Morning Preview: August 14, 2018

Scott GreenDaily Market Report

Early Look

Tuesday, August 14, 2018

Stock futures are on the rise, looking to erase yesterday’s declines following better-than-expected quarterly earnings from Dow component Home Depot and as declines in Turkey’s markets and currency abated. This morning, global markets are rising as the Turkish Lira rebounds off all-time lows against other currencies, climbing more than 6% after falling roughly 40% the last 2-weeks. Yesterday, the Central Bank of the Republic of Turkey revealed measures to boost liquidity in the market, but investors were unphased, remaining concerned that country’s economic health. U.S. stocks ended lower Monday, pressured as Turkey’s currency crisis dampened global investor appetite for equities and other assets perceived as risky. The energy sector led losses for the S&P 500, falling 1.2% as oil prices fell sharply before ending lower but off of session lows. In Asian markets overnight, The Nikkei Index jumped 498 points to settle at 22,356, the Shanghai Index dipped -4 points to settle at 2,780 and the Hang Seng Index lost -183 points to settle at 27,752. In Europe, the German DAX is up around 30 points at 12,390, while the FTSE 100 is little changed at 7,650.

Market Closing Prices Yesterday

· The S&P 500 Index slipped -11.35 points, or 0.40%, to 2,821.93

· The Dow Jones Industrial Average fell -125.44 points, or 0.50%, to 25,187.70

· The Nasdaq Composite dropped -19.40 points, or 0.25%, to 7,819.71

· The Russell 2000 Index declined -11.49 points, or 0.68% to 1,675.32

Events Calendar for Today

· 6:00 AM EST NFIB Small Business Optimism for July

· 7:45 AM EST ICSC Weekly Retail Sales

· 8:30 AM EST Import and Export Prices for July

· 8:55 AM EST Johnson/Redbook Weekly Sales

· 11:00 AM EST NY Fed to release Q2 Household Debt and Credit report

· 4:30 PM EST API Weekly Inventory Data

Earnings Calendar:

· Earnings Before the Open: AAP, ARRY, CDK, EAT, HD, TPR

· Earnings After the Close: A, MYGN, TCEHY, VIAV, WYY

Other Key Events:

· Susquehanna Financial Group Energy Conference in New York (1-day)

· KeyBanc Annual Technology Leadership Forum, 8/12, 8/14 in Vail, CO

· Wedbush PacGrow Healthcare Conference, 8/14-8/15, in New York

· Stephens Mid-Atlantic Bank trip 8/14, 8/15, in Washington DC

· China retail sales, and industrial production data for July

· Eurozone GDP data for Q2

· Eurozone ZEW sentiment survey for August

World News

· The National Federation of Independent Business (NFIB) small business optimism index rose 0.7 points in July to 107.9. The NFIB said it was the second-highest level in history and just under the 1983 peak. Eight of the ten components, led by plans to increase employment, expectations for rising sales and for expansion, increased

· Germany’s Gross domestic product (GDP) grew at a quarterly rate of 0.5%, or 1.8% in annualized terms in Q2 according to the Federal Statistical Office while it also raised its first-quarter growth estimate to an annualized 1.5% from 1.2% growth reported in May.

· Business activities in China cooled further in July, with investment slowing to a near two-decade low, as fixed-asset investment in China’s non-rural areas climbed 5.5% in the January-July period from a year earlier

· Erdogan said that Turkey would boycott American electronics in retaliation for US sanctions on his country

· Police detained the driver of a car that crashed into barriers outside the U.K. Houses of Parliament injuring pedestrians on Tuesday morning, yards away from the site of a terrorist attack in Westminster last year.

Sector News Breakdown


· Home Depot (HD) Q2 EPS $3.05/$30.46B vs. est. $2.84/$30.03B; Q2 comp sales up 8% vs. est. 6.5%; raises FY18 EPS view to $9.42 vs. est. 9.45; based on its year-to-date performance, Home Depot updated its fiscal 2018 sales growth guidance and now expects sales will be up approximately 7.0% including the 53rd week, with comp sales growth of approximately 5.3% for the comparable 52-week period

· Elon Musk teased more details about his plan to take Tesla Inc. (TSLA) private, tweeting Monday night that he’s working with high-profile financial advisers and lawyers on the deal that would need about $70 billion in funding. “I’m excited to work with Silver Lake and Goldman Sachs as financial advisors,” Tesla’s co-founder and chief executive said

