Morning Preview: May 10, 2018

Scott GreenDaily Market Report

Early Look

Thursday, May 10, 18

U.S. stock futures are flat after surging higher on Wednesday, as markets prepare for a couple of potential market moving catalysts in the next few hours. Consumer prices (CPI) for April is expected at 8:30 AM EST and while yesterday’s PPI reading came in “tamer” than expected, a jump in prices today could give fuel to those at Fed who want faster rate hikes. Also, the Bank of England holds it monetary policy meeting at 7:00 AM EST, and while no rate hike is currently expected amid slower inflation readings recently, any surprises could cause volatility in the currency markets. There are also a couple of important earnings releases today, including chip maker Nvidia after the close.

U.S. stocks ended solidly higher on Wednesday, bouncing off early weakness, with financials, energy and technology sector pacing the gains. The Dow Jones Industrial Average advanced for a fifth straight session, while the benchmark S&P 500 index added 1% to close just below the psychological 2,700 level. 2,698. The Nasdaq Composite Index also rose 1% for its fourth straight session gain.

In Asian markets, The Nikkei Index gained 88 points to settle at 22,497, the Shanghai Index rose 15 points to end at 3,174, while the Hang Seng Index rose 273 points to settle at 30,809. In Europe, the German DAX is up around 60 points at 13,000, while the FTSE 100 is down around 20 points ahead of the Bank of England meeting.

Events Calendar for Today

· 8:30 AM EST Weekly Jobless Claims…est.219K

· 8:30 AM EST Continuing Claims…est. 1.8M

· 8:30 AM EST Consumer Price Index (CPI) MoM for April…est. 0.3%

· 8:30 AM EST CPI Ex: Food & Energy MoM for April…est. 0.2%

· 8:30 AM EST CPI Ex: Food & Energy YoY for April…est. 2.2%

· 9:45 AM EST Bloomberg Consumer Comfort Index…prior 56.5

· 10:30 AM EST Weekly EIA Natural Gas Inventory Data

· 2:00 PM EST Monthly Budget Statement for April…est. $212B

Market Closing Prices Yesterday

· The S&P 500 Index jumped 25.87 points, or 0.97%, to 2,697.79

· The Dow Jones Industrial Average rose 182.33 points, or 0.75%, to 24,542.54

· The Nasdaq Composite surged 73.00 points, or 1.00%, to 7,339.91

· The Russell 2000 Index advanced 9.66 points, or 0.61% to 1,596.05

World News

· UK Production output declined 0.1% on month in March after falling 0.2% in February, in the second straight drop after almost a year of growth.

· Iranian forces in Syria fired about 20 rockets at Israeli soldiers along the border in the Golan Heights, the Israeli military said, in what appeared to be the first instance of a direct attack by Iran against Israel from Syria.

Sector News Breakdown


· Costco (COST) April comp sales up 10.9% vs. est. up 8.80%; April U.S. comp sales ex-gas up 7.9% vs. est. up 6.60%

· Builders FirstSource (BLDR) Q1 revenue $1.70B, in-line with estimates; Q1 adjusted Ebitda $82.6M vs. est. $79.4M; Q1 gross margin +24.2%

· Carvana (CVNA) Q1 EPS loss (40c)/$360.4M vs. est. loss (40c)/$342.76M; Q1 EBITDA margin was (12.4%), an improvement from (21.6%); Q1 retail units sold up 122% to 18.5K; sees Q2 revenue $395M-$435M vs. est. $434.46M and sees Q2 Retail unit sales of 20K-22K up 87%-106%; raises its year EPS and revenue guidance

· Chefs’ Warehouse (CHEF) Q1 EPS 3c/$318.6M vs. est. 0c/$319.52M; narrows FY18 EPS view to 68c-77c from 68c-78c (est. 74c) and backs FY18 revenue $1.4B-$1.44B (est. $1.42B)

· Craft Brew Alliance (BREW) Q2 EPS 1c/$47.5M vs. est. loss (2c)/$43.86M; backs FY18 CapEx view $16M-$19M;

· Darling Ingredients (DAR) Q1 EPS 58c/$875.4M vs. est. 28c/$872.5M

· e.l.f. Beauty (ELF) Q1 adjusted EPS 11c/$65.9M vs. est. 9c/$63.5M; backs FY18 adjusted EPS view 59c-61c vs. est. 59c and backs FY18 revenue view $286M-$291M vs. est. $288.52M

· Ford Motor Co. (F) has halted production of its best-selling F-series pickup trucks after a fire damaged a supplier’s plant in Michigan and caused a shortage of parts for the vehicles, the company said late Wednesday. The production shortage is expected to dent the company’s results, but Ford kept intact its guidance for the year intact

