Morning Preview: November 07, 2019

Auto PostDaily Market Report

Early Look

Thursday, November 7, 2019

Futures

Up/Down

%

Last

DJ Industrials

149.00

0.54%

27,579

S&P 500

13.00

0.42%

3,088

Nasdaq

41.50

0.50%

8,248

 

 

Stocks futures in the U.S. are jumping, on track to open at fresh new highs for all major averages following reports overnight that China and the U.S. will cancel planned tariffs on each other’s products in stages, with the first agreement due to be signed in the next few weeks. The amount of tariff relief that’s coming will depend on what’s in that deal, said Ministry of Commerce spokesman Gao Feng, according to the report. The news is a welcome one for global stocks with major averages rising overseas as well as the Nikkei Index gained 26 points to 23,330, the Shanghai Index was little changed, holding at 2,978 and the Hang Seng Index jumped 158 points to 27,847. In Europe, the German DAX is higher by around 100 points to 12,275, while the FTSE 100 is up around 10 points above the 7,400 level. The news has also increased best on riskier assets while investors once again rotate out of safe-havens’ with gold prices down around -$10, the dollar moving above the 109 level against the Japanese yen, and Treasury prices sliding as the 10-year yield tops 1.87% (highest levels in over a month). U.S. stocks closed mixed Wednesday, after seeing record highs in recent days, as markets weighed a report that an interim China-U.S. trade deal could be delayed until December and weakness in the energy sector underscored by disappointing corporate quarterly results. Note coming into today, the Dow’s year-to-date gain now stands at nearly 18% after rallying 3.3% in the past month, the S&P 500 is up more than 22% this year after surging 4% in the past month. It was also a very busy night of earnings with details and highlights of top movers below.

 

Market Closing Prices Yesterday

·     The S&P 500 Index gained 2.16 points, or 0.07%, to 3,076.78

·     The Dow Jones Industrial Average slipped -0.07 points, or 0.00%, to 27,492.56

·     The Nasdaq Composite dipped -24.05 points, or 0.29%, to 8,410.63

·     The Russell 2000 Index declined -10.07 points, or 0.63% to 1,589.54

 

Events Calendar for Today

·     8:30 AM EST      Weekly Jobless Claims…est. 215K

·     8:30 AM EST      Continuing Claims…est. 1,682M

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

·     3:00 PM EST       Consumer Credit for September

 

Earnings Calendar:

·     Earnings Before the Open: ABC, ADNT, AMC, APD, AXSM, BCC, CAH, CATB, CBB, CEVA, CLVS, CNP, COMM, CORE, CRK, DISCA, ESI, EYE, GOGO, HAIN, JCI, KDP, MBUU, MCFT, MEET, NBL, NCLH, PLUG, PNW, RLGY, SEAS, TCP, TGNA, TRGP, VSTO, WRK, WWW, XRAY, ZTS

·     Earnings After the Close: AL, ALTR, AMBC, ATVI, BKNG, DBX, DIS, EB, ENV, EOG, EVRG, FSLY, G, GPRO, HEAR, JAG, LGF/A, MR, MTD, MTW, NCR, NDLS, NWSA, PLNT, RLJ, SEMG, SGMS, SRPT, STMP, SVMK, SWAV, SYMC, SYNA, TDC, TIVO, TRUE, TTD, TTWO, UPLD, VRTU, YELP, ZG

 

Other Key Events:

·     Piper Western Bank Symposium, 11/6-11/7, in Santa Monica, CA

·     RW Baird Global Industrial Conference, 11/5-11/7, in Chicago

·     Society of Immunotherapy of Cancer, 11/6-11/10, in Maryland

 

 

Macro

Up/Down

Last

WTI Crude

0.74

57.09

Brent

0.80

62.54

Gold

-10.00

1,483.10

EUR/USD

0.0021

1.1087

JPY/USD

0.17

109.15

10-Year Note

+0.047

1.875%

 

 

World News

·     China and the U.S. will cancel planned tariffs on each other’s products in stages, with the first agreement due to be signed in the next few weeks – Bloomberg

·     German industrial production continued to worsen, as output fell 0.6% in September, compared with economist estimates for a slide of 0.4% led by a decline in manufacturing, while construction and energy

 

Sector News Breakdown

Consumer

·     Costco (COST) Q3 comps +5.7% and U.S. comps ex-gas, FX +6.8%; Oct net sales $11.92B

·     e.l.f. Beauty (ELF) Q2 adjusted EPS 15c/$67.6M vs. est. 9c/$61.02M; said Q2 was another strong quarter with net sales of $68 Million, up 11% excluding e.l.f. stores; raises FY20 adjusted EPS view to 44c-48c from 37c-41c and ups FY20 revenue view to $265M-$272M from $246M-$256M

·     Fossil Cuts (FOSL) shares fall -22%; Q3 EPS loss (51c) on revs $539.5M vs. est. $558M; lowers 4Q gross margin 49% to 51% from 50% to 53%, and lowers Q4 sales to -5% to -10% from prior -5% to +1%; guides 4Q operating margin 7.5% to 9%, from 9% to 11%; lowers FY net sales -11% to -13%, from prior -8% to -12%; sees FY Ebitda $18M-$34M from $45M-$75M

