Morning Preview: November 24, 2017

Scott GreenDaily Market Report

Early Look
Friday, November 24, 17
  
Stock futures are pointing to a higher open, on track to post another record closing weekly high for major averages on this holiday abbreviated session (markets close at 1:00 PM EST today, with bond market recommended close of 2:00 PM EST). Retailers (TGT, WMT, AMZN, others) and freight (FDX, UPS) are expected to dominate the holiday trading session as several updates, forecasts and other analytics will be released throughout the day about Black Friday sales, Cyber Monday online forecasts and mobile data about shopping. In a week shortened by the holiday, the DJIA and S&P 500 are each looking at gains of 0.7%, while the Nasdaq Composite is set to gain 1.2%, with just a shortened session of trading to go. On the data front, a preliminary reading of the manufacturing purchasing managers’ index for November is expected from Markit at 9:45 a.m. Eastern Time, along with the services PMI.
 
Stocks ended mostly lower in thin, pre-holiday trade Wednesday, although the Nasdaq Composite eked out another record close. Stocks maintained a soft tone after minutes of the Federal Reserve’s November policy meeting showed a rate rise remains likely next month but underlined worries about persistently subdued inflation. The S&P 500 declined 0.1%, while the Dow industrials ended around 65 points lower, a loss of 0.3%, a day after all three major benchmarks logged record finishes. The Nasdaq Composite posted another record, however, advancing 0.1%.
 
In Asian markets, The Nikkei Index gained 27 points to settle at 22,550, the Shanghai Index gained 1 point to end at 3,353 and the Hang Seng Index rose 158 points to end at 29,866. In Europe, the German DAX is up over 30 points at 13,040, while the FTSE 100 id down a few points holding above 7,400. China shares hold steady after falling the prior trading day as the Shenzhen Composite closed down 2.9% as Beijing took steps to halt the proliferation of small online lenders, days after saying it plans to streamline oversight of asset-management products sold by financial institutions.
 
Market Closing Prices Yesterday
·      The S&P 500 Index slipped -1.95 points, or 0.08%, to 2,597.08
·      The Dow Jones Industrial Average fell -64.65 points, or 0.27%, to 23,526.18
·      The Nasdaq Composite gained 4.88 points, or 0.07%, to 6,867.36
·      The Russell 2000 Index declined -2.13 points, or 0.14% to 1,516.76
 
Events Calendar for Today
·      9:45 AM EST       Markit US Manufacturing PMI, Nov-P
·      9:45 AM EST       Markit US Services PMI, Nov-P
  
World News
·      European Central Bank officials differed at their October policy meeting on whether to announce a concrete end-date for their giant bond-buying program, with some warning that an open-ended program might lead investors to believe that it would be extended again, according to the minutes
·      Germany’s Ifo think tank said Friday that its business climate index rose to 117.5 points from a previous record of 116.8 points in October. The latest figure marks the highest level since records began in 1991.
·      Germany’s Social Democrats said Friday they would hold talks with other parties to discuss ways out of the political crisis, reducing the likelihood of imminent snap elections after Chancellor Angela Merkel’s efforts to form a government collapsed
·      Data firm IHS Markit said its composite Purchasing Managers Index for the eurozone rose to 57.5 in November from 56.0 in October, reaching its highest level in more than 6 1/2 years
·      Eurozone flash manufacturing PMI at 60.0 in November vs. 58.3 FactSet estimate
·      Eurozone flash services PMI at 56.2 in November vs. 55.2 FactSet estimate
·      Eurozone flash composite PMI at 57.6 in November vs. 56.6 in October
·      Germany flash services PMI at 54.9 in November vs. 54.7 in October
·      Germany flash manufacturing PMI 62.5 in November vs. 60.6 in October
·      Chinese regulators may be growing concerned about the country’s rising margin debt after it increased for six straight months. Outstanding margin debt on local stock exchanges climbed above 1 trillion yuan – Bloomberg
 
