Morning Preview: September 10, 2019

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Early Look

Tuesday, September 10, 2019

Futures

Up/Down

%

Last

DJ Industrials

-46.00

0.17%

26,794

S&P 500

-5.50

0.19%

2,972

Nasdaq

-21.50

0.27%

7,809

 

 

Stock futures point to a slightly lower open, giving back some of yesterday’s gains in what is expected to be another slow day of news amid light economic data, only a handful of earnings, and no Fed speakers on the agenda, though there are several sell-side related conferences that could produce guidance or commentary that could move some sectors. In corporate news today, Apple (AAPL) holds its annual product announcement in Cupertino, CA later this afternoon (1:00 PM EST) where no phones are expected. Overseas, North Korea launched two projectiles toward the sea on Tuesday, South Korea’s military said, hours after the North offered to resume nuclear diplomacy with the United States but warned its dealings with Washington may end without new U.S. proposals. In Asian markets, The Nikkei Index rose 73 points to 21,392, the Shanghai Index fell -3 points to 3,021 and the Hang Seng Index inched higher 2 points to 26,683. In Europe, the German DAX is down -15 points to 12,210, while the FTSE 100 is down a few points at 7,225. European markets look to this Thursday’s central bank meeting where a rate cut or additional easing measures are somewhat expected to help their slowing economy. In China, its State Administration of Foreign Exchange said it’s decided to cancel the investment quota limitations of qualified foreign institutional investors and RMB qualified foreign institutional investors.

Market Closing Prices Yesterday

·     The S&P 500 Index slipped -0.28 points, or 0.01%, to 2,978.43

·     The Dow Jones Industrial Average rose 38.05 points, or 0.14%, to 26,835.51

·     The Nasdaq Composite dropped -15.64 points, or 0.19%, to 8,087.44

·     The Russell 2000 Index advanced 19.06 points, or 1.27% to 1,524.23

 

Events Calendar for Today

·     6:00 PM EST       NFIB Small Business Optimism for August

·     7:45 AM EST      ICSC Weekly Retail Sales

·     8:55 AM EST      Johnson/Redbook Weekly Sales

·     10:00 AM EST    JOLTs Job openings for July

·     4:30 PM EST       API Weekly Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: CBKC, FRAN, HDS

·     Earnings After the Close: FARM, GEM, LTRX, PLAY, RH, ZS

 

Other Key Events:

·     Apple (AAPL) product event announcements

·     2019 World Conference on Lung Cancer, 9/7-9/10 in Barcelona, Spain

·     Barclay’s Global Financial Services Conference, 9/9-9/11, in New York

·     Credit Suisse 32nd Annual Basic Materials Conference, 9/9-9/11, in New York

·     Deutsche Bank Technology Conference, 9/10-9/11, in Las Vegas

·     HC Wainwright Healthcare Conference, 9/9-9/10, in New York

·     Morgan Stanley 17th Annual Healthcare Conference, 9/9-9/11, in New York

·     Wells Fargo 8th Annual Net Lease REIT Forum, in New York

 

 

Macro

Up/Down

Last

WTI Crude

0.29

58.14

Brent

0.28

62.87

Gold

-8.50

1,502.60

EUR/USD

-0.0008

1.104

JPY/USD

0.12

107.36

10-Year Note

-0.017

1.626%

 

 

World News

·     The National Federation of Independent Business (NFIB) small business optimism index fell 1.6 points to a seasonally adjusted 103.1 in August, the worst showing since March. There was an 8-percentage point drop in those expecting the economy to improve, and a 5-point drop in those expecting real sales higher

·     In its budget review published Monday afternoon, the CBO said the deficit for the first 11 months of the fiscal year was $1.07 trillion, up $168 billion from last year. Outlays have climbed by 7%, on rises in both the number and amount of Social Security and Medicare claims, which both rose 6%. Medicaid outlays rose 5%.