· Advance Auto Parts (AAP) Q2 EPS $1.97/$2.33B vs. est. $1.86/$2.27B; Q2 comp sales rose 2.8% vs. est. 0%; reports new $600M share buyback authorization; sees FY18 revenue $9.3B-$9.5B vs. est. $9.38B and sees FY18 comp sales growth 0%-1.5%; (watch shares of comps AZO and ORLY after report)

· Brinker (EAT) Q4 EPS $1.19/$817.1M, in-line with estimates while Q4 co-owned comp sales rose 0.6% vs. est. 1%; sees year EPS $3.70-$3.90 vs. est. $3.75

· Tapestry (TPR) Q4 EPS 60c/$1.4B vs. est. 57c/$1.47B; Q4 comp sales 2% vs. est. 2.3%; sees FY EPS $2.70-$2.80 vs. est. $2.84; sees year revs $6.1B-6.2B vs. est. $6.08B

· Hill International Inc. (HIL) said the NYSE has suspended its common shares and has started delisting proceedings. After the company said it would delay its financial filings as it worked on restating results. The company said Monday that it has made significant progress, but informed the NYSE it wouldn’t become current with its filings by Aug. 15.


· German energy group Innogy (IGY.DE) will sell a 41% stake in its 2 billion pound ($2.6 billion) offshore wind farm Triton Knoll to Japan’s Electric Power Development Co (9513.T) and Kansai Electric Power Co

· Canadian Solar (CSIQ) Q2 EPS 26c/$650.6M vs. est. 27c/$684.63M; Q2 solar module shipments were 1,700 MW, including 246 MW shipped to the company’s own solar projects not recognized into revenue in the quarter vs. shipment of 1,374 MW in Q1, and Q2 module shipment guidance in the range of 1,500 MW to 1,600 MW; sees Q3 revenue $790M-$840M vs. est. $1.07B and expects total solar module shipments to be 1.5 GW-1.6 GW


· First Data (FDC) 64M share secondary offering priced at $23.75 per share

· Credit Suisse (CS) will divide its main wealth-management unit into seven divisions from the current four in a push to regionalize the bank, Bloomberg reported

· On Deck Capital (ONDK) downgraded to Sell from Neutral at BTIG


· Addus HomeCare (ADUS) files to sell 1.08M shares of common stock

· ArQule (ARQL) announced the publication of preclinical study data for ARQ 531, the Company’s rationally-designed, reversible inhibitor of both wild type and C481S-mutant Bruton’s tyrosine kinase

· Gemphire Therapeutics (GEMP) said it sees sufficient resources to fund operations through 4Q19; says based on current projections, considering the delay of significant cash expenditures for clinical trials and manufacturing and the amended terms of the loan agreement with SVB

· Aridis Pharmaceuticals (ARDS) 2M share IPO priced at $13.00

Industrials & Materials

· President Trump signed a $716 billion defense policy bill that authorizes military spending and includes watered-down controls on government contracts with China’s ZTE and Huawei Technologies

· Safe Bulkers, Inc. (SB) says it acquired a 181,000 dwt, Japanese, 2009-built, dry-bulk, Capesize class vessel at an “attractive price;” says acquisition was financed from cash on hand; expects purchase to be accretive to revenues

Technology, Media & Telecom

· Nvidia Corp. (NVDA) announced the first products containing a long-awaited new generation of graphics technology late Monday, upgrading from its Pascal architecture first released in 2016.

· Veritone (VERI) Q2 EPS loss (88c)/$4.2M vs. est. loss (85c)/$4.92M; Q2 active client growth of 64% from last year to 74; aims for Q3 AI customer count of 95, up 9 and looks to bring AI account total to 655, an addition of 30 accounts; and process 2.7 million total hours of video and audio content on aiWARE

· Switch (SWCH) shares fall -14%; Q2 revs $102.2M vs. est. $102.8M; Q2 adjusted Ebitda $50.3M; cuts FY18 revenue view to $405M-$408M from $423M-$440M (est. $428.3M); sees FY18 Adjusted EBITDA in the range of $197M-$200M, versus a prior range of $216M-$224M; capital expenditures is unchanged in the range of $260M-$310M

· Vipshop (VIPS) Q2 adjusted EPS 13c/$3.1B vs. est. 14c/$3.08B; sees Q3 revenue growth 13%-18% y/y vs. est. $2.75B

· ProsHoldings (PRO) files to sell 4M shares of common stock

· Independent music labels group Impala has called on EU antitrust regulators to block Sony Corp’s (SNE) bid to become the world’s largest music publisher with its $2.3 billion offer for control of EMI

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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