Morning Preview: June 17, 2019

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Early Look

Monday, June 17, 2019





DJ Industrials




S&P 500










Stock future in the U.S. are inching higher along with global markets, trading in fairly tight ranges overnight, ahead of several market moving catalysts the next 2-weeks. In Asian markets, The Nikkei Index inched higher 7 points to 21,124, the Shanghai Index gained 5 points to 2,997 and the Hang Seng Index rose 108 points to 27,227. In Europe, the German DAX is up a few points to 12,100, while the FTSE 100 is little changed at 7,340. Markets remain cautious ahead of a Federal Open Market Committee meeting this week, where they hope to get more guidance on possible interest rate cuts. All indexes gained for a second week in a row with the Dow up 0.4%, the S&P 500 up 0.5% and the Nasdaq adding 0.7%. Stocks slipped on Friday as all three major indexes closed slightly lower, but overall for the week remained stuck in place ahead of a few upcoming events in the next two weeks that could move the broader market. The Federal Open Market Committee (FOMC) is meeting this Tuesday and Wednesday to discuss the latest monetary policy after May’s market selloff with expectations for them to hold steady (though there is a small outside chance of a potential rate cut). Meanwhile, the G-20 meeting later this month could see President Donald Trump and Chinese President Xi Jinping talk about trade again which would be seen a s positive for global markets. A dovish tone from the Fed or progress in the trade negotiations could jump start the market. There are a few M&A stories moving stocks early, but the macro picture the main story heading into the FOMC and G20.

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -4.66 points, or 0.16%, to 2,886.98

·     The Dow Jones Industrial Average fell -17.16 points, or 0.07%, to 26,089.61

·     The Nasdaq Composite slipped -40.47 points, or 0.52%, to 7,796.66

·     The Russell 2000 Index declined -13.30 points, or 0.87% to 1,522.50


Events Calendar for Today

·     8:30 AM EST      Empire Manufacturing for June…est. 11.0

·     10:00 AM EST    NAHB Housing Market Index for June…est. 67

·     4:00 PM EST       Net Long-term TIC Flows for April…prior (-$28,4B)


Other Key Events:

·     Jefferies 2019 Global Consumer Conference, 6/17-6/19, in Nantucket, MA

·     The 53rd International Paris Air Show takes place 6/17-6/23, at Paris-Le Bourget Airport






WTI Crude















10-Year Note





World News

·     Bitcoin crossed the $9,000 threshold Sunday for the first time in more than a year, peaking at around $9,385 in intraday trading, according to Coindesk. The is up more than 22% over the past 30 days, and up 142% year to date. Sunday’s intraday prices were the highest for bitcoin since May 2018, though still well off its all-time high above $19,000 in late 2017

·     Hong Kong leader Carrie Lam apologized as hundreds of thousands of black-clad protesters-maintained calls for her to resign over her handling of a bill that would have allowed people to be sent to mainland China for trial


Sector News Breakdown


·     Hibbett Sports (HIBB) delayed filing its 10-Q; said it has determined that it is unable to file its Quarterly Report on Form 10-Q for the quarter ended May 4 w due to the company’s need to further review its recent adoption of the Financial Accounting Standards Board’s update

·     VICI Properties Inc. (VICI) and Century Casinos Inc. (CNTY) have acquired three regional gaming properties from Eldorado Resorts Inc. (ERI) for $385 million cash. VICI Properties is buying the land and real estate assets of Isle Casino Cape Girardeau in Cape Girardeau, Mo., Lady Luck Casino Caruthersville in Caruthersville, Mo, and Mountaineer Casino, Racetrack & Resort in New Cumberland, W.Va., for about $278 million, and Century will acquire the operating assets of the properties for about $107 million.

