Morning Preview: April 10, 2019

Scott GreenDaily Market Report

Early Look

Wednesday, April 10, 2019

Futures

Up/Down

%

Last

DJ Industrials

45.00

0.17%

26,203

S&P 500

6.00

0.21%

2,888

Nasdaq

14.50

0.19%

7,607

 

 

Stock futures are edging higher, looking to rebound from its worst daily performance in over two-weeks, as markets look to trade optimism and upcoming earnings as catalysts to push markets back to all-time highs reached last Fall. In corporate news, reports indicate that Uber Technologies Inc has decided it will seek to sell around $10 billion worth of stock in its initial public offering, and will make public the registration of the offering on Thursday. In Asian markets, The Nikkei Index dropped -115 points to 21,687, the Shanghai Index inched higher by 2 points to 3,241 and the Hang Seng Index fell -37 points to 30,119. In Europe, the German DAX is rising more than 50 points to 11,900, while the FTSE 100 is up a few points at 7,435. Regarding Brexit, Donald Tusk, President of the European Council, has written to EU leaders to ask them to back his proposal to offer the U.K. a one-year extension to the Brexit process. U.S. stocks snapped their eight-day winning streak after the International Monetary Fund cut its global growth outlook for the third time in six months (to 3.3% from 3.5%, lowest since the financial crisis) while trade fears also pulled stocks off recent five month highs after reports the Trump administration is moving toward imposing tariffs on about $11 billion in imports from the EU.

Market Closing Prices Yesterday

·      The S&P 500 Index dropped -17.57 points, or 0.61%, to 2,878.20

·      The Dow Jones Industrial Average fell -190.44 points, or 0.72%, to 26,150.58

·      The Nasdaq Composite slumped -44.61 points, or 0.56%, to 7,909.28

·      The Russell 2000 Index declined -19.32 points, or 1.22% to 1,559.68

AnchorAnchorAnchorAnchorEvents Calendar for Today

·      7:00 AM EST       MBA Mortgage Applications Data

·      8:30 AM EST       Consumer Price Index (CPI) MoM for March…est. 0.4%

·      8:30 AM EST       CPI Ex: Food & Energy MoM for March…est. 0.2%

·      8:30 AM EST       CPI Ex: Food & Energy YoY for March…est. 2.1%

·      10:30 AM EST     Weekly DOE Inventory Data

·      2:00 PM EST        FOMC Meeting Minutes from March 20th

·      2:00 PM EST        Monthly Budget Statement for March…est. (-$181.0B)

Earnings Calendar:

·      Earnings Before the Open: DAL, MSM

·      Earnings After the Close: BBBY, SEAC, VNCE

Other Key Events:

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

·      EASL Int’l Liver Congress 2019, 4/10-4/14



 

Macro

Up/Down

Last

WTI Crude

0.45

64.43

Brent

0.34 70.95

Gold

0.10

1,304.20

EUR/USD

0.0012

1.1275

JPY/USD

0.04

111.18

10-Year Note

+0.00

2.501%

 

 

World News

·      Donald Tusk, President of the European Council, has written to EU leaders to ask them to back his proposal to offer the U.K. a one-year extension to the Brexit process. Keen to avoid a potential series of shorter delays, Tusk said his so-called “flextension” model offered the U.K. its best chance of agreeing a way to exit the bloc with a deal in place.

·      Federal Reserve Vice Chairman Richard Clarida said Tuesday night in a speech in Minnesota that he did not agree with analysts who believe the current 3.8% unemployment rate is below “full employment,” or the level where economists believe the jobless rate couldn’t go below without sparking higher inflation.

