Morning Preview: March 13, 2019

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Early Look

Wednesday, March 13, 2019

Futures

Up/Down

%

Last

DJ Industrials

-18.00

0.07%

25,571

S&P 500

2.50

0.08%

2,799

Nasdaq

7.00

0.10%

7,241

 

 

Stock futures are mostly flat across the board, while Asian markets declined and European markets are mixed to little changed as well on slowing growth fears and political issues (UK) weigh on sentiment. Overnight, Japan’s machinery orders fell in January at the fastest pace in four months, pushing the Nikkei down more than 1%, while in Australia, an index of consumer sentiment slipped in March. The optimism over China/US trade talks have eased after U.S. Trade Representative Robert Lighthizer said in testimony to Congress yesterday it was unclear whether gaps between the two sides could be closed. In the U.S. today, PPI inflation data after CPI data yesterday was “softer” than expected. In the U.K. Parliament rejected PM May’s Brexit deal late day by a margin of 391-242. Lawmakers will now have the chance to vote on whether they want a hard, no-deal Brexit on Wednesday, followed by a vote on a possible extension of the March 29 Brexit deadline on Thursday. In Asian markets, The Nikkei Index fell -213 points to settle at 21,290, the Shanghai Index dropped -33 points to close at 3,026 and the Hang Seng Index dropped -113 points to 28,807. In Europe, the German DAX is down a few points at 11,520, while the FTSE 100 is up a few points above 7,150.

 

U.S. stocks finished Tuesday mixed as the Dow Industrial Average closed lower following another day of losses for Boeing, falling -6.4% (the index’s most heavily weighted component) on growing concerns over the company’s 737 Max aircraft, while the S&P 500 and Nasdaq gained, led by technology, energy and healthcare sectors. Countries that have banned flights of the plane include the U.K., Singapore, Australia, China, Indonesia, Malaysia, Oman and Ethiopia. Inflation data sent Treasury yields lower, February consumer price data came in “softer” than expected (10-year fell to 2.61%). Today, investors get a look at February Producer Prices.

Market Closing Prices Yesterday

·     The S&P 500 Index climbed 8.22 points, or 0.30%, to 2,791.52

·     The Dow Jones Industrial Average fell -96.22 points, or 0.38%, to 25,554.66

·     The Nasdaq Composite spiked 32.97 points, or 0.44%, to 7,591.03

·     The Russell 2000 Index advanced 0.96 points, or 0.06% to 1,549.83

 

Events Calendar for Today

·     7:00 AM EST      MBA Mortgage Applications Data

·     8:30 AM EST      Producer Price Index MoM for February…est. 0.2%

·     8:30 AM EST      PPI Ex: Food & Energy MoM for February…est. 0.2%

·     8:30 AM EST      PPI Ex: Food & Energy YoY for February…est. 2.6%

·     8:30 AM EST      Durable Goods Orders, Jan-P…est. (-0.4%)

·     8:30 AM EST      Durable Goods Ex: Transportation, Jan-P…est. 0.1%

·     10:00 AM EST    Construction Spending MoM for January…est. 0.5%

·     10:30 AM EST    Weekly DOE Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: AAC, BBW, EXPR, SYNC, TRVN, VRA

·     Earnings After the Close: ACTG, AXAS, CLDR, DOMO, MDB, SMRT, SMTC, VKTX

 

Other Key Events:

·     Barclay’s Global Healthcare Conference, 3/12-3/14, in Miami, FL

·     Cowen 39th Annual Healthcare Conference, 3/11-3/13, in Boston, MA

·     Deutsche Bank 2019 Media & Telecom Conference, 3/11-3/13, in Palm Beach, FL

·     William Blair 3rd Annual Technology Conference, 3/13 in Boston

 

 

Macro

Up/Down

Last

WTI Crude

0.54

57.41

Brent

0.46

67.13

Gold

10.60

1,308.70

EUR/USD

0.0008

1.1296

JPY/USD

-0.03

111.33

10-Year Note

+0.008

2.619%

 

 

Sector News Breakdown

Consumer

·     Adidas AG (ADDYY) swung to a Q4 profit and raised its dividend for the year by nearly a third; said it expects 2019 currency-adjusted revenue growth of between 5% and 8%; forecast a 2019 operative margin of between 11.3%-11.5% and expects profit from continuing operations to rise between 10% and 14%.

