Wednesday, December 20, 17
Stocks futures are trading higher following votes on the tax bill yesterday which appear close to President Trump signing it into law. Stocks posted modest losses yesterday, slipping from all-time highs as the House of Representatives (as expected) passed tax legislation that would slash corporate rates. However, overnight it was reported that House Republicans will need to pass their tax bill a second time, after its passage Tuesday hit a procedural snag. Overnight, Senate Republicans passed the most extensive rewrite of the U.S. tax code in more than 30 years, a bill that delivers a deep, permanent tax cut for corporations and shorter-term relief for individuals. The chamber’s 51-48 party line vote just before 12:45 a.m. Wednesday in Washington brought President Donald Trump to the brink of his first major legislative victory. Stocks are moving higher ahead of the news. In Asian markets, The Nikkei Index gained 23 points to settle at 22,891, the Shanghai Index slipped -8 points to end at 3,287 and the Hang Seng Index fell -19 points to settle at 29,234. In Europe, the German DAX is down about -30 points at 13,180, while the FTSE 100 is down around -10 points at 7,530. Bitcoin plunged about 14%, or over $2,500 late Tuesday after cryptocurrency trading site Coinbase said it would allow its customers to buy and sell its offshoot currency, bitcoin cash. In a matter of hours, the price of bitcoin dropped from $18,125 to as low as $15,578 before paring losses.
Market Closing Prices Yesterday
· The S&P 500 Index dropped -8.69 points, or 0.32%, to 2,681.47
· The Dow Jones Industrial Average fell -37.45 points, or 0.15%, to 24,754.75
· The Nasdaq Composite slumped -30.91 points, or 0.44%, to 6,963.85
· The Russell 2000 Index declined -12.17 points, or 0.79% to 1,536.75
Events Calendar for Today
· 7:00 AM EST MBA Mortgage Applications Data
· 10:00 AM EST Existing Home Sales MoM for November…est. 5.53M
· 10:30 AM EST Weekly DOE Inventory Data
· The International Monetary Fund said it expects growth in the U.K. economy to slow to around 1.5% in 2018, reflecting weakening business and consumer spending as a result of the uncertainty surrounding Brexit
· Investor Intelligence poll shows newsletter writers classified as bulls rebounds to 64.1% vs 61.9% last week and 64.2% the prior week; Bears at 15.1% vs 15.2% last week; and those expecting a correction at 20.8% vs 22.9% last week
· Michel Barnier, the EU’s chief Brexit negotiator, has said that any temporary transition period for the UK after it leaves the EU should not continue beyond December 31 2020
Sector News Breakdown
· Toys “R” Us Inc. said its latest quarter was disappointing as revenue fell 7.5% to $2.11B as domestic same-store sales fell 7% in Q3; posted a net loss of $623M, compared with a loss of $156M in the same quarter last year
· Steelcase (SCS) Q3 EPS 31c/$772.1M vs. est. 22c/$780.1M; sees Q4 EPS 14c-18c on revs $740M-$765M vs. est. 22c/$775.8M
· The American Petroleum Institute (API) said U.S. oil inventories dropped by 5.2 million barrels last week
· Goodrich (GDP) sets preliminary 2018 CapEx budget at $65M-$75M; expects 2018 production growth of 130-145% to 28.3-30.3 Bcfe (or avg 77k-83k Mcfe/day)
· Dynegy (DYN) files automatic mixed securities shelf
· Qatargas said Wednesday that it has signed a five-year sale-and-purchase agreement with OMV AG (OMV.VI) to deliver up to 1.1 million metric tons of liquefied natural gas per year to the Austrian oil-and-gas company.
· Siemens Gamesa Renewable Energy SA said that it will supply 22 turbines to two Spanish wind farms currently under development by Gas Natural SDG SA (GAS.MC).
· Biogen (BIIB) and Ionis Pharmaceuticals (IONS) signed a collaboration agreement to identify new antisense oligonucleotide drug candidates for spinal muscular atrophy; BIIB will be responsible for their development and commercialization; IONS will get a $25M upfront payment
· BioMarin (BMRN) has dosed the first patient in the global GENEr8-1 Phase 3 study with the 6e13 vg/kg dose for valoctocogene roxaparvovec, an investigational gene therapy for the treatment of patients with severe hemophilia A. This is the first of two Phase 3 studies in the global Phase 3 program to dose a first patient
Industrials & Materials
· FedEx (FDX) Q2 EPS $3.18/$16.3B vs. est. $2.89/$15.68B; raises FY18 EPS ex-items view to $12.70-$13.30 from $12.00-$12.80 (est. $12.47); said it is unable to forecast the fiscal 2018 year-end mark-to-market pension accounting adjustments
· Schnitzer Steel (SCHN) sees Q1 EPS 59c-63c vs. est. 56c and outlook includes an adverse impact of 14c per share related to a legacy environmental liability of $4 million
· ABB Ltd (ABBN.SW) said that it will form a joint venture with Canada’s SNC-Lavalin Group Inc (SNC.T) to develop electric-substation infrastructure projects.
· Lockheed Martin Corp. (LMT) failed to meet delivery timelines set out in contracts for its F-35 jet for the fourth consecutive year, according to the Pentagon’s contract management agency – Bloomberg
Technology, Media & Telecom
· Micron (MU) Q1 EPS $2.45/$6.8B vs. est. $2.19/$6.41B; sees 2Q adjusted EPS $2.51-$2.65 on revs $6.8B-$7.2B vs. est. $2.04/$6.18B; sees 2Q adjusted gross margin 54%-58% vs. est. 51.7% after Q1 margins were 55.4%
· Red Hat (RHT) Q3 EPS 73c/$748M vs. est. 71c/$739.27M; sees FY17 non-GAAP EPS $2.88 on revs $2.910B-$2.911B vs. est. $2.78/$2.89B; non-GAAP operating margin is expected to be approximately 23.9%; operating cash flow is expected to be approximately $900M to $910M
· Stitch Fix (SFIX) Q1 EPS 4c/$295.56M vs. est. 3c/$295.02M; sees Q2 revenue $287M-$294M, vs. consensus $286.32M and sees Q2 adjusted EBITDA $11.5M-$15.5M; sees FY18 revenue $1.17B-$1.22B vs. est. $1.18B; sees FY18 adjusted EBITDA $40M-$60M
· Verint (VRNT) raises FY19 non-GAAP EPS view at midpoint from $3.00 to $3.03 and raises FY19 revenue view to $1.225B from $1.215B, with a range of +-2% (est. $1.21B)
· MercadoLibre (MELI) downgraded to Sell from Neutral at Citi
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.