Mid-Morning Look: April 29, 2019

Auto PostDaily Market Report

Mid-Morning Look

Monday, April 29, 2019






DJ Industrials




S&P 500








Russell 2000






U.S. equities open the trading week higher, as the S&P 500 index trades to a fresh all-time intraday record high (moving above 2,940 September level) while the Nasdaq Composite also a record high intraday and as SmallCaps continue to play catch-up the last week or so, outperforming even large caps. Investors expecting another high volume week of quarterly earnings, as well as the next round of China-U.S. trade talks expected late week in Beijing (U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin travel to China). Also a heavy economic data calendar with Friday’s monthly U.S. jobs report, Tuesday’s China PMI data and EuroZone GDP report after todays mixed personal income and spending reports (weaker income/strong spending). Financials and Industrials among the early gainers, while tech awaits earnings from GOOGL and AAPL the next 2-days. Crude prices added to Friday’s 3% decline after President Donald Trump renewed his push for lower prices. Note this week, another 150 of the S&P 500 companies reporting earnings, as CNBC noted 231 have reported thus far (says EPS -0.2% and revs up 5% to this point). Oil prices are down along with gold while Treasury yields inching higher and the dollar is mixed.


Economic Data

·     Personal Income for March rose 0.1%, below the 0.4% estimate but personal spending in March rose 0.9%, topping the 0.7% estimate; real personal spending in March rose 0.7% vs. est. 0.5%. Inflation data showed: PCE prices in March rose 0.2% (est. 0.3%) while core inflation in March was unchanged; est. 0.1%; rose 1.6% y/y; the savings rate at 6.5% in March vs 7.3% last month







WTI Crude















10-Year Note





Sector Movers Today

·     Auto’s; VNE shares dropped after posted Q1 EPS loss ($1.57)/$494M vs. est. loss ($1.19)/$525.33M; said vehicle segment saw a sharper production decline than the general market; said they currently see these trends continuing through 2019, primarily due to weak markets in China and Europe; after plunging last week on earnings, VC was upgraded to hold from underperform at Jefferies as believe valuation adequately reflects ’19 headwinds & more tempered ’20 margin outlook; in tires, CTB posted Q1 EPS and rev beat saying profit was higher than we expected due to stronger than anticipated performance in North America and Asia

·     Refiners: Bank America with a few rating changes as they upgraded HFC to neutral from underperform and PSX to buy from neutral while MPC, VLO remain top ideas saying after a dismal period for broader sector performance, they see all stocks trading below mid-cycle valuations, but with the best set up for a secular recovery as margins normalize in 2019

·     Transports; AAL was upgraded to buy at Deutsche Bank with $40 tgt as sees a floor for AAL’s share price after last week’s cut in guidance due to higher fuel prices and the Max grounding; truckers among the biggest drags in the S&P and Transports (CHRW, JBHT) as North American spot-trucking relative demand decreased 2.1% sequentially to 32.2 in the week ended April 26 while spot rates, excluding fuel surcharges, declined 1.9% to $1.74, Bloomberg reported

·     Software movers; VMW tgt raised to $22 at Oppenheimer as checks point to steady vSphere and vSAN interest, strong NSX trends (up QoQ), and record interest/adoption for VMC on AWS; ADBE was upgraded to overweight at Morgan Stanley saying it should sustain a 20%+ EPS CAGR over the next three years, even if Digital Media growth begins to wane; CTSH cut to underweight at Morgan Stanley saying checks suggest only a partial recovery ahead, leading us to cut estimates to below Street expectations for the company’s largest vertical; in video games, Stephens changed best idea to TTWO from EA; SAP was upgraded to outperform at RBC Capital

·     Media & Telecom movers; DIS touched another record high after its “Avengers: Endgame” movie took a record $1.2 billion globally this weekend which includes an estimated international debut of $859 million and domestic debut of $350 million; Sprint (S) was downgraded at Raymond James as encouraged by the initial political momentum the T-Mobile/Sprint deal seemed to garner; but momentum seems to have waned and switched directions as opposition has grown; LGF was downgraded at Imperial Capital to in-line saying the company may need to look at a guidance cut (cuts tgt to $16 from $24)



·     ADM +3%; was upgraded to outperform at BMO Capital reflecting an earnings inflection in mid/late F2019 and 2020 earnings approaching $4.00, led by internally driven structural improvement in operations, potential catalysts

·     CTB +5%; after posting Q1 EPS and revenue beat saying profit was higher than we expected due to stronger than anticipated performance in North America and Asia

·     GDI +17%; the WSJ reported it is closing in on a deal to combine with a division of Ingersoll-Rand (IR) to form the world’s second-largest manufacturer of industrial pumps and compressors with a market cap of roughly $11.6B https://on.wsj.com/2PJeGmR

·     INNT +18%; after highlighting results for larazotide in combination with Intercept Pharmaceuticals’ OCA (obeticholic acid) in a 12-week mouse study

·     LXRX +5%; after European Commission approval of Zynquista (Sotagliflozin) as an adjunct to insulin to improve blood sugar control in adults with type 1 diabetes and a body mass index of at least 27 kg/m2, considered overweight

·     SPOT ; posted Q1 results that beat on revenue, missed on EPS, and in-line Q2 and FY19 revenue guidance of €1.51-€1.71B and €6.35-€6.8B, respectively/Premium subscribers totaled 100M, beating the 99.2M consensus and at the high end of SPOT’s prior guidance



·     CHRW -5%; truckers underperform in Transport sector (JBHT) amid news of growing competition from companies such as Amazon and Uber, as well as weakness in the truck market spot rates.

·     DIS -1%; reversed after touching another record high after its “Avengers: Endgame” movie took a record $1.2 billion globally this weekend

·     DO -4%; posted a narrow quarterly loss on slightly better revs

·     ON -1%; after its Q2 outlook for revenue and gross margins fell below expectations

·     VNE -17%; after posted Q1 EPS loss ($1.57)/$494M vs. est. loss ($1.19)/$525.33M; said vehicle segment saw a sharper production decline than the general market


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