Morning Preview: July 24, 2018

Scott GreenDaily Market Report

Early Look

Tuesday, July 24, 2018

Stock futures are higher, pointing to a stronger open, led behind better earnings from GOOGL and LLY lifting the tech and healthcare sector (two of the few sectors that outperformed on Monday), as the heart of earnings season kicks in with over 180 S&P components expected to report this week. The S&P 500 and the Nasdaq close slightly higher Monday thanks to strength in the financial and technology sectors, but the Dow Industrials slipped, extending its losing streak to a third session. In Asian markets, The Nikkei Index gained 113 points to settle at 22,510, the Shanghai Index jumped 46 points to settle at 2,905 and the Hang Seng Index jumped 406 points to close at 28,662. In Europe, the German DAX is up around 180 points to 12,730, while the FTSE 100 is higher by 60 points at 7,725. There are a few economic data points on the calendar today, including the Philly Fed Manufacturing Index at 8:30 and Markit flash PMI data at 9:45 AM EST. Overnight, European flash PMI data came in mostly better. Markets will also keep a close eye on bonds after yesterday’s sell-off and any comments related to trade developments between the U.S. and counterparts.

Market Closing Prices Yesterday

· The S&P 500 Index gained 5.15 points, or 0.18%, to 2,806.98

· The Dow Jones Industrial Average dipped -13.83 points, or 0.06%, to 25,044.29

· The Nasdaq Composite climbed 21.67 points, or 0.28%, to 7,841.87

· The Russell 2000 Index advanced 1.61 points, or 0.09% to 1,698.41

Events Calendar for Today

· 7:45 AM EST ICSC Weekly Retail Sales

· 8:55 AM EST Johnson/Redbook Weekly Sales

· 9:00 AM EST FHFA House Price Index MoM for May…est. 0.4%

· 9:45 AM EST Markit US Manufacturing PMI, July-P…est. 55.1

· 10:00 AM EST Richmond Fed Index for July…est. 18

· 4:30 PM EST API Weekly Inventory Data

Earnings Calendar:

· Earnings Before the Open: ATI, AVY, BIIB, BKU, CIT, CNC, CVLT, DGX, HOG, HUBB, IPG, JBLU, KMB, LLY, LMT, MDSO, MMM, PCAR, SHW, SNV, TRU, UBS, UTX, VZ, WAT

· Earnings After the Close: AMP, BHE, CB, CNI, CSGP, EQR, IEX, IPHI, IRBT, KN, MANH, MKSI, NAVI, SLM, SYK, T, TER, TSS, TXN, WRB, WYNN

World News

· Eurozone flash July composite PMI at 54.3 vs. 54.8 FactSet estimate

· Eurozone July flash services PMI at 54.4 vs. 55.0 FactSet estimate

· Eurozone July flash manufacturing PMI 55.1 vs. 54.7 FactSet estimate

· Germany flash July services PMI at 54.4, meeting FactSet estimate

· Germany July flash manufacturing PMI at 57.3 vs. 55.5 FactSet estimate

Sector News Breakdown

Consumer

· Whirlpool (WHR) shares fall -9%; Q2 EPS $3.20/$5.14B vs. est. $3.70/$5.29B; cuts FY18 ongoing EPS view to $14.20-$14.80 from $14.50 -$15.50 (est. $15.63)

· Harley-Davidson (HOG) Q2 EPS $1.52/$1.53B vs. est. $1.41/$1.42B; sees 3Q motorcycle shipments 45,500 to 50,500

· Noodles (NDLS) announces a public offering of 2.5M Class A shares, as well as the sale by certain stockholders of another 6M shares

· HNI Corporation (HNI) Q2 EPS 44c/$543.6M vs. est. 34c/$525M; narrows FY18 non-GAAP EPS view to $2.35-$2.55 from $2.40-$2.70 and expects full year organic sales to be up 6-8% vs. est. $2.24B; guides Q3 EPS 80c-90c vs. est. $1.17

· Vitamin Shoppe Inc. (VSI) named Sharon Leite as CEO, effective Aug. 27. Leite served as president at Godiva Chocolatier and Sally Beauty prior

Energy

· Helix Energy (HLX) Q2 adjusted EPS 12c/$204.63M vs. est. 7c/$185.56M

· SRC Energy (SRCI) preliminary 2Q Production 47,646 BOE and expects its product mix in terms of oil to trend toward the low end of the initial guidance range of 47% to 50%; affirmed its full year production volume guidance

· Penn Virginia (PVAC) said intends to evaluate a range of strategic alternatives including corporate sale, merger or other business combination, one or more strategic acquisitions, or other transactions.

Financials

· TD Ameritrade (AMTD) Q3 EPS 89c/$1.38B vs. est. 80c/$1.35B; 3Q net interest margin 1.94%, operating margin 45.7%, number of trades 50.2 million, 3Q pretax profit margin +43.6%; Q3 average client trades per day 784,000, up 54% and average commissions and transaction fees per trade $7.40; said results more than offset a modest decline in trading revenue

· UBS Group AG (UBS) said Q2 net profit rose, supported by the performance of its wealth-management and investment-bank units; Q2 net profit grew 9.4% to 1.28 billion Swiss francs ($1.29 billion). Operating income increased to CHF7.55 billion from CHF7.27 billion a year earlier.

