Morning Preview: July 02, 2019

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Early Look

Tuesday, July 2, 2019





DJ Industrials




S&P 500










U.S. stock futures are trading slightly lower, with the S&P trading in a narrow ten-point range overnight (2,972 high and 2,959.75 low) a day after major U.S. averages traded to their best levels ever. U.S. stocks climbed to fresh record highs on Monday (its 6th all-time closing high for the S&P 500 Index of 2019) after a thaw in trade relations between the U.S. and China sparked a rally in shares of tech companies. The DJIA pared its earlier gains to close the day up 0.4% to 26,717.43 from an intraday high of 26,890.64. The S&P 500 dropped from its intraday record of 2,977 to close up 0.8% to 2,964.68. The tech sector showed strength after the US-China trade truce and eased Huawei ban. In Asian markets, The Nikkei Index rose 24 points to 21,754, the Shanghai Index was little changed, falling a point to 3,043 and the Hang Seng Index jumped 332 points to 28,875 after being closed the prior session. In Europe, the German DAX is down about -30 points to move below 12,500, while the FTSE 100 is up around 30 points to 7,530. Overnight, the Office of the U.S. Trade Representative added another 89 items to the list of products from the European Union that could become subject to tariffs. Highlights today include monthly auto sales data, but overall expect another light day of volume heading into the abbreviated holiday trading week (US markets close early tomorrow at 1:00 and are closed Thursday).

Market Closing Prices Yesterday

·     The S&P 500 Index gained 22.57 points, or 0.77%, to 2,964.33

·     The Dow Jones Industrial Average rose 117.47 points, or 0.44%, to 26,717.43

·     The Nasdaq Composite spiked 84.92 points, or 1.06%, to 8,091.16

·     The Russell 2000 Index advanced 3.09 points, or 0.20% to 1,569.66


Events Calendar for Today

·     6:35AM EST        Fed’s Williams speaks on Global Economic and Policy Outlook

·     7:45 AM EST      ICSC Weekly Retail Sales

·     8:55 AM EST      Johnson/Redbook Weekly Sales

·     4:30 PM EST       API Weekly Inventory Data


Earnings Calendar:

·     Earnings Before the Open: AYI, GBX, OMN

·     Earnings After the Close: None


Other Key Events:

·     Monthly Auto sales data for June






WTI Crude















10-Year Note





World News

·     The Reserve Bank of Australia opted to cut its key policy rate again at its July meeting, a month after it eased monetary policy for the first time in three years

·     The Office of the U.S. Trade Representative added another 89 items to the list of products from the European Union that could become subject to tariffs

·     The U.K. saw a sizable miss in the IHS Markit construction purchasing managers index (PMI) survey for June, coming in at 43.1 versus 49.3 estimates


Sector News Breakdown


·     AB InBev (BUD) rises after Asian business seeks $9.8B in world’s largest IPO this year; the co’s Asia business, Budweiser Brewing Company APAC, owns over 50 beer brands, including Stella Artois and Corona; IPO will raise between $8.3B-$9.8B for AB InBev before any over-allocation option is included

·     Nordstrom (JWN) downgraded to neutral from buy at UBS

·     Nike (NKE) is pulling the Air Max 1 USA, a U.S.A.-themed sneaker featuring an early American flag, after NFL star-turned-activist Colin Kaepernick told the company it shouldn’t sell a shoe with a symbol that he and others consider offensive because of its connection to an era of slavery – WSJ


Energy, Industrials & Materials

·     Greenbrier (GBX) Q3 adjusted EPS 89c/$856.15M below est. 95c/$862.45M; sees Q4 EPS $1.30-$1.50 on revs $1.0B also below estimates of $1.89/$1.1B

·     Airbus (EADSY) and engine maker CFM International concluded an agreement at the Paris air show to increase production of A320 family aircraft to 65 planes/month in the 2022-23 time frame from 63/month in 2021, La Tribune reports

·     Southwest Airlines (LUV) expects it will have to remove the grounded Boeing Co (BA) 737 MAX jets from its flying schedule beyond the current Oct. 1 re-entry date following the discovery of a fresh safety issue, Chief Executive Gary Kelly told employees on Monday – Reuters

·     Landec (LNDC) expects charge for quarter ended in May stemming from actions to cut costs in Curation Foods business, plus severance and other related expenses.

·     Nordson (NDSN) acquired Optical Control, Germany based designer and developer of high speed, fully automatic counting systems utilizing x-ray technology.

·     SM Energy (SM) will replace Multi-Color Corp. (LABL) in the S&P SmallCap 600 effective prior to the open of trading on Tuesday, July 9.



·     Deutsche Bank (DB) has held talks with German and European regulators over lowering its capital requirements to help finance its impending restructuring, Bloomberg reports

·     Spirit Realty Capital (SRC) will replace SM Energy Co. (SM) in the S&P MidCap 400



·     Gilead Sciences Inc. (GILD) said that it plans to ask the FDA to approve an arthritis drug this year. Gilead, in partnership with Galapagos NV (GLPG) has been testing a drug known as filgotinib for rheumatoid arthritis, and the latest study results excited investors in March.

·     Amarin (AMRN) raises FY19 revenue view to $380M-$420M from $350M (est. $364.78M) and reports preliminary Q2 revenue $97M-$101M vs. est. $88.21M

·     Aethlon’s (AEMD) net loss was approximately $6.2 million, or $(0.34) per share for the fiscal year ended March 31, 2019, compared to a net loss of approximately $5.7 million, or $(0.46) per share for the fiscal year ended March 31, 2019

·     Neon Therapeutics (NTGN) files $200M mixed securities shelf

·     U.S. Physical Therapy (USPH) said it has sold its 50% interest in one physical therapy partnership to the group’s founders. The sales proceeds to U.S. Physical Therapy which is cash, is $11.6M


Technology, Media & Telecom

·     Global chip sales dropped nearly 15% in May from a year ago and logged a fifth straight month of declines, according to the Semiconductor Industry Association (SIA). Global chip sales reached record high levels in Q3’18, and then declined for a second straight quarter. Global chip sales declined 14.6% to $33.1 billion from the year-ago period, SIA said

·     Roku (ROKU) downgraded to sector perform at RBC Capital with a $90 tgt


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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