Morning Preview: February 21, 2019

Auto PostDaily Market Report

Early Look

Thursday, February 21, 2019

Futures

Up/Down

%

Last

DJ Industrials

27.00

0.10%

25,991

S&P 500

2.00

0.07%

2,789

Nasdaq

16.50

0.23%

7,089

 

 

Stock futures in the U.S. are slightly higher as markets continue to focus on trade after Reuters reported overnight that U.S. and Chinese negotiators have begun to outline a deal to end the trade war between the world’s two largest economies. Reuters said agreements in principle are being drawn up on six key areas: forced technology transfer and cyber theft, intellectual property rights, services, currency, agriculture and non-tariff barriers to trade. The report suggested the outline is the most significant progress made so far after months of trade talks that are currently ongoing in Washington (after week-long discussions last week in Beijing). Stock indexes closed moderately higher Wednesday, with the Nasdaq up for an eighth session in a row (longest streak since August), following the release of minutes from the Federal Reserve’s January meeting, which showed the policy-setting committee was split on the path for interest rates. In Asian markets overnight, The Nikkei Index rose 32 points to 21,464, the Shanghai Index dipped -9 points to 2,751 and the Hang Seng Index gained 115 points to settle at 28,629. In Europe, the German DAX is up over 30 points at 11,435, while the FTSE 100 is down about -40 points at 7,190. In the UK, British Prime Minister Theresa May held “constructive” talks with European Commission president Jean-Claude Juncker last night, prompting speculation of some long-awaited progress in Brexit talks. The British Pound ticked up on news of possible progress in Brexit talks.

Market Closing Prices Yesterday

·     The S&P 500 Index climbed 4.94 points, or 0.18%, to 2,784.70

·     The Dow Jones Industrial Average rose 63.12 points, or 0.24%, to 25,954.44

·     The Nasdaq Composite gained 2.30 points, or 0.03%, to 7,489.07

·     The Russell 2000 Index advanced 7.19 points, or 0.46% to 1,581.66

 

Events Calendar for Today

·     7:50 AM EST      Fed’s Bostic speaks on Economy and Monetary Policy

·     8:30 AM EST      Weekly Jobless Claims…est. 228K

·     8:30 AM EST      Continuing Claims…est. 1.743M

·     8:30 AM EST      Philly Fed Business Outlook for February…est. 14.0

·     8:30 AM EST      Durable Goods Orders, Dec-P…est. 1.7%

·     9:45 AM EST      Bloomberg Consumer Comfort Index

·     9:45 AM EST      Markit US Manufacturing PMI, Feb-P…est. 54.8

·     10:00 AM EST    Leading Index for January…est. 0.1%

·     10:00 AM EST    Existing Home Sales MoM for January…est. 5.0M

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

·     11:00 AM EST    Weekly DOE Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: ACRE, AIMC, BG, BRC, CCOI, CNSL, COMM, CRK, DIN, DOZ, EME, ES, FND, GOGO, HEES, HL, HRL, IART, IDCC, MCS, NCLH, NEM, PLAB, PWR, ROCK, RS, SFM, TCP, TFX, TTC, VC, VG, WEN, WIN, WPX

·     Earnings After the Close: AAOI, ACIA, AL, AMH, APPN, ASPN, BEAT, BJRI, BMRN, BOOM, BYC, CASA, CENX, CUBE, CWST, CYTK, CZR, DBX, DXCM, ECOL, ED, EHTH, ENV, EXAS, FLR, FSLR, GMED, HALO, HPE, INFN, INTU, KHC, LNT, MATX, MDRX, NCMI, NVRO, OLED, PE, PRA, ROKU, SAIL, SBAC, SGMS, STMP, TTD, TXMD, UCTT, UEIC, XOG, ZG

 

Other Key Events:

·     Consumer Analyst Group of New York (CAGNY) Conference, 2/18-2/22, in New York

 

 

Macro

Up/Down

Last

WTI Crude

0.24

57.41

Brent

0.05

67.13

Gold

-10.10

1,337.80

EUR/USD

0.0005

1.1343

JPY/USD

-0.09

110.76

10-Year Note

+0.001

2.664%

 

 

Sector News Breakdown

Consumer

·     Cheesecake Factory (CAKE) Q4 adjusted EPS 60c/$585.2M vs. est. 62c/$598.81M; comparable restaurant sales at The Cheesecake Factory restaurants increased 1.9% in Q4

·     Jack in the Box (JACK) Q1 EPS $1.35/$290.79M vs. est. $1.28/$271.15M; Q4 comp sales up 0.5%; 1Q Jack system comparable sales -0.1%, 1Q Jack company comparable sales +0.5% and 1Q Jack franchise comparable sales -0.1%; backs FY19 system comps view of roughly flat to up 2%

