Morning Preview: August 30, 2018

Terrie AmengualDaily Market Report

Early Look

Thursday, August 30, 2018


U.S. stock futures are pointing to a lower open, following European and Asian markets lower, as investors take profit after another historic run. Stocks continued their upward march Wednesday, with the S&P 500 and Nasdaq Composite notching their fourth straight record finishes. Stocks rallied on strong GDP data as Q2 was revised higher to 4.2% and on renewed talks by U.S. and Canadian trade negotiators. A rally in tech and biotech related stocks helped propel the Nasdaq Composite nearly 1%, led by record all-time highs for AMZN, MSFT and others. The S&P 500 ended 0.6% higher at 2,914, while the Nasdaq settled above 8,100. The blue-chip Dow Industrial Average settled within less than 2% of its record close set in late January. This morning however, global markets are taking a “breather” as simmering trade and geopolitical issues weighed on sentiment. Also, late yesterday, President Donald Trump accused China of undermining American efforts to pressure North Korea into giving up its nuclear weapons. In Asian markets, The Nikkei Index rose 21points to settle at 22,869, the Shanghai Index fell -31 points to settle at 2,737 and the Hang Seng Index fell -252 points to settle at 28,164. In Europe, the German DAX is down around -130 points at 12,430, while the FTSE 100 is down around -50 points above 7,500. Canada’s Foreign Minister Chrystia Freeland also says Nafta talks with the U.S. are going well and the discussion is constructive. The Australian dollar declined after second-quarter business investment was worse than expected, while New Zealand’s currency slumped as business confidence hit a 10-year low.

Events Calendar for Today

· 8:30 AM EST Weekly Jobless Claims…est. 213K

· 8:30 AM EST Continuing Claims…est. 1.73M

· 8:30 AM EST Personal Income for July…est. 0.4%

· 8:30 AM EST Personal Spending for July…est. 0.2%

· 8:30 AM EST PCE Deflator MoM for July…est. 0.1%

· 8:30 AM EST PCE Core MoM for July…est. 0.2%

· 8:30 AM EST PCE Core YoY for July…est. 2.0%

· 9:45 AM EST Bloomberg Consumer Comfort Index…prior 58.6

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


Earnings Calendar:

· Earnings Before the Open: ANF, BBW, BURL, CIEN, CPB, DG, DLTR, DXLG, KIRK, MEI, MIK, PDCO, SIG, TD, TECD, TITN

· Earnings After the Close: AMBA, AOBC, COO, LULU, MEIP, NTNX, ULTA, YEXT


Market Closing Prices Yesterday

· The S&P 500 Index gained 16.52 points, or 0.57%, to 2,914.04

· The Dow Jones Industrial Average rose 60.55 points, or 0.23%, to 26,124.57

· The Nasdaq Composite spiked 79.65 points, or 0.99%, to 8,109.69

· The Russell 2000 Index advanced 6.33 points, or 0.37% to 1,734.75


Sector News Breakdown

Consumer

· Campbell Soup (CPB) Q4 EPS 25c/$2.22B vs. est. 24c/$2.24B; has adjusted its long-term targets “to reflect the company’s actions and more focused portfolio; now sees organic net sales growth of 1% to 2%; adjusted EBIT growth of 4% to 6%; adjusted earnings growth of 7% to 9%; engages Goldman to divest international, fresh businesses; sees FY19 adjusted EPS $2.40-$2.50 on revs $7.925B-$8.05B vs. est. $2.69/$10.27B

· Guess (GES) Q2 EPS 36c/$645.9M vs. est. 32c/$650.6M; sees Q3 EPS 12c-15c vs. est. 15c; sees Q3 net revenue up 10.5%-11.5% in constant currency and Q3 operating margin 2.5%-3.0%; raises FY19 EPS view to 94c-$1.03 from 88c-99c (est. $1.05) while sees FY19 revenue up 8.0%-8.5% in constant currency

· PVH Corp. (PVH) Q2 EPS $2.18/$2.33B vs. est. $2.10/$2.29B; 2Q international Calvin Klein comparable sales +5% and 2Q international Tommy Hilfiger comparable sales +11%; sees Q3 EPS $3.10-$3.13 vs. est. $3.13 and Q3 revenue growth 7%

