Morning Preview: August 02, 2019

Auto PostDaily Market Report

Early Look

Friday, August 2, 2019





DJ Industrials




S&P 500










U.S. futures are on track to add to yesterday’s losses (though futures have been paring losses from overnight) where stocks plummeted after President Donald Trump said in a tweet that the U.S. would levy a 10% tariff on $300 billion in Chinese goods starting Sept. 1. The 10-year Treasury yield reached its lowest level since November 2016, while oil prices tanked almost 8% (its biggest drop since February 2015). The Dow Jones Industrial Average swung in a 627-point range to erase an early rally and close down 1%. After hopes for further interest-rate cuts supported most markets early in the trading session, President Trump’s midday announcement of 10% tariffs on an additional $300 billion of Chinese imports dragged down major indexes, bond yields and commodities in tandem. The sentiment didn’t get any better this morning when China pledged to retaliate if the U.S. raised tariffs on an additional $300B of Chinese goods. Treasury yields are plunging globally with the German benchmark bund hitting a historic record low of -0.5%, while the 30-year fell below 0% for the first time ever. The U.S. 10-year yield has extended its decline, falling to 1.84% this morning while the 2-year yield drops under 1.70% as fed fund future expectations jump for additional rate cuts from the FOMC this year given the trade uncertainty. Asian markets plunged overnight in reaction to the sell-off in US markets Thursday on increased trade tensions with China, as the Nikkei Index dropped -453 points to 21,087, the Shanghai Index dropped -40 points to 2,867 and the Hang Seng Index plunged -647 points (2.35%) to 26,918. In Europe, the picture is just as glum with the German DAX is down around -300 points to trade back under 12,000, while the FTSE 100 down -130 points to 7,450. The trade news has detracted away from several earnings results overnight moving sectors and also away from the important non-farm payroll report later this morning which is expected to show a gain of 165K jobs for both nonfarm and private payrolls and unemployment to dip to 3.6% with wages at 0.2%.

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -26.82 points, or 0.90%, to 2,953.56

·     The Dow Jones Industrial Average fell -280.85 points, or 1.05%, to 26,583.42

·     The Nasdaq Composite slumped -64.30 points, or 0.79%, to 8,111.12

·     The Russell 2000 Index declined -23.84 points, or 1.51% to 1,550.76


Events Calendar for Today

·     8:30 AM EST      Change in Nonfarm Payrolls for July…est. 165K

·     8:30 AM EST      Change in Private Payrolls for July…est. 165K

·     8:30 AM EST      Change in Manufacturing Payrolls for July…est. 5K

·     8:30 AM EST      Average Hourly Earnings MoM for July…est. 0.2%

·     8:30 AM EST      Trade Balance for June…est. (-$54.6B)

·     10:00 AM EST    Factory Orders for June…est. 0.7%

·     10:00 AM EST    Durable Goods Orders, June-F…

·     10:00 AM EST    University of Michigan Sentiment, July-F…est. 98.5

·     1:00 PM EST       Baker Hughes Weekly Rig Count


Earnings Calendar:







WTI Crude















10-Year Note





Sector News Breakdown


·     Etsy (ETSY) Q2 EPS 14c/$181.1M vs. est. 13c/$183.04M; Q2 GMS $1.095B, up 21.4% YoY while raises FY19 GMS growth view to 20%-22% from 18%-21% and raises year sales growth outlook

·     Floor & Decor (FND) shares rose 10%; Q2 EPS 34c/$520.3M vs. est. 30c/$510.35M and Q2 comp sales up 3%; sees Q3 EPS 25c-26c on revs $520M-$527M vs. est. 29c/$521.25M; narrows FY19 EPS view higher to $1.09-$1.12 from $1.07-$1.12 while ups FY19 revenue view to $2.06B-$2.08B from $2.02B-$2.06B

·     Fortune Brands (FBHS) Q2 EPS $1.03/$1.5B vs. est. $1.03/$1.53B; cuts FY19 EPS view to $3.53-$3.67 from $3.53-$3.77 (est. $3.66) and says outlook is based on a U.S. home products market growth assumption of 2%-2.5% (from 2%-4% prior) and an assumption of 2%-2.5% growth for our total global market (from 2%-4%)

·     Herbalife Nutrition (HLF) Q2 adjusted EPS 70c/$1.2B vs. est. 77c/$1.29B; sees Q3 adjusted EPS 50c-70c on revs growth (2%)-4% vs. est. 78c/$1.29B; cuts FY19 adj. EPS view to $2.40-$2.80 from $2.50-$2.95

·     Scientific Games (SGMS) shares fell -10%; Q2 EPS loss (83c)/$845M below est. 1c/$860.77M; said net loss primarily driven by a $60 million debt financing expense related to the successful notes offering that lowered cash interest costs and extended debt maturities

·     National Beverage Corp. (FIZZ) will replace Barnes & Noble Inc. (BKS) in the S&P SmallCap 600 effective prior to the open of trading on Wednesday, August 7. Elliott Management Corp. is acquiring Barnes & Noble

