Morning Preview: August 29, 2018

Terrie AmengualDaily Market Report

Early Look

Wednesday, August 29, 2018

Stock futures are mixed to little changed as major US averages look to extend their record setting market moves. Stocks closed little changed on Tuesday, but managed to eke out small gains across the board, allowing both the S&P 500 and the Nasdaq to finish at records for a third straight session as consumer confidence hits 18-year high, but major averages finished off their intraday best. Yesterday’s move followed a sharp rally Monday, when both the S&P 500 and the Nasdaq surged after investors cheered a new proposed trade deal between the U.S. and Mexico. Concerns over trade policy have been a primary driver of market activity over the last month (to the up and downside) after various tariffs the Trump administration has levied against China and the European Union. Real estate and tech shares rose the most, offsetting losses from commodity stocks. In Asian markets, The Nikkei Index rose 34 points to settle at 22,848, the Shanghai Index dipped -8 points to settle at 2,769 and the Hang Seng Index gained 64 points to end at 28,416. In Europe, the German DAX is down a few points holding above 12,500, while the FTSE 100 is down around -40 points at 7,575. For the month of August, the Dow is up 2.6%, the S&P is up 2.9%, and the Nasdaq is up 4.7%. Both the S&P and the Nasdaq are on track for their fifth straight monthly gain.

Market Closing Prices Yesterday

· The S&P 500 Index climbed 0.78 points, or 0.03%, to 2,897.52

· The Dow Jones Industrial Average rose 14.38 points, or 0.06%, to 26,064.02

· The Nasdaq Composite gained 12.14 points, or 0.15%, to 8,030.04

· The Russell 2000 Index advanced 0.02 points, or 0.00% to 1,728.42

Events Calendar for Today

· 7:00 AM EST MBA Mortgage Applications Data

· 8:30 AM EST Gross Domestic Product (GDP) for Q2-S…est. 4.0%

· 8:30 AM EST Personal Consumption for Q2-S…est. 3.9%

· 8:30 AM EST GDP Price Index for Q2-S…est. 3.0%

· 8:30 AM EST Core PCE QoQ for Q2-S…est. 2.0%

· 10:00 AM EST Pending Home Sales MoM for July…est. 0.3%

· 10:30 AM EST Weekly DOE Inventory Data

Earnings Calendar:

· Earnings Before the Open: AEO, BF/B, CHS, DKS, DY, EV, EVLV, EXPR, MOV

· Earnings After the Close: CRM, GEF, GES, HOME, PRCP, PVH, SMTC, TLYS

World News

· The U.S. Justice Department is investigating whether a fugitive Malaysian financier laundered tens of millions of dollars through two associates and used the funds to pay a U.S. legal team that includes former New Jersey Gov. Chris Christie and a lawyer who represents President Trump https://on.mktw.net/2C9L66T

· Rep. Martha McSally won the Republican Senate primary in Arizona on Tuesday, beating former state senator Kelli Ward and former Maricopa County Sheriff Joe Arpaio

· Rep. Ron DeSantis won the Republican gubernatorial primary in Florida on Tuesday after he was catapulted from underdog to victor by an endorsement from President Trump.

· Investor Intelligence Poll show those considered bullish rose for a fourth week to 59.6% vs 57.7% last week; remains at highest since late January when bulls peaked at 66.7%; bears remain unchanged at 18.3%, while those looking for a correction, slips for a 4th week to 22.1% from 24.0% last week, and remains at lowest level since late January

Sector News Breakdown

Consumer

· Shoe Carnival (SCVL) Q2 EPS 76c/$268.4M vs. est. 55c/$267.16M; Q2 Comparable store sales increased 6.7%; raises FY18 EPS view to $2.07-$2.15 from $1.90-$2.05 (est. $2.05) and raises FY18 revenue view to $1.016B-$1.02B from $1.013B-$1.02B (est. $1.02B)

· NCI Building (NCS) Q2 EPS 51c/$548.5M vs. est. 48c/$534.23M; reports Q3 adjusted Ebitda $63.3M; sees Q4 revenue $550M-$570M vs. est. $547.07M; sees Q4 adjusted EBITDA $60M-$70M

· Tailored Brands, Inc. (TLRD) says Chief Operating Officer Bruce Thorn resigns to pursue another opportunity; says CEO Doug Ewert to retire end of September

