Morning Preview: June 18, 2019

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Early Look

Tuesday, June 18, 2019





DJ Industrials




S&P 500










Stocks futures are pushing higher as all eyes remain focused on central bank action this week. The two-day FOMC meeting kicks off today, with results/commentary expected tomorrow afternoon. While not cut is currently priced into the stock market, dovish commentary and rate cuts for upcoming meetings are, and investors will look to clues to back up that sentiment. Dovish comments from Europe’s central bank chief cheered stock markets ahead of the Fed’s interest-rate decision due Wednesday. In Asian markets, The Nikkei Index fell -151 points to 20,972, the Shanghai Index was up slightly to settle at 2,890 and the Hang Seng Index rose 271 points to settle at 27,498. In Europe, the German DAX is higher by 90 points to 12,180, while the FTSE 100 is up about 40 points to around the 7,400 level. In Europe, the euro is lower against the U.S. dollar after ECB President Mario Draghi indicated the bank is ready for more stimulus if the euro-area economy doesn’t improve, at a conference in Portugal. Draghi said the risk outlook for the European economy “remains tilted to the downside, and indicators for the coming quarters point to lingering softness,” in prepared remarks. The yield on 10-year Treasuries sank to 2.05% following Draghi’s move to put stimulus on the table in order to combat slowing growth.


U.S. stocks posted modest gains on Monday outside of technology and biotech shares which outperformed, led by strength in social media and entertainment shares as markets eagerly await the Federal Reserve’s two-day policy-setting meeting which begins today. Markets are widely pricing in more than two interest rate cuts this year on fears of the fallout from global trade tensions and a slowdown in the economy, but the likelihood of a rate cut tomorrow when the meeting concludes at this point remains low. Weak economic data yesterday did spark more economic growth concerns as a survey of manufacturing activity in the New York state area showed its largest-ever drop into negative territory in June, plunging 26.4 points to negative 8.6 in June, a record decline.

Market Closing Prices Yesterday

·     The S&P 500 Index climbed 2.69 points, or 0.09%, to 2,889.67

·     The Dow Jones Industrial Average rose 22.92 points, or 0.09%, to 26,112.53

·     The Nasdaq Composite gained 48.37 points, or 0.62%, to 7,845.02

·     The Russell 2000 Index advanced 10.25 points, or 0.67% to 1,532.75


Events Calendar for Today

·     7:45 AM EST      ICSC Weekly Retail Sales

·     8:30 AM EST      Housing Starts MoM for May…est. +0.4% to 1.24M

·     8:30 AM EST      Building Permits MoM for May…est. +0.2% to 1.293M

·     8:55 AM EST      Johnson/Redbook Weekly Sales

·     4:30 PM EST       API Weekly Inventory Data


Earnings Calendar:

·     Earnings Before the Open: None

·     Earnings After the Close: ADBE, CHKE, JBL, LZB


Other Key Events:

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

·     JPMorgan Energy Conference, 6/18-6/19, in New York

·     Oppenheimer Annual Consumer Growth, E-Commerce Conference, 6/18-6/19, in Boston, MA

·     Roth Capital 5th Annual London Conference, 6/18-6/20, in London, UK

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






WTI Crude















10-Year Note





World News

·     President Donald Trump is threatening to remove millions of people living in the country illegally. In a pair of tweets Monday night, Trump said that U.S. Immigration and Customs Enforcement would next week “begin the process of removing the millions of illegal aliens who have illicitly found their way into the United States.” “They will be removed as fast as they come in,” he said


Sector News Breakdown

Energy, Industrials & Materials

·     Solar stocks upgraded at Goldman Sachs: SunPower (SPWR) and Sunrun (RUN) both upgraded to buy from neutral and SolarEdge (SEDG) upgraded to neutral from sell anticipating volume tailwinds in the second half of 2019 given the recent signs of strength in the sector’s financing environment

·     Steel Dynamics (STLD) sees 2Q EPS 86c-90c below the 96c estimate citing lower profitability from the company’s long product steel operations; said 2Q profitability for the company’s metals recycling platform is expected to decrease QoQ

·     JinkoSolar (JKS) downgraded to Neutral from Buy at UBS

·     SM Energy (SM) said Q2 production is exceeding expectations and the Company is raising guidance for second quarter and full year production volumes by 0.4 MMBoe, at the mid-point, due to better than expected well performance and completion timing. Second quarter and full year production is expected to be approximately 43-44% oil.

