Friday, January 12, 18
U.S. stock futures in cruise control, with Dow futures rising another 100 points, and major averages on track for their 8th daily climb in 9 days to start the year. Market optimism soaring ahead of earnings season and the positive effects the Trump administration tax plan will have on companies. Major averages set to open at new record highs after the Nasdaq closed above the 7,200 level (up 4.4% since the start of the year) for the first time and is up about 285 points during this 8-day stretch; oil prices (down early) jumped yesterday as Brent crude hits $70 for first time since 2014, while the Dow Transports rose 2.3%, touching highs of 11.300 yesterday. After knocking out a round-number milestone at 25,000, marking the fastest such move for the gauge in its 121-year history, the Dow Industrial average could touch a midpoint milestone, at 25,500, at the fastest rate ever, 7 sessions. In Asian markets, The Nikkei Index slipped -56 points to settle at 23,653, the Shanghai Index gained 3 points to settle at 3,428 and the Hang Seng Index rose 292 points to settle at 31,412. In Europe, the German DAX is higher by around 30 points at 13,230, while the FTSE 100 is up over 15 points at 7,780. The gains in Europe come despite a surging Euro, rising to 3-year highs against the greenback after German lawmakers agreed on a coalition blueprint, more than three months after the country’s general election.
Events Calendar for Today
· 8:30 AM EST Consumer Price Index MoM for December…est. 0.1%
· 8:30 AM EST CPI Ex: Food & Energy (core) MoM for Dec…est. 0.2%
· 8:30 AM EST CPI Ex: Food & Energy YoY for Dec…est. 1.7%
· 8:30 AM EST Retail Sales Advance MoM for December…est. 0.5%
· 8:30 AM EST Retail Sales Ex: Autos MoM for Dec…est.
· 10:00 AM EST Business Inventories for November
· 1:00 PM EST Baker Hughes Weekly Rig Count
· 4:15 PM EST Fed’s Rosengren gives Keynote Address at UC San Diego Conference
· Earnings Before the Open: BLK, JPM, INFY, PNC, WFC
Market Closing Prices Yesterday
· The S&P 500 Index jumped 19.33 points, or 0.70%, to 2,767.56
· The Dow Jones Industrial Average rose 205.60 points, or 0.81%, to 25,574.73
· The Nasdaq Composite spiked 58.21 points, or 0.81%, to 7,211.78
· The Russell 2000 Index advanced 26.99 points, or 1.73% to 1,586.79
· The euro surges after reports Chancellor Angela Merkel’s conservative CDU party and Martin Schulz’s center-left SPD after all-night talks agreed to a blueprint for formal coalition negotiations. The Germans voted in a general election on Sept. 24, where Merkel’s party came out with the most votes, but fell short of an outright majority.
· China’s exports grew at a slightly slower pace than expected in December, extending gains to a 10th straight month; Exports increased 10.9% in December from a year earlier, following growth of 12.3% in November
· China imports slowed significantly, ending 11 straight months of double-digit gains; Imports in December expanded 4.5% from a year earlier, compared with a 17.7% gain in November. The rise was much smaller than the poll’s forecast for a 15.0% gain.
· China’s trade surplus widened in December to $54.69 billion from $40.21 billion the previous month, exceeding a median forecast for a $38.5 billion surplus.
· Crypto currency markets rebound after broad selling pressure yesterday as Bitcoin fell -7% to $13,466 (had high $14,965 to low $12,801) and Ethereum was down -6.3%; though prices are higher this morning with Bitcoin back above $14,000
Sector News Breakdown
· T. Boone Pickens is said to close his energy-focused hedge fund according to the WSJ citing both his deteriorating health and weak financial performance as reasons for closure, according to a letter it obtained.
· JP Morgan (JPM) Q4 revenue $25.4B vs. est. $25.51B; Q4 equity and sales trading $1.15B, FICC sales and trading revs $2.22b, and investment banking revs $1.64B; Q4 adjusted EPS $1.76 (est. $1.69)
· PNC Bank (PNC) Q4 EPS $2.29 vs. est. $2.20; Q4 provision for credit losses $125M vs. Bloomberg est. $130.6M; Q4 loans $220.46B
· BlackRock (BLK) Q4 adjusted EPS $6.24/$3.47B vs. est. $6.02/$3.32B; raises quarterly dividend 15% to $2.88 per share; reports Q4 AUM $6.29T, up 22% y/y, up 5% sequentially; Cash management AUM increased 6% from the prior quarter to $449.9B
· Ally Financial (ALLY) raises quarterly dividend to 13c from 12c
· Waddell & Reed Financial (WDR) preliminary assets under management of $81.1 billion for the month ended December 31, 2017, compared to $81.4 billion on November 30, 2017
· Manning & Napier (MN) reports preliminary AUM $25.1B as of December 31, 2017, which included approximately $16.8B in separately managed accounts and approximately $8.3B in mutual funds and collective investment trusts
· MarketAxess (MKTX) sees 4Q one-time expense of $11M-$14M on tax act; non-recurring income tax expense relates to the repatriation tax and re-measurement of U.S. deferred tax assets, among other items
· Aradigm’s (ARDM) inhaled formulation of ciprofloxacin, dubbed Linhaliq, fails to win an FDA advisory committee’s recommendation for approval
· Exact Sciences (EXAS) files to sell $500M of convertible senior notes due 2025
· Horizon Pharma (HZNP) upgraded to buy at Mizuho citing higher sales expectations for Horizon’s gout drug Krystexxa, as the company seeks an updated label from the FDA
Industrials & Materials
· Safran SA (SAF.FR) and General Electric Co.’s (GE) joint-venture company CFM International has signed a $4.2 billion memorandum of understanding with China’s Hainan Airlines Holding Co. Ltd. (600221.SH) to deliver aircraft engines https://goo.gl/NF5zM6
· Alaska Air Group (ALK) said December revenue per mile rose 9.2%; reported 10.3% increase in capacity, revenue passengers rose 6%, capacity gained 10.3% and passenger load factor declined 0.8 pts
Technology, Media & Telecom
· Intel (INTC) is quietly advising some customers to hold off installing patches that address new security flaws affecting virtually all of its processors. It turns out the patches had bugs of their own; said it identified three issues in updates released over the past week for “microcode,” or firmware, software that is installed directly on the processor
· Finisar (FNSR) CEO and chairman Jerry Rawls to retire, Michael Hurston to be new CEO
· Worldwide shipments of traditional PCs totaled 70.6M units in the fourth quarter of 2017, recording slightly positive, namely 0.7%, year-on-year growth, according to the International Data Corporation Worldwide Quarterly Personal Computing Device Tracker. The results outperformed the forecast of a 1.7% decline in shipments during the quarter
· Daily-fantasy startup DraftKings Inc. said it has begun “an aggressive hiring campaign” to grow the company to more than 700 employees by mid-2019, from the current 425 employees. At least 600 of the positions would be based in Boston, the company said
· eBay (EBAY) upgraded to Buy from Hold at SunTrust
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.