Morning Preview: April 18, 2019

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Early Look

Thursday, April 18, 2019





DJ Industrials




S&P 500










Global stocks are mixed, with U.S. futures down slightly on this final day of trading for the week (US markets are closed tomorrow in observance of Good Friday) as markets await another round of earnings. U.S. stocks dropped to their lowest in a week on Wednesday, spurred by a sell-off in health-care providers, which have come under pressure in the midst of calls for expanding Medicare to all Americans. The industry has been hit hard, specifically in the managed care, hospital and large cap pharma categories (though no subsector has been immune to pressure). In Asian markets, The Nikkei Index fell -187 points to end the week at 22,090, the Shanghai Index dipped -12 points to 3,250 and the Hang Seng Index dropped -161 points to close at 29,963. In Europe, the German DAX is up around 50 points to move above 12,200, while the FTSE 100 is down around -20 points at 7,450. European markets fell further after French and German surveys of purchasing managers in the manufacturing sector for April showed activity continuing to contract (sending the euro lower).


In corporate news, another busy morning of earnings while there were six IPOs that priced last night, highlighted by Pinterest’s (PIN) 75M shares offering at $19, above the recent price range, while Zoom Video (ZM) prices 20.9M share IPO at $36, above the recently raised $33-$35 range. In commodities, oil prices are little changed (holding just off 5-month highs) as well as gold (at 2019 lows), with the dollar trading in a narrow range all week. Also of note today, Robert Mueller’s redacted report goes public with potential peril and opportunity for both Donald Trump and his critics. The biggest focus will be on the special counsel’s decision to not charge the president with obstructing justice. Stocks have been soaring since their December lows with the Nasdaq just about 50 points shy of record close (the Nasdaq 100 hit record highs yesterday), the S&P 500 is 15 points shy, and Dow stands less than 400 points away.

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -6.61 points, or 0.23%, to 2,900.45

·     The Dow Jones Industrial Average fell -3.12 points, or 0.01%, to 26,449.54

·     The Nasdaq Composite dipped -4.15 points, or 0.05%, to 7,996.08

·     The Russell 2000 Index declined -15.19 points, or 0.96% to 1,567.60


Events Calendar for Today

·     8:30 AM EST      Weekly Jobless Claims…est. 205K

·     8:30 AM EST      Continuing Claims…est. 1.722M

·     8:30 AM EST      Retail Sales MoM for March…est. 1.0%

·     8:30 AM EST      Retail Sales Ex: Autos for March…est. 0.7%

·     8:30 AM EST      Philly Fed Survey for March…est. 11.0

·     9:45 AM EST      Bloomberg Consumer Comfort Index…prior 59.8

·     9:45 AM EST      Markit US Manufacturing PMI, Apr-P…est. 52.8

·     10:00 AM EST    Leading Index for March…est. 0.4%

·     10:00 AM EST    Business Inventories for February…est. 0.3%

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

·     12:10 PM EST    Fed’s Bostic speaks at Economic event in Florida


Earnings Calendar:


·     Earnings After the Close: EXPO, GBCI, INDB, ISRG, PBCT






WTI Crude















10-Year Note





World News

·     Activity in Germany’s services sector rose to a seven-month high in April, but investors focused on the 44.5 reading for the manufacturing sector, well below the 50.0 mark separating growth from contraction even if it was above the 44.1 reading last month

·     North Korea has test-fired a “new-type tactical guided weapon,” its state media announced Thursday, in a possible attempt to register displeasure with currently deadlocked nuclear talks with the United States

·     North Korea said on Thursday it no longer wanted to deal with U.S. Secretary of State Mike Pompeo and said he should be replaced in talks by someone more mature, hours after it announced its first weapons test since nuclear talks broke down.


Sector News Breakdown


·     Las Vegas Sands (LVS) Q1 adjusted EPS 91c/$3.65B vs. est. 86c/$3.47B; 1Q Macau operations revenue $2.33B vs. Bloomberg est. $2.20B; 1Q Macau adjusted property Ebitda $858M vs. est. $800.1M; 1Q Sands China revenue $2.33 and 1Q Sands China adjusted property EBITDA $858M

·     Sleep Number (SNBR) Q1 EPS 80c/$426.4M vs. est. 73c/$427.3M; backs FY19 EPS view of $2.25-$2.75 vs. est. $2.45 as outlook assumes 6%-10% net sales growth for 2019 and a 25% effective income tax rate for the remainder of the year; 1Q comparable sales +5% vs. -4% y/y while 1Q online and phone comp sales +5% vs. +7.00% YoY; 1Q total location count 585 vs. 579 QoQ

·     Pier 1 (PIR) Q4 adjusted EPS loss (85c) vs. est. loss (24c); 4Q gross margin 25.9% vs. Bloomberg estimate 31.8% and 4Q adjusted Ebitda loss $51.9M



·     Kinder Morgan (KMI) Q1 EPS 25c vs. est. 24c; sees FY DCF per share $2.20; sees FY adjusted Ebitda $7.8 billion, vs. estimate $7.74 billion

·     Gulfport Energy (GPOR) said Q1 realized natural gas price, before the impact of derivatives and including transportation costs, averaged $2.70 per Mcf; realized oil price for Q1, before the impact of derivatives and including transportation costs, averaged $53.10 per barrel; says remains on track to deliver previously announced 2019 production guidance of 1,360 MMcfe to 1,400 MMcfe per day



·     House Democrats have subpoenaed nine large banks (JPM, C, MS, WFC, BAC, COF, DB, RY, TD)as part of an inquiry into President Trump’s financial interests, according to people familiar with the matter, including six U.S. firms and three foreign lenders.

