Morning Preview: February 27, 2018

Scott GreenDaily Market Report

Early Look
Tuesday, February 27, 18
Stock futures are slipping after yesterday’s winning session, as markets anxiously await new Federal Reserve Chairman Jerome Powell’s first day of testimony in front of lawmakers, as he is set testify on Capital Hill at 10:00 AM EST later this morning on the economy and monetary policy. Markets will focus on what Powell will say about inflation and the pace of interest-rate hikes. Bond and currency markets were quiet yesterday in anticipation of the commentary, and are once again trading in tight ranges this morning. On Monday, the Dow Jones Industrial Average and S&P 500 each saw a third session of gains and, along with the Nasdaq Composite climbed more than 1%. The Dow industrials closed up nearly 400 points. In corporate M&A news, several stories as Comcast Corp. (CMCSA) has made a tentative GBP22.1 billion ($30.9 billion) offer for Sky PLC, topping a rival bid from 21st Century Fox Inc. (FOXA). In negative news, shares of AKRX plunge over 30% after Fresenius said it may back out of the planned acquisition of the company if its probe into data integrity yields evidence of wrongdoing. Lastly, reports indicate semi-chip maker MCHP is in talks to buy rival MSCC valued at roughly $60 per share . In Asian markets, The Nikkei Index gained 236 points to settle at 22,389, the Shanghai Index fell -37 points to settle at 3,292 and the Hang Seng Index fell -229 points to end at 31,268. In Europe, the German DAX is down over -60 points at 12,450, while the FTSE 100 is down about -10 points at 7,275.
Events Calendar for Today
·      7:45 AM EST       ICSC Weekly Retail Sales
·      8:30 AM EST       Advance Goods Trade Balance for January…est. (-$72.3B)
·      8:30 AM EST       Durable Goods Orders, Jan-P…est. (-2.0%)
·      8:30 AM EST       Durables Goods Ex: Transportation, Jan-P…est. 0.5%
·      8:55 AM EST       Johnson/Redbook Weekly Sales
·      9:00 AM EST       FHFA House Price Index for Q4…est. 0.4%
·      9:00 AM EST       S&P CoreLogic’s CS 20-city data for December
·      10:00 AM EST     Richmond Fed Index for February…est. 15
·      10:00 AM EST     Consumer Confidence for February…est. 126.4
·      4:30 PM EST        API Weekly Inventory Data
Earnings Calendar
·      Earnings Before the Open: AES, AMT, AZO, BNS, DISCA, EE, ENDP, M, MNK, SAH, SEAS, SERV
·      Earnings After the Close: ALB, ALRM, BUFF, DXCM, ESRX, EVHC, FTR, IMAX, PCLN, SQ, TIVO, TSRO, WMGI
Other Key Events
·      BMO Capital 27th Annual Global Metals & Mining Conference, 2/25-2/28, in Florida
·      BTIG Healthcare Conference 2/26-3/1, in Utah
·      JMP Securities Technology Conference, 2/26-2/27, in San Francisco, CA
·      Morgan Stanley Technology, Media and Telecom Conference, 2/26-3/1, in San Francisco
·      Eurozone M3 money supply for January
·      Eurozone confidence numbers for February      
Market Closing Prices Yesterday
·      The S&P 500 Index jumped 32.30 points, or 1.18%, to 2,779.60
·      The Dow Jones Industrial Average rose 399.28 points, or 1.58%, to 25,709.27
·      The Nasdaq Composite spiked 84.07 points, or 1.15%, to 7,421.46
·      The Russell 2000 Index advanced 10.15 points, or 0.65% to 1,559.33
Sector News Breakdown
·      Nutrisystem (NTRI) shares fell -27%; Q4 EPS 36c/$131.2M vs. est. 40c/$128.73M; raises quarterly dividend 43% to 25c; sees Q1 EPS 3c-8c on revs $204M-$209M below est. 28c/$240.77M; sees FY18 EPS $1.99-$2.09on revs $685M-$705M below est. $2.31/$791.56M
