Morning Preview: March 16, 2018

Scott GreenDaily Market Report

Early Look
Friday, March 16, 18
Stock futures are mixed, with the benchmark S&P 500 index looking to snap its longest streak since December, after sliding for its 4thstraight session decline late yesterday, led by weakness in consumer-discretionary, energy and materials sectors. The decline in energy came despite a rise in oil prices, with weakness contained in the MLP sector after a tax ruling weighed on the group. The Dow Industrials managed to post a solid gain Thursday, while the Nasdaq Composite stretched its losing streak to three days. The stock market pared firmer gains midday following a report that Special counsel Robert Mueller subpoenaed the Trump Organization to turn over documents, including some related to Russia, the New York Times reported. In political news overnight, it was reported overnight that President Trump has decided to oust national security advisor Lt. Gen. H.R. McMaster and has conveyed that decision to John Kelly, his chief of staff, according to administration officials. The timing of a departure was unclear. However, it appears President Donald Trump is not about to oust his national security adviser, H.R. McMaster, according to White House Press Secretary Sarah Huckabee Sanders, “Just spoke to @POTUS and Gen. H.R. McMaster – contrary to reports they have a good working relationship and there are no changes at the NSC,” she said in a Twitter post. In Asian markets, The Nikkei Index dropped -127 points to settle at 21,676, the Shanghai Index fell -21points to 3,269 and the Hang Seng Index slid -39 points to settle at 31,501. In Europe, the German DAX is up over 40 points at 12,385, while the FTSE 100 is up a few points around 7,150.
Events Calendar for Today
·      8:30 AM EST       Housing Starts MoM for February…est. down (-2.7% to 1.29M
·      8:30 AM EST       Building Permits MoM for February…est. down (-4.1%) to 1.32M
·      9:15 AM EST       Industrial Production MoM for February…est. 0.4%
·      9:15 AM EST       Capacity Utilization for February…est. 0.5%
·      10:00 AM EST     University of Michigan Sentiment, Mar-P…est. 99.3
·      10:00 AM EST     JOLTS Job Openings for January…est. 5917
·      1:00 PM EST        Baker Hughes Weekly Rig Count
Market Closing Prices Yesterday
·      The S&P 500 Index slipped -2.15 points, or 0.08%, to 2,747.33
·      The Dow Jones Industrial Average rose 115.54 points, or 0.47%, to 24,873.66
·      The Nasdaq Composite dropped -15.07 points, or 0.20%, to 7,481.74
·      The Russell 2000 Index declined -7.69 points, or 0.49% to 1,576.62
World News
·      The eurozone’s annual rate of inflation was even lower than previously estimated in February, rising 1.1% which was lower than the 1.2% it first estimated and marked the third straight month of decline; brought the rate to its lowest level since December 2016
·      U.S. Total Cross-Border Investment Inflow (TIC) $119.7B in January and U.S. net long-term portfolio securities inflows at $62.1B in January. China holds $1.17T of U.S. Treasuries, a decrease of $16.7B from last month while Japan holds $1.07T, an increase of $4.3B from last month. Foreign net buying of Treasuries at $8.35B and foreign net buying of equities at $34.5B
Sector News Breakdown
·      Ulta Beauty (ULTA) Q4 EPS $2.75/$1.94B vs. est. $2.78/$1.94B; Q4 comp sales increased 8.8% driven by 6.2% transaction growth and 2.6% growth in average ticket; sees Q1 EPS $2.43-$2.48 on revs $1.506B-$1.519B vs. est. $2.55/$1.52B; sees Q1 comp sales to increase 6%-7%; approves $625M share buyback; plans to increase total sales in the low teens percentage range for FY2018
·      Tiffany (TIF) Q4 EPS $1.67/$1.33B vs. est. $1.64/$1.31B; Q4 comp sales ex-FX 1% vs. est. 2.7%
