Morning Preview: September 26, 2019

Auto PostDaily Market Report

Early Look

Thursday, September 26, 2019





DJ Industrials




S&P 500










Stocks futures in the U.S. are moving higher, following strong gains on Wednesday and overnight advances in both Asia and Europe, as signs of easing trade tensions with China outweighed political drama in Washington. President Donald Trump suggested a trade deal with China was possible and showed signs of moving toward a pact with Japan. The headlines trumped calls from Democrats to impeach President Trump following a transcript from a phone call with the Ukrainian President asking to look into Joe Biden’s son. The Ukraine President aid that “nobody pushed me,” in reference to questions about pressure from Trump to investigate Biden and his son. In new details overnight, the whistleblower complaint that focused on President Donald Trump’s request of Ukraine’s government to investigate former Vice President Joe Biden also alleges White House officials moved the records of some of Trump’s communications with foreign officials onto a separate computer network. It appears there will be no quick end to this inquiry and drama in Washington, likely hurting chances for a deal with China on trade along with other policies. Elsewhere on the trade front, China reportedly is buying more pork from the U.S, partly due to African swine fever which has afflicted the Chinese herd. In Asian markets, The Nikkei Index gained 28 points to 22,048, the Shanghai Index declined -26 points to 2,929 and the Hang Seng Index rose 96 points to 26,041. In Europe, the German DAX is higher by about 60 points at the 12,300 level, while the FTSE 100 is up around 90 points to 7,380. The SmallCap Russell 2000 snapped its 6-day losing streak yesterday, while energy was weak with WTI crude falling -1.4% and Treasury yields rising across the board, pushing yields lower along with gold prices (which fell 1.8%).

Market Closing Prices Yesterday

·     The S&P 500 Index gained 18.27 points, or 0.62%, to 2,984.87

·     The Dow Jones Industrial Average rose 162.94 points, or 0.61%, to 26,970.71

·     The Nasdaq Composite surged 83.76 points, or 1.05%, to 8,077.38

·     The Russell 2000 Index advanced 17.07 points, or 1.11% to 1,550.65


Events Calendar for Today

·     8:30 AM EST      Gross Domestic Product (GDP), Q2-T…est. 2.0%

·     8:30 AM EST      Personal Consumption for Q2-T…est. 4.7%

·     8:30 AM EST      GDP Price Index, Q2-T…est. 2.4%

·     8:30 AM EST      Core PCE QoQ, for Q2-T…est. 1.7%

·     8:30 AM EST      Advance Goods Trade Balance for Aug…est. (-$73.4B)

·     8:30 AM EST      Weekly Jobless Claims…est. 212K

·     8:30 AM EST      Continuing Claims…est. 1.66M

·     9:30 AM EST      Fed’s Kaplan give opening remarks at Dallas Fed Conference

·     10:00 AM EST    Pending Home Sales MoM for Aug…est. 1.0%

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

·     11:00 AM EST    Kansas City Fed Manufacturing for Sept…est. (-4)


Earnings Calendar:

·     Earnings Before the Open: CAG, FDS, RAD

·     Earnings After the Close: CAMP, MTN, MU


Other Key Events:

·     Bernstein Annual Strategic Decisions Conference, 9/25-9/26, in London, England

·     Cowen 22nd Annual Therapeutics Conference, 9/25-9/26, in New York

·     Jefferies Data Conference,9/25-9/26, in London

·     Jefferies MISD Cap Growth Summit, in Denver, CO

·     Roth Capital Annual Solar & Storage Symposium, 9/23-9/26, in Salt Lake, UT

·     Wells Fargo Consumer Conference & Beauty Forum, 9/25-9/27, in CA






WTI Crude















10-Year Note





World News

·     The whistleblower complaint that focused on President Donald Trump’s request of Ukraine’s government to investigate former Vice President Joe Biden also alleges White House officials moved the records of some of Trump’s communications with foreign officials onto a separate computer network, according to a published report. The Washington Post, citing a person who has read the complaint, reported the whistleblower alleged officials moved communications from Trump’s July 25 call with Ukrainian President Volodymyr Zelensky onto a different network.

·     Ukraine President Zelenskiy spoke Wednesday in New York during a meeting with Trump as Washington was consumed with questions about what transpired during a July phone call between the two leaders. “We had I think good phone call,” Zelenskiy said. “It was normal. We spoke about many things. I think, and you read it, that nobody pushed it.”


