Morning Preview: May 10, 2019

Auto PostDaily Market Report

Early Look

Friday, May 10, 2019

Futures

Up/Down

%

Last

DJ Industrials

8.00

0.03%

25,824

S&P 500

-2.50

0.08%

2,870

Nasdaq

5.50

0.06%

7,600

 

 

Well, no trade deal was reached between the U.S. and China last night, as the U.S. followed-through with its threat to hike tariffs to 25% on more than 5,700 product categories or $200 billion of Chinese goods, while China has pledged to respond with no specific details at this point. Despite the tariff increases on China good, Asian markets were strong, and Europe is also edging higher. Talks will resume today after going nowhere last night. In Asian markets, The Nikkei Index dipped -57 points to 21,344, the Shanghai Index gained 88 points to 2,939 and the Hang Seng Index gained 239 points to settle at 28,550. In Europe, the German DAX is up over 120 points to around 12,100, while the FTSE 100 is up around 30 points to 7,240. Overall, stocks have had a dreadful week, one of its worst since December in anticipation of failed talks, so global markets are getting a small bounce while Treasuries are steady and the dollar is weak. Oil rose along with gold and industrial metals. Investors get another look at inflation data today with Consumer prices expected to have risen 0.4% MoM for April for headline reading and up 0.2% fore core, while YoY figures are expected to rise 2.1%. In stock news, one of the most highly anticipated IPOs in recent memory priced last night with UBER selling 180M shares at $45 per share for a market cap of around $75B. For the week as of Thursday, the Dow and S&P 500 are set for losses of around 2.6% and the Nasdaq is down 3.1%. Those losses would mark the worst weekly return since the market selloff in December.

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -8.70 points, or 0.30%, to 2,870.72

·     The Dow Jones Industrial Average fell -138.97 points, or 0.54%, to 25,828.36

·     The Nasdaq Composite slumped -32.73 points, or 0.41%, to 7,910.59

·     The Russell 2000 Index declined -4.92 points, or 0.31% to 1,570.06

 

Events Calendar for Today

·     8:30 AM EST      Consumer Price Index MoM for April…est. 0.4%

·     8:30 AM EST      CPI Ex: Food & Energy MoM (core) for April…est. 0.2%

·     8:30 AM EST      CPI Ex: Food & energy YoY for April…est. 2.1%

·     1:00 PM EST       Baker Hughes Weekly Rig Count

·     2:00 PM EST       Monthly Budget Statement for April…est. $160.5B

 

Earnings Calendar:

·     Earnings Before the Open: CLNY, EFX, MAR, PTE, RCKT, VIAB

 

Other Key Events:

·     RBA statement on monetary policy.

·     German imports/exports for March

·     American Academy of Neurology (AANC) Annual Meeting, 5/4-5/10, in PA

 

 

Macro

Up/Down

Last

WTI Crude

0.29

61.99

Brent

0.34

70.73

Gold

1.40

1,285.40

EUR/USD

0.0013

1.1228

JPY/USD

0.09

109.83

10-Year Note

+0.002

2.457%

 

 

World News

·     Trade tensions that have been dogging the market all week were front and center as President Donald Trump’s increased tariffs on $200 billion in Chinese imports kicked in as of 12:01 Eastern time Friday. Beijing has vowed to retaliate, though no specific details of such tariff hikes have been made public yet

 

Sector News Breakdown

Consumer

·     Uber (UBER) prices 180M share IPO at $45 per share

·     Wynn Resorts (WYNN) Q1 adjusted EPS $1.61/$1.65B vs. est. $1.60/$1.66B; Q1 adjusted Property EBITDA was $494.8M for Q1 a decrease of 12.3%, or $69.6M, from $564.3M YoY; operating revenues from Wynn Macau were $523.9M for Q1, a 15.3% decrease from Q1 of last year and operating revenues from our Las Vegas Operations were $401M, a 7.1% decrease YoY

·     Callaway Golf (ELY) Q1 adjusted EPS 63c/$516.2M vs. est. 48c /$504.1M; sees FY adjusted EPS 96c-$1.06 (above prior view 96c-$1.06) on sales $1.67B-$1.70B vs. est. $1.01/$1.68B

·     Noodles & Company (NDLS) Q1 adjusted EPS loss (3c)/$110M vs. est. loss (5c)/$108.83M; raises FY19 comp sales guidance to 3%-5% from 2%-4%; sees adding 5-9 new restaurants system-wide in FY19

·     SpartanNash (SPTN) cuts Q1 EPS view to 23c-24c from 33c-37c (est. 36c) and cuts FY19 EPS view to $1.20-$1.50 from $1.70-$1.80 (est. $1.75) while backs FY19 net sales growth forecast of mid-single digits saying challenges in the supply chain, fresh kitchen and retail operations did not allow them to convert our top line success to the bottom line