·     American Public (APEI) Q4 EPS 55c/$76.9M vs. est. 52c/$77.1M; sees 1Q EPS 29c-34c vs. est. 40c; sees 1Q revenue -5% to 0%

·     Bridgepoint Education (BPI) Q4 adjusted EPS loss (23c)/$94.7M vs. est. loss (25c)/$97.6M; 4Q total student enrollment 38,153

·     Zagg (ZAGG) Q4 EPS 52c/$166.5M vs. est. 49c/$163.29M; CEO confident in long-term goal of $1B in annual sales; sees FY19 EPS $1.47-$1.60 on revs $610M-$630M vs. est. $1.65-$627.01M

·     Rite-Aid (RAD) said that CEO Standley and other top executives are leaving the company amid a restructuring aimed at cutting costs; will “reduce managerial layers and consolidate roles across the organization,” eliminating about 400 full-time positions, or more than 20% of corporate jobs

·     American Outdoor Brands (AOBC) downgraded to Neutral from Outperform at Wedbush

 

Energy, Industrials & Materials

·     The American Petroleum Institute (API) reported that U.S. crude supplies fell by -2.6M barrels for the week ended March 8, showed that gasoline stockpiles dropped by -5.8M barrels, while distillate inventories rose by 195,000 barrels

·     PG&E Corp. (PCG) will not face criminal charges related to devastating wildfires in Northern California’s Wine Country that killed 46 people in 2017 according to a statement by the Sonoma County District Attorney’s office

·     Clean Energy (CLNE) Q4 EPS loss (1c)/$96.2M vs. est. loss (5c)/$77.53M

·     Clearwater Paper (CLW) Q4 adjusted EPS 45c/$428.7M vs. est. 45c/$414.3M; sees Q1 adj. EPS 16c-40c and sees Q1 revenue 1%-2% lower

·     Halcon Resources (HK) Q4 EPS loss (9c)/$60.3M vs. est. loss (7c)/$64.6M; 4Q avg production 17,196 boe/d vs. 6,283 y/y; 4Q realized crude price/barrel $49.41 vs. $52.61 y/y and 4Q realized natural gas price per thousand cubic feet $1.05 vs. $2.09 y/y; sees FY19 production 19K- 22K Boe/d

 

Financials

·     American Express (AXP) hosts its investor day scheduled for Wednesday at 9:00 AM EST this morning

·     Everi Holdings (EVRI) Q4 EPS 6c/$119.5M vs. est. loss (5c)/$114.2M; sees 2019 adjusted Ebitda $252M-$255M vs. est. $248M

·     Manning & Napier (MN) reported preliminary assets under management as of February 28 of $20.8B compared with $20.7B at January 31, and $20.2B at December 31, 2018

·     Hercules Capital (HTGC) CEO Manuel Henriquez has voluntarily stepped aside as Chairman and CEO, effective immediately. The board has elected Robert Badavas, currently Lead Independent Director to be Interim Chairman of the Board

 

Healthcare

·     Glaukos (GKOS) says a study conducted in Germany showed use of iStent Trabecular Micro-Bypass Stent during cataract surgery delivered a 38% reduction in mean intraocular pressure after five years of follow-up

·     Guardant Health (GH) Q4 EPS loss (30c)/$32.9M vs. est. loss (36c)/$25.8M; 4Q cash and cash equivalents $496.5M

·     Natera (NTRA) Q4 EPS loss (51c)/$67M vs. est. loss (52c)/$64M; sees 2019 revenue $275M-$302M vs. est. $287.5M

·     Sientra (SIEN) Q4 EPS loss (86c)/$19M vs. est. loss (68c)/$18.83M; Q4 adjusted Ebitda loss $19.5M; Q4 cash and cash equivalents $86.9M

 

Technology, Media & Telecom

·     Spotify (SPOT) has filed an antitrust complaint with EU regulators against Apple (AAPL), claiming the tech giant unfairly limits competitors to its own Apple Music streaming service, Reuters reports

·     MercadoLibre (MELI) 2.1M share Secondary priced at $480.00

·     Cohu (COHU) Q4 adjusted EPS 24c/$170.6M vs. est. 19c/$173.5M; sees Q1 sales roughly $145M vs. est. $170.43M

·     Switch (SWCH) Q4 EPS 5c/$103.2M vs. est. 3c/$104.15M; 4Q adjusted Ebitda $53.6M vs. est. $51.1M; sees FY revenue $436M-$445M vs. est. $449.8M; Sees FY19: Adjusted EBITDA in the range of $217M-$223M, representing a 50% EBITDA margin at the midpoint; Capital expenditures in the range of $210M-$260M

·     Synchronoss (SNCR) Q4 EPS loss ($2.49) on revs $82.1M; says agreement will white-label our Synchronoss cloud platform for its Pocket Geek solution which is offered in their device protection bundles

·     Pareteum (TEUM) projected 2019 sales that topped the estimate and 4Q revenue and EPS that beat; sees 2019 revenue $105M-$115M vs. est. $103.6M and sees positive adjusted Ebitda and cash flow in 2019

_________________________________________________________________

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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