Morning Preview: June 04, 2019

Darwin SarazaDaily Market Report - TEST

Early Look

Tuesday, June 4, 2019





DJ Industrials




S&P 500










U.S. futures are pointing to a rebound, with global markets getting a boost off recent lows and Treasuries on track to slide for the first time in over a week with it currently all quiet on the trade and tariff front. Later today, Fed Chairman Powell discusses policy strategy at the Fed conference in Chicago today (Fed’ Brainard also set to speak). Yesterday, the Fed’s Bullard made waves after saying the Fed may have to cut interest rates soon due to trade wars, low inflation. In Asian markets, The Nikkei Index was little changed at 20,408, the Shanghai Index fell -27 points to 2,862 and the Hang Seng Index fell -132 points to settle at 26,761. In Europe, the German DAX is up over 100 points to 11,900, while the FTSE 100 is up around 20 points at the 7,200 level. Australia’s central bank cut rates for the first time in almost three years with pressure now from other banks to possibly follow suit. Technology stocks got slammed Monday, led by declines in some of the biggest technology companies following a federal government crackdown targeting them. Facebook shares fell over 7%, Alphabet over 6%, Amazon over 4% and Apple ended down 1% after a series of reports claiming that those companies face regulatory scrutiny from the Trump administration. Alphabet’s Google division, Amazon and Apple are reportedly under investigation by the Justice Department, while the Federal Trade Commission is said to be investigating Facebook. Late Monday, the House Judiciary Committee also said it would investigate competition in the tech industry.

Events Calendar for Today

·     7:45 AM EST      ICSC Weekly Retail Sales

·     8:30 AM EST      Fed’s Williams speaks at conference on reforming bank culture

·     8:55 AM EST      Johnson/Redbook Weekly Sales

·     9:45 AM EST      Fed Chairman Powell welcome remarks at Fed Conference

·     10:00 AM EST    Factory Orders for April…est. (-1.0%)

·     10:00 AM EST    Durable Goods Orders, Apr-F…prior (-2.1%)

·     10:00 AM EST    Durable Goods Ex: Transportation, Apr-F…prior (0%)

·     4:30 PM EST       API Weekly Inventory Data


Market Closing Prices Yesterday

·     The S&P 500 Index slipped -7.61 points, or 0.28%, to 2,744.45

·     The Dow Jones Industrial Average rose 4.74 points, or 0.02%, to 24,819.78

·     The Nasdaq Composite plunged -120.13 points, or 1.61%, to 7,333.02

·     The Russell 2000 Index advanced 4.50 points, or 0.31% to 1,469.98


Earnings Calendar:

·     Earnings Before the Open: CBRL, CMD, DCI, GSM, LE, NAV, TIF

·     Earnings After the Close: AMBA, CRM, GME, GWRE, HQY, NX, PVTL


Other Key Events:

·     American Society of Clinical Oncology (ASCO) 5/31-6/4, in Chicago

·     Annual Worldwide Developers Conference, 6/3-6/7, in San Jose, CA

·     Bank America Global Technology Conference, 6/4-6/6, in San Francisco

·     Baird Global Consumer & Technology Service conference, 6/4-6/6, in New York

·     Jefferies 2019 Healthcare Conference, 6/4-6/7, in New York

·     REITWeek 2019 Investor Conference, 6/4-6/6, in New York

·     Roth Capital 6th Annual China Solar Tour, 6/6-6/6, in Shanghai

·     RBA rate decision






WTI Crude















10-Year Note





World News

·     Australia became the largest developed economy to cut interest rates in 2019, lowering borrowing costs for the first time in nearly three years as it cut its benchmark interest rate by a quarter of a percentage point to 1.25%.

·     The eurozone’s annual rate of inflation fell sharply in May to reach its lowest level in more than a year. Consumer prices were just 1.2% higher in May than a year earlier, an inflation rate that was down from 1.7% in April and the lowest since April 2018.