Sector News Breakdown
Consumer
·      On Thanksgiving Day, U.S. consumers have spent $1.52B shopping online as of 5pm, up 16.8% y/y, according to Adobe Analytics data. Adobe’s forecast for Thanksgiving Day online shopping is $2.8B, up 15% y/y.
·      Avg order value (AOV) is up 3.2% for this year’s Thanksgiving Day at $132. A record 46.0% of all traffic to retail sites are coming from smartphones (up 15.2% y/y) as of Thanksgiving afternoon
·      Share of traffic from desktop (44%) fell 11% y/y, and tablet shares (10%) is down 5.7% from last year. So far, a total of $30.39B has been spent online between 11/1 and 11/22, reflecting 17.9% y/y growth; 22 out of 22 days in November have resulted in over $1b in online spend
·      Shares of European consumer goods companies including Danone, Nestle, Reckitt Benckiser and L’Oreal may strengthen on Friday amid steps by China to lower import taxes for a broad range of consumer goods, including baby formula, as a way to spur more domestic consumption.
·      Fiat Chrysler Automobiles NV (FCAU) said it is recalling about 8,000 late-model Jeep SUVs to fix defective airbags that pose a potential hazard to front-seat passengers.
 
Energy
·      Carl Icahn has purchased at least 13% of SandRidge Energy Inc. (SD), according to people familiar with the matter. The stake, Icahn’s first new activist position this year, makes him the biggest holder of SandRidge shares https://goo.gl/7PkQty
·      Oil futures moved higher, as investors kept watch on a pipeline disruption to a major crude-oil hub in the U.S. (Keystone)
 
Financials
·      Online lender WeLab Ltd., backed by Credit Suisse Group AG is working on a listing just weeks after closing a private funding round. WeLab Ltd. has picked banks to advise on a Hong Kong initial public offering that could raise about $500 million -Bloomberg
·      Chinese Online Lenders fall again (QD, XRF, YRD) after China halted approvals for new online micro-lenders earlier this week
 
Healthcare
·      Nektar Therapeutics (NKTR) shares indicated lower by 7% after a late-stage Bayer (BAYRY) study of a drug-device combo in pneumonia failed. The combo known as Amikacin Inhale used Nektar’s proprietary Synchronized Inhalation System under a 2007 accord with the German drug maker
·      Teva (TEVA) intends to cut as much as 25% of its Israeli workforce, Bloomberg reports, citing a local business daily
·      Koninklijke Philips NV (PHG) said that it has bought U.S. startup Analytical Informatics Inc. for an undisclosed sum to expand its radiology business.
·      Heat Biologics (HTBX) requests withdrawal of registration statement
 
Industrials & Materials
·      Germany’s Thyssenkrupp AG said it swung to a loss in fiscal 2017, largely due to charges relating to the sale of its Brazilian operations in September; its net loss for the year ended Sept. 30 was 649 million euros ($767.4M), compared with a net profit of EUR296 million profit a year earlier.
·      Swiss chemicals company Clariant AG rejected many demands of its largest shareholder in the wake of the failed $15 billion merger with U.S.-based Huntsman Corp., escalating a battle with activist investors https://goo.gl/mrDnc5
 
Technology, Media & Telecom
·      Dish Network Corp. (DISH) and CBS Corp. (CBS) agreed to a new multiyear contract, ending a blackout that would have left millions of satellite-TV subscribers without the nation’s most-watched network and its popular football programming. The agreement allows Dish to use CBS content across various U.S. cities
·      Altice NV (ATUS) is seeking to sell its telecoms network in the Dominican Republic, the Financial Times reported. Altice is selling the unit as part of its plan to offload non-core assets in order to cut its leverage and improve the company’s finances, said the FT
·      Rovio Entertainment Ltd. Shares plunged 20% Thursday after it reported a surprise third-quarter loss, a little more than a month after its initial public offering
·      Uber Technologies Inc said that it discussed a massive data breach with potential investor SoftBank Group Corp ahead of going public with details of the incident on Tuesday

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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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