Morning Preview: November 08, 2018

Terrie AmengualDaily Market Report

Early Look

Thursday, November 8, 2018

U.S. futures are slipping, paring some of yesterday’s strong returns that saw the Dow, S&P and Nasdaq all rise more than 2%, as results from the mid-term elections were in-line with Wall Street expectations (Democrats captured control of the House and Republicans expanded their Senate majority). Next up on the agenda, the Fed, with today’s meeting the last of the year without a press conference and probably the last before another rate hike as they are widely expected to raise rates at the December meeting. The Fed is likely to keep its assessment that economic risks are roughly balanced. Also today, Chinese economic data as exports jumped 15.6% in dollar terms in October from last year, beating the near 12% estimate. In corporate news, chip maker QCOM shares tumbled after its sales forecast missed estimates, while markets await Disney earnings after the close in another busy day of earnings. In Asian markets, The Nikkei Index surged 401 points to 22,486, the Shanghai Index slipped -5 points to 2,635 and the Hang Seng Index gained 80 point to settle at 26,227. In Europe, the German DAX is down about -15 points at 11,560, while the FTSE 100 is up around 15 points at 7,135. Overall the post-election stock rally has faded, while the dollar climbed and Treasury yields slipped before the Fed meeting.

Market Closing Prices Yesterday

· The S&P 500 Index jumped 58.44 points, or 2.12%, to 2,813.89

· The Dow Jones Industrial Average rose 545.29 points, or 2.13%, to 26,180.30

· The Nasdaq Composite surged 194.79 points, or 2.64%, to 7,570.75

· The Russell 2000 Index advanced 26.06 points, or 1.67% to 1,582.16

Events Calendar for Today

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

· 8:30 AM EST Continuing Claims…est. 1.634M

· 9:45 AM EST Bloomberg Consumer Comfort Index…prior 60.3

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

· 2:00 PM EST FOMC Rate Decision (no change expected)

Earnings Calendar:

· Earnings Before the Open: CAH, COMM, COT, CRCM, DT, DHI, DISCA, ENDP, GCI, HRI, LNG, NICE, PRGO, PRTY, SBH, WIN, WP

· Earnings After the Close: AGO, AMC, ARRS, ATVI, CTL, DBX, DIS, DOX, FOE, HDP, HTZ, LGF, MIME, NSTG, PDFS, SCOR, SWKS, SYNA, TTD, UIS, VRTU, XRAY, YELP

Other Key Events:

· RW Baird 48th annual Industrials Conference, 11/6-11/8, in Chicago

· Stephens Investment Conference, 11/6-11/8, in New York

· Piper Western Bank Symposium, 11/7-11/8, in CA

· REITWorld 2018 Annual Conference, 11/7-11/9, in San Francisco

· FOMC Rate Decision

World News

· Chinese exports jumped 15.6% in dollar terms in October from last year, beating the 11.7% estimate, as companies rushed to make deliveries before higher U.S. tariffs kick in. Imports surged 21.4% and the trade surplus widened to $34 billion.

· The EU raised its 2018-2019 euro-area CPI forecasts to 1.8% from 1.7% and said the region’s government deficit will be 0.6% of GDP this year and 0.8% next.

· China’s oil imports rose to a record 9.65 million barrels a day in October.

Sector News Breakdown

Consumer

· Costco Wholesale (COST) net sales of $11.16B for the retail month of October, the four weeks ended November 4, an increase of 10.6% from last year. Comparable sales were up 10.4% for U.S., 2.4% for Canada and up 8.6% for total company. E-commerce comparable sales up 20.0

· Keurig Dr Pepper (KDP) Q3 EPS 30c/$2.73B vs. est. 28c/$2.87B; 3Q adjusted operating income $697M; says on track to deliver full year 2018 outlook

· Monster Beverage (MNST) Q3 EPS 50c/$1.02B vs. est. 46c/$987.92M

· Nu Skin (NUS) Q3 EPS $1.01/$675.3M vs. est. 98c/$664.83M; sees Q4 adjusted EPS $1.00-$1.07 on revs $665M-$685M vs. est. $1.10/$666M

· Roku (ROKU) Q3 EPS loss (9c)/$173.4M vs. est. loss (12c)/$169.08M; sees Q4 revenue $255M-$265M vs. est. $258.64M; sees Q4 adjusted EBITDA $13M-$20M; 3Q average rev. per user $17.34; 3Q active customer accounts 23.8 million

