Morning Preview: June 28, 2018

Terrie AmengualDaily Market Report

Early Look

Thursday, June 28, 2018

Stock futures are rebounding in the U.S., though markets are lower in Europe and were mixed in Asia as markets still continue to focus on every word out of Washington related to the issues on trade between the U.S. and China. On Wednesday, President Donald Trump’s administration seemed to back away from invoking executive authority to impose a tough crackdown on Chinese investment in the U.S., but markets failed to bounce. The selloff in U.S. stocks that has been driven by trade-related fears might has sent the Dow Industrials to a near 2% drop this week, bringing its year-to-date decline to 2.3% and falling below key technical support levels. Investors may turn their attention to U.S. economic data with an updated estimate on U.S. first-quarter economic growth (GDP) expected at 8:30 AM EST, along with weekly jobless claims data.

U.S. stocks closed near the lows on Wednesday, erasing an early rally, as a drop in technology stocks and financials more than offset an advance in the energy sector. The S&P 500 index closed at 2,699, falling below both its 50-day (2,716) and 100-day (2,701) moving average support levels, while the Dow Industrials remained below its 200-day MA of 24,302 (after trading as high as 24,569 on Wednesday). Energy stocks the top gainers after WTI crude roses more than 3% for a second consecutive session, trading to its best levels since late 2014, amid bullish inventory data and Nigeria uncertainty.

In Asian markets, The Nikkei Index ended little changed at 22,270, the Shanghai Index fell -26 points to close at 2,786 and the Hang Seng Index rose 141 points to settle at 28,497. In Europe, the German DAX is down around -90 points at 12,250, while the FTSE 100 is down a few points above the 7,600 level. India’s rupee has touched its weakest point on record against the dollar. Emerging market index – which also includes other hard-hit countries including Mexico, Brazil, Turkey and South Africa – dropped to its weakest in almost a year, following a surging US dollar.

Market Closing Prices Yesterday

· The S&P 500 Index dropped -23.43 points, or 0.86%, to 2,699.63

· The Dow Jones Industrial Average fell -165.52 points, or 0.68%, to 24,117.59

· The Nasdaq Composite dropped -116.54 points, or 1.54%, to 7,445.08

· The Russell 2000 Index declined -28.07 points, or 1.68% to 1,640.45

Events Calendar for Today

· 8:30 AM EST Weekly Jobless Claims…est. 220K

· 8:30 AM EST Continuing Claims…est. 1.718M

· 8:30 AM EST Gross Domestic Product (GDP) QoQ, Q1-T…est. 2.2%

· 8:30 AM EST Personal Consumption, Q1-T…est. 1.0%

· 8:30 AM EST GDP Price Index, Q1-T…est. 1.9%

· 8:30 AM EST Core PCE QoQ, Q1-T…prior 2.3%

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

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

· 10:45 AM EST Fed’s Bullard speaks on the US Economy and Monetary Policy

· 11:00 AM EST Kansas City Fed Manufacturing Activity for June…est. 26

Earnings Calendar:

· Earnings Before the Open: APOG, CAG, GMS, LNN, MKC, OMN, WBA

· Earnings After the Close: KBH, NKE, SNX

Sector News Breakdown


· BJ’s Wholesale (BJ) 37.5M share IPO priced at $17.00

· Bed Bath & Beyond (BBBY) Q1 EPS 32c/$2.8B vs. est. 32c/$2.75B; Q1 comp sales fell (-0.6%) vs. est. up 0.1%; backs FY18 EPS view in low-to-mid $2.00 range vs. est. $2.27 and said it remains on track with its three-year financial goals that comprise its vision for 2020 which include: to achieve comparable sales growth beginning in fiscal 2018

· McCormick (MKC) Q2 EPS $1.02/$1.33B vs. est. 93c/$1.32B; reaffirms year sales, operating income and EPS views

· Rite Aid (RAD) Q1 EPS loss (1c)/$5.39B vs. est. loss (1c)/$5.33B; Q1 Adjusted EBITDA $147.3M vs. $136.0M last year; Q1 comp sales fell (-0.7%); confirms fiscal 2019 outlook of 2c-6c on revs $21.7B-$22.1B vs. est. 3c/$21.65B

· Pier 1 Imports (PIR) Q1 EPS loss (36c)/$371.9M vs. est. loss (39c)/$375.48M; Q1 comp sales decreased (-8.2%) vs. est. (-7.6%); Sees 2Q comparable sales -6% to -7% and sees FY comparable sales +1.5% to +2.5%

