Wednesday, November 22, 17
U.S. futures are mixed, as the Dow and S&P look to add to record all-time highs following yesterday’s push higher on earnings, economic data and as tax reform hopes build, while the tech heavy Nasdaq Comp, which outperformed yesterday, is flat after mixed earnings results last night (HPE, HPQ, CRM) and after HPE announced CEO Meg Whitman was stepping down. Oil prices jump nearly 2% overnight after a weekly drawdown of over -6M barrels reported by the API last night (and ahead of the EIA later this morning). Trading volumes are likely to be thin ahead of the Thanksgiving Day holiday tomorrow (U.S. markets are closed and Friday markets close at 1:00 PM EST). Meanwhile, there are several data points “crammed” in ahead of the holiday, with weekly jobless claims pushed up a day, along with durable goods orders and sentiment data. On the Federal Reserve front, minutes from the central bank’s meeting that ended Nov. 1 are due at 2:00 PM EST. Industrial stocks get a boost this morning after Deere (DE) earnings topped views. In Asian markets, The Nikkei Index gained 106 points to settle at 22,523, the Shanghai Index…the Hang Seng Index jumped 185 points, topping the 30,000 level. In Europe, the German DAX is down over -40 points at 13,120, while the FTSE 100 is up around 20 points at 7,430. The dollar falls as euro rises and European stocks are mixed.
Events Calendar for Today
· 7:00 AM EST MBA Mortgage Applications Data
· 8:30 AM EST Weekly Jobless Claims…est. 240K
· 8:30 AM EST Continuing Claims…est. 1.88M
· 8:30 AM EST Durable Goods Orders, Oct-P…est. 0.3%
· 8:30 AM EST Durable Goods Ex Transportation, Oct-P…est. 0.5%
· 9:45 AM EST Bloomberg Consumer Comfort, weekly…prior 52.1
· 10:00 AM EST University of Michigan Sentiment, Nov-F…est. 98.0
· 10:30 AM EST Weekly DOE Inventory Data
· 12:00 PM EST EIA Weekly Natural Gas Inventory data
· 2:00 PM EST FOMC Meeting Minutes from November 1st meeting
Market Closing Prices Yesterday
· The S&P 500 Index jumped 16.89 points, or 0.65%, to 2,599.03
· The Dow Jones Industrial Average rose 160.50 points, or 0.69%, to 23,590.83
· The Nasdaq Composite spiked 71.76 points, or 1.06%, to 6,862.48
· The Russell 2000 Index advanced 15.49 points, or 1.03% to 1,518.89
· Federal Reserve Chairwoman Janet Yellen’s said one of the “biggest challenges” to the central bank remained inflation staying below its 2% target. Inflation has remained stubbornly low even as slack in the labor market appears to have been much diminished.
· With NAFTA talks grinding toward stalemate, U.S. President Donald Trump may be tempted to carry out his threat to withdraw from the trade pact, but legal experts say such a decision could be defeated, or delayed significantly by court challenges – Reuters
· A U.S. Navy airplane flying to the USS Ronald Reagan aircraft carrier with 11 passengers and crew crashed into the Pacific Ocean on Wednesday, according to multiple published reports. Japan’s defense minister said eight of the people have been found, but it’s unclear if they’re alive, according to an AP report
Sector News Breakdown
· GameStop (GME) Q3 EPS 54c/$1.99B vs. est. 43c/$1.96B; Q3 same store sales increase of 1.9%, the third consecutive quarter of growth; sees FY17 EPS $3.10-$3.40 vs. est. $3.31 and sees FY17 comparable store sales to increase in the low-to-mid single digits; says on track to achieve FY17 collectibles revenue view of $650M-$670M; Q4 hardware sales driven by Switch, Xbox One X
· Guess (GES) Q3 EPS 12c/$554M vs. est. 12c/$569.75M; Q3 Americas Retail revenues decreased 13.4% in U.S. dollars and 14.3% in constant currency; raises FY18 adjusted EPS view to 56c-63c from 52c-60c (est. 60c) and narrows FY18 net revenue growth in U.S. dollars view to 6%-6.5% from 6%-7.5%
· Caleres (CAL) Q3 EPS 80c/$774.7M vs. est. 85c/$785.75M; Q3 Famous Footwear total sales of $473.1M were up 1.1%, while back-to-school same-store-sales were up 2.6% and Q3 same-store-sales were up 0.9%
· Copart (CPRT) Q1 EPS 33c/$419.2M vs. est. 27c/$381.04M
· Thomas Cook Group PLC’s shares fell as much 14% overnight after the holiday firm said that margins had fallen 130 basis points in fiscal 2017 to 22.1%.
