Morning Preview: March 6, 2018

Scott GreenDaily Market Report

Early Look
Tuesday, March 6, 18
  
Stock futures are adding to yesterday gains, with the Dow pointing to triple digit gains after a 1% gain for all major averages yesterday as worries over a trade war lessened amid a push-back on the Trump administration’s tariff plan from key Republicans such as House Speaker Paul Ryan. Ryan warned about the potential fallout if President Donald Trump’s plan to impose tariffs on steel and aluminum imports went ahead. Markets also get a trio of speakers (Brainard, Kaplan and Dudley) along with a few economic data points ahead of the all-important nonfarm payroll report on Friday (with a close eye on wages for inflation expectations). There are a handful of earnings expected today in the retail sector with TGT, COST, DLTR among those reporting. Futures recently spike on reports North and South Korea have agreed to hold their first summit in more than a decade in late April, the South’s presidential office said on Tuesday, according to media reports. The announcement comes after a senior delegation from South Korea met with North Korean leader Kim Jong Un in Pyongyang on Monday.
 
Stocks surged on Monday as the Dow Jones Industrial Average snapped its 4-day losing streak, with markets looking beyond the threat of a global trade war and instead focused on positive economic data. The benchmark S&P 500 index gained 1% with all 11 subsectors finishing higher, led by utilities and financials. Stocks rebounded in strong fashion after posting hefty losses last week, with the Dow dropping 3% and notching its fourth-straight-session loss on Friday. The S&P 500 shed 2% for the week and the Nasdaq declined 1.1%.
 
In Asian markets, The Nikkei Index gained 375 points to settle at 21,417, the Shanghai Index gained 32 points to settle at 3,289 and the Hang Seng Index jumped over 2% or 624 points to settle at 30,510. In Europe, the German DAX is higher by more than 1% at 12,220, while the FTSE 100 is up over 60 points at 7,180. Trade wars starting? As the European Union proposed retaliatory tariffs on imports of a range of U.S. products.
 
Market Closing Prices Yesterday
·      The S&P 500 Index jumped 29.69 points, or 1.10%, to 2,720.94
·      The Dow Jones Industrial Average rose 336.70 points, or 1.37%, to 24,874.76
·      The Nasdaq Composite spiked 72.84 points, or 1.00%, to 7,330.70
·      The Russell 2000 Index advanced 12.88 points, or 0.84% to 1,546.05
 
Events Calendar for Today
·      7:30 AM EST       Fed’s Dudley speaks in Virgin Islands
·      7:45 AM EST       ICSC Weekly Retail Sales
·      8:55 AM EST       Johnson/Redbook Weekly Sales
·      10:00 AM EST     Factory Orders for January…est. (-1.4%)
·      10:00 AM EST     Durable Goods Orders, Jan-F…est. (-3.6%)
·      10:00 AM EST     Durable Goods Ex-Transportation, Jan-F…
·      4:30 PM EST        API Weekly Inventory Data
·      5:30 PM EST        Fed’s Brainard speaks in New York
·      8:30 PM EST        Fed’s Kaplan speaks at Energy Conference
   
World News
·      Tariff retaliation: the European Union proposed retaliatory tariffs on imports of a range of U.S. products. Bloomberg notes the EU intends to apply a tit-for-tat levy should Trump go ahead with his plans, according to a list drawn up by the European Commission and obtained by Bloomberg News. List targets imports of shirts, jeans, cosmetics, other consumer goods, motorbikes and pleasure boats worth around EU1B
·      Senator Thad Cochran, a Mississippi Republican, will resign on April 1, the Associated Press reported. Cochran cited health concerns as his reason for leaving. Cochran leads the appropriations committee and is one of the Senate’s 51 Republicans
 
Sector News Breakdown
Consumer
·      Target Corp (TGT) Q4 EPS $1.37/$22.8B vs. est. $1.38/$22.53B; Q4 comp sales rose 3.6% vs. est. 3.4%; sees Q1 EPS $1.25-$1.45 vs. est. $1.40; says saw healthy comparable sales growth across core merchandise categories
·      Ascena Retail (ASNA) Q2 EPS loss (12c)/$1.72B vs. est. loss (9c)/$1.64B; Q2 comp sales fell (-2%); sees 3Q adjusted EPS loss (12c-7c) on sales $1.48B-$1.52B vs. est. 7c/$1.48B; sees 3Q comparable sales -3% to -5%; 2Q Justice comparable sales +7%, 2Q Lane Bryant comparable sales 0%, 2Q Maurice’s’ comparable sales -5%, 2Q Dressbarn comparable sales -12% and 2Q Catherine’s comparable sales -5%
·      Nordstrom Inc. (JWN) said a special committee of its board of directors has received and rejected as insufficient a proposal to take the company private. Shares of Nordstrom fell more than 2% after the news. The committee had been notified by a group consisting of members of the Nordstrom familyhttps://goo.gl/zQtNU4
·      Freshpet (FRPT) shares fell -12%; Q4 EPS 4c/$40.7M vs. est. 5c/$41.12M; sees FY18 net sales less than $185M vs. est. $187.84M
·      Quanex Building (NQ) Q4 EPS loss (4c)/$191,7M vs. est. loss (10c)/$190M; Q1 adjusted Ebitda $13.2M; reaffirms full year 2018 guidance
·      Nautilus(NLS) Q4 EPS 28c/$127.8M vs. est. 31c/$128.65M
 