·      The European Union will grant Prime Minister Theresa May a second delay to Brexit at an emergency summit on Wednesday but the bloc’s leaders are likely to demand she accepts a longer extension with conditions – Reuters

·      U.S. Homeland Security Secretary Kirstjen Nielsen said on Tuesday that Claire Grady, the acting deputy secretary of the department, had offered her resignation to President Donald Trump


Sector News Breakdown

Consumer

·      Uber Technologies Inc has decided it will seek to sell around $10 billion worth of stock in its initial public offering, and will make public the registration of the offering on Thursday, people familiar with the matter said on Tuesday. – Reuters https://reut.rs/2uU0FZL

·      Levi Strauss (LEVI) Q1 adjusted EBIT $206M vs. $180M last year and Q1 revenue $1.44B vs. $1.34B last year in its first earnings results as a public company; Q1 gross margin 54.6% vs. 54.9% last year; sees FY19 adjusted EBIT margin flat to up slightly and sees FY19 revenue growth of mid-single-digits

·      PriceSmart (PSMT) Q2 EPS 79c/$854.4M vs. est. 67c/$856.6M; 2Q net warehouse club sales $820.3 million; reports Q2 comparable net merchandise sales down (-0.9%)

·      WD-40 (WDFC) Q2 EPS $1.14/$101.3M vs. est. $1.11/$104.1M; sees FY19 EPS $4.51-$4.58 vs. est. $4.55 and sees FY19 revenue $425M-$437M (or up 4%-7%) vs. est. $427.7M

·      Nordstrom (JWN) upgraded to overweight from sector weight at KeyBanc with $55 tgt saying that demand weakness at the department store was transient, and that the stock was trading at an attractive valuation

·      JetBlue (JBLU) reports March traffic up 7.9%, capacity up 12.6%; load factor for March was 85.3%, a decrease of 3.7 points from March 2018


Energy, Industrials & Materials

·      The American Petroleum Institute (API) reported that U.S. crude supplies rose by 4.1 million barrels for the week ended April 5, also reportedly showed stockpile declines of 7.1 million barrels for gasoline and 2.4 million barrels for distillates

·      MSC Industrial (MSM) Q2 EPS $1.24/$823M vs. est. $1.26/$827.09M; Q2 average daily sales increased 8.8% year-over-year; sees Q3 EPS $1.46-$1.52 on revs $874M-$891M vs. est. $1.61/$888.26M

·      Exelon (EXC) upgraded to neutral from sell at Goldman Sachs and raise tgt to $47

·      Norsk Hydro ASA confirmed that hackers used a relatively new form of ransomware known as LockerGoga in a March 19 cyberattack that crippled the company’s global operations.


Financials

·      Invesco (IVZ) reports preliminary AUM $954.8B as of March 31, up 1%. driven by favorable market returns, non-management fee earning AUM inflows, and reinvested distributions, partially offset by foreign exchange and net long-term outflows. FX decreased AUM by $2.7B. Preliminary average total AUM for the quarter through March 31 were $932.8B

·      Artisan Partners (APAM) reported that its assets under management, or AUM, as of March 31 totaled $107.8B. Separate accounts accounted for $55.8B of total firm AUM, while Artisan Funds and Artisan Global Funds accounted for $52B


Healthcare

·      Indivior Plc lost 75% of its stock market value and former parent Reckitt Benckiser also fell after the U.S. Justice Department accused the British drugmaker of illegally boosting prescriptions for its blockbuster opioid addiction treatment.

·      Sanofi SA (SNY) said it will cut the cost of its insulin products to $99 per month for uninsured patients and others who pay cash for it in the United States, as the drugmaker contends with intense criticism over the high price of the life-sustaining diabetes medication.

·      PhaseBio (PHAS) files to sell 3M shares of common stock

·      AmerisourceBergen (ABC) downgraded to Underperform from Buy at Bank America and to in-line at Evercore/ISI

·      Homology Medicines (FIXX) 5.55M share Secondary priced at $22.50


Technology, Media & Telecom

·      AT&T (T) has internally discussed about selling its HBO Europe business as the telecom group aims to reduce a debt pile of $170 billion, the Financial times reported. Comcast-owned Sky would be an “obvious buyer” given its relationship with HBO, the paper said https://reut.rs/2VEp5Cs

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

·      Huya (HUYA) 18.4M share Secondary priced at $24.00

·      Liberty Global (LBTYA) downgraded to Underperform from Neutral at BofA/Merrill

_________________________________________________________________

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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