Morning Preview: May 14, 2019

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Early Look

Tuesday, May 14, 2019

Futures

Up/Down

%

Last

DJ Industrials

155.00

0.61%

25,436

S&P 500

20.50

0.74%

2,827

Nasdaq

73.50

1.00%

7,388

 

 

U.S. stock futures are pointing to a bounce, looking to recover after its worst daily decline since early January and following last week’s biggest 5-day drop since December as trade turmoil has hurt market sentiment. It was a rough start to the week as U.S. stocks suffered their biggest one-day losses since early January on Monday after China retaliated with its own round of tariffs against the U.S., as the trade war intensified behind the two power house economies. Chinese officials announced retaliatory tariffs against the U.S., hitting $60B in annual exports to China with new or expanded duties that could reach 25%. The move came after the U.S. raised tariffs on $200 billion worth of annual Chinese imports to 25% from 10% on Friday. President Trump said he was ready to impose higher tariffs on another roughly $300 billion of goods if terms can’t be worked out. On a positive note for markets, Trump said he would meet Chinese President Xi Jinping next month at a Group of 20 summit. Overnight in Asian markets, The Nikkei Index fell -124 points to 21,067, the Shanghai Index dropped -20 points to 2,883 and the Hang Seng Index fell -428 points to settle at 28,122. In Europe, the German DAX is up about 60 points to 11,940, while the FTSE 100 is also up over 60 points at 7,225.

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -69.53 points, or 2.41%, to 2,811.87

·     The Dow Jones Industrial Average fell -617.38 points, or 2.38%, to 25,324.99

·     The Nasdaq Composite plunged -269.92 points, or 3.41%, to 7,647.02

·     The Russell 2000 Index declined -49.99 points, or 3.18% to 1,523.00

 

Events Calendar for Today

·     3:15 AM EST      Fed’s Williams speaks in Zurich

·     6:00 AM EST      NFIB Small Business Optimism for April

·     7:45 AM EST      ICSC Weekly Retail Sales

·     8:30 AM EST      Import Prices MoM for April

·     8:30 AM EST      Export Prices MoM for April

·     8:55 AM EST      Johnson/Redbook Weekly Sales

·     12:45 PM EST    Fed’s George speaks to Economic Club of Minnesota

·     4:30 PM EST       API Weekly Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: AZZ, CATB, RL

·     Earnings After the Close: A, EGHT, NEWR, SUNW, TCS, VRML

 

Other Key Events:

·     Eurozone industrial production for March

·     Piper Eastern Bank Symposium, 5/13-5/13, in Washington DC

·     JPMorgan 47th Annual Technology, Media & Communications Conference, 5/14-5/16, in Boston

·     JPMorgan Global Consumer & Retail Conference, 5/14-5/16, in London

·     MLP & Energy Infrastructure 2019 conference, 5/14-5/16, in Las Vegas

·     Oppenheimer 4th Annual Emerging Growth Conference in New York

 

 

Macro

Up/Down

Last

WTI Crude

0.17

61.21

Brent

0.39

70.62

Gold

-2.05

1,297.85

EUR/USD

0.001

1.1232

JPY/USD

0.37

109.67

10-Year Note

+0.012

2.407%

 

 

World News

·     Federal Reserve Bank of New York President John Williams said Tuesday governments can help play a role in changing the post-financial crisis environment where short-term rates are lower than they have been historically.

·     President Donald Trump in a tweet this morning said “In one-year Tariffs have rebuilt our Steel Industry – it is booming! We placed a 25% Tariff on “dumped” steel from China & other countries, and we now have a big and growing industry. We had to save Steel for our defense and auto industries, both of which are coming back strong!

·     Turkey is considering a U.S. request to delay the purchase of a Russian missile-defense system into 2020, a move that could ease tensions between the NATO allies – Bloomberg reported

 

Sector News Breakdown

Consumer

·     Limoneira (LMNR) cuts FY19 EPS view to 55c-65c from 65c-75c (est. 78c) and also lowers FY19 Adjusted EBITDA view to $23.5M-$27.5M from $28.0M-$32.0M; lowers FY19 operating income outlook to $14.5M-$17.5M from $20.0M-$27.5M

·     Nissan (NSANY) has warned that its operating profit will fall to the lowest level since the Lehman crisis as struggles in the US, Japan and Europe force the Japanese carmaker to abandon an expansion policy

