Morning Preview: February 08, 2019

Auto PostDaily Market Report

Early Look

Friday, February 8, 2019

Futures

Up/Down

%

Last

DJ Industrials

-91.00

0.36%

25,040

S&P 500

-10.50

0.38%

2,693

Nasdaq

-37.50

0.54%

6,868

 

 

Stock futures are lower across the board, on track for a third day of losses as investors continue to deal with trade issues with China, prepare for another possible government shutdown and digest the heavy dose of earnings overnight. President Donald Trump is expected to sign an executive order banning Chinese telecom equipment from U.S. wireless networks next week, Politico reported late Thursday, adding to the already tense negotiations expected next week when the U.S. resumes talks. Despite the recent pullback in U.S. stocks, major averages come into the day with modest gains as Dow is looking at a gain of 0.4%, the Nasdaq Composite is up 0.3%, while the S&P 500 is flat (as of Thursday). In Asian markets, The Nikkei Index fell -418 points to settle at 20,333, the Shanghai Index remained closed for its week-long holiday while the Hang Seng Index reopened, losing -43points to settle at 27,946. In Europe, the German DAX is flat at 11,020, while the FTSE 100 is also little changed around the 7,100 level.

 

U.S. stocks dropped again on Thursday, with the Dow Jones Industrial Average falling as much as 390 points at its low before paring losses while tech underperformed as the Nasdaq Comp dropped more than 1% as the market focused on U.S.-China trade tensions as well as slowing global economic growth after the EC lowered its growth outlook and German data was weaker. China concerns jitters resurfaced after National Economic Council Director Larry Kudlow said during an interview with Fox Business Network that there is still a long way to go before the U.S. will strike a trade deal with China. President Donald Trump also said it was unlikely to meet China President Xi Jinping before a March 1 deadline, but the U.S. is likely to keep tariffs at 10% rather than raise them to 25% as scheduled. A possible government shutdown lingers as well ahead of the Feb 15 date Trump gave Congress to come up with a new bill that includes funding for his border wall.

Market Closing Prices Yesterday

·     The S&P 500 Index slumped -25.56 points, or 0.94%, to 2,706.05

·     The Dow Jones Industrial Average fell -220.77 points, or 0.87%, to 25,169.53

·     The Nasdaq Composite plunged -86.93 points, or 1.18%, to 7,288.35

·     The Russell 2000 Index declined -12.40 points, or 0.82% to 1,505.63

 

Events Calendar for Today

·     1:00 PM EST              Baker Hughes Weekly Rig Count

 

Earnings Calendar:

·     Earnings Before the Open: ARNC, BPL, CBOE, CLF, COTY, EEFT, ESNT, EXC, HAS, IMGN, PSX, RDN

 

Other Key Events:

·     William Blair 16th annual Utilities conference, 2/7-2/8, in Toronto

·     USDA World Agricultural Supply and Demand Estimates (WASDE) report

 

 

Macro

Up/Down

Last

WTI Crude

-0.26

52.38

Brent

0.21

61.84

Gold

1.00

1,315.20

EUR/USD

-0.0002

1.1339

JPY/USD

0.03

109.85

10-Year Note

-0.01

2.646%

 

 

World News

·     St. Louis Fed President James Bullard on Thursday said he thinks the central bank’s current interest-rate policy stance is slightly restrictive at the time when the central bank should be more concerned about the slower growth and weaker inflation expected this year.

·     German exports increased 1.5% from the month before while imports rose 1.2%, with both figures taking into account seasonal swings and calendar effects.

·     The Russian central bank held rates as expected, and flagged tightening in September and December as pivotal to future decisions.

 

Sector News Breakdown

Consumer

·     Tata Motors Ltd. (TTM) shares plunged after the company unveiled a write-down in its luxury Jaguar Land Rover Automotive Plc unit saying plummeting sales in China are compounding Jaguar Land Rover’s challenges that include the industry’s shift away from vehicles powered by gas and diesel

·     Beacon Roofing (BECN) Q1 EPS 60c/$1.72B vs. est. 55c/$1.66B; Q1 adjusted EBITDA margin 7.1% vs. 7.7% last year; Q1 adjusted EBITDA $121.7M vs. $86.0M in the prior year; backs both year EPS and revenue outlooks

·     Columbia Sportswear (COLM) shares rose 11%; Q4 EPS $1.63/$917.6M vs. est. $1.28/$841.93M; sees FY19 EPS $4.30-$4.45 on revs $2.97B-$3.03B vs. est. $4.08/$2.93B; announces $200M share buyback; expects 2019 gross margin to improve by approximately 70 basis points

