Morning Preview: November 29, 2017

Scott GreenDaily Market Report

Early Look
Wednesday, November 29, 17
  
Stock futures are once again pointing to a higher open after U.S. stocks closed sharply higher on Tuesday, with all main indexes ending at all-time highs. Stocks surged yesterday, led by Small Caps (Russell 2000 up over 1.3%) and financials (KRE Regional Bank ETF biggest one-day gain since June) as markets focused on upbeat economic data and news that the Republican tax bill moved forward in the Senate, also boosting confidence (banks JPM, BAC, C all surged). Markets also welcomed incoming Federal Reserve Chairman Jerome Powell’s comments that he wouldn’t make drastic changes to central bank policy. Investors once again shrugged off cautious news out of North Korea after the country tested a missile for the first time since September that landed outside of Japan. Oil prices come under pressure after inventories estimated by the American Petroleum Institute show a spike in U.S. crude supplies overnight. The move in oil comes ahead of the OPEC meeting start tomorrow and EIA inventory data later this morning. In Asian markets, The Nikkei Index rose 110 points to end at 22,597, the Shanghai Index gained 4 points to end at 3,337 and the Hang Seng Index fell -57 points to settle at 29,622. In Europe, the German DAX is up over 130 points to 13,190, while the FTSE 100 is down around -40 points at 7,415. European stocks jump to the highest level in almost three weeks, boosted by a rally in the region’s bank shares. Busy day of economic data as the second reading of Q3 GDP is published at 8:30 AM EST, with expectations for a slight increase to an annualized 3.2%
 
Events Calendar for Today
·      7:00 AM EST       MBA Mortgage Applications Data
·      8:30 AM EST       GDP Annualized QoQ for Q3-S…est. 3.2%
·      8:30 AM EST       Personal Consumption for Q3-S…est. 2.5%
·      8:30 AM EST       GDP Price Deflator for Q3-S…est. 2.2%
·      8:30 AM EST       Core PCE Q0Q for Q3-S…est. 1.3%
·      8:30 AM EST       Fed’s Dudley speaks about U.S. Economy
·      10:00 AM EST     Pending Home Sales MoM for October…est. 1.1%
·      10:00 AM EST     Fed’s Yellen appears before Joint Economic Committee of Congress
·      10:30 AM EST     Weekly DOE Inventory Data
·      12:45 PM EST     Fed’s Williams speaks at Economic Forecast luncheon in Arizona
·      2:00 PM EST        Fed Beige Book Released
 
Earnings Calendar
·      Earnings Before the Open: PLAB, TIF
·      Earnings After the Close: BOX, DSGX, FAT, GWRE, JACK, LZB, NWY, PVH, SMTC, SNPS, TLYS, WDAY
 
Other Key Events
·      Citigroup Basic Materials Conference, 11/28-11/29 in New York
·      Credit Suisse Industrials Conference, 11/29-11/30, in Palm Beach, FL
·      Credit Suisse Tech, Media and Telecom Conference, 11/28-11/30, in Scottsdale, AZ
·      Jefferies Global Energy Conference, 11/28-11/29, in Houston, TX
·      Piper Jaffray Healthcare Conference, 11/28-11/29, in New York
 
Market Closing Prices Yesterday
·      The S&P 500 Index jumped 25.62 points, or 0.98%, to 2,627.04
·      The Dow Jones Industrial Average rose 255.93 points, or 1.09%, to 23,836.71
·      The Nasdaq Composite gained 33.84 points, or 0.49%, to 6,912.36
·      The Russell 2000 Index surged 23.12 points, or 1.53% to 1,536.43
   
World News
·      Bitcoin rose above the symbolic $10,000 threshold for the first time on Wednesday (highs of $10,903), bringing its rise for the year to date to more than 900% and up over 30% this week alone
·      Investor Intelligence Poll shows newsletter writers classified as bulls rises to 62.3% versus 61.5% last week (Nov. 8 it reached a 30-year high of 64.4%.) while bears tumbled to 15.1% vs 15.4% last week (Investors Intelligence says bulls peaked in 1987 near 65%); those expecting a correction slips to 22.6% from last week’s 5-week high of 23.1%
 
Sector News Breakdown
Consumer
·      Tiffany (TIF) Q3 EPS 80c/$976M vs. est. 76c/$956.9M; Q3 total comp sales ex-FX unchanged vs. est. (-0.1%); maintained its sales and earnings guidance for the year
·      British movie theater operator Cineworld Group PLC said Wednesday that it is in advanced talks to buy American counterpart Regal Entertainment Group (RGC)for $3.1 billion, offering to pay $23 per share (news out late day yesterday) https://goo.gl/gHAB62
·      China Lodging (HTHT) Q3 ADS $1.01 on revs 2.37 billion yuan; narrows its revenue forecast for the full year to up +24%-25%, from prior +23%-26%
·      Daimler AG has declined an offer from Zhejiang Geely Holding Group to buy a stake of between 3% and 5% in the German car maker, according to a Reuters report
·      Delphi Technologies (DLPH- new) will replace Frontier Communications (FTR) in the S&P MidCap 400
·      SORL Auto Parts (SORL) says it recently won major supply contracts from the Shanghai Municipal Transportation Commission
 