·     Continental Building (CBPX) Q2 EPS 37c/$124.2M vs. est. 47c/$130.37M; lowers FY19 SG&A view to $38M-$40M from $39M-$41M; lowers year cap-ex to $26M-$30M from $30M-$34M



·     Dow components Exxon (XOM) and Chevron (CVX) both expected to report earnings today

·     EOG Resources (EOG) Q2 adjusted EPS $1.31/$4.7B vs. est. $1.32/$4.43B; narrows its NGLs Sales Volume forecast for the full year to 125.0 to 135.0 MMbbl/d, from prior view 120.0 to 140.0 and sees 3Q net sales volume 453.5 to 463.9 mboe/d; still sees FY capital expenditure $6.1B-$6.5B

·     First Solar (FSLR) Q2 sales $585M misses the $662.8M view; guides year EPS $2.25-$2.75 vs. $2.44 and revs $3.5B-$3.7B vs. est. $3.56B; slightly raises year gross margin view and reaffirms cap-ex of $650M-$750M

·     Gulfport Energy (GPOR) Q2 EPS 21c vs. est. 24c; reaffirms its cap-ex view for 2019 cap-ex of $565M-$600M; still sees 2019 average daily net production in the range of 1,360 MMcfe to 1,400 MMcfe per day; 2Q production 1,359 mmcfe/d, +2.2% YoY

·     California Resources (CRC) Q2 adjusted EPS loss (29c)/$653M vs. est. 11c/$665.39M; Q2 total daily production volumes decreased 4% YoY, from 134,000 BOE per day Q2’18 to 129,000 BOE per day



·     Square (SQ) Q2 adjusted EPS 21c/$563M vs. est. 16c/$557.07M; Q2 gross payment volume up 25% to $26.8B; guides Q3 EPS 18c-22c on revs $590M-$600M vs. consensus of 22c/$599M; agrees to sell Caviar to DoorDash for $410M in cash and DoorDash preferred stock; reaffirms 2019 guidance for net revenue, adjusted revenue, adjusted ETBITDA, and adjusted EPS.

·     Western Union (WU) Q2 adjusted EPS 45c/$1.3B vs. est. 46c/$1.34B; sees full-year EPS of $1.70-$1.80 vs. $1.78 consensus; said during Q2, consumer-to-Consumer revenue fell 1% on a reported basis. Geographically, growth was driven by Latin America and the U.S. outbound business, partially offset by declines in Asia Pacific and U.S. domestic money transfer

·     Redfin (RDFN) Q2 EPS loss (14c)/$197.8M vs. est. loss (15c)/$190.39M; said visitors to the website and mobile application increased by 27% YoY; sees Q3 revenue $223M-$233M above consensus $195.58M

·     Hartford (HIG) Q2 core EPS $1.33/$5.09B vs. est. $1.14/$4.97B; book value per diluted share (excluding AOCI) of $41.55 as of June 30, 2019 increased 5% from $39.40 at Dec. 31, 2018

·     Legg Mason (LM) Q1 adjusted EPS 75c/$705.4M vs. est. 70c/$709.07M



·     DaVita (DVA) Q2 adjusted EPS $1.22/$2.843B vs. est. $1.11/$2.86B; sees FY adjusted operating cash flow $1.45B-$1.63B up from prior view $1.38B-$1.58B

·     Fluidigm (FLDM) Q2 EPS loss (20c)/$28.2M vs. est. loss (21c)/$30.06M; sees Q3 revenue $27M-$30M below consensus $32.71M

·     Mettler-Toledo (MTD) Q2 adjusted EPS $5.16/$731.4M vs., est. $5.08/$735.99M; cutting 2019 revenue guidance for the year from 5.5% to 5.0%, guiding next quarter Q3 light at $5.65-$5.75 vs. $5.73 expected and narrows FY19 adj. EPS view to $22.60-$22.75 from $22.55-$22.75

·     Tandem Diabetes (TNDM) Q2 EPS loss (3c)/$93.3M vs. est. loss (25c)/$70.0M; Q2 adjusted EBITDA improved to 13% of sales from negative 29%; raises FY19 revenue view to $350M-$365M from $300M-$315M (est. $312.8M) and also raises FY19 gross margin view to ~54% from ~52%

·     Acorda (ACOR) shares fell -10%; Q2 EPS loss (55c) better than ($1.10) est. and sees Ampyra net sales above $140M vs. est. $74.5M, while sales of its recently-launched drug, Inbrija was only $3M vs. est. $5.9M

·     CareDx (CDNA) Q2 revenue $31.45M vs. est. $28.04M and raises FY19 revenue view to $123M-$125M from $113M-$115M

·     Aphria (APHA) Q4 revenue up 969% to $128.6M, distribution revenue: $99.2M (+72%); net cannabis revenue: $28.6M (+86%) and net income: $15.8M (+416%)


Industrials & Materials

·     Fluor (FLR) shares fell -17%; Q2 EPS with charges ($3.96) on revs $4.1B vs. est. 52c/$4.7B; earnings attributable to Fluor were negatively impacted by pre-tax charges of $714M; said given announcements and the ongoing strategic review of its business and operations, the company is withdrawing all previously issued earnings per share guidance for 2019