 

Energy

·     Basic Energy Services (BAS) Q1 EPS loss ($1.02)/$197.2M vs. est. loss ($1.21)/$202.8M; cut its capital expenditure forecast for the full year to $69M from prior view of $94.1M; 1Q contract drilling utilization 12% vs. 18% y/y and 1Q rig utilization 74% vs. 76% y/y

·     Halcon Resources (HK) Q1 EPS loss (1c) vs. est. loss (7c); 1Q avg production 17,089 boe/d vs. 10,967 YoY and 1Q realized crude price/barrel $49.42 vs. $62.15 YoY

·     Jagged Peak (JAG) Q1 adjusted EPS 9c/$129.6M vs. est. 12c/$133.8M; sees 2Q production 36.5 to 37.9 mboe/d after Q1 avg production 36,657 boe/d vs. 27,596 y/y, estimate 37,168

·     SunPower (SPWR) Q1 adjusted EPS loss (41c)/$411.6M vs. est. loss (36c)/$376.8M; sees Q2 adjusted revenue $420M-$460M vs. est. $472M and sees Q2 adjusted gross margin 7%-10%; sees FY19 adjusted revenue $1.9B-$2B vs. est. $2.05B and Gigawatts deployed is expected to be in the range of 1.9 GW to 2.1 GW

·     Summit Midstream Partners (SMLP) Q1 adjusted Ebitda $69.0M vs. est. $71.1M; said 1Q natural gas throughput 1,462 MMcf/d and 1Q cash from operating activities $52.7 million

·     Vivint Solar (VSLR) Q1 EPS loss (74c)/$69.4M vs. est. loss (8c)/$67.3M; sees 2Q MW Installed 52 – 55 MWs; Cost per Watt: $3.32 to $3.40

 

Financials

·     Assured Guaranty (AGO) Q1 adjusted operating EPS 82c vs. est. 74c; 1Q gross written premiums $39M vs. $73M YoY

·     Equifax (EFX) Q1 adjusted EPS $1.20/$846.1M vs. est. $1.20/$848.93M; Q1 adjusted EBITDA margin was 30.5% compared to 33.5% in Q1 of 2018; sees Q2 EPS $1.32-$1.37 on revs $865M-$880M vs. est. $1.50/$887.63M

·     Banks including JPMorgan (JPM) and Citigroup Inc. (C) are set to be fined imminently by the European Union over collusion on foreign-exchange trading, according to a Bloomberg report late yesterday. Barclays Plc, HSBC Holdings Plc and UBS Group AG are also among a group of banks

·     Invesco (IVZ) reports preliminary AUM $975.2B as of April 30, up 2.1% as the increase was driven by favorable market returns, non-management fee earning AUM inflows, net long-term inflows, higher money market AUM, and reinvested distributions, partially offset by foreign exchange

 

Healthcare

·     FibroGen (FGEN) shares fell -27%; after saying a pooled analysis of Roxadustat for anemia in chronic kidney disease failed to show a clinically meaningful difference in MACE between the drug and epoetin alfa

·     Mettler-Toledo (MTD) Q1 EPS $4.10/$679.5M vs. est. $4.05/$673.6M; raises 2019 adjusted EPS view to $22.55-$22.75 from $22.50-$22.70; anticipates local currency sales growth in 2019 will be approximately 5.5%

·     Nevro (NVRO) Q1 EPS loss ($1.45)/$82.1M vs. est. loss (67c)/$87.5M; suspends full year 2019 revenue guidance

·     Puma Biotechnology (PBYI) shares plunge -30% as Q1 net revs from Nerlynx missed the lowest analyst estimate at $45.6M vs. est. $65.8M saying net product revenue declined in the quarter as a result of an increase in patients discontinuing treatment with Nerlynx; overall Q1 revs $99.1M and Q1 cash and cash equivalents $48.8M with Q1 operating expenses $89.2M; Q1 EPS loss (26c) vs. est. loss (68c)

·     Teva Pharmaceutical (TEVA) announced the launch of a generic version of Tarceva tablets, 100 and 150 mg, in the U.S.; said Tarceva tablets have annual sales of $202 million in the U.S.

