Morning Preview: June 4, 2018

Terrie AmengualDaily Market Report

Early Look

Monday, June 4, 2018

U.S. stock futures point to a strong open, looking to build on its momentum from Friday when markets jumped around 1% on a positive job numbers-based rally, while political concerns in Europe eased. With Friday’s gains, the Dow finished 0.9% higher, the Nasdaq Composite Index rose 1.5% and the S&P 500 booked a 1.1% gain as the better jobs report helped spur a move back into riskier assets such as stocks. The positive report and news out of Europe helped overshadow lingering concerns over global trade. A round of trade talks between the U.S. and China broke down over the weekend with no agreement, while finance ministers from Canada, France, Germany, Italy, Japan and the U.K. at a G7 meeting on Saturday expressed their concern and disappointment about President Donald Trump’s decision to place tariffs on metals imports from his major allies last week. There are a few data points on the calendar today though no Federal Reserve speeches this week as the central bank is in its so-called blackout period ahead of its June 12-13 meeting.

In Asian markets, The Nikkei Index gained 304 points to close at 22,475, the Shanghai Index advanced 16 points to settle at 3,091, and the Hang Seng Index jumped 505 points to settle at 30,997. In Europe, the German DAX is higher by around 30 points around 12,750, while the FTSE 100 is up over 50 points at 7,750. U.K. stocks push higher as they continue to find relief in political strife. Last week, Populist parties the Italian 5 Star Movement and the League formed a coalition administration, while Spain also has a new government after a Socialist Party leader Pedro Sánchez was sworn-in as prime minister on Saturday after Mariano Rajoy was ousted in a parliamentary vote of no confidence.

Market Closing Prices Yesterday

· The S&P 500 Index jumped 29.35 points, or 1.08%, to 2,734.62

· The Dow Jones Industrial Average rose 219.37 points, or 0.90%, to 24,635.21

· The Nasdaq Composite spiked 112.22 points, or 1.51%, to 7,554.33

· The Russell 2000 Index advanced 14.37 points, or 0.88% to 1,647.98

Events Calendar for Today

· 10:00 AM EST Factory Orders for April…est. (-0.5%)

· 10:00 AM EST Durable Goods Orders, Apr-F…prior (-1.7%)

· 10:00 AM EST Durable Goods Ex: Transportation, Apr-F…prior 0.9%

Earnings Calendar:

· Earnings Before the Open: DVMT, PANW, ROAD

· Earnings After the Close: ASNA, COUP, HQY, NX

Other Key Events:

· American Society of Clinical Oncology (ASCO), 6/1-6/5, in Chicago

· Macquarie Global Metals & Mining Conference, 6/4-6/6, in NY

· EuroZone Producer Prices for April

Sector News Breakdown


· Southwest Airlines (LUV) cuts its Q2 RASM view to down (-3%) YoY; said it now sees 2Q operating RASM at the lower end of the company’s previous guidance range of down 1%-3%, primarily driven by lower bookings largely due to reduced marketing efforts following the Flight 1380 incident; sees 2Q capacity growth about 3.5%, at lower end of previous range for growth of 3.5%-4% YoY

· American Airlines (AAL) warned airline passengers may face higher ticket prices if oil prices remain high, prompting carriers to remove seats from the market, according to Reuters

· Dollar Tree (DLTR) cautious in Barron’s saying after recommending the dollar store ahead of its earnings report, Barron’s said was wrong to think the Family Dollar’s issue was already baked into the stock. To remain bullish, one has to believe that the problems at Family Dollar can be fixed, and quickly, but this week’s results suggest that they might not be easily solved


· Matador (MTDR) says it has successfully executed a firm sales agreement with an affiliate of Kinder Morgan beginning on the in-service date of the Gulf Coast Express Pipeline Project

· Transocean (RIG) says EVP, C00 and Chief Performance Officer John Stobart retiring


· Italian bank UniCredit is considering a merger with France’s Société Generale according to a report Sunday night by the Financial Times. While no formal offer has yet been made, officials from both banks are in the early stages of talks, the FT said

· Société Generale SA France (GLNCY) said that it reached agreements in principle with U.S. and French authorities regarding its alleged manipulation of Libor rates and transactions involving Libyan counterparts. The French bank said the penalties it will have to pay under the agreements are covered by provisions it made earlier of about 1 billion euros ($1.2 billion) for the litigation.