·     Boeing (BA), Korean Air, and Air Lease say Korean Air to add 30 new 787 Dreamliner airplanes to its fleet, with a commitment to purchase 10 new 787-10s and 10 additional 787-9 airplanes valued at $6.3 billion at current list prices

·     GE Aviation (GE) booked $24B in orders for engines and services on the first day of the Paris Air Show, including the largest engine order ever with Indigo Airlines, which placed a $20B order for CFM International LEAP-1A engines – CNBC reported

·     Air Lease (AL) announced long-term lease placements for six new Airbus (EADSY) A330-900neo aircraft with Virgin Atlantic Airways



·     Blockchain company Ripple announced an investment in and partnership with MoneyGram International Inc. (MGI). Ripple agreed to purchase $30M worth of freshly created MGI shares at $4.10 apiece, and can purchase another $20M more at its discretion at a minimum of $4.10

·     Bank of America (BAC) upgraded to Outperform from Market Perform at BMO Capital

·     Schwab (SCHW) downgraded to hold from buy at Deutsche Bank

·     JPMorgan (JPM) is working on a secretive digital banking project based out of London, TechCrunch reports



·     Biohaven Pharmaceutical (BHVN) offers to sell $300M in common stock

·     Calithera Biosciences (CALA) announces commencement of 10M share offering

·     PhaseBio Pharmaceuticals (PHAS) announces preliminary data from its Phase 2a clinical trial of PB2452; the trial includes older (ages 50-64) and elderly (ages 65-80) subjects on dual antiplatelet therapy of ticagrelor and low-dose aspirin

·     Rockwell Medical (RMTI) announces offering of common stock

·     AstraZeneca (AZN) and Merck & Co. (MRK) say European Commission has approved Lynparza (olaparib) as a 1st-line maintenance treatment for women with BRCA-mutated advanced ovarian cancer.

·     Illumina’s (ILMN) proposed takeover of Pacific Biosciences (PACB) raises competition concerns in the supply of specialist DNA sequencing systems in the U.K., the Competition and Markets Authority said

·     Alexion Pharmaceuticals (ALXN) said Japan’s Ministry of Health, Labour & Welfare has approved Ultomiris (ravulizumab) for treatment of adult patients with paroxysmal nocturnal hemoglobinuria


Technology, Media & Telecom

·     Facebook Inc. (FB) unveiled plans for a new cryptocurrency that the social-media giant hopes will one day trade on a global scale much like the U.S. dollar. Called Libra, the new currency will launch as soon as next year and be what’s known as a stablecoin, a digital currency that’s supported by established government-backed currencies and securities

·     Oracle (ORCL) downgraded to Neutral from Outperform at Macquarie

·     Volvo Group has signed an agreement with NVIDIA (NVDA) to jointly develop the decision-making system of autonomous commercial vehicles and machines. Utilizing NVIDIA’s end-to-end artificial intelligence platform for training, simulation and in-vehicle computing, the resulting system is designed to safely handle fully autonomous driving on public roads and highways, the companies said

·     AT&T (T) said it is the winning bidder for spectrum licenses covering more than 98% of the U.S. population following the close of FCC Auction 102. The company spent about $980M in the auction. This purchase of high-quality spectrum does not change AT&T’s 2019 guidance for free cash flow, net asset monetization or debt leverage ratio.

·     AT&T’s (T) WarnerMedia is close to a deal worth around $500 million with Hollywood hit maker J.J. Abrams, the New York Times reported Monday. Abrams’ Bad Robot Productions has been behind popular TV shows such as “Lost,” “Alias” and “Westworld.”


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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