Morning Preview: February 15, 2018

Scott GreenDaily Market Report

Early Look
Thursday, February 15, 18
Stock futures are charging higher again, on track for a 5th straight day of gains as the equity market keeps rebounding from its tumble earlier this month. Dow component Cisco (CSCO) is helping lift Dow futures following better earnings and guidance, with shares rallying over 7% this morning. The sudden decline in the U.S. dollar also boosting stocks, with the greenback falling to the lowest levels vs. the yen since November ’16, down as low as 106.18 overnight. Amazingly, the higher inflation reading yesterday (CPI) and continued uptick in bond yields (10-yr above 2.92% this morning) failing to dent the market optimism over the last 24-hours. Another inflation reading, January PPI will be released at 8:30 AM this morning. The three gauges stand between 4.8% and 6.5% below last month’s all-time highs, recovering from their drop in the first half of February. In Asian markets, The Nikkei Index gained 310 points to close at 21,464, the Shanghai Index was closed as it begins its Golden Week holiday and the Hang Seng Index spiked 599 points, or nearly 2% to 31,115. In Europe, the German DAX is rising around 100 points to 12,435, while the FTSE 100 is up around 40 points above 7,250.
Events Calendar for Today
·      8:30 AM EST       Weekly Jobless Claims…est. 228K
·      8:30 AM EST       Continuing Claims…est. 1.925M
·      8:30 AM EST       Empire Manufacturing for February…est. 18.0
·      8:30 AM EST       Producer Price Index (PPI) MoM for Jan…est. 0.4%
·      8:30 AM EST       PPI: Ex Food & Energy (core) MoM for Jan…est. 0.2%
·      8:30 AM EST       PPI: Ex Food & Energy (core) YoY for Jan…est. 2%
·      8:30 AM EST       Philly Fed Business Survey for February…est. 21.6
·      9:15 AM EST       Industrial Production MoM for January…est. 0.2%
·      9:15 AM EST       Capacity Utilization for January…est. 78.0%
·      9:45 AM EST       Bloomberg Consumer Comfort Index…prior 54.4
·      10:00 AM EST     NAHB Housing Market Index for February…est. 72
·      10:30 AM EST     Weekly EIA Natural Gas Inventory Data
·      4:00 PM EST        Total Net TIC Flows for December…prior $33.8B
Earnings Calendar
·      Earnings Before the Open: CBB, COMM, CYBR, DDR, EQT, ETR, GPN, HII, ICLR, KIM, NICE, PVF, SHOP, THS, USFD, WM, ZTS
·      Earnings After the Close: ANDV, ANET, BL, CBS, CGNX, LOGM, MDRX, MULE, NUS, PDFS, PI, SSNC, TRUE     
Market Closing Prices Yesterday
·      The S&P 500 Index jumped 35.69 points, or 1.34%, to 2,698.49
·      The Dow Jones Industrial Average rose 253.04 points, or 1.03%, to 24,893.49
·      The Nasdaq Composite spiked 130.10 points, or 1.86%, to 7,143.62
·      The Russell 2000 Index advanced 27.15 points, or 1.82% to 1,522.10
Sector News Breakdown
·      Hyatt (H) Q4 adjusted EPS 23c vs. est. 22c; Q4 adjusted EBITDA increased 4.0% to $179M, up 3.0% in constant currency; Q4 comparable systemwide RevPAR increased 3.8%, including an increase of 4.1% at comparable owned and leased hotels
·      Marriott International (MAR) Q4 EPS $1.12/$5.88B vs. est. $1.00/$5.67B; sees FY adjusted Ebitda $3.32B-$3.42B vs. est. $3.47B; 4Q Worldwide REVPAR change in constant currency +5.1% and 4Q North America REVPAR change in constant currency +3.9%