· Hostess Brands (TWNK) Q1 adjusted EPS 23c/$208.7M vs. est. 14c/$200.85M; Q1 adjusted EBITDA was $47.0M, or 22.5% of net revenue, compared to $54.5M or 29.5% or net revenue YoY; backs FY18 EPS view 65c-70c vs. est. 69c

· SkyWest (SKYW) reported 144,600 block hours in April 2018, compared to 152,100 block hours in April 2017, a decrease of 7,600 or five percent. The net decrease was consistent with SkyWest’s fleet transition plan to improve the mix of aircraft in its fleet by adding new E175 aircraft while reducing its 50-seat jets

· Zumiez (ZUMZ) April comp. sales rise 1.7% vs. est. down (-0.5%); raises outlook for 1Q operating margins and sees 1Q EPS at the high end of its prior range; now sees 1Q operating margin down 1.3% to down 1.5%, had seen down 1.7% to down 2.6%; April sales up 3.7% to $58.6M

· Wyndham (WYN) approves $300M stock buyback following spin-off

· PlayAGS (AGS) 4.25M share Secondary priced at $21.50


· SolarEdge (SEDG) Q1 adjusted EPS 87c/$209.9M vs. est. 80c/$204.81M; sees Q2 revenue $220M-$230M vs. est. $207.97M; sees Q2 gross margins flat within range of 36%-38%.

· Sunrun (RUN) Q1 diluted EPS 25c/$144.36M vs. est. 16c/$132.72M; expects FY18 deployments to grow 15% year-over-year

· TechnipFMC (FTI) Q1 adjusted EPS 28c/$3.125B vs. est. 34c/$3.13B; backs FY18 Onshore/Offshore revenue view $5.3B-$5.7B; 1Q backlog $14.01 billion

· WildHorse Resource (WRD) Q1 adjusted EPS 45c/$218.76M vs. est. 34c/$181.04M


· AXA Equitable (EQH) 137.25M share IPO priced at $20.00

· Royal Bank of Scotland Group Plc (RBS) said it reached a tentative agreement to pay a $4.9 billion penalty to resolve a long-running U.S. probe into its packaging and sale of mortgage-backed securities before the 2008 financial crisis – Bloomberg

· Dun & Bradstreet (DNB) Q1 adjusted EPS $1.24/$384.7M vs. est. $1.07/$386.9M

· Envestnet (ENV) Q1 EPS 37c/$198.0M vs. est. 36c/$194.02M; sees Q2 adjusted EPS 37c on revs $197.0M vs. est. 43c/$202.2M; sees year revs $811M-$821M vs. est. $$817.3M

· Green Dot (GDOT) Q1 adjusted EPS $1.40/$315.0M vs., est. $1.29/$297.4M; raises FY18 EPS view to $2.93-$3.00 from $2.81-$2.88 (est. $2.87) and raises FY18 revenues view to $1.002B-$1.012B from $982M-$997M (est. $999.3M)

· Houlihan Lokey (HLI) Q4 EPS 65c/$244.8M vs. est. 57c/$236.3M; raises dividend to 27c from 20c

· MBIA (MBI) Q1 operating loss (69c) vs. est. loss (13c); 1Q adjusted book value per share $28.60; 1Q book value per share $13.97;1Q net investment income $31 million


· Akebia (AKBA) Q1 EPS loss (48c)/$45.9M vs. est. loss (59c)/$46.13M

· Cellectar Biosciences (CLRB) received FDA orphan status for its treatment of soft tissue sarcomas including rhabdomyosarcoma

· Glaukos (GKOS) Q1 EPS loss (8c)/$40.1M vs. est. loss (11c)/$37.61M; backs FY18 revenue view $160M-$165M vs. consensus $163.23M

· ICU Medical (ICUI) Q1 EPS $2.26/$372.0M vs. est. $1.84/$346.28M

· Owens & Minor (OMI) Q1 EPS 43c/$2.37B vs. est. 47c/$2.39B

· Portola (PLTA) Q1 EPS loss ($1.28)/$6.64M vs. est. loss ($1.57)/$3.2M; 1Q cash and cash equivalents $451.1M; earned an added $100M milestone on Andexxa FDA approval

· PTC Therapeutics (PTCT) Q1 EPS loss (46c)/$56.1M vs. est. loss (43c)/$56.72M; sees FY18 revenue $260M-$295M vs. est. $280.27M; sees FY18 Translarna net product revenue $170M-$185M

· Puma Biotechnology (PBYI) Q1 EPS loss (65c) vs. est. (54c); 1Q cash and cash equivalents $78.6 million and 1Q operating expenses $89.9 million

