Morning Preview: February 16, 2018

Scott GreenDaily Market Report

Early Look
Friday, February 16, 18
U.S. stock futures are pointing to a higher open, looking to make it a 6th straight day of gains as investors head into the long holiday weekend. Major U.S. averages are closed on Monday in observance of President’s Day, which could dampen volumes today. Stocks have absolutely surged since a week ago today, where the S&P 500 and Dow Industrials each dropped more than 10% from its record highs last Friday…but it has been up, up and away since then, recovering around 70% of those losses since. The Dow Industrials rose to close above the 25,000-mark Thursday for the first time in nearly two weeks as U.S. stocks finished higher for a fifth straight session in volatile trade. Higher inflation readings, rising bond yields and mixed earnings have failed to dent this rally thus far as investors continue to take advantage of any market pullback to add to gains. So far this week, the Dow and the S&P are both up more than 4% and on track for their biggest weekly percentage rise since November 2016. The Nasdaq is up over 5%, which represents its best week since October 2014. Meanwhile, the dollar fell, on track for its worst weekly performance in two years, down roughly 2%. In Asian markets, The Nikkei Index rose 255 points to settle at 21,720, while both the Shanghai Index and the Hang Seng Index were closed for holiday. In Europe, the German DAX is higher around 75 points at 12,420, while the FTSE 100 is up around 50 points at 7,280.
Market Closing Prices Yesterday
·      The S&P 500 Index jumped 32.57 points, or 1.21%, to 2,731.20
·      The Dow Jones Industrial Average rose 306.88 points, or 1.23%, to 25,200.37
·      The Nasdaq Composite spiked 112.81 points, or 1.58%, to 7,256.43
·      The Russell 2000 Index advanced 15.10 points, or 0.99% to 1,537.20
Events Calendar for Today
·      8:30 AM EST       Import Prices MoM for January…est. 0.6%
·      8:30 AM EST       Housing Starts MoM for January…est. 1.235M
·      8:30 AM EST       Building Permits MoM for Jan…est. 1.3M
·      10:00 AM EST     University of Michigan Sentiment, Feb-P…est. 95.4
·      1:00 PM EST        Baker Hughes Weekly Rig Count
Earnings Calendar
·      Earnings Before the Open: AEE, CPB, DE, EPAM, IPGP, IRM, KHC, KO, NWL, R, SJM, WBC
World News
·      U.S. net long-term portfolio securities inflows at $27.3B in December as China holds $1.18T of U.S. Treasuries, an increase of $8.3B from last month, while Japan holds $1.06T, a decrease of $22.6B from last month; foreign net selling of Treasuries at $15.96B, foreign net buying of equities at $35.1B and foreign net selling of corporate debt at $1.3B
·      U.K. retail sales grew only modestly in January, up by 0.1% compared with a 1.4% monthly decline in December. January’s reading was significantly below the expectations of 0.6%.
·      Gov. Haruhiko Kuroda was nominated to lead the Bank of Japan for a second term
Sector News Breakdown
·      Shake Shack (SHAK) Q4 adjusted EPS 10c/$96.1M vs. est. 6c/$92.87M; Q4 same-shack sales up 0.8%; sees FY18 revenue $444M-$448M vs. est. $461.09M; sees FY18 same-shack sales flat; sees opening 32-35 domestic company-operated Shacks in FY18
·      Nu Skin (NUS) Q4 adjusted EPS $1.20/$666.2M vs. est. $1.19/$665.44M; boosts dividend; sees 1Q EPS 65c-70c on revs $550M-$570M vs. est. 73c/$530.2M
·      Sleep Number (SNBR) Q4 EPS 39c/$363.3M vs. est. 19c/$331.7M; 4Q comparable sales +12%, vs. estimate +3.2%; sees FY EPS $1.70-$2.00 vs. estimate $1.85 (watch other mattress names on the strong comp guidance)
·      Chesapeake Lodging (CHSP) Q4 adjusted FFO 48c/$142.7M vs. est. 50c/$143.43M; reports Q4 Comparable RevPAR up 0.3% for the 21-hotel portfolio and 1.2% for the 14-hotel portfolio over the same period in 2016; sees FY18 FFO $2.33-$2.43 vs. consensus $2.38
·      Wendy’s (WEN) raises dividend 21%, announces new $175M share repurchase program
·      Cloud Peak Energy (CLD) Q4 EPS 23c/$213.89M vs. est. $244.38M; received approval for the Antelope Lease by Modification; expected to add approximately 14 million tons of 8800 Btu coal at below-average mine strip ratio; sees FY adjusted Ebitda $75M-$100M vs. est. $108.7M 
·      Continental Resources (CLR) currently expects production to grow 15%-20% YoY with a capital budget of $2.5B-$2.8B while generating “significant free cash” flow comparable to 2018 projections; announced a 2018 capital expenditures budget of $2.3B, which it says is focused on both free cash flow generation and annual production growth to approximately 285,000 to 300,000 Boe per day, with a 2018 exit rate of 305,000 to 315,000 Boe per day
