Mid-Morning Look: March 15, 2019

Auto PostDaily Market Report

Mid-Morning Look

Friday, March 15, 2019






DJ Industrials




S&P 500








Russell 2000






U.S. equities are mixed, with the S&P 500 and Dow Industrials paring overnight gains and the tech heavy Nasdaq Comp outperforms (coming into the day the S&P 500 and NASDAQ on track for weekly gains of over 2% while the Dow gains slimmer due to Boeing issues). Helping lift sentiment early, China’s Premier Li said his country will use reserve requirements and interest rates to support the slowing economy, while markets also remain hopeful that the U.S. and China make progress on trade talks. Nasdaq Composite outperforms, led by strength in semis as the Philly semi index (SOX) spikes 3.6% topping the 1,400 level (highest levels since early September). The sector led by stronger results from AVGO and equipment stocks surge again amid positive channel checks from Citigroup, raising their tgt on LRCX to $215. Software stocks slump, led by weaker guidance outlooks from ADBE and ORCL. Likely to see an increase of volume later given quadruple witching day, where futures and options on indexes and stocks expire. Boeing weak again after saying it will pause deliveries of its 737 MAX jetliner, and a U.S. Air Force official raised concerns about the company’s KC-46A aerial refueling tanker program. U.S. Treasury prices edge higher, pushing the two-year yield down 2 bps to 2.43% and the 10-year yield 5 bps lower at 2.58%.A good week for stocks overall ahead of central bank meetings next week and as earnings slow.


Treasuries, Currencies and Commodities

·     In currency markets, the US dollar erases all of its gains from yesterday, weighed down by a round of weaker than expected economic data (NY Manufacturing to 2-year lows and Industrial Production a big miss), with the euro, yen, and Pound all rising. Gold prices benefit once again from the dollar dip, with prices moving back above the $1,300 an ounce level. Treasury prices jump on the weaker economic data as it raises expectations for the Fed to hold rates steady going forward (note FOMC meeting next week) as the 10-year yield trades to lows of 2.58%. Oil prices still on track for a strong week of returns, but prices taking a breather today with WTI crude sliding to around $58 per barrel, down from roughly 4-month highs.


Economic Data

·     Empire State Fed Manufacturing index fell to a reading of 3.7 in March from 8.8 in the prior month, the lowest level in almost two years and below estimates for a reading of 10. The new orders index fell 4.5 points to 3 in March, shipments index slipped 2.7 points to 7.7, its lowest level in more than 2-years and the number of employees climbed 10 points to 13.8, indicating an increase in employment, but the average workweek turned negative for the first time since 2016.

·     Industrial Production for February rose a smaller-than-expected 0.1%, below the 0.4% estimate after falling (-0.4%) in January. Industrial production was revised up to -0.4% from -0.6% in Jan. Capacity utilization fell to 78.2% from 78.3% in Jan., revised up from 78.2%

·     The preliminary University of Michigan consumer sentiment survey for March rose to 97.8 vs. 93.8 prior month and above the estimate of 95.6; the current economic conditions index rose to 111.2 vs. 108.5 last month and expectations index rose to 89.2 vs. 84.4 last month. The expected change in median prices during the next year fell to 2.4% vs. 2.6% last month.

·     Job Openings (JOLTs) rose to 7.581M in January vs. the 7.225M estimate, rising 102K from 7.479M in the prior month; Jan. pace of hiring 3.9% vs 3.8% prior month







WTI Crude















10-Year Note





Sector Movers Today

·     Credit cards; monthly mater trust data out: 1) BAC Feb. Credit-Card Charge-Offs 2.62% vs. 2.65% MoM, while delinquencies 1.7% vs. 1.69% in January; 2) ADS Feb. Charge-Offs 6.3% vs. 6.6% in January and February delinquencies of 5.67% vs. 5.8% in January; 3) SYF Feb Credit Card Charge-offs 5.38% vs. 4.82% in January and Feb credit card net charge-offs 5.38% vs. 4.82% MoM; 4) COF reports February net charge-offs 4.90% vs. 5.08% last month and February delinquencies 4.04% vs. 4.16% last month; Auto credit card charge-offs 1.29% vs. 2.14%; 5) JPM February net credit losses 2.25% vs. 2.26% last month and delinquencies 1.25% vs. 1.21% last month

