Morning Preview: March 04, 2019

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Early Look

Monday, March 4, 2019

Futures

Up/Down

%

Last

DJ Industrials

69.00

0.27%

26,100

S&P 500

7.50

0.26%

2,812

Nasdaq

31.50

0.44%

7,187

 

 

Stock futures in the U.S. are rising amid reports that a China/American trade deal was moving closer, with the two sides in the final stages of an agreement. The WSJ reported overnight, citing sources that Washington and China could reach a trade deal as early as this month saying the pact would end most U.S. tariffs levied against China in exchange for following up on its own promises to allow in more U.S. exports, among other measures. While the deal has yet to be finalized and hurdles remain on both sides, a formal agreement could be reached at a summit, likely around March 27. The Dow Industrial Average snapped its 9-day winning streak, which was the longest since 1995, falling about -0.1% while the S&P 500 gained 0.4% and the Nasdaq added 0.9%. Treasury yields meanwhile ended the week near at highs as the 10-year yield rose 4.4 bps to 2.755% on Friday and booking a near 10 bps point move higher on the week as stocks rose. The two-year Treasury note yield rose 4.6 bps to 2.559%, bringing its weekly advance to 6.7 bps. In Asian markets, The Nikkei Index gained 219 points to settle at 21,822, the Shanghai Index rose 33 points, trading to 3,027 (highest since June) while the Hang Seng Index rose 142 points to 28,959. In Europe, the German DAX is up a few points above 1,600, while the FTSE 100 is up about 30 points at 7,140. Not a busy day of economic data and no Fed speakers, but a busy week on tap with several central banks out with policy decisions (RBA, BOC, ECB) as well as lots of data, including the non-farm payroll data on Friday and a heavy dose of Fed speakers as well.

Market Closing Prices Yesterday

·     The S&P 500 Index jumped 19.20 points, or 0.69%, to 2,803.69

·     The Dow Jones Industrial Average rose 110.32 points, or 0.43%, to 26,026.32

·     The Nasdaq Composite spiked 62.82 points, or 0.83%, to 7,595.35

·     The Russell 2000 Index advanced 14.09 points, or 0.89% to 1,589.64

 

Events Calendar for Today

·     10:00 AM EST    Construction Spending for December…vs. est. 0.2%

 

Earnings Calendar:

·     Earnings Before the Open: BCRX, SPKE, IPAR

·     Earnings After the Close: CRM, LEAF, LJPC, SD

 

Other Key Events:

·     Morgan Stanley Global Energy & Power Conference, 3/4-3/6, in New York

·     Raymond James 40th Annual Institutional Investors Conference, 3/3-3/6, in Orlando, FL

·     RSA Conference 2019, 3/4-3/8, in San Francisco

·     Sandler O’Neill 2019 West Financial Services Conference, 3/4-3/6, in San Diego, CA

·     Shoptalk 2019, 3/3-3/6, in Las Vegas, NV

 

 

Macro

Up/Down

Last

WTI Crude

0.30

56.10

Brent

0.51

65.58

Gold

-10.80

1,288.40

EUR/USD

-0.0025

1.134

JPY/USD

-0.06

111.83

10-Year Note

-0.011

2.744%

 

 

World News

·     The head of the U.S. House Judiciary Committee said the panel would seek documents from more than 60 people and entities as part of a probe into possible obstruction of justice and abuse of power by President Donald Trump

 

Sector News Breakdown

Consumer

·     Kraft Heinz (KHC) upgraded to Equal Weight from Underweight at Morgan Stanley

·     L Brands (LB) mentioned cautiously in Barron’s saying while the company may have begun the process of fixing what caused its stock to lose more than half its value in 2018, investors should not expect the stock to bounce anytime soon, as the bigger problem remains Victoria’s Secret

·     Weight Watchers (WTW) mentioned in Barron’s noting Morgan Stanley’s analyst-initiated coverage with an Equal Weight rating last fall, around the time his firm issued a report finding that WW has only addressed 8% of its market. CEO Mindy Grossman partially blamed “keto doughnuts” for Q4 results that missed expectations

·     Barron’s said food stocks to buy now: best to wait for U.S. food giants like Kraft Heinz (KHC) to fix their growth recipes and instead look to European companies like Unilever (UN) and Nestlé (NSRGY), says Vontobel Asset Management’s Donny Kranson

·     Volkswagen’s Porsche unit on Sunday said it was cooperating with state prosecutors to clear up investigations into alleged tax debts related to early retirees and taxable benefits enjoyed by former top executives. Reuters

·     Tesla Inc. (TSLA) will unveil its new Model Y electric crossover SUV on March 14. “Model Y unveil event on March 14 at LA Design Studio,” Chief Executive Elon Musk tweeted Sunday

 

Healthcare

·     Biogen (BIIB) to acquire Nightstar Therapeutics (NITE) for $25.50 in cash for each share as offer represents a total transaction value of approximately $800 million https://yhoo.it/2ENRxMd

·     Clovis Oncology (CLVS) announced that Rubraca is now available by prescription in Germany as monotherapy for the maintenance treatment of adults with platinum-sensitive relapsed high-grade epithelial ovarian, fallopian tube, or primary peritoneal cancer who are in response to platinum-based chemotherapy.

·     Masimo (MASI) announced the CE marking of Next Generation SedLine brain function monitoring for pediatric patients (1-18 years of age)

·     BioMarin (BMRN) and Sarepta (SRPT) mentioned in Barron’s saying big pharma wants in on gene therapy as BioMarin, which treats hemophilia A, and Sarepta (SRPT), which treats muscular dystrophy, are diversified companies with exposure to gene therapy

·     Biotech names mentioned positively by Chardan analyst in Barron’s saying uniQure (QURE) has doubled so far this year to $55, and there could be upside in a deal (firm has $70 price target); Regenxbio (RGNX) shares are up 25% this year to $52, but down from a high of $82 and MeiraGTx Holdings (MGTX) as it recently raised to $40 from $30 last week

·     Intec Pharma (NTEC) files $200M mixed securities shelf

 

Industrials & Materials

·     Vale SA (VALE) CEO Schvartsman and other top executives of the Brazilian mining giant stepped down following pressure from authorities after the deadly collapse of one of its dams recently

·     Century Aluminum (CENX) files $300M mixed securities shelf

 

Technology, Media & Telecom

·     John Stankey, the AT&T (T) executive at the helm of WarnerMedia, is planning to revamp the CNN’s digital operation, which he believes isn’t reaching its potential and requires more investment in product development and data analytics according to reports

·     Lumentum (LITE) mentioned positively in Barron’s saying shares may thrive even if Apple Phone sales do not, saying that iPhone supplier is a key supplier for 3-D sensing products. Barron’s said as lower-cost, higher-volume Android phones adopt the technology, the market should expand

·     Samsung (SSNLF) and Huawei view their new devices – Galaxy Fold and Mate X, respectively – as the most significant change to the wireless industry since the first-ever smartphones, built on the view that a phone’s physical form remains as important as the latest apps and software – Barron’s

·     Activist investment firm Elliott Management purchased an 8.4% stake in information-services provider Nielsen (NLSN) last year, and now would like to see the entire company sold, which could reward Nielsen shareholders, Barron’s says

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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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