Morning Preview: March 01, 2019

Auto PostDaily Market Report

Early Look

Friday, March 1, 2019





DJ Industrials




S&P 500










As has been the case, U.S. stock futures (as well as Asian and European markets overnight) are moving higher after positive trade reports, as Bloomberg said officials in the U.S. are preparing a final trade deal that President Donald Trump and China’s President Xi Jinping could sign in weeks citing people familiar with the matter, while the U.S. is eyeing a summit between the two presidents as soon as mid-March. Following the reports, The Nikkei Index gained 217 points to 21,602, the Shanghai Index jumped 50 points to close just below the 3,000 level (2,994) and posted its best week since 2015, while the Hang Seng Index rose 178 points to settle at 28,812. In Europe, the German DAX is spiking over 100 points to 11,630, and the FTSE 100 is up about 30 points as it tops the 7,100 level. Also helping Asia, a day after China manufacturing data disappointed materials and metals, the country’s Caixin factory PMI surprised on the upside as the private gauge rose to 49.9 last month from 48.3, and topping consensus while the new orders component rebounded strongly. Gold prices are lower and headed for its worst week since November, sliding closer to the psychological $1,300 an ounce level. Today also marks a busy morning of economic data, especially inflation as the December PCE deflator is seen slowing to 1.7% from 1.8%, with the core gauge staying at 1.9% YoY. The delayed PCE report will include end -of-year spending and income figures plus January income. In stock news, Tesla shares dropped over 4% last night after the company introduced its $35,000 Model 3, but Elon Musk said he is closing physical stores and warned the company won’t make a profit in the first quarter. Also in stock news, shares of retailer Gap Stores (GPS) jump on its plans to create two independent publicly traded companies. U.S. stocks declined Thursday, falling for a third day for the first time since Christmas, as a report showing a steadier-than-expected economy failed to offset trade and geopolitical concerns.


Market Closing Prices Yesterday

·     The S&P 500 Index slipped -7.89 points, or 0.28%, to 2,784.49

·     The Dow Jones Industrial Average fell -69.16 points, or 0.27%, to 25,916.00

·     The Nasdaq Composite dropped -21.98 points, or 0.29%, to 7,532.53

·     The Russell 2000 Index declined -5.50 points, or 0.35% to 1,575.55


Events Calendar for Today

·     8:30 AM EST      Personal Income for January…est. 0.3%

·     8:30 AM EST      Personal Spending for January…est. (-0.3%)

·     8:30 AM EST      PCE Deflator MoM…est. 0.0%

·     8:30 AM EST      PCE Core MoM…est. 0.2%

·     8:30 AM EST      PCE Core YoY…est. 1.9%

·     9:45 AM EST      Markit US Manufacturing PMI, Feb-F…est. 53.7

·     10:00 AM EST    ISM Manufacturing for February…est. 55.7

·     10:00 AM EST    University of Michigan Sentiment, Feb-F…est. 95.9

·     12:50 PM EST    Fed’s Bostic remarks at Luncheon at Economic Policy Conference

·     1:00 PM EST       Baker Hughes Weekly Rig Count

·     N/A Monthly auto sales for February


Earnings Calendar:

·     Earnings Before the Open: CLNY, CORE, FL, IPAR, PEGI, PTLA, STRA, TRCO, XRAY


Other Key Events:

·     Monthly auto sales for February

·     Leerink 8th Annual Global Healthcare Conference, 2/27-3/1, in New York






WTI Crude















10-Year Note





World News

·     China’s Caixin factory PMI surprised on the upside as the private gauge stayed t rose to 49.9 last month from 48.3, and topping consensus while the new orders component rebounded strongly

·     German jobless claims fell by 21,000 in February compared with January, according to data adjusted for seasonal swings, compared to estimates for a fall of 5,000. The adjusted jobless rate remained at the 5.0% level it fell to in November, marking the lowest rate since the beginning of the data series in January 1992

·     Headline euro-area inflation picked up to 1.5% in February from 1.4%, but the core gauge fell to 1% from 1.1%, slower than the estimate and still a long way from the ECB’s target.


Sector News Breakdown


·     Gap (GPS) shares rose 21%; plans to create two independent publicly traded companies: Old Navy and a yet-to-be-named company. NewCo to consist Gap brand, Athleta, Banana Republic, Intermix and Hill City. Gap Inc.’s current President and CEO, Art Peck, will hold the same position with NewCo after the separation

·     Gap (GPS) Q4 EPS 72c/$4.62B vs. est. 69c/$4.7B; Q4 comparable sales were down 1% compared with a 5% increase last year; Q4 Old Navy Global comps flat versus positive 9% last year; Gap Global comps negative 5% versus flat last year and Banana Republic Global: negative 1% versus positive 1% last year.

