Stock futures are pointing to a strong open, with the S&P 500 and Dow Industrials on track to open at fresh all-time highs, as markets look to wrap up a solid year of returns in this final day of trading for the year. Coming into today, the Dow Industrials are up 25%, the S&P 500 20% and the Nasdaq Comp 29% in a year filled with optimism, strong economic indicators and improved earnings. Global stocks have surged, with strength in Europe, Asia and Emerging markets throughout the year as well. Markets are expected to be quiet today, with light volumes ahead of the New Years holiday weekend. Stock markets in the U.S. are open full day today, but bond markets will close at 2:00 PM and both markets are closed Monday for the holiday.
U.S. stocks closed higher on Thursday, as the Dow Industrial Average posted its 71st record close of 2017 extending its all-time closing peaks in a single year (prior to 2017, the most closing records it had ever posted in a year was 69). The day’s gains were broad, with ten of the 11 primary S&P 500 sectors ending up on the day, led by financials. Oil futures move higher on Friday, the last trading day of the year, setting up to finish 2017 at the highest level in 2 1/2 years, with WTI crude above $60 per barrel (and is up 11% this year vs Brent up 17%). The dollar index (DXY) on track to suffer worst year since 2003 with 10% yearly loss.
In Asian markets, The Nikkei Index slipped -19 points to 22,764, the Shanghai Index gained 10 points to settle at 3,307 and the Hang Seng Index rose 55 points to settle at 29,919. In Europe, the German DAX is down around -40 points at 12,930, while the FTSE 100 is up over 25 points to 7,650 (ending at a record high) and is up about 7% for the year.
Market Closing Prices Yesterday
· The S&P 500 Index climbed 4.92 points, or 0.18%, to 2,687.54
· The Dow Jones Industrial Average rose 63.21 points, or 0.26%, to 24,837.51
· The Nasdaq Composite gained 10.82 points, or 0.16%, to 6,950.16
· The Russell 2000 Index advanced 4.99 points, or 0.32% to 1,548.93
Events Calendar for Today
- No Major Economic Data Today
Sector News Breakdown
- Macau’s gross gaming revenue is expected to grow in December for a 17th consecutive month of y/y gains. The gaming regulator plans to report December data in early January, according to the Gaming Inspection & Coordination Bureau website – Bloomberg
- S&P SmallCap 600 constituent Scientific Games Corp. (SGMS) will replace Huntington Ingalls Industries in the S&P MidCap 400 effective prior to the open of trading on Wednesday, January 3, 2018
- Bonanza Creek Energy (BCEI) announced that it has agreed to terminate its previously announced agreement to merge with SandRidge Energy (SD). After consultation with SandRidge’s largest shareholders, SandRidge’s board concluded that it would not receive approval for the transaction at its planned special meeting
- Duke Energy (DUK) Florida filed a petition with the Florida Public Service Commission to recover from customers an estimated $381 million in costs associated with the company’s response to September’s Hurricane Irma in Florida
- Advanced Energy (AEIS) CFO Thomas Liguori is resigning effective January 26, 2018 to pursue another opportunity. Tom McGimpsey, currently Executive VP and General Counsel, will assume the additional role of CFO on an interim basis
- The Alerian MLP Sector (AMZ) outperformed yesterday, with the index up 3.4% since the start of the month but is down 13% on the year
- Goldman Sachs (GS) reports a $5B cut in 4Q and year earnings, citing Tax Law saying about 2/3rds due to repatriation tax in 8-K; remainder includes effects of implementation of territorial tax system and re-measurement of U.S. deferred tax assets at lower enacted corporate tax rates
- SVB Financial (SIVB) sees some tax-related assets value cut about $32M-$37M citing the reduction in the corporate tax rate under the recently signed U.S. tax legislation for the onetime revaluation of certain tax-related assets; sees its 2018 effective tax rate 27% to 30%
- Iovance Biotherapeutics (IOVA) files $250M mixed securities shelf
- TherapeuticsMD (TXMD) has submitted the New Drug Application for TX-001HR, the company’s investigational bio-identical hormone therapy combination of estradiol and progesterone in a single, oral soft gel for the treatment of moderate-to-severe vasomotor symptoms due to menopause
- Atara Biotherapeutics (ATRA) received FDA clearance to start two Phase 3 clinical studies with tabelecleucel in patients with rituximab-refractory Epstein-Barr virus associated post-transplant lymphoproliferative disorder.
Industrials & Materials
- Huntington Ingalls Industries (HII) will replace C. R. Bard (BCR) in the S&P 500 effective prior to the open of trading on Wednesday, January 3, 2018, as Becton Dickinson and Co. (BDX) is acquiring C.R. Bard
- Eaton (ETN) estimates $90M-$110M Q4 expense related to U.S. Tax Cuts and Jobs Act
Technology, Media & Telecom
- SoftBank Group Corp. won its bid to buy a major stake in Uber Technologies Inc. at a steep discount to the company’s previous valuation. Uber investors and employees tendered shares equal to about 20% of the company in an offer by a SoftBank-led consortium. SoftBank itself will take about 15% of the shares in the tender offer, which values Uber at $48 billion, a roughly 30% discount to its most recent valuation of about $68 billion and other members of SoftBank’s bidding group will get a stake of around 2.5% https://goo.gl/Y43iDL (story late Thursday)
- Apple (AAPL) offered a steep discount on battery replacements, which typically cost $79 for iPhones that are not under warranty. Apple said it would instead charge $29 to replace batteries in an iPhone 6 or later model, starting in late January and running through December 2018. The move comes in response to a wave of criticism and lawsuits for Apple after the company admitted it had slowed down iPhones with older batteries to avoid shutdowns that result from overtaxing degraded lithium-ion batteries.
- Adtran (ADTN) said it sees 4Q EPS 1c on revs about $125M, below est. 18c and prior view $155M-$165M (est. $161.4M)
- Ultra-Clean Holdings Inc. (UCTT) will replace Scientific Games in the S&P SmallCap 600 effective prior to the open of trading on Wednesday, January 3, 2018