Mid-Morning Look: April 25, 2019

Auto PostDaily Market Report

Mid-Morning Look

Thursday, April 25, 2019






DJ Industrials




S&P 500








Russell 2000






U.S. equities are mixed early as tech stocks were buoyed by strong earnings results from MSFT and FB, pushing the Nasdaq Composite to fresh all-time highs, but the industrial sector falls due to a very weak quarter and lower outlook from Dow component MMM, as shares fell over 10%. Dow Transports fall over 200-points, dragged down by UPS after 1Q EPS/revs missed estimates. US Treasury prices and the dollar overall are little changed, outside of a jump in the yen as investors rotate into defensive assets (gold, yen, utilities) given the broader stock pullback from record highs. Early action in U.S. stocks being driven by the busiest earnings day of the quarter so far, but it is important to note that many of these stocks have had a great run from the December lows and some are paring those gains. Economic data was mixed as jobless claims jumped but durable goods orders came in stronger than expected.


Economic Data

·     Durable Goods Orders for March rises 2.7%, handily topping the 0.8% estimate while Durable goods new orders revised up to -1.1% for Feb. from -1.6%; new orders ex-trans. rose 0.4% in March after 0.2% fall and new orders ex-defense rose 2.3% in March after 1.7% fall

·     Weekly Jobless Claims rose 37k to 230K, well above the 200K estimate and off over 50-year lows as the 4-week moving avg. at 206k in the week ending April 20; prior week claims revised up to 193k from 192k; continuing claims rose 1k to 1.655m in the week ending April 13







WTI Crude















10-Year Note





Sector Movers Today

·     Consumer finance and lending; PYPL reported solid Q4 results that were within guidance and essentially in-line with consensus; ADS reported core EPS for Q1 that missed the average analyst estimate; AXP upgraded to overweight at Morgan Stanley as now view robust revenue growth as sustainable/raise 2020e EPS by 6% and expect rev growth to rebound from 7% in 1Q19 to 8-10%; Dow component Visa (V) results better as net revenue grew 8.3% Y/Y (~10% in CC) and EPS beat while volume growth was mixed

·     Auto’s; TSLA results missed expectations, with both revenue and loss-per share below estimates while reaffirmed its FY19 delivery outlook (360,000-400,000 units)/hopes rest on comments during c/c saying it would be profitable again this year; in auto dealers, earnings results today from SAH, PAG, LAD moving that sector; auto retailers soft following ORLY in-line 1Q19 EPS results and comp sales that increased less than consensus expectations/Q1 comparable sales +3.2%, estimate +4.1% (AAP, AZO active as well)

·     Transports; UPS 1Q EPS/revs missed estimates, reflecting the impact of severe winter weather in the U.S. and of Easter moving to mid-April but reaffirmed year (FDX, XPO active in sympathy); ECHO also declines in logistics sector on EPS miss; LUV solid results in airline space as Q1 EPS of 70c/$5.15B topped estimates and said 2Q RASM expected to benefit by one-half point due to timing shift of Easter and by about one point due to lower 2Q capacity from MAX groundings; but SAVE was downgraded to neutral at Bank America after the carrier lowered 2Q total revenue per available seat mile (Trasm) revenue guidance below estimates, and 1Q Trasm missed Sprit’s earlier guidance; in trucking, LSTR mixed results with Q1 EPS beat/rev miss and lower guidance as Q2 revs/EPS below views

·     Pharma movers; ABBV beat EPS expectations and raised forecasts despite suffering a 28% drop in international sales of Humira/raises year EPS to $8.73-$8.83 vs. prior view of $8.65-$8.75 (est. $8.69); LLY pulls Lartruvo from market after failed late-stage study as failed to demonstrate a survival benefit in soft tissue sarcoma patients; BMY on Q1 beat and raised GAAP EPS guidance on strong sales of stroke and cancer drugs; NVS was upgraded to buy at Guggenheim

·     REITs; mortgage REITs active after AGNC missed Q1 EPS results (watch NLY, TWO, NYMT, MFA); ROIC reported in-line 1Q19 results and management affirmed its 2019 FFO and SSNOI growth guidance; ESS earnings report beat consensus, and management increased 2019 core FFO guidance by 0.4% at the midpoint; BDN posted a 1Q19 FFO beat and maintained the midpoint of 2019 FFO guidance AVB core FFO beat expectations by over 1% in 1Q19. Same-store-revenue growth increased slightly better than expectation; AKR reported a solid 1Q beat, highlighted by SSNOI growth of 4.6% and steady fundamentals across the Company’s portfolio



·     FB +6%; reported strong 1Q results driven by 31% FX neutral ad growth and lower than expected expenses/user growth remains solid both across core segments

·     FBHS +5%; posted Q1 beat on top and bottom line with mostly in-line outlook for the year

·     HSY +4%; rises on earnings as gross margin was 45.7% of sales vs. 44.9% a year ago, while volume (+1.7%) and pricing (+0.2%) gains in Q1/sales beat and reaffirm year

·     LRCX +4%; posted a solid F3Q beat and guided F4Q moderately above consensus

·     MSFT +5%; results beat estimates, consensus, and guidance across the board, driven by particularly strong revenue growth in Intelligent Cloud, with Azure posting growth of +73%

·     NOW +7%; subscription billings +27% YoY topped most estimate of 25% billings growth while revenue outperformance + some expenses pushing to Q2 drove operating margin higher

·     OIS +10%; rises on positive revenue and EBITDA beat expectations and backlog grows



·     CMG -7%; good earnings results but fell following another subpoena from federal prosecutors seeking information on E. coli outbreak in Ohio that left hundreds of people sick in 2018

·     FCX -9%; posts a Q1 EPS miss revenues tumble 22%, as copper prices and production fell but raises guidance for full-year operating cash flows to $2.3B, up from $1.8B

·     MMM -10%; after Q1 adjusted EPS $2.23/$7.86B fell short of the $2.48/$8.06B estimates and cuts FY EPS $9.25-$9.75 down from prior view of $10.45-$10.90

·     MO -4%; as Q1 EPS missed on better revs but notable was the 14.3% Y/Y drop in cigarette volume/and lowers its estimate for full-year total domestic cigarette industry volume growth

·     NTGR -13%; after Q1 revenue, gross margin, operating margin, and EPS beat but Q2 guidance misses views (Q2 revenue $215M-$230M vs. $256.15M)

·     ORLY -5%; following in-line 1Q19 EPS results and comp sales that increased less than consensus expectations/Q1 comparable sales +3.2%, estimate +4.1%

·     PTC -11%; as lowered its full year bookings/revenue guidance due to lighter-than-expected hiring in higher-growth IoT/AR areas and lower-than-expected bookings in lower-priority SLM/ALM biz

·     TSLA -2%; downgraded at Wedbush after posted a wider-than-expected Q1 adjusted loss and missed revenue forecasts, but the car maker said it would be profitable again this year

·     UPS -7%; 1Q EPS/revs missed estimates, reflecting the impact of severe winter weather in the U.S. and of Easter moving to mid-April but reaffirmed year

·     XLNX -16%; as the quarter was in-line to slightly better, but the gross margin guidance for Q1 was well below consensus as well as revs (two analyst downgrades)

·     WWE -10%; as reported larger than expected Q1 EPS loss of (11c) on weaker revs ($182.4M vs. $199M estimate)


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.

Live Trading

Open an Account

Paper Trading