· Sientra (SIEN) Q1 EPS loss (99c)/$14.7M vs. est. loss (84c)/$11.87M; Q1 total net sales $14.7M, an increase of 96% compared to total net sales of $7.5M for the same period in 2017

Industrials & Materials

· Albemarle (ALB) Q1 adjusted EPS $1.30/$821.6M vs. est. $1.21/$803.36M; backs FY18 adjusted EPS view $5.10-$5.40 vs. est. $5.17; backs FY18 revenue view $3.2B-$3.4B vs. est. $3.3B; backs FY18 adjusted EBITDA view $955M-$1.005B

· Franco-Nevada (FNV) Q1 adjusted EPS 34c/$173.1M vs. est. 27c/$170.05M

· Tutor Perini (TPC) Q1 EPS with charges (24c)/$1.03B vs. est. 26c/$1.06B

Media & Telecom

· Altice USA (ATUS) Q1 EPS loss (17c)/$2.33B vs. est. loss (12c)/$2.34B; reports total unique Residential customer relationships grew with net additions of 8K in Q1 with a strengthening in Suddenlink customer trends as expected, offsetting the Starz and storms impacts at Optimum; reiterates 2018 revenue growth forecast of 2.5%-3.0% y/y vs estimate 3%

· CenturyLink (CTL) Q1 adjusted EPS 25c/$5.95B vs. est. 19c/$6B; 1Q cash flow from operating activities $1.67B, sees 2018 Free cash flow $3.15B-$3.15B; sees 2018 Free cash flow after dividends $850M-$1.05B

· IAC Corp. (IAC) Q1 revenue $995.1M vs. est. $923.83M; sees FY18 adjusted EBITDA $905M-$995M; sees FY18 operating income $515M-$635M

· 21st Century Fox (FOXA) Q3 adjusted EPS 51c/$7.42B vs. est. 53c/$7.44B; 3Q Cable Network Programming revenue $4.42B, 3Q TV revenue $1.15B and Q3 Filmed Entertainment revenue $2.24B


· Booking Holdings (BKNG) Q1 adjusted EPS $12.00/$2.93B vs. est. $10.67/$2.87B; Q1 gross travel bookings were $25.0B, an increase of 21% YoY, or approximately 12% on a constant-currency basis; sees Q2 adjusted EPS $16.35-$17.00 vs. est. $16.71; sees Q2 YoY growth of 11.5%-15.5%, or 6%-10% in constant currency

· Infinera (INFN) Q1 EPS loss (5c)/$202.7M vs. est. loss (11c)/$200.74M; sees Q2 EPS (5c), +/- 2 on revenue $203M-$213M vs. est. loss (6c)/$205.37M

· Nuance (NUAN) Q2 EPS 27c/$514.2M vs. est. 28c/$516.85M; lowers 2018 organic growth outlook to 2%-4% from 3%-5% but is reiterating its expectation for 5% to 7% growth in net new bookings in fiscal year 2018

· OpenText (OTEX) Q3 EPS 54c/$686M vs. est. 62c/$691.75M; 3Q license rev. $84.1 million and 3Q cloud rev. $209.1 million; raises dividend

· Qualcomm (QCOM) announces new $10B share repurchase program

· RingCentral (RNG) Q1 adjusted EPS 16c/$150M vs. est. 12c/$145.41M; sees Q2 adjusted EPS 14c-16c on revs $154.5M-$156.5M vs. est. 14c/$152.23M; raises FY18 adjusted EPS view to 61c-65c from 56c-60c and raises FY18 revenue view to $638M-$647 from $629M-$639M

· Roku (ROKU) Q1 EPS loss (7c)/$136.6M vs. est. loss (15c)/$127.15M; Q1 Platform revenue up 106% YoY to $75.1M; Q1 Active accounts up 47% YoY to 20.8 million at quarter end; Q1 Streaming Hours up 56% YoY to 5.1B; Q1 ARPU up 50% YoY to $15.07; sees Q2 revenue $135M-$145M vs. est. $135.3M and sees Q2 adjusted EBITDA ($12M) to ($7M

· SailPoint (SAIL) Q1 adjusted EPS 2c/$49.7M vs. est. loss (3c)/$44.6M; Q1 adjusted EBITDA $3.3M; sees Q2 EPS loss (3c)-(2c) on revs $49.5M-$50.5M vs. est. loss (3c)/$49.09M

· Upland Software (UPLD) Q1 adjusted EPS 37c/$31.6M vs. est. 27c/$30.05M; sees Q2 revenue $33.5M-$34.5M vs. est. $33.78M, including subscription and support revenue between $30.5M-$31.5M for growth in recurring revenue of 60% at the mid-point over the quarter-ended June 30


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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