Morning Preview: September 23, 2019

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Early Look

Monday, September 23, 2019





DJ Industrials




S&P 500










Stocks futures in the U.S. are flat to mixed, outperforming their European counterparts after dismal manufacturing economic data weighed on the region. S&P futures rose initially overnight after the China Business News reported that Vice Agriculture Minister Han Jun said his nation’s cancellation of a planned visit to U.S. farm states had nothing to do with trade talks. News of cancelled visits in the U.S. was responsible for the pullback in stocks late Friday, raising tension fears ahead of high-level trade representative talks in a few weeks. In Asian markets, The Nikkei Index was closed, the Shanghai Index dropped -29 points to 2,977 and the Hang Seng Index fell -213 points to 26,222. In Europe, the German DAX is down around -145 points to 12,325, while the FTSE 100 is down over -40 points to 7,300. European markets were rattled after manufacturing sentiment in the eurozone fell in September to the worst level in nearly seven years, dropping to an 83-month low of 45.6 in September, down from 47 in August and below the 47.3 reading. German manufacturing PMI fell to 41.4 in September from 43.5 a ten-year low. The euro fell sharply as the data for September was weaker than expected, raising more fears about the health of the economy.

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -14.72 points, or 0.49%, to 2,992.07

·     The Dow Jones Industrial Average fell -159.73 points, or 0.59%, to 26,935.07

·     The Nasdaq Composite slid -65.21 points, or 0.80%, to 8,117.67

·     The Russell 2000 Index declined -1.71 points, or 0.11% to 1,559.76


Events Calendar for Today

·     8:30 AM EST      Chicago Fed Nat Activity Index for Aug

·     9:45 AM EST      Markit US Manufacturing PMI, Sept-P

·     9:45 AM EST      Markit US Services PMI, Sept-P

·     9:50 AM EST      Fed’s Williams speaks at Treasury Market Conference

·     1:00 PM EST       Fed’s Bullard speaks on Economy and Monetary Policy


Earnings Calendar:

·     Earnings Before the Open: CCL, CMD

·     Earnings After the Close: None


Other Key Events:

·     Deutsche Bank 27th Annual Leveraged Finance Conference, 9/23-9/25, in Scottsdale, AZ

·     Fall Summit focusing on Specialty Pharma & Rare disease, 9/23-9/24 in New York

·     Roth Capital Annual Solar & Storage Symposium, 9/23-9/26, in Salt Lake, UT

·     Stephens Annual Bank Forum 9/23-9/25, in Little Rock, AR






WTI Crude















10-Year Note





World News

·     Manufacturing sentiment in the eurozone fell in September to the worst level in nearly seven years, as the flash eurozone manufacturing purchasing managers index fell to an 83-month low of 45.6 in September, down from 47 in August (vs. est. 47.3).

·     German manufacturing PMI fell to 41.4 in September from 43.5, the worst reading in more than a decade.

·     The flash eurozone services PMI fell to an 8-month low of 52 from 53.5 in August, which was below the 53.2 reading expected by economists.


Sector News Breakdown


·     Clorox (CLX) downgraded to underweight at Barclay’s in Consumer staples sector while upgraded Kimberly Clark (KMB) to overweight with $152 tgt

·     Caesars (CZR) announced it has signed an agreement to sell the Rio All-Suite Hotel & Casino to a company controlled by a principal of Imperial for $516.3M

·     Consumer Staples sport attractive yields and steady dividend growth, such as Procter & Gamble (PG), Coca-Cola (KO), PepsiCo (PEP), Colgate-Palmolive (CL), Kimberly Clark (KMB) and Kellogg (K), according to Barron’s saying cooler returns lately have made some of these stocks a little more attractive for income investors


Energy, Industrials & Materials

·     Full repairs to the attacked Saudi oil fields may take “many months,” not the 10 weeks that the nation has promised, the Wall Street Journal reported

·     Tellurian Inc.’s (TELL) shares rose after Friday India’s Petronet LNG signed an initial agreement under which PLNG and its affiliates will negotiate to buy up to 5 million tonnes per annum of liquefied natural gas from TELL

·     PG&E (PCG) said it’s reached an agreement to resolve claims with entities representing 85% of the insurance claims from the 2017 Northern California wildfires and the 2018 Camp Fire. Subject to bankruptcy court approval, PG&E said the agreement formalizes the $11 billion agreement in principle announced last week

·     Goldman Sachs downgraded Alcoa (AA) to Neutral from Buy and cut tgt to $25 from $30 citing lower aluminum and alumina prices expected in the near-term and few company-specific catalysts in sight; Commercial Metals (CMC) downgraded to Neutral from Buy saying remaining upside appears limited while prices for long steel products appear at risk and Schnitzer Steel (SCHN) was downgraded to Sell from Neutral amid concern for the ferrous scrap market

·     Steel sector cautious at JPMorgan as cuts price targets for steel companies to reflect more flattish price environment for steel saying if current economic and trade conditions hold, steel prices to likely fluctuate between $500/ton and $600/ton over near to medium term. Downgraded AK Steel Holding Corp (AKS) to underweight and United States Steel Corp (X) to neutral



·     Deutsche Bank AG (DB) finalized a deal with BNP Paribas SA to transfer its equities prime brokerage business to the French bank as part of the German lender’s overhaul



·     Johnson & Johnson (JNJ) could rack up $5.9 billion in legal liabilities for its part in the opioid crisis, according to Barron’s citing a Morgan Stanley analyst. Teva Pharmaceutical Industries Ltd. (TEVA) may be liable for $4.7 billion in legal liabilities with Endo International Plc (ENDP) and Mallinckrodt Plc (MNK) possibly suffering $4.4 billion and $2.4 billion, respectively

·     Arcadia Biosciences (RKDA) rises as the U.S. Patent and Trademark Office awarded co a patent for reduced gluten wheat grains; says its reduced gluten wheat contains 75% less allergenic gluten content than traditional wheat; plans to offer retail version in Q4, which will be co’s first direct-to-consumer product offering

·     Insulet Corporation (PODD) received clearance from the FDA to market its Omnipod DASH Insulin Management System (Omnipod DASH System) as an integrated insulin pump

·     Xynomic Pharmaceuticals Holdings Inc. (XYNO) said the FDA granted fast-track designation to abexinostat, the company’s lead drug candidate, in follicular lymphoma.


Technology, Media & Telecom

·     Some WeWork board members, including officials tied to SoftBank Group Corp, are planning to try to push Adam Neumann to step down as chief executive, The Wall Street Journal reported on Sunday, citing people familiar with the matter

·     Vivendi (VIVHY) is taking steps to widen its legal battle against Mediaset beyond Italy, in a move that indicates the French media group has not liquidated its stake in the Italian broadcaster, according to Reuters

·     Facebook Inc (FB) said it has suspended tens of thousands of apps on the social networking platform, as part of the company’s ongoing app developer investigation it began in March 2018 in response to the Cambridge Analytica row. The suspended apps are associated with about 400 developers, Facebook said


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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