·     Expedia (EXPE) Q4 adjusted EPS $1.24/$2.56B vs. est. $1.08/$2.54B; Q4 room night growth of 11% vs. 15% a year ago; 4Q gross bookings $21.96 billion

·     Lear (LEA) raises share repurchase authorization to $1.5B, raises dividend 7% to 75c

·     Mattel (MAT) shares rose 18%; Q4 EPS 4c/$1.52B vs. est. loss (16c)/$1.44B; 4Q gross margin 46.6% vs est. 41.2%; 4Q reported operating income $107M, an improvement of $358M YoY; power Brands division sales fell 6% to $1.2B, better than Stifel’s estimate for a 15% drop; 4Q Barbie gross sales rose 12% YoY and Hot Wheels gross sales rose 9%

·     Mohawk (MHK) Q4 adjusted EPS $2.53/$2.45B vs. est. $2.50/$2.43B; sees Q1 EPS $2.02-$2.12 vs. est. $2.28

·     Skechers (SKX) shares rose 18%; Q4 EPS 31c/$1.08B vs. est. 23c/$1.1B; international wholesale sales rose 18.4%, company-owned global retail sales rose 7.5%, and Total international wholesale and retail sales combined represented 55.6% of total sales; sees Q1 EPS 70c-75c on revs $1.275B-$1.3B vs. est. 69c/$1.35B

·     Urban Outfitters (URBN) Q4 revenue $1.129B vs. est. $1.14B; total company net sales for the three months ended January 31, 2019 increased 3.7% over the same period last year to a record $1.129B; 4Q Urban Outfitters comparable sales +4%, 4Q Free People comparable sales +4%, 4Q Anthropologie comparable sales +2%, 4Q comparable retail segment sales +3%

 

Financials

·     Bank America (BAC) raises share repurchase plan by $2.5B

·     Western Union (WU) Q4 adjusted EPS 49c/$1.40B vs. est. 49c/$1.44B; consumer money transfer revenues declined 1% in the quarter due to the impact of foreign exchange, but increased 1% in constant currency; sees FY EPS $1.83-$1.95 vs. est. $1.94; raises dividend 5% to 20c per share

 

Healthcare

·     Alnylam (ALNY) Q4 adjusted EPS loss ($1.82)/$21.03M vs. est. loss ($2.28)/$15.12M

·     Gossamer Bio (GOSS) 17.25M share IPO priced at $16.00

·     Harpoon Therapeutics (HARP) 5.4M share IPO priced at $14.00

·     Ligand (LGND) Q4 EPS adjusted EPS $1.70/$59.6M vs. est. $1.18/$51.26M; raises 2019 adjusted EPS outlook to $6.05 from $5.50 (est. $5.51) and raises 2019 revenue outlook to $224M from $212M, which includes royalties of approximately $154M

·     Mettler-Toledo (MTD) Q4 adjusted EPS $6.85/$817.92M vs. est. $6.75/$807.03M; raises FY19 adj. EPS view to $22.50-$22.70 from $22.40 to $22.60 (est. $22.48); said based on market conditions management anticipates local currency sales growth in 2019 will be approximately 5%

·     Seattle Genetics’ (SGEN) shares fell -10%; Q4 EPS loss (75c)/$174.5M vs. est. loss (42c)/$163.7M; full-year guidance and Adcetris view missed estimates; sees FY revenue $790.0M-$840M below est. $861.6M; sees Adcetris net product sales of $610M-$640M below est. $668.2M

 

Industrials & Materials

·     Carlisle (CSL) Q4 EPS$1.49/$1.08B vs. est. $1.23/$1.06B

·     Forward Air (FWRD) Q4 EPS 95c/$356.6M vs. est. 82c/$346.35M

·     Hub Group (HUBG) Q4 EPS $1.01/$1B vs. est. 90c/$970.8M; sees FY19 EPS $3.10-$3.30 vs. est. $3.20; sees 2019 cap-ex $90M-$100M

·     Manitowoc (MTW) Q4 adjusted EPS 16c/$515.3M vs. est. 1c/$487.98M; reports Q4 orders of $485.7M; sees 2019 revenue $1.85B-$1.95B vs. est. $1.95B; sees 2019 adjusted EBITDA $125M-$145M vs. est. $131.8M

·     Republic Services (RSG) Q4 EPS 80c/$2.53B vs. est. 78c/$2.54B; sees FY adjusted EPS $3.23-$3.28 vs. est. $3.26 and sees FY revenue +4.25% to +4.75%; sees FY adjusted free cash flow $1.13B-$1.18B

·     Weyerhaeuser (WY) authorizes additional $500M stock buyback

 

Media & Telecom

·     IAC/InterActiveCorp (IAC) Q4 revs $1.1B vs. est. $1.07B; 4Q adj. Ebitda $268M vs. est. $258.1M; 4Q operating income $133.9m, 42% y/y growth