· SpartanNash (SPTN) Q3 adjusted EPS 50c/$1.89B vs. est. 48c/$1.91B; increase in net sales driven by continued sales growth in the food distribution segment of 4.6%, partially offset by lower sales in the military and retail segments of 1.1% and 3.7%, respectively

· Wynn Resorts (WYNN) Q3 EPS $1.68/$1.71B vs. est. $1.69/$1.66B; Q3 Wynn Macau revenue $579.6M, up 3.1%; reports Q3 Las Vegas Operations revenue $398.9M, down 14.1%; 3Q adjusted property Ebitda $504.4M; 3Q total Macau operations adj. property Ebitda $409.1M

· Alarm.com (ALRM) Q3 EPS 36c/$111.8M vs. est. 25c/$96.83M;

· Flowers Foods, Inc. (FLO) agreed to acquire Canyon Bakehouse LLC, a privately held, gluten-free baking company based in Johnstown, Colo., for approximately $205 million

· Zumiez (ZUMZ) reports October comp sales rose 1.6%; total net sales for the four-week period ended November 3, 2018 increased 0.6% to $61.9M million, compared to $61.5 million for the four-week period ended October 28, 2017

Energy

· Murphy Oil (MUR) Q3 EPS 35c/$674.8M vs. est. 36c/$633.43M; Q3 adjusted EBITDA $400.1M vs. $307.9M last year

· Marathon Oil (MRO) Q3 EPS 24c/$1.67B vs. est. 21c/$1.48B; cees FY production 405,000 to 415,000 boe/d, saw 400,000 to 415,000, estimate 417,478; sees 4Q International E&P production 105,000 to 115,000 boe/d

· Sunrun (RUN) Q3 EPS loss (2c)/$114.6M vs. 27c/$190.06M; sees FY18 deployments to grow 15% year-over-year

· WildHorse Resource (WRD) Q3 EPS 38c/$259.5M vs. est. 48c/$224.24M; Q3 net production was 49.0 Mboe/d compared to 36.6 Mboe/d YoY; Q3 2018 net production consisted of approximately 35.5 Mbbls/d oil, 6.2 Mboe/d NGLs, and 43.3 MMcf/d natural gas.

Financials

· Square (SQ) shares fell -8%; sees Q4 Ebitda $75M-$80M vs. estimate $81.1M; overshadowed the 4Q adjusted sales outlook of $446M- $451M vs. est. $440.6M; 3Q subscription- and services-based revenue reached $166M, up 155% y/y and an acceleration from a 2Q expansion of 127%; Q3 adjusted EPS 13c/$431M vs. est. 11c/$413.88M; reports Q3 GPV $22.5B.

· Ambac Financial (AMBC) Q3 EPS loss ($1.66) vs. est. 30c; 3Q net investment income $58.3 million; 3Q adjusted book value per share $28.50

· Envestnet (ENV) Q3 EPS 53c/$203.2M vs. est. 50c/$204.04M; sees Q4 adjusted EPS 59c on revs $209.5M-$211M vs. est. 59c/$212.85M; raises FY18 adj. EPS view to $1.91 from $1.85-$1.89 and narrows FY18 revenue view to $812M-$813M from $812M-$818M

· Green Dot (GDOT) Q3 adjusted EPS 59c/$230.6M vs. est. 43c/$223.97M; raises FY18 EPS view to $3.18-$3.22 from prior $3.03-$3.08 and raises FY18 revenue view to $1.038B-$1.042B from $1.022B-$1.032B (est. $1.03B)

· New York Mortgage (NYMT) files to sell 12.5M shares of common stock

· Prudential Financial (PRU) Q3 EPS $3.15 vs. est. $3.16; assets under management $1.41 trillion; 3Q adjusted book value per share $95.20

Healthcare

· DaVita (DVA) Q3 EPS 56c/$2.85M vs. est. 87c/$2.93B; narrowed 2018 Kidney Care adjusted consolidated operating income to $1.5B-$1.525B from $1.5B-$1.6B; still expects operating cash flow from continuing operations of $1.4B-$1.6B

· Editas Medicine (EDIT) Q3 EPS loss (32c)/$14.5M vs. est. loss (66c)/$9.83M; cash, cash equivalents, and marketable securities at September 30, 2018, were $337.5M, compared to $329.1M at December 31, 2017

· Hologic (HOLX) Q4 EPS 58c/$813.5M vs. est. 58c/$806.55M; sees Q1 EPS 55c-57c on revs $800M-$815M vs. est. 58c/$817.51M

· Immunomedics (IMMU) announced its current clinical collaboration with AstraZeneca (AZN) and MedImmune for the development of Imfinzi and sacituzumab govitecan combination therapy has been broadened to include second-line metastatic non-small cell lung cancer

