Morning Preview: December 12, 2017

Scott GreenDaily Market Report

Early Look
Tuesday, December 12, 17
  
Stock futures point to a slightly mixed open, little changed overnight as markets await the onslaught of Central Bank policy decisions over the next two days. Both the S&P 500 index and Dow industrials closed at fresh records on Monday, while the Nasdaq Composite Index gained 0.5% at 6,875, less than a percentage point from its record closing high as markets await a key policy decision from the Federal Reserve on Wednesday. Tech led the gains yesterday helping the market recover from a dip that was triggered by reports of an explosion in midtown Manhattan at Port Authority, though there were no fatalities in the attempted terror attack. Financial and small-cap shares (the Russell), companies seen mostly tied to the prospect of Donald Trump’s tax reform, slipped as news out of Washington remains quiet. Markets likely quiet again today ahead of the policy decision expected: Wed Dec 13 – FOMC decision (2:00 PM EST) and press conference (2:30 PM EST). On Thursday Dec 14, the Swiss National Bank (SNB) rate decision at 3:30 PM EST, Bank of England (BOE) 7:00 AM EST and the European Central Bank (ECB) rate decision at 7:45 AM EST and the Draghi press conference at 8:30 AM EST. In Asian markets, The Nikkei Index fell -72 points to end at 22,866, the Shanghai Index declined -41 points to close at 3,280 and the Hang Seng Index dropped -171 points to settle at 28,793. In Europe, the German DAX is up around 10 points at 13,135, while the FTSE 100 is up around 20 points at 7,475. Energy market volatility picks up, especially for Brent crude (trades to best levels in over 2-years) reports that a major North Sea pipeline has been shut down. A crack in the Forties pipeline, which carries about 40% of North Sea crude across land for processing at a refinery in Scotland, was discovered last week.
 
Market Closing Prices Yesterday
·      The S&P 500 Index gained 8.49 points, or 0.32%, to 2,659.99
·      The Dow Jones Industrial Average rose 56.87 points, or 0.23%, to 24,386.03
·      The Nasdaq Composite climbed 35.00 points, or 0.51%, to 6,875.08
·      The Russell 2000 Index dropped -1.88 points, or 0.12% to 1,519.84
 
Events Calendar for Today
·      6:00 AM EST       NFIB Small Business Optimism for Nov…est. 104.0
·      7:45 AM EST       ICSC Weekly Retail Sales
·      8:30 AM EST       Producer Price Index (PPI) MoM for Nov…est. 0.3%
·      8:30 AM EST       PPI Ex: Food & Energy MoM for Nov…est. 0.2%
·      8:55 AM EST       Johnson/Redbook Weekly Sales
·      2:00 PM EST        Monthly Budget Statement for Nov…est. (-$135.0B)
·      4:30 PM EST        API Weekly Inventory Data
  
World News
·      The index of small-business optimism from the National Federation of Independent Business (NFIB) rose 3.7 points to 107.5 in November, the second-highest reading in it 44-year history and easily topped the 104.4 consensus
·      German ZEW current conditions 89.3 in December vs. 88.8 in November
·      German ZEW economic expectations 17.4 in December vs. 18.1 expected and 18.7 in Nov
·      Bitcoin rallied on Monday, hitting its latest in a series of records in the first full day of trading for bitcoin futures. The price of a single bitcoin rose 14.5% to $17,209.28, according to data and news website Coindesk. Earlier, it hit a record of $17,382.64, which represented a new high for the world’s largest cryptocurrency, taking out a record hit last Thursday
 
Sector News Breakdown
Consumer
·      Casey’s General Stores (CASY) Q2 EPS $1.28/$2.15B vs. est. $1.40/$2.16B; for Q2, same-store gallons sold were up 1.9% (vs. est. 1.5%) with an average margin of 19.7 cents per gallon
·      Urban Outfitters (URBN) said in 10-Q filing 4Q comparable retail segment net sales are mid-single-digit positive thus far
·      Quanex (NX) Q4 EPS 37c/$233.0M vs. est. 29c/$234.3M; sees FY revenue $890M-$900M vs. est. $904.8M; sees FY adjusted Ebitda $103M-$108M
·      Coty (COTY) upgraded to Buy from Neutral at Citi
 
Energy
·      A cracked oil pipeline from the North Sea is setting the pace in global markets, lifting crude, and energy stocks. Brent outperforms again after jumping 2% Monday on reports that a major North Sea pipeline has been shut down. A crack in the Forties pipeline, which carries about 40% of North Sea crude across land for processing at a refinery in Scotland, was discovered last week
·      UK gas prices for January soared by as much as 20% after an explosion at Austria’s main import hub added to fears of tightening supplies, with the shutdown of the key North Sea
·      Exxon Mobil (XOM) is planning to disclose new information to shareholders regarding how climate change may impact its business in an effort to appease critics and avoid another proxy fight, Reuters reports
·      Carrizo Oil & Gas (CRZO) said it is selling about 24,000 acres in Eagle Ford Shale, which had 3q production of 3,400 boe/d, to unnamed seller for $245M in cash
·      Oasis Petroleum (OAS) reports Delaware Basin purchase for $946M, buying 20,300 net acres consists of about $483M cash, 46M shares from Forge Energy; boosts 4Q production guidance to 71,000 – 73,000 Boe/day from 69,000 – 72,000 Boe/day and files to sell 32M shares of common stock to fund purchase
·      Unitil (UTL) files to sell 600K shares of common stock
 
