Morning Preview: May 06, 2019

Auto PostDaily Market Report

Early Look

Monday, May 6, 2019

Futures

Up/Down

%

Last

DJ Industrials

-491.00

1.85%

26,008

S&P 500

-50.50

1.72%

2,896

Nasdaq

-172.50

2.19%

7,693

 

 

U.S. equity futures are under significant pressure, dragged lower by renewed trade concern between the U.S. and China following two tweets yesterday from President Trump. Trump ramped up pressure on China to finalize a trade deal during talks in Washington this week by threatening to more than double tariffs on $200 billion of its sales to the world’s largest economy, and impose new import taxes. Trump also raised the possibility of imposing a 25% tariff on another $325 billion in imports from China not currently covered. Oil prices and materials also declined overnight as Trump threatened more tariffs on Chinese goods while auto related stocks fell on tariff concerns as well. Following the comments by Trump, the WSJ reported late last night that China is considering canceling trade talks with the United States this week after U.S. President Donald Trump vowed to hike tariffs on China. In Asian markets, The Nikkei Index remained closed but the Shanghai Index plunged over170 points (5.58%) to settle at the lows just above 2.900 and the Hang Seng Index dropped -871 points (2.9%) to 29,209. Europe wasn’t much better as the German DAX is down around -250 points to 12,160, while the FTSE 100 was closed. The trade fears took markets lower (overshadowing another expected busy week of earnings) with major averages pulling back from near all-time record highs last week after stocks rallied Friday helping turn the S&P 500 positive for the week and closing just below its record, after data showed the U.S. labor market added more jobs than expected in April.

Market Closing Prices Yesterday

·     The S&P 500 Index gained 28.12 points, or 0.96%, to 2,945.64

·     The Dow Jones Industrial Average rose 197.16 points, or 0.75%, to 26,504.95

·     The Nasdaq Composite surged 127.22 points, or 1.58%, to 8,164.00

·     The Russell 2000 Index advanced 31.37 points, or 1.98% to 1,614.02

 

Earnings Calendar:

·     Earnings Before the Open: AMG, BHC, CEVA, KELYA, KOS, PETS

·     Earnings After the Close: AEIS, AIG, AIZ, APU, BE, CBT, CDEV, CDXS, COHU, CPE, DCP, EVER, FMC, FRAC, GLUU, HIIQ, HTZ, IPAR, LCI, MASI, MOS, MWA, NLS, OXY, PAHC, PXD, RNG, RP, SKT, SYKE, TACO, TDW, VECO

 

Macro

Up/Down

Last

WTI Crude

-0.77

61.17

Brent

-0.64

70.21

Gold

2.45

1,281.60

EUR/USD

-0.0008

1.119

JPY/USD

-0.33

110.77

10-Year Note

+0.00

2.525%

 

 

World News

·     A Russian passenger plane caught fire after an emergency landing at one of Moscow’s main airports on Sunday, killing at least 41 people and triggering a criminal probe of the incident, according to Russian state media

 

Sector News Breakdown

Consumer

·     Churchill Downs (CHDN): Wagering from all-sources on the Kentucky Derby Day program totaled $250.9M, an 11% increase over the 2018 total and previous record of $225.7M. Wagering from all-sources on the Kentucky Derby race increased 10% to $165.5M from the previous record of $149.9M set last year.

·     Uber Technologies (UBER) mentioned cautiously in Barron’s noting shares are set to go public this week in the most closely watched stock market debut since Facebook ‘s (FB) in 2012, but says investors may want to steer clear for multiple reasons, including slowing revenue growth, competition, lack of profitability, and legal and regulatory risks

·     Burlington Stores (BURL) mentioned positively in Barron’s saying shares have risen at an annualized rate of 51% since returning to the public markets in 2013, while also occupies a rare retailing bright spot that has been mostly immune to Amazon’s (AMZN) price cutting

·     Farfetch (FTCH), Home Depot (HD), Lovesac (LOVE), Nike (NKE), Zuora (ZUO), Burlington Stores (BURL), and Facebook (FB) saw positive mentions in this week’s edition of Barron’s

·     Park Hotels & Resorts Inc. (PK) to acquire Chesapeake Lodging Trust (CHSP) in a cash and stock transaction valued at about $2.7 billion, including of transaction costs; CHSP holders to receive $11.00 in cash and 0.628 of a share of Park common stock

·     Kraft Heinz (KHC) said it will restate its financial statements and related disclosures for the years ended Dec. 30, 2016 and 2017 and each of the quarterly and year-to-date periods in fiscal year 2017 as well as the quarterly and year-to-date periods for the nine months ended Sept. 29, 2018.

 

Energy, Industrials & Materials

·     Occidental Petroleum Corp. (OXY) revised its offer for Anadarko Petroleum Corp. (APC), increasing the cash portion of its bid and removing any requirement for a shareholder vote trying to top Chevron Corp. (CVX) bid. The revised offer of $76-a-share, $59 of which will be cash, as APC weighs a previous deal it struck with Chevron that is now valued at slightly less than $62 a share as of Friday’s close. https://on.mktw.net/2H7g6ox

·     Occidental Petroleum (OXY) announced that, in connection with Occidental’s proposal to acquire Anadarko Petroleum (APC), it has entered into a binding agreement to sell Anadarko’s Algeria, Ghana, Mozambique and South Africa assets to Total S.A. (TOT) for $8.8B.

·     Johnson Controls (JCI) to buy back up to $4B in common stock in modified Dutch auction

·     Occidental Petroleum (OXY) Q1 core EPS 84c/$4.09B vs. est. 73c/$4.02B

·     Kosmos (KOS) Q1 adjusted EPS loss (6c)/$297M vs. est. loss (7c)/$238.93M

·     Boeing (BA) said in a statement over the weekend, “In 2017, within several months after beginning 737 MAX deliveries, engineers at Boeing identified that the 737 MAX display system software did not correctly meet the AOA Disagree alert requirements

 

Healthcare

·     Cytokinetics (CYTK) said a Phase II study of reldesemtiv for patients with ALS failed to reach its primary endpoint of showing a dose-dependent response as measured by a test for respiratory function at 12 weeks

·     Barron’s said Healthcare stocks have been out of favor, but Medtronic (MDT), Quest Diagnostics (DGX) and UnitedHealth (UNH) have decent and growing yields

 

Technology, Media & Telecom

·     Disney’s (DIS) “Avengers: Endgame” continued its global domination at the box as it crossed the $2 billion mark in record time and unseat “Titanic” as the second highest-grossing film ever worldwide. “Endgame” added $145.8 million from North American theaters and $282.2 million internationally bringing its global total to $2.2 billion.

·     Barron’s noted Apple’s (AAPL) shares have been rallying since it reported better than expected earnings, with supplier stocks appearing to lead Watching Apple suppliers’ stock prices to get a real-time read on iPhone demand seems like a good idea, Barron’s noted

·     Sinclair Broadcast (SBGI) will acquire the equity interests in 21 Regional Sports Networks and Fox College Sports from Disney (DIS), which were acquired by in its acquisition of Twenty-First Century Fox for a purchase price of $9.6B

·     Alphabet (GOOGL) is facing a sudden growth slowdown in its core advertising business, with the stock plunging 7.5% the day after earnings Barron’s noted

_________________________________________________________________

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

Register