·     Foot Locker (FL) increases quarterly dividend to 38c from 34.5c; board approved new 3-year, $1.2b share buyback program, replacing previous $1.2b program

·     SpartanNash (SPTN) Q4 adjusted EPS 32c/$1.90B vs. est. 38c/$1.93B. Q4 Adjusted EBITDA was $44.3M vs. $48.1M last year; Q4 Gross profit was $245.4M, or 12.9% of net sales, compared to $254.8M, or 13.5% of net sales last year; sees FY19 EPS $1.70-$1.80 vs. est. $1.93

·     Boston Beer (SAM) Q4 EPS $1.86/$225.2M vs. est. $1.70/$227.86M; sees FY19 EPS $8.00-$9.00, vs. consensus $8.51; sees FY19 national price increases 1%-3%.

 

Energy

·     Cimarex Energy (XEC) Q4 adjusted EPS $1.98/$624.12M vs. est. $1.80/$624.67M; Sees 2019 production 250 to 270 mboe/d; sees 2019 exploration expenses $1.35 billion to $1.45 billion

·     Energy Transfer LP (ETE) Q4 EPS 26c/$13.6B vs. est. 34c/$14.23B; reports Q4 adjusted EBITDA $2.67B, up 29% from last year

·     Noble Corp. (NE) Q4 adjusted EPS loss (36c)/$309.9M vs. est. loss (38c)/$291.13M; 4Q rig utilization 75% vs. 58.0% y/y; 4Q dayrate $176.4 million vs. $0.21 million y/y and 4Q drill ships dayrate $294.9 million vs. $0.38 million y/y

·     TechnipFMC (FTI) Q4 adjusted EPS loss (9c)/$3.32B vs. est. 37c/$3.4B; said exceeded total Company financial objectives for a second consecutive year, largely driven by continued strength in Onshore/Offshore execution as evidenced by early start-up of Trains 2 and 3 for Yamal LNG

·     SolarEdge (SEDG) Q4 EPS 63c/$263.7M vs. est. 70c/$249.68M; sees Q1 revenue $260M-$270M, vs. consensus $241.96M; sees Q1 gross margins within the range of 30% to 32%

·     QEP Resources (QEP) announced that its board has commenced a comprehensive review of strategic alternatives to maximize shareholder value, which could result in a merger or sale of the company or other transaction involving the company or its assets

·     Sunoco (SUN) Q4 revenue $3.88B vs. est. $4.28B; 4Q loss per unit $1.11; 4Q adjusted Ebitda $180M vs. Bloomberg est. $154.9M

·     WPX Energy (WPX) Q4 adjusted EPS 2c/$544M vs. est. 6c/$540.57M

·     The American Petroleum Institute (API) reported that U.S. crude supplies rose by 1.3M barrels for the week ended Feb. 15, showed that gasoline stockpiles fell by -1.6M barrels, while distillate inventories declined by -758,000 barrels

 

Financials

·     Canyon Capital Advisors withdraws its initial expression of interest to buy Navient (NAVI), says it doesn’t plan to take part in any acquisition process “at this time.” https://on.wsj.com/2BLmkam

·     Green Dot (GDOT) Q4 adjusted EPS 56c/$237.8M vs. est. 50c/$235.83M; sees FY19 adjusted EPS $3.59-$3.67 on revs $1.114B-$1.134B vs. est. $3.62/$1.15B; 2019 says financial outlook with expectations for 100% organic double-digit top and bottom-line growth rates at the midpoint of guidance ranges

·     Realty Income (O) Q4 AFFO 79c/$342.6M vs. est. 75c/$343.16M

 

Healthcare

·     Johnson & Johnson (JNJ) said it has received subpoenas and inquiries on its talc baby-powder products from federal prosecutors and securities regulators. The requests for documents have come from the U.S. Justice Department, the SEC and the top Democrat on the Senate Committee on Health, Education, Labor and Pensions

·     Agilent (A) Q1 EPS 76c/$1.28B vs. est. 73c/$1.27B; raises FY19 EPS view to $3.03-$3.07 from $3.00-$3.05 (vs. est. $3.05) and raises FY19 revenue view to $5.15B-$5.19B from $5.13B-$5.17B (est. $5.17B); sees Q2 EPS 70c-72c on revs $1.255B-$1.27B vs. est. 72c/$1.27B

