Morning Preview: September 8, 2017

Regal HelpdeskDaily Market Insights

Early Look
Tuesday, September 12, 17
U.S. stock futures are climbing steadily, on track to open at new record highs for the S&P 500 and the Nasdaq Composite ahead of a moderately busy day of announcements. Apple Inc. (AAPL) shares are extending yesterday’s gains ahead of the highly anticipated iPhone 8 launch that is set to be revealed later this afternoon (more details below). Also, Tax reform remains a big topic as President Donald Trump plans an aggressive travel schedule, taking him to as many as 13 states over the next seven weeks, to sell the idea of a tax overhaul as the administration tries to avoid repeating the failures of its attempt to repeal Obamacare. Inflation is rising overseas as the UK CPI surprised to the upside (follows higher inflation out of China recently as well), which is lifting the British Pound early vs. other currencies. Outside of that, it is a relatively quiet day of earnings and news. In Asian markets, The Nikkei Index rose 230 points to end at 19,776, the Shanghai Index rose 3 points to 3,379 and the Hang Seng Index inched higher 17 points to 27,972. In Europe, the German DAX is higher by about 75 points at 12,550, while the FTSE 100 is down around -10 points at 7,400.
 
Yesterday, equities rose toward record highs while the greenback gained and Treasuries tumbled as investors piled into riskier assets after Hurricane Irma wreaked less damage than forecast and North Korea failed to exacerbate tensions. Speculation that the country would mark the anniversary of its founding with another missile over the weekend didn’t happen as many feared. European and emerging-market equities also advanced, while gold, bonds and the yen retreated. Note according to Bespoke Investment, yesterday’s S&P 500 high made it 311 days since the last 3%+ pullback — the 2nd longest streak in the S&P’s history
Market Closing Prices Yesterday
·      The S&P 500 Index jumped 26.68 points, or 1.08%, to 2,488.11
·      The Dow Jones Industrial Average rose 259.58 points, or 1.19%, to 22,057.37
·      The Nasdaq Composite spiked 72.07 points, or 1.13%, to 6,432.26
·      The Russell 2000 Index advanced 15.40 points, or 1.10% to 1,414.83
 
Events Calendar for Today
·      6:00 AM EST       NFIB Small Business Optimism for August
·      7:45 AM EST       ICSC Weekly Retail Sales
·      8:55 AM EST       Johnson/Redbook Weekly Sales
·      10:00 AM EST     JOLTs Job Openings for July
·      4:30 PM EST        API Weekly Inventory Data
 
Other Key Events:
·      Apple (AAPL) to hold product event
·      Barclays Global Financial Services Conference, 9/11-9/13, in NYC
·      Morgan Stanley Global Healthcare Conference, 9/11-9/13, in NYC
·      Deutsche Bank Technology Conference, 9/12-9/13, in Las Vegas
World News
·      The sentiment tracker from the National Federation of Independent Business (NFIB) ticked up 0.1 point to 105.3, the group said Tuesday. NFIB’s gauge surged after the election, when business owners anticipated less regulation and more business-friendly policies
·      In the UK, the Office for National Statistics said inflation rose to 2.9% in August, more than the 2.8% reading expected.
·      British Prime Minister Theresa May won a key vote on Brexit legislation early Tuesday, resolving some concerns that the House of Commons could hold up a bill designed to transpose 10,000 EU laws into U.K. law.
 
Sector News Breakdown
Consumer
·      Bunge (BG) announced that it has entered into a definitive agreement to acquire a 70% ownership interest in IOI Loders Croklaan from IOI Corporation Berhad, or IOI, for $946M, comprising EUR 297M and $595M in cash
·      Limoneira (LMNR) Q3 EPS 52c/$40.4M vs. est. 52c/$37.94M; backs FY17 EPS view 51c-55c and backs FY17 adjusted EBITDA view $21.7M-$22.2M
 
Financials
·      Cohen & Steers (CNS) announces preliminary AUM $62B as of August 31, an increase of $152M from July 31, due to net inflows of $264M and market appreciation of $210M partially offset by distributions of $322M
·      Franklin Resources (BEN) reported preliminary month-end assets under management of $747.4B at August 31, compared to $752.7B at July 31
·      Brookfield Infrastructure (BIP) reports $1B equity offering
·      Camden Property (CPT) files to sell 4.75M shares of common stock
·      Investors Real Estate (IRET) Q1 FFO 10c vs. est. 8c
·      AGNC Investment (AGNC) announces estimated net tangible book value of $19.22 per share
 
Healthcare
·      Teva (TEVA) announced it has entered into a definitive agreement under which Cooper Surgical (COO) will acquire PARAGARD, product within its global Women’s Health business, in a $1.1B cash transaction https://goo.gl/swYEHy
·      pSivida (PSDV) Q4 EPS loss (16c)/$701K vs. est. loss (15c)/$470,000; sees year manufacturing revs $50M-$55M; achieved several significant milestones during FY 2017 and has built operational, clinical and business development momentum entering FY 2018
·      Sage Therapeutics (SAGE) shares fall -25%; reported top-line results from its Phase 3 STATUS Trial of brexanolone (SAGE-547) in the treatment super-refractory status epilepticus (SRSE) saying it did not achieve its primary endpoint and the secondary endpoint results were consistent with the primary endpoint
 
Industrials & Materials
·      The steel sector was downgraded to in-line from attractive at Morgan Stanley, with Nucor (NUE) and Steel Dynamics (STLD)both cut to equal-weight from overweight citing weakening U.S. demand outweighing the positive effect of China supply side reforms.
·      MasTec (MTZ) upgraded to Buy from Hold at Deutsche Bank
·      Georgia Pacific has reportedly raised linerboard prices by $50/ton and $60/ton price for corrugated medium, according to Jefferies citing industry contacts; said a full $50/ton containerboard price increase would boost earnings by more than 25% forIP, WRK, PKG
·      Potash Corp. of Saskatchewan Inc.’s (POT) merger with Agrium Inc. (AGU) won antitrust approval in Canada, according to a statement by the country’s competition bureau.
·      Sealed Air Corporation (SEE) announced today the acquisition of Fagerdala Singapore Pte Ltd., a manufacturer and fabricator of polyethylene foam. Sealed Air will acquire 100% of Fagerdala shares for approximately $100 million in cash. The sale is expected to close in October of 2017
·      Layne Christensen (LAYN) Q2 EPS loss (11c)/$126.2M and Q2 adjusted Ebitda $10.0M
 
Technology, Media & Telecom
·      Apple (AAPL) product presentation today for new iPhone: also expected for a new Watch (potentially with LTE/cellular capabilities) and TV, but the real focus is on the iPhone. Three new iPhones are expected, including two iterative/evolutionary ones (likely to be dubbed iPhone 8 and iPhone 8 Plus) and one revolutionary model (likely to be dubbed iPhone X or iPhone X Edition and include an edge-to-edge OLED display, facial recognition technology, wireless charging, and more)
·      First Data (FDC) files to sell 85M shares of stock for holders
·      Workday (WDAY) to offer $1B in convertible senior notes due 2022
·      Pitney Bowes (PBI) announces the renewal and extension of its global strategic alliance with HP (HPQ)
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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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