Morning Preview: July 19, 2019

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Early Look

Friday, July 19, 2019





DJ Industrials




S&P 500










Stock futures are pointing to another higher open, looking to add to yesterday’s late day push higher as major U.S. averages attempt to end the week on a strong note. Stocks gyrated Thursday in what was a wild day of macro related headlines that sunk and lifted markets along with a mixed bag of earnings reports. Stocks ended the session higher amid an afternoon recovery after New York Fed President John Williams bolstered market interest rate-cut hopes with dovish commentary along with positive headlines that eased market tensions between the U.S. and Iran. Despite the volatility, major averages ended modestly higher and has now been 28 straight trading days that the S&P 500 has not seen a move, up, or down, of more than 1% (longest streak this year). In Asian markets, The Nikkei Index surged 420 points (2%) to end the week at 21,466, the Shanghai Index gained 23 points to 2,924 and the Hang Seng Index rose 303 points to 28,765. In Europe, the German DAX is up a few points at 12,235, while the FTSE 100 is flat trading just under 7,500. It has been a busy week of earnings, but it kicks into full gear the next three weeks with next week being the busiest of the quarter. Dow component MSFT reported results overnight, with shares rising after results while fellow Dow component AXP is expected to report their earnings later this morning. Stocks remain not far off record highs reached earlier this week, with Treasury yields sinking and gold prices surging to fresh 6-year highs.

Market Closing Prices Yesterday

·     The S&P 500 Index climbed 10.69 points, or 0.36%, to 2,995.11

·     The Dow Jones Industrial Average rose 3.12 points, or 0.01%, to 27,222.97

·     The Nasdaq Composite gained 22.04 points, or 0.27%, to 8,207.24

·     The Russell 2000 Index advanced 4.85 points, or 0.31% to 1,555.62


Events Calendar for Today

·     10:00 AM EST    University of Michigan Confidence, July-P

·     11:05 AM EST    Fed’s Bullard speaks at Central Bank Research in NY

·     1:00 PM EST       Baker Hughes Weekly Rig Count


Earnings Calendar:

·     Earnings Before the Open: AXP, BLK, CFG, CLF, GNTX, IBKC, KSU, MAN, RF, SLB, STT, SYF






WTI Crude















10-Year Note





Sector News Breakdown


·     Chewy (CHWY) Q1 net sales $1.1B and Q1 adjusted EBITDA loss $15.8M and net loss $29.6M; Q1 gross margin 22.9%; sees year net sales $4.675B-$4.750B vs. est. $4.65B; sees FY19 adjusted EBITDA 400-450 basis points improvement YoY

·     Skechers (SKX) Q2 adjusted EPS 49c/$1.26B vs. est. 34c/$1.22B; sees Q3 EPS 65c-70c on revs $1.325B-$1.350B vs. est. 65c/$1.31B; Q2 comp sales rose 4.9% vs. est. 2.6%; expects full-year effective tax rate between 17% and 20%

·     Vintage Capital proposes to acquire Red Robin (RRGB) at $40 per share – Vintage is a holder of 11.6% stake – disclosed it has offered to acquire Red Robin at $40 per share, stating: “Vintage Capital hopes to continue to engage constructively with the Issuer regarding this proposal”

·     Resources Connection (RECN) Q4 EPS 29c/$182.1M vs. est. 27c/$182.5M; 4Q adjusted Ebitda rose 3% YoY to $17.5M

·     Anheuser-Busch InBev (BUD) on Friday announced it’s selling its Australian subsidiary for A$16 billion ($11.3 billion) just days after scrapping the initial public offering of its Asia business

·     Afya (AFYA) 13.744M share IPO priced at $19.00



·     Gulfport Energy (GPOR) preliminary production for Q2 of 1,359 mmcfe/d; net daily production mix was comprised of approximately 90% natural gas, 7% NGL and 3% oil in Q2



·     Capital One (COF) Q2 adjusted EPS $3.37/$7.1B vs. est. $2.86/$7B; 2Q card delinquencies 3.15% vs. 2.88% YoY while credit-card charge-offs 4.76% vs. 4.67% YoY; 2Q provision for credit losses rose 5.2% YoY to $1.34B; NIM rises to 6.80% vs. 6.66% YoY; net interest income $5.75B up 3.5% YoY; Average loans held for investment increased $694M, or less than 1%, to $242.7B; credit card average loans fell $658M, or 1%, to $110.8B.

