Tuesday, January 16, 18
U.S. stock futures are again pointing to record levels, with momentum very strong and the Dow Industrials on track for its fastest 1,000-point gain as it sets its eyes on the 26,000-level following strong gains last week. Earnings will likely be the main driver today/this week with Dow component UNH reporting a quarterly beat and strong guidance this morning. On Friday ahead of the three-day weekend, the Dow &P 500 and Nasdaq Composite scored yet another round of all-time closing highs, with the blue-chip index ending at 25,803.19. The three major equity benchmarks have extended 2017 gains, helped by factors such as an expanding U.S. economy, growth in corporate profits and enthusiasm over the Trump administration’s tax cuts and other business-friendly policies. The U.S. dollar rebounds after falling sharply vs. other currencies yesterday, including 3-year lows vs. the euro and the Pound trading above 1.38 since Brexit. Bitcoin dropped 13%, falling below $12,000 to its weakest level since its day of wild swings before Christmas (was down around 20%), while other crypto currencies plunging as well (Ripple, etc.). Oil prices are edging lower, falling from 3-year highs.
In Asian markets, The Nikkei Index gains another 236 points to settle at 23,951, the Shanghai Index gained 26 points to close at 3,436 and the Hang Seng Index jumped 565 points to settle at 31,904 (new record closing highs topping 2007 levels). In Europe, the German DAX gains 140 points trading around 13,340, while the FTSE 100 is up a few points at 7,775. Note Hong Kong’s stock benchmark declined on Monday and broke a 14-day winning streak, falling alongside Chinese equities after some downbeat domestic data.
Market Closing Prices Yesterday
· The S&P 500 Index jumped 18.68 points, or 0.67%, to 2,786.24
· The Dow Jones Industrial Average rose 228.46 points, or 0.89%, to 25,803.19
· The Nasdaq Composite spiked 49.28 points, or 0.68%, to 7,261.06
· The Russell 2000 Index advanced 5.18 points, or 0.33% to 1,591.97
Events Calendar for Today
· 7:45 AM EST ICSC Weekly Retail Sales
· 8:30 AM EST Empire Manufacturing Index for January…est. 19.0
· 8:55 AM EST Johnson/Redbook Weekly Sales
· 4:30 PM EST API Weekly Inventory Data
· Earnings Before the Open: ADTN, C, CMA, FRC, MBWM, OZRK, UNH
· Earnings After the Close: CSX, IBKR, PNFP
· An emergency alert was sent mistakenly to Hawaii’s residents warning of an imminent ballistic missile attack when an employee at the state emergency management agency pushed the “wrong button,” Hawaii’s governor said.
· China’s Dagong Global Credit Rating Co. has downgraded its sovereign credit ratings for the U.S., citing political “deficiencies.” Dagong, one of China’s major ratings agencies, announced the cut in the local and foreign-currency sovereign ratings from A- to BBB+ on Tuesday
Sector News Breakdown
· Energizer Holdings (ENR) agrees to acquire Spectrum Brands’ (SPB) Global Battery and Portable Lighting Business for $2.0 billion in cash
· Ford (F) is increasing its planned investments in electric vehicles to $11B by 2022, according to Reuters, citing chairman Bill Ford, up from the prior target of $4.5B by 2020
· Fiat Chrysler (FCAU) and Daimler (DDAIF) have warned that they might not be able to hit Europe’s CO2 targets of emitting 95 grams of CO2 per kilometer which go into effect in 2021, the Financial Times reports
· Campbell Soup (CPB) upgraded to Buy from Neutral at Citi
· Group 1 Automotive (GPI) said cash bonus of $500 to qualified Group 1 Automotive employees will be paid on March 1
· London-based mining company Gem Diamonds Limited (GEMD) said it has recovered a huge diamond from a Lesotho mine in which it is a majority owner; said it believes the 910-carat diamond is the fifth-largest gem-quality diamond ever found.
· BP PLC’s (BP) said Tuesday it expects to book a $1.7 billion post-tax charge in Q4 earnings for claims associated with the 2010 disaster and changes to the U.S. corporate tax rate.
