Mid-Morning Look
Thursday, June 06, 2019
Index |
Up/Down |
% |
Last |
|
||
DJ Industrials |
50.35 |
0.20% |
25,589 |
|||
S&P 500 |
3.58 |
0.13% |
2,829 |
|||
Nasdaq |
6.98 |
0.09% |
7,568 |
|||
Russell 2000 |
-11.20 |
0.74% |
1,495 |
|||
Treasuries, Currencies and Commodities
· In currency markets, the dollar is under pressure early, falling vs. most rival currencies after mixed weaker economic data, calls for the Fed to cut interest rates at least twice in 2019, and general sour market sentiment to start the day. The euro posted a quick drop to lows 1.1203 after its ECB meeting headlines but then quickly popped as high as 1.13 before paring gains. Commodity prices are mixed as oil prices erase early gains after falling into correction territory on Wednesday (defined as 20% drop from recent highs), while gold prices are on track for its 7th straight day of gains. Treasury market’s rally with yields falling across the board again.
Economic Data
· Nonfarm productivity for Q1 rose 3.4%, just missing the 3.5% economist estimate after prelim 1Q productivity was up 3.6%. Unit labor costs fell (-1.6%) in 1Q, greater than the prelim reading of down (-0.9%) which was also the estimate.
· Weekly Jobless Claims were unchanged from the prior week at 218K, slightly above the 215K estimate while the 4-week moving average stood at 215K in the latest week; continuing claims rose 20k to 1.682M
· The U.S. trade deficit for April narrowed to (-$50.8B) from (-$51.9B) in March and was mostly in-line with the (-$50.7B) estimate as imports fell (-2.2%) in April to $257.64B from $263.32B MoM while exports fell (-2.2%) in April to $206.85B from $211.41B in March. Goods shipments to China fell to $8.5B in April from $10.2B MoM (down 20% year-to-date, while imports from the nation have declined 13.2% in 2019
Macro |
Up/Down |
Last |
|
||
WTI Crude |
-0.24 |
51.44 |
|||
Brent |
-0.05 |
60.58 |
|||
Spot Gold |
7.50 |
1,338.00 |
|||
EUR/USD |
0.0051 |
1.1272 |
|||
JPY/USD |
-0.27 |
108.19 |
|||
10-Year Note |
-0.035 |
2.095% |
|||
Sector Movers Today
· Consumer Staples; shares of tobacco names (PM, MO) active after BTI, IMMBY shares jumped overseas after Barclays with industry note saying the US FDA probably won’t publish a rule banning menthol cigarettes over the next 12 months; BYND with its first quarterly earnings since its IPO later this afternoon
· Semiconductors; AMD was upgraded to equal weight from underweight at Morgan Stanley and tgt raised to $28 from $17 as sees positive near-term catalysts saying the table is set well for 2020; tgts were cut at Barclays MU (to $40 from $45), LITE (to $50 from $60), NVDA to $180 from $220, QCOM to $90 from $100 and XLNX to $105 from $130 – to reflect pullback in the sector given softer demand environment, Huawei Technologies Co uncertainty and risk of further trade escalation/also notes DRAM and NAND contract prices continue to fall
· Software movers; CLDR shares plunge as Q1 EPS/revs were in-line but bookings and churn were weak, said its CEO will be retiring at the end of the quarter and cut its full-year revenue guidance by $90M to $745M-$765M and said that Q2 would be another tough booking quarter; MDB reported a top-line beat 7% ahead of consensus estimates while guiding 2Q revs to be $91M at the mid-point, about 3.5% above the Street; CTXS upgraded to buy at Deutsche Bank citing improving growth in the company’s desktop business after the segment grew 13% in Q1
Stock GAINERS
· AMD +5%; upgraded to equal weight from underweight at Morgan Stanley and tgt raised to $28 from $17 as sees positive near-term catalysts saying the table is set well for 2020
· CIEN +24%; raised FY19 revenue outlook to 13%-14% from previous 6%-8% guidance range and guided Q3 revs above views after Q2 beat (Q2 EPS 48c/$865M vs. est. 41c/$819.3M; Q2 GM 43.9% vs. 40.9% YoY)
· CMTL +19%; after Q3 beat and raised FY19 revenue view to $660.0M from $645M-$660M (est. $655.18M), though guides Q4 EPS and revs below views
· CTRV +130%; as announces positive data from preclinical study of its experimental drug, CRV431, to treat liver disease from non-alcoholic steatohepatitis (NASH)/says CRV431 significantly decreased extent of fibrosis in a second animal model of liver fibrosis
· EOG +2%; as the energy sector rebounds after leading declines yesterday (CXO, CVX, OXY higher)
· FLEX +2%; upgraded at Goldman Sachs to conviction buy list citing the recent pullback with shares down 18% from a May peak, which created an “attractive” and “compelling” valuation
· SFIX +16%; Q3 active clients of 3.1M, was an increase of 17% YoY while raises year rev outlook to $1.57B-$1.58B from prior view $1.53B-$1.56B/Stifel notes marks the fourth consecutive quarter of accelerating ARPU growth
· UAL +2%; airlines rise again after strong returns yesterday; UAL was upgraded to buy at Goldman Sachs today while the firm downgraded SAVE
Stock LAGGARDS
· CLDR -43%; shares plunge as Q1 EPS/revs were in-line but bookings and churn were weak, said its CEO will be retiring at the end of the quarter and cut its full-year revenue guidance by $90M to $745M-$765M and said that Q2 would be another tough booking quarter
· EROS -34%; said the company and all of its units “have met and continue to meet all debt service commitments,” in response to a credit rating downgrade earlier that sunk shares
· FLT -5%; after Citron Research posted a negative call on the company talking about the company’s egregious billing practices https://bit.ly/2wD0CCj
· HOME -48%; as profit fell in Q1 citing unfavorable weather conditions/guided year adjusted EPS 67c-74c on revs $1.39B below est $1.03/$1.4B
· KIRK -39%; reports a net loss of $8.9M for the quarter as total sales fell (-9.1%) and comp sales dropped (-10.7%) vs. up 1.4% YoY – both below estimates – while also cut its FY19 EPS view
· MIK 13%; trades to record lows as Q1 comp sales fell (-2.9%) missing the est. for a drop of (-1.5%) amid a decrease in customer transactions while gross profit fell 130 bps to 38.2% of sales
· TUSK -29%; recall late yesterday the WSJ reported that the FBI is looking into Mammoth Energy work in Puerto Rico https://on.wsj.com/2XtF5Ig
Syndicate
· Avalara (AVLR) 3.59M share Secondary priced at $69.40
· Descartes Systems (DSGX) 6M share Secondary priced at $35.50
· i3 Verticals (IIIV) 4.49M share Secondary priced at $22.75
· Orchard Therapeutics (ORTX) 9M share Secondary priced at $14.25
· Q2 Holdings (QTWO) 2.52M share Secondary priced at $69.50
· Verra Mobility (VRRM) 15M share Secondary priced at $12.50
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.