Early Look

Tuesday, April 9, 2019

Futures	Up/Down	%	Last
DJ Industrials	-2.00	0.01%	26,332
S&P 500	-2.50	0.08%	2,896
Nasdaq	-10.50	0.14%	7,612

 

 

Stock futures are pointing to a flat open, while the S&P 500 index looks to extend its recent winning streak to 9-straight days, having been boosted by anticipation of better times ahead in this dovish rate environment (Fed saying recently no more rate hikes scheduled for this year). Markets rallied back from lows yesterday to close mostly higher (the Dow declined due to weakness in Boeing), with investors attention turning to earnings shortly after trade talks concluded last week between the US and China (reports indicating they are closer to a trade deal) as big banks JPM, WFC, PNC are expected to report earnings this upcoming Friday. European markets hanging on to small gains despite reports of fresh U.S. tariffs on EU goods. In Asian markets, The Nikkei Index rose 40 points to 21,802, the Shanghai Index fell -5 points to 3,239 and the Hang Seng Index gained 80 to settle at 30,157. In Europe, the German DAX is up slightly at 11,970, while the FTSE 100 is up a few points above 7,650. The Trump administration moved Monday toward imposing tariffs on about $11 billion in imports from the European Union, saying the move was justified by the bloc’s subsidies for European aircraft manufacturer Airbus. In Brexit news, UK Prime Minister May will meet German Chancellor Angela Merkel in Berlin and then French President Emmanuel Macron in Paris to try to convince them to extend the deadline for Brexit until June 30. The EU has already delayed Brexit once — to April 12, or May 22 with a deal.

Market Closing Prices Yesterday

·     The S&P 500 Index climbed 3.03 points, or 0.10%, to 2,895.77

·     The Dow Jones Industrial Average fell -83.97 points, or 0.32%, to 26,341.02

·     The Nasdaq Composite gained 15.19 points, or 0.19%, to 7,953.88

·     The Russell 2000 Index declined -3.55 points, or 0.22% to 1,579.00

 

Events Calendar for Today

·     6:00 AM EST      NFIB Small Business Optimism for March…est. 102.0

·     7:45 AM EST      ICSC Weekly Retail Sales

·     8:55 AM EST      Johnson/Redbook Weekly Sales

·     10:00 AM EST    JOLTs Job Openings for February…est. 7550

·     4:30 PM EST       API Weekly Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: LNN

·     Earnings After the Close: PSMT, SLP, WDFC

 

Other Key Events:

·     25th Annual Oil & Gas Investment Symposium, 4/8-4/9, in New York

·     Needham 18th Annual Healthcare Conference, 4/9-4/10, in New York

 

 

Macro	Up/Down	Last
WTI Crude	0.12	64.52
Brent	-0.03	71.07
Gold	4.50	1,302.00
EUR/USD	0.0012	1.1275
JPY/USD	-0.19	111.29
10-Year Note	+0.00	2.517%

 

 

World News

·     The office of the U.S. Trade Representative threatened to levy tariffs on many European goods Monday afternoon as retaliation against European companies’ subsidies for aircraft manufacturer Airbus SE (EADSY)

·     The National Federation of Independent Business (NFIB) reported its small-business optimism index edged up 0.1 points to a seasonally adjusted 101.8, marking the third month in a row in a narrow range

 

Sector News Breakdown

Consumer

·     Hawaiian Airlines (HA) narrows Q1 operating revenue per ASM to (5%)-(3%) from prior view (6%)-(3%); lowers Q1 operating costs per ASM excluding fuel to up 0.5%-2.5% from up 1%-4% citing lower than expected expenses related to its Neighbor Island freighter operation

·     Altria Group, Inc. (MO) announces it has received a request for additional information (Second Request) from the U.S. Federal Trade Commission (FTC) relating to its investment in JUUL Labs, Inc. (JUUL) that closed in December 2018.

·     Wyndham Hotels & Resorts (WH) announced that it has achieved several major milestones in its integration of La Quinta by Wyndham

 

Energy

·     Saudi Aramco got orders for $85 billion in its debut bond sale, demand that may produce a lower yield than the country’s sovereign debt in final pricing today – Bloomberg

·     Callon Petroleum (CPE) announced it has entered into a definitive agreement regarding the sale of certain non-core assets in the Midland Basin for initial cash proceeds of $260M

·     Black Hills Corp. (BKH) announced that its two Nebraska natural gas distribution utilities filed a joint application with the Nebraska Public Service Commission to consolidate the two utilities into a new public utility entity

·     Laredo Petroleum (LPI) cut total employee count by approximately 20%, including a greater than 40% reduction at the Vice President and above level, resulting in annualized savings of approximately $30M

 

Financials

·     Franklin Resources (BEN) reported preliminary month-end assets under management of $712.3B at March 31, compared to $714.2B at February 28

·     SocGen is shedding 1,600 jobs according to various reports, mostly in fixed income trading, as the firm doubles down on efforts to revive investment banking

 

Healthcare

·     Zogenix Inc. (ZGNX) shares fell -31% after hours as received a refusal to file letter from FDA regarding its new drug application for Fintepla for the treatment of seizures associated with Dravet syndrome. FDA determined that the NDA, submitted on Feb. 5, was not sufficiently complete to permit a substantive review (shares of GWPH rose in reaction)

·     PhaseBio (PHAS) announced that the FDA has granted breakthrough therapy designation for PB2452, a reversal agent for the antiplatelet drug ticagrelor. The breakthrough therapy designation for PB2452 was supported by Phase 1 trial results, in which PB2452 achieved immediate and sustained reversal of ticagrelor’s antiplatelet effects

·     Bio-Rad Laboratories, Inc. (BIO) announced that it has received 510(k) clearance from the U.S. FDA for its IH-500 automated random-access system for blood typing and screening.

·     Homology Medicines (FIXX) files to sell $125M in common stock

 

Industrials & Materials

·     Pentair (PNR) cuts forecast for the year and Q1; sees Q1 EPS 43c, down from prior view of 52c-55c (est.54c)

·     Lindsay (LNN) Q2 revs $109.2M missing the $116.3M estimate

·     US Steel (X) downgraded to underperform at Credit Suisse and tgt lowered to $13 from $21

·     Compass Minerals (CMP) said its primary North American deicing markets were above both the 10-year average and prior-year results, which helped offset the impact of mild weather in the U.K. as well as lower highway deicing sales commitments in North America; sold approximately 3.5 million tons of highway deicing salt products in first quarter of 2019 compared to 4.3 million tons in the prior-year period

·     Donaldson Co. (DCI) sees achieving 2021 total fiscal sales of $3 billion to $3.3 billion, reflecting an average annual growth of 3%-7% 2019 through 2021

·     McEwen (MUX) says it anticipates half of the net proceeds from a potential sale of its Mexican assets would be used for development, with the other half used to retire a portion of its debt.

 

Technology, Media & Telecom

·     The Philadelphia Semiconductor index (SOX) advanced for a seventh straight session yesterday, its longest winning streak since last August.

·     Disney (DIS) upgraded to Outperform from Market Perform at Cowen

·     SAP (SAP) downgraded to Neutral from Buy at UBS