· Chipotle (CMG) warned investors of some short-term hiccups, including the closure of up to 60 underperforming stores and a restructuring charge of as much as $135M; says Q1 sales trends have continued into Q2

· Ford Motor Co. (F) plans to team up with Chinese internet-search provider Baidu Inc. (BIDU) to develop new artificial-intelligence technology and other digital services

· Azul (AZUL) 19.4M share Secondary priced at $16.15

· Franklin Covey (FC) Q3 adjusted EPS loss (18c)/$50.5M vs. est. loss (23c)/$49.7M

· BrightView (BV) 21.3M share IPO priced at $22.00


· BP Plc (BP) plans to acquire the U.K.’s largest electric vehicle charging company, acquiring Chargemaster, which has more than 6,500 charging points across the U.K., for about $170 million

· Sempra Energy (SRE) will divest certain non-utility natural gas storage assets in the southeast U.S. and all of its U.S. wind and solar assets

· Tullow Oil PLC (TLW.LN) raised the lower limit for its group production guidance for 2018 because it expects increases in average daily oil production; now expects production to be between 89,000-95,000 barrels of oil equivalent a day compared with a previous range of 86,000-95,000 barrels of oil equivalent.


· Edge Therapeutics (EDGE) updated results from its ongoing analyses of the Phase 3 Newton 2 study of EG-1962 in adults with aneurysmal subarachnoid hemorrhage

· Forty Seven (FTSV) 7.04M share IPO priced at $15.00

· Neuronetics (STIM) 5.5M share IPO priced at $17.00

· Translate Bio (TBIO) 9.4M share IPO priced at $13.00

· Tricida (TCDA) 11.7M share IPO priced at $19.00

· Intrexon (XON) files to sell $100M of common stock, $200M of convertible senior notes

· Jazz Pharmaceuticals plc (JAZZ) said the FDA accepted for priority review its supplemental new drug application (sNDA) seeking revised labeling for Xyrem® (sodium oxybate) oral solution

· Kura Oncology (KURA) files to sell common stock

· Zafgen (ZFGN) files to sell common stock

Industrials & Materials

· H.B. Fuller (FUL) Q2 adjusted EPS 89c/$789.4M vs. est. 85c/$803.13M; narrows higher FY18 EPS view to $3.15-$3.40 from $3.10-$3.40 (est. $3.23); is also updating its adjusted EBITDA guidance to approximately $470M to reflect the impact of the modified calculation of EBITDA; revenue growth for the remainder of FY18 is expected to be between 5% and 6% when compared to 2017 on a proforma basis

· Worthington (WOR) Q4 EPS w/items 50c/$1.02B vs. est. $1.04/$914M

· Apogee Enterprises (APOG) Q1 adjusted EPS 62c/$336.5M vs. est. 53c/$304.52M; sees year EPS $3.48-$3.68 vs. est. $3.45 and affirms its year outlook

· GMS Inc. (GMS) Q4 EPS 56c/$635.8M vs. est. 65c/$670.9M

Technology, Media & Telecom

· Madison Square Garden (MSG) announced that its board of directors has authorized the company’s management to explore a possible spinoff that would create a separately-traded public company comprised of its sports businesses, including the New York Knicks and New York Rangers professional sports franchises

· CalAmp (CAMP) Q1 adjusted EPS 29c/$94.9M vs. est. 28c/$93.05M; sees Q2 EPS 25c-31c on revs $93M-$98M vs. est. 31c/$95.59M

· Progress Software (PRGS) Q2 adjusted EPS 60c/$96.1M vs. est. 53c/$95.03M; raises FY18 EPS view to $2.45-$2.50 from $2.36-$2.41 (est. $2.42), while backs FY18 revenue $399M-$404M vs. est. $403.92M

· Zillow (ZG) files to sell $325M of Class C capital stock

· The New York Attorney General’s office is probing how T-Mobile’s (TMUS) $26B pact to acquire Sprint (S) could affect competition in the pay-as-you-go wireless market, the Wall Street Journal reports

· Gilat Satellite Networks (GILT) won a new award by Peru’s Fitel for two additional regional telecommunications infrastructure projects totaling $153.6M

· EverQuote (EVER) 4.6875M share IPO priced at $18.00

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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