·     Retailers; ASNA shares drop following a sharply lower Q3 outlook/sees Q3 adjusted EPS loss (45c)-(35c) on revs $1.43B-$1.46B, well below the est. of 2c profit and $1.52B; TLYS results beat pre-announced guidance on its strongest comp since 3Q11/but Q1 EPS guidance missed estimates due to higher shipping costs and a LSD comp; KIRK shares fell after full-year guidance arrives in below expectations as sees rev growth of 0% to +2% vs. +2.5% consensus and EPS of 15c-30c below the 40c estimate; ZUMZ shares slide on mixed Q4 results, while sees Q1 EPS loss (13c) to (7c) on revs $202M-$206M vs. est. loss (5c)/$213.07M

·     Oil services mixed after Jefferies downgrades SLB, HP, PDS to hold from buy; while upgrades FRAC, OII to buy from hold and SPN to hold from saying oilfield services growth prospects seem more modest, which isn’t completely negative, but overall support Jefferies’ neutral sector outlook, and favors stock picking; TUSK shares active after Q4 Ebitda and revs missed estimates while Barclay’s said backlog was reduced to $765M from $1.2B largely from the removal of future work in Puerto Rico

·     Media & Telecom movers Raymond James upgrades AT from Market Perform to Outperform with the PT set at $34, implying a 12% upside noting earlier this week, AT&T confirmed DirecTV Now changes that included higher prices and CFO John Stephens provided a guidance update that expected WarnerMedia to be stronger in the second half of the year; LYV was downgraded to neutral at Citigroup as continue to like Live Nation’s business model and long-term growth prospects…but, valuation appears full, M&A may be less likely

·     Medical equipment and devices; EW and MDT low-risk transcatheter aortic valve replacement studies are scheduled as late-breakers on Sunday, March 17; RMED shares dropped as Q4 revenue came in slightly below expectations and Q1 revs outlook also weak; SLNO soars after reporting that a data safety monitoring board recommended the continuation of the company’s Phase 3 trial in Prader-Willi Syndrome (PWS) patients, without any changes



·     ASUR +2%; Q4 EPS, revs and Ebitda all topped consensus

·     AVGO +11%; strong Q1 EPS beat while revs of $5.79B just miss the $5.82B est. while reiterated its FY19 revenue, margin, free cash flow outlook, on a strong pipeline of new product cycles in cloud networking, next-gen iPhones, custom ASIC pipeline

·     KPTI +20%; after announced that the FDA has decided to extend selinexor’s PDUFA date by three months to July 6, 2019 (from April 6, 2019).

·     SLNO +223%; after reporting that a data safety monitoring board recommended the continuation of the company’s Phase 3 trial in Prader-Willi Syndrome (PWS) patients, without any changes.

·     ULTA +8%; trades to all-time highs, and analysts raises tgts after Q4 EPS of $3.61 topped a Street forecast of $3.56 and Q4 comps increased 9.4% with two-year trends improving modestly



·     ADBE -5%; Q1 EPS/sales topped consensus but guidance for Q1 ($1.77/$2.7B) missed estimates ($1.88/$2.72B) with KeyBanc downgrading shares citing balanced risk/reward

·     FB -3%; as said Chief Product Officer Chris Cox has decided to leave Facebook, CEO Mark Zuckerberg says in statement. Chris Daniels, CEO of WhatsApp, has also decided to leave

·     HEAR -14%; quarterly results beat but forecast of 5c/$42M missed analyst estimates for current quarter and also said it would restate financial results after improperly accounting for warrants

·     ORCL -1%; provides a downside Q4 outlook with the strengthening dollar posing an up to 3% headwind to total revenue with a -$0.03 impact on EPS

·     PVTL -1%; posted slightly better Q4 results but gave an outlook for Q1 and year revs that was below expectations (but analyst were positive with many raising their tgt prices)

·     SPPI -9%; after reporting it withdrew its ROLONTIS biologics license application citing added time to address FDA request for additional manufacturing-related information

·     TUSK -14%; after Q4 Ebitda and revs missed estimates while Barclay’s said backlog was reduced to $765M from $1.2B largely from the removal of future work in Puerto Rico

·     WHR -5%; after Cleveland Research cautious saying headwinds are building across North America, citing sluggish 1Q appliance demand partially driven by less aggressive pricing and promotions



·     Foresight Autonomous (FRSX) 4M share Spot Secondary priced at $1.50

·     GDS Holdings (GDS) 11.94M share Secondary priced at $33.50

·     Healthcare Realty Trust (HR) 3.25M share Spot Secondary priced at $31.41

·     Kopin (KOPN) 7.273M share Spot Secondary priced at $1.10

·     Matinas BioPharma (MTNB) 27.3M share Spot Secondary priced at $1.10

·     Stellus Capital (SCM) 2.75M share Spot Secondary priced at $14.43

·     TPG RE Finance (TRTX) 6M share Spot Secondary priced at $19.90

·     Triton International (TRTN) 7.133M share Block Trade priced at $31.35


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