Morning Preview: September 25, 2018

Scott GreenDaily Market Report

Early Look

Tuesday, September 25, 2018

U.S. stock futures are moving higher, looking to rebound after mixed results yesterday, as markets await the Federal Reserve Monetary policy meeting on Wednesday. The Fed is widely expected to raise interest rates this week and continue its quarterly drumbeat of 25-basis-point increases straight through to June 2019 when the upper boundary hits 3%. Oil extended gains near the highest level in almost four years after OPEC and other non-members kept production unchanged this weekend. The 10-year Treasury yields climbed to 3.1%, while the dollar was steady. In Asian markets, The Nikkei Index rose 70 points to settle at 23,940, the Shanghai Index slipped -16 points to settle at 2,781 and the Hang Seng Index was closed. In Europe, the German DAX is up about 30 points at 12,380, while the FTSE 100 is up around 20 points at 7,480. U.S. stocks closed mostly lower Monday as the U.S.-China trade war entered a new phase when tariffs on billions of dollars of products took effect. Treasuries weakened Monday, pushing up yields, as investors looked ahead to a Federal Reserve meeting that’s expected to deliver a midweek rate increase. Despite yesterday’s declines, the S&P 500 has risen in eight of the past 10 trading days, as of Friday, and the Dow posted its biggest weekly gain since July last week.

Market Closing Prices Yesterday

· The S&P 500 Index dropped -10.30 points, or 0.35%, to 2,919.37

· The Dow Jones Industrial Average fell -181.46 points, or 0.68%, to 26,562.05

· The Nasdaq Composite gained 6.29 points, or 0.08%, to 7,993.25

· The Russell 2000 Index declined -7.00 points, or 0.41% to 1,705.32

Events Calendar for Today

· 7:45 AM EST ICSC Weekly Retail Sales

· 8:55 AM EST Johnson/Redbook Weekly Sales

· 9:00 AM EST FHFA House Price Index MoM for July…est. 0.3%

· 9:00 AM EST S&P CoreLogic Case City 20-city for July

· 10:00 AM EST Richmond Fed Index for September…est. 20

· 10:00 AM EST Conference Consumer Confidence for Sept…est. 132.0

· 10:15 AM EST President Trump address UN General Assembly

· 4:30 PM EST API Weekly Inventory Data

Earnings Calendar:

· Earnings Before the Open: FDS, JBL, NEOG

· Earnings After the Close: AIR, CTAS, KBH, NKE

Other Key Events:

· Johnson & Rice 2018 Energy Conference, 9/24-9/26, in New Orleans

· Stephens 8th Annual Bank CEO Forum, 9/24-9/26, in Little Rock

· Denver Gold Forum industry conference, 9/24-9/26, in Colorado Springs

· Bank of America 2018 Global Real Estate Conference, 9/25-9/26 in NY

· Dreamforce (Salesforce.com) 2018 conference, 9/25-9/28, in San Francisco

· Roth Capital 6th Annual Solar and Storage Symposium, 9/25-9/26, in Anaheim

Sector News Breakdown

Consumer

· Ascena (ASNA) shares rose 20%; Q4 EPS 7c/$1.77B vs. est. 2c/$1.62B; 4Q Total Premium Fashion comparable sales +5%, 4Q Justice comparable sales +15%, 4Q Lane Bryant comparable sales +2%, 4Q Maurice’s comparable sales +1%, 4Q Dressbarn comparable sales -5%, 4Q Catherine’s comparable sales +3%; sees FY19 adjusted EPS 0c-10c vs. est. loss (1c) and sees FY19 revenue $6.45B-$6.55B vs. est. $6.26B

· BJ’s Wholesale (BJ) files to sell 28M shares of common stock for holders

· Nike (NKE) to report earnings tonight after the close

· Starbucks Corp. (SBUX) is planning an organizational shake-up, including corporate layoffs that will start at top levels, as the coffee chain tries to reverse stagnant sales and rekindle investors’ interest.

· Viomi Technology (VIOT) 11.4M share IPO priced at $9.00

Energy, Materials and Industrials

· Dominion Energy (D) announced that it has executed definitive agreements to divest its interests in three merchant electric generation assets for total proceeds of $1.32 billion. The interests being sold in two separate transactions include: 100% interest in the Fairless Power Station, a 1,240-megawatt combined-cycle gas turbine located in Pennsylvania; 100% interest in the Manchester Street Power Station, a 468-megawatt combined-cycle gas turbine located in Rhode Island; and 25% interest in the Catalyst Old River Hydroelectric Limited Partnership

· CenterPoint Energy (CNP) announced the commencement of concurrent underwritten public offerings of $1.5B of shares of common stock and 15M depositary shares

· W&T Offshore (WTI) announced that it has entered into a definitive purchase and sale agreement to divest its ownership in overriding royalty interests in the Permian Basin for $56.8M

· Glencore (GLNCY) has announced plans to repurchase a further $1bn of its own shares

· Canadian National (CNI) upgraded to buy at Citigroup

Financials

· BNY Mellon (BK) plans to shut down its fund of hedge funds business and return $2.1 billion in assets to investors by the end of November. BNY’s EACM Advisors is closing because “the overall demand for fund of hedge funds strategies has diminished it said

· CMC Markets, the online trading platform, issued a first-half profit warning on Tuesday, blaming low market volatility over the summer and the impact of a recent regulatory crackdown

· Digital Realty (DLR) 8.5M share Secondary priced at $113.00

Healthcare

· AnaptysBio (ANAB) announces $200M common stock offering

· Syndax (SNDX) announces updated results from phase 2 ENCORE 601 Trial of Entinostat in combination with KEYTRUDA (pembrolizumab) in non-small cell lung cancer; says results didn’t meet prespecified ORR endpoint

· Novan (NOVN) says it is finalizing clinical development plans for SB204 and the acne indication based on the receipt or written meeting minutes from a Type C meeting held with the FDA.

· Arena Pharmaceuticals (ARNA) says olorinab three times daily cut stomach pain for people with Crohn’s disease within the first week of treatment. The Phase 2a study showed 11 of 13 patients at week four had a 30% or greater improvement in pain from baseline while 11 of 11 evaluable at week eight showed similar improvements

· Novartis (NVS) has announced 1,700 job cuts in Switzerland as well as up to 400 job losses in the UK and the end of manufacturing in Grimsby

Technology, Media & Telecom

· IHS Markit (INFO) Q3 EPS 58c/$1.001B vs. est. 55c/$991.04M; raises FY18 adj. EPS view to $2.25-$2.27 from $2.23-$2.27 (est. $2.28); raises FY18 revenue view to $4B-$4.02B from $3.85B-$3.90B (est. $4.01B)

· Nvidia (NVDA) price target raised to street high $360 at Bank America

· Google (GOOGL) Chief Executive Sundar Pichai plans to appear at a private meeting of top GOP lawmakers on Friday and again at a public hearing this year, responding to new scrutiny of the company’s work with China

· Kevin Systrom and Mike Krieger, who together founded the photo-sharing app Instagram, have resigned and plan to leave the company, now owned by Facebook (FB), in the coming weeks, the New York Times reported

· CenturyLink (CTL) announced that executive VP and CFO Sunit Patel has resigned from CenturyLink after accepting an executive leadership role at another company

 

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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