·      TripAdvisor (TRIP) shares rose 17%; Q4 EPS 6c/$321M vs. est. 14c/$309.17M; announces up to $250M share repurchase program; made one-time repatriation of $325M of foreign earnings; sees 2018 adjusted EBITDA flat compared to 2017; sees 2018 revs/adjusted EBITDA 2H-weighted
·      Allison Transmission (ALSN) Q4 EPS $1.51/$588M vs. est. 63c/$575.41M; sees 2018 revenue up 3%-7% vs. est. $2.37B and sees 2018 Adjusted EBITDA margin 37.5%-39.5%
·      Chemed (CHE) Q4 adjusted EPS $2.32/$428M vs. est. $2.27/$424M; sees 2018 adjusted EPS $10.60-$10.85 vs. est. $10.65; revenue growth for VITAS in 2018, prior to Medicare Cap, is estimated to be in the range of 2.5% to 3.5%
·      International Flavors (IFF) Q4 EPS $1.22/$854.6M vs. est. $1.31/$831.64M; sees FY18 adjusted EPS up 5.5%-7.5% (est. $6.31) and sees FY18 revenue up 6%-8% (est. $3.55B)
·      SolarEdge (SEDG) shares rose 14%; Q4 EPS 85c/$189.3M vs. est. 65c/$180.71M; sees Q1 revenue $200M-$210M, vs. consensus $158.43M and sees Q1 gross margins flat in 36%-38%
·      SunPower (SPWR) shares fell -7%; Q4 EPS 25c/$824M vs. est. 17c/$839.3M; said it is already seeing negative near-term impact from 201 tariffs; sees Q1 non-GAAP revenue of $300M-$350M vs. est. $427.4M and gross margin of 4% to 6%; sees FY18 non-GAAP revenue of $1.8B-$2.2B below consensus $2.41B
·      Marathon Oil (MRO) Q4 adjusted EPS 7c/$1.38B vs. est. 1c/$1.27B; production excluding Libya averaged 383,000 net Boed, up 4% sequentially on a divestiture-adjusted basis; sees FY18 production ex-Libya to average 390K-410K Boed
·      Williams Partners (WPZ) Q4 EPS loss (35c) vs. est. (39c); 4Q adjusted Ebitda $1.15B vs. est. $1.12B; said Q4 impacted by $713M of non-cash charges on tax Act
·      Williams (WMB) Q4 adjusted EPS 20c(in-line); sees FY18 adjusted EBITDA $4.45B-$4.65B vs. est. $4.73B; said 2018 div growth and coverage remain on target
·      Martin Midstream Partners (MMLP) Q4 EPS 47c/$305.7M vs. est. 34c/$242.33M
·      Cimarex Energy (XEC) Q4 EPS $1.47/$550.94M vs. est. $1.40/$532.72M
·      Laredo Petroleum (LPI) announces $200M share repurchase program
·      Popular (BPOP) announced that Banco Popular de Puerto Rico, its Puerto Rico banking subsidiary, has agreed to acquire and assume certain assets and liabilities related to Wells Fargo’s (WFC) auto finance business in Puerto Rico. As part of the transaction, Banco Popular will acquire approximately $1.5B in retail auto loans and $340M in commercial loans
·      Capital One (COF) reports January net charge-offs 5.33% vs. 5.37% last month and January 30-plus day delinquencies 4.11% vs. 4.01% last month
·      JPMorgan (JPM) reports January net charge offs 2.40% vs. 2.43% last month and January 30-plus day delinquency rate 1.21% vs. 1.20% last month
·      Synchrony (SYF) reports January charge-off rate 4.98% vs. 4.94% last month and January 30-plus day delinquency rate 3.11% vs. 302% last month
·      CYS Investments (CYS) 4Q core EPS 22c vs. est. 25c; 4Q net interest income $46.2M, 4Q book value per share $8.38; 4Q return on equity +0.35%
·      Equinix (EQIX) Q4 EPS 82c/$1.20B vs. est. $1.18/$1.19B; announced it has entered into a definitive agreement to acquire the Infomart Dallas, including its operations and tenants, from ASB Real Estate Investments, in an $800M debt and cash transaction
·      Annaly Capital (NLY) Q4 adjusted EPS 31c vs. est. 30c; Q4 GAAP return on average equity 20.58% and core return on average equity 10.67%
