Morning Preview: April 11, 2019

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Early Look

Thursday, April 11, 2019

Futures

Up/Down

%

Last

DJ Industrials

30.00

0.11%

26,196

S&P 500

3.50

0.13%

2,898

Nasdaq

6.00

0.08%

7,647

 

 

Stock futures are inching higher amid new developments in Europe pertaining to Brexit, while central banks yesterday (ECB) warned of threats to the global economy. Meanwhile, the U.S. dollar retreated for a fourth session amid the global growth fears and dovish central banks. Markets also await the start of earnings season tomorrow morning when big banks JPM and WFC are expected to report. In Asian markets, The Nikkei Index rose 23 points to settle at 21,711, the Shanghai Index dropped over -50 points to settle at 3,189 and the Hang Seng Index fell -280 points to 29,839. In Europe, the German DAX is up around 20 points at 11,930, while the FTSE 100 is up a few points at 7,430. The mess continues overseas as Brexit may be deferred until the end of October, triggering six more months of political uncertainty. EU leaders said the U.K. can stay in the bloc until Oct. 31, with a review in June. Theresa May accepted the offer. U.S. stocks advanced yesterday as the Dow Jones Industrial Average edged into positive territory the minutes of trading, along with solid gains for the S&P 500 and Nasdaq Comp, while the Russell 2000 outperformed rising over 1.4%. The Fed minutes from the March FOMC meeting showed that policy makers dropped plans for further rate increases in 2019 due to unease over the U.S. and global economies and unexpectedly tame inflation. The European Central Bank also made no changes to monetary policy, saying it intends to leave rates at current levels until at least the end of 2019.

Events Calendar for Today

·     8:30 AM EST      Weekly Jobless Claims…est. 210K

·     8:30 AM EST      Continuing Claims…est. 1.735M

·     8:30 AM EST      Producer Price Index (PPI) MoM for March…est. 0.3%

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

·     8:30 AM EST      PPI Ex: Food & Energy YoY for March…est. 2.4%

·     9:30 AM EST      Fed’s Clarida speaks at annual IIF Meeting in Washington

·     9:45 AM EST      Bloomberg Consumer Comfort Index…prior 58.9

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

 

Earnings Calendar:

·     Earnings Before the Open: CBSH, FAST, RAD

·     Earnings After the Close: none

 

 

Market Closing Prices Yesterday

·     The S&P 500 Index climbed 10.01 points, or 0.35%, to 2,888.21

·     The Dow Jones Industrial Average rose 6.58 points, or 0.03%, to 26,157.16

·     The Nasdaq Composite gained 54.97 points, or 0.69%, to 7,964.24

·     The Russell 2000 Index advanced 21.87 points, or 1.40% to 1,581.55

 

 

Macro

Up/Down

Last

WTI Crude

-0.67

63.94

Brent

-0.55

71.18

Gold

-6.00

1,307.90

EUR/USD

0.0004

1.1278

JPY/USD

0.10

111.11

10-Year Note

+0.001

2.476%

 

 

World News

·     Leaders of the 27 remaining EU member states met for more than six hours before agreeing to postpone Brexit until Oct. 31, two officials said. European Union leaders offered Britain a delay to its EU departure date until Halloween. UK Prime Minister Teresa May, who had sought a delay only until June 30, agreed to the offer.

·     WikiLeaks founder Julian Assange has been arrested by British police at the Ecuadorean Embassy in London. The Metropolitan Police said its officers had taken Mr. Assange into custody

·     China’s inflation picked up to 2.3% in March from 1.5% in February as expected, driven by temporary food supply factors, but the core gauge stayed flat at 1.8%

 

Sector News Breakdown

Consumer

·     Tesla (TSLA) shares fell -3% after reports it and Panasonic re suspending plans to expand the capacity of their $4.5B U.S. plant in the face of uncertain demand for electric vehicles, the Nikkei reports. The two had intended to raise capacity 50% by 2020 to the equivalent of 54 gigawatt-hours, but financial problems forced a re-think. Panasonic also intends to suspend planned investment in Tesla’s battery and EV plant in Shanghai and instead provide technical support

