Morning Preview: April 20, 2018

Scott GreenDaily Market Report

Early Look

Friday, April 20, 18

U.S. stock futures are little changed ahead of a busy day of large cap earnings (GE, HON, BHGE, SLB, KSU) and commentary from an OPEC meeting, as stocks remain on pace for a weekly win. For the week, as of Thursday, the Nasdaq is ahead with a gain of around 2%, while the Dow and S&P 500 are set to rise 1.4% and 1.3%, respectively. Currency markets are active as the dollar rises to near 2-week highs, while the Pound continued its recent slide as Bank of England governor Mark Carney hinted that the British central bank could hold off raising interest rates next month, highlighting a recent run of disappointing data and the uncertainty over the final Brexit deal. The euro also dropped under the 1.23 level, while the greenback rises against the yen. Oil prices resume its upward movement while bond yields rise. There is no top-tier economic data for release in the session. In Asian markets, The Nikkei Index fell -28 points to close at 22,162, the Shanghai Index declined -45 points to settle at 3,071 and the Hang Seng Index dropped -290 points to settle at 30,418. In Europe, the German DAX is up slightly around 12,575, while the FTSE 100 is up over 30 points at 7,360.

U.S. stocks dropped yesterday, as the latest round of earnings failed to extend the recent rally, though major averages finished off their worst levels. The day’s losses were broad as nine of the eleven S&P 500 sectors dropped, led by weakness in the tech and the consumer-staples sectors following lower guidance and/or earnings from TSM in semis and PG and PM in staples. On the flip side, financials were among the best gainers following better earnings results out of several companies (AXP, BBT, KEY, BK) as well as a resurgence on Treasury yields, with the 10-yr topping 2.93% at one point and the 2-yr at 2.43%. Stocks pared losses late day after a Bloomberg report that President Donald Trump had been told he wasn’t a target of special counsel Robert Mueller’s probe, news that seemed to lessen some of the political uncertainty swirling around markets.

Market Closing Prices Yesterday

· The S&P 500 Index dropped -15.51 points, or 0.57%, to 2,693.13

· The Dow Jones Industrial Average fell -83.18 points, or 0.34%, to 24,664.89

· The Nasdaq Composite dropped -57.18 points, or 0.78%, to 7,238.06

· The Russell 2000 Index declined -9.74 points, or 0.62% to 1,573.82

Events Calendar for Today

· 1:00 PM EST Baker Hughes Weekly Rig Count

World News

· Rudy Giuliani said Thursday that he will join President Donald Trump’s legal team and hopes to bring an end to the special counsel’s investigation into Russian election meddling in “a week or two.” “I’m going to join the legal team to try to bring this to a resolution,” Giuliani told The Post.

· Bank of England governor Mark Carney hinted that the British central bank could hold off raising interest rates next month, highlighting a recent run of disappointing data and the uncertainty over the final Brexit deal.

Sector News Breakdown

Consumer

· Skechers (SKX) Q1 EPS 75c/$1.25B vs. est. 75c/$1.2B; Q1 domestic wholesale sales increased 8.5% and company-owned global retail sales increased 26.4%, with a comparable same store sales increase of 9.5% worldwide; sees Q2 EPS 38c-43c on revs $1.12B-$1.145B vs. est. 54c/$1.16B

· Stanley Black & Decker (SWK) Q1 EPS $1.39/$3.2B vs. est. $1.36/$3.1B; backs FY18 adj. EPS view of $8.30-$8.50 vs. est. $8.43; saysQ1 organic growth up 4%

· Chemed (CHE) Q1 EPS $2.72/$439.2M vs. est. $2.36/$419.3M; reiterates 2018 earnings guidance

· Turtle Beach (HEAR) announced a new partnership with Knicks Gaming as the organization’s official gaming peripherals partner for the 2018 NBA 2K League season. The partnership will see Knicks Gaming players using Turtle Beach headsets at the Knicks Gaming training facility

· Mattel (MAT) announced that the Board of Directors has named Ynon Kreiz, a Mattel director since June 2017, as CEO effective April 26 as Margo Georgiadis, who became Mattel’s CEO in February 2017, steps down

Energy

· Baker Hughes (BHGE) Q1 EPS 9c/$5.4B vs. est. 6c/$5.42B

· Crude oil futures finished lower Thursday, pulling back from early gains to as high as $69.56, though Brent closed at fresh 3 ½ year highs; move lower likely on profit-taking following yesterday’s big gains

