Morning Preview: August 13, 2019

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Early Look

Tuesday, August 13, 2019





DJ Industrials




S&P 500










U.S. futures are pointing to a slightly weaker open, paring overnight losses as tensions in Hong Kong remain high following increased protests Monday that shut down the city’s airport and the pro-democracy demonstrations show no sign of letting up. Chinese officials have used the term “terrorism” to describe the protests and the fears of a harsh crackdown by China in response has raised the prospect it could trigger a global market selloff. Also in China, the PBoC set the yuan’s midpoint weaker than 7 per U.S. dollar for a fourth straight day Tuesday as the reference point of 7.0326 per dollar was weaker than the previous day (and remains a hot button for President Trump who has called China a currency manipulator). In Asian markets, The Nikkei Index fell -229 points to 20,455, the Shanghai Index dropped -17 points to move back under 2,800 and the Hang Seng Index plunged -543 points to 25,281. In Europe, the German DAX is lower by over -100 points to 11,560, while the FTSE 100 is down about 40 points to 7,185. Not helping Europe was another negative data point in Germany as the German ZEW indicator of economic sentiment for Germany slumped to a -44.1 reading in August, its worst level since Dec. 2011. It was a rough day for stocks to start the week Monday as major U.S. averages dropped and Treasuries rallied amid political unrest in Hong Kong (protests move into a ninth week) and rising Argentine default risk hit markets after voters sided with market friendly President Mauricio Macri’s opponent in a primary vote, adding to sour sentiment already on edge over trade tensions. The 30-year Treasury bond yield ended at 2.13% on Friday, only three basis points away from its all-time low set in July 2016, when it touched 2.10% after the U.K. voted to leave the European Union. The weakness in stocks fed demand for haven assets, boosting gold prices and the yen for a fourth day while the dollar traded mixed. Gold prices are up over 1.6% back near $1,545 while Treasury prices extend gains as yields fall.

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -35.56 points, or 1.22%, to 2,883.09

·     The Dow Jones Industrial Average fell -389.73 points, or 1.48%, to 25,897.71

·     The Nasdaq Composite sunk -95.73 points, or 1.20%, to 7,863.41

·     The Russell 2000 Index declined -19.58 points, or 1.29% to 1,493.46


Events Calendar for Today

·     6:00 AM EST      NFIB Small Business Optimism for July…est. 104.0

·     7:45 AM EST      ICSC Weekly Retail Sales

·     8:30 AM EST      Consumer Price Index (CPI) MoM for July…est. 0.3%

·     8:30 AM EST      CPI Ex: Food & Energy MoM for July…est. 0.2%

·     8:30 AM EST      Consumer Price Index (CPI) YoY for July…est. 1.7%

·     8:30 AM EST      CPI Ex: Food & Energy YoY for July…est. 2.1%

·     8:55 AM EST      Johnson/Redbook Weekly Sales

·     4:30 PM EST       API Weekly Inventory Data


Earnings Calendar:

·     Earnings Before the Open: AAP, CVET, ELAN, IAA, IIVI,

·     Earnings After the Close: ADPT, CDK, CHNG, GO, PSNL, REAL, TH


Other Key Events:

·     Cowen Communication Infrastructure Summit, 8/12-8/13, in CO

·     KeyBanc Annual Technology Conference, 8/12-8/13, in Vail, CO

·     Needham Medical Technology 1×1 Conference in New York

·     Wedbush PacGrow Healthcare Conference, 8/13-8/14, in New York

·     Wells Fargo 2019 Technology Services Forum, 8/12-8/13, in Newport, RI






WTI Crude















10-Year Note





World News

·     The German ZEW indicator of economic sentiment for Germany slumped to a -44.1 reading in August, which is the worst level since Dec. 2011 and down from -24.5 in July (est. expected a -28 reading). The current situation index also fell, to -13.5, which is the worst since May 2010.

