC) to acquire H.D. Smith for $815M in cash; sees FY18 revenue up 8%-11% following H.D. Smith acquisition
·      Revance (RVNC) reports FDA orphan drug designation for RT002 for the treatment of cervical dystonia
·      NewLink Genetics (NLNK) presents Indoximod data in Phase 1 study for children NewLink Genetics announced the presentation of data from a Phase 1 study of indoximod, in combination with radiation, for children with progressive brain tumors
 
Industrials & Materials
·      Jacobs Engineering (JEC) Q4 EPS 98c/$2.65B vs. est. 82c/$2.60B; sees year EPS $3.25-$3.60 vs. est. $3.40
·      ZTO Express (ZTO) Q3 EPS 15c/$472.4M vs. est. 15c/$454.89M; sees Q4 revenue $586.2M-$616.2M vs. est. $618.36M
·      Raven (RAVN) Q3 EPS 33c/$101.3M vs. est. 23c/$85.9M
·      Arconic (ARNC) announced plans to install a new horizontal heat treat furnace at its Davenport Works facility in Iowa. Heat treatment is a required step in the production of certain high-strength products, and is essential for products intended for large aerospace and industrial applications
 
Technology, Media & Telecom
·      AT&T (T) CEO Randall Stephenson told antitrust enforcers that AT&T Inc. would see them in court after the Justice Department sued to block the company’s $85.4 billion bid to buy Time Warner Inc. (TWX). The lawsuit “stretches the very idea of antitrust law beyond the breaking point,” Stephenson said
·      Palo Alto Networks (PANW) shares up 8%l Q1 EPS 74c/$505.5M vs. est. 68c/$489M; Q2 adjusted EPS 78c-80c on revs $518M-$528M vs. est. 77c/$519.89M; sees Q2 total billings in the range of $640M-$655M, representing year-over-year growth between 14%-17%; Q1 billings grow 15% YoY to $596.5M and deferred revenue grows 37% YoY to $1.9 billion; raises year view to $3.35-$3.41 on revs $2.15B-$2.19B from prior view $3.24-$3.34 and $21.3B-$2.17B; Raises FY18 total billings view to $2.65B-$2.71B; says added more than 2,500 new customers in Q1
·      Vipshop (VIPS) shares up 2%; Q3 EPS 14c/$2.3B vs. est. 14c/$2.29B; sees Q4 revenue growth 20%-25% YoY vs. est. $3.5B; customers 23.8 million
·      Cheetah Mobile (CMCM) Q3 ADS 17c/$179.6M vs. est. 9c/$177.7M; sees Q4 revs $188M-$197M vs. est. $188.3M; says Chief Technology officer to leave
·      Cubic (CUB) Q4 EPS 49c on revs $445.6M vs. est. $449.8M; 4Q backlog $3.10B; sees FY 2018 sales $1.51B-$1.56B
·      Amtech Systems (ASYS) reports Q4 EPS 51c on revs $54.7M

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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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