Morning Preview: April 24, 2018

Scott GreenDaily Market Report

Early Look

Tuesday, April 24, 18

U.S. stock futures are pointing to significantly higher open, looking to snap recent losing streaks for the Dow and Nasdaq Composite, as investors turn their attention to earnings and as Treasury yields pullback from recent 4-year highs. Rising bond yields watched closely, with the 10-year Treasury note yield ending around 2.9729%, the highest level since January 2014, but had moved above 2.995% at one point, as markets are starting to price in four interest-rate hikes in 2018 from the Federal Reserve, rather than the three-signaled prior. Earnings the story today, with six Dow components scheduled to report earnings this morning (CAT, KO, MMM, TRV, UTX, VZ). In Asian markets, The Nikkei Index gained 190 points to settle at 22,278, the Shanghai Index spiked 60 points (2%) to settle at 3,128 and the Hang Seng Index jumped 381 points to end at 30,636. In Europe, the German DAX is up around 40 points, moving above 12,600, while the FTSE 100 is up over 20 points at 7,425.

U.S. stocks ended mixed on Monday, with the S&P 500 ending the day virtually flat amid one of the slowest trading days this year ahead of one of the busiest earnings weeks of the quarter, including six Dow components expected to report earnings Tuesday morning. Telecom and energy stocks were among the day’s best performers while financials and technology shares lagged. The Nasdaq Composite posted its 3rd straight daily decline, while the Dow Industrials extended its losing streak to 4-days.

Events Calendar for Today

· 7:45 AM EST ICSC Weekly Retail Sales

· 8:55 AM EST Johnson/Redbook Weekly Sales

· 9:00 AM EST FHFA House Price Index MoM, for Feb…est. 0.6%

· 9:00 AM EST S&P CoreLogic CS 20-city for Feb…est. 0.68%

· 10:00 AM EST New Home Sales MoM for March…est. 630K

· 10:00 AM EST Richmond Fed Index for April…est. 16

· 10:00 AM EST Consumer Confidence for April…est. 126.0

· 4:30 PM EST API Weekly Inventory Data

Market Closing Prices Yesterday

· The S&P 500 Index narrowly gained 0.15 points, or 0.00%, to 2,670.29

· The Dow Jones Industrial Average fell -14.25 points, or 0.06%, to 24,448.69

· The Nasdaq Composite dropped -17.52 points, or 0.25%, to 7,128.60

· The Russell 2000 Index declined -2.00 points, or 0.13% to 1,562.12

World News

· Former President George H.W. Bush was hospitalized Monday, two days after the funeral for his wife, Barbara. According to a statement from his office, Bush, 93, was admitted to a Houston hospital “after contracting an infection that spread to his blood

· German business sentiment slipped further in April, as the Ifo business climate index, which now also includes the service sector, fell to 102.1 points from 103.3 points in March, below economists’ forecasts of 102.6 points. It marks the fifth straight monthly decline

Sector News Breakdown


· Polaris Industries (PII) Q1 EPS $1.06/$1.3B vs. est. 88c/$1.21B; narrows FY18 EPS view to $6.05-$6.20 from $6.00-$6.20 (est. $6.16) and raised full year 2018 sales guidance to up 4%-6% from prior view of up 3%-5%; 1Q Off-Road Vehicle dealer inventory +15%

· Whirlpool (WHR) Q1 ongoing EPS $2.81/$4.9B vs. est. $3.00/$4.95B; Reaffirms full-year operating cash flow guidance; reaffirms FY ongoing EPS guidance

· Heidrick & Struggles (HSII) Q1 EPS 53c/$160.1M vs. est. 32c/$155.61M; Sees 2Q revenue $160.0M-$170M vs. est. $161M


· U.S. Silica (SLCA) Q1 EPS 54c/$369.3M vs. est. 46c/$367.52M; sees Q2 Oil & Gas volumes up 10%-15%; sees year cap-ex $300M-$350M

· W&T Offshore (WTI) files $500M mixed securities shelf


· Ameriprise (AMP) Q1 EPS $3.70/$3.17B vs. est. $3.46/$3.0B; raises quarterly dividend 8% to 90c per share

· TD Ameritrade (AMTD) Q2 adjusted EPS 73c/$1.42B vs. est. 74c/$1.38B; Q2 net new client assets $22.2B, up 8%; Q2 Record average client trades per day of approximately 943,000, up 82% year over year. Q2 total Client assets of approximately $1.2T, up 40 percent YoY

· Assured Guaranty Ltd. (AGO) shares fell in the extended session late Monday after Greenlight Capital’s David Einhorn recommended a short position against the bond insurer

· Sallie Mae (SLM) Q1 core EPS 27c vs. est. 24c; Q1 2018 GAAP results included $4M of pre-tax gains from derivative accounting treatment that are excluded from core earnings results, compared with $5M of pre-tax losses in the year-ago period; 1Q net interest margin 6.17%

· Moelis & Co (MC) Q1 EPS 84c/$219.4M vs. est. 71c/$199.3M

· American Campus (ACC) reports Q1 FFO 62c/$220.4M vs. est. 63c/$209.8M; reports Same-Store NOI up 0.1%; sees year FFO $2.33-$2.43 vs. est. $2.37

· Zions Bancorp (ZION) Q1 EPS $1.09 vs. est. 82c

· Banner (BANR) Q1 EPS 89c vs. est. 73c; Q1 allowance for loan losses $92.2M and Q1 cash and cash equivalents $242.0M