·     Knowles (KN) Q4 EPS 37c/$223.8M vs. est. 34c/$224.4M; Q4 gross margin 42.1% vs. 41.5% last year; sees Q1 EPS 9c-13c on revs $165M-$185M vs. est. 16c/$190.44M

·     Lionsgate (LGF/A) Q3 EPS 35c/$933.2M vs. est. 32c/$1.01B; 3Q adjusted Oibda $171.4 million

·     News Corp (NWSA) Q2 adjusted EPS 18c/$2.63B vs. est. 15c/$2.63B; 2Q news and information services revenue $1.26B, Q2 book publishing revs $496M, Q2 digital real estate services revs $311M

·     Zayo (ZAYO) Q2 EPS 13c/$639.1M vs. est. 14c/$642.01M

 

Technology

·     Angi HomeServices (ANGI) Q4 GAAP EPS 7c/$279M vs. est. 3c/$280.74M; Marketplace service requests increased 24% year-over-year to 5.3M with FY18 service requests of over 23M, from over 13M households. Marketplace paying service professionals increased 18% to 214,000 and revenue per paying service professional increased 16% year-over-year’’

·     Carbonite (CARB) Q4 adjusted EPS 45c/$77M vs. est. 42c/$79.92M; sees FY19 adjusted revenue $488M-$502M vs. est. $334.58M; sees FY19 adjusted EBITDA $129M-$134M; announced an all-cash deal to acquire cybersecurity company Webroot for about $618.5M in cash

·     Motorola Solutions (MSI) Q4 EPS $2.63/$2.25B vs. est. $2.54/$2.22B; sees FY19 EPS $7.55-$7.70 vs. est. $7.56; sees revenue up 6%-7%, implying $7.78B-$7.86B vs. est. $7.70B

·     NCR Corp. (NCR) Q4 EPS 84c/$1.80B vs. est. 82c/$1.78B; Q4 services revenue up 2% and gross margin expansion of 250bps; sees FY19 EPS $2.75-$2.85 vs. est. $2.90; sees FY19 revenue up 1%-2%, implying $6.47B-$6.54B, consensus $6.51B

·     Nuance (NUAN) Q1 EPS 33c/$495.2M vs. est. 28c/$505.0M; raising full-year operating margin guidance as a result of an improved mix of higher-margin recurring healthcare revenue and full-year EPS guidance as a result of this revenue mix and the benefits from capital allocation activities

·     Omnicell (OMCL) Q4 non-GAAP EPS 70c/$211.8M vs. est. 67c/$215.4M; sees FY19 non-GAAP EPS $2.40-$2.60 on revs $880M-$900M vs. est. $2.42/$876.4M; sees FY19 product revenues $652M-$668M, and non-GAAP service revenues $228M-$232M

·     Qorvo (QRVO) Q3 EPS $1.85/$832M vs. est. $1.69/$819.32M; sees Q4 EPS $1.05 at mid-point vs. est. $1.35 and sees Q4 revenue $660M-$680M below consensus $725.69M

·     Rapid7 (RPD) Q4 EPS (5c)/$68.8M vs. est. loss (9c)/$66.62M; sees FY19 revenue $304M-$312M, vs. consensus $291.45M; sees Q1 revenue $68.9M-$70.5M vs. est. $65.59M

·     Synaptics (SYNA) Q2 EPS $1.55/$425.5M vs. est. $1.34/$422.02M; sees Q3 revenue $340M-$380M, vs. est. $392.36M and expects the revenue mix from mobile, IoT and PC products to be approximately 62%, 20% and 18%, respectively

·     Teradata (TDC) Q4 adjusted EPS 49c/$588M vs. est. 44c/$566.21M; sees Q1 adjusted EPS 18c-20c vs. est. 27c and sees FY19 adjusted EPS $1.45-$1.55 vs. est. $1.58

·     TrueBlue (TBI) Q4 EPS 61c/$650.1M vs. est. 59c/$650.2M

·     VeriSign (VRSN) Q4 EPS $1.58/$307.5M vs. est. $1.21/$308.64M; 4Q new domain name registrations processed 9.5 million; sees FY19 revenue $1.215B-$1.235B below est. $1.27B; authorizes additional $603M of share repurchases

·     Vocera (VCRA) shares fell over 20%; Q4 EPS 18c/$48.9M vs. est. 18c/$49.8M; sees 1Q EPS loss (22c-29c) on revs $32M-$35M vs. est. 6c/$45.7M; sees FY revenue $187M-$197M vs. est. $205.8

·     Sony (SNE) to buy back as much as 100B yen of shares

·     Presidio (PSDO) 4M share Block Trade priced at $15.25

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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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