· (OSTK) said in a filing after the close of trading on Thursday: “In February 2018, the Division of Enforcement of the SEC informed tZERO and subsequently informed us that it is conducting an investigation and requested that we and our affiliates, including Medici Ventures and tZERO voluntarily provide certain information and documents related to tZERO and the tZERO security token offering in connection with its investigation; Q4 EPS loss ($3.72) on revs $456.3M; sees Q1 pre-tax loss of approximately $50M
·      Hibbett Sports (HIBB) Q4 EPS 51c/$266.7M vs. est. 43c/$262.52M; Q4 comparable store sales increased 1.6%; opened 12 new stores, expanded two high-performing stores and closed 14 underperforming stores; sees year EPS $1.65-$1.95 vs. est. $2.08
·      Kirkland’s (KIRK) reports Q4 EPS 79c/$224.6M vs. est. 80c/$224.99M; sees FY18 EPS 50c-60c vs. est. 50c and sees FY18 revenue up 3%-5%
·      Zumiez (ZUMZ) Q4 EPS 80c/$308.2M vs. est. 90c/$297.38M; Q4 results include $3.8M in net sales related to the recognition of deferred revenue; Q4 comp sales rose 7.5% vs. est. 6.7% and monthly comp sales 9.2% vs. est. up 6.8%; sees Q1 EPS loss (13c-18c) vs. est. (16c)
·      Kroger (KR) approves $1B stock authorization
·      Revlon (REV) Q4 adjusted EPS loss (86c) on revs $786.6M
·      Tallgrass Energy Partners (TEP) announced that it does not expect policy revisions governing recovery of income taxes released from the Federal Energy Regulatory Commission, or FERC, to have a material impact on the company’s revenues
·      Infinity Pharmaceuticals (INFI) Q4 EPS loss (14c) vs. est. loss (25c); said at December 31, 2017, had total cash, cash equivalents and available-for-sale securities of $57.6M, compared to $92.1M at December 31, 2016; sees FY18 net loss of $35M-$40M
·      Rockwell Medical (RMTI) Q4 EPS loss (18c)/$14.8M vs. est. loss (13c); cash and other $33.1M
Industrials & Materials
·      Deutsche Post’s DHL said Thursday it is launching a new same-day and next-day delivery service for online retailers in Chicago, New York and Los Angeles. The service will expand to Dallas, Atlanta, San Francisco and Washington, D.C., by the end of the year
·      Space Exploration Technologies Corp., the formal name of Musk’s company, won a $290 million fixed-price contract to launch three Global Positioning System Satellites into orbit on Falcon 9 rockets by the end of 2020
·      Moog (MOG/A) announced the initiation of a dividend program under which Moog intends to pay a regular quarterly cash dividend to shareholders of its Class A and Class B stock
Technology, Media & Telecom
·      Broadcom (AVGO) Q1 EPS $5.12/$5.33B vs. est. $5.04/$5.32B; sees Q2 revenue $5B plus/minus $75M vs. est. $5B; sees 2Q adjusted gross margin +65%-67% vs. estimate +64.3% after Q1 gross margin 64.8% vs. 64.5%
·      Adobe Systems (ADBE) Q1 EPS $1.55/$2.08B vs. est. $1.44/$2.05B; sees Q2 revs about $2.15B vs. est. $2.14B and reaffirms 2018 forecast; 1Q digital media revenue $1.46B and Q1 creative revenue $1.23B
·      Jabil Circuit (JBL) Q2 core EPS 66c/$5.3B vs. est. 62c/$4.9B; sees Q3 core EPS 35c-55c on revs $4.75B-$5.05B vs. est. 44c/$4.8B; sees FY core EPS $2.60 vs. estimate $2.57; said is committed to delivering $1 billion in operating cash flows
·      Zscaler (ZS) 12M share IPO priced at $16 per share, above the $13-$15 range
·      Vivendi SA (VIVHY) said it would examine comments made by Elliott Advisors regarding the strategy and governance of Telecom Italia SpA (TIT.MI), in which it is the main shareholder
·      Ericsson (ERIC) said that it has restated its accounts for 2017 and for 2016 due to the new IFRS 15 accounting standards
·      ExOne (XONE) Q4 EPS loss (12c)/$20.2M vs. est. loss (5c)/$20.9M;4Q gross margin +33%
·      PFSweb (PFSW) Q4 EPS 19c/$92.7M vs. est. 18c/$91.76M


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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