Morning Preview: March 15, 2019

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Early Look

Friday, March 15, 2019





DJ Industrials




S&P 500










Stock futures are pointing to a higher open, looking to rebound after yesterday’s modest losses, tracking gains in both Europe and Asia overnight. Chinese shares rallied as the government’s plans for big tax cuts reinforced expectations for an eventual pick-up in the economy. Chinese legislators on Friday also approved a new law against the forced transfer of technology by foreign companies, a step to appease US trade negotiators. In Europe, British lawmakers approved a measure to seek to push the Brexit deadline back to June. In Asian markets, The Nikkei Index rose 163 points to 21,450, the Shanghai Index gained 31 points to 3,021 and the Hang Seng Index gained 160 points to settle at 29,012. In Europe, the German DAX is up about 40 points to 11,630, while the FTSE 100 is also up around 40 points at 7,225. We may see added volume as today marks quadruple witching, where futures and options on indexes and stocks expire. Busy night in the tech space with earnings results from ADBE, ORCL, AVGO.


Stocks slipped on Thursday as market uncertainty over trade progress between the U.S. and China kept buyers from jumping in. Despite the slip-up yesterday, the S&P 500, Dow and Nasdaq are all at least 1% higher so far this week after suffering their worst showing of the year last week. Bloomberg News reported that a meeting between President Donald Trump and President Xi Jinping to sign an agreement ending trade tensions between U.S. and China was more likely to take place in April at its earliest, instead of this month which disappointed investors. Gold prices dropped, while the dollar rebounded and crude oil settled near 4-month highs.


Market Closing Prices Yesterday

·     The S&P 500 Index slipped -2.44 points, or 0.09%, to 2,808.48

·     The Dow Jones Industrial Average rose 7.05 points, or 0.03%, to 25,709.94

·     The Nasdaq Composite dipped -12.49 points, or 0.16%, to 7,630.91

·     The Russell 2000 Index declined -6.25 points, or 0.40% to 1,549.63


Events Calendar for Today

·     8:30 AM EST      Empire Manufacturing for March…est. 10.0

·     9:15 AM EST      Industrial Production MoM for February…est. 0.4%

·     9:15 AM EST      Capacity Utilization for February…est. 78.5%

·     10:00 AM EST    JOLTs Job openings for January…est. 7225

·     10:00 AM EST    University of Michigan Confidence, March-P…est. 95.7

·     1:00 PM EST       Baker Hughes Weekly Rig Count

·     4:00 PM EST       Net Long-term TIC Flows for January


Earnings Calendar:

·     Earnings Before the Open: BKE, CTRN






WTI Crude















10-Year Note





World News

·     The International Energy Agency has warned that crude supplies from Venezuela are at risk of falling sharply and becoming a “challenge” for the global the oil market

·     Japan’s Kuroda defended the BOJ’s 2% inflation target as calls grew for a flexible approach. “There’s no change to the BOJ’s policy of aiming to bring about stable prices while considering the economy, prices and the financial environment overall,” Kuroda said after policy meeting

·     Mass shootings at two mosques in New Zealand left 49 dead. A man in his late 20s was charged with murder and is scheduled to appear in court tomorrow. Three others were detained


Sector News Breakdown


·     Ascena Retail (ASNA) Q2 adjusted EPS loss (26c)/$1.69B vs. est. loss (26c)/$1.71B; reports Q2 total company comp sales up 2%; sees Q3 adjusted EPS loss (45c)-(35c) on revs $1.43B-$1.46B, well below the est. of 2c profit and $1.52B; sees Q3 comp sales down 2%-4%

·     Noodles & Company (NDLS) Q4 EPS 1c/$113.2M vs. est. 3c/$113.76M; Q4 comparable restaurant sales increased 4.0% system-wide (vs. est. 4.2%), increased 3.7% for company-owned restaurants and increased 5.3% for franchise restaurant Q4 adjusted EBITDA decreased 3.0% to $8.4M from $8.6M; sees FY19 EPS 6c-15c on sales $462M-$470M vs. est. 13c/$463.69M

·     Papa Murphy’s (FRSH) Q4 EPS 14c/$32M; comparable store sales decreased 1.3% compared to Q4 of last year; sees 2019 system-wide comparable store sales growth in the range of flat to low single-digit positive; sees domestic franchise new store openings of approximately 10 unit

·     Tilly’s (TLYS) Q4 adjusted EPS 27c/$170.6M vs. est. 25c/$169M; Q4 comp sales rose 6.4%; sees 1Q loss per share (1c-3c) vs. est. 7c and total sales $128M-$130M (est. $131/7M) and comp sales up low single-digit

·     Turtle Beach (HEAR) shares fell -9%; improperly accounted for warrants issued in connection with exchange of Series B preferred shares in April 2018, board’s audit committee concluded; expects to file amendments to initial filings by March 31; amendments will result in net income of $14.6M for Jan.-Sept. 2018 compared with originally reported net income of $23M

·     Ulta Beauty (ULTA) shares up 3%; Q4 EPS $3.61/$2.12B vs. est. $3.56/$2.11B; sees FY comparable sales +6% to +7% after Q4 comp sales +9.4% vs. estimate +7.9%; says beginning in 2019, the company will no longer provide a quarterly outlook; plans to open approximately 80 new stores in 2019; targets year EPS range of $12.65-$12.85 vs. est. $12.74, including the impact of approximately $700 million in share repurchases and assuming a 24% effective tax rate

·     Zumiez (ZUMZ) Q4 adjusted EPS $1.18/$304.6M vs. est. $1.11/$306.1M; Q4 comp sales rose 3.9%; sees Q1 EPS loss (13c) to (7c) on revs $202M-$206M vs. est. loss (5c)/$213.07M; sees Q1 SSS down 2% to flat

·     Zillow (ZG) downgraded to Underweight from Equal Weight at Barclays

·     Las Vegas Sands (LVS) settled a lawsuit by Hong Kong businessman Richard Suen claiming he was entitled to as much as $328 million for helping the casino operator secure a license to operate in Macau.


