Morning Preview: April 08, 2019

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Early Look

Monday, April 8, 2019





DJ Industrials




S&P 500










Stock futures are moving lower in the U.S. while both Europe and Asia were mixed amid a pullback in global stocks after prices hit their best levels of the year last Friday. Brexit talks between teams led by U.K. Prime Minister Theresa May and opposition Labour Party leader Jeremy Corbyn were set to continue Monday despite Labour’s statement Friday that the Conservative government had not offered to compromise on any of its major issues. An escalating battle between government and rebel forces in Libya added to a wealth of factors driving up oil prices. Overall, a relatively quiet week ahead of the start of earnings season next week. In Asian markets, The Nikkei Index fell -45 points to 21,761, the Shanghai Index slipped a point to 3,244 and the Hang Seng Index gained 140 points to mover back above the 30K level (30,077). In Europe, the German DAX is down over -30 points back under 12,000, while the FTSE 100 is little changed at 7,450. Oil prices are edging to fresh 2019 highs after the U.S. military said it pulled a small contingent of American forces from Libya as the country teetered on the brink of full-scale civil war, with fighting continuing around the capital Tripoli.

Market Closing Prices Yesterday

·     The S&P 500 Index climbed 13.35 points, or 0.46%, to 2,892.74

·     The Dow Jones Industrial Average rose 40.36 points, or 0.15%, to 26,424.99

·     The Nasdaq Composite gained 46.91 points, or 0.59%, to 7,938.69

·     The Russell 2000 Index advanced 15.06 points, or 0.96% to 1,582.56


Events Calendar for Today

·     10:00 AM EST    Factory Orders for February…est. (-0.5%)

·     10:00 AM EST    Durable Goods Orders, Feb-F…est. (-1.6%)






WTI Crude















10-Year Note





World News

·     German trade slowed as the Federal Statistical Office said that total exports of goods–not goods and services–fell by 1.3% in February from the month before; German imports of goods fell by 1.6%. Germany’s adjusted trade surplus was 18.7 billion euros ($20.9 billion), up slightly from EUR18.5 billion in January. The nation’s current account surplus was EUR16.3 billion in February, down from EUR18.3 billion the previous month.

·     Homeland Security Secretary Kirstjen Nielsen resigned on Sunday amid the administration’s growing frustration of the border situation. President Donald Trump thanked her for her work in a tweet and announced U.S. Customs and Border Protection Commissioner Kevin McAleenan would be taking over as acting head of the department

·     National Economic Council director Larry Kudlow reassured investors on a number of fronts. Appearing on CBS’ Face the Nation, Kudlow said that the previous week’s U.S.-China trade talks were productive. “We’re closer than we ever have been before,” Kudlow said


Sector News Breakdown


·     American Airlines (AAL) said Sunday it was extending the grounding of its Boeing (BA) 737-Max aircraft through at least June 5, resulting in the cancellation of about 90 flights per day throughout the carrier’s system

·     Fiat Chrysler Automobiles (FCAU) is teaming up with Tesla Inc. (TSLA) to comply with stricter European Union emission rules. FCA is using an EU “open pool” option that allows automakers to group their fleets together to meet carbon dioxide emission targets.

·     Foot Locker (FL) mentioned positively in Barron’s saying shares could return 20% over the next year based on sales and earnings momentum, saying sneaker seller is seeing some success reaching its core young, male customers at its megastore in New York’s Times Square

·     Lyft (LYFT) mentioned cautiously in Barron’s noting the company is now valued at more than $21 billion, after going public last week at $72, above the original range of $62 to $68; Guggenheim’s Jake Fuller doesn’t see profitability until 2023 for the ride-sharing service.

·     Procter & Gamble (PG) upgraded to Outperform from Market Perform at Wells Fargo

·     Starbucks (SBUX) was downgraded to neutral from buy at UBS while raised tgt to $78 from $72

·     Starboard withdrew is proxy fight at Dollar Tree (DLTR) saying it’s pleased the company has announced intentions to “perform a significant test of multiple price points” at stores and decided to withdraw its slate of board nominations.

·     Wynn Resorts (WYNN) upgraded to buy with $170 target at Jefferies



·     Oil prices rise as the U.S. military said it pulled a small contingent of American forces from Libya as the country teetered on the brink of full-scale civil war. Citing the ability of U.S. forces to “flex where required” in Libya, Col. Christopher Karns, a spokesman for U.S. Africa Command, confirmed the departure from Tripoli

·     California Public Utilities Commission said it will host two forums to explore what changes to the corporate governance, management, structure, and ownership of PG&E (PCG) are needed to ensure the safe provision of electric and natural gas service



·     Aon plc (AON) raises quarterly dividend 10% to 44c from 40c per share

·     Berkshire Hathaway (BRK/A) owned Applied Underwriters has been under investigation by the New York Department of Financial Services since at least June, the New York Post reported, citing a private settlement it saw

·     Warren Buffett, the largest shareholder in Wells Fargo (WFC), is urging the bank to look outside of Wall Street for a new CEO to restore its bruised reputation after former CEO Tim Sloan stepped down last month – Financial Times



·     Johnson & Johnson (JNJ) won the latest trial over claims its talc baby powder can cause cancer when a jury in Long Beach, California rejected a lawsuit; the victory comes the week after the company settled three cases alleging baby powder caused a rare asbestos-connected cancer.

·     Coherus Biosciences (CHRS) reported 1Q preliminary unaudited Udenyca sales of $36M-$38M


Industrials & Materials

·     Versum Materials Inc. (VSM) said Merck KGaA has offered to acquire the company for $53 a share, or about $5.78 billion, and that its board determined that the bid constitutes a superior proposal to its planned all-stock merger with Entegris (ENTG)

·     Boeing (BA) shares fell late Friday after saying its cutting production of its 737 jet output 19% to 42 airplanes a month by mid-April to reduce its spending on the 737 and preserve cash

·     General Electric (GE) downgraded to Underweight from Neutral at JPMorgan and lowered price target to $5 from $6


Technology, Media & Telecom

·     Snap (SNAP) was upgraded to Outperform from Sector Perform at RBC Capital late Friday and raised its price target to $17 from $10 saying they see early evidence that its Android platform improvements are finally gaining traction and may have reached a fundamentals inflection point

·     Pinterest sets its IPO at 75M shares at $15-$17 per share according to news wires

·     Micron Technology (MU) was downgraded to market perform from outperform at Cowen and cut tgt to $45 from $46

·     Microsoft (MSFT) mentioned positively in Barron’s saying the company looks well-positioned to take market share from (CRM) after announcing last week that it’s partnering with Adobe (ADBE) to share data and integrate into LinkedIn, which Microsoft acquired in 2016


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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