Morning Preview: April 12, 2019

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Early Look

Friday, April 12, 2019

Futures

Up/Down

%

Last

DJ Industrials

159.00

0.61%

26,292

S&P 500

12.50

0.41%

2,903

Nasdaq

29.50

0.39%

7,647

 

 

Stock futures look for a higher open, with Dow futures surging more than 150-points early as investors prepare for the start of earnings season. U.S. stocks closed mixed on Thursday amid a day with thin trading volumes as markets look to earnings in the banking sector this morning with JPM, WFC and PNC reporting. In stocks news, there was a big M&A announcement in the energy space, as Dow component and oil giant Chevron agreed to acquire Anadarko (APC) for $65 per share in a $33B deal. IN IPO news, the highly anticipated Uber IPO filing was announced last night as well. In Asian markets, The Nikkei Index jumped 159 points to 21,870, the Shanghai Index slipped -1 point to end at 3,188 and the Hang Seng Index gained 70 points to close the week at 29,909. In Europe, the German DAX is up about 60 points to around the 12,000 level, while the FTSE 100 is up about 30 points at 7,450. Data showed China exports rose 14.2% from a year earlier in March, against forecasts calling for a rise of 8.7% and after a sharp drop in February. “The rise in exports is more encouraging suggesting that demand for Chinese goods remains strong. Stocks have been trading a in a fairly narrow range this week, on track for gains.

Market Closing Prices Yesterday

·     The S&P 500 Index was little change up 0.11 points, or 0.00%, to 2,888.32

·     The Dow Jones Industrial Average fell -14.11 points, or 0.05%, to 26,143.05

·     The Nasdaq Composite slipped -16.88 points, or 0.21%, to 7,947.36

·     The Russell 2000 Index declined -2.41 points, or 0.15% to 1,579.14

 

Events Calendar for Today

·     8:30 AM EST              Import Prices MoM for March…est. 0.4%

·     10:00 AM EST            University of Michigan Confidence, Apr-P…est. 98.2

·     1:00 PM EST              Baker Hughes Weekly Rig Count

 

Earnings Calendar:

·     Earnings Before the Open: FRC, JPM, PNC, WFC

 

 

Macro

Up/Down

Last

WTI Crude

0.96

64.54

Brent

0.85

71.68

Gold

1.50

1,294.00

EUR/USD

0.0056

1.1309

JPY/USD

0.28

111.94

10-Year Note

+0.04

2.538%

 

 

World News

·     China’s total trade with the U.S slumped by 11% in the first three months of this year, according to the latest customs department data. That’s mainly due to a 28% slump in U.S. imports to China for the first quarter, in yuan-denominated terms

·     Eurozone industrial output fell less than expected in February as production dropped 0.2% from January

 

Sector News Breakdown

Consumer

·     Uber files for IPO, seeks NYSE listing under symbol “UBER”; said 2018 revenue $11.3B, net income $997M; gross bookings from ridesharing $41.5B in 2018, revenue from ridesharing products $9.2B in 2018; says doesn’t intend to pay cash dividends for the foreseeable future; end-2018 91m monthly active platform consumers vs 68M y/y; lost $3.04 billion on an operating basis in 2018

·     Tesla (TSLA) has begun leasing its Model 3 sedan in the U.S., in a financing option that would increase the EV maker’s base, but customers will not have the option to buy their cars at the end of the lease as Tesla intends to use the vehicles for its long-planned Tesla Network ride sharing program. Tesla has also halted online sales of its $35,000 Model 3, meaning the lowest-priced version available on the net for order is now the $39,500

·     Fiat Chrysler (FCAU) said results in North America, its most important region, will drop during the first half from a year ago, CEO Mike Manley says at Fiat’s annual general meeting in Amsterdam; Fiat sees continued strong performance in North, South America

·     J. Crew is actively exploring strategic alternatives, including a potential initial public offering of its Madewell business, which, if pursued, could be completed as early as the second half of 2019

·     Alaska Air (ALK) reports combined March traffic up 0.5%, capacity up 1.3%; load factor decreased 0.7 points to 84.2%

 

Energy

·     Chevron Corp. (CVX) will acquire Anadarko Petroleum Corp. (APC) for $65 per share, as APC holders will receive 0.3869 shares of Chevron and $16.25 in cash for each. Anadarko share in a deal valued at $33B. Chevron will issue 200 million shares and pay $8 billion in cash and will also assume about $15 billion of net debt. https://on.mktw.net/2Ux68VM

·     Goldman Sachs downgraded both California Resources (CRC) and Chesapeake Energy (CHK) to Sell from Neutral while upgraded Murphy Oil (MUR) to Neutral from Sell

 

Financials

·     JPMorgan (JPM) Q1 EPS $2.65 vs. est. $2.35

·     PNC Bank (PNC) Q1 EPS $2.61 vs. est. $2.61 as loans for Q1 grew to $232.2B from $226.5B QoQ

·     Earnings from Dow component JPMorgan (JPM), as well as Wells Fargo (WFC) and PNC Bank (PNC) are expected later this morning

 

Healthcare

·     Ophthotech Corporation (OPHT) announced that the company has converted its option and entered into an exclusive global license agreement with the University of Pennsylvania, for rights to develop and commercialize novel adeno-associated virus gene therapy product candidates

·     Gilead Sciences (GILD) and Novo Nordisk (NVO) intend to collaborate on a clinical trial in nonalcoholic steatohepatitis (NASH)

·     PhaseBio (PHAS) 3.59M share Secondary priced at $12.00

 

Industrials & Materials

·     Boeing Co’s (BA) CEO said that a software update designed to prevent disasters like two recent fatal crashes involving its 737 MAX is working, with about two-thirds of the fast-selling jetliner’s customers having seen the fix in simulator sessions.

·     ATI Technology (ATI) sees Q1 EPS 10c-13c on sales about $1B vs. est. 25c/$1.01B

·     Mosaic (MOS) says that it’s idling production at its Tapira and Catalão phosphate mines in Brazil to comply with new Brazilian regulations governing mine tailings dams, the company announced today in a statement.

·     Coeur Mining, Inc. (CDE) said Q1 production of 78,336 ounces of gold, 2.5 million ounces of silver, 3.7 million pounds of zinc and 3.1 million pounds of lead. Metal sales for the quarter were 85,326 ounces of gold, 2.6 million ounces of silver, 4.7 million pounds of zinc and 2.7 million pounds of lead.

 

Technology, Media & Telecom

·     Disney (DIS) says its new streaming service, Disney Plus, will cost $6.99 per month when it launches in the U.S. on November 12. That is cheaper than rival Netflix, which charges $13 per month for its most popular streaming plan. But the Disney service has a narrower focus on family-friendly shows and movies, which will include a live action Star Wars series and a series about Marvel character Loki.

·     Amazon.com Inc’s (AMZN) Japanese unit raised the membership fee for its Prime service by 26 percent on Friday, the first such hike since it was launched in the country 11 years ago. The new annual Prime membership fee is 4,900 yen ($43.86) versus 3,900 yen previously

·     Japan Display, a key Apple supplier, has sealed a deal to receive a bailout of ¥80bn ($715m) from a consortium of Chinese and Taiwanese groups – Financial Times

·     Toshiba shares fell after the sale of its US liquefied natural gas business to a Chinese group collapsed

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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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