·     Foot Locker (FL) Q4 comp sales rise 9.7% vs. est. 4.6% with EPS $1.56 vs. est. $1.40

·     Marriott (MAR) Q4 adjusted EPS $1.44/$5.29B vs. est. $1.39/$5.48B; sees FY19 EPS total $5.87-$6.10 vs. est. $6.33; sees 2019 adjusted Ebitda $3.62B-$3.72B vs. est. $3.73B; sees 2019 North America REVPAR change in constant currency +1% to +3%; raises share repurchase authorization by 25M

·     Nordstrom (JWN) Q4 EPS $1.48/$4.48B vs. est. $1.42/$4.61B; Q4 comp sales, which were not impacted by the 53rd week, increased 0.1%. In Full-Price, comparable sales decreased 1.6%, primarily driven by softer traffic trends in full-line stores; sees FY19 EPS $3.65-$3.90 vs. est. $3.67; sees FY19 net sales growth of 1%-2%

·     Funko (FNKO) Q4 EPS 44c/$233.2M vs. est. 34c/$198.22M; sees FY19 EPS $1.05-$1.15 on revs $810M-$825M vs. est. 97c/$739.47M; ended 4Q with net debt of $233.8 million, which includes total debt of $247.3 million less cash and cash equivalents of $13.5 million

·     Habit Restaurants (HABT) Q4 EPS 3c/$102.7M vs. est. loss (2c)/$99.97M; Q4 company-operated comparable restaurant sales increased 2.4% as compared to the fourth quarter of 2017; sees FY19 revenue $458M-$462M, consensus $451.46M

·     Investment Technology Group (ITG) was notified by its independent registered public accounting firm on Feb. 27 that the firm will require additional time to complete the audits of the financial statements for the year ended Dec. 31



·     Sunrun (RUN) Q4 EPS loss (5c)/$240.12M vs. est. 27c/$199.5M; in Q4 MW deployed increased to 115 MW from 85 MW in the fourth quarter of 2017, a 35% year-over-year increase; sees Q1 deployments of 83 MW and 85 MW

·     Southwestern Energy (SWN) Q4 adjusted EPS 31c/$1.18B vs. est. 30c/$974.47M; during Q4, Southwestern invested a total of approximately $175M in its Appalachia operations and $21M on the water project; 4Q production 234 Bcf vs. 239 y/y; 4Q adjusted Ebitda $394M vs. est. $411.9M

·     Edison International (EIX) Q4 adjusted EPS 94c/$3.01B vs. est. 95c/$3.15B. Southern California Edison is awaiting a proposed decision from the California Public Utilities Commission on its 2018 General Rate Case; 4Q operating expenses $5.05 billion; to provide 2019 earnings guidance after a final decision has been issued by the CPUC on the Southern California Edison 2018 GRC

·     Jagged Peak Energy (JAG) Q4 adjusted EPS 13c/$138.5M vs. est. 16c/$149.01M; Q4 production volumes grew 6% sequentially from Q3and averaged 38.4 MBoe per day, 29.1 Mbbls/d oil.

·     Diamondback Energy (FANG) said Kaes Van’t Hof, currently senior VP of Strategy and Corporate Development, has been appointed CFO and executive VP of Business Development for Diamondback



·     Acorda Therapeutics (ACOR) announced that Inbrija is now available by prescription in the United States. Inbrija was approved by the FDA on December 21, 2018 for intermittent treatment in people with Parkinson’s taking carbidopa/levodopa who experience OFF episodes

·     Acadia (ACHC) Q4 EPS 61c/$743.5M vs. est. 49c/$745.7M; sees FY19 EPS $2.15-$2.30 on revs $3.15B-$3.20B vs. est. $2.40/$3.18B; sees Adjusted EBITDA in a range of $610M-$630M

·     Bio-Rad (BIO) Q4 EPS $2.13/$617.5M vs. est. $1.70/$609.02M

·     Editas (EDIT) Q4 EPS loss (52c)/$6.12M vs. est. loss (28c)/$21M; 4Q cash and other securities $369.0 million; said plans to dose patients with EDIT-101, making it the first in vivo CRISPR medicine administered to patients in history

·     Nektar (NKTR) Q4 EPS loss (57c)/$39.8M vs. est. loss (68c)/$26.1M; 4Q cash and cash equivalents $194.9M

·     Sangamo (SGMO) Q4 EPS loss (18c)/$26.8M vs. est. loss (21c)/$22.51M; said “in the remainder of the year, we anticipate providing important data that will help us understand the potential clinical benefit of our MPS I and MPS II programs, as well as clinical results and analyses from three clinical hematology assets for hemophilia A, hemophilia B and beta thalassemia

·     Puma Biotechnology (PBYI) shares rose 18%; Q4 adjusted EPS loss (32c)/$71.1M vs. est. loss (77c)/$53.65M; 4Q cash and cash equivalents $108.4M; 4Q operating expenses $89.7M; said it expects full-year U.S. Nerlynx sales of $255M-$280M vs. Bloomberg est. $253.6M