·      Agilent (A) Q1 adjusted EPS 66c/$1.21B vs. est. 58c/$1.16B; sees Q2 adjusted EPS 61c-63c on revs $1.2B-$1.22B vs. est. 64c/$1.17B; raises FY18 adj. EPS view to $2.62-$2.68 from $2.50-$2.56 (est. $2.59) and raises FY18 revenue view to $4.885B-$4.905B from $4.72B-$4.74B
·      Teva Pharmaceuticals (TEVA) shares rose 8%; as Warren Buffett’s Berkshire Hathaway disclosed in an SEC filing one new buy during the fourth quarter, Teva (TEVA)
·      LivaNova PLC (LIVN) announced it has entered into an agreement to acquire TandemLife, a privately held company focused on advanced cardiopulmonary temporary support solutions
·      Neurocrine Biosciences (NBIX) said the U.S. FDA has provided guidance on the regulatory path forward to support the NDA for opicapone, an investigational drug for Parkinson’s disease
·      On Assignment (ASGN) Q4 EPS $1.44/$679M vs. est. 79c/$670.64M; sees Q1 adjusted EPS 74c-78 on revs $672M-$682M vs. est. 74c/$667.95M
·      Vanda (VNDA) Q4 non-GAAP EPS 3c/$44.28M vs. est. loss (12c)/$43.45M; sees FY18 sales from Hetlioz and Fanapt $180M-$200M
·      Amicus (FOLD) files to sell $250M in common stock
Industrials & Materials
·      Andersons (ANDE) Q4 revs $1.0B vs. est. 42c/$1.22B; says recognized one-time tax benefit of $2.62
·      CAI International (CAI) Q4 EPS $1.03/$94M vs. est. 86c/$$96.7M; 4Q owned container fleet avg utilization 99% vs 94.3% y/y, 98.2% QoQ
·      CF Industries (CF) Q4 sales $1.1B vs. est. $988.9M; sees FY capital expenditure about $400M-$450M citing higher number of plant turnarounds than in 2017
·      Chemours (CC) Q4 EPS $1.19/$1.6B vs. est. 97c/$1.55B; said higher prices, primarily for Ti-Pure titanium dioxide, added 10% to revenue, while volume across all segments grew revenue by 8%; raises FY18 adjusted EPS view to $4.95-$5.60 vs. est. $5.09 and expects to deliver 2018 Adjusted EBITDA within a range of $1.7B-$1.85B
·      Barrick Gold (ABX) Q4 EPS 22c/$2.23B vs. est. 21c/$2.21B; Q4 gold production was 1.34M ounces, at a cost of sales applicable to gold of $801 per ounce, and all-in sustaining costs of $756 per ounce; sees 2018 gold production 4.5M-5.0M oz.
·      Goldcorp (GG) Q4 EPS 28c vs. est. 11c; Q4 gold production of 646,000 ounces at all-in sustaining costs of $870 per ounce, compared to 761,000 ounces at AISC of $747 per ounce YoY
·      Kinross Gold (KGC) Q4 EPS 1c/$810.3M vs. est. 3c/$870.3M; Q4 production 652,710 gold equivalent ounces
·      Safe Bulkers (SB) Q4 EPS 2c/$42.4M vs. est. loss (1c)/$38.14M
·      Waste Connections (WCN) Q4 adjusted EPS 52c/$1.157B vs. est. 49c/$1.13B; sees FY18 revenue $4.825B vs. consensus $4.85B and year Ebitda $1.55B
Technology, Media & Telecom
·      Cisco (CSCO) Q2 EPS 63c/$11.89B vs. est. 59c/$11.81B; recurring revenue was 33% of total revenue, up 2 points YoY; sees Q3 EPS 64c-66c vs. est. 63c and sees Q3 revenue up 3%-5% year over year vs. est. $12.13B; sees Q3 gross margins 63%-64% and 64.7% in Q2; increases dividend 14% and approves $25B increase to stock buyback program
·      Applied Materials (AMAT) announces new $6B share repurchase authorization; doubles quarterly cash dividend to 20c per share; Q1 EPS $1.06/$4.2B vs. est. 98c/$4.12B; sees Q2 EPS $1.10-$1.18 on revs $4.35B-$4.55B vs. est. $1.02/$4.24B
·      NetApp (NTAP) shares fell -8%; Q3 EPS 99c/$1.52B vs. est. 91c/$1.5B; sees Q4 EPS 95c-$1.03on revs $1.525B-$1.675B vs. est. $1.00/$1.57B


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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