Morning Preview: November 2, 2017

Scott GreenDaily Market Report

Early Look
Thursday, November 2, 17

 
Stock futures are pointing to a slightly lower open ahead of a very busy day of news and meetings, with a Bank of England decision (rates hike expected for first time in a decade) the announcement of the next Fed Chair and the official release of the tax reform bill all expected today. Throw in another very busy day of corporate earnings and you have yourself a lot for investors and markets to “chew on” with major averages hovering at or around record highs for the last month.
 
Stocks ended mixed on Wednesday as the Dow and S&P 500 both posted gains (hitting intraday record) while the tech heavy Nasdaq Comp and SmallCap Russell 2000 index declined as markets assessed the latest Federal Reserve policy statement (keeping rates unchanged but said economic activity has been picking up at a “solid rate”) and prepared for the nomination of the next head of the central bank, expected on Thursday. According to reports late yesterday, President Trump is expected to nominate Federal Reserve governor Jerome Powell as the next FOMC Chairperson later today. The unveiling of a House Republican tax bill was postponed a day to Thursday to give lawmakers time to iron out issues.
 
In Asian markets, The Nikkei Index gained 119 points to settle at 22,539, the Shanghai Index dropped -12 points to 3,383 and the Hang Seng Index slipped -75 points to end at 28,518. In Europe, the German DAX is down around -25 points at 13,440, while the FTSE 100 is up around 10 points at 7,500. The strength in the pound comes as investors wait for the BOE to deliver its so-called Super Thursday clutch of releases: its rate decision, meeting minutes and Quarterly Inflation Report. The central bank is widely expected to raise its benchmark interest rate to 0.5% from the current record low of 0.25%.
 
Market Closing Prices Yesterday
·      The S&P 500 Index gained 4.10 points, or 0.16%, to 2,579.36
·      The Dow Jones Industrial Average rose 57.77 points, or 0.25%, to 23,435.01
·      The Nasdaq Composite slipped -11.14 points, or 0.17%, to 6,716.53
·      The Russell 2000 Index declined -9.99 points, or 0.67% to 1,492.78
 
Events Calendar for Today
·      8:30 AM EST       Weekly Jobless Claims…est. 235K
·      8:30 AM EST       Continuing Claims…est. 1.894M
·      8:30 AM EST       Nonfarm Productivity for Q3-P…est. 2.6%
·      8:30 AM EST       Unit Labor Costs, Q3-P…est. 0.4%
·      9:45 AM EST       Bloomberg Consumer Comfort Index…prior 51.0
·      10:30 AM EST     Weekly EIA Natural Gas Inventory Data
·      6:15 PM EST        Fed’s Bostic speaks in Chicago about Gov’t Statistics
 
Earnings Calendar
·      Earnings Before the Open: ADP, AMCX, AN, APRN, ARW, AVP, BABA, BCE, BDX, BT, CBB, CI, CRCM, CS, CYBR, DISCA, DWDP, GCI, GOGO, H, ICE, LDOS, MITL, MLM, MSCI, NWL, PAH, PBH, PCG, PH, RL, RDSA, SNY, SFM, SPWR, TDC, TEVA, THS, VAC, VMC, W, WLTW, WRK, YUM, ZTS
·      Earnings After the Close: AAPL, ACLS, AGO, AIG, ANET, ATVI, BL, CARB, CATM, CBS, CRUS, DATA, EVH, FLR, FND, HDP, HLF, JCOM, MDRX, MOH, MSI, NANO, OTEX, RDUS, RMAX, SBUX, STMP, TIVO, UNIT, VECO, WU, XPER
   