·      Enbridge Energy (EEP) reports Q4 adjusted EPS 26c vs. est. 21c; sees FY distributable cash flow $720M-$770M; 4Q adjusted Ebitda $430M
·      Energous (WATT) Q4 revs $29K vs. est. $345K; Q4 Ebitda loss $7.6M; said the focus in 2018 is to continue the expansion of our customer engagements with the expectation of seeing multiple WattUp-enabled products launched to the global market, resulting in significant revenue growth
·      Kayne Anderson Energy (KED) to merge with and into Kayne Anderson MLP Investment Company (KYN) in a non-taxable transaction. The Exchange ratio to be based on relative net asset value per share immediately prior to closing. Based on NAVs as of February 14th, KED stockholders would have received approximately 0.96 shares of KYN for each share of KED
·      MRC Global (MRC) Q4 EPS 30c/$903M vs. est. 4c/$907.68M.
·      Spectra Energy Partners (SEP) Q4 EPS 82c vs. est. 84c 
·      Western Gas Partners (WES) Q4 EPS 39c/$632.02M vs. est. 46c/$587.65M; 4Q natural gas production 3,470 mmcfe/d and Q4 Ebitda $273.3M
·      DDR Corp. (DDR) Q4 FFO 28c vs. est. 26c; sees Q3 FFO at least 15c vs. est. 25c
·      Digital Realty (DLR) Q4 core FFO $1.55/$731.44M vs. est. $1.52/$729.78M; reiterate 2018 core FFO of $6.45-$6.60 (est. $6.54)
·      ITG Inc. (ITG) increases share repurchase authorization by 4M shares
·      AMN Healthcare (AMN) Q4 EPS 63c/$509.1M vs. est. 64c/$501.64M; sees Q1 revenue $516M-$522M vs. est. $517.44M; sees Q1 Gross margin 32.0%; SG&A as percentage of revenue 20.0%; and adjusted EBITDA margin 12.5%-13.0%
·      Allscripts (MDRX) Q4 EPS 18c/$547M vs. est. 18c/$523.54M; sees FY18 EPS 72c-82c on revs $2.15B-$2.25B vs. est. 79c/$2.15B
·      Amicus (FOLD) 19.355M share Secondary priced at $15.50
Industrials & Materials
·      Deere & Co (DE) Q1 EPS $1.31/$5.97B vs. est. $1.33/$6.41B; sees FY net income about b$2.1B and year adjusted earnings around $2.85B
·      Flowserve (FLS) Q4 adjusted EPS 50c/$1.03B vs. est. 51c/$1.03B; sees FY18 adjusted EPS $1.50-$1.70 on revs growth 3%-6% vs. est. $1.84/$3.74B; 4Q bookings $985 million
·      Gardner Denver (GDI) Q4 EPS 69c/$665.0M vs. est. 48c/$657.53M; Q4 Adjusted EBITDA of $172.6 million grew 16% over the prior year, reflecting a margin of 26.0%
·      SPX Corporation (SPXC) Q4 EPS 60c/$387M vs. est. 62c/$390.59M
·      Mercer International (MERC) Q4 EPS 64c/$337.7M vs. est. 57c/$305.5M
·      Sealed Air Corporation (SEE) announced that it is implementing a price increase on products in its North American Product Care business
Technology, Media & Telecom
·      CBS Corp. (CBS) Q4 adjusted EPS $1.15/$3.92B vs. est. $1.14/$3.71B; 4Q Entertainment revenue $2.82B, Cable Networks revenue $547M, publishing revs $235M, local media revenue $450.0M
·      Arista Networks (ANET) shares fell -14%; Q4 EPS $1.71/$467.9M vs. est. $1.41/$458.67M; Q4 Non-GAAP gross margin of 65.9%, compared to non-GAAP gross margin of 64.4% in Q3; sees Q1 revenue $450M-$468M vs. est. $457.9M; sees Q1 Non-GAAP gross margin between 63% to 65%
·      Cohu (COHU) shares fell -14%; Q4 adjusted EPS 28c/$84.1M vs. est. 31c/$84.2M
·      Cray (CRAY) Q4 EPS 22c/$166.6M vs. est. 20c/$164.1M; sees Q1 revs $50M (in-line w/est.)
·      Globant (GLOB) Q4 EPS 39c/$115.4M vs. est. 38c/$109.09M; sees FY18 Non-IFRS Adjusted EPS $1.52-$1.62 on revs $495M-$505M vs. est. $1.57/$492.31M
·      Impinj (PI) Q4 EPS loss (28c)/$26.9M vs. est. loss (19c)/$29.5M;
·      Instructure (INST) files to sell 2.3M shares of common stock
·      LogMeIn(LOGM) Q4 EPS $1.20/$279.92M vs. est. $1.17/$277.19M; sees FY18 EPS $5.43-$5.53, on revs $1.135B-$1.15B vs. est. $4.90/$1.15B.
·      MuleSoft (MULE) Q4 EPS loss (12c)/$88.7M vs. est. loss (12c)/$83.5M; 4Q gross margin +71.2%
·      PDF Solutions (PDFS) Q4 EPS 13c/$26.8M vs. est. 11c/$26.5M
·      Viavi (VIAV) raises share repurchase authorization to $200M from $150M
·      TrueCar (TRUE) shares down -4%; the number of automobiles bought by users in 4Q was 239,521 units, vs. company’s own forecast of 240,000-245,000; Q4 EPS 5c/$83.1M vs. est. 1c/$81.7M; sees Q1 revs $80M-$82M vs. est. $82.4M
·      VeriSign (VRSN) added $1.7M domain name registrations in Q4 to total 332.4M
·      Instructure (INST) 2.5M share Spot Secondary priced at $39.50
·      Entercom (ETM) 12.9M share Block Trade offered at $16.80


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