· Sarepta (SRPT) files to sell $500M in common stock

Industrials & Materials

· Albemarle (ALB) Q3 adjusted EPS $1.31/$777.7M vs. est. $1.25/$796.65M; sees FY18 adjusted EPS $5.30-$5.50 on revs $3.3B-$3.5B vs. est. $5.39/$3.38B

· Flowserve (FLS) Q3 EPS 49c/$953M vs. est. 43c/$925.33M; raises FY18 adj. EPS view to $1.65-$1.75 from $1.50-$.170

· Genco Shipping (GNK) Q3 EPS 10c/$92.3M vs. est. 16c/$67.3M

· Tetra Tech (TTEK) Q4 EPS 75c/$747.3M vs. est. 74c/$571.73M; sees FY19 EPS $2.75-$2.95, on revs $2.2B-$2.4B vs. est. $2.88/$2.31B; announces new $200M stock buyback

· Woodward (WWD) Q4 EPS $1.16/$719.4M vs. est. $1.32/$687.5M; FY19 EPS $4.40-$4.70, vs. consensus $4.56; total net sales are expected to be between $2.65B-$2.80B

Technology, Media & Telecom

· Qualcomm (QCOM) Q4 EPS 90c/$5.83B vs. est. 83c/$5.52B; sees Q1 adjusted EPS $1.05-$1.15 on revs $4.5B-$5.3B vs. est. 95c/$5.57B; 4Q MSM chip shipments 232 million

· Take-Two (TTWO) Q2 EPS $1.05 on revs $583.4M vs. est. 91c/$551.1M; sees 3Q adj. revenue $1.4B-$1.45B vs. est. $1.37B and EPS $2.50 to $2.60 vs. est. $2.63

· Angi HomeServices (ANGI) Q3 EPS 5c/$303.1M vs. est. 4c/$296.5M. Marketplace service requests from homeowners increased 28% year-over-year to 6.4M; expects $75M-$85M of operating income and $260M-$270M of Adjusted EBITDA in 2018

· Carvana (CVNA) Q3 EPS loss (40c)/$534.9M vs. est. loss (37c)/$509.95M; Q3 Retail units sold totaled 25,324, an increase of 116%; sees Q4 revenue $570M-$630M vs. est. $578.94M; sees Q4 retail unit sales of 27,500-30,000, an increase of 103%-122%; sees FY18 revenue $1.94B-$2.0B vs. consensus $1.92B

· Cornerstone OnDemand (CSOD) Q3 EPS 23c/$134M vs. est. 18c/$130.2M; raises FY18 revenue view to $528M-$531M from prior $520M-$526M vs. est. $524.21M

· CyberArk (CYBR) Q3 EPS 48c/$84.7M vs. est. 27c/$78.8M; Q3 license revenue was $46.1M, a 29% increase compared YoY and Maintenance and Professional Services revenue was $38.5M, a 33% increase YoY; sees Q4 EPS 58c-60c on revs $94.75M-$96.25M vs. est. 51c/$94.68M

· IAC Corp. (IAC) Q3 EPS $1.49/$1.1B vs. est. 93c/$1.07B; ANGI HomeServices revenue increased 67% to $303.1M. Match Group total Average Subscribers increased 23% to 8.1M. Vimeo subscribers increased 10% to 932,000 and SaaS revenue, excluding acquisitions, increased 29%

· Microchip (MCHP) Q2 EPS $1.81/$1.51B vs. est. $1.73/$1.51B; sees 3Q adjusted EPS $1.49-$1.64 on sales $1.36B-$1.44B vs. es.t $1.65/$1.47B; sees 3Q adjusted gross margin +61% to +61.5%

· SailPoint (SAIL) Q3 EPS 12c/$66.4M vs. est. loss (2c)/$55.22M; sees Q4 EPS 8c-9c on revs $70.0M-$71.5M vs. est. 10c/$76.03M; sees 2018 EPS 25c-26c on revs $240.7M-$242.2M, vs. consensus 13c/$235.46M

· Talend (TLND) announced it has entered into a definitive agreement to acquire Stitch, a leader in the fast-growing, self-service data integration market for $60M

· TripAdvisor (TRIP) Q3 EPS 72c/$458M vs. est. 48c/$469.4M; Q3 adjusted Ebitda $146M

· Zayo Group (ZAYO) announced it plans to separate into two publicly traded companies: one to focus on providing core communications infrastructure and another to leverage infrastructure to provide solutions for a broad set of enterprise customers

____________________________________________________

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

Register