Morning Preview: September 28, 2017

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Early Look
Thursday, September 28, 17
Stock futures are slightly lower, barely pulling back from record levels achieved yesterday in several major indices, as investors await an update on gross domestic product data and speeches from more Federal Reserve officials. It was another record setting day on Wall Street as major averages closed higher on Wednesday with the financial and technology sectors driving the gains (Nasdaq Comp jumped over 1%). The S&P 500 closed just a point below the record level set last week after hitting an intraday record high, while the Russell 2000 index closed at records, after rising nearly 2% to 1,484.65, its best one-day gain since November. The Dow Transports also boasted a new record closing higher, while the Dow Industrials snapped its 4-day win streak. Among the best performers, Micron Technology Inc. led semiconductors higher after a strong quarterly earnings beat/raised guidance, while Dow component Nike lagged after a cautious outlook. Bonds retreated further, driving yields higher, after the White House unveiled further details of its plan to overhaul the tax code. The move was an extension of Tuesday’s decline after Fed Chairwoman Janet Yellen outlined the Fed’s reasoning for an additional rate increase this year. The yield on the benchmark 10-year rose over 8 bps topping 2.30% (and is up another 3 bps this morning around 2.34%). Gold fell to a six-week low on Thursday, fading after the stronger dollar. In Asian markets, The Nikkei Index rose 96 points to settle at 20,363, the Shanghai Index fell -5 points to 3,339 and the Hang Seng Index fell -220 points to end at 26,421. In Europe, the German DAX is higher by about 40 points at 12,700, while the FTSE 100 is up a few points around 7,315.
Market Closing Prices Yesterday
·      The S&P 500 Index gained 10.20 points, or 0.41%, to 2,507.04
·      The Dow Jones Industrial Average rose 56.39 points, or 0.25%, to 22,340.71
·      The Nasdaq Composite spiked 73.10 points, or 1.15%, to 6,453.26
·      The Russell 2000 Index surged 27.95 points, or 1.92% to 1,484.81
Events Calendar for Today
·      8:30 AM EST       Gross Domestic Product (GDP) Annualized QoQ, Q2-T…est. 3.0%
·      8:30 AM EST       Personal Consumption for Q2-T…est. 3.3%
·      8:30 AM EST       GDP Price Index for Q2-T…est. 1.0%
·      8:30 AM EST       Core PCE QoQ for Q2-T…est. 0.9%
·      8:30 AM EST       Weekly Jobless Claims…est. 270K
·      8:30 AM EST       Continuing Claims…est. 1.993M
·      8:30 AM EST       Advance Goods Trade Balance for August…est. (-$65.1B)
·      8:30 AM EST       Wholesale Inventories MoM for August…est. 0.4%
·      9:45 AM EST       Bloomberg Consumer Comfort Index…prior 50.6
·      9:45 AM EST       Fed’s George speaks on Economy and Monetary Policy
·      10:15 AM EST     Fed’s Fischer speaks at BOE Independence Conference in London
·      11:00 AM EST     Kansas City Fed Manufacturing Activity for September…est. 15
·      10:30 AM EST     Weekly EIA Natural Gas Inventory Data
Earnings Calendar:
·      Earnings Before the Open: CAN, ANGO, BBRY, CAG, CMD, MKC, MTN, OMN, RAD
·      Earnings After the Close: AEHR, CAMP, KBH, SGH
World News
·      Japan’s Prime Minister Shinzo Abe dissolved the country’s lower house of parliament on Thursday, with snap elections expected on Oct. 22, according to reports. Abe is looking to boost his support from voters as his popularity has increased amid the crisis with North Korea. Abe’s Liberal Democratic Party (LDP) currently has a two-thirds “super” majority
·      The European Commission said its Economic Sentiment Indicator, which aggregates business and consumer confidence, rose to 113.0 from 111.9 in August, its highest level since June 2007
Sector News Breakdown
·      Thor Industries (THO) shares up 3%; Q4 EPS $2.26/$1.93B vs. est. $1.96/$1.83B; Q4 Consolidated RV backlog $2.33B driven by continued strong consumer demand for Thor’s affordably-priced travel trailers and motorhomes, Q4 gross margin 15.6%
·      Pier 1 Imports (PIR) shares down -7%; Q2 adjusted EPS loss (5c)/$407.6M vs. est. loss (6c)/$406.82M; 2Q comparable sales +1.8% vs. estimate +0.9%; cuts FY18 adjusted EPS view to 38c-48c from 46c-52c (est. 47c) and cuts FY18 net sales growth view to 0%-2% from 1.5%-2.5%; cuts comp sales growth view to (1%)-1% from 1%-2%; sees Q4 EPS 36c-46c vs. est. 37c