 

Sector News Breakdown

Consumer

·     The Wendy’s Company (WEN) shares fell -6%; said it sees 2019 adjusted EPS down (3.5%-6.5%) vs. prior view up 3.5%-7% – says to remove 2020 goals due to breakfast launch; announced that it plans to launch its breakfast menu, currently available in more than 300 restaurants, across the U.S. system in 2020 – watch shares of DNKN, MCD, SBUX

·     HD Supply (HDS) shares fell -2%; Q2 adjusted EPS $1.08/$1.6B vs. est. $1.08/$1.63B; cuts FY19 adjusted EPS view to 3.45-$3.60 from $3.52-$3.70 (est. $3.58) while also lowers FY19 revenue view to $6.1B-$6.2B from $6.25B-$6.35B (est. $6.26B)

·     Casey’s (CASY) Q1 revs $2.63B vs. est. $2.61B and EPS $2.31; Q1 same store gallons -2% vs. +0.50% YoY and Q1 same-store grocery sales +3.2%; makes no changes to FY2020 guidance

·     Boyd Gaming Corporation (BYD) and FanDuel Group today announced the debut of FanDuel Sportsbooks at four Boyd Gaming properties: Blue Chip Casino Hotel and Spa in Michigan City, Indiana; Diamond Jo Casino in Dubuque, Iowa; Diamond Jo Casino in Northwood, Iowa; and Belterra Casino Resort in Florence, Indiana

·     Moody’s Investors Service downgraded the senior unsecured debt rating of Ford Motor Company (F) to Ba1 from Baa3, and concurrently assigned the company a Ba1 Corporate Family Rating and an SGL-1 Speculative Grade Liquidity rating. The outlook is stable

·     Hawaiian Airlines (HA) reports August traffic up 2.8%, capacity down 1.9%; load factor was up 4.0 pts to 88.4%

·     Limoneira (LMNR) Q3 adjusted EPS 0c/$50.9M vs. est. loss (2c)/$48.87M; said they continued to face pricing headwinds due to larger than normal size fruit which resulted in low 50% fresh utilization and $18.00 price per carton; backs year EPS outlook for loss of (22c-21c)

·     Laureate Education (LAUR) files to sell 15M shares of common stock

 

Energy, Industrials & Materials

·     Electricite de France shares dropped in Europe after saying its majority-owned nuclear reactor construction firm Framatome had found anomalies in manufacturing parts. The faults concern both in-service components as well as new components which have not yet been installed on any sites.

·     PG&E Corp. (PCG) on Monday unveiled a plan to settle billions of dollars in wildfire-related claims and exit bankruptcy next year as it seeks to prevent creditors from taking over the embattled company. PG&E Plan Offers Nearly $18 Billion to Wildfire Victims and Public Entities

·     Repsol (REPYY) is in advanced discussions to buy some deepwater assets in the Gulf of Mexico from Exxon Mobil (XOM) for about $1B according to Reuters

·     Schlumberger (SLB) upgraded to Overweight with a price target of $51 at Morgan Stanley, saying that while the stock struggled over the past several years, its relative outlook is improving

·     Fortis (FTS) announced its five-year capital investment plan of $18.3B for the period 2020 to 2024, up $1.0B from the prior year’s plan

·     Amplify Energy (AMPY) files to sell 12.29M shares of common stock for holders

 

Financials

·     Boston Properties (BXP) upgraded to Equal Weight on valuation at Morgan Stanley

 

Healthcare

·     Lakeland (LAKE) Q2 GAAP EPS 17c/$27.4M (up 7.2% YoY) vs. est. 6c/$25.72M

·     Zoetis Inc. (ZTS) announced that its scientists presented positive efficacy data for the company’s investigational, triple combination parasiticide product at the 2019 Triennial meeting of the American Heartworm Society (AHS) in New Orleans

·     Aveo Oncology’s (AVEO) kidney cancer drug Fotivda (tivozanib) was unable to show better prolonged survival than Bayer’s Nexavar

 

Technology, Media & Telecom

·     Tegna (TGNA) announces $900M offering of senior notes due 2029

·     MercadoLibre (MELI) upgraded to Buy from Neutral at BTIG

·     Taiwan Semiconductor Manufacturing (TSM) reports August revenue of NT$106.12B (+25.2% M/M) (+16.5% Y/Y)

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Content is provided by Hammerstone Inc., which has no affiliation with Regal Securities, Inc. (“Regal”) This commentary is provided for information purposes only, and is not a recommendation, offer or solicitation by Regal to buy or sell securities or to adopt any investment strategy. Regal has not participated in the creation of the Hammerstone content and does not directly or indirectly endorse the content. Any reliance on this material is at the sole discretion of the reader.

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