Financials
·      Invesco Ltd. (IVZ) said preliminary month-end assets under management (AUM) of $937.6B, an increase of 1.0% MoM driven by favorable market returns, foreign exchange, and PowerShares QQQs inflows; partially offset by lower money market AUM and net long-term outflows
·      AllianceBernstein L.P. (AB) said preliminary assets under management increased to $549 billion during November 2017 from $542 billion at the end of October. The 1.3% increase was predominantly due to market appreciation, but modest firm wide net inflows from the Retail, Institutions and Private Wealth client channels contributed as well
·      Cohen & Steers, Inc. (CNS) preliminary assets under management of $62.6B as of November 30, 2017, an increase of $986M from October 31, 2017; said the increase was due to market appreciation of $1.3B and net inflows of $7M, partially offset by distributions of $276M
·      Franklin Resources, Inc. (BEN) preliminary month-end assets under management of 753.2 billion at November 30, 2017, compared to $750.7 billion at October 31, 2017. The increase in assets under management was due to net market gains that more than offset slight net outflows.
·      Artisan Partners Asset Management Inc. (APAM) assets under management (AUM) as of November 30, 2017 totaled $115.6 billion. Separate accounts accounted for $58.4 billion of total firm AUM, while Artisan Funds and Artisan Global Funds accounted for $57.2 billion.
·      Union Savings will acquire Hibernia Bancorp (HIBE) and its wholly-owned subsidiary, Hibernia Bank, in an all-cash transaction valued at $32.00 per share; transaction has an aggregate deal value of approximately $28.2 million
·      Iron Mountain Inc. (IRM) plans to buy U.S. operations of IO Data Centers LLC for $1.32B, including land and buildings in Arizona, New Jersey and Ohio, the company saidhttps://goo.gl/mKvcbZ
 
Healthcare
·      Amgen (AMGN) said Phase 3 ASPIRE trial met the key secondary endpoint of OS, demonstrating that the addition of KYPROLIS to lenalidomide and dexamethasone cut the risk of death by 21% versus lenalidomide and dexamethasone alone and extended survival by 7.9 months
·      Agios Pharmaceuticals’ (AGIO) IDH1 and IDH2-inhibitors, ivosidenib and Idhifa (enasidenib), show early signs of efficacy in first-line acute myeloid leukemia (AML), investigator for an early-stage study said in statement
·      Aurinia Pharmaceuticals Inc., (AUPH) was selected for addition to the NASDAQ Biotechnology Index®(NBI), which will become effective prior to market open on Monday, December 18, 2017
·      Blueprint Medicines (BPMC) files to sell $275M in common stock
·      bluebird bio (BLUE) files to sell $600M in common stock
·      Argenx (ARGX) files to sell $150M in ADSs
·      miRagen Therapeutics (MGEN) announced new interim results from its ongoing Phase 1 clinical trial of MRG-106 in patients with the mycosis fungoides form of cutaneous T-cell lymphoma
 
Industrials & Materials
·      Boeing (BA) said it would increase its quarterly dividend 20% to $1.71 per share, and replaced a share-repurchase authorization of $14B, with one for $18B
·      Freeport McMoRan (FCX) upgraded to Equal Weight from Underweight at Morgan Stanley after the firm’s metals team upwardly revised its 2018 metals estimates and now forecasts upside to spot aluminum and copper/zinc prices remaining near current levels (raise tgt to $14)
·      Amerco (UHAL) announces special cash dividend of 50c per share
·      KMG Chemicals (KMG) Q1 EPS 83c on sales $110.7M vs. est. 63c; Q1 adjusted Ebitda $27.5M
·      Goldman Sachs is remaining bullish on the commodities sector heading into 2018, expecting it to generate returns of almost 10%
·      GMS Inc. (GMS) 5M share Spot Secondary priced at $38.25
·      Navistar (NAV) upgraded to Buy from Hold at Stifel
·      YRC Worldwide (YRCW) said October 2017 tonnage per day increased approximately 1.7% compared to October 2016 and November 2017 tonnage per day increased approximately 1.1% compared to November 2016
 
Technology, Media & Telecom
·      Comcast Corp. (CMCSA) is no longer bidding for entertainment assets from 21st Century Fox Inc. (FOXA) according to an afternoon report, which could leave Walt Disney Co. (DIS) as the sole bidder remaining. “We are no longer engaged in the review of those assets” Comcast said https://goo.gl/3bEPjX
·      Activision Blizzard (ATVI) upgraded to buy at Goldman Sachs and removes Electronic Arts (EA) from its conviction buy list
·      Veeco (VECO) announces $100M common stock buyback
·      RCM Technologies (RCMT) declares $1.00 per share special cash dividend

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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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