Morning Preview: June 12, 2018

Scott GreenDaily Market Report

Early Look

Tuesday, June 12, 18

U.S. stocks futures are trending lower, pulling back after markets extended their recent gains yesterday, as markets assess the historical summit overnight from President Trump and North Korean leader Kim Jong Un. Trump and Kim signed a joint document pledging to work toward the complete denuclearization of the Korean Peninsula, but news reports note the lack of detail on the verification of the process. Outside of the summit, attention turns to three key central bank meetings this week as the FOMC is widely expected to raise interest rates on Wednesday (2-day meeting starts today), while European Central Bank policy makers are expected to announce the timing for unwinding its bond buying when they meet on Thursday. The Bank of Japan holds its policy meeting Friday. Other key items this week include inflation data reports in the form of CPI later this morning and PPI tomorrow. Stocks closed higher on Monday as the Dow posted its 4th straight consecutive gain, while the Nasdaq and Russell 2000 finished not far from their recent record closing highs. The benchmark S&P 500 index reached its best levels in roughly 3-months. In Asian markets, The Nikkei Index gained 74 points to settle at 22,878, the Shanghai Index jumped 27 points to settle at 3,079 and the Hang Seng Index rose 39 points to close at 31,103. In Europe, the German DAX is down about -20 points at 12,820, while the FTSE 100 is down around -30 points above 7,700. Today also markets the AT&T and TWX court decision.

Events Calendar for Today

· 6:00 AM EST NFIB Small Business Optimism for May…est. 105.0

· 7:45 AM EST ICSC Weekly Retail Sales…

· 8:30 AM EST Consumer Price Index (CPI) for May…est. 0.2%

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

· 8:30 AM EST Consumer Prices (core) for May YoY…est. 2.2%

· 8:55 AM EST Johnson/Redbook Weekly Sales

· 2:00 PM EST Monthly Budget Statement for May…est. (-$139.5B)

· 4:30 PM EST API Weekly Inventory Data

Earnings Calendar:

· Earnings Before the Open: CASY, JW/A, LE

· Earnings After the Close: APPS, HRB, OXM, SAIC

Other Key Events:

· Stifel 2018 Cross Sector Insight Conference, 6/11-6/13, in Boston

· Nasdaq Investor Conference 6/12, in London

· Morgan Stanley Financials Conference, 6/12-6/13, in New York

· Wells Fargo West Coast Energy Conference, 6/12-6/13, in San Francisco

· Deutsche Bank Global Consumer Conference, 6/12-6/14, in Paris France

· Goldman Sachs Healthcare Conference, 6/12-6/14, in California

· William Blair Annual Growth Stock Conference, 6/12-6/14, in Chicago

Market Closing Prices Yesterday

· The S&P 500 Index gained 2.97 points, or 0.11%, to 2,782.00

· The Dow Jones Industrial Average rose 5.78 points, or 0.02%, to 25,322.31

· The Nasdaq Composite climbed 14.41 points, or 0.19%, to 7,659.93

· The Russell 2000 Index advanced 2.19 points, or 0.13% to 1,674.68

World News

· U.S. President Donald Trump and North Korean leader Kim Jong Un signed an agreement to work toward complete denuclearization of the Korean Peninsula on Tuesday, but the declaration has been criticized as falling short on new commitments from Pyongyang.

· President Donald Trump said in a tweet that his top economic adviser, Larry Kudlow, suffered a heart attack and was in the hospital.

· The National Federation of Independent Business small-business optimism index rose 3 points in May to a reading of 107.8, its second-highest level in 45 years and strongest of the recovery. That’s just a touch under the record level of 108 reached in July, 1983.

· The number of people in work in the U.K. rose in the three months to April to 32.4 million, which is a record. The unemployment rate held steady at 4.2%. The last time the U.K. had a lower jobless rate was in 1975.

Sector News Breakdown


· Dave & Buster’s (PLAY) shares rise 15%; Q1 EPS $1.04/$332.2M vs. est. 93c/$322.05M; Q1 comp sales fell (-4.9%) vs. est. down (-5.7%); sees FY18 revenue $1.2B-$1.24B, vs. consensus $1.23B; sees FY18 same-store sales decline in low-to-mid single digits

· Hawaiian Airlines (HA) May traffic rises 5.6% and capacity up 6.5%; also reports it’s cutting its forecast for 2Q operating revenue per available seat mile to -0.5% to +1.5%; saw unchanged to +3.0% (primarily due to a reduction in the pace of domestic bookings following an increase in volcanic activity on the Big Island of Hawai’i); May load factor decreased 0.8 points to 85.9%

