Morning Preview: April 04, 2019

Auto PostDaily Market Report

Early Look

Thursday, April 4, 2019

Futures

Up/Down

%

Last

DJ Industrials

-0.00

0.00%

26,240

S&P 500

-0.50

0.05%

2,879

Nasdaq

-3.50

0.06%

7,578

 

 

Stock futures in the U.S. are flat to down slightly as investors await a key meeting between U.S. President Trump meets with the Chinese leader’s special envoy, Vice Premier Liu. Expectations are that Trump may announce plans for a summit with China’s President Xi Jinping, a sign that trade talks between the two countries may be nearing conclusion. According to reports, the deal will give China until 2025 to keep promises on commodity purchases and to allow U.S. firms to wholly own Chinese enterprises. Markets are coming off good gains Wednesday as U.S. equities climbed to six-month highs as optimism over global growth and ongoing trade developments between the U.S. and China lifted investor sentiment. In Asian markets, The Nikkei Index rose 11 points to 21,724, the Shanghai Index gained 30 points to 3,246 and the Hang Seng Index fell -50 points to settle at 29,936. In Europe, the German DAX is up a few points at 11,960, while the FTSE 100 is down over -30 points at 7,380. The pound rose for a fourth day after lawmakers passed the bill to block a no-deal divorce.

Market Closing Prices Yesterday

·     The S&P 500 Index gained 6.16 points, or 0.21%, to 2,873.40

·     The Dow Jones Industrial Average rose 39.00 points, or 0.15%, to 26,218.13

·     The Nasdaq Composite climbed 46.86 points, or 0.60%, to 7,895.55

·     The Russell 2000 Index advanced 7.59 points, or 0.49% to 1,560.91

 

Events Calendar for Today

·     7:45 AM EST      Challenger Job Cuts YoY for March

·     8:30 AM EST      Weekly Jobless Claims…est. 215K

·     8:30 AM EST      Continuing Claims…est. 1.75M

·     9:45 AM EST      Bloomberg Consumer Comfort Index

·     10:30 AM EST    Weekly EIA Natural Gas Inventory Data

·     1:00 PM EST       Fed’s Mester speaks at Banking Conference

 

Earnings Calendar:

·     Earnings Before the Open: ISCA, RPM, SCHN, STZ

·     Earnings After the Close: DLTH, FC

 

Other Key Events:

·     Deutsche Bank 6th Annual Shipping Summit in New York

·     William Blair Late Stage Therapeutics Conference in New York

 

 

Macro

Up/Down

Last

WTI Crude

0.09

62.54

Brent

0.05

69.36

Gold

-0.00

1,295.30

EUR/USD

-0.0003

1.1230

JPY/USD

-0.08

111.41

10-Year Note

-0.023

2.497

 

 

World News

·     The RBI (India) cut its main rate to 6% from 6.25% as expected, to support a sluggish economy. It comes just a week before elections kick off and reverses the 50 basis points of increases delivered last year.

·     House Democrats formally demanded the IRS turn over six years of his personal and business records, with Ways and Means Chairman Richard Neal citing Congress’s oversight responsibility.

·     German Feb Factory Orders fell (-4.1%) MoM vs. est. for a 0.3% rise; and fell (-8.4%) YoY vs. est. for (-3.1%)

 

Sector News Breakdown

Consumer

·     Tesla (TSLA) said deliveries were 62,950 vehicles, which was 110% more than the same quarter last year, but 31% less than last quarter. This included approximately 50,900 Model 3 (vs. est. 51,750) and 12,100 Model S and X; said 1Q net income to be negatively impacted by lower than expected delivery volumes and several pricing adjustments; reaffirms prior guidance of 360,000 to 400,000 vehicle deliveries in 2019

·     Constellation Brands Inc. (STZ) agreed to sell about 30 of its brands of under-$11 wine to E. & J. Gallo Winery for $1.7 billion. Constellation said it will hold onto its more premium line of wine brands like Robert Mondavi, The Prisoner Wine Co., Kim Crawford, Ruffino, and Meiomi

·     NIO Inc. (NIO) upgraded to Neutral from Underperform at Bank America and upgraded to buy at Citigroup

·     Toyota (TM), Ford (F) and GM formed a consortium to promote safety in autonomous vehicles. Together with auto engineering group SAE, the automakers will establish a set of safety principles to be used in the development of standards.