· Oneok, Inc. (OKE) boosts quarterly dividend to 79.5c from 77c; sees about 90%-95% of this dividend to be a return of capital

· Holly Energy Partners (HEP) raises quarterly distribution 5.6% to 65.5c per unit

Financials

· Citizens Financial (CFG) Q1 EPS 78c/$1.46B vs. est. 76c/$1.46B

· Regions Financial (RF) Q1 EPS 35c/$1.4B vs. est. 31c/$1.44B; Q1 net interest margin 3.46%

· SunTrust (STI) Q1 EPS $1.29/$2.24B vs. est. $1.11/$2.28B; Q1 book value per share $47.14; Q1 CET1 capital ratio 9.8%; Q1 net charge-offs 0.22%

· Synchrony Financial (SYF) Q1 EPS 83c vs. est. 75c; 1Q net interest margin 16.1%. Q1 loan receivables growth +6%

· E-Trade (ETFC) Q1 EPS 88c/$708M vs. est. 77c/ $676.07M; said Q1 operating margin 47% and adjusted operating margin was 44%; Q1 DARTS of 309,000

· Associated Banc (ASB) Q1 EPS 40c vs. est. 41c; 1Q net interest margin 2.92%, net interest income $210 million, non-interest income $90 million, 1Q net charge-offs $9 million, 1Q provision for credit losses nothing

· BancFirst (BANF) Q1 EPS 89c vs. est. 82c; 1Q net interest margin 3.66%; Q1 provision for loan losses $0.31M

· First Financial (FFBC) Q1 EPS 49c vs. est. 47c; Q1 NIM on taxable-equivalent basis 3.84%

· First Financial (FFIN) Q1 EPS 51c with items and Q1 loan loss provision $1.31M; Q1 net charge-offs $33K vs. ($1.54M) a year ago

· Square (SQ) said buying certain assets of Zesty will strengthen its food ordering platform Caviar; financial terms weren’t disclosed

Industrials & Materials

· Honeywell (HON) Q1 EPS $1.95/$10.39B vs. est. $1.90/$10.3B; boosted its FY sales view to $42.7B-$43.5B from prior $41.8B-$42.5B (est. $42.37B);

· General Electric (GE) Q1 EPS 16c/$28.7B vs. est. 12c; reaffirms yearly forecast

· Werner (WERN) Q1 EPS 38c/$562.68M vs. est. 36c/$555.29M; sees FY capital expenditure $300M-$350.0M; Q1 effective income tax rate of 21.3% was lower than expected range of 25% to 26

· Clearwater Paper (CLW) Q1 EPS 31c/$437.0M vs. est. 65c/$437M

· Mercury Systems (MRCY) announced it received a $16.1M follow-on order from a leading defense prime contractor

· Seaspan (SSW) upgraded to Buy from Hold at Deutsche Bank

· Marten Transport (MRTN) Q1 EPS 19c/$187M vs. est. 19c/$188.5M;

Technology, Media & Telecom

· Atlassian (TEAM) Q3 non-IFRS EPS 10c/$223.7M vs. est. 8c/$218.39M; sees Q4 non-IFRS EPS 12c on revs $232M-$234M vs. est. 14c/$231.93M; sees FY18 non-IFRS EPS 47c-48c on revs $862M-$864M vs. est. 48c/$856.64M

· Pivotal Software Inc. (PVTL) priced its 37M share initial public offering at $15.00

· Limelight Networks (LLNW) Q1 EPS 6c/$52.1M vs. est. 2c/$47.97M; raises FY18 adjusted EPS view to 13c-17c from 11c-15c (est. 12c) and raises FY18 revenue view to $198M-$202M from $196M-$200M (est. $198.67M)

· Exponent (EXPO) Q1 EPS 75c/$96.5M vs. est. 62c/$89.51M

· Nielsen (NLSN) raises quarterly dividend to 35c per share from 34c

· Rogers Communications (RCI) Q1 adjusted EPS C$0.93/C$3.6B vs. est. C$0.74/C$3.47B

· Qualcomm Inc. (QCOM) began laying off employees, cutting 4.4% of its workforce starting in June, according to documents filed with the state of California

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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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