· The American Petroleum Institute (API) reported that U.S. crude supplies dropped by 6.4 million barrels for the week ended Nov. 17, showed a rise of 869,000 barrels in gasoline stockpiles, while inventories of distillates fell by 1.7 million barrels
· CONSOL Energy (CEIX) to replace Iconix Brand (ICON) in S&P 600 at open on 11/30
· Portola Pharmaceuticals Inc. (PTLA) said the FDA needs more time to review company manufacturing changes to a drug already approved. Portola said the FDA needs time to review the entire Prior Approval Supplement submission for Bevyxxa and pushes out the release of Bevyxxa to February, given that the FDA is required to act by Jan. 30.
Industrials & Materials
· Nippon Paint Holdings Co Ltd made an all-cash offer on Tuesday to acquire U.S. coatings company Axalta Coating Systems Ltd, (AXTA) two people familiar with the matter said, ending merger talks between Axalta and Dutch peer Akzo Nobel https://goo.gl/zb8Ypx
· Deere & CO (DE) Q4 EPS $1.57/$7.09B vs. est. $1.47/$6.9B; sees FY equipment sales up 22%, net sales $2.6B, agriculture and turf equipment sales up 9% and year net income about $2.6B (watch shares af ag related stocks CNHI, AGCO after DE’s results)
Technology, Media & Telecom
· Salesforce (CRM) Q3 EPS 39c/$2.68B vs. est. 37c/$2.65B; 3Q billings growth +24.2%, vs. estimate +13%; 3Q subscription and support revenue $2.49 billion; sees Q4 adjusted EPS 32c-33c on revs $2.801B-$2.811B vs. est. 34c/$2.79B; raises FY18 adjusted EPS view to $1.32-$1.33 from $1.29-$1.31 and raises FY18 revenue view to $10.43B-$10.44B from $10.35B-$10.40B, consensus $10.4B;
· HP Inc. (HPQ) Q4 EPS 44c/$13.9B vs. est. 44c/$13.35B; sees Q1 EPS 40c-43c vs. est. 42c; raises estimates for GAAP diluted net EPS from continuing operations to be in the range of $1.70-$1.80 and non-GAAP diluted net EPS to be in the range of $1.75-$1.85 vs. est. $1.79; 4Q personal systems net revs up 13% YoY and printing revs up 7% YoY
· HP Enterprise (HPE) Q4 EPS 31c/$7.8B vs. est. 28c/$7.75B; CEO Meg Whitman will step down early next year and be succeeded by President Antonio Neri; sees Q1 EPS 20c-24c below est. 28c; backs FY18 EPS view $1.15-$1.25
· Samsung Electronics Co Ltd said it would create an artificial intelligence (AI) research center and strengthen an executive role to look for new business areas for all its three major business groups.
· PDF Solutions (PDFS) to replace Black Box in S&P 600 at open on 11/30
· TiVo Corp. (TIVO) won a federal patent ruling against Comcast Corp. (CMCSA) as the U.S. International Trade Commission ruled that Comcast set-top boxes violated two patents of Rovi Corp., owned by TiVo and were infringed by Comcast’s X1 products
· Hackers stole the personal data of 57 million customers and drivers from Uber Technologies Inc., a massive breach that the company concealed for more than a year, paying the pirates to keep quiet instead
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.