 

Energy, Industrials & Materials

·     Bayer AG (BAYRY) was ordered to pay more than $2 billion in damages to a California couple that claimed they got cancer as a result of using its Roundup weed killer for about three decades, raising pressure on the company to settle thousands of similar lawsuits. It’s the largest jury award in the U.S. so far this year and the eighth-largest ever in a product-defect claim, according to reports

·     Agco (AGCO) upgraded to Overweight from Neutral at JPMorgan while the firm downgraded Deere (DE) to underweight

·     Genesee & Wyoming (GWR) reports April traffic of 255,647 carloads, down 5.4% y/y compared with April 2018. G&W’s same railroad traffic in April decreased 815 carloads, or 0.3%, compared with G&W’s traffic in April 2018

·     Transocean (RIG) amends terms of revolving credit line to increase capacity to $1.36B from $1B

 

Financials

·     AllianceBernstein L.P. (AB) said preliminary assets under management increased to $568 billion during April 2019 from $555 billion at the end of March. The 2.3% increase was due to market appreciation, as well as total firm wide net inflows

·     Legg Mason (LM) Q4 EPS 56c/$692.6M vs. est. 54c/$702.58M; raises quarterly dividend 18% to 40c per share from 34c

·     StoneCo (STNE) Q1 revenue R$535.8M vs. est. R$532.0M; 1Q active clients 309,700, 1Q payment volume R$26.5B and said to buy back shares up to $200M

 

Healthcare

·     CorMedix (CRMD) Q1 EPS loss (22c) vs. est. loss (29c); 1Q cash and cash equivalents $18.3M; says funds sufficient to file an NDA if FDA agrees

·     Forty-Seven (FTSV) Q1 EPS (74c), consensus (63c); said as of March 31, cash, cash equivalents and short-term investments were $113.6M, as compared to $139M as of December 31, 2018 which reflects cash used to fund operating activities

·     Solid Biosciences (SLDB) Q1 EPS loss (85c) vs. est. loss (63c); had $94.7M in cash, cash equivalents and available-for-sale securities as of March 31 compared to $122.5M as of December 31, 2018; said Q1 R&D expenses $23.3M vs. $11.9M YoY

·     Steris (STE) Q4 EPS $1.53/$768.2M vs. est. $1.43/$737.8M

·     Roche (RHHBY) announced the CE-IVD launch of the cobas MTB-RIF/INH test to detect resistance to antibiotics within tuberculosis DNA

 

Technology, Media & Telecom

·     Take-Two Interactive (TTWO) 4Q adjusted eps 78c/$488.4M vs. est. 74c/$508.7M; sees Q1 EPS 65c-75c on revs $310M-$360M vs. est. 42c/$418.3M; raises FY19 EPS view to $3.39-$3.65 from $3.07-$3.18 while cuts FY19 net bookings view to $2.5B-$2.6B from $2.89B-$2.94B vs. est. $2.95B

·     Immersion Corporation (IMMR) agreed to enter into a settlement and license agreement with Samsung Electronics Co., Ltd., resolving the global patent infringement litigation brought by Immersion against Samsung.

·     Tencent Music (TME) Q1 EPS 11c/$855M vs. est. 10c/$850.05M; announced that Mr. Guomin Xie has tendered his resignation as the company’s co-president and director due to personal reasons, effective June 6, 2019.

·     Democratic presidential contender Joe Biden tells AP he would be open to breaking up Facebook (FB) and that dismantling big technology companies is “something we should take a really hard look at.”

·     Google (GOOGL) is assembling a team of engineers in Germany to tackle privacy and safety issues on its platforms as big tech companies, the FT reported

·     Kornit Digital (KRNT) Q1 EPS 3c/$38.2M vs. est. 6c/$38.14M

·     Intelsat SA (I) shares rallied late yesterday after Bloomberg reported two U.S. senators urged the FCC to “act quickly” to make airwaves used by the company and SES SA available for advanced 5G communications.

·     Mimecast (MIME) Q4 EPS 7c/$92.2M vs. est. 8c/$91.32M; sees Q1 revenue $96.7M-$97.7M vs. est. $96.95M; adjusted EBITDA for the first quarter is expected to be in the range of $12.1M to $13.1M; sees FY20 revenue $413M- $427M vs. est. $419.6M

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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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