·      Fitbit (FIT) shares fell -11%; Q4 adjusted EPS loss(2c)/$570.8M vs. est. 0c/$588.89M; sold 5.4M wearable devices in Q4; the average selling price increased 20% to $102 per device driven by adding Fitbit Ionic to device mix; sees Q1 adjusted EPS loss (21c)-(18c) on revs $240M-$255M, vs. est. loss (9c)/$340.34M
·      Fiesta Restaurant (FRGI) Q4 adjusted EPS 0c/$162.2M vs. est. 11c/$155.6M; Q4 comparable restaurant sales at Pollo Tropical decreased 0.1%, primarily driven by a decrease in comparable restaurant transactions of 2.7%; Comp sales at Taco Cabana decreased 7.4%, primarily driven by a decrease in comp transactions of 12.2%; approves repurchase program for up to 1.5M shares
·      Heidrick & Struggles (HSII) Q4 EPS 15c/$169.4M vs. est. 32c/$156.71M; sees Q1 revenue $150M-$160M vs. consensus $149.85M
·      Toll Brothers (TOL) Q1 EPS 83c/$1.18B vs. est. 61c/$1.18B; Q1 net signed contract value was $1.69B; Q1 backlog value at first-quarter end rose to $5.58B, up 28% and units totaled 6,250
·      SeaWorld (SEAS) Q4 EPS loss (24c)/$265.5M vs. est. loss (19c)/$260.66M; on track’ to deliver $40M in total net cost savings by end of 2018 and says YTD attendance, season pass sales to date have increased YoY
·      Carrizo Oil & Gas (CRZO) Q4 adjusted EPS 58c/$246.77M vs. est. 57c/$237.42M; Q4 total production of 62,417 Boe/d, 39% above Q4’16 and above the high-end of the company’s guidance range; sees 1Q production 48,600 to 49,800 b/d and sees FY production 58,500 to 60,100 b/d
·      California Resources (CRC) Q4 EPS adjusted loss (33c)/$455M vs. est. loss (57c)/$535.08M; estimates its 2018 capital program will range from $425 million to $450 million, which includes approximately $100 to $150 million in JV capital
·      Jagged Peak Energy Inc. (JAG) CEO announced plans to retire at the end of March for health, personal reasons. Independent director James Kleckner to become president, CEO following transition period; says 4Q production less than anticipated primarily due to fewer well completions, delays with both operated and non-operated wells coming online during quarter
·      Oneok (OKE) Q4 EPS 16c (includes charges) vs. est. 52c; reports Q4 net income attributable to ONEOK totaled $63.0M; Q4Ebitda $547.7M vs. est. $548.7M
·      Delek US (DK) Q4 adjusted EPS 50c/$2.48B vs. est. 40c/$2.04B; announces $150M share buyback, raises quarterly dividend 33%
·      Ensco (ESV) Q4 adjusted EPS loss (23c)/$454M vs. est. loss (28c)/$452.92M
·      CoreLogic (CLGX) Q4 adjusted EPS 55c/$454.2M vs. est. 52c/$450.87M; sees 2018 tax rate 26% vs. 35% in 2017
·      NMI Holdings (NMIH) files to sell 3.7M shares of common stock
·      Willis Towers Watson (WLTW) increases share repurchase authorization up to $1.2B for share repurchases; increases quarterly dividend 13%
·      Akorn (AKRX) shares plunge over 35%; Fresenius (FMS) may back out of the planned acquisition of Akorn (AKRX) if its probe into data integrity at the U.S. maker of liquid generic drugs yields evidence of wrongdoing, the German healthcare group’s chief executive said. Fresenius had said late on Monday it was conducting an independent investigation into “alleged breaches” at Akorn of U.S. FDA data integrity requirements relating to product development
·      Endo (ENDP) Q4 adjusted EPS 77c/$769M vs. est. 61c/$760.09M; sees FY18 adjusted EPS $2.15-$2.55 on revs $2.6B-$2.8B vs. est. $2.86/$3.03B
·      Clovis Oncology (CLVS) Q4 EPS loss ($1.27) vs. est. loss ($1.31); Q4 Rubraca revenue $17M vs. Bloomberg estimate $19.3M; Q4 cash and cash equivalents $464.2M
