Morning Preview: April 03, 2019

Auto PostDaily Market Report

Early Look

Wednesday, April 3, 2019

Futures

Up/Down

%

Last

DJ Industrials

108.00

0.41%

26,261

S&P 500

13.50

0.48%

2,880

Nasdaq

41.50

0.55%

7,560

 

 

Global stocks are trading higher, with U.S. futures on track for a strong open after the Financial Times reported last night that negotiators for U.S. and China have resolved the majority of the issues in the trade dispute but continue to debate the details on the implementation and enforcement of the trade deal. The report states that the agreement is “within reach”, though the two sides remain apart on the fate of the current U.S. tariffs on Chinese exports and the enforcement mechanism term requested by negotiators on the U.S. side. Meanwhile, the WSJ reported that Donald Trump’s still mad at Jerome Powell and blasted him at three meetings in the past week, blaming the Fed for holding back the economy and stocks. In Asian markets, The Nikkei Index jumped 207 points to 21,713, the Shanghai Index gained 39 points to settle at 3,216 (up 1.24%) and the Hang Seng Index gained 361 points to 29,986. In Europe, the German DAX is sharply higher, rising about 140 points to 11,900, alongside other markets in Europe thought the FTSE 100 is little changed. Stocks are looking to extend their gains on the trade reports, ahead of key economic data later this week (jobs data on Friday).

Market Closing Prices Yesterday

·     The S&P 500 Index was unchanged on the day, or 0.00%, to 2,867.24

·     The Dow Jones Industrial Average fell -79.29 points, or 0.30%, to 26,179.13

·     The Nasdaq Composite gained 19.78 points, or 0.25%, to 7,848.69

·     The Russell 2000 Index declined -2.74 points, or 0.18% to 1,553.32

 

Events Calendar for Today

·     7:00 AM EST      MBA Mortgage Applications Data

·     8:15 AM EST      ADP Employment Change for March…est. 175K

·     8:30 AM EST      Fed’s Bostic speaks at American Banker Association

·     9:45 AM EST      Markit US Services PMI, Mar-F…est. 54.8

·     9:45 AM EST      Markit US Composite PMI, Mar-F

·     10:00 AM EST    ISM Non-Manufacturing Index for March…est. 58.0

·     10:30 AM EST    Weekly DOE Inventory Data

·     5:00 PM EST       Fed’s Kashkari speaks in North Dakota

 

Earnings Calendar:

·     Earnings Before the Open: AYI, SIG

·     Earnings After the Close: LNDC, MIND, RECN

 

 

Macro

Up/Down

Last

WTI Crude

0.11

62.69

Brent

0.34

69.71

Gold

1.50

1,296.90

EUR/USD

0.0044

1.1248

JPY/USD

0.15

111.47

10-Year Note

+0.019

2.512%

 

 

World News

·     President Donald Trump has blasted the Federal Reserve and its chairman, Jerome Powell, at three meetings in the past week for holding back the economy and the stock market the Wall Street Journal reported on Tuesday, citing attendees. His criticism of the central bank comes even after the Fed did an about-face in saying it would be patient on further interest rate hikes and setting an end to its quantitative tightening program

·     A private indicator of China’s service sector rose to a 14-month high in March due to stronger demand. The Caixin China services purchasing managers index rose to 54.4 last month from February’s 51.1, which was a four-month low, Caixin Media Co. and research firm Markit said

·     The World Trade Organization has cut its forecast for trade growth this year by more than a percentage point, to 2.6% (from a 3.7% forecast in September), due to an economic slowdown and amid a trade conflict between the United States and China.

·     Investor Intelligence poll shows that equity newsletter writers classified as bulls are little changed, rising to 53.4% versus 52.0% last week and 53.9% the prior week, which was the highest since October 10, while bears tumble to 19.4%, lowest since Nov. 14, vs 20.6% last week; those expecting a correction slip to 27.2% from 27.4%

 

Sector News Breakdown

Consumer

·     GameStop (GME) Q4 adjusted EPS $1.45/$3.06B vs. est. $1.58/$3.28B; sees FY19 comparable store sales down 5%-10%; sees FY19 total sales down 5%-10%; 4Q comparable sales +1.4% vs. est. -2.1%; Q4 new hardware sales -9.8%, 4Q new software sales -7.8% and digital receipts +4.7% vs. +16.1% y/y; not providing annual EPS guidance