·     UK Unemployment in the three months to June rose a tenth to 3.9%, the Office for National Statistics said Tuesday. The number of jobless claimants rose 28,000, while average weekly earnings including bonuses were up 3.7%


Sector News Breakdown


·     Advance Auto Parts (AAP) Q2 adjusted EPS $2.00 /$2.33B below the $2.21/$2.35B estimates with Q2 gross margins lighter as well 43.3%; Q2 comp sales 0% vs. est. 1.6%; narrowed its year comp sales view to 1%-2% but raises FCF view to at least $700M (from $650M)

·     Yum! Brands, Inc. (YUM) elected David Gibbs as Chief Executive Officer, effective January 1, 2020, and appointed him to the Company’s Board, effective November 1, 2019. Gibbs had served as Yum! Brands President and Chief Operating Officer, overseeing the global KFC, Pizza Hut and Taco Bell divisions

·     Darden’s (DRI) Olive Garden’s Never-Ending Pasta Pass is back for a sixth year, and this time they’ve got an upgrade available: a $500 Lifetime Pasta Pass that will be available to 50 fans. The Never-Ending Pasta Pass, which costs $100 plus tax, offers guests nine weeks of unlimited pastas and sauces from Olive Garden’s Never-Ending Pasta Bowl menu

·     Famous Dave’s (DAVE) Q2 adjusted EPS 16c/$21.1M in revs vs. est. 7c/20.05M

·     Ronn Motor Group Inc. (RONN) filed for an initial public offering, seeking to sell 10 million shares between $5 and $8 apiece

·     United Natural Foods, Inc. (UNFI) said Mike Zechmeister will resign his position as Chief Financial Officer, effective August 23, 2019, to pursue an opportunity outside the Company


Energy, Industrials & Materials

·     Bloom Energy (BE) Q2 EPS loss (13c)/$234M vs. est. loss (64c) GAAP and revs $208M

·     New Fortress Energy (NFE) Q2 EPS loss (28c)/$39.77M vs. est. loss (8c)/$46.04M

·     Southern Company (SO) announced it plans to sell 30M equity units in a public offering.



·     AllianceBernstein L.P. (AB) announced that preliminary assets under management increased to $585 billion during July 2019 from $581 billion at the end of June. The 0.7% increase was due to market appreciation, as well as total firm wide net inflows

·     Invesco Ltd. (IVZ) reported preliminary month-end assets under management (AUM) of $1,198.7 billion, an increase of less than 0.1%. The increase was driven by favorable market returns, higher money market AUM, non-management fee earning AUM inflows, and reinvested distributions, partially offset by foreign exchange and net long-term outflows

·     Manning & Napier (MN) preliminary assets under management of $21.0B at July 31, 2019 fell from $21.3B at June 30, 2019; blended asset AUM of $13.6B fell by 1.8% M/M

·     PayPal (PYPL) upgraded to neutral from sell at Guggenheim



·     Elanco (ELAN) Q2 EPS 28c/$781.6M vs. est. 26c/$782.9M; narrows year revs view to $3.08B-$3.12B from $3.08B-$3.14B and also narrows year EPS view to $1.04-$1.10 from $1.02-$1.12

·     Jazz Pharmaceuticals Plc (JAZZ) announced the acquisition of Cavion, Inc. through a merger with a Jazz subsidiary for a total potential consideration of $312.5 million

·     Hookipa Pharma (HOOK) Q2 loss $12.41M on revs $4.05M vs. est. $2.08M; cash and cash equivalents as of June 30 were $135.2M compared to $48.6M as of December 31, 2018

·     Optinose (OPTN) Q2 EPS loss (66c)/$6.68M vs. est. loss (74c)/$6.56M

·     Unum Therapeutics (UMRX) Q2 EPS loss (34c)/$3.14M vs. est. loss (40c)/$3.2M


Technology, Media & Telecom

·     Tencent Music Entertainment Group (TME) Q2 results were in-line with ests, but flat mobile monthly active user growth and a dip in monthly average revenue per user; said mobile MAUs grew just 1% to 652 million and monthly ARPU dipped 1%

·     Verizon Communications (VZ) has agreed to sell Tumblr to the owner of online-publishing tool WordPress, Automattic Inc., Dow Jones reported, citing the companies

·     Workiva (WK) files to sell 1.5M shares of Class A common stock for holders


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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