· Berkshire Hills (BHLB) Q1 EPS 65c vs. est. 64c; 1Q NIM on taxable-equivalent basis 3.36%, Q1 provision for loan losses $5.58M; 1Q results reflect benefit of lower federal tax rate due to U.S. tax reform near end of 2017


· Eli Lilly (LLY) Q1 EPS $1.34/$5.70B vs. est. $1.14/$5.52B; sees year EPS $5.10-$5.20 vs. est. $4.88; raises FY revenue to $23.7B-$24.2B from prior view of $23B-$23.5B (est. $23.43B); some top drug sales revs: Q1 Humalog revenue $791.7M, Cialis revenue $495.4M, Altima revenue $499.6M, and Trulicity revenue $678.3M

· Centene (CNC) Q1 EPS $2.17/$13.19B vs. est. $1.88/$13.28B; cuts FY18 adj. EPS view to $6.75-$7.15 from $6.95-$7.35 (est. $7.09) and also reduces FY18 revenue guidance to $58.2M-$59M from $60.6B-$61.4B (est. $60.28B)

· Incyte (INCY) and Eli Lilly (LLY): An FDA advisory panel voted 10-5 in favor of Eli Lilly and partner Incyte’s experimental drug for rheumatoid arthritis, Olumiant (baricitinib), recommending approval for the 2mg dose only. The advisory committee voted 5-10 against approving the 4mg dose, asking for more clinical data on blood-clotting safety risks

· ChromaDex Corp. (CDXC) announced a new management structure including the appointment of Frank Jaksch to executive chairman of the ChromaDex board, effective June 22 after the 2018 Annual Meeting of Stockholders

· Zymeworks (ZYME) announced that Celgene (CELG) has exercised its right to expand its collaboration agreement for the research, development, and commercialization of bispecific antibody therapeutics using Zymeworks’ Azymetric platform

· Tivity Health (TVTY) Q1 EPS 49c/$149.9M vs. est. 49c/$154.32M; affirms yearly guidance

· Genesis HealthCare (GEN) announced that it has signed a definitive agreement to sell 51% of its subsidiary in China, referred to as GRS-HS, to Riswein Health Industry Investment Co., Ltd for $30M.

· Epizyme (EPZM) said partial hold follows a safety report of a pediatric patient who developed a secondary lymphoma

Industrials & Materials

· Barrick Gold (ABX) Q1 adjusted EPS 15c/$1.79B vs. est. 14c/$1.84B; Q1 gold production was 1.05 million ounces, at a cost of sales applicable to gold of $878 per ounce, all-in sustaining costs of $804 per ounce, and cash costs of $573 per ounce

· Canadian National (CNI) lowered FY18 EPS view to $5.10-C$5.25 from prior view of C$5.25-C$5.40; 1Q adjusted EPS C$1.00/$C$3.19B vs. est. C$1/C$3.15B; 1Q operating ratio 67.8%

· Crane (CR) Q1 EPS $1.31/$799.1M vs. est. $1.27/$802; raises FY18 EPS view to $5.45-$5.65 from $5.35-$5.55 vs. est. $5.52

· Hexcel (HXL) Q1 EPS 68c/$540.1M vs. est. 66c/$514.32M; reaffirms FY18 adjusted EPS view $2.96-$3.10 vs. est. $3.02 and reaffirms FY18 revenue view $2.10B-$2.20B; sees free cash flow greater than $230M and accrual basis capital expenditures of $170M-$190M

· Owens-Illinois (OI) Q2 EPS 75c/$1.7B vs. est. 76c/$1.70B; sees 2Q adjusted EPS 75c (vs. est. 76c) and year EPS $2.75-$2.85 vs. est. $2.80

· Rush Enterprises (RUSHA) Q1 EPS 51c/$1.24B vs. est. 47c/$1.19B

· Woodward (WWD) Q2 EPS 82c/$548M vs. est. 78c/$527.97M; sees FY18 EPS $3.60-$3.80 vs. est. $3.39 and sees FY18 revenue approximately $2.2B (est. $2.23B)

· Volkswagen (VLKAY) is on track for profitable growth in 2018 due to positive sales momentum in all regions at the beginning of the year, Reuters reports, citing CEO

· Teck Resources (TECK) Q1 EPS C$1.31 and revenue C$3.09B

Technology, Media & Telecom

· Alphabet (GOOGL) Q1 EPS $13.33/$24.9B in revs vs. est. $9.30/$24.27B; Q1 paid clicks +55%, Q1 cost-per-click -18%; Q1 Google advertising revenue $26.64B; Q1 free cash flow $4.34B

· Sanmina (SANM) shares rose 15%; Q2 EPS 50c/$1.68B vs. est. 45c/$1.64B; Q2 adjusted operating margin 3.1%; sees Q3 adjusted EPS 53c-61c on revs $1.7B-$1.75B vs. est. 55c/$1.7B

· Cadence Design (CDNS) shares rose 10%; Q1 adjusted EPS 44c/$517M vs. est. 37c/$505.33M; cuts FY18 adjusted EPS view to $1.57-$1.65 from $1.62-$1.72 (est. $1.56) and cuts FY18 revenue view to $2.055B-$2.085B from $2.055-$2.095B (est. $2.04B)

· SAP AG (SAP) raised its outlook for 2018 to reflect the acquisition of Callidus Software Inc. and a strong first-quarter operating performance.

· CoStar (CSGP) Q1 EPS $1.65/$273.7M vs. est. $1.37/$270.6M; sees FY adjusted EPS $7.44-$7.64, vs. est. $7.15 and year revs $1.17B-$1.19B vs. est. $1.17B

· Carvana (CVNA) files to sell 10M shares of common stock


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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