Morning Preview: December 21, 2017

Scott GreenDaily Market Report

Early Look
Thursday, December 21, 17
Stock futures are edging slightly higher, looking to bounce after major averages posted modest declines on Wednesday despite both the House and the Senate passing tax legislation, sending it to President Donald Trump for his signature. There are several key economic indicators that could move markets early in an otherwise expected quiet day of trading into the Christmas holiday weekend. Weekly jobless claims and a revision to growth domestic product, could provide volatility early (note recent data points have continued to show strength in the U.S. economy). Outside of a few earnings reports today, including Dow component Nike (NKE) after the close, corporate news is relatively quiet now that Washington passed the tax reform bill yesterday. In Asian markets, The Nikkei Index dropped -25 points to settle at 22,866, the Shanghai Index gained 12 points to settle at 3,300 and the Hang Seng Index rose 132 points to settle at 29,367. In Europe, the German DAX is up about 10 points at 13,075, while the FTSE 100 is up about 25 points at 7,550. Bond prices holding after yields surged the last 3-days.
Market Closing Prices Yesterday
·      The S&P 500 Index dropped -2.22 points, or 0.08%, to 2,679.25
·      The Dow Jones Industrial Average fell -28.10 points, or 0.11%, to 24,726.65
·      The Nasdaq Composite slipped -2.89 points, or 0.04%, to 6,960.96
·      The Russell 2000 Index advanced 3.33 points, or 0.22% to 1,540.08
Events Calendar for Today
·      8:30 AM EST       Weekly Jobless Claims…est. 233K
·      8:30 AM EST       Continuing Claims…est. 1.898M
·      8:30 AM EST       Gross Domestic Product (GDP) Annualized for Q3-T…est. 3.3%
·      8:30 AM EST       Personal Consumption for Q3-T…est. 2.3%
·      8:30 AM EST       GDP Price Index for Q3-T…est. 2.1%
·      8:30 AM EST       Core PCE QoQ for Q3-T…est. 1.4%
·      8:30 AM EST       Philadelphia Business Survey for December…est. 21.0
·      9:00 AM EST       FHFA House Price Index MoM for Oct…est. 0.4%
·      9:45 AM EST       Bloomberg Consumer Comfort Index…prior 51.3
·      10:00 AM EST     Leading Index for November…est. 0.4%
·      10:30 AM EST     Weekly EIA Natural Gas Inventory Data
Earnings Calendar
·      Earnings Before the Open: ACN, APOG, CAG, FINL, HOV, KMX, LNN, PAYX
·      Earnings After the Close: CAMP, CTAS, NKE, SGH
World News
·      U.K. consumer sentiment worsened again in December as Britons turned more pessimistic about their finances. The long-running barometer of consumer confidence dropped by one point in December and stood at minus 13, the lowest reading in four years
·      The Bank of Japan (BOJ) stuck to its aggressive monetary easing and offered no indication it was considering policy changes despite recent speculation it may be preparing for rate increases next year. The Japanese central bank voted 8 to 1 to maintain its target for 10-year Japanese government bond yields at around zero and its short-term deposit rate at minus 0.1%. The bank also kept its pledge to buy government bonds at an annual rate of 80 trillion yen ($705 billion)
·      A car hit pedestrians and Christmas shoppers in a busy part of central Melbourne, Australia on Thursday afternoon, injuring at least 15 people. Australian police said they arrested the driver of the car and another man. Police believe the driver deliberately struck the pedestrians, though the motivation for the crash wasn’t clear. It wasn’t clear if the incident was related to terrorism.
Sector News Breakdown
·      Bed Bath & Beyond (BBBY) Q3 EPS 44c/$2.95B vs. est. 37c/$2.9B; said Q3 comp sales fell (-0.3%) vs. est. (-2.5%); said comparable sales from customer-facing digital channels continued to have strong growth while comparable sales from stores declined in the low-single-digit percentage range during Q3’17
·      Herman Miller (MLHR) Q2 adjusted EPS 57c/$604.6M vs. est. 57c/$606.0M; sees Q3 EPS 46c-50c on revs $565M-$585M vs. est. 46c/$552.7M; said if tax changes signed into law before end calendar 2017, co. sees effective FY 2018 tax rate to be between 26% to 28%
·      Apogee Enterprises (APOG) Q3 EPS 90c/$356.5M vs. est. 96c/$375.5M; boosted its revenue forecast for the full year to +20% from prior +10% and sees FY adjusted EPS $3.04-$3.14 vs. estimate $3.41