Energy
·      PetroQuest (PQ) Q4 EPS loss (2c)/$35.08M vs. est. loss (1c)/$31.78M
·      CNX Midstream Partners (CNXM) to sell to eligible purchasers $400M of senior notes due 2026.; intends to use the net proceeds of the sale to fund the previously-announced acquisition of CNX Resource Corporation’s 95% interest in the Shirley-Pennsboro gathering system
 
Financials
·      Ares Management (ARES) announces offering of 5M shares of common stock
·      New York REIT (NYRT) announces 1-for-10 reverse stock split
 
Healthcare
·      GlycoMimetics (GLYC) releases details of the design of a pivotal study for its lead candidate, GMI-1271. Study is expected to enroll 380 relapsed/refractory acute myeloid leukemia patients, the primary endpoint will be overall survival (OS) with remission rate as a secondary endpoint; enrollment to start in 3Q
·      Aduro Biotech (ADRO) earned a $3M development milestone payment from Merck (MRK) for initiating a Phase I clinical trial of its anti-CD27 antibody; Phase 1 trial will evaluate the safety and pharmacokinetics of the anti-CD27 antibody when administered alone and in combination with pembrolizumab in adults with advanced solid tumors
·      Analogic (ALOG) Q2 EPS $1.27/$129.2M vs. est. 69c/$112.5M; 2Q gross margin +44%; said not commenting on FY guidance
·      Quidel (QDEL) received 510(k) clearance from the U.S. FDA to market its Sofia Lyme FIA to be used with the Sofia 2 Fluorescent Immunoassay Analyzer
·      Anika Therapeutics (ANIK) announced the appointment of Joseph Darling as CEO, succeeding Charles Sherwood, who will retire as CEO and a director of Anika on March 9, after almost 20 years of service
·      Fate Therapeutics (FATE) said it sees FT500 IND filing in 1H’18; said quarterly revs $1.03M
·      Cerner (CERN) announced a new collaboration with Salesforce (CRM). Cerner is extending its population health, clinical and administration portfolio with an integrated solution that combines Salesforce Health Cloud and Marketing Cloud
 
Industrials & Materials
·      Europe’s largest paper packaging producer Smurfit Kappa has rejected a takeover approach from U.S.-based International Paper Co (IP), saying the proposal “fails entirely” to reflect its growth prospects and industry outlook. https://goo.gl/So98Sy
·      U.S. agricultural investor Continental Grain Co plans to push Bunge Ltd (BG) to consider a potential sale, a person familiar with the matter said on Monday, after Archer Daniels Midland Co (ADM) approached Bunge about a takeover. https://goo.gl/KmnhbZ
·      Dow component 3M Co. (MMM) said CEO Inge Thulin will move to a newly created executive chairman role and be replaced by COO Michael Roman. Roman has been COO for 3M since last summer, but has been with the company for three decades
·      Airbus (EADSY) is hoping to triple service revenues from its commercial aircraft business to $10B within seven years while sharply decreasing the number of times jets are stranded on the ground for technical issues, Reuters reports
·      Leidos (LDOS) awarded $230M follow-on task order from the General Services Administration
 
Technology, Media & Telecom
·      Qualcomm Inc. (QCOM) said that its annual shareholder meeting would be held April 5. The meeting was supposed to be Tuesday morning, but the Committee on Foreign Investment in the United States requested a month delay late Sunday after it decided to look at Broadcom Ltd.’s (AVGO) hostile takeover bid for Qualcomm
·      Tintri Inc. (TNTR) said its CEO is departing amid a 20% staff cut less than nine months after the flash-storage company’s initial public offering, and shares soared higher. Tintri said that CEO Ken Klein will continue to serve in his position and on the board until a replacement is found, and that an executive search firm has been hired; Q4 adjusted EPS loss (72c)/$28.9M vs. est. loss (80c)/$26.32M
·      January sales of semiconductors topped records marking a year and a half of consecutive monthly gains, according to the Semiconductor Industry Association. January chip sales rose 22.7% to a record $37.6 billion, SIA said. Year-over-year sales in the Americas saw the largest rise with a gain of 40.6%, followed by Europe with a 19.9% rise
·      Gogo Inc.(GOGO) announced that CEO Michael Small has stepped down from his position immediately, by “mutual decision” between the executive and the company.

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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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