·     MasTec (MTZ) shares rose 10%; %; Q2 EPS $1.60/$1.94B vs. est. $1.12/$1.81B; sees Q3 adjusted EPS about $1.62 on revs $2.15B vs. est. $1.48/$2.2B; and raises year EPS/revs view as well

·     U.S. Steel (X) Q2 EPS 45c/$3.54M vs. est. 39c/$3.44M; Q2 adjusted EBITDA fell 38% YoY to $278M but beat prior guidance of $225M; Q2 total shipments of flat-rolled steel rose 8.5% YoY to 2.8M tons from 2.58M tons in the prior-year quarter but average realized prices fell 5% to $779/ton from $819/ton

·     Chemours (CC) Q2 adjusted EPS 72c/$1.4B vs. est. 86c/$1.5B; cuts FY19 EPS view to $2.37-$3.08 (below est. $3.90) citing the weaker financial performance in Q2 and increasing macro-economic uncertainty; also now expects to deliver 2019 Adjusted EBITDA within a range of $1B-$1.15B

·     S&P MidCap 400 constituents Leidos Holdings Inc. (LDOS) and IDEX Corp. (IEX) will replace Anadarko Petroleum Corp. (APC) and Foot Locker Inc. (FL) respectively in the S&P 500, and GrubHub Inc. (GRUB) and Foot Locker will replace Leidos and IDEX in the S&P MidCap 400

·     XPO Logistics (XPO) lowered full-year rev outlook to down 1% to up 1% YoY from growth of 3% to 5% previously citing lower rates and unfavorable foreign exchange; Q2 EPS beat while sales missed


Technology, Media & Telecom

·     NetApp (NTAP) shares fell -19%; guides Q1 EPS 55c-60c on revs $1.22B-$1.23B well below est. 83c/$1.39B; said now sees year revs down between 5% and 10% year-over-year, below the company’s previously stated full fiscal year 2020 guidance of low-end of the mid-single-digits

·     Arista Networks (ANET) Q2 EPS $2.44/$608.3M vs. est. $2.20/$606.86M; sees Q3 revenue $647M-$657M vs. est. $650.92M; sees Q3 Non-GAAP gross margin between 63%-65%; Q2 gross margin ticked up slightly to 64.7%, vs. 64.5% in Q1 and last year’s Q2

·     Universal Display (OLED) Q2 EPS 92c/$118.17M vs. est. 46c/$79.22M; raises FY19 revenue view to $370M-$390M from $345M-$365M (est. $360.07M)

·     Cloudera (CLDR) rises 20% after Carl Icahn reported a 12.62% holding and plans for talks to enhance shareholder value in a new 13D filing

·     Fortinet (FTNT) Q2 EPS 58c/$521.7M vs. est. 50c/$511.14M; said Fortinet Security Fabric, SD-WAN and cloud offerings contributed to our 21% year-over-year billings growth; sees FY19 EPS $2.23-$2.26 on revs $2.10B-$2.12B vs. est. $2.14/$2.09B

·     GoPro (GPRO) Q2 EPS 3c/$292M vs. est. 4c/$302.3M; Plus subscription service surpassed 252,000 active paying subscribers as of July 31, 2019, up 15% since its Q1 earnings dated May 9, 2019, and up more than 50% YoY; said raising its outlook for the 2H

·     Qorvo (QRVO) Q1 EPS $1.36/$776M vs. est. $1.15/$739.12M; sees 2Q adj revs $745-765 vs est $740.2M

·     Glu Mobile (GLUU) shares fall -24%; Q2 revenues fell short and lower guidance; Q2 revenues $95.5M for the quarter, and bookings rose to $101.9M (high of guidance midpoint) from $99.4M. Growth games bookings grew 12% as a unit; sees Q3 bookings of $110M-$112M vs. est. $120.4M and full-year bookings of $406M-$410M vs. est. $447.2M.

·     GoDaddy (GDDY) Q2 revs $737.2M vs. est. $735.38M; reports total bookings of $846.1M, up 12.2% YoY, or approximately 13.9% on a constant currency basis; CEO Scott Wagner stepped down for health reasons

·     Pinterest (PINS) Q2 EPS loss (6c)/$261.2Mvs. est. loss (8c)/$235.5M; reports Q2 global ARPU 88c vs. 69c last year; Q2 global MAUs up 30% at 300M; raises FY19 revenue view to $1.10B-$1.12B from $1.06M-$1.08B and ups FY19 adjusted EBITDA to ($50M) to ($25M) from ($70M) to ($45M)

·     Motorola Solutions (MSI) Q2 EPS $1.69/$1.9B vs. est. $1.60/$1.85B; reports backlog of $10.9B, up $1.5B or 16% from a year ago; sees Q3 EPS $1.91-$1.96 vs. est. $1.93 and expects revenue growth of approximately 6.5% YoY; raises year outlook


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