· PlayAGS, Inc. (AGS), a leading designer and supplier of electronic gaming machines, table games, and interactive products and services for the global gaming industry, today announced an agreement to provide third-party slot content aggregation for real-money wagering to GVC Holdings PLC, one of the world’s largest sports betting and gaming groups

· Pernod Ricard SA. (RI.FR) said it will raise its dividend for fiscal 2018 after earnings increased, helped by a reduction in expenses; the spirits company’s net profit was 1.58 billion euros ($1.85 billion) in 2018, a 13% on-year increase

· Aston Martin unveiled plans for a stock-market listing that could value the car maker at around $6 billion; it has notified financial regulators it is considering a listing on the London Stock Exchange

Energy, Materials, and Industrials

· The American Petroleum Institute (API) reported that U.S. crude supplies barely budged for the week ended Aug. 24, climbing 38,000 barrels; showed supplies of gasoline up 21,000 barrels, while distillate stockpiles rose 982,000 barrels

· Dycom (DY) Q2 EPS $1.05/$799.5M vs. est. $1.09/$799.45M; sees Q3 EPS 80c-$1.04 on revs $785M-$835M vs. est. $1.10/$808.18M and backs fY19 views; announces authorization of new $150M stock repurchase program

· Genesis Energy (GEL) is in a pact to sell its Powder River Basin midstream assets for about $300 million in net cash proceeds to an affiliate of Silver Creek Midstream

· Barrick Gold (ABX) upgraded to Neutral from Sell at Citigroup

Financials

· H&R Block (HRB) Q1 EPS loss (72c)/$145.2M vs. est. loss (77c)/$137.57M; 1Q operating expenses $327.3M; reaffirms forecast for the year

· National Bank of Canada (NA.CN) Q3 EPS C$1.53 vs. est. C$1.50; 3Q common equity Tier 1 ratio 11.6%

Healthcare

· Tilray (TLRY) Q2 EPS loss (17c) on revs $9.7M vs. est. $9M; CEO says Tilray is well-positioned to continue to pioneer the development of the global medical cannabis market and to become a leader in the adult-use cannabis market

· Lannett (LCI) Q4 EPS 64c/$170.9M vs. est. 64c/$171.45M; sees FY19 revenue $580M-$610M vs. est. $635M and sees FY19 CapEx $30M-$35M

Technology, Media & Telecom

· HP Enterprise (HPE) Q3 EPS 44c/$7.76B vs. est. 37c/$7.68B; sees FY18 EPS $1.50-$1.55 up from prior $1.40-$1.50 and est. $1.46; names Tarek Robbiati as CFO as current CFO Tim Stonesifer to remain through end of October

· Box (BOX) Q2 EPS loss (7c)/$148.2M vs. est. loss (6c)/$146.54M; sees Q3 EPS loss (8c)-(7c) on revs $154M-$155M vs. est. loss (6c)/$155.02M; sees FY19 EPS (18c)-(16c) on revs $606M-$608M vs. est. loss (18c)/$606.48M; Q2 billings $162.8M, up 17% from last year

· ScanSource (SCSC) Q4 adjusted EPS 77c/$993.9M vs. est. 77c/$987.19M; sees Q1 EPS 83c-89c on revs $950M-$1.01B vs. est. 86c/$990.5M;

· Ooma (OOMA) Q2 EPS loss (5c)/$31.7M vs. est. loss (6c)/$30.88M; sees Q3 adjusted EPS loss (7c)-(4c) on revs $31.5M-$32Mvs. est. loss (5c)/$31.5M; narrows FY19 adjusted EPS view to (23c)-(18c) from (23c)-(13c) while raises FY19 revenue view to $125.5M-$127.5M from $124.5M-$127M

· Amazon.com (AMZN) tgt raised to $2,500 at Morgan Stanley as see AMZN’s rapidly growing, high margin revs allowing it to continue to invest while also generating higher profits

· Alphabet (GOOGL) price tgt raised to $1,515 at Morgan Stanley saying it is still just in the early stages of monetizing its seven 1billion+ user platforms, and the launch of Waymo’s ride-hailing service is also a potential catalyst for value realization

· Taiwan Semiconductor (TSM) shares rise after competitor Globalfoundries said it’s dropping development of 7-nanometer technology; TSMC is set to benefit from gaining share in AMD orders, Credit Suisse said

 

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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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