Industrials & Materials

·     Kratos Defense (KTOS) Q4 EPS 9c/$164.4M vs. est. 6c/$188.24M; sees Q1 revs $147M-$157M vs. est. $169.8M; sees 1q Adjusted EBITDA of $9M-$11M; sees FY19 revenue $720M-$760M vs. consensus $722.1M

·     Stericycle (SRCL) Q4 EPS $1.03/$852.7M vs. est. 95c/$849.97M; sees FY19 EPS $3.32-$3.72 on revs $3.408B-$3.533B vs. est. $4.20/$3.49B; announces CEO and President changes


Technology, Media & Telecom

·     Autodesk (ADSK) Q4 adjusted EPS 46c/$737M vs. est. 42c/$707.18M; sees Q1 adjusted EPS 44c-48c on revs $735M-$745M vs. est. 57c/$724.11M; sees 2020 revenue $3.25B-$3.3B vs. est. $3.22B and EPS $2.71-$2.90 vs. est. $3.10; 4Q total subscriptions 4.33 million

·     Nutanix (NTNX) shares fell -25%; Q2 EPS loss (23c)/$335.4M vs. est. loss (25c)/$331.3M; sees 3Q adjusted loss per share (60c) on revs $290M-$300M vs. est. loss (28c)/$347.6M; sees 3Q adjusted gross margin 75% to 76% vs. Bloomberg est. 79%; 2Q billings growth +37% to $413.4M

·     Pure Storage (PSTG) Q4 adjusted EPS 14c/$422.2M vs. est. 18c/$442.2M; sees FY20 revenue $1.74B-$1.81B vs. est. $1.76B; sees FY20 non-GAAP gross margin in the range of 65.0% to 68.0% and non-GAAP operating margin in the range of 3.0% to 7.0%

·     Splunk (SPLK) Q4 EPS 93c/$622M vs. est. 76c/$562.52M; sees Q1 revenue $395M vs. est. $393.1M; sees Q1 non-GAAP operating margin to be approximately negative 8%; raises FY20 revenue view to $2.2B from $2.15B vs. est. $2.16B; non-GAAP operating margin is expected to be approximately 14%, unchanged from previous guidance; signed more than 600 new enterprise customers in 4Q

·     Workday (WDAY) Q4 EPS 41c/$788.6M vs. est. 32c/$777.1M; 4Q subscription revs $673.5M vs. $490.0My/y; sees FY20 subscription revenue $3.03B-$3.045B

·     AMC Entertainment (AMC) Q4 EPS 43c/$1.41B vs. est. 17c/$1.40B; reports overall attendance up 1.9% at 94.1M. Reports Q4 adjusted EBITDA $264.1M vs. $288.2M last year

·     3D Systems (DDD) Q4 EPS 10c/$180.7M vs. est. 6c/$181M

·     CarGurus (CARG) Q4 EPS 11c/$126.1M vs. est. 8c/$122.4M; sees Q1 EPS 6c-7c on revenue $127M-$130M vs. est. 8c/$128.02M

·     Dell Technologies (DELL) 4Q adjusted net income $1.59B, adjusted revenue $24.0B, Q4 adjusted Ebitda $3.03B and 4Q revenue by unit: Infrastructure Solutions $9.9B, up 10% y/y, Client Solutions $10.9B, up 4% y/y and notes 4Q VMware revenue was $2.6B, up 17% y/y

·     Finisar (FNSR) Q3 EPS 29c/$327.64M vs. est. 27c/$338.99M; non-GAAP gross margin improved from 28.3% in the second quarter to 30.2%; 3Q adjusted gross margin 30.2% vs. est. 28.5%; not providing guidance for 4Q due to previously announced proposed acquisition by II-VI Inc.

·     Maxar Technologies (MAXR) shares fell -13%; Q4 EPS loss ($16.10)/$496M vs. est. $1.06/$560.3M; did not issue guidance

·     NeoPhotonics (NPTN) Q4 EPS 5c/$91.1M vs. est. 2c/$90.9M; sees Q1 EPS (17c)-(8c) on revs $77M-$82M vs. est. loss (7c)/$79.6M; 4Q adjusted gross margin 28.6% and 4Q cash and cash equivalents $58.2 million

·     VMware (VMW) Q4 EPS $1.98/$2.59B vs. est. $1.88/$2.5B; 4Q billings growth +17% and 4Q free cash flow $946M

·     Zscaler (ZS) shares rose 12%; Q2 EPS 9c/$74.3M vs. est. loss (1c)/$66.27M; sees Q3 EPS 1c on revs $74M-$75M vs. est. loss (2c)/$67.98M; sees FY19 EPS 11c-13c on revs $289M-$291M vs. est. loss (2c)/$271.87M


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