Morning Preview: April 3, 2018

Scott GreenDaily Market Report

Early Look
Tuesday, April 3, 18
U.S. stock futures are bouncing slightly, trying to rebound after stocks fell sharply on the first day of the month and quarter, as the S&P 500 snapped its streak of 442 consecutive days above its key 200-day technical moving average and as the Nasdaq-100 ends -2.9% lower, slipping into negative territory for the year as all 100 of Nasdaq-100 components finished in negative territory. More pressure on large cap-tech stocks such as AMZN, TSLA, FB, NFLX and others dragged the NASDAQ lower, while China’s previously announced retaliatory measures on American imports took effect. All major industries fell, led by consumer discretionary and tech shares, which dropped more than 2.5%, while the volatility index (VIX) rose 18% to 23.62. Markets will try and rebound and turn its attention to jobs data this week with the private payroll ADP report tomorrow morning and the nonfarm payroll report later this week (Friday). In Asian markets, The Nikkei Index fell -96 points to settle at 21,292, the Shanghai Index fell -24 points to settle at 3,136 and the Hang Seng Index gained 86 points to finish at 30,180. After being closed the last two days in European trading, the German DAX is lower by more than -100 points trading back under 12,000, while the FTSE 100 is down around -30 points at 7,020.
Market Closing Prices Yesterday
·      The S&P 500 Index dropped -58.99 points, or 2.23%, to 2,581.88
·      The Dow Jones Industrial Average fell -458.92 points, or 1.90%, to 23,644.19
·      The Nasdaq Composite plunged -193.33 points, or 2.74%, to 6,870.12
·      The Russell 2000 Index plummeted -36.90 points, or 2.41% to 1,492.53
Events Calendar for Today
·      7:45 AM EST       ICSC Weekly Retail Sales
·      8:55 AM EST       Johnson/Redbook Weekly Sales
·      4:30 PM EST        API Weekly Inventory Data
·      N/A Monthly auto vehicle sales data for March
World News
·      Eurozone final manufacturing PMI at 56.6 in March, unchanged from flash estimate
·      U.K. manufacturing PMI at 55.1 in March vs. 54.7 FactSet estimate
·      The New York Federal Reserve will launch a benchmark U.S. rate on Tuesday to potentially replace Libor, and market participants hope it will prove more reliable after a long and complex switchover. Reuters
·      The White House is pushing for a preliminary Nafta deal ahead of next week’s summit in Peru, according to three people familiar with the talks. Both the Mexican peso and the Canadian dollar trimmed losses on reports of the discussions – Bloomberg
·      Demand and profits are slowing at many of the more than 150 cryptocurrencies hedge funds amid bitcoin’s 50% fall in value this year, Bloomberg reports, citing crypto hedge funds
Sector News Breakdown
·      General Motors Co. (GM) said it is abandoning its decades-old practice of reporting monthly auto sales, saying a 30-day period doesn’t provide an adequate snapshot of the company’s complex business or the broader industry, and will begin reporting on a quarterly basis immediately
·      Urban Outfitters (URBN) said in April 2 10-K filing that retail comp. sales “thus far during the first quarter” are up in low double-digit range
·      Advance Auto Parts (AAP) said CFO Okray is leaving, effective April 15, to take a role at a publicly traded company outside the aftermarket parts industry.
·      FTD Cos (FTD) Q4 EPS loss ($5.57) on revs $278.2M sees FY18 revenue view down 2% to up 2% from FY17 and reaffirms FY18 adjusted EBITDA around $52M-$62M. Sees FY18 CAPEX around $35M-$40M
·      Limbach Holdings (LMB) Q4 EPS 12c on revs $131.4M; sees FY18 revenue $510M-$530M
·      Signet Jewelers (SIG) backs prior FY19 EPS view $3.75- $4.25 vs. est. $4.06 and sees FY19 revenue $5.9B-$6.1B vs. est. $6.0B
·      Statoil ASA (STO) said it has awarded contracts worth a total of 12 billion Norwegian kroner ($1.53 billion) for services on 18 of its fixed platforms. The contracts have been awarded to Archer Ltd., KCA Deutag Drilling Ltd. and Odfjell Drilling Ltd.
·      Longfin (LFIN) disclosed that on March 5, the Division of Enforcement of the SEC informed the company that it is conducting an investigation in the matter of trading in the securities of Longfin Corp. and requested the company provide certain documents in connection with its investigation, including documents related to its IPO, other financings and the acquisition of
·      Exact Sciences (EXAS) upgraded to Buy from Neutral at BTIG
·      AstraZeneca (AZN) and Merck & Co. (MRK) report European Medicines Agency has validated LYNPARZA Marketing Authorization Application for review in patients with BRCA-mutated HER2-negative metastatic breast cancer
·      OncoCyte Corporation (OCX) strengthened its intellectual property portfolio as it filed global patent applications for 190 newly identified novel biomarkers
Industrials & Materials
·      Airline index (XAL) falls over 3.2%, with DAL falling over 5%, AAL -4.2% and LUV -4.8%, leading the transport index lower by about 2% to finish at 10,190 (well off all-time highs 11,423 on 1/16)
·      Grainger (GWW) announced it has appointed Thomas Okray as Senior Vice President and Chief Financial Officer, effective May 2, 2018 (Okray left AAP)
·      Steel sector at Citigroup: US Steel (X) upgraded to buy from neutral, while Commercial Metals (CMC) downgraded to neutral and tgt cut to $22 from $29 saying multiple new rebar projects announced in recent months will offset the benefit of lower imports
Technology, Media & Telecom
·      Spotify (SPOT) – On Tuesday, investors will be able to buy and sell shares in the New York Stock Exchange’s first-ever direct floor listing. This is without Spotify having hired investment banks as underwriters and undertaking an investor road show as is typical in a traditional IPO
·      CBS Corp (CBS) plans to make an all-stock offer for Viacom Inc (VIAB) that values the U.S. media company below its current market valuation, people familiar with the matter said on Monday
·      Switch (SWCH) Q4 EPS loss ($2.09)/$99.3M vs. est. $98.8M; sees FY18 revenue $423M-$440M vs. est. $431.34M; sees FY18 Adjusted EBITDA in the range of $216M-$224M; Q4 churn of 0.3% vs. 1.9% a year ago; Q4 adjusted EBITDA $51.1M vs. $41M a year ago
·      MaxLinear (MXL) announced that Adam Spice, VP and CFO, has given notice that he will be leaving the company on May 23; company reaffirmed its guidance for quarter and year
·      21st Century Fox Inc. (FOXA) said Walt Disney Co. (DIS) was prepared to buy Sky PLC’s news channel, a move that would help Fox consolidate its ownership of the European pay-TV operator
·      Mediaset SpA shares rose Tuesday after news of a content-sharing agreement with Sky Italia that makes Mediaset’s premium content available to Sky Italia subscribers.
·      Bank America/Merrill adds Nvidia (NVDA) to its US1 list saying the company is levered to growth markets in artificial intelligence, gaming, virtual reality and autonomous cars


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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