Sector News Breakdown
Consumer
·      Tesla (TSLA) shared fell -4%; Q3 EPS loss ($2.92)/$2.98B vs. est. loss ($2.27)/$2.93B; posted a wider-than-expected 3Q loss and said that it is it difficult to predict exactly how long it will take for all Model 3 bottlenecks to be cleared or when new ones will appear; expects to achieve a production rate of 5,000 Model 3 vehicles per week by late 1Q 2018
·      Bojangles (BOJA) Q3 EPS 17c/$133.4M vs. est. 17c/$133.9M; sees FY revenue $544M-$547M and EPS 77c-80c vs. est. $549.5M/82c
·      Fitbit (FIT) Q3 EPS loss (1c)/$392.5M vs. est. loss (4c)/$391.8M; reports 3.6M devices sold in Q3, up 7% sequentially; said 42% of the activations in the quarter came from customers who made repeat purchases; sees Q4 EPS (3c)-1c on revs $570M-$600M vs. es.t loss (3c)/$578.1M
·      Funko (FNKO) 10.4M share IPO priced at $12.00
·      Hanesbrands (HBI) Q3 EPS 60c/$1.8B vs. est. 60c/$1.8B; sees Q4 adjusted EPS 51c-53c on revs $1.625B-$1.65B vs. est. 56c/$1.63B; narrows FY17 adjusted EPS view to $1.93-$1.95 from $1.93-$2.03 (est. $1.98) and narrows FY17 revenue view to $6.45B-$6.475B from $6.45B-$6.55B
·      Kraft Heinz (KHC) Q3 EPS 83c/$6.31B vs. est. 82c/$6.32B; says built top- and bottom-line momentum in Q3; 3Q organic revenue +0.3% vs. Bloomberg estimate +1.5%
·      L Brands Inc. (LB) said Oct comp sales rose 2% and sees Q3 EPS on the high end of its prior guidance for earnings of 25c-30c and reiterated its full-year guidance for EPS of $3.00 to $3.20
·      Nu Skin (NUS) Q3 EPS 76c/$563.7M vs. est. 76c/$562.07M; sees Q4 EPS $1.16-$1.21 on revs $650M-$670M vs. est. $1.10/$664.88M, raises year EPS and narrows year revs
·      Shake Shack (SHAK) Q3 EPS 17c/$94.6M vs. est. 15c/$94.72M; Q3 comp sales decreased (-1.6%) vs. est. (-2.6%); said added nine new Shacks in both new and current markets at home and internationally; now expect to open 24 to 26 domestic company-operated Shacks and 18, net licensed Shacks in year; raises FY17 revenue view to $354M-$355M from $351M-$355M and raises FY17 Same-Shack sales view to (2%)-(1.5%) from (3%)-(2%).
·      Zumiez (ZUMZ) Oct com sales rose 6.6%; total net sales for the four-week period ended October 28 increased 10.0% to $61.5M, compared to $55.9M for the four-week period ended October 29
 
Energy
·      Gulfport Energy (GPOR) Q3 EPS 32c/$302.5M vs. est. 33c/$302.07M; sees FY E&P capex $1.16B; Q3 production 1,200 mmcfe/d; reiterated 2017-year production guidance
·      Occidental Petroleum (OXY) Q3 core EPS 18c vs. est. 11c; said Hurricane Harvey impacted Q3 income by $70M in the Chemical and Midstream segments and reduced average daily production by 1,000 barrels of oil equivalent in the company’s Permian Resources operations; Q3 total average daily production volumes were 600,000 BOE
·      Pioneer Natural (PXD) Q3 EPS 48c/$1.46B vs. est. 29c/$1.04B; produced 276K BoE per day, an increase of 17 MBOEPD, or 6%, compared to Q2; Q3 production was negatively impacted by 3,500 barrels oil equivalent per day due to Hurricane Harvey and unplanned downtime at a third-party gas processing facility; raises 2017 capital budget to $2.75B from $2.70B
·      Transocean (RIG) Q3 EPS 16c/$808M vs. est. loss (5c)/$700.5M; 3Q revenue efficiency 97.1%
·      Williams (WMB) Q3 EPS 15c/$1.89B vs. est. 17c/$1.74B; Q3 adjusted Ebitda $1.11B
·      WPX Energy (WPX) Q3 EPS loss (10c) vs. est. loss (12c); sees FY production 106 to 117 mboe/d after 3Q production 112.0 mboe/d
 
Financials
·      Allstate (ALL) Q3 EPS $1.60/$9.66B vs. est. 87c; 3Q net premiums written $8.58 billion; Q3 net premiums earned $8.12 billion and 3Q underlying combined ratio 85.4%
·      MetLife (MET) Q3 operating EPS $1.09/$16.77B vs. est. 92c; book value, excluding accumulated other comprehensive income other than foreign currency translation adjustments, was $40.96 per share, down 23% from $53.40 per share at September 30, 2016; approved a new $2 billion authorization for share repurchases
·      Lincoln National (LNC) Q3 EPS $1.94/$3.61B vs. est. $1.84/$3.59B; 3Q book value per share $74.31; 3Q return on equity 10.3%; raised dividend to 33c
·      Prudential (PRU) Q3 EPS $3.01 vs. est. $2.71; Assets under management $1.37 trillion and Q3 adjusted book value per share $84.65
·      Annaly Capital (NLY) Q3 core EPS 30c (in-line) and reports Q3 Book value per common share of $11.42, up from $11.19 at June 30, 2017
·      FleetCor (FLT) Q3 EPS $2.18/$577.9M vs. est. $2.15/$576.96M; boosts share buyback program by $350M; raises FY17 adjusted EPS view to $8.38-$8.48 from $8.24-$8.44 (est. $8.39) and raises FY17 revenue view to $2.225B-$2.255B from $2.195B-$2.245B
·      Taubman Centers (TCO) Q3 FFO 8c/$3.89B vs. est. 68c; lowers FY17 FFO view to $3.49-$3.59 from $3.53-$3.63
 
