Morning Preview: July 05, 2019

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Early Look

Friday, July 5, 2019





DJ Industrials




S&P 500










Stocks are slipping from Wednesday’s record setting gains, with investors returning from yesterday’s 4th of July holiday market closure to small profit taking (and very light news flow), though volumes are expected to be very light on this final trading day of the week. The S&P 500 index had some record-setting company on Wednesday, with the Dow Industrial Average, Nasdaq Composite and Nasdaq 100 also hitting all-time highs on the abbreviated trading session. The gains were boosted by defensive sectors such as utilities (which also reached a new intraday high), along with strong gains in consumer staples and consumer discretionary indexes. The breadth of this rally was wide with 85% of S&P 500 stocks advancing, while on the NYSE composite gainers outpaced decliners by ~3:1. Meanwhile, the attention today turns to the monthly nonfarm payroll report, which is expected to show over 160K jobs being added on the month, an important data point for the Fed which is expected to cut interest rates when they meet at the end of the month to help stimulate growth and protect against trade uncertainties. In Asian markets, The Nikkei Index gained 43 points to 21,746, the Shanghai Index gained 5 points to settle at 3,011 and the Hang Seng Index fell -20 points to 28,774. In Europe, the German DAX is down around -30 points to dip below 12,600, while the FTSE 100 is down about -15 points to move back below the 7,600 level. The yield on the benchmark Treasury remains near 2-year lows below 2%.

Market Closing Prices Yesterday

·     The S&P 500 Index gained 22.81 points, or 0.77%, to 2,995.82

·     The Dow Jones Industrial Average rose 179.32 points, or 0.67%, to 26,966.00

·     The Nasdaq Composite jumped 61.14 points, or 0.75%, to 8,170.23

·     The Russell 2000 Index advanced 11.58 points, or 0.74% to 1,572.12


Events Calendar for Today

·     8:30 AM EST      Change in Nonfarm Payrolls for June…est. 162K

·     8:30 AM EST      Change in Private Payrolls for June…est. 153K

·     8:30 AM EST      Change in Manufacturing Payrolls for June…est. 2K

·     8:30 AM EST      Unemployment Rate for June…est. 3.6%

·     8:30 AM EST      Average Hourly Earnings MoM for June…est. 0.3%






WTI Crude















10-Year Note





World News

·     OPEC output for June falls 170,000 bd from May to 29.60 mln bpd, the lowest since 2014 – Reuters

·     Oil is set for the biggest weekly drop since May as global demand concerns outweigh worries that renewed tensions with Iran threaten supplies

·     German factory orders dropped (-2.2%) overall for the month, worse than the (-0.2%) fall predicted by economists and the year-on-year decline of (-8.6%) was the biggest in almost a decade


Sector News Breakdown

Energy, Industrials & Materials

·     British Royal Marines seized a giant Iranian oil tanker in Gibraltar on Thursday for trying to take oil to Syria in violation of EU sanctions, Reuters reported

·     Osram Licht (OSAGY) confirmed late Wednesday that it has received a binding offer from a consortium of Bain Capital and The Carlyle Group to conclude an investment agreement and to make a public takeover offer worth 35 euros per share.

·     China is investigating the cause of a steep rise in iron ore prices imported into China in an effort to “crack down on abnormal behavior”, an industry association official has said – Financial Times

·     SemGroup (SEMG) and DCP Midstream (DCP) announced an extension of the open season on the NGL pipeline connecting DJ Basin to Mont Belvieu, due to ongoing shipper interest



·     Deutsche Bank (DB) is planning to create a separate “corporate bank” unit that will include its transaction banking activities, German newspapers reported Thursday – Reuters

·     Aquis Exchange announced that it has agreed to acquire NEX Exchange from CME Group (CME) for a cash consideration of GBP1, plus approximately GBP2.7M based on NEX Exchange’s current working capital levels

·     Brookfield Asset Management Inc. (BAM) and Endesa SA are among companies weighing bids for a package of EDP-Energias de Portugal SA electricity assets that could fetch about 2 billion euros – Bloomberg


Technology, Media & Telecom

·     Samsung Electronics Co Ltd forecast a steep plunge in its Q2 operating profit as the U.S.-China trade war wreaks havoc in global chip and smartphone markets, although one-off gains helped it beat analyst expectations; April-June operating profit likely fell 56% to 6.5 trillion won ($5.6 billion), Samsung in ahead of the release of its detailed earnings in late July. (est. 6 trillion)

·     A U.S. judge late Wednesday ruled against Qualcomm Inc’s (QCOM) effort to block the implementation of a sweeping antitrust ruling against it as the company pursues an appeal that could take more than a year to wind through the courts.

·     AT&T Inc. (T) and Nexstar Media Group Inc. (NXST) are having a war of words after more than 120 TV stations — including local affiliates of ABC, CBS, NBC and FOX — were blacked out in 97 markets across the U.S. on the Fourth of July holiday


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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