·     Caesars Entertainment (CZR) is preparing to put itself up for sale as soon as this week after its board approved a sales process amid pressure from billionaire investor Carl Icahn, the New York Post reports https://nyp.st/2uXc0In

·     Bed Bath & Beyond (BBBY) shares fell -10%; Q4 adjusted EPS $1.20/$3.3B vs. est. $1.11/$3.33B; Q4 comp sales fell about (-1.4%); sees FY19 adjusted EPS $2.11-$2.20, vs. consensus $1.79; sees double-digit EPS growth rates in 2020 and long term; raises quarterly dividend to 17c from 16c per share; sees Q1 ex-items EPS 7c-12c, well below consensus of 29c

·     JetBlue (JBLU) announced it intends to launch multiple daily flights from both cities to London in 2021,

·     Spirit Airlines (SAVE) sees Q1 total revenue per ASM up 4.0% and sees Q1 capacity as measured by Available Seat Miles up 16.9%

 

Energy, Industrials & Materials

·     Shell (RDSA) sold its stake in an oil-producing reservoir in the Gulf of Mexico to Delek Group (DK) for $965 M; Delek will pay cash for Shell’s 22.5% stake in the Caesar-Tonga field,

·     Apogee Enterprises (APOG) Q4 EPS 85c/$346.26M vs. est. 91c/$357.3M; sees 2020 EPS $3.00-$3.20 vs. est. $3.46; said Q4 results were negatively affected by severe winter weather

·     PG&E (PCG) is considering expanding its board in a move to possibly settle an ongoing battle with shareholder BlueMountain Capital Management, Reuters reported

·     The IEA said oil markets are tightening while warning that threats to the world economy risk a downgrade to the demand forecast. It highlighted the U.S.-China trade dispute, a modest demand recovery in the Middle East and weakness in the EU that may be exacerbated if there’s a disorderly Brexit

·     Northrop Grumman (NOC) was awarded a $3.17B for modification to the previously awarded E-2D Advanced Hawkeye, or AHE, Lot 7 advance acquisition contract to a multi-year fixed-price-incentive-firm contract

 

Financials

·     Commerce Bancshares (CBSH) Q1 EPS 85c/$324.73M vs. est. 91c/$336.2M; Q1 loan loss provision $12.46M vs. $10.4M a year ago and reports Q1 net charge-offs $394K vs. ($255K) a year ago

·     CareTrust REIT (CTRE) 5.25M share Spot Secondary priced at $23.35

·     AllianceBernstein (AB) said that preliminary assets under management increased 1.5% to $555B during March 2019 from $547B at the end of February, due to market appreciation

·     Manning & Napier (MN) reports preliminary AUM $21.1B as of March 31

 

Healthcare

·     Bristol-Myers Squibb Co.’s (BMY) proposed takeover of Celgene Corp. (CELG) will finally reach a climax on Friday when investors cast their votes on the merger

·     Eli Lilly (LLY) downgraded to neutral from buy at Guggenheim

·     Cardiovascular Systems (CSII) downgraded to Underperform on valuation at Bank America

·     Autolus Therapeutics (AUTL) 4.2M ADS Secondary priced at $24.00

 

Technology, Media & Telecom

·     PagerDuty Inc. (PD) filed its 11.8M share IPO at $24, above its recently raised pricing range of $21 to $23 a share on Tuesday, up from an initial estimate of $19 to $21 a share

·     Tufin (TUFN) 7.7M share IPO priced at $14.00 (the high end of the $12-$14 range)

·     Disney (DIS) holds its investor meeting later today

·     T-Mobile (TMUS) on Wednesday introduced TVision Home, a rebranded and upgraded version of Layer3 TV. TVision Home is launching in Chicago, Dallas-Fort Worth, Los Angeles, New York City, Philadelphia, San Francisco, and Washington, D.C. metro areas

·     Worldwide PC shipments totaled 58.5M units in the first quarter of 2019, a 4.6% decline from the first quarter of 2018, according to preliminary results by Gartner (IT); Lenovo (LNVGY), HP Inc. (HPQ) and Dell (DELL) – accounted for 61.5% of global PC shipments in the first quarter of 2019, compared with 56.9% of shipments in the first quarter of 2019

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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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