Morning Preview: June 5, 2018

Terrie AmengualDaily Market Report

Early Look
Tuesday, June 5, 2018

U.S. stock futures are edging higher, as technology shares look to pace the gains again, after the sector helped markets in Europe, a day after touching record closing highs for the NASDAQ. Shares of TWTR are higher early after news it will replace MON in the S&P 500 index, while NFLX will replace MON in the S&P 100 index as the Bayer deal with Monsanto is expected to close soon. U.S. stocks jumped on Monday, led by a resurgence in technology stocks, as the Nasdaq Composite rose to an all-time closing high (still below its 7,637 intraday high on March 13th), led by gains in Apple, Netflix trading to new record bests. The S&P 500 index closed 0.5% higher as gains in consumer and real estate stocks offset losses in energy and utility shares. The Russell 2000 of small-caps rose 0.3%, also hitting another all-time high as well. Also today, a few economic data points with the ISM services index data at 10:00 AM. Investors appeared to be putting trade tensions aside, even after trade talks broke down between the U.S. and China over the weekend. But leaders of the Group of Seven nations will hold talks in Canada on Friday and Saturday. In Asian markets, The Nikkei Index gained 63 points to end at 22,539, the Shanghai Index rose 23 points to settle at 3,114 and the Hang Seng Index climbed 95 points to settle at 31,093. In Europe, the German DAX is up over 100 points shy of 12,900, while the FTSE 100 is down around -40 points at 7,700.

Market Closing Prices Yesterday

· The S&P 500 Index gained 12.25 points, or 0.45%, to 2,746.87

· The Dow Jones Industrial Average rose 178.48 points, or 0.72%, to 24,813.69

· The Nasdaq Composite jumped 52.13 points, or 0.69%, to 7,606.46

· The Russell 2000 Index advanced 5.39 points, or 0.33% to 1,653.37

 

Events Calendar for Today

· 7:45 AM EST ICSC Weekly Retail Sales

· 8:55 AM EST Johnson/Redbook Weekly Sales

· 9:45 AM EST Markit US Services PMI, May-F…est. 55.7

· 9:45 AM EST Markit US Composite PMI, May-F…prior 55.7

· 10:00 AM EST JOLTs Job Openings for April…est. 6350

· 10:00 AM EST ISM Non-Manufacturing Composite, for May…est. 57.6

· 4:30 PM EST API Weekly Inventory Data

 

Earnings Calendar:

· Earnings Before the Open: DLTH, FRAN, GCO, GIII, HOFT, HDS, NAV

· Earnings After the Close: AMBA, GWRE, IDT, NCS, OLLI, PDVW

 

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

· Bank of America Global Tech Conference, 6/5-6/7, in San Francisco, CA

· Baird Global Consumer, Technology and Services Conference, 6/5-6/7, in NY

· REITWeek 2018, 6/5-6/7, in New York

· Jefferies Global Healthcare Conference, 6/5-6/8, in NY

 

World News

· U.S. Secretary of State Mike Pompeo has called for the suspension of Venezuela from the Organization of American States, according to a report in The Hill

· U.K. May services PMI at 54.0 vs. 52.8 in April and vs. est. 53.2

 

Sector News Breakdown

Consumer

· Starbucks (SBUX) Howard Schultz stepping down as executive chairman and member of the board of directors

· Ascena Retail (ASNA) shares fell -13%; Q3 EPS loss (8c)/$1.5B vs. est. loss (9c)/$1.47B; Q3 comparable sales -3%; 3Q Justice comparable sales +10%, Lane Bryant comparable sales -1%, Maurice’s comparable sales -5%, Dressbarn comparable sales -14% and Catherine’s comparable sales -9%; sees Q4 adjusted EPS (5c)-5c on revs $1.62B-$1.66B vs. est. 4c/$1.58B