·     Lufthansa (LHA.GY) lowered its profit outlook for 2019, said it expects an adjusted margin for earnings before interest and tax of 5.5% to 6.5% for the year, down from previous



·     C&J Energy Services (CJ) and Keane Group, Inc. (FRAC) entered into a definitive agreement whereby the companies will combine in an all-stock merger of equals. The combined company will be positioned as an industry-leading, diversified oilfield services provider with a pro-forma enterprise value of approximately $1.8 billion, including $255 million of net debt



·     Capital One (COF) May charge-offs 4.89% vs. 5.15% last month while 30-plus day performing delinquencies 3.29% vs. 3.42% last month

·     Synchrony Financial (SYF) May charge-offs for May of 4.91% vs. 5.26% YoY while May delinquencies +2.24% vs. +2.73% YoY

·     Deutsche Bank (DB) is preparing a deep overhaul of its trading operations including the creation of a bad bank to hold tens of billions of euros of assets – the Financial Times reported

·     Goldman Sachs Group Inc. (GS) is pulling together four separate units to create a new investing unit and planning a fundraising, the Wall Street Journal reported. The division’s exact makeup will take shape over the next few months, but it is likely to have around $140B in assets



·     UniQure NV (QURE) is exploring options including a potential sale amid interest from pharmaceutical companies looking to expand in gene therapy, Bloomberg reported. QURE is working with advisers as it weighs options including a sale or partnerships

·     Editas (EDIT) presented preclinical data from its ex vivo gene editing program to treat sickle cell disease (SCD) and beta thalassemia, additionally announcing the asset, now called EDIT-301, has entered IND-enabling studies

·     Incyte’s (INCY) ruxolitinib cream met the primary goal of a mid-stage study in vitiligo, a chronic autoimmune disease that causes patches of skin to lose their pigment

·     McKesson (MCK) and Cardinal Health (CAH) mentioned positively in Barron’s saying shares looking like bargains after selling off the last four years. Barron’s noted MCK and CAH shares are down roughly half since June 2015, while ABS is down a third, as they face declining prices for generic drugs, hundreds of lawsuits accusing them of liability in the opioid crisis, policy concerns


Industrials & Materials

·     The Federal Aviation Administration could start flight trials of Boeing’s (BA) proposed 737 MAX safety enhancement as early as this week, WSJ reported

·     Airbus SE (EADSY) is nearing a deal to sell A330neo wide-body passenger jets to Virgin Atlantic Airways Ltd. in a contract that could be worth as much as $4.15 billion, Bloomberg reported. The order will be for 14 of the bigger A330-900 variant

·     Emirates is in negotiations with Boeing (BA) that could defer its order for 150 Boeing 777X jets and substitute smaller 787 airplanes for some portion of the order, the Seattle Times reported

·     United Technologies (UTX) and Raytheon (RTN) shares look cheap according to Barron’s noting shares came under pressure after the companies announced their merger. If the deal were to die, the stocks could rally in relief, but a tougher scenario would await if the merger goes forward

·     Machinery stocks Deere (DE) and Titan Machinery (TITN) upgraded to outperform at Baird

·     Mosaic Co. (MOS) upgraded to buy from neutral at Bank America with $30 tgt


Technology, Media & Telecom

·     U.S. chip makers, including Intel Corp. (INTC), Qualcomm Inc. (QCOM), and Xilinx Inc. (XLNX), have quietly lobbied the Trump administration to ease its ban on sales to Chinese tech giant Huawei Technologies Co., Reuters reported Sunday. One source told Reuters that the aim was not to help Huawei, but to prevent harm to U.S. companies

·     Sony’s (SNE) “Men in Black: International” debuted with a weak $28.5M from 4,200 theaters domestically (vs. a budget of over $100M), though overseas, the sequel collected $73.7M, making its global haul an estimated $102.2M

·     Amazon (AMZN) is shuttering Amazon Restaurants sending GrubHub’s (GRUB) stock higher this week. Amazon’s departure from the business could be a signal that beaten-down GrubHub is getting ready to rally. Online food ordering will rise 20% to $56B this year in the U.S., and 16% to $203B worldwide, predicts market researcher Euromonitor

·     President Trump Tweeted over the weekend that the New York Times (NYT) and Washington Post (owned by Amazon) will be gone at the end of his tenure

·     Huawei’s founder cut the company’s revenue forecast for 2019 by a sixth and said it would scale back production


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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