Morning Preview: October 12, 2018

Terrie AmengualDaily Market Report

Early Look

Friday, October 12, 2018

U.S. stocks futures are bouncing following back-to-back declines for major U.S. averages, while Europe and Asian markets are also moving higher on the final day of trading for the week. Overnight, markets in Asia were boosted by robust China export figures with the MSCI Asia Pacific Index climbing 1.2%. S&P futures bounced after the close yesterday following a Bloomberg report that the U.S. Treasury Department’s staff has advised Secretary Steven Mnuchin that China isn’t manipulating the yuan as the Trump administration prepares to issue a closely watched report on foreign currencies. The conclusion, if accepted by Mnuchin, would avert an escalation of the U.S.-China trade war. Stocks futures have rallied overnight, holding those gains in what has been a very rough week for Bulls on Wall Street. In Asian markets, The Nikkei Index rose 103 points to finish at 22,694, the Shanghai Index gained 23 points to end at 2,606 (bouncing off 4-year lows) and the Hang Seng Index jumped 532 points to settle at 25,801. In Europe, the German DAX is up around 50 points at 11,600, while the FTSE 100 is also up around 50 points above 7,050.

Stocks sunk for a second straight day, with the S&P 500 index dropping over 2.1% to its lowest levels since July, while the Dow Industrial Average has lost around -1.375 points during that stretch. With yesterday’s carnage, all four major indexes (Dow, S&P, Nasdaq and Russell 2000) have now traded below their respective 200-day moving averages, as key technical levels were damaged. Investors rotated into defensive and safe haven assets yesterday with gold prices surging 3% to its highest levels in about 10 weeks and Treasury prices rallying, pulling yields off multi-year highs.

Market Closing Prices Yesterday

· The S&P 500 Index plunged -57.31 points, or 2.06%, to 2,728.37

· The Dow Jones Industrial Average fell -545.91 points, or 2.13%, to 25,052.83

· The Nasdaq Composite dropped -92.99 points, or 1.25%, to 7,329.06

· The Russell 2000 Index declined -30.03 points, or 1.91% to 1,545.38

Events Calendar for Today

· 8:30 AM EST Import Prices MoM for Sept

· 9:30 AM EST Fed’s Evans in moderated discussion on economy

· 10:00 AM EST University of Michigan Sentiment, Oct-P

· 1:00 PM EST Baker Hughes Weekly Rig Count

Earnings Calendar:

· Earnings Before the Open: C, FRC, JPM, PNC, WFC

World News

· The International Energy Agency (IEA) cut forecasts for oil demand this year and next because of growing threats to global economic growth, yet warned that dwindling spare oil supplies will keep prices high. Reduced growth estimates from the International Monetary Fund, trade disputes and the strain of high oil prices all fed into the downgrade to consumption. The IEA cut its estimate for global oil-demand growth for both 2018 and 2019 by about 110,000 barrels a day to 1.3M-1.4M

· Eurozone industrial production rose in August for the first time in three months despite stagnation in Germany

Sector News Breakdown


· British American Tobacco Plc (BTI) and Imperial Brands Plc (IMB.LN) led cigarette stocks lower on concern the U.S. FDA is planning to propose strict limits on the amount of nicotine in traditional cigarettes, Bloomberg reported

· Tesla Inc. (TSLA) domestic sales are closing in on U.S. sales of storied luxury trio Lexus, BMW and Mercedes-Benz, and have zoomed past U.S. sales for Audi and Acura, among other car brands. The data is according to an analysis by, which estimated Tesla U.S. sales to have reached 64,727 in the third quarter, just shy of Mercedes-Benz’s 66,542 for the quarter.

Energy, Materials and Industrials

· Alaska Air (ALK) sees 3Q RASM at the high end of view on improved pricing; sees combined 3Q RASM 13.03c – 13.05c, up from previous view of 12.76c – 13.06c, due primarily to improved close-in pricing in many markets

· Volkswagen Group (VLKAY) warned of more sales fluctuations this quarter as it reported that deliveries in Europe dropped nearly two-fifths last month

· Eastman Chemical (EMN) upgraded to Overweight from Neutral at JPMorgan

· Wabash (WNC) guides Q3 EPS 27c-30c, below the 52c estimate and sees year EPS $1.50-$1.55, missing the $1.96 est.; says total new trailer shipments/revs below views


· PNC Bank (PNC) Q3 EPS $2.82 vs. est. $2.72; provision for credit losses $88M vs. Bloomberg est. $116.8M

· JP Morgan (JPM) Q3 FICC sales and trading revs $2.84B vs. Bloomberg est. $2.96B; investment banking revs $1.73B vs. Bloomberg est. $1.82B

· Earnings from Citigroup (C) and Wells Fargo (WFC) are expected later this morning


· Corium International, Inc. (CORI) to be acquired by Gurnet Point Capital, a private investment firm focused on the healthcare and life sciences sectors, with CORI holders to receive $12.50 per share in cash

· J&J’s (JNJ) Janssen Pharmaceutical Cos. says the U.S. FDA approved Xarelto to reduce the risk of major cardiovascular (CV) events including death, myocardial infarction (MI), and stroke, in people with chronic coronary or peripheral artery disease.

· Tetraphase Pharmaceuticals (TTPH) announced the U.S. commercial launch of Xerava for the treatment of complicated intra-abdominal infections, or cIAI

· AbbVie (ABBV) announced a global resolution of all intellectual property-related litigation with Sandoz over its proposed biosimilar adalimumab product

· Iovance Biotherapeutics (IOVA) reports results from FDA end of Phase 2 meeting; says FDA acknowledged acceptability of a single-arm cohort for registration in metastatic melanoma post PD-1 blocking antibody; sees enrollment for metastatic melanoma study in early 2019

· Progenics Pharmaceuticals (PGNX) to advance I-131 1095, its PSMA-targeted therapeutic candidate for the treatment of metastatic prostate cancer, into a Phase 2 clinical study; expects to begin enrollment of about 120 evaluable patients in the study in early 2019

· Damage from Hurricane Michael has forced hospitals, nursing homes and assisted-living facilities in Florida to close

Technology, Media & Telecom

· Netflix (NFLX) upgraded to Buy from Neutral at Citi

· Microsoft (MSFT) upgraded to Outperform from Neutral at Macquarie

· Marvell (MRVL) upgraded to buy from hold at Stifel saying it is well positioned to boost revenue and profits in data center networking market and the stock market selloff has created an attractive entry point for investors

· Anaplan (PLAN) 15.5M share IPO priced at $17.00



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.

Live Trading

Open an Account

Paper Trading