·      McCormick (MKC) Q3 EPS $1.12/$1.19B vs. est. $1.03/$1.17B; sees FY adjusted EPS $4.20-$4.24 vs. est. $4.07; sees FY sales +9% to +10%
·      Vail Resorts (MTN) Q4 EPS ($1.43)/$209.1M vs. est. $211M
·      Mazda Motor Corporation (MDZAF), Denso Corporation (DNZOY), and Toyota Motor Corp. (TM) signed a contract to jointly develop basic structural technologies for electric vehicles
·      Ford Motor Co. (F) and Lyft Inc. said they would develop self-driving vehicles for the ride-hailing service, adding to a growing number of alliances between auto makers
·      Limoneira (LMNR) said CFO announced intention to resign from his position as the company’s CFO, Treasurer and Corporate Secretary, to pursue other opportunities
·      SRC Energy (SRCI) boosts full-year production to be ~33-35 MBOE/D, compared with prior guidance of 32-34 MBOE/D; sees 3Q production volumes of ~40-41k MBOE/D and boosts borrowing base to $400M under its revolving credit facility from $225M
·      Chubb (CB) reported preliminary loss estimates in Q3 attributable to Hurricanes Harvey and Irma at approximately $650M pre-tax, or $520M after tax. Losses for Hurricane Irma are currently estimated to range from $800M-$950M pre-tax, or $640M-$760M after tax
·      Assured Guaranty Ltd. (AGO), which insures more than $300 million of Hartford, Connecticut debt, hired Lamont Financial Services Corporation to advise on strategies to help the city avert a default or bankruptcy, according to a person familiar with the matter – Bloomberg
·      Equifax (EFX) is planning to launch a new service on January 31 that will permanently enable consumers to lock and unlock their credit for free, Bloomberg reports
·      DexCom (DXCM) falls -18%; as the FDA, approved Abbott’s (ABT) continuous glucose monitoring system for adults not requiring blood sample calibration
·      Deciphera (DCPH) 7.5M share IPO priced at $17.00
·      Nightstar Therapeutics (NITE) 5.36M share IPO priced at $14.00
·      NuCana (NCNA) 6.667M share IPO price $15.00
·      AngioDynamics (ANGO) Q1 EPS 12c/$85.4M vs. est. 16c/$86.08M; backs FY18 adjusted EPS view 64c-68c and backs FY18 revenue view $352M-$359M
·      Medtronic (MDT) says its HeartWare HVAD System got FDA approval as a destination therapy for patients with advanced heart failure who are not candidates for heart transplants
·      Quest Diagnostics (DGX) cuts 3q revenue/EPS views citing storms and earthquake; sees Q3 revs cut by about 1.5%, EPS cut by about 10c
·      Roche Holding AG (RHHBY) said it received approval from Swiss regulators for Ocrevus, a treatment for multiple sclerosis, or MS.
·      Chiasma, Inc. (CHMA) provided an update on both of its international Phase 3 clinical trials of its octreotide capsules product candidate, conditionally trade-named Mycapssa®, for the maintenance therapy of adult patients with acromegaly
Industrials & Materials
·      HB Fuller (FUL) Q3 EPS 65c/$562.9M vs. est. 67c/$554.6M; sees FY adjusted EPS $2.57-$2.62 vs. est. $2.60; sees FY adjusted Ebitda $290M
·      Schnitzer Steel (SCHN) sees Q4 adjusted EPS 60c-63c vs. est. 61c; is expected to generate operating income of $23M-$24M and operating income per ferrous ton in the range of $27-$28 for Q4
·      Eastman Chemical (EMN) upgraded to Buy from Neutral at Goldman Sachs
·      Huntsman (HUN) upgraded to Outperform at Wells Fargo
Technology, Media & Telecom
·      Toshiba Corp. said it reached a legally-binding agreement with a group led by U.S. private-equity firm Bain Capital LLC to sell its memory chip unit for ¥2 trillion ($17.7B).
·      Jabil Circuit (JBL) Q4 core EPS 64c/$5.02B vs. est. 61c/$4.9B; sees Q1 core EPS 65c-91c on revs $5.25B-$5.75B vs. est. 83c/$5.38B; backs FY18 core EPS view of $2.60 vs. consensus $2.58
·      Roku (ROKU) 15.668M share IPO priced at $14.00
·      Progress Software (PRGS) Q3 EPS 48c/$97.6M vs. est. 46c/$97.1M; sees FY adjusted EPS $1.82-$1.85 on revs $394M-$397M vs. est. $1.80/$396M
·      Comtech Telecom (CMTL) Q4 EPS 31c/$147.8M vs. est. 29c/$150.8M
·      DHX Media (DHXM) Q4 EPS C$0.03/C$87.7M vs. est. C$0.14/C$101.7M; Q4 adjusted Ebitda C$23.7M
·      Cloudera (CLDR) 13.432M share Secondary priced at $16.45
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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