·      Boyd Gaming (BYD) announced that it has entered into a definitive agreement with Valley Forge Convention Center Partners, L.P., to acquire Valley Forge Casino Resort in King of Prussia, Pennsylvania, for total cash consideration of $280.5M
·      PG&E Corp. (PCG) shares fell -9%; suspended its dividend amid potential liabilities for October’s Northern California wildfires. PG&E shares fell 10% to $46.04 after hours. The company said its board will suspend the dividend beginning in the fourth quarter. PG&E last paid out a dividend of 53 cents a share for the third quarter.
·      Cabot Oil & Gas Corporation (COG) has reached an agreement to sell its operated and non-operated Eagle Ford Shale assets to an affiliate of Venado Oil & Gas LLC for $765M; divestiture includes approximately 74,500 net acres (~65,100 operated and ~9,400 non-operated) of Eagle Ford Shale leasehold primarily located in Frio and Atascosa counties. Production from these properties during the third quarter of 2017 was 15,656 barrels of oil equivalent (Boe) per day.
·      Statoil ASA (STO) submitted its development plan for the extension of the Snorre field in the North Sea, a 19 billion-Norwegian-kroner ($2.27 billion) project that will increase recovery from the field by close to 200 million barrels of oil.
·      8point3 Energy (CAFD) raises quarterly distribution 3% to 28.02c per share
·      Raymond James (RJF) Nov AUM $129B and Client Assets Under Admin $717.9B; said Nov. securities commissions, fees $366.5M, while Nov. private client group assets under administration $683B
·      Fifth Third Bancorp (FITB) announced plans to raise its minimum hourly wage for all employees to $15 and distribute a one-time bonus of $1,000 for more than 13,500 employees. Approximately 75% of employees will receive a pay increase or bonus. Once tax legislation is signed into law, nearly 3,000 hourly employees will see their pay increase to $15 an hour
·      Wells Fargo (WFC) pledged to raise its minimum hourly pay rate from $13.50 to $15 per hour once tax reform is signed into law; is targeting $400M in donations to community and nonprofit organizations in 2018; investing $100M over three years to provide small businesses access to capital
·      Voya Financial (VOYA) says it will sell all of its Closed Block Variable Annuity segment and its individual fixed and fixed indexed annuity business
·      Roche’s (RHHBY) Genentech announced FDA approval for Perjeta in combination with Herceptin and chemotherapy for adjuvant (after surgery) treatment of HER2-positive early breast cancer at high risk of recurrence
·      Horizon Global (HZN) subsidiary Horizon Global Americas and Hopkins Manufacturing Corporation have agreed to resolve their four-year-old dispute over patent rights to their electronic brake controllers
Technology, Media & Telecom
·      Comcast (CMCSA) said it would award more than 100,000 eligible employees a special $1,000 bonus each, and to invest more than $50 billion in infrastructure over the next five years
·      Accenture (ACN) Q1 EPS $1.79/$9.52B vs. est. $1.67/$9.26B; raises FY18 EPS view to $6.48-$6.66 from $6.36-$6.60 (est. $6.56) saying its business outlook for the full 2018 fiscal year now assumes that the foreign-exchange impact on its results in U.S. dollars will be positive 2.5% compared with fiscal 2017; the previous foreign-exchange assumption was positive 3%; now expects net revenue growth to be in the range of 6%-8% in local currency, compared with 5%-8% previously
·      Nokia Corp. (NOK) signed a multi-year patent license agreement with China’s Huawei Technologies Co., it said; no details disclosed
·      Veritone, Inc. (VERI) announced it has acquired the advanced data analytics software and related intellectual property (IP) assets of Atigeo Corporation
·      Pinterest is expected to go public in 2019 after missing its more than $500 million revenue target for 2017, The Information reported, citing anonymous sources. The social network is expected to have losses of about $100 million on revenue of about $490 million


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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