Morning Preview: April 15, 2019

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Early Look

Monday, April 15, 2019

Futures

Up/Down

%

Last

DJ Industrials

46.00

0.17%

26,454

S&P 500

0.50

0.03%

2,913

Nasdaq

-2.50

0.03%

7,649

 

 

U.S. stock futures are mixed to start the week, as investors turn their attention to quarterly earnings, though President Trump is once again making waves overnight in a attack against the Fed. President Trump ramped his verbal attack against the Fed again this weekend, saying in a tweet” if the Fed had done its job properly, which it has not, the Stock Market would have been up 5000 to 10,000 additional points, and GDP would have been well over 4% instead of 3%…with almost no inflation. Quantitative tightening was a killer, should have done the exact opposite!” Regarding trade, Bloomberg reported that China is considering a U.S. request to shift some tariffs on key agricultural goods to other products so the Trump administration can sell any eventual trade deal as a win for farmers ahead of the 2020 election. The step would involve China moving retaliatory duties it imposed starting last July on $50 billion worth of U.S. goods to non-agricultural imports. More bank earnings today, with Dow component Goldman Sachs (GS) and Citigroup (C) earnings both expected, following results from JPM on Friday (good) and Wells Fargo (not as good). Banks dominate this week’s earnings, sprinkled in with some large cap tech and healthcare results as well. In other corporate news, Waste Management agreed to buy smaller rival Advanced Disposal in a near $5B deal. In Asian markets, The Nikkei Index jumped 298 points to settle at 22,169, the Shanghai Index dipped -10 points to 3,177 and the Hang Seng Index slipped -99 points to 29,810. In Europe, the German DAX is up about 10 points holding just above the 12,000 level, while the FTSE 100 is flat at 7,440.

Market Closing Prices Yesterday

·     The S&P 500 Index jumped 19.09 points, or 0.66%, to 2,907.41

·     The Dow Jones Industrial Average rose 269.25 points, or 1.03%, to 26,412.30

·     The Nasdaq Composite gained 36.80 points, or 0.46%, to 7,984.16

·     The Russell 2000 Index advanced 5.66 points, or 0.36% to 1,584.80

 

Events Calendar for Today

·     8:30 AM EST      Empire Manufacturing Index for April…est. 8.0

·     4:00 PM EST       Net-Long term TIC Flows for February…prior (-$7.2B)

 

Earnings Calendar:

·     Earnings Before the Open: C, GS, JBHT, MTB, SCHW, SGRP

·     Earnings After the Close: PNFP, SFBS, WTFC

 

Other Key Events:

·     1:00 PM EST       Fed’s Evans discusses the economy and monetary policy

·     8:00 PM EST       Fed’s Rosengren speaks ad Davidson college in N.C.

 

 

Macro

Up/Down

Last

WTI Crude

-0.54

63.35

Brent

-0.54

71.01

Gold

-4.50

1,286.00

EUR/USD

0.001

1.1309

JPY/USD

-0.10

111.92

10-Year Note

-0.01

2.558%

 

 

World News

·     Reuters published a report suggesting European Central Bank would prefer to use negative rates on Targeted Long-Term Refinancing Operations (TLTROs) to support banks meeting their lending targets, rather than tiered rates – Marketwatch.com on Friday

·     Tiger Woods rallied to win the Masters for the fifth time Sunday, a comeback that goes well beyond the two-shot deficit he erased. Woods had gone nearly 11 years since he won his last major, 14 years since that green jacket was slipped over his Sunday red shirt.

·     Finland’s leftist Social Democrat party (SDP) leader Antti Rinne has declared victory in Sunday’s general election, after partial results showed his party winning by a tight margin with 17.8% – Reuters

·     Steven Mnuchin said the U.S. is open to repercussions if it doesn’t live up to an accord and it’ll expect the same from China. But talks with Japan may be tricky. – Bloomberg

 

Sector News Breakdown

Consumer

·     Volkswagen plans to build a fully electric sports utility vehicle (SUV) for China from 2021, taking on the Chinese market leader Tesla’s (TSLA) Model X as the German carmaker ramps up production of zero emissions vehicles

·     The U.S. Centers for Disease Control and Prevention issued a food-safety alert on an outbreak of salmonella infections linked to pre-cut melons made by SpartanNash’s (SPTN) unit Caito Foods

 

Energy

·     Barron’s said oil drillers sitting on oil-rich land and offshore holdings are now poised to outperform, citing large U.S. names like Concho Resources (CXO), and Noble Energy (NBL), and the its favorite Diamondback Energy (FANG).