·     E*TRADE Financial (ETFC) Q2 EPS 90c/$685M vs. est. $1.09/$751.7M; 2Q net interest income $490.0M, +8.2% YoY and Q2 daily average revenue trades 268,488; announces $1.5B share repurchase authorization

·     BlackRock (BLK) Q2 EPS $6.41/$3.52B vs, es. $6.50/$3.52B; with the company blaming market headwinds for the decline; reported long-term net inflows of $125.4 billion during the quarter

·     People’s United (PBCT) Q2 EPS 34c vs. est. 33c; 2Q net interest margin 3.12% vs. 3.10% YoY, 2Q return on average assets 1.04% and return on average equity 7.7%

·     Regions Financial (RF) Q2 EPS 39c/$1.46B vs. est. 39c/$1.48B; Q2 NIM 3.45% vs. 3.49% YoY

·     Synchrony (SYF) Q2 adjusted EPS 97c vs. est. 95c; Q2 book value per share $22.03; Q2 net charge-offs 6.01%

·     Intercorp Financial Services (IFS) 9M share IPO priced at $46.00



·     Intuitive Surgical (ISRG) Q2 EPS $3.25/$1.1B vs. est. $2.88/$1.03B; said Q2 worldwide procedure growth +17% vs. +18% YoY; Global da Vinci procedures up ~17% and shipments of da Vinci systems up 24% to 273

·     Amarin (AMRN) 22.222M share Secondary priced at $18.00


Industrials & Materials

·     Boeing (BA) to recognize charge and increased costs in second quarter due to 737 max grounding; amounts relate to expensing of estimated potential concessions and other considerations to customers and impact of continued lower 737 max production rate; said charge will result in a $5.6B reduction of revenue and pre-tax earnings in quarter and will record an after-tax charge of $4.9B

·     Exponent (EXPO) Q2 EPS 39c/$106.5M vs. est. 33c/$100.87M; said due to strong Q2 results and positive momentum across the business, we are increasing our full year expectations for revenue and EBITDA margin

·     Marten Transport (MRTN) Q2 EPS 28c/$212.1M vs. est. 27c/$208.5M


Technology, Media & Telecom

·     Microsoft (MSFT) Q4 EPS $1.71/$33.72B vs. est. $1.22/$32.78B; 4Q Intelligent Cloud revenue up 19% YoY to $11.39B, More Personal Computing revenue up 4.3% YoY to $11.28B, Productivity and Business Processes revs up 14% YoY to $11.05B; revenue growth in Azure was 64% in the reported quarter, compared with 89% a year earlier and 73% in the prior quarter

·     CrowdStrike (CRWD) Q2 EPS loss (47c)/$96.07M vs. est. loss (47c)/$95.67M; notes achieved 103% year-over-year revenue growth in the first quarter, which is consistent with the preliminary results that we shared in our IPO prospectus; sees Q2 EPS (24c)-(23c) on revs $103M-$104M vs. est. loss (29c)/$97.7M; Subscription revenue grew 116% Y/Y to $86M; ARR was up 114% to a record $364.6M and non-GAAP subscription gross margin was 73% compared to 62% YoY

·     Medallia (MDLA) 15.5M share IPO price $21.00

·     WeWork co-founder and CEO Adam Neumann cashed out more than $700m from the company ahead of its IPO, WSJ reported late yesterday

·     Gannett (GCI) is in advanced talks to combine with GateHouse Media, Dow Jones reported, saying a deal could be announced in next few weeks

·     AT&T Inc. (T) is exploring options for its business in Puerto Rico that could include a potential sale for around $3 billion, Reuters reported. The sale process comes as AT&T seeks to cut the debt pile it took on to purchase Time Warner Inc. for $85 billion last year.

·     IntriCon (IIN) lowers FY19 revenue outlook to $115M-$117.5M from $128M-$133M saying the reduced guidance primarily reflects lower order volume related to its largest customer’s on-going global commercial product launch to continue through at least Q3; order delays associated with restructuring activity within a large insurance customer’s health biz


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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