Morning Preview: August 13, 2018

Scott GreenDaily Market Report

Early Look

Monday, August 13, 2018

Stock futures point to a lower open to start the week, once again tracking its European and Asian counterparts lower amid sell-off fears about the potential contagion from Turkey’s problems, especially in the banking sector in Europe related to the Turkish Lira plunge. The Turkish central bank pledged to provide “all the liquidity the banks need” in a statement Monday. It also said banks would be able to borrow foreign-exchange deposits from the central bank at a one-month maturity and one-week maturities. However, the comments have had little effect on markets to this point. The euro has dropped below the 1.14 level from late Friday, while European averages slide, with the German DAX lower by about -80 points at 12,340, while the FTSE 100 is down around -40 points at 7,625. In Asian markets, The Nikkei Index lost -440 points to settle at 21,857, the Shanghai Index dropped -9 points to settle at 2,785, and the Hang Seng Index dropped -430 points to close at 27,936. Last week, the S&P 500 and Dow ended their longest winning streak since December as trade fears and deepening turmoil in Turkey’s financial markets fueled a wave of global risk aversion on Friday. The Nasdaq Composite also snapped its 8-day win streak on Friday. The greenback traded at the strongest in a year and the euro weakened. Treasuries rose and Italian bonds fell, while gold tested lows near $1,200 an ounce. On Monday, the Turkish lira extended its slide, with one dollar buying 6.8475 lira, compared against 6.4275 late Friday, a decline of 6.4% for the monetary unit after plunging about 14% on Friday.

Market Closing Prices Yesterday

· The S&P 500 Index dropped -20.30 points, or 0.71%, to 2,833.28

· The Dow Jones Industrial Average fell -196.09 points, or 0.77%, to 25,313.14

· The Nasdaq Composite slipped -52.67 points, or 0.67%, to 7,839.11

· The Russell 2000 Index declined -4.08 points, or 0.24% to 1,686.80

Events Calendar for Today

· No Major Economic Data Released Today

Sector News Breakdown


· Saudi Arabia’s Public Investment Fund (PIF) has shown no interest so far in financing Tesla Inc (TSLA) CEO Elon Musk’s proposed $72 billion deal to take the U.S. electric car maker private, despite acquiring a minority stake in the company this year – Reuters

· VF Corporation (VFC) said it intends to separate the company into two independent, publicly traded companies: VF Corporation, a global apparel and footwear powerhouse, and a yet-to-be named company (NewCo), which will hold VF’s Jeans and VF Outlet businesses and will be a global leader in the denim category

· The Stars Group (TSG) cuts FY18 adj. EPS view to $1.99-$2.22 from $2.33-$2.47 (est. $2.28) while raises FY18 revenue view to $2B-$2.15B from $1.39B-$1.47B (est. $1.31B)

· Planet Fitness (PLNT) downgraded to Neutral from Overweight at JPMorgan

· Kraft Heinz (KHC) mentioned cautiously in Barron’s saying shares remain expensive and analysts worry that its packaged foods, from macaroni and cheese to Kool-Aid, are growing stale as shoppers flock to the fresh and prepared-food aisles

· Retailers such as Abercrombie & Fitch (ANF), Urban Outfitters (URBN), and American Eagle Outfitters (AEO) have rallied, after getting hard by the Amazon (AMZN) effect, but Barron’s notes that valuations are still reasonable


· Australian pipeline operator APA Group’s directors are recommending shareholders accept a 12.98 billion Australian dollar (US$9.47 billion) takeover offer from a consortium led by Hong Kong’s CK Infrastructure Holdings Ltd

· FuelCell (FCEL) files $200M mixed securities shelf


· Alnylam (ALNY) receives FDA approval for the first ever RNAi therapeutic treating patients with a rare disease known as hereditary ATTR amyloidosis. The FDA approval was made possible due to positive phase 3 results from the APOLLO study which met both on the primary and secondary endpoints

· Stemline Therapeutics (STML) announced that the U.S. FDA has accepted for filing the company’s Biologics License Application for ELZONRIS for the treatment of patients with blastic plasmacytoid dendritic cell neoplasm. The FDA also granted Priority Review for the BLA and has set a target action date of February 21, 2019

· Sorrento Therapeutics (SRNE) announced that the first enrolled patient in the phase 1b study of its non-opioid, afferent nerve ablating drug candidate, resiniferatoxin or RTX, for the treatment of pain from osteoarthritis in the knee received treatment on July 31, 2018

Industrials & Materials

· Dycom (DY) prelim Q2 EPS $1.05-$1.08 on revs $799.5M vs. est. $1.19/$844.46M; lowers FY19 adj. EPS view to $2.62-$3.07 from $4.26-$5.15 (est. $4.68) and lowers FY19 revenue view to $3.01B-$3.11B from $3.23B-$3.43B (est. $3.34B)

· Genesee & Wyoming (GWR) July Traffic Rises 2.7%; says total traffic in July was 284,754 carloads; same railroad traffic increased 18,063 carloads, or 6.8%

· LyondellBasell (LYB) positive mention in Barron’s saying with shares selling for a scant 10x this year’s earnings forecast, there could be plenty more upside for investors; notes the stock traded cheaply relative to chemical peers and recent investments bode well for growth

· A jury has ordered Monsanto Co. (acquired by BAYRY) to pay $289.2 million in a landmark lawsuit over whether exposure to two of its powerful weed killers caused cancer

Technology, Media & Telecom

· Activist investor Elliott Management Corp. has taken a big stake in Nielsen Holdings PLC (NLSN) and plans to push the TV-ratings company to sell itself. The New York hedge fund owns more than 8% of Nielsen, worth at least $640 million, people familiar with the matter said Sunday.

· Equinix (EQIX) shares mentioned positively in Barron’s saying shares deeply entrenched in the world of tech, even though it became a REIT three and a half years ago, and represents a nice link to growing payouts for income investors, as the company has increased its sales steadily

· Twitter (TWTR) and Square (SQ) may be a world apart when it comes to their businesses, but they are across the street from each other so Jack Dorsey can shuttle between them in just two minutes on foot – Barron’s. Despite a recent drop by Twitter and the controversies swirling around the platform’s decision not to ban certain bad actors, the social site has the most upside.

· Analysts are bullish on Roku (ROKU) and Yelp (YELP), whose shares jumped after posting solid quarterly results, Barron’s says. Yelp, the online review service, is benefiting from a business model shift to no-contract ad sales, while streaming TV service Roku continues to attract viewers to its smart TVs

· Akamai (AKAM) downgraded to Neutral from Outperform at Credit Suisse

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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