·     Chemed (CHE) Q4 adjusted EPS $3.35/$458M vs. est. $3.26/$460.5M; reports VITAS admissions of 16,579, essentially equal to prior year; sees 2019 adjusted EPS $12.65-$12.85 vs. est. $12.54; revenue growth for VITAS in 2019, prior to Medicare Cap, is estimated 5.5%-6.0%

·     Community Health (CYH) Q4 adjusted EPS loss (42c)/$3.45B vs. est. loss (58c)/$3.32B; adjusted EBITDA was $419M, an increase compared with the same period in 2017. On a same-store basis, admissions decreased 0.5% and adjusted admissions increased 0.1%, compared with the same period in 2017

·     NuVasive (NUVA) Q4 EPS 69c/$288.33M vs. est. 63c/$290.96M; sees FY19 EPS $2.20-$2.30, vs. consensus $2.47 and sees FY19 revenue $1.14B-$1.16B vs. est. $1.17

 

Industrials & Materials

·     Albemarle (ALB) Q4 adjusted EPS $1.53/$921.7M vs. est. $1.47/$894.83M; sees FY19 adjusted EPS $6.10-$6.50 vs. est. $6.14; sees 2019 net sales $3.65B-$3.85B vs. est. $3.64B

·     Avis Budget (CAR) Q4 EPS 53c/$2.05B vs. est. 37c/$2.05B; sees FY19 EPS $3.35-$4.20 on revs $9.2B-$9.5B vs. est. $3.79/$9.32B; sees FY19 free cash flow of $250M-$300M

·     Flowserve (FLS) Q4 adjusted EPS 58c/$987M vs. est. 58c/$1.06B; Q4 total bookings $1.05B; sees FY19 adjusted EPS $1.95-$2.15 vs. est. $2.16 and sees FY19 revenue growth 4%-6% vs. consensus $4.07B

·     Nordson (NDSN) Q1 adjusted EPS 92c/$497.9M vs. est. $1.12/$497.91M

·     Tenaris (TS) Q4 EPS 38c/$2.11B vs. est. 43c/$2.1B

·     Trinity Industries (TRN) Q4 EPS 19c/$645.2M vs. est. 25c/$702.12M; sees FY19 EPS $1.15-$1.35, vs. consensus $1.28; sees net lease fleet investment of $1.2B-$1.4B in 2019

·     Universal Forest (UFPI) Q4 EPS 50c/$988.2M vs. est. 52c/$1.02B

 

Technology, Media & Telecom

·     GoDaddy (GDDY) Q4 EPS 24c/$695.8M vs. est. 14c/$693.63M; Q4 total bookings of $732.4M, up 11.3% year over year and average revenue per user of $148, up 6.6% year over year; reports customers of 18.5M at end 2018, up 6.8% YoY; sees 2019 revenue $2.97B-$3.0B vs. est. $2.99B; sees FY19 free cash flow in a range of $730M-$745M, representing growth of 18%-20%

·     NLight Inc. (LASR) shares fell (-10%) on weak outlook; Q4 EPS 10c/$46.2M vs. est. 6c/$46.7M; sees Q1 revs $40M-$44M below the $46.5M est.; said adjusted Ebitda is expected to fall to $2 million to $4 million, after the company recorded $6.3 million by that metric a year ago

·     Synopsys (SNPS) Q1 beats with 7% Y/Y revenue growth. Q2 guidance has in-line revenue from $810M-$850M vs. est. $820.05M and upside EPS from $1.07-$1.12 (est. $1.05)

·     Tyler Technologies (TYL) Q4 adjusted EPS $1.26/$242M vs. est. $1.26/$247.58M; sees FY19 adjusted EPS $5.20-$5.35 vs. est. $5.37 and sees FY19 revenue $1.08B-$1.1B vs. consensus $1.04B

·     Vipshop (VIPS) Q4 adjusted EPS 19c/$3.8B vs. est. 18c/$3.96B; sees 1Q revenue 19.9 billion yuan to 20.9 billion yuan vs. estimate 21.33B yuan; customers 32.4M; 4Q customer growth rate +13%

·     Carbon Black (CBLK) Q4 EPS loss (20c)/$56.9M vs. est. loss (24c)/$55.69M; sees Q1 EPS (23c)-(22c) on revs $56.5M-$57.5M vs. est. loss (21c)/$58.53M; sees FY19 EPS (64c)-(61c) on revs $240M-$244M vs. est. loss (70c)/$256.11M

·     SailPoint Technologies Holdings (SAIL) last night announced that it will reschedule its Q4 earnings conference call in order to allow additional time to complete its annual report. SailPoint currently expects to file the report within 15 calendar days of the March 1 deadline

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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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