Morning Preview: January 3, 2018

Scott GreenDaily Market Report

Early Look
Wednesday, January 3, 18
Stock futures are pointing to another strong open, with the Dow Industrial Average on track to power to fresh records ahead of the latest Federal Reserve minutes that could provide hints on the number of rate rises in 2018. Futures are broadly higher, tracking gains in Europe a day after the Nasdaq Composite finished at an all-time high, closing above the 7,000 for the first time ever, while the Dow Transports, S&P 500 Index and Russell 2000 also closed at record highs. The Dow Industrial Average ended only 14 points below its all-time closing high. The dollar slumped yesterday in its first full trading day of 2018, with the dollar index (DXY) falling for a fifth-straight session to trade at a more than three-month low, but has rebounded this morning. On the calendar today, monthly auto sales data released throughout the session, along with a handful of economic data points including Construction Spending and Manufacturing. The positive trading mood from 2017 appeared to continue into 2018, with stocks in Asia and U.S. kicking off the new year on a strong note. In Asian markets, The Nikkei Index remained closed for holiday, the Shanghai Index rose 20 points to settle at 3,369 and the Hang Seng Index rose 45 points to settle at 30,560. In Europe, the German DAX is up over 60 points at 12,935, while the FTSE 100 is little changed at 7,650.
Market Closing Prices Yesterday
·      The S&P 500 Index jumped 22.20 points, or 0.83%, to 2,695.81
·      The Dow Jones Industrial Average rose 104.79 points, or 0.42%, to 24,824.01
·      The Nasdaq Composite spiked 103.51 points, or 1.50%, to 7,006.90
·      The Russell 2000 Index advanced 14.50 points, or 0.94% to 1,550.01
Events Calendar for Today
·      7:00 AM EST       MBA Mortgage Applications Data
·      10:00 AM EST     Construction Spending MoM for November
·      10:00 AM EST     ISM Manufacturing for December
·      10:00 AM EST     ISM Prices Paid for December
·      2:00 PM EST        FOMC Meeting Minutes from December meeting
·      4:30 PM EST        API Weekly Inventory Data
·      N/A                        Monthly Auto Sales data for December released
World News
·      Former U.S. Treasury Secretary Jacob J. Lew said the Trump administration’s decision to add a significant amount of debt through last year’s tax legislation is leaving the country broke. “It’s a ticking time bomb in terms of the debt,” Lew said in a Bloomberg Radio interview.
·      German jobless claims fell more than expected in December as the unemployment rate remained at a record low level. Jobless claims fell by 29,000 in December, more than the decline of 10,000 expected by economists. The November figure was also revised to show a fall of 20,000 compared with the first reading for a decline of 18,00
·      China’s central bank guided the yuan to its highest level against the U.S. dollar in more than a year and a half on Wednesday, following the dollar’s overnight slide against global currencies. The People’s Bank of China set the dollar’s daily reference rate at 6.4920 yuan, meaning the Chinese currency was at its strongest since May 2016
Sector News Breakdown
·      Aptiv Plc and ride-hailing firm Lyft are discussing further engagement beyond showcasing self-driving rides in Las Vegas during the Consumer Electronics Show (CES) this month, the U.S auto parts supplier said
·      Next PLC (NXT.LN) said total sales increased 1.5% in the 54 days to Dec. 24 and raised its guidance for the fiscal year; online sales during the 54-day period performed particularly well, it said, increasing 13.6% on year; said it expects to report pretax profit of 725M pounds ($983M) for the year to January 2018 up from prior view of GBP717M
·      Spectrum Brands (SPB) says it will explore strategic options for its global batteries and appliances businesses with the intention to sell the units during 2018
·      Sempra Energy (SRE) files to sell $2.5B in common stock
·      Anadarko (APC) downgraded to Neutral from Buy at Citigroup
·      EOG Resources (EOG) upgraded to Buy from Neutral at Citigroup
·      Cabot Oil & Gas (COG) upgraded to Buy from Neutral at Citigroup
·      MoneyGram (MGI) and Ant Financial Services Group announced that they have mutually agreed to terminate their Amended Merger Agreement following the inability of the companies to obtain the required approval for the transaction from the Committee on Foreign Investment in the United States (“CFIUS”), despite extensive efforts to address the Committee’s concerns
·      Howard Hughes (HHC) files to sell 2.5M shares of common stock
·      Bank of the Ozarks (OZRK) raises quarterly dividend 2.7% to 19c per share
·      Atara Biotherapeutics (ATRA) files to sell $100M in common stock
·      Alexion Pharmaceuticals, Inc. (ALXN) said today that its Board of Directors and Elliott have agreed to work collaboratively to promptly identify a new member to join the Alexion Board
·      Trevena (TRVN) announced that the U.S. FDA has accepted the Company’s New Drug Application for OLINVO Injection
·      Tetraphase Pharmaceuticals, Inc. (TTPH) submitted its New Drug Application (NDA) to the U.S. FDA for intravenous (IV) eravacycline for the treatment of complicated intra-abdominal infections
·      Crispr Therapeutics (CRSP) files to sell $100M of common stock
·      Novartis (NVS) breast cancer therapy gets FDA breakthrough designation
·      Ardelyx (ARDX) successfully completed safety extension portion of Phase 3 T3MPO program, designed to support registration of tenapanor for treatment of irritable bowel syndrome with constipation.
Industrials & Materials
·      Commercial Metals (CMC) Q1 EPS 31c/$1.2B vs. est. $1,11B; Q1 Ebitda was $90.3M
·      American Airlines Group (AAL) said Tuesday it would give every employee a $1,000 bonus in the wake of the recent U.S. tax overhaul. The company said the bonuses will come in the first quarter of 2018 and total about $130 million. Earlier Tuesday, Southwest Airlines (LUV) also said it would give $1,000 bonuses to its employees
Technology, Media & Telecom
·      Altice (ATUS) said it would no longer carry Starz’ channels to its 3.4 million Optimum and SuddenLink TV customers, after the two failed to reach an agreement on pricing. It advised customers to sign up for the premium cable network’s $8.99 online video service if they want to continue getting its programing
·      IBM upgraded to Outperform at RBC Capital


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.

Live Trading

Open an Account

Paper Trading