Morning Preview: March 14, 2019

Auto PostDaily Market Report

Early Look

Thursday, March 14, 2019

Futures

Up/Down

%

Last

DJ Industrials

-24.00

0.09%

25,745

S&P 500

-3.50

0.11%

2,816

Nasdaq

-3.50

0.05%

7,293

 

 

Stock futures are slipping after trading flat overnight, following a Bloomberg report that a meeting between President Donald Trump and President Xi Jinping to sign an agreement to end their trade war won’t occur this month and is more likely to happen in April at the earliest. Asian equities were down on mixed economic data from China, as the Nikkei Index slipped -3 points to 21,287, the Shanghai Index dropped -36 points to 2,990 and the Hang Seng Index gained 43 points to settle at 28,851. In Europe, the German DAX is flat around the 11,570 level, while the FTSE 100 is up around 20 points at 7,180. Boeing shares dropped on Wednesday after U.S. regulators grounded the 737 Max family of airliners citing new evidence that a flight that crashed Sunday in Ethiopia may have experienced the same problem as a plane that went down five months ago off Indonesia. Stocks gained Wednesday following tamer than expected inflation data reducing pressure on the Federal Reserve to raise interest rates. Stocks rose across the board as the S&P 500 Index rallied to a four-month high after climbing for a third day to erase last week’s losses, with all 11-S&P 500 sectors advancing.

 

In the UK late yesterday, Parliament voted against a no-deal, hard Brexit, by a close margin (just four votes), but was still in-line with expectations. Lawmakers then confirmed a rejection of any no-deal in a follow-on vote. Parliamentarians also rejected the so-called Malthouse compromise, which included an extension of the March 29 deadline to May 22 to manage a no-deal exit. On Thursday, Parliament will vote on whether to request an extension to the March 29 deadline to reach a trade agreement with the European Union.

 

Market Closing Prices Yesterday

·     The S&P 500 Index jumped 19.40 points, or 0.69%, to 2,810.92

·     The Dow Jones Industrial Average rose 148.23 points, or 0.58%, to 25,702.89

·     The Nasdaq Composite gained 52.37 points, or 0.69%, to 7,643.41

·     The Russell 2000 Index advanced 6.05 points, or 0.39% to 1,555.88

 

Events Calendar for Today

·     8:30 AM EST      Weekly Jobless Claims…est. 225K

·     8:30 AM EST      Continuing Claims…est. 1.763M

·     8:30 AM EST      Import Prices MoM for February…est. 0.3%

·     9:45 AM EST      Bloomberg Consumer Comfort Index

·     10:00 AM EST    New Home Sales MoM for January…est. 0.2% to 622K

·     10:30 AM EST    Weekly EIA Natural Gas Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: AXSM, DG, GCO, INAP, XONE

·     Earnings After the Close: ADBE, ASUR, AVGO, JBL, NDLS, ORCL, PVTL, TLYS, ULTA, ZUMZ

 

Other Key Events:

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

·     Stephens Annual West Coast 1X1 Conference, 3/14 in San Francisco, CA

 

 

Macro

Up/Down

Last

WTI Crude

-0.13

58.13

Brent

-0.11

67.44

Gold

-11.40

1,297.90

EUR/USD

-0.0018

1.1309

JPY/USD

0.46

111.63

10-Year Note

+0.011

2.627%

 

 

World News

·     China’s economy showed more weakness as industrial output slowed despite a modest rebound in investment, as value-added industrial output in China rose 5.3% in the January to February period from a year earlier, slowing from a 5.7% year-over-year increase in December

·     German inflation remained stable in February, as the annual inflation rate measured 1.7%, the same rate as in January and in December 2018. Energy prices in Germany rose 2.9% from February last year, while prices for food and services both increased by 1.4%.

