Monday, December 11, 17
U.S. equities move cautiously higher, bouncing off slightly lower levels earlier following reports of an explosion in midtown Manhattan. The terror attack occurred at Port Authority in New Work, but luckily only injured a few individuals in what could have been a more devastating attack. Market activity and volumes will likely be stagnant ahead of a busy week of central bank policy meetings, with the FOMC, ECB, BOE and SNB all expected to offer somewhat hawkish commentary (FOMC expected to produce a 25 bps hike).
Markets shaking off news earlier that an ISIS-inspired suicide bomber set off an homemade explosive device at the Port Authority Bus Terminal subway station in New York Monday morning, seriously wounding himself and injuring three others. The 27-year-old Brooklyn man had wires attached to him and was armed with a five-inch metal pipe bomb and battery pack strapped to his midsection. The man partially detonated the device prematurely inside the passageway to the A, C, and E trains at 8th Avenue and W. 42ndStreet at around 7:40 AM EST according to reports.
In an interesting stat, in Q3, households and nonprofits held 36.3% of their money in stocks, the second-highest rate ever. The only time this peak was topped occurred in the first quarter of 2000, during the peak of the dot-com bubble, when stockholdings reached 42% of total assets. The lowest level in history occurred in the second quarter of 1982, when only 10.9% of total assets were held in equities, according to Federal Reserve data.
Treasuries, Currencies and Commodities
· In currency markets, the U.S. dollar edged lower after the dollar index (DXY) posted its best performance since late October last week, and extended its losses to a session low after U.S. job openings dropped; dollar saw small dip vs. safe-havens like the Japanese yen and Swiss franc, following an explosion near Times Square in New York
· Commodity prices are moving higher, led by gains in oil, though gold failing to catch a bid, holding at the $1,250 an ounce level ahead of expected commentary from various central banks later this week, which may boost the dollar
· Treasury markets bounced early given the news out of New York, but has since pared gains, though bond yields slightly lower after rising last week (2 bps rise for 10-yr and 2-yr last week)
Sector Movers Today
· Biotech sector among the most active after data being presented at the 59th American Society of Hematology (ASH) Annual Meeting and Exposition (some highlights below)
· Credit cards: Barclays upgraded DFS to Overweight and raised price target to $93 from $73 saying consumer lenders should benefit from both lower corporate tax rates and lower personal taxes; firm also raised price target for SYF to $53 and made it their new Top Pick; Wedbush also raised tgts on COF, DFS and SYF to factor in high probability corporate tax rates drop to 20% in 2019 (maybe 2018) from 35%; AXP said to eliminate need for signatures at point of sale
· Solar sector; CSIQ receives “going private” proposal for $18.47 per share cash from its CEO https://goo.gl/VK5yHP ; FSLR was upgraded to outperform at Baird and raise tgt to $82 as sees FSLR well positioned for growth; Baird also upgraded SPWR to outperform and raise tgt to $10 saying sentiment should improve as it ramps P series production and strengthens balance sheet
· REITs; GGP rejected a $14.8B offer from the company’s biggest shareholder BPY, Reuters reported saying Brookfield Property made a $23 per share cash and stock offer last month for the 66% of GGP it does not already own https://goo.gl/cciJNu ; in research, Evercore/ISI downgraded four REITs, cutting BPY and LXP to in-line and cut MAC and WPY to underperform while upgraded ESS and UDR saying key themes for 2018 include the impact of Fed tightening on the yield curve, job growth and tax reform
· Semiconductors; group was among weaker sectors last week on broader tech sell-off, while Citigroup today following a trip last week to Asia meeting with companies across the technology supply chain, said they are “getting more nervous” on the semiconductor sector. Firm notes while demand from the PC end market remains strong, the NAND market remains weak and data points on Apple’s (AAPL) iPhone were mixed
· Payments & Services; Goldman Sachs upgraded ADP to buy saying the Street probably underestimates margin expansion the company can produce, while client retention is likely to improve; the firm also DXC is top value pick as it’s a self-help story, with earnings growth driven by cost reduction and said top laggard picks FLT and WEX as expects fleet card companies to see cyclical upturn as end markets inflect positive, execution issues get fixed
· BLUE +17%; price targets raised by several analysts (street high $309 at Goldman Sachs) after data out of the ASH conference showed its data targeting CAR-T therapy bb2121 was superior vs. rivals in the first round of data (with partner CELG)
· BMRN +8%; study showed most patients with a maximum follow up of 19 months sustained normal or near-normal Factor VIII levels in severe hemophilia A
· BPMC +17%; reported early-stage data for BLU-285 for advanced systemic mastocytosis, and said it plans to talk to regulators to discuss a registration path forward in the first half of 201
· CSIQ +5%; as gets “going private” proposal for $18.47 per share from CEO https://goo.gl/VK5yHP
· CTL +8%; has been selected as the network provider to Pennsylvania, a deal that will have it supplying a full suite of products and services to the Commonwealth
· GRUB +3%; tgt raised to $80 at KeyBanc as believes is effectively withstanding competition
· RIOT +19%; said it’s TessPay Inc. unit has signed a non-binding letter of intent to merge with Canada’s Cresval Capital Corp. https://goo.gl/6hGcEp
· SPWR +13%; upgraded to outperform at Baird (along with FSLR) and up tgt to $10
· TTD +6%; upgraded to buy at SunTrust post the 3Q earnings shake-out and pullback in stock
· XENT +14%; as announces FDA approval for SINUVA sinus implant
· GBT -7%; its voxelotor shows positive action in mid-stage study in adolescents with sickle cell disease, but two deaths in compassionate use study pressures shares
· KMB -1%; downgraded to sell at Citigroup and lowered 2018-2019 estimates
· LJPC -8%; extend losses from Friday after being downgraded to underweight at JP Morgan and cut tgt to $20 (shares fell 15% Friday)
· ONCE -42%; reported data from trials of a hemophilia treatment that analysts said look less competitive than a rival product from BMRN
· SGEN -10%; after data from its Adcetris regimen showed a marginal benefit at multiple endpoints
· SYRS -36%; lead candidate fails to impress in mid-stage blood cancer study
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.