·     Dave & Buster’s (PLAY) Q4 EPS 75c/$331.8M vs. est. 63c/$323.29M; 4Q comparable sales +2.9% vs. est. +2% while sees FY comparable sales 0% to +1.5%; sees FY revenue $1.37B-$1.40B vs est. $1.38B; 4Q Ebitda $72.1M vs. est. $69.1M; 4Q total location count 121; announces added $200M share buyback

·     Urban Outfitters (URBN) upgraded to Buy from Neutral at DA Davidson

·     Blue Apron (APRN) named Linda Findley Kozlowski as its new CEO; says Kozlowski brings a proven record of success at innovative, consumer-focused companies, having most recently served as COO of Etsy; also reaffirms its prior guidance of a significant improvement in net loss and achieving profitability on an adjusted EBITDA basis in Q1 and for the full year

 

Energy, Industrials & Materials

·     The American Petroleum Institute (API) said U.S. crude oil inventories rose 3M barrels last week, also reported a -2.6M barrel fall in gasoline stocks and a -1.9M barrel fall in distillate stocks

·     Securities regulators will let Exxon Mobil (XOM) block shareholders from voting on a proposal that the company disclose goals for reducing greenhouse gas emissions

·     Tellurian (TELL) and Total S.A. (TOT) announced that the two companies have signed a Heads of Agreement, or HOA, for Total to make a $500M equity investment in the integrated Driftwood project and to purchase one million tonnes per annum of liquefied natural gas

·     DMC Global (BOOM) raised Q1 revenue guidance to about $100M from $82M-$85M (est. $82.51M), while gross margin is expected to be consistent with the company’s prior forecast of 34% due to strong sequential growth at DynaEnergetics, DMC’s oilfield products business

·     Iron ore futures in China crossed the $100 per tonne level for the first time in early trade on Wednesday, buoyed by supply disruption concerns flagged by the world’s major sellers of the steelmaking raw material as well as demand from steel mills.

·     Caterpillar Inc. (CAT) was downgraded to hold from buy at Deutsche Bank, saying it was “becoming increasingly clear” that the company’s backlog growth was poised to turn negative in the next quarter, which it views as an early warning sign for earnings prospects.

 

Financials

·     StoneCo (STNE) 19.5M share Secondary priced at $40.50

 

Healthcare

·     Cellectis (CLLS) said FDA approved the company’s Investigational New Drug application to initiate a Phase 1 clinical trial for UCARTCS1 in patients with multiple myeloma Client

·     Usana (USNA) preliminary Q1 EPS 97c-$1.01 on revs $270M-$273M vs. est. $1.26/$308.23M; cuts FY19 EPS view to $5.00-$5.35 from $5.25-$5.55 (est. $5.57) and cuts FY19 revenue view to $1.21B-$1.26B from $1.25B-$1.3B (est. $1.29B)

·     Achillion Pharmaceuticals (ACHN) achieved threshold enrollment in phase 2 trials of ACH-4471 for patients with C3 glomerulopathy.

·     Cigna (CI) launches program capping out-of-pocket cost at $25 for a 30-day supply of insulin https://on.wsj.com/2WDjM60

 

Technology, Media & Telecom

·     Intel Corp. (INTC) said that George Davis will become the chipmaker’s CFO effective Wednesday. Prior to the announcement, Davis, 61, had served as CFO at chipmaker Qualcomm Inc. (QCOM) since 2013

·     EXFO (EXFO) Q2 EPS 9c/$73.79M vs. est. 5c/$72.76M; Q2 bookings improved 16.0% to $76.1M, book-to-bill ratio of 1.03; sees Q3 revenue $70.0M-$75.0M vs. est. $73.66M; sees Q3 IFRS net loss (4c)-0c. IFRS net loss includes 5c per share in after-tax amortization of intangible assets and stock-based compensation costs.

·     Snapchat (SNAP) is testing out features that would allow users to share their location with detail about their activity, TechCrunch reports

·     Bilibili (BILI) 18M share Secondary priced at $18.00

·     Qutoutiao (QTT) 10M share Secondary priced at $10.00

·     Ruhnn (RUHN) 10M share IPO priced at $12.50

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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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