·     SeaWorld (SEAS) Q3 EPS $1.24/$473.7M below est. $1.40/$489.75M; said Q3 attendance decreased by 0.2 million guests, or 2.6%, to 8.1 million guests from the third quarter of 2018; announced the appointment of Sergio Rivera to the position of CEO and member of the board, effective November 11

·     Wynn Resorts (WYNN) Q3 adjusted EPS 17c/$1.65B vs. est. 90c/$1.67B; Q3 Las Vegas Local Adjusted EBITDA down -7.6% YoY to $88.0M, Q3 adjusted property Ebitda down -21% YoY to $396.9M and 3Q total Macau operations property Ebitda down -26% YoY to $301.2M

·     Toyota Motor Corp. (TM) said that Q2 net profit rose 1.2% on year due to stronger sales in North America and Japan; net profit for the quarter-ended September amounted to 592.00 billion yen ($5.43 billion), and beat the estimate of Y509.01 billion

 

Energy, Industrials & Materials

·     EOG Resources (EOG) Q3 adjusted EPS $1.13/$4.3B vs. est. $1.13/$4.41B; 3Q U.S. total crude & condensate sales volume MMbbl/d 463.2 up +13% y/y

·     Marathon Oil (MRO) Q3 EPS 14c down from 24c YoY while Q3 revenue, other income $1.35B tops the $1.27B estimate; sees 4Q avg oil production 190,000 to 200,000 b/d after Q3 production 426 mboe/d, -2.1% QoQ; Q3 cash from operating activities $737 million, -23% YoY

·     SolarEdge (SEDG) reports record Q3 sales which rose 73% YoY to a quarterly record $410.6M and issuing upside guidance for Q4; Q3 revenues related to the solar business surged 66% Y/Y to $387.8M; non-GAAP gross margin for solar of 35.4% fell from 36.4% in Q2; guides Q4 revenues of $410M-$420M vs. est. $394.4M with gross margin of 32%-34%.

·     Antero Midstream (AM) files to sell 25.97M shares of common stock

·     Albemarle (ALB) Q3 adjusted EPS $1.53/$879.7M vs. est. $1.56/$879.14M; cuts FY19 adjusted EPS view to $6.00-$6.20 from $6.25-$6.65 (est. $6.12) while backs FY19 revenue view to $3.6B-$3.7B

·     Rent-A-Center (RCII) Q3 adjusted EPS 47c vs. est. 50c; comp sales rose 4.5% vs. est. 4.3%; narrows year EPS view to $2.10-$2.35 from prior $2.05-$2.40

 

Financials

·     Square (SQ) Q3 gross payment volume $28.2B vs. est. $28B, adj revs $602Mm vs. est. $597.1Mm; guides 4Q adj revs $585-595Mm below est. $618.7Mm and boosts FY adj EPS view to $0.76-0.78 from prior $0.74-0.78 (est. 77c); Q3 adjusted EPS of 25c topped the 20c estimate

·     Munich Re raised its full-year outlook after reporting a jump in net profit despite major losses from natural disasters; net profit for the period was 865 million euros ($958.1 million) compared with EUR483 million a year earlier, while gross premiums written rose by 7.4% to EUR13.74B

 

Healthcare

·     Aerie Pharmaceuticals (AERI) Q3 EPS loss ($1.09)/$18.5M vs. est. loss (80c)/$17.74M; said as of September 30, 2019, Aerie had cash and cash equivalents and investments of $345.8 million, reflecting the net proceeds from the convertible debt offering in September 2019

·     AmerisourceBergen (ABC) Q4 adjusted EPS $1.61/$45.6B vs. est. $1.58/$45.2B; guides FY20 adjusted EPS $7.30-$7.60 vs. est. $7.58 and sees FY20 revenue growth in the mid- to high-single digit percent range

·     DexCom (DXCM) shares rose 19%; Q3 adjusted EPS 65c/$396.3M vs. est. 20c/$347.9M; raises year rev view to $1.43B-$1.45B from $1.33B-$1.38B but lowers year margin view to 63% from 64%-65%

·     Lannett (LCI) 1Q adj EPS $0.22 vs. est. $0.19 on sales $127.3Mm; no change guide FY net sales $525-545Mm vs. est. $535.8Mm, adj gr margin 40-42%, adj EBITDA $145-160Mm vs. est. $152M

·     Livongo Health (LVGO) Q3 EPS loss (5c)/$46.7M vs. est. loss (13c)/$42.7M; guides Q4 revs $49M-$49.5M vs. est. $45.17M; sees FY revs $168.5-169Mm vs prior $159-162Mm; sees 4Q EBITDA loss $5-5.5Mm vs. est. loss $10.2Mm

·     Puma Biotechnology (PBYI) shares fell -17%; Q3 adjusted EPS loss (12c)/$56.4M vs. est. loss (71c)/$60.4M; Q3 Cash & Cash Equivalents fell 14% YoY to $58.9M; 3Q operating expenses $70.8 million, dropping -4.2% YoY; 3Q Nerlynx sales of $53.5M missed the estimates for $59M