Sector News Breakdown


·     Peloton Interactive (PTON) priced its 40M initial public offering at $29 a share at the high end of the company’s anticipated price range of $26-$29 a share; the company will have just shy of 280 million shares outstanding, giving the company a market cap of $8.1 billion

·     KB Homes (KBH) Q3 EPS 73c/$1.16B vs. est. 66c/$1.17B; Q3 net orders rose 24% vs. est. 13% with net order value increasing 25% to $1.28B and qtrly homes delivered increased slightly to 3,022; Average selling price of $381,400 decreased 7%, mainly due to a community mix shift within the Company’s West Coast region; ending backlog rose 14% to 6,230 homes/ending backlog value grew to $2.30B, up 13% from $2.04B, with increases in all regions

·     McDonald’s (MCD) said it will trial a plant-based burger made by Beyond Meat (BYND) starting Sept. 30, as McDonald’s will sell what it will called the P.L.T. — Plant. Lettuce. Tomato. — in 28 restaurants in Southwestern Ontario. The trial is slated to run for 12 weeks

·     Pier 1 (PIR) reported comparable sales for the second quarter of -12.6% vs. -11.4% YoY with gross margin down at 16.7% vs. 26.3% YoY; Q2 adjusted Ebitda loss $80.9M and Q2 net sales $304.6M

·     Forestar Group (FOR) 5.25M share Secondary priced at $17.50

·     British Airways parent IAG warned that its full-year profits will be 6% lower than last year after pilot strikes earlier this month wreaked havoc



·     NGL Energy Partners (NGL) agreed to acquire Hillstone Environmental Partners from Golden Gate Capital for about $600 million, subject to certain adjustments.

·     Timken (TKR) downgraded to Underperform from Neutral at Bank America

·     Sunoco (SUN) files $300M securities shelf



·     Raymond James (RJF) reported financial assets under management for August of $142.8 billion, +1% YoY; assets under administration $825.1 billion, +4.6% YoY

·     Plymouth Industrial REIT (PLYM) 3M share Spot Secondary priced at $18.00

·     Northern Trust (NTRS) downgraded to Neutral from Buy at UBS on valuation

·     Oportun Financial (OPRT) 6.25M share IPO priced at $15.00

·     Palomar (PLMR) 5.25M share Secondary priced at $36.50



·     Hologic (HOLX), Bruker (BRKR), PerkinElmer (PKI) all upgraded to Buy from Neutral at Bank America while the firm downgraded Myriad Genetics (MYGN) to underperform from neutral

·     Enanta Pharmaceuticals (ENTA) announced topline results from its ARGON-1 Phase 2a study of EDP-305 for the treatment of non-alcoholic steatohepatitis. The ARGON-1 study was a 12-week, randomized, double-blind, placebo-controlled Phase 2a study evaluating the safety, tolerability, pharmacokinetics and efficacy of EDP-305 in a NASH population. The study’s primary endpoint was achieved


Industrials & Materials

·     AAR Corp. (AIR) Q1 adjusted EPS 57c/$541.5M vs. est. 51c/$495.03M; backs FY20 adjusted EPS view $2.45-$2.65 (est. $2.57) and also backs FY20 revenue view $2.1B-$2.2B (vs. est. $2.15B); said continue to expect selling, general and administrative expenses to be approximately 10.5% of sales and anticipate an effective tax rate of 24% in Fiscal Year 2020

·     H.B. Fuller (FUL) shares fall -7% after lowering guidance; Q3 adjusted EPS 86c/$725M vs. est. 90c/$749.3M; sees FY EPS $2.95-$3.05, down from prior view $3.10-$3.30; also announces operating segment alignment from five to three segments


Technology, Media & Telecom

·     Oracle Corp (ORCL), which has clashed with Alphabet’s Google (GOOGL) over a range of business issues, has received requests for information from congressional and state investigators looking into allegations the company violated antitrust law – Reuters reported

·     Ericsson (ERIC) said its Q3 results will be impacted by a 12 billion Swedish krona ($1.23 billion) provision it is making in relation to probes by the U.S. SEC and the Department of Justice.

·     The U.S. Justice Department will open an antitrust investigation of Facebook Inc. (FB), a source familiar with the matter said on Wednesday – Reuters

·     SoftBank is considering investing an extra $1b or more to change the terms of a warrant agreement it struck this year with WeWork, the Financial Times reports

·     Lattice Semiconductor Corporation (LSCC) and Synopsys, Inc. (SNPS) announced the extension of their multi-year OEM licensing agreement for Synopsys’ Synplify® FPGA synthesis tools

·     Pearson (PSO) warned weak sales to US universities and students would weigh on profits this year, sending shares in the educational publisher lower


Content is provided by Hammerstone Inc., which has no affiliation with Regal Securities, Inc. (“Regal”) This commentary is provided for information purposes only, and is not a recommendation, offer or solicitation by Regal to buy or sell securities or to adopt any investment strategy. Regal has not participated in the creation of the Hammerstone content and does not directly or indirectly endorse the content. Any reliance on this material is at the sole discretion of the reader.

Live Trading

Open an Account

Paper Trading