Morning Preview: September 10, 2018

Scott GreenDaily Market Report

Early Look

Monday, September 10, 18

U.S. stock futures are pointing to a higher open, look to bounce after last week’s declines as trade tensions between the U.S. and its partners have put pressure on global markets in recent months. China will respond if the United States takes any new steps on trade, the foreign ministry said, after President Trump warned he was ready to slap tariffs on virtually all Chinese imports into the United States. Note a tweet over the weekend from President Donald Trump urging Apple Inc. (AAPL) to move its manufacturing to the U.S. put some pressure on Asian tech stocks. In other tech news, BABA shares slip after Jack Ma said he would step down as CEO of the Chinese e-commerce giant in a year, while CBS shares will likely be active after chairman and CEO resigned Sunday following new sexual misconduct allegations against him from six additional women. In Asian markets, The Nikkei Index gained 66 points to settle at 22,373, the Shanghai Index dropped -32 points to end at 2,669 and the Hang Seng Index dropped -360 points to finish at 26,613. In Europe, the German DAX is up about 15 points at 11,975, while the FTSE 100 is up a few points under 7,300.

The S&P 500 index dropped 1% last week, the Dow Industrials logged a weekly decline of 0.2% and the Nasdaq Composite underperformed, falling 2.55% for the week. The Nasdaq and S&P 500 each recorded their 4th straight decline and the Nasdaq registers worst weekly decline since March 23. U.S. stocks ended Friday lower on more trade concerns after President Donald Trump said the U.S. had tariffs ready to go on another $267 billion in Chinese goods, on top of tariffs on $200 billion in goods the administration is now preparing. Concerns about trade disputes between the U.S. and China and tense discussions with Canada to revamp the North American Free Trade Agreement dominated headlines all week and weighed on investors’ sentiment. Trade overshadowed a strong jobs report after the Labor Department’s showed that 201,000 jobs were added in the month of August, slightly better than what had been expected by analysts, while the unemployment rate held steady at 3.9%.

Market Closing Prices Yesterday

· The S&P 500 Index dropped -6.37 points, or 0.22%, to 2,871.68

· The Dow Jones Industrial Average fell -79.33 points, or 0.31%, to 25,916.54

· The Nasdaq Composite slipped -20.18 points, or 0.25%, to 7,902.54

· The Russell 2000 Index declined -1.29 points, or 0.08% to 1,713.18

Events Calendar for Today

· 12:00 PM EST Fed’s Bostic Discusses Economic Outlook

· 3:00 PM EST Consumer Credit for July

Earnings Calendar:

· Earnings Before the Open: DEST, HOV

· Earnings After the Close: AGTC, CASY, CDMO, IRET, LAKE, MTRX, SONO

World News

· Japan’s economy expanded at a significantly faster pace than initially estimated in the April-June quarter as the economy grew at an annualized pace of 3.0%, better than the initial estimate of 1.9%. In non-annualized terms, the economy expanded 0.7% from the previous quarter.

· China’s consumer inflation accelerated to a six-month high in August, driven by a faster increase in vegetable prices and softer decline in pork prices. The consumer-price index rose 2.3% in August from a year earlier, compared with a 2.1% gain in July, the National Bureau of Statistics said. Food prices rose 1.7% from a year earlier after climbing 0.5% in July

· China’s total trade surplus narrowed in August despite a worsening imbalance with the U.S., as China reported a total trade surplus of $27.91 billion in August, narrowing from a surplus of $28.05 billion a month earlier

· The SEC said it was immediately suspending trading in two investment products that track cryptocurrencies, citing confusion in the markets over whether the products are exchange-traded funds. The SEC said in a statement that trading in Bitcoin Tracker One and Ether Tracker One would be halted in the United States until at least Sept. 20.

· Hurricane Florence strengthened early on Monday, packing maximum sustained winds of 105 mph (170 kph), and forecasters warned that it is “expected to become a major hurricane very soon” as it churns toward the U.S. East Coast.