· Comerica (CMA) Q4 EPS $1.28 vs. est. $1.23; Q4 provision for credit losses $17M
· JPMorgan (JPM) Dec Net Charge-offs (NCO) were 2.43% vs. 2.36% MoM and Dec. delinquencies fell to 1.20% from 1.22% MoM
· IHS Markit (INFO) reports Q4 adjusted EPS 52c/$945M vs. est. 50c/$912.62M; sees FY18 adjusted EPS $2.23-$2.27 vs. consensus $2.23
· Carillion’s liquidation will hit Spain’s Banco Santander as its U.K. branch is one of the company’s principal creditors, Spanish business daily Expansion reports; Santander’s total exposure to Carillion could be between 50M-100M pounds, said the newspaper https://goo.gl/A84468
· Franklin Resources (BEN) mentioned positively in Barron’s saying despite suffering high outflows recently, the shares could be a smart contrarian play, noting the asset manager is likely to repatriate a large chunk of its overseas cash under new tax rules; says cash represents some 42% of Franklin’s current share price of $44, and its real estate could be worth another $2-$3 a share
· Melrose appealed directly to GKN’s (GKN.LN) investors to back its 7 billion-pound ($9.6 billion) takeover offer after the British engineering company’s board rejected it. GKN disclosed on Friday that it had rebuffed 405 pence per share cash-and-stock offer made on Jan 8 as it set out plans to split its aerospace and automotive businesses https://goo.gl/qxmBZJ
· UnitedHealth (UNH) reports Q4 EPS $2.59/$52.06B vs. est. $2.52/$51.51B; sees FY18 adj. EPS $12.30-$12.60 vs. est. $11.47 saying revised its 2018 financial outlook to reflect the effects of the U.S. corporate tax law changes
· Molina Healthcare (MOH) upgraded to overweight from neutral with PT lifted to $103 from $65 at JPMorgan
· Tandem Diabetes Care (TNDM) files to sell up to $40M in secondary
· Pfizer (PFE), Amgen (AMGN), AbbVie (ABBV), Elli Lilly (LLY), Bristol-Myers Squibb (BMY) and Johnson & Johnson (JNJ) have strong prospects, promising product pipelines, and good dividends that should keep growing, according to Barron’s
Industrials & Materials
· General Electric (GE) provides an update on Insurance review as sees a $6.2B charge in 4Q; GE Capital expects to make statutory reserve contributions of about $15b over seven years; sees no effect on Industrial business and 2018 capital allocation plan; sees goodwill and other non-cash impairments of $1.8b after-tax related to GE Capital actions
· Airbus (EADSY) said 2017 was another record year for deliveries, wrapping up what the company says was a “remarkable” period; said it delivered 718 aircraft to 85 companies
· Goldcorp (GG) says full year 2017 gold production was 2,569,000 ounces, exceeding the midpoint of gold production guidance 2,500,000 ounces
Technology, Media & Telecom
· SoftBank Group Corp. said it was considering listing its Japanese wireless business – a move that could reportedly raise $18 billion. SoftBank Group is aiming to sell about 30 percent of SoftBank Corp, Japan’s No. 3 wireless carrier, for around 2 trillion yen ($18 billion) https://goo.gl/WB2D49
· JD.com (JD) has kicked off a fundraising round at its logistics unit with a target of at least $2 billion, and eventually plans to list the business overseas – Reutershttps://goo.gl/8Bxdau
· Disney’s (DIS) “Last Jedi” passes Beauty and the Beast ($1,263.5B) to become the No. 10 global release of all-time; also becomes the No. 1 global release of 2017, with an estimated $1,264.9M through Sunday
· Vivendi (VIVHY) shares may to climb the charts, rising 50% or more, Barron’s said as its Universal Music unit controls a third of recorded music and 20% of its publishing, and stands to benefit from the popularity of streaming services like Spotify making music rights more valuable.
· Dozens of companies presented driverless technology at the annual Consumer Electronics Show, but while optimism about the growth of the market comes as consumers appear to become more comfortable with self-driving “robo-taxis,” the technology has not quite arrived – Barron’s
· Facebook (FB), Amazon.com (AMZN), Apple (AAPL), Netflix (NFLX) and Google owner Alphabet (GOOGL) — have room to run, Barron’s said
· Qualcomm (QCOM), which is under a hostile takeover by Broadcom (AVGO), announced new radio frequency business, signaling a greater will to fight back and even go to the offense
· Ericsson AB (ERIC) will book 14.2 billion Swedish kronor ($1.76 billion) write-down and a SEK1 billion U.S. tax charge in the fourth quarter
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.