·     Sangamo Biosciences (SGMO) 3Q revs $22Mm vs. est. $12.2Mm, EPS ($0.24) vs. est. ($0.34); still sees FY op exp $210-220Mm

·     Nektar (NKTR) Q3 EPS loss (56c)/$29.9M vs. est. loss (73c)/$26.4M; said with partner BMY, they are conducting registrational trials evaluating the combination of bempegaldesleukin with nivolumab in melanoma, urothelial cancer and renal cell carcinoma; said cash/equivalents down -63% YoY to $81.2M

·     Vanda Pharmaceuticals (VNDA) Q3 revs $59.5Mm vs. est. $58.3Mm, EPS $1.84 vs. est. $0.09; still sees FY revs $215-225Mm

 

Media & Telecom

·     CenturyLink (CTL) Q3 adjusted EPS 31c/$5.61B vs. est. 33c/$5.54B; said “we are pleased with our solid performance and are reiterating all of our financial outlook measures for the full year 2019”

·     Fox Corp. (FOXA) Q1 revs $2.67B vs. est. $2.60B, TV rev$1.36B vs. est. $1.35B, adj EPS $0.83 vs. est. $0.70; rev beat was driven by growth in its affiliate and television and cable-network programming businesses.

 

Technology

·     Applied Optoelectronics (AAOI) 3Q adj loss $0.15 vs. est. loss $0.24 on revs $46.1Mm vs. est. $47.9Mm; guides 4Q revs $46-49Mm vs. est. $52.3Mm, sees 4Q adj loss $0.21-0.30 vs. est. loss $0.19

·     Baidu (BIDU) Q3 adjusted EPS $1.76/$3.93B vs. est. $1.11/$3.88B; App traffic continues to grow robustly with DAUs reaching 189 million, up 25% year over year, in September and Baidu’s in-app search continues to gain market share; guides q4 revs $3.78B-$4.02B vs. est. $3.88B

·     Carvana (CVNA) 3Q adj loss $0.56 vs. est. loss $0.39 on revs $1.1B vs. est. $999.7Mm; raises FY19 revenue view to $3.85B-$3.95B from $3.6B-$3.7B; guides FY19: Retail unit sales of 174,000 – 176,000, an increase of 85%-87%

·     Expedia (EXPE) Q3 adjusted EPS $3.38/$3.56B vs. est. $3.80/$3.58B; reports revenue and gross bookings increased 9% in Q3; core OTA bookings were up 10% during the quarter, while VRBO bookings increased 5%. Domestic gross bookings increased 10% and international gross bookings increased 7% (including 3 percentage points of negative foreign exchange impact)

·     ForeScout Technologies (FSCT) guides FY revs $339-342Mm vs prior $365.3-375.3Mm, sees FY adj loss/share $0.80-0.82 vs. est. loss/share $0.48; said results were impacted by extended sales cycles, with the resulting revenue shortfall most pronounced in EMEA,

·     GoDaddy (GDDY) shares rose 11%; Q3 EPS 42c/$760.5M vs. est. 21c/$761.39M. Average revenue per user (ARPU) of $155, up 7.1% year over year; sees 2019 revenue $2.98B-$2.99B vs. est. $2.99B; expects full-year cash interest payments of approximately $80M and sees 2019 free cash flow $730M-$740M

·     Glu Mobile (GLUU) Q3 EPS loss (3c) on revs $107.1M; with margins 64.7% from 61.2% YoY but below vies above 65%; guides Q4 bookings $101.5M-$103.5M and year $416.4M-$418.4M from prior $406M-$410M

·     Qualcomm (QCOM) Q4 EPS 78c/$4.8B vs. est. 71c/$4.71B; guides Q1 EPS 80c-90c on revs $4.8B vs. est. 77c/$4.78B; sees Q1 MSM chip shipments 145M-165M vs. est. 149.8M; said delivered a strong quarter, with Non-GAAP earnings per share above the high end of our guidance range, primarily on solid performance in our QTL segment

·     Roku (ROKU) shares fell -14% after Q3 Ebitda forecast missed and Q3 customer accounts missed; 3Q net revs $260.9Mm vs. est. $257.3Mm, EPS ($0.22) vs. est. ($0.28), active accounts 32.3Mm up 1.7m from last quarter (est. 32.6m); guides FY net revs $1.11B vs. prior $1.08-1.10B

·     SailPoint (SAIL) 3Q adj EPS $0.07 vs. est. $0.02, raises FY19 adj. EPS view to 13c-14c from 12c-13c and boosts FY19 revenue view to $284M-$285.5M from $278.5M-$281.5M (est. $280.08M)

·     TripAdvisor (TRIP) Q3 adj EPS 58c/$428M vs. est. 68c/$458.7M; 3Q adjusted Ebitda down 12% YoY to $129M below views and 3Q cash flow from operations $1 million, -93% YoY; said Q3 Hotels, Media and Platform Revenue $238M; announced a joint venture with Trip.com Group Ltd. and a special dividend of $3.50

_________________________________________________________________

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

Register