·     The long-delayed $19.1 billion disaster aid bill sailed through the House on Monday and headed to President Donald Trump for his expected signature. Lawmakers gave the measure final congressional approval by 354-58

·     The Chinese government has warned its citizens over the risks of travelling to the US, accusing US law enforcement of “repeatedly harassing”

·     Refinitiv removed Reuters stories relating to the 30th anniversary of the crackdown on Tiananmen Square protests from its Eikon terminals


Sector News Breakdown


·     Tiffany (TIF) Q1 EPS $1.03/$1B vs. est. $1.02/$1.02B; Q1 comps sales ex-fx fell (-2%) vs. est. (-1.2%); boosts quarterly dividend by 5%; lowers FY outlook to rising by low-to-single-digit percent, down from prior view of up mid-single-digit percent

·     Uber (UBER) said it is currently under a federal income tax examination by the Internal Revenue Service for tax years 2013 and 2014. The company is also under examination by various state and foreign tax authorities, it said

·     Caleres (CAL) Q1 adjusted EPS 36c/$677.8M vs. est. 35c/$670M and comp sales fell (-1%); lowers year EPS view to $2.35-$2.45 from prior $2.45-$2.55 and cuts FY19 revenue view to $3.0B from $3.0B-$3.05B


Energy, Industrials & Materials

·     Navistar (NAV) Q2 EPS loss (48c)/$3.0B vs. est. $2.69B; boosted its revenue forecast for the full year to $11.25B-$11.75B form prior $10.75B-$11.25B (est. $11B) and sees FY adjusted Ebitda $875M-$925M from prior $850M-$900M

·     U.S. Steel (X) downgraded to Sell from Neutral at Goldman Sachs and lower tgt to $11

·     LyondellBasell (LYB) announced it has ended discussions with Odebrecht S.A. concerning the potential acquisition of Braskem

·     Ferroglobe (GSM) Q1 EPS loss (13c)/$456.8M vs. est. loss (11c)/$481.09M; 1Q total shipments 247,739 Mt vs. 239,119 YoY and Ebitda $11.8M vs. $89.6M YoY

·     Volkswagen said on Monday it would seek a dual listing of a minority stake in its Traton trucks unit on the Frankfurt and Nasdaq Stockholm exchanges, with an initial public offering (IPO) planned for completion before the summer break.

·     Royal Dutch Shell PLC (RDSA) said it expects to return $125 billion or more to shareholders from 2021 to 2025 via dividends and buybacks; also raised its guidance for organic free cash flow in 2025 to $35 billion at an oil price of $60 a barrel.

·     S&P MidCap 400 constituent Bemis Company Inc. (BMS) will replace Mattel Inc. (MAT) in the S&P 500, and Mattel will replace Bemis in the S&P MidCap 400 effective prior to the open of trading on Friday, June 7. Amcor Limited is merging with Bemis in a transaction expected to be completed soon pending final conditions

·     Martin Midstream Partners (MMLP) files for $250M in mixed securities



·     Ventas (VTR) 11M share secondary priced at $62.75 per share

·     Avalara (AVLR) files to sell 3M shares of common stock

·     New Mountain Finance (NMFC) announces $50M convertible notes offering



·     AstraZeneca PLC (AZN) has started looking for a successor to Chairman Leif Johansson, who has been in the role seven years, Sky News reports.

·     Sientra (SIEN) announces $75M common stock offering


Technology, Media & Telecom

·     Box Inc. (BOX) shares fell -14%; Q1 adjusted EPS loss (3c)/$163M vs. est. loss (5c)/$161.45M; sees Q2 adjusted EPS loss (2c)-(1c) on revs $169M-$170M vs. es.t loss (2c)/$170.8M; raises FY20 adj. EPS view to 0c-2c from (3c)-1c while lowers FY20 revenue view to $688M-$692M from $700M-$704M (est. $701.91M)

·     Coupa Software (COUP) Q1 adjusted EPS 3c/$81.3M vs. est. loss (4c)/$73.8M; sees Q2 EPS loss (10c-12c) on revs $84.5M-$85.5M vs. est. loss (1c)/$77.86M; Q2 subscription revenues are expected to be between $77M-$78M; Q1 subscription revenue $73M, up 46% y/y

·     Millicom (TIGO) files to sell 11M shares of common stock for holders

·     Take-Two (TTWO) upgraded to Market Perform from Underperform at BMO Capital


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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