Sector News Breakdown

Consumer

· Weight Watchers International (WTW) will replace KLX Inc. (KLXI) in the S&P MidCap 400, and KLX Energy Services Holdings Inc. (KLXE) will replace FTD Companies Inc. (FTD) in the S&P SmallCap 600 effective prior to the open of trading on Tuesday, September 18, 2018

· Constellation Brands (STZ) downgraded to hold from buy at SunTrust

· RV companies overestimated demand for this year’s new models, leaving dealer lots with excess inventory, Barron’s noted. Now, RV dealership Camping World (CWH) looks cheap compared with the industry’s manufacturers, saying it might be the best way to play an eventual rebound in the industry

· Allegiant (ALGT) and T-Mobile (TMUS) Arena announced a multi-year partnership, designating Allegiant as the “Official Domestic Airline of T-Mobile Arena”

· Richemont SA that it has named Jerome Lambert as its chief executive officer, as five-month sales through August showed double-digit growth.

Energy, Materials and Industrials

· Several armed men attacked the headquarters of the National Oil Corporationin the Libyan capital on Monday and blasts were heard before wounded people were ferried away from the building in ambulances – Reuters

· Buckeye Pipe Line (BPL) said it shut down one of its pipelines spilled over 8,000 gallons of jet fuel into the St. Mary’s River in Decatur,

· Volkswagen (VLKAY) went on trial on Monday to face investors seeking 9.2 billion euros ($10.6 billion) in compensation, arguing the carmaker should have informed shareholders earlier about its diesel pollution scandal. https://reut.rs/2OaXC7i

· RPC Group (RPC.LN) said on Monday it is in talks on a possible sale to Apollo Global Management (APO) and Bain Capital, driving shares in Europe’s biggest plastics packaging maker more than 25 percent higher. https://reut.rs/2oWbLKA

Financials

· Pzena Investment (PZN) reports AUM of $38.9B as of August 31st vs. $34.1B last year

· Riot Blockchain (RIOT) named Chris Ensey its interim CEO after the company’s chairman and CEO John O’Rourke resigned. Ensey previously served as Riot’s chief operating officer. The move is part of a “restructuring of the company’s senior executives,” Riot said in a release.

· Credit Suisse (CS) upgraded to equal-weight at Barclay’s

Healthcare

· GlaxoSmithKline (GSK) said the FDA needs more clinical data to support the approval of mepolizumab as an add-on treatment for exacerbations in patients with chronic obstructive pulmonary disease

· The U.K.’s National Institute for Health and Care Excellence declined to recommend Roche Holding AG’s (RHHBY) RO multiple sclerosis drug in its final draft guidance, citing a lack of information on its efficacy as well as costs.

· Iovance Biotherapeutics (IOVA) files $250M mixed securities shelf

· HealthEquity (HQY) files automatic mixed securities shelf

Technology, Media & Telecom

· CBS Corp. (CBS) CEO Les Moonves will leave his role as chairman and CEO, effective immediately, with COO Joseph Ianniello appointed president and acting CEO, co. says in a statement on its website. The move comes as six additional women have come forward to accuse CBS Corp. Chief Executive Officer Les Moonves of harassment or assault in previous decades

· Alibaba Group Holding Ltd. (BABA) said Monday that CEO Daniel Zhang will succeed Jack Ma as chairman a year from now, saying the period will ensure a smooth transition

· Barron’s noted that during the past three months, Tencent (TCEHY) has tumbled 26%, Alibaba (BABA) has slumped 20%, and Baidu (BIDU) has dropped 18% amid concerns over a slowing economy and the impact of U.S. tariffs…but says now may be time to buy

· Cirrus Logic (CRUS), Analog Devices (ADI) and Skyworks Solutions (SWKS) were among Apple (AAPL) suppliers that extended losses on Friday after the iPhone maker warned that a list of proposed tariffs would affect many of its products and increase costs

· President Donald Trump said in a tweet: “Apple prices may increase because of the massive Tariffs we may be imposing on China – but there is an easy solution where there would be ZERO tax, and indeed a tax incentive. Make your products in the United States instead of China. Start building new plants now

· Dell Technologies (DVMT) may need to increase its offer to buy a tracking stock tied to VMware (VMW) that’s central to its plan to restore its public listing, says Barron’s. Dell may need to offer as much as $115 to $120 a share from the stated value of $109 to win over shareholders said Barron’s

· Viacom (VIAB) is working to increase the value of its shares by putting the company’s television assets to better use in the era of streaming. “We see tremendous value in the assets we already own,” CEO Robert Backish said to Barron’s

· Snap Inc (SNAP) said on Monday its Chief Strategy Officer, Imran Khan, would step down

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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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