· RH Inc. (RH) shares rose 13%; Q1 adjusted EPS $1.33/$557.4M vs. est. $1.02/$563.16M; sees Q2 EPS $1.70-$1.77 on revs $655M-$662M vs. est. $1.51/$654.39M; sees Q2 gross margin in the range of 40.5% to 40.7%; raises FY18 EPS view to $6.34-$6.83 from $5.45-$6.20 (est. $5.91), backs year revs $2.53B-$2.57B (est. $2.55B) and raises FY18 free cash flow view to over $260M

· Limoneira (LMNR) Q2 EPS 44c/$43.1M vs. est. 42c/$43.62M; backs FY18 EPS view of 65c-75c vs. est. 68c

· Urban outfitters (URBN) said Q2 to date comp sales up in mid-teems

· Philip Morris (PM) Japan is seeking to raise tobacco prices from Oct. 1 to coincide with the increase in the nation’s tobacco tax – Bloomberg


· Franklin Resources, Inc. (BEN) preliminary month-end assets under management of $732.8 billion at May 31, 2018, compared to $732.5 billion at April 30, 2018. The

· AllianceBernstein L.P. (AB) said preliminary assets under management increased to $541 billion during May 2018 from $538 billion at the end of April. The 0.6% increase was due to market appreciation and total firm wide net inflows

· Artisan Partners Asset Management Inc. (APAM) prelim assets under management (AUM) as of May 31, 2018 totaled $115.0 billion. Separate accounts accounted for $56.9 billion of total firm AUM, while Artisan Funds and Artisan Global Funds accounted for $58.1 billion

· Cohen & Steers, Inc. (CNS) preliminary assets under management of $59.3 billion as of May 31, 2018, an increase of $769 million from April 30, 2018. The increase was due to market appreciation of $988 million and net inflows of $52 million, partially offset by distributions of $271 million

· Invesco Ltd. (IVZ) preliminary month-end assets under management (AUM) of $977.3 billion, an increase of 0.5% month over month. The increase was driven by favorable market returns, non-management fee earning AUM inflows, higher money market AUM, and net long-term inflows. FX decreased AUM by $5.1 billion

· Hercules Capital (HTGC) files to sell 6M shares of common stock

· Flagstar Bancorp (FBC) 8M share Secondary priced at $34.50


· AstraZeneca PLC (AZN) and Eli Lilly & Co. (LLY) agreed to scrap the two late-stage trials of an experimental Alzheimer’s drug they were co-developing; the decision was taken after an independent data monitoring committee concluded that trials associated with lanabecestat, the experimental drug, wouldn’t achieve their original goals

· Pluristem (PSTI) says results from a Phase II Intermittent Claudication Study of its Peripheral Arterial Disease treatment showed statistically significant improvement in maximal walking distance as compared to baseline at 52 weeks after patients were treated with 2 administrations of 300 million cells

· Medpace (MEDP) 3M share Spot Secondary priced at $42.25

· Kadmon (KDMN) 30.303M share Spot Secondary priced at $3.30

· Immunomedics (IMMU) files to sell $275M in common stock

Industrials & Materials

· Fed-Ex (FDX) raises quarterly dividend to 65c from 50c

· KMG Chemicals (KMG) Q3 EPS $1.10/$118.6M vs. est. 84c/$112.97M; raises FY18 revenue view to $455M-$465M from $445-$455 (est. $455.29M); sees FY adjusted Ebitda $118M-$120M vs. est. $116.3M

· YRC Worldwide (YRCW) reported certain operating metrics for the first two months of Q2; April 2018 tonnage per day decreased approximately 3.8% compared to April 2017 and May 2018 tonnage per day decreased approximately 0.8% compared to May 2017. Quarter-to-date through May 2018, revenue per hundredweight increased approximately 5.4% compared to a year ago. Revenue per shipment increased approximately 8.4% quarter-to-date

· Barrick Gold (ABX) downgraded to Underweight from Equal Weight at Morgan Stanley

· Newmont Mining (NEM) upgraded to Overweight from Equal Weight at Morgan Stanley

Technology, Media & Telecom

· Today marks the expected court decision on whether AT&T (T) $85B deal with Time Warner (TWX) proceeds or if the federal judge in Washington will grant the U.S. Justice Department’s request to block the takeover on antitrust grounds

· Intelsat (I) 13.477M share Secondary priced at $14.84

· Republican Senate leaders set up a vote for this week that would undo the White House deal to revive Chinese telecommunications company ZTE Corp


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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