· HD Supply (HDS) Q1 EPS 70c/$1.4B vs. est. 64c/$1.36B; sees Q2 adjusted EPS 92c-97c on revs $1.535B-$1.595B vs. est. 92c/$1.55B; sees FY18 adjusted EPS $3.11-$3.27 on revs $5.82B-$5.94B vs. est. $3.16/$5.86B

· Quanex Building (NX) Q2 EPS 14c/$214.2M vs. est. 11c/$213.5M; 2Q adjusted Ebitda $21.7M and reaffirms year forecast for revs and Ebitda

 

Energy

· Crude oil futures fell yesterday, with U.S. WTI settling near a two-month low, as investors continue to sell in the face of growing U.S. production, possible global supply growth and nagging trade tensions. July WTI settled -1.6% to 64.75/bbl, the lowest finish for a front-month contract since April 9, with August Brent -2% to $75.29/bbl, the lowest since May 8

· The U.S. government has quietly asked Saudi Arabia and some other OPEC producers to increase oil production by about 1 million barrels a day, according to Bloomberg. The rare request came after U.S. retail gasoline prices surged to their highest in more than three years and President Donald Trump publicly complained about OPEC policy and rising oil prices on Twitter

· Noble Drilling (NE) downgraded to underperform at Bernstein

· New Jersey Resources (NJR) downgraded to Underperform from Neutral at Bank America

 

Financials

· American Campus Communities (ACC) announced that it has entered into a non-binding letter of intent to lease land from Walt Disney World Resort (DIS) in Lake Buena Vista, FL to develop and own housing for participants of the Disney College Program

 

Healthcare

· Mylan NV (MYL) said it received FDA approval of a drug biosimilar to Neulasta, which is made by Amgen (AMGN). Mylan’s version, called Fulphila, is approved to treat chemotherapy patients with low white-blood-cell counts.

· Catabasis Pharmaceuticals (CATB) files $30M mixed securities shelf

· Deciphera (DCPH) files to sell 3.75M shares of common stock

· HealthEquity (HQY) Q1 EPS 31c/$69.9M vs. est. 28c/$68.77M; Q1 adjusted Ebitda $29.6M; sees FY EPS $1.00-$1.06 on revs $278M-$284M vs. est. $1.02/$281.65M; sees adjusted EBITDA outlook is a range of $107M to $111M

 

Industrials & Materials

· Navistar (NAV) Q2 EPS 55c/$2.42B vs. est. $2.44B; Q2 adjusted Ebitda $182M vs. Bloomberg est. $161.8M; sees FY revenue $9.75B-$10.25B, up from prior $9.25B-$9.75B (est. $9.62B); sees FY adjusted Ebitda $725M-$775M up from prior $700M-$750M; now sees 2018 Industry retail deliveries of Class 6-8 trucks and buses in the United States and Canada to be 380,000 units to 410,000 units, saw 360,000 units to 390,000 units

· Paccar (PCAR) upgraded to Outperform from Neutral at Macquarie

 

Technology, Media & Telecom

· Netflix (NFLX) to replace Monsanto (MON) in the S&P 100 index

· Twitter (TWTR) shares rise 4%; to replace Monsanto (MON) in the S&P 500 index

· Qualcomm (QCOM) unveiled a new chip and that Samsung is on board as a customer and offered free wireless data for devices based on the preocessor

· Altair (ALTR) files to sell 5.6M shares of common stock

· Coupa Software (COUP) Q1 EPS loss (1c)/$56.4M vs. est. loss (11c)/$51.8M; sees Q2 EPS loss (8c)-(10c) on revs $56M-$57M vs. est. (11c)/$55.55M; lowers FY19 EPS view to (14c)-(19c) from (11c)-(13c) while raises FY19 revenue view to $233M-$236M from $227M-$230M

· Smartsheet (SMAR) Q1 adjusted EPS loss (12c)/$36.3M vs. est. loss (18c)/$33.16M; sees FY19 adjusted EPS loss (59c)-(56c) on revs $159M-$162M, vs. est. loss (61c)/$155.03M

 

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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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