·     SunTrust (STI) Q1 EPS $1.24/$2.33B vs. est. $1.30/$2.33B; Q1 book value per share $51.15 and Q1 net charge-offs .26%

·     KeyCorp (KEY) Q1 EPS 40c vs. est. 41c

·     E-Trade (ETFC) Q1 EPS $1.09/$755M vs. est. 93c/$736.7M; Q1 EPS of $1.09 includes a net benefit of $19M, or 8c per diluted share, related to benefits to provision for loan losses and communications expense; 1Q allowance for loan losses $37 million, 1Q daily average revenue trades 279,405

·     Texas Capital (TCBI) Q1 EPS $1.60 vs. est. $1.35; net interest income was $235.6M for Q1, compared to $240.7M for Q4; average total deposits for Q1 increased $136.1M, or 1%, from Q4 of 2018 and increased $1.6B, or 8%, from Q1 of 2018

·     Bank OZK (OZK) Q1 EPS 86c vs. est. 84c; returns on average assets, average common stockholders’ equity and average tangible common stockholders’ equity for the first quarter of 2019 were 1.99%, 11.77% and 14.40%, respectively, compared to 2.16%, 13.17% and 16.53%,

·     Boston Private Financial (BPFH) Q1 EPS 25c vs. est. 21c; Q1 tangible book value per share $8.47

·     Cathay General (CATY) Q1 EPS 83c vs. est. 80c; 1Q return on average assets 1.61% and 1Q return on average equity 12.6%

·     Cohen & Steers (CNS) Q1 adjusted EPS 58c/$94.23M vs. est. 57c/$91.48M

·     Eagle Bancorp (EGBN) Q1 EPS $1.11 vs. est. $1.12; reports CET1 capital ratio 12.69%, Q1 net charge-offs .19%, book value per share $33.25 and Q1 net interest margin 4.02%

·     Sallie Mae (SLM) Q1 adjusted EPS 34c/$402M vs. est. 30c/$384.78M; narrows FY19 core EPS view to $1.23-$1.26 from $1.22-$1.26

·     SL Green Realty (SLG) Q1 FFO $1.68/$304.3M vs. est. $1.70/$307.3M. Same-store cash net operating income, including share of same-store cash NOI from unconsolidated joint ventures, increased 5.1% for Q1

·     Triumph Bancorp (TBK) Q1 EPS 55c vs. est. 52c; Q1 net interest margin was 6.15% and total loans held for investment increased $4.2M, or 0.1%, to $3.613B at March 31

·     Torchmark (TMK) Q1 operating EPS $1.64/$1.12B vs. est. $1.59/$1.1B; sees FY operating EPS $6.61-$6.75 vs. est. $6.59; 1Q adjusted book value per share $45.45

·     Umpqua (UMPQ) shares fell -7%; Q1 EPS 34c vs. est. 37c; Q1 provision for loan losses $13.7M, Q1 net interest margin 4.03% and 1Q book value per share $18.65



·     Hookipa Pharma (HOOK) 6M share IPO priced at $14.00

·     Natera (NTRA) 5.3M share Secondary priced at $19.00

·     AngioDynamics (ANGO) announced that it has entered into a definitive agreement to sell its NAMIC fluid management portfolio to Medline Industries for $167.5M


Industrials & Materials

·     Alcoa (AA) Q1 adjusted EPS loss (23c)/$2.7B vs. est. loss (11c)/$2.81B; cut its global aluminum deficit forecast for the full year to 1.5M-1.9M metric tons, from prior 1.7M-2.1M; 1Q adjusted Ebitda $467M; sees FY19 global aluminum demand growth 2-3%, down from 3-4%

·     Honeywell (HON) Q1 EPS $1.92/$8.88B vs. est. $1.83/$8.63B; quarter helped by organic sales of up 8%; raises year EPS view to $7.90-$8.15 from prior view $7.80-$8.10 and boosted its revenue outlook as well to $36.5B-$37.2B

·     United Rentals (URI) Q1 adjusted EPS $3.31/$2.12B vs. est. $3.05, consensus $2.07B; backs FY19 revenue $9.15B-$9.55B, consensus $9.33B; backs FY19 adjusted EBITDA view $4.35B-$4.55B

·     Brigham Minerals LLC (MNRL) priced its IPO at the top of its expected range at $18, but increased the number of shares it sold to 14.5M from 13.5M to raise more than $260 million


Technology, Media & Telecom

·     Pinterest Inc. (PINS) priced its 75M share IPO at $19, ng higher than the expected $15-$17 range and raising more than $1.4 billion and valuing the company at more than $10 billion

·     Zoom Video (ZM) prices 20.9M share IPO at $36, above the recently raised $33-$35 range

·     Endava (DAVA) 5M share Secondary priced at $27.25

·     Facebook (FB) has “unintentionally uploaded” the email contacts of 1.5 million new Facebook users since May 2016, Business Insider’ reported and noted it is now deleting them

·     Plexus (PLXS) Q2 EPS 79c/$789M vs. est. 84c/$782.27M; sees Q3 EPS 76c-86c on revs $760M-$800M below est. 93c/$804.65M; said expect weakness in our communications sector to offset anticipated growth in our aerospace/defense and healthcare/life sciences sectors

·     Atlassian (TEAM) Q3 EPS 21c/$309.3M vs. est. 18c/$304.65M; sees Q4 non-IFRS EPS roughly 16c on revenue $329M-$331M vs. est. 19c/$327.32M; raises FY19 revenue view to $1.205B-$1.207B from $1.195B-$1.199B, consensus $1.2B

·     Crown Castle (CCI) Q1 EPS 44c/$1.43B vs. est. 40c/$1.39B; sees FY adjusted Ebitda $3.34B-$3.39B vs. est. $3.37B; reaffirms forecast as backs previously issued FY19 net income view $821M


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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