·     Barron’s also said the proposed purchase of Anadarko Petroleum (APC) by Chevron (CVX) is sparking new enthusiasm for other companies whose stocks have been dormant, even as the price of crude oil has risen

·     Phillips 66 (PSX) and EnLink Midstream (ENLC) downgraded to Hold from Buy at Jefferies

 

Financials

·     Publicis agreed with Alliance Data (ADS) to buy its Epsilon unit for $4.4B in cash or $3.95B after tax step-up; Publicis says it plans to build a strategic partnership with Alliance Data remaining business https://on.mktw.net/2Gq0evN

·     M&T Bank (MTB) Q1 operating EPS $3.38 vs. est. $3.30; Q1 provision for credit losses $22M and Q1 NIM 4.04%

·     Franklin Resources (BEN) and Artisan Partners (APAM) upgraded to Neutral from sell at Citigroup

·     JPMorgan (JPM) March Credit-Card Charge-Offs 2.55% vs. 2.25% in February and March delinquencies 1.23%, vs. 1.25% in February

 

Healthcare

·     Clovis Oncology (CLVS) shares fell -12% after discontinuing its Phase 2 open-label monotherapy clinical trial evaluating rucaparib in recurrent, metastatic bladder cancer. The decision was based on recommendations by an independent data monitoring committee after preliminary efficacy data indicated the objective response rate did not meet the protocol-defined continuance criteria

·     Alcon (ALC) mentioned positively in Barron’s saying it deserves another look now that the leader in ocular surgical supplies and No. 2 in contact lenses has become independent from Novartis (NVS) and is poised to benefit from an aging population and an increase of myopia incidence.

·     Alnylam’s (ALNY) givosiran showed a 74% mean and 90% median reduction in the primary endpoint measure of annualized rate of composite attacks in patients on givosiran relative to placebo, according to results from a phase 3 study

·     CVS (CVS) has assets that “leave it uniquely well positioned for a future when consumers gain more control over health care, and prices fall” and that means it’s time to buy the shares, Barron’s said in its cover story.

 

Industrials & Materials

·     Waste Management Inc. (WM) announced a roughly $4.9 billion deal to buy its smaller rival Advanced Disposal Services Inc. (ADSW), as Waste Management would pay $33.15 a share in cash for Advanced Disposal https://on.mktw.net/2vb2uBv

·     American Airlines (AAL) has become the second major U.S. carrier to pull the grounded Boeing (BA) 737 Max from its flight schedule through the busy summer travel season.

·     A Defense Department notice showed that Boeing (BA) was awarded a $14.3 billion contract for the B-1/B-52 weapons system

·     Barron’s said the Brown Advisory Sustainable Growth fund likes some less-celebrated companies, including evolving manufacturer Danaher (DHR) and Ball Corp. (BLL), maker of metal beverage packaging and eponymous glass jars saying both companies have 25% upside within three years

·     DMC Global (BOOM) will replace Belmond (BEL) in the S&P SmallCap 600 effective prior to the open of trading on Thursday, April 18

 

Technology, Media & Telecom

·     Disney (DIS) said ’Captain Marvel’ posted an estimated $17 million global weekend, bringing its global total box office to $1.065 billion.

·     Spotify Technology SA (SPOT) shares slipped 3% in early trading after Billboard reported late Friday that Amazon.com Inc. is in talks to start a free ad-supported music service.

·     Microsoft (MSFT) confirmed to TechCrunch that a “limited” number of people who use web email services managed by the company had their accounts compromised but that the hackers could not read users’ emails

·     Disney (DIS) stock could continue to rise this year, Barron’s said noting that investors were “clearly impressed” with Disney’s targets presented at the company’s Investor Day and seem willing to wait out years of losses

·     Facebook (FB) suffered its third major outage this year, with users across the world unable to access the social network or Messenger, Instagram and WhatsApp

_________________________________________________________________

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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