 

Sector News Breakdown

Consumer

·     Smart & Final Stores (SFS) Q4 adjusted EPS 8c/$1.1B vs. est. 12c/$1.09B; sees 2019 adjusted Ebitda $185M-$195M vs. est. $186.7M; sees 2019 net sales +2.5% to +3.5% and sees 2019 comparable sales +1.5% to +2.5%

·     Stein Mart (SMRT) Q4 EPS 9c/$340.8M and gross margin 27.1%; expects to maintain our improved 2018 gross profit rate with leverage of occupancy costs; anticipates flat to low single-digit increases in comparable sales in 2019

·     Tailored Brands (TLRD) Q4 adjusted EPS loss (28c)/$785.76M vs. est. loss (29c)/$786.23M; Men’s Wearhouse comparable sales decreased (-3.2%); comparable sales for clothing decreased primarily due to decreases in both transactions and units per transaction partially offset by an increase in average unit retail. Comparable rental services revenue increased 0.7%

 

Energy, Industrials & Materials

·     Abraxas Petroleum (AXAS) Q4 adjusted EPS 2c/$36.0M vs. est. 4c/$34.53M; Q4 crude oil equivalent production 10.5M BOE/D vs. 8.8M BOE/D last year

·     Legacy Reserves Inc. (LGCY) announced that it is evaluating potential strategic alternatives. Alternatives include sale or other business combination transaction, sales of assets, and financing transactions

·     Smart Sand (SND) Q4 revs $52.2M vs. est. $48.3M; Q4 adjusted Ebitda $18.7M vs. est. $12.3M; 4Q tons sold 610,000 vs. 706,400 y/y

·     Genesee & Wyoming’s (GWR) total traffic for February 2019 was 237,072 carloads, a decrease of 17,198 carloads compared with February 2018. Same railroad traffic in Feb. decreased 4,429 carloads, or 1.8% y/y

 

Healthcare

·     Melinta Therapeutics (MLNT) Q4 EPS loss ($3.94)/$35.49M vs. est. loss ($4.33)/$16.9M; 4Q cash and cash equivalents $81.8M; sees 2019 Net Product Sales of about $65M and sees 2019 Gross Margin of about 55%; expects to file supplemental new drug application to FDA for Baxdela in CABP in 2Q19

·     Viking Therapeutics (VKTX) said Phase 2 data from a study of VK2809 trial in the fatty liver disease, NAFLD, and hypercholesterolemia will be presented at the European Association for the Study of Liver meeting next month in Vienna.

 

Technology, Media & Telecom

·     Cloudera (CLDR) Q4 adjusted EPS loss (15c)/$144.5M vs. est. loss (11c)/$121.07M; sees Q1 adjusted EPS loss (25c)-(22c) on revs $187M-$190M vs. est. loss (11c)/$122.38M; sees Q1 subscription revenue in the range of $154M-$156M

·     Domo (DOMO) Q4 EPS loss (94c)/$39.41M vs. est. loss ($1.24)/$37.76M; sees Q1 EPS loss ($1.30)-($1.26) on revs $40M-$41M vs. est. loss ($1.40)/$38.93M

·     Facebook (FB) is facing criminal investigation into data sharing, NY Times reports. Federal prosecutors are pursuing a criminal investigation into deals that Facebook (FB) struck with global technology companies such as AMZN AAPL, MSFT and SNE, allowing the companies to see personal information, in some instances without user consent.

·     MongoDB (MDB) Q4 non-GAAP EPS loss (17c)/$85.5M vs. est. loss (38c)/$74.03M; sees FY20 non-GAAP EPS loss ($1.06)-(98c) on revs $363M-$371M vs. est. loss ($1.28)/$347.76; company adopted ASC 606 accounting effective as of Jan. 31, 2019, and applied retrospectively

·     Semtech (SMTC) Q4 adjusted EPS 55c/$160M vs. est. 53c/$158.48M; sees Q1 adjusted EPS 30c-36c on revs $125M-$135M below est. 51c/$156.16M

·     I.D. Systems, Inc. (IDSY) and Industrial Internet of Things (IoT) technology, and Pointer Telocation Ltd. (PNTR) entered into a definitive agreement whereby I.D. Systems will acquire all of the outstanding shares of Pointer in a cash/stock transaction valued at approximately $140M

_________________________________________________________________

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.

Live Trading

Open an Account

Paper Trading

Register