Healthcare
·      AmerisourceBergen (ABC) Q4 EPS $1.33/$39.1B vs. est. $1.32/$40.1B; sees FY18 adjusted EPS $5.90-$6.15 vs. est. $6.04 and sees FY18 revenue growth 7%-9%
·      Cigna (CI) Q3 EPS $2.83/$10.4B vs. est. $2.36/$10.18B; raises FY17 adjusted EPS view to $10.20-$10.40 from $9.75-$10.05 (est. $10.03); sees FY17 revenue growth approximately 4%
·      Ionis Pharmaceuticals (IONS) reports data from Phase 3 NEURO-TTR study demonstrated early and significant benefit in both co-primary endpoints
·      Community Health (CYH) Q3 EPS loss (77c)/$3.67B vs. est. loss (29c)/$3.7B; on a same-store basis, both admissions and adjusted admissions decreased 2.3% YoY
·      Exelixis (EXEL) Q3 EPS 26c/$152.5M vs. est. 8c/$105M; said is focused on maximizing the opportunity for its two internally discovered compounds, cabozantinib and cobimetinib
·      Health Insurance Innovations (HIIQ) Q3 EPS 46c/$63.3M vs. est. 39c/$58.31M; sees FY17 EPS $1.50-$1.60 on revs $235M-$240M vs. est. $1.57/$234.55M
·      Juno (JUNO) Q3 EPS loss (73c)/$44.8M vs. est. loss (80c)/$17.3M
·      Neurocrine (NBIX) gains 16%; Q3 EPS loss (13c)/$60.77M above est. loss (49c)/$29.86M
·      Quidel (QDEL) Q3 adjusted EPS loss 17c/$50.9M vs. est. 13c/$50.26M
·      Teladoc (TDOC) Q3 EPS loss (55c)/$68.7M vs. est. loss (53c)/$67.6M; total membership of 22.6M was up 33% from prior year and total visits of 306K grew 51% from prior year; sees Q4 EPS loss (43c) to (41c) on revs $75M-$77M vs. est. (38c)/$77.3M; cuts FY17 EPS view to ($1.58) to ($1.56) from ($1.55) to ($1.52) and narrows FY17 revenue to $231M-$233M from $230M-$235M
·      Allena Pharmaceuticals (ALNA) 5.333M share IPO priced at $14.00
·      Intellia Therapeutics (NTLA) 6.25M share Secondary priced at $24.00
·      Spero Therapeutics (SPRO) 5.5M share IPO priced at $14.00
 
Industrials & Materials
·      DowDuPont (DWDP) Q3 EPS 55c/$18.3B vs. est. 42c/$18.01B; also announced actions taken to generate cost savings of $3 billion
·      CF Industries (CF) cut its capital expenditure forecast for the full year to $375M from $400M; Q3 EPS loss (39c)/$870M vs. est. loss (55c)/$736.2M
·      Ferro (FOE) raises 2017 adjusted EPS outlook to $1.26-$1.29 from $1.22-$1.27 and raises 2017 consolidated sales growth outlook to 17.0%-17.5% from 12.0%-13.0%
·      Flowserve (FLS) Q3 adjusted EPS 37c/$883.4M vs. est. 34c/$871.8M; sees FY adjusted EPS $1.30-$1.40 vs. est. $1.40 and sees FY revenue -7% to -9%
·      Itron (ITRI) Q3 EPS 77c/$486.7M vs. est. 89c/$526.6M; sees 2017 EPS at or above low end of prior guidance and sees 2017 revenue at or modestly below the low end of prior view
·      Rayonier (RYN) Q3 EPS 19c/$177.9M vs. est. 5c/$141.48M; sees year adjusted Ebitda near higher end of prior forecast
·      Rexnord (RXN) Q3 EPS 32c/$510.8M vs. est. 32c/$505.38M; raises FY17 net income view to $95M-$102M from $87M-$107M
·      Evoqua Water Technologies (AQUA) 27.778M share IPO priced at $18.00
 