·     Resources Connection (RECN) Q3 EPS 20c/$179.5M vs. est. 22c/$184M; 3Q adjusted Ebitda $13.9M

·     Snap-on (SNA) announced that it has acquired Power Hawk Technologies for approximately $8M in cash

 

Energy

·     PG&E Corp. (PCG) named William Johnson as chief executive officer and president and appointment of 10 new directors to its board

·     Jones Energy, Inc. (JONE) announces comprehensive restructuring support agreement with first lien and unsecured noteholders for prepackaged chapter 11 plan; holders of ~84% in principal of the first lien notes and ~84% in principal of the unsecured notes entered into RSA on April 2

 

Financials

·     JPMorgan (JPM) CEO Jamie Dimon on a letter to shareholders (as per Bloomberg) said geopolitical uncertainty is now heightened due to uncertainty around how the United States intends to exercise global leadership; concerns on China’s economy is legitimate, but manageable; cybersecurity may be biggest threat to U.S. financial system; may have 6,500 wealth advisers in AWM by end of 2019; prefers to use capital to grow, rather than to buy back stocks

·     EVO Payments (EVOP) 5M share Secondary priced at $26.50

·     Nomura said it would cut $1B in costs over the medium term, and close 30 of its 156 domestic retail branches

·     Bank of America (BAC) announces it will mobilize an additional $300B in in capital by 2030 through its Environmental Business Initiative

 

Healthcare

·     Sangamo (SGMO) spot secondary re-offered at $11.50

·     Silk Road Medical (SILK) 6M share IPO priced at $20.00

·     Tricida (TCDA) 5.6M share secondary priced at $36.00

·     Recro Pharma (REPH) raises FY19 revenue view to $85M-$87M from $80M (est. $85.12M) and raises FY19 adjusted EBITDA view to $38M-$40M from $34M; cuts about 50 jobs in acute care segment unit as targets reduction of operating expenses; sees cash flow breakeven during 3Q and cash flow positive in the second half of 2019

·     Pulmatrix (PULM) 10.667M share Spot Secondary priced at $1.35

·     Aveo Pharmaceuticals (AVEO) 217.399M share Spot Secondary priced at $1.15

·     NGM Biopharmaceuticals (NGM) 6.67M share IPO priced at $16.00

 

Industrials & Materials

·     Air accident investigators faulted a flight-control feature on a Boeing Co. (BA) 737 MAX flown by Ethiopian Airlines that crashed in March, raising pressure on Boeing to fix the problem

·     DowDuPont (DWDP) announced that its Board of Directors has approved a reverse stock split of the company’s common stock

·     Landec (LNDC) Q3 EPS 4c/$155.7M vs. est. 3c/$156.47M; sees Q4 EPS 12c-15c on revs $150M-$153M vs. est. 22c/$154M; sees FY EPS 12c-15c below the estimate 25c and sees FY revenue +6% to +7%; sees Lifecore meeting original 2019 revenue growth expectations

·     RPM International (RPM) Q3 EPS 14c/$1.14B vs. est. 11c/$1.13B

 

Technology, Media & Telecom

·     Tradeweb Markets (TW) 40M share IPO priced at $27.00

·     DBV Technologies (DBVT) 5.218M share Spot Secondary priced at $6.75

·     Facebook (FB) upgraded to Buy from Neutral at Guggenheim

·     Micron (MU) downgraded to Underweight from Equal Weight at Morgan Stanley

·     Live Nation Entertainment (LYV) downgraded to in-line from outperform at Evercore ISI saying the stock surpassed his $64 price target; continues to like LYV’s business model, growth opportunities and execution track record, but thinks there’s headline risk to shares

_________________________________________________________________

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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