· Synovus Financial (SNV) to acquire FCB Financial (FCB) in all-stock transaction valued at about $58.15/share or about $2.9b in total; SNV reports Q2 EPS 92c vs. est. 88c and NIM of 3.86%

· American Campus (ACC) Q2 FFO 52c/$201.1M vs. est. 53c/$203.8M; Q2 Increased same store net operating income by 0.1% YoY with revenues increasing 1.5% and operating expenses increasing 3.2%; sees FY modified FFO per share $2.28-$2.34 vs. est. $2.33

· Heartland Financial (HTLF) Q2 EPS 85c vs. est. 90c; Q2 return on average assets 1.05% and Q2 return on average equity 9.81%

· Moelis & Co (MC) Q2 EPS 78c/$2290.4M vs. est. 55c/$183.7M

· Washington Trust (WASH) Q2 EPS $1.01/$49.1M vs. est. 94c/$32.48M; reports Q2 returns on average equity and average assets of 16.99% and 1.53%, respectively and Q2 net interest margin 3.05%

· WSFS Financial (WSFS) Q2 EPS 89c/$96M vs. est. 82c/$59.98M; said pleased to report another very strong quarter, which positions us to meet or exceed the primary goals in our enhanced 2016-2018 Strategic Plan, including a full year 2018 Core and Sustainable ROA of 1.50%

· Zions Bancorp (ZION) Q2 EPS 89c vs. est. 92c; 2Q net interest margin 3.56%, 2Q net charge-offs $13M and provision for credit losses $12M

· Redwood Trust (RWT) announces offering of 6.25M shares of common stock

Healthcare

· Eli Lilly (LLY) shares rise 4%; to separate Elanco Animal Health with IPO; reports Q2 EPS $1.50/$6.36B vs. est. $1.30/$6.05B; raises FY18 adj. EPS to $5.40-$5.50 from $5.10-$5.20 (est. $5.15) and raises FY18 revenue view to $24B-$24.5B from $23.7B-$24.2B (est. $23.99B)

· Biogen (BIIB) Q2 EPS $5.80/$3.36B vs. est. $5.19/$3.25B; raises year revs ti $13B-$13.2B form prior view $12.7B-$13B

· Celgene (CELG) announced results from a phase III, randomized, double-blind, international clinical study. REVLIMID (lenalidomide) plus rituximab achieved a highly statistically significant improvement in the primary endpoint of progression-free survival, compared to rituximab plus placebo, in the final PFS analysis

· HealthStream (HSTM) Q2 EPS 11c/$57M vs. est. 7c/$56.71M; Sees FY revenue +6% to +8%, sees FY operating income growth +35% to +45% and sees FY capital expenditure $20 million

· Merit Medical (MMSI) Q2 EPS 43c/$224.8M vs. est. 40c/$214.63M; raises FY18 EPS view to $1.60-$1.70 from $1.57-$1.69 (est. $1.65) and raises FY18 revenue view to $870M-$880M from prior $838M-$851M (est. $849.8M)

· Bluebird Bio (BLUE) announces $400M common stock offering

· Catalent (CTLT) announces $400M common stock offering

· National Vision (EYE) files to sell 12M shares of common stock for holders

· Novus Therapeutics (NVUS) files $150M mixed securities shelf

· Teladoc (TDOC) files mixed securities shelf

· Veracyte (VCYT) Q2 EPS loss (18c)/$22.8M vs. est. loss (27c)/$20.56M. Genomic Test Volume was 7,686, an increase of 18%. Gross Margin was 64%, an increase of 2%

Industrials & Materials

· Crane (CR) Q2 EPS $1.41/$851M vs. est. $1.35/$834.4M

· Graphic Packaging (GPK) Q2 EPS 18c/$1.51B vs. est. 19c/$1.55B

· Hexcel (HXL) Q2 EPS 75c/$547.5M vs. est. 75c/$540.92M; Sees FY adjusted EPS $2.96-$3.10 on net sales $2.1B-$2.2B vs. est. $2.18B

· Kaiser Aluminum (KALU) Q2 EPS $1.68/$415M vs. est. $1.63/$397.71M

· Owens-Illinois (OI) Q2 EPS 77c/$1.8B vs. est. 74c/$1.81B; sees year adjusted EPS $2.75-$2.85 vs. estimate $2.75; sees Q3 EPS 75c vs. est. 79c

· Steel Dynamics (STLD) Q2 EPS $1.53/$3.1B vs. est. $1.49/$2.90B; Q2 adjusted Ebitda $590.4M

· Werner (WERN) Q2 EPS 61c/$619.1M vs. est. 50c/$598.3M

Technology, Media & Telecom

· Alphabet (GOOGL) shares rise 4%; Q2 EPS $11.75/revs ex-TAC $26.24B vs. est. $9.59/$25.55B; 2Q Google other revenue $4.43B; Q2 paid clicks on Google properties up 58% year-over-year and cost-per-click on Google properties down (22%); 2Q Google advertising revenue $28.09B, free cash flow $4.66B, 2Q capital expenditure $5.48B

· Cadence Design (CDNS) Q2 adjusted EPS 44c/$518M vs. est. 40c/$514.95M; sees Q3 adjusted EPS 40c-42c on revs $510M-$520M vs. est. 40c/$516.92M; raises FY18 adjusted EPS view to $1.64-$1.70 from $1.57-$1.65 and raises FY18 revenue view to $2.07B-$2.09B from $2.055B-$2.085B (vs. est. $2.07B)

· Verizon (VZ) is aiming to partner with Google (GOOG) or Apple (AAPL) to provide television when it rolls out its 5G service to homes in Los Angeles and Sacramento later this year, Bloomberg reports

· Materialise (MTLS) 3M share Secondary priced at $13.00

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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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