Energy
·      The American Petroleum Institute (API) reported that U.S. crude supplies climbed by 1.8 million barrels for the week ended Nov. 24, a fall of -1.5 million barrels in gasoline stockpiles, while inventories of distillates climbed by 2.7 million barrels
·      Shell Midstream Partners (SHLX) enters pact to buy 100% interest in five products terminals and partial interest in two Gulf of Mexico corridor pipelines and in two strategic onshore pipelines from Shell (RDSA)
·      Atmos Energy (ATO) announces offering of $400M of common stock
 
Financials
·      Banco Bilbao Vizcaya Argentaria SA (BBVA) said Wednesday that it has reached an agreement to sell 80% of its Spain real-estate business to a subsidiary of Cerberus Capital Management LP for about 4 billion euros ($4.74 billion). https://goo.gl/KpZA5Q
·      Nomura Holdings will inject ¥100bn ($895.6M) into a new business the financial services provider says will provide funding for corporate restructuring and management buyouts. 
·      Royal Bank of Canada (RY) Q4 EPS C$1.88 vs. C$1.65 a year ago and Q4 revenue C$10.52B vs. $9.36B a year ago
·      LendingTree (TREE) entered into amended and restated five-year senior secured revolving credit facility that will replace its previous $125M credit agreement
 
Healthcare
·      Teladoc Inc. (TDOC) said it plans to sell shares of its common stock, 3.25 million shares offered by the company and 830,000 shares offered by certain stockholders
·      Aratana Therapeutics Inc. (PETX) canceled plans for a stock offering Tuesday afternoon, one day after it announced the equity issuance and saw its share price plunge in response
 
Industrials & Materials
·      Landec (LNDC) reiterates FY18 EPS guidance but lowers its Q2 outlook
·      Wesco Aircraft (WAIR) Q4 EPS 8c/$361.6M vs. est. 19c/$363.3M; said sees better second half than first half of FY18
 
Technology, Media & Telecom
·      Autodesk (ADSK) Q3 EPS loss (12c)/$515M vs. est. loss (13c)/$513.47M; 3Q total subscriptions 3.6M and 3Q annualized recurring revenue $1.90B; sees FY18 non-GAAP EPS (53c)-(49c) on revs $2.040B-$2.050B vs. est. loss (54c)/$2.05B; sees FY18 net subscription additions 625,000-650,000 and total ARR 24%-26%; announced a restructuring plan to focus on the company’s strategic priorities of completing the subscription transition – saying it will take a $135M-$149Mm pretax restructuring charge as part of a plan to refocus on strategic priorities
·      Microchip Technology (MCHP) reaffirms financial guidance for Q3 ahead of Credit Suisse conference
·      Nuance (NUAN) 4Q EPS 20c/$474.7M vs. est. 15c/$457.8 M; 4Q net new bookings $424.4 million
·      Pure Storage (PSTG) Q3 EPS loss (1c)/$278M vs. est. loss (3c)/$272.7M; sees Q4 revenue $327M-$335M vs. est. $330.68M and sees Q4 non-GAAP gross margin 63.5%-66.5%; and non-GAAP operating margin 3.0%-7.0%; sees FY18 revenue $1.012B-$1.020B vs. est. $1.01B
·      Marvell (MRVL) Q3 EPS 34c/$616M vs. est. 33c/$613.33M; sees Q4 adjusted EPS 29c-33c on revs $595M-$625M vs. est. 28c/$589.95M and non-GAAP gross margins are expected to be approximately 62%
·      Ooma (OOMA) Q3 EPS loss (2c)/$28.5M vs. est. loss (4c)/$28.03M; sees Q4 EPS loss (5c)-(3c) on revs $29.3M-$29.8M vs. est. loss (3c)/$29.53M
·      Silicon Valley venture capitalist Michael Arrington is going all-in with cryptocurrencies, announcing Tuesday the launch of a $100 million hedge fund tied to a bitcoin rival
·      Uber’s adjusted losses widened to $743m during the third quarter of this year, up 14% from the previous quarter
·      Frontier Communications (FTR) will replace Contango Oil & Gas Co. (MCF) in the S&P SmallCap 600 effective prior to the open of trading on Wednesday

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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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