Energy, Industrials & Materials

·     Alaska Air (ALK) reports combined February traffic down 2.0% on a 1.9% decrease in capacity compared to February 2018; load factor decreased 0.1 points to 79.3%

·     Mammoth Energy (TUSK) Q4 revs $278.2M vs. est. $349.9M; 4Q adjusted Ebitda $84.3M vs. Bloomberg est. $85.4M; 4Q capital expenditure $42.4M; 4Q pressure pumping revenue $72.8M vs. $111.9M y/y; 4Q infrastructure revenue $159.6M vs. $209.2M y/y

·     Kosmos (KOS) files to sell 34.99M shares of common stock for holders



·     Capital One (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% and auto credit card delinquencies 6.1% vs. 6.87%

·     UBS Group AG (UBS) has taken $516 million in provision for a tax case in which French judges ordered the bank to pay a hefty fine for helping wealthy clients in France evade taxes.

·     State Street (STT) downgraded to Hold from Buy at Deutsche Bank and lowered price target to $70 from $84

·     Envestnet (ENV) will acquire PIEtech, Inc., the creator of the MoneyGuide family of financial planning applications for $295M in cash and 3.185M shares; sees deal adding immediately to adjusted EBITDA and adjusted net income per share



·     Adamis Pharmaceuticals (ADMP) said that the FDA accepted for review its New Drug Application for its higher dose naloxone injection product candidate to treat opioid overdoses

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

·     ViewRay (VRAY) Q4 EPS loss (17c)/$20.7M vs. est. loss (23c)/$20.38M; received 8 new orders for MRIdian systems totaling $48.7M; says backlog at year-end: $212.2M; guides 2019 revs $111M-$124M vs. consensus of $124M

·     Xeris (XERS) has begun dosing patients in a Phase 2 trial with its ready-to-use, room-temperature stable liquid glucagon in patients with Type 1 diabetes who experience episodes of exercise-induced hypoglycemia (EIH)


Technology, Media & Telecom

·     Adobe (ADBE) Q1 adjusted EPS $1.71/$2.6B vs. est. $1.62/$2.55B; raises FY19 adjusted EPS view to about $7.80 from $7.75 (est. $7.77) and backs FY19 total revenue view of roughly $11.15B, vs. consensus $11.16B; 1Q digital media revenue $1.78B, 1Q creative revenue $1.49B

·     Broadcom (AVGO) Q1 adjusted EPS $5.55/$5.789B vs. est. $5.23/$5.82B; 1Q adjusted gross margin 71.4% vs. estimate 69.4%; Q1 gross margin 55.4% vs. 49.3% a year ago; CEO says “we see a slowdown in China impacting demand”; reaffirms year outlook

·     Facebook (FB) 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 the company (Will Cathcart new head of WhatsApp and Fidji Simo new head of the Facebook app)

·     Oracle (ORCL) Q3 adjusted EPS 87c/$9.6B vs. est. 84c/$9.59B; raises quarterly dividend to 24c from 19c; reports Q3 short-term deferred revenue $8B, up 1%; short-term deferred revenues were up 1% to $8B compared to a year ago; Cloud Services and License Support revenues were $6.7B, while Cloud License and On-Premise License revenues were $1.3B. Total Cloud Services and License Support plus Cloud License and On-Premise License revenues were $7.9B

·     DocuSign (DOCU) Q4 adjusted EPS 6c/$199.7M vs. est. 1c/$193.62M; sees Q1 revenue $205M-$210M (est. $197.86M) and sees FY20 revenue $910M-$915M (vs. est. $861.62M); sees FY20 CapEx $60M-$70M

·     Jabil (JBL) Q2 adjusted EPS 64c/$6.10B vs. est. 61c/$6.10B; sees Q3 EPS 47c-67c on revs $5.7B-$6.3B vs. est. 57c/$5.97B

·     Pivotal (PVTL) Q4 adjusted EPS loss (7c)/$169.2M vs. est. loss (9c)/$169.82M; sees FY20 adjusted EPS loss (15c)-(13c) on revs $798M-$806M vs. est. loss (16c)/$814.83M; sees Q1 adjusted EPS (6c)-(5c) on revs $183M-$185M vs. est. loss (6c)/$191.09M

·     Asure Software (ASUR) Q4 EPS 15c/$24.4M vs. est. 14c/$23.92M; Q4 cloud bookings up 32% from last year; Q4 adjusted EBITDA $5.9M vs. $3.3M last year; sees FY19 revenue $104M-$107M vs. est. $104.6M; sees FY19 EBITDA $23M-$25M vs. $19.9M in FY18

·     Avid Technology (AVID) Q4 EPS 14c/$112.7M vs. est. 16c/$110.43M; backs FY19 revenue view $420M-$430M vs. est. $422.9M; backs FY19 adjusted EBITDA view $60M-$65M

· (AMZN) was upgraded to overweight from sector weight at KeyBanc Capital


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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