· Tilly’s (TLYS) Q2 EPS 29c/$157.4M vs. est. 26c/$155.3M; Q2 comparable store net sales, which includes e-commerce net sales, increased 4.4% in total, while comp store sales in physical stores increased 3.8%; said E-commerce net sales increased 8.1%; sees Q3 EPS 20c-24c vs. est. 22c

· At Home Group (HOME) Q2 EPS 34c/$288.5M vs. est. 33c/$286.5M; Q2 comp sales rose 2.8% vs. Bloomberg est. 3.1%; sees FY adjusted EPS $1.27-$1.31 vs. est. $1.30; announces CFO transition; guides year sales $1.159B-$1.164B vs. est. $1.16B

· Tempur Sealy International Inc.’s (TPX) legal battle with former customer Mattress Firm Inc. intensified, filing a lawsuit accusing the retail chain of selling copycat products without authorization

· Sotheby’s (BID) said it does not believe proposed US tariffs on art of Chinese origin will have a “material effect” on its results

· Kirkland’s (KIRK) Q2 EPS loss (40c)/$133.9M vs. est. loss (36c)/$136.55M; backs FY18 EPS and revenue outlooks

Energy, Materials and Industrials

· U.S. autos get a boost after a report in Politico that the EU is willing to scrap car tariffs in U.S. trade deal (watch shares of F, GM, FCAU and suppliers)

· Albemarle (ALB) has plans to invest millions to engineer specialized lithium for electric car batteries in an effort to remain the top lithium producer, according to Reuters

· Greif (GEF) Q3 EPS $1.20/$1.01B vs. est. $1.08/$1.04B; Q3 adjusted Ebitda $146.3M vs. est. $139.7M; sees year EPS $3.53-$3.69 vs. est. $3.57

· GMS Inc. (GMS) Q1 EPS 82c/$778.1M vs. est. 73c/$768.84M

· Volkswagen AG’s (VLKAY) namesake brand said that only half of its models have received certification under new emissions rules that come into effect on Saturday.

Financials

· Toronto-Dominion (TD) Q3 adjusted EPS C$1.66 vs. C$1.46 last year while reports for Q3 was C$9.885B vs. C$9.286B last year; Common Equity Tier 1 Capital ratio on a Basel III fully phased-in basis was 11.7%

Healthcare

· Insys (INSY) granted fast track designation by FDA for its epinephrine nasal spray as investigational treatment for anaphylaxis

· Johnson & Johnson (JNJ) unit Actelion submits Type II Variation to European Medicines Agency seeking to expand OPSUMIT indication to include treatment of adults with inoperable chronic thromboembolic pulmonary hypertension

· Perrigo (PRGO) said it has postponed its investor event to discuss its long-term consumer growth strategies and key operational initiatives, previously planned as a conference call for September 25, 2018

Technology, Media & Telecom

· Salesforce (CRM) Q2 EPS 71c/$3.28B vs. est. 47c/$3.23B; Q2 billings growth 19.6% vs. Bloomberg est. 25.3%; sees Q3 adjusted EPS 49c-50c on revs $3.355B-$3.365B vs. est. 53c/$3.35B; raises FY19 adjusted EPS view to $2.50-$2.52 from $2.29-$2.31 (est. $2.32) and ups FY19 revenue view to $13.125B-$13.175B from $13.075B-$13.125B (est. $13.13B); raises FY19 operating cash flow growth view to 15%-16% from 14%-15%

· Semtech (SMTC) Q2 EPS 55c/$163.2M vs. est. 54c/$161.22M; sees Q3 adjusted EPS 58c-64c on revs $168M-$178M vs. est. 60c/$171.2M

· Avnet (AVT) files mixed securities shelf

· Nutanix (NTNX) upgraded to Neutral from Underweight at JPMorgan

· News Corp’s (NWSA) subsidiary Move Inc., operator of Realtor.com, has agreed to acquire real-estate technology platform Opcity for $210M, as the media and information services company looks to increase its presence in the digital real-estate services market

· Tech Data (TECD) Q2 EPS $2.01/$8.89B vs. est. $2.11/$8.73B; sees Q3 EPS $2.00-$2.30 on revs $8.7B-$9B vs. est. $2.39/$8.85B

 

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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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