·      Diplomat Pharmacy (DPLO) Q4 adjusted EPS 18c/$1.16B vs. est. 16c/$1.17B; sees FY18 adjusted EPS 87c-97c on revs $5.3B-$5.6B vs. est. $1.02/$5.42B
·      Exelixis (EXEL) Q4 EPS 12c/$120.1M vs. est. 11c/$120.25M; sees FY operating expenses $430M-$460M; Q4 cash and other equivalents $457.2M
·      HTG Molecular Diagnostics (HTGM) announced the issuance of Australian Patent Number 2012316129 for “Methods of Co-detecting mRNA and Small Non-coding RNA
·      Lilly’s (LLY) abemaciclib gets FDA approval in combination with an aromatase inhibitor as initial endocrine-based therapy for postmenopausal women with hormone receptor (HR)-positive, human epidermal growth factor receptor 2 (HER2)-negative advanced or metastatic breast cancer
·      Medpace (MEDP) authorizes new $50M share repurchase program; Q4 adjusted EPS 39c/$112.7M vs. est. 38c/$97.36M; Net new business awards were $114.7 million, representing a net book-to-bill ratio of 1.15x
·      Pfizer (PFE) files automatic mixed securities shelf
·      NuVasive (NUVA) Q4 adjusted EPS 56c/$271.7M vs. est. 56c/$272.64M; sees FY18 adjusted EPS $2.44-$2.47 on revs $1.095B-$1.105 vs. est. $2.37/$1.09B
·      Tenet (THC) Q4 EPS $1.40/$4.98B vs. est. $1.25/$4.87B; sees Q1 adjusted EPS loss (10c)-5c on revs $4.45B-$4.65B vs. est. 12c/$4.63B; revises FY18 adjusted EPS view to 73c-$1.07 on revs $17.9B-$18.3B vs. est. $1.02/$18.29B
·      Tyme Technologies (TYME) files to sell 12M shares of common stock
Industrials & Materials
·      John Bean Technologies (JBT) Q4 adjusted EPS $1.10/$483.7M vs. est. $1.08/$470.35M; sees 1Q revenue about +8% and sees FY revenue +10% to +13%; sees FY18 EPS $3.85-$4.05 vs. est. $3.72
·      Sun Hydraulics (SNHY) Q4 EPS 27c/$84.2M vs. est. 25c/$83.9M; sees 2018 revs $370M-$385M vs. est. $382.8M
·      Ferroglobe (GSM) Q4 EPS 6c/$468.2M vs. est. 7c/$463.6M; 4Q total shipments 226,558 Mt; 4Q adjusted Ebitda $54.9M
Technology, Media & Telecom
·      Comcast Corp. (CMCSA) made a tentative GBP22.1 billion ($30.9 billion) offer for Sky PLC, topping a rival bid from 21st Century Fox Inc. (FOXA) to consolidate ownership of the U.K. broadcaster. Comcast is offering GBP12.50 a share for all of Sky, topping a GBP10.75 a share offer from Fox for the 61% of Sky it doesn’t already own.
·      Microchip Technology (MCHP) is in talks to buy Microsemi Corp (MSCC), the largest U.S. commercial supplier of military and aerospace semiconductor equipment, for roughly $60 per share according to reports
·      Palo Alto Networks (PANW) Q2 adjusted EPS 97c/$542.4M vs. est. 79c/$524.98M; sees Q3 adjusted EPS 94c-96c on revs $538M-$548M vs. est. 81c/$532.68M; sees Q3 total billings in the range of $665M-$680M up 22%-25% YoY; sees FY18 adjusted EPS $3.84-$3.91 on revs $2.19B-$2.22B vs. est. $3.40/$2.17B; sees FY18 total billings in the range of $2.715B-$2.770B
·      Pandora (P) files automatic mixed securities shelf
·      Pegasystems (PEGA) Q4 adjusted EPS 27c/$239.54M vs. est. 15c/$208.48M; sees FY18 adjusted EPS $1.20 on revs $950M vs. est. 79c/$892.02M
·      SBA Communications (SBAC) Q4 AFFO $1.78/$443.1M vs. est. $1.76/$436.46M; 4Q adjusted Ebitda $310.1M vs. est. $305.9M; 4Q capital expenditure $41.9M; Sees FY AFFO/share $7.27-$7.67 on revs $1.83B-$1.87B vs. est. $7.76/$1.84B
·      Scripps Networks (SNI) Q4 EPS $1.38/$956.1M vs. est. $1.18/$915.97M; said ot won’t issue 2018 guidance
·      2U forecast (TWOU) Q4 EPS 14c/$86.7M vs. est. 13c/$85.1M; sees 1Q adjusted loss (13c-14c) on revs $91.1M-$91.6M vs. est. loss (13c)/$86.4M


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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