· Lincoln National (LNC) mentioned positively in Barron’s saying the company got caught in an insurance-stock downdraft, and now looks cheap relative to its growth potential


· Celgene (CELG) said its OPTIMISMM phase III study of the investigational combination regimen of POMALYST (pomalidomide), bortezomib and dexamethasone met its primary endpoint of progression-free survival. Analysis found that treatment with PVd resulted in significantly improved progression-free survival and more durable response compared to Vd treatment.

· Multiple myeloma patients treated with an experimental CAR-T therapy developed by Bluebird Bio and licensed to Celgene went nearly one year before their cancer progressed, according to updated study results presented Friday night at the ASCO annual meeting. The durability of responses to Bluebird’s (BLUE) and partner Celgene (CELG) CAR-T treatment called BB2121 showed median progression-free survival of 11.8 months, effectively meets the lower end of expectations, which ranged as high as 15 months, based on analyst reports

· Nektar Therapeutics’ (NKTR) shares down -23%; cancer drug in combination with Bristol-Myers Squibb’s (BMY) Opdivo meet the pre-specified efficacy criteria in three tumors, including first-line melanoma, first-line renal cell carcinoma and first-line urothelial cancer. As a result, the cos. will initiate a Phase 3 registrational trial in first-line advanced melanoma patients in 3Q

· Bristol-Myers Squibb (BMY) announced that the U.S. FDA lifted a partial clinical hold placed on CA209-602 (CheckMate -602), a randomized, open-label Phase 3 study evaluating the addition of Opdivo to pomalidomide and dexamethasone in patients with relapsed or refractory multiple myeloma. The decision follows consultation with the FDA and agreement on amendments to the study protocol. Three trials evaluating Opdivo-based combinations in relapsed or refractory multiple myeloma were placed on partial clinical hold in September 2017

· Agios Pharmaceuticals’ (AGIO) ivosidenib, which has an Aug. 21 FDA action goal date, showed an overall survival rate of 50.1% at 18 months, compared with a historical survival of less than 5 months for patients with relapsed acute myeloid leukemia (AML) and two prior therapies

· Novartis (NVS) says new data shows nearly half of CML patients treated with Tasigna remain in remission almost three years after stopping therapy

· Agios Pharmaceuticals (AGIO) presented the first data from the ongoing Phase 1 study evaluating single agent AG-881 in advanced glioma and other solid tumors

· Amgen (AMGN) said Phase 3 interim analysis shows once-weekly 70 mg/m2 KYPROLIS regimen significantly extended progression-free survival versus a twice-weekly 27 mg/m2 regimen in patients with relapsed and refractory multiple myeloma

· Henry Schein (HSIC) holders approved a proposal that will double the number of authorized shares of common stock to 480M from 240M

· Teladoc (TDOC) bought privately held, global virtual telemedicine and medical opinion services provider Advance Medical for approximately $292M in cash and $60M in shares

Technology, Media & Telecom

· Palo Alto Networks (PANW) early Q3 revenue release of $567.1M vs. est. $545.68M (was expected to report Monday after the close (says rest of release Monday morning); says Q3 product revenue grew 31% YoY to $215.2M, and billings grew 33% year over year to $721M

· The Trump administration may soon claim as much as $1.7 billion penalty from ZTE Corp., as it looks to punish and tighten control over the Chinese telecommunications company before allowing it back into business

· Veritone (VERI) files $150M mixed securities shelf

· Salesforce (CRM) positive mention in Barron’s saying shares can reach new highs as business is ripping. With a market value of close to $97B, Salesforce looks likely to soon join an elite club of just over 50 U.S. companies valued at more than $100B, adding that it is lofty sum for a company expected to generate $2.6B in free cash in its current fiscal year.

· Samsung Electronics Co. will feature an upgraded camera when it unveils its next Galaxy Note smartphone called the Note 9 on Aug. 9, Bloomberg reported

· Nintendo Co. (NTDOY) suffered its biggest two-day drop in 18 months, as shares fell more than 6% today after a 4% drop Friday on no specific news, leaving the stock at its lowest level since September


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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