·     Verastem (VSTM) shares fell -29% after 2019 sales outlook for its lead cancer drug Copiktra trailed expectations at $10M-$12M (Bloomberg est. full-year product sales of $40.5M from the drug)

 

Industrials & Materials

·     Air Lease (AL) Q1 adjusted EPS $1.67/$466M vs. est. $1.20/$456.8M; Q1 cash and cash equivalents $285.7M

·     Allison Transmission (ALSN) boosts stock repurchase authorization by $1B to $3B

·     Axon (AAXN) Q1 adjusted EPS 21c/$116M vs. est. 16c/$110.61M; raises FY19 revenue view to $485M-$495M from $480M-$490M (est. $485.92M)

·     Fly Leasing (FLY) Q1 adjusted EPS $1.44/$134.7M vs. est. $1.26/$133.3M

·     Manitowoc (MTW) Q1 adjusted EPS 8c/$418.0M vs. est. 0c/$399.4; sees FY adjusted Ebitda $130M-$150M vs. est. $131.4M and sees FY capital expenditure $35M

·     ShotSpotter (SSTI) shares fell -25%; posted Q3 EPS loss (3c)/$9.6M vs. est. loss (1c)/$9.8M; cuts revenue forecast for 2019 to $44.5M-$45.5M form prior $45M-$47M citing delays with two potential customers and the loss of another

·     TransDigm (TDG) will go before a House Oversight committee on May 15 to testify about the Defense Dept. Inspector General’s report on “excess profits” by the company.

 

Media & Telecom

·     News Corp (NWSA) Q3 EPS 4c/$2.46B vs. est. 2c/$2.50B; 3Q news and information services revenue $1.22B, Q3 book publishing revenue $421M, 3Q digital real estate services revenue $272M

·     Qurate Retail (QRTEA) Q1 adjusted Oibda $460.0 M (est. $434.3M) and 1Q QVC Group revenue $3.09B vs. Bloomberg est. $3.25B

·     TiVo Corporation (TIVO) said it board has unanimously approved a plan to separate its Product and IP Licensing businesses; says board will continue to be open to strategic transactions for each business that could create additional stockholder value; cuts dividend after earnings

 

Technology:

·     Booking Holdings (BKNG) Q1 adjusted EPS $11.17/$2.84B vs. est. $11.26/$2.93B; Q1 gross travel bookings were $25.4B, an increase of 2% over a year ago, or approximately 8% on a constant-currency basis; sees Q2 adjusted EPS $22.15-$22.60 on revs growth of 5%-7% vs. est. $22.68/$3.79B; sees 2Q room nights booked +6% to +8% and Q2 gross travel bookings -1% to +1% as Q1 gross travel bookings +2% vs. +9% QoQ

·     CarGurus (CARG) Q1 EPS 12c/$135.3M vs. est. 6c/$129.44M; said U.S. audience grew 24% YoY, and we generated 38 million average unique monthly visitors; sees FY19 EPS 39c-43c on revs $569M-$578M above est. 38c/$564.68M

·     Dropbox (DBX) Q1 adjusted EPS 10c/$385.6M vs. est. 6c/$381.6M; sees Q2 revenue $399M-$401M vs. est. $399M

·     ForeScout (FSCT) shares fell -17%; guided Q2 EPS and revs below consensus to loss of (48c-46c) on revs $75.3M-$78.3M vs. est. loss (24c)/$83M

·     GoPro (GPRO) Q1 adjusted EPS loss (7c)/$243M vs. est. loss (9c)/$234.42M; Q1 adjusted gross margin 34.2%

·     Symantec (SYMC) shares fell -13%; Q4 EPS 39c/$1.195B vs. est. 39c/$1.21B; announced that Richard S. Hill has been named Interim President and CEO as Greg Clark steps down effective immediately – will commence a search process to find a permanent CEO; sees Q1 EPS 30c-34c on revs $1.175B-$1.205B below est. 40c/$1.20B and sees Q1 operating margin 25%-27%

·     Synaptics (SYNA) Q3 EPS 83c/$334M vs. est. 74c/$345.25M; said while they continue to be impacted by the residual effects of unfavorable supply chain dynamics in the near term, they are confident in the strengths and untapped potential of their product portfolio; sees Q4 revs $300M-$320M vs. est. $362.8M

·     TrueCar (TRUE) shares fell -11%; Q1 EPS 0c/$85.6M vs. est. loss (1c)/$84.91M sees Q2 revenue of $88.5M-$90.5M below the $92M consensus and full-year revenue of $361M-$374M vs. $374M est.; adjusted EBITDA for the full year is expected to be $27M to $36M

·     Yelp (YELP) shares fell -7%; Q1 EPS 2c/$235.9M vs. est. 1c/$235.34M; reaffirms 2019 outlook as still sees net revenue growth of 8-10% for 2019 with adjusted Ebitda margins increasing by 2-3 percentage points over 2018 levels

·     Zillow (ZG) shares rose 18%; reported Q1 revs $454.1M vs. est. $430.6M; sees 2Q revenue $568M-$594M vs. est. $494.8M; sees 2Q adjusted Ebitda loss $5M to adjusted Ebitda $11M vs. est. profit $13.9M

_________________________________________________________________

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