Technology, Media & Telecom
·      Facebook (FB) Q3 EPS $1.59/$10.33B vs. est. $1.28/$9.84B; Daily active users were 1.37B on average for September 2017, an increase of 16% YoY; Monthly active users were 2.07B as of September 30, 2017, an increase of 16% YoY (est. 2.04B); Mobile advertising revenue represented approximately 88% of advertising revenue for Q3, up from approximately 84% of advertising revenue in Q3 of 2016
·      Acxiom (ACXM) Q2 EPS 22c/$225M vs. est. 19c/$222.49M; raises FY17 adjusted EPS view to 80c-85c from roughly 80c and backs year revenue outlook
·      Arris (ARRS) Q3 EPS 80c/$1.73B vs. est. 69c/$1.77B; sees 4Q EPS 74c-80c on revs $1.68B-$1.75B vs. est. 81c/$1.82B
·      Cavium (CAVM) Q3 EPS 76c/$252M vs. est. 74c/$250.1M; 3Q adjusted gross margin 66%
·      Ctrip.com (CTRP) Q3 EPS 41c/$1.2B vs. est. 24c/$1.15B; sees Q4 net revenue growth 25%-30%
·      Electro Scientific (ESIO) shares jumped 32%; Q2 EPS 39c/$71.0M vs. est. 27c/$65.5M; sees Q3 EPS 48c-60c on revs $80M-90M well above estimates of 2c/$44.5M
·      FireEye (FEYE) raises FY17 EPS view to (19c)-(16c) from (24c)-(19c) vs. est. loss (21c) and raises FY17 revenue view to $739M-$745M from $734M-$746M vs. est. $741.81M; Q3 EPS loss (4c)/$189.6M vs. est. loss (7c)/$186.4M; Q4 billings forecast of $210M-$230M missed estimates of $237M
·      GoPro (GPRO) shares fell -10%; Q3 EPS 15c/$330M vs. est. 2c/$313.1M;sees Q4 EPS 37c-47c on revs $470M, plus or minus $10M below est.56c/$521.4M; sees Q4 gross margin of 41.5% +/- 50 bps; ended 3Q with cash balance $197M, up from $150M in 2Q
·      Impinj (PI) shares fell -24%; Q3 EPS loss (8c)/$32.6M vs. est. loss (3c)/$32.58M; sees Q4 EPS (24c)-(16c) on revenue $28.25M-$29.75M vs. est. 2c/$35.43M
·      Qualcomm (QCOM) Q4 EPS 92c/$5.96B vs. est. 81c/$5.8B; sees Q1 adjusted EPS 85c-95c, vs. consensus 90c and sees Q1 MSM chip shipments 220M-240M after Q4 220M
·      Oclaro (OCLR) Q1 EPS 20c/$155.6M vs. est. 18c/$154.32M; sees 2Q revenue $135M-$143M vs. est. $159.1M and sees 2Q adjusted gross margin 36% to 39% vs. estimate 40.2%
·      Qorvo (QRVO) Q2 EPS $1.52/$820.6M vs. est. $1.43/$812.62M; sees Q3 EPS of $1.60 on revs $830M-$850M, below est. $1.74/$894M
·      Symantec (SYMC) shares fell -9%; Q2 EPS 40c/$1.24B vs. est. 43c/$1.27B; sees Q3 EPS 42c-46c on revs $1.25B-$1.28B below consensus 51c/$1.32B and cuts year forecast
·      Ultimate Software (ULTI) Q3 EPS $1.05/$236.1M vs. est. 88c/$232.89M; sees 4Q revenue $242M-$246M vs. est. $250.1M; sees FY18 revenue up roughly 19%,
·      Viavi (VIAV) Q1 EPS 11c/$195.2M vs. est. 8c/$183.89M; sees Q2 non-GAAP ES 6c-8c on revs $175M-$195M vs. est. 9c/$196.2M
·      Yelp (YELP) Q3 EPS 29c/$222.4M vs. est. 21c/$220.8M; said transactions revenue totaled $18.5M, representing 16% growth YoY; other services revenue totaled $4.3M, compared to $1.4M YoY; sees Q4 net revenue $211M-$216Mvs. est. $233.59M; sees FY17 revenue $839M-$844M vs. est. $860.72M
·      ZAGG (ZAGG) Q3 EPS 34c/$134.4M vs. est. 33c/$128.23M
·      Intuit (INTU) named Diego Rodriguez as executive VP, chief product and design officer
 
 
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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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