Morning Preview: November 12, 2019

Auto PostDaily Market Report

Early Look

Tuesday, November 12, 2019

Futures

Up/Down

%

Last

DJ Industrials

21.00

0.08%

27,679

S&P 500

2.50

0.07%

3,089

Nasdaq

10.50

0.13%

8,260

 

 

U.S. stocks futures are edging higher, with major averages on track to open just below their record all-time highs, a day after stocks slipped amid unrest in Hong Kong with more clashes between protestors and police and after President Donald Trump said over the weekend that reports of the U.S. rolling back tariffs on China were incorrect. The S&P 500 dropped for first time in four sessions in trading nearly 20% below its average of the last 100 days. Overnight there were new reports on trade, this time with Europe as President Donald Trump is expected to put off for another six months a decision on whether to slap tariffs up to 25% on European auto imports, Politico reported. Markets are coming off a day where stocks slipped though the Dow Jones Industrial Average rose on Boeing’s announcement that deliveries of MAX jets to airline customers could resume in December. In Asian markets overnight, The Nikkei Index gained 188 points to 23,520, the Shanghai Index was up a few points to 2,914 and the Hang Seng Index rose 138 points to 27,065. In Europe, the German DAX is up about 70 points to 13,270 and while the FTSE 100 is up over 25 points to 7,355. The highlight today President Trump speaking at around noon time on China trade relations to the Economic Club of New York.

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -6.07 points, or 0.20%, to 3,087.01

·     The Dow Jones Industrial Average rose 10.25 points, or 0.04%, to 27,691.49

·     The Nasdaq Composite slipped -11.04 points, or 0.13%, to 8,464.28

·     The Russell 2000 Index declined -4.09 points, or 0.26% to 1,594.77

 

Events Calendar for Today

·     6:00 AM EST      NFIB Small Business Optimism for Oct

·     7:45 AM EST      ICSC Weekly Retail Sales

·     8:55 AM EST      Johnson/Redbook Weekly Sales

·     12:55 PM EST    Fed’s Harker speaks in New York

·     6:00 PM EST       Fed’s Kashkari speaks in Madison, Wisconsin

 

Earnings Calendar:

·     Earnings Before the Open: AAP, ACM, ACTG, AEIS, CALA, CBS, CLNE, DF, DHI, DPLO, EBIX, EDIT, FTSV, GTT, IAA, IIVI, INFN, NOG, OCUL, OSTK, RETA, ROK, SAGE, SCON, SYRS, TSN, TTOO, XON

·     Earnings After the Close: ADMP, ADT, AGTC, BDSI, BREW, CARB, CPRX, DDOG, DOX, HALO, HIIQ, INO, KIN, MCRN, MTSI, OMER, PRTK, RUN, SCSC, SDC, SENS, SNSS, SWKS, TVTY, TWOU, VLRX, VRAY

 

Other Key Events:

·     Cowen 2nd Annual Cannabis Conference, 11/12-11/13, in Boston, MA

·     Credit Suisse 28th Annual Healthcare Conference, 11/11-11/13, in Scottsdale, AZ

·     Jefferies West Coast Consumer Conference, 11/12-11/13, in San Francisco

·     Morgan Stanley 8th Annual Chemicals, Ag and Packaging Conference, 11/12-11/13, in Boston

·     The Edison Electric Institute (EEI) Financial Conference, 11/10-11/12, in Orlando, FL

·     REITWorld (NAREIT) 2019 Annual Conference, 11/12-11/14, in Los Angeles, CA

 

 

Macro

Up/Down

Last

WTI Crude

0.32

57.18

Brent

0.41

62.59

Gold

-3.80

1,453.30

EUR/USD

-0.0019

1.1014

JPY/USD

0.18

109.23

10-Year Note

-0.003

1.938%

 

 

World News

·     President Donald Trump is expected to put off for another six months a decision on whether to slap tariffs up to 25% on European auto imports, Politico reported Monday. The deadline for a decision is Wednesday, and it has already been postponed once before, in May.

·     The ZEW indicator of economic sentiment for Germany rose to -2.1 in November, a gain of 20.7 points from October. Economists polled by FactSet expected a -14.8 reading

·     The NFIB Small Business Optimism Index had an October reading of 102.4, up 0.6 point from the prior month. The NFIB said optimism rose because business owners are still creating jobs, raising wages and expanding their businesses. Overall, eight of the 10 components in the index advanced in October.

·     Britain’s Labour Party says it has experienced a “sophisticated and large-scale cyberattack” on its digital platforms. The party is confident that no data breach occurred

 

Sector News Breakdown

Consumer

·     Grocery Outlet (GO) Q3 EPS 22c/$652.5M vs. est. 19c/$652.8M; Q3 adjusted Ebitda $44.2M vs. est. $42.4M; raises FY 2019 adj. EPS to 73c-74c, from prior view 68c-71c and est. 72C; comparable store sales increased by 5.8% over a 4.2% increase in the same period last year

·     Advance Auto Parts (AAP) Q3 adjusted EPS $2.10/$2.3B vs. est. $2.05/$2.3B; 3Q comparable sales +1.2% in-line with estimates and sees FY comparable sales +1% to +1.5%, from prior +1% to +2%; reaffirms year new sales $9.65B-$9.75B, FY adjusted operating income margin 8% to 8.2% and free cash flow of at least $700 million

·     Edgewell Personal Care (EPC) Q4 adj. EPS 86c/$528M vs. est. 84c/$527.73M; guides FY20 EPS $3.10-$3.30 vs. est. $3.32; sees FY20 revenue down 1%-2%, vs. consensus $2.12B and said the adjusted effective tax rate for FY20 is estimated to be in the range of 22.5% to 24.5%

·     D.R. Horton (DHI) Q4 EPS $1.35/$5.04B vs. est. $1.25/$4.86B; raises dividend to 17.5c from 15c; Q4 homes closed increased 9% to 16,024 homes and 10% in value to $4.8B; net sales orders increased 14% to 13,130 homes and 16% in value to $4B; sees FY20 revenue $18.5B-$19B vs. est. $18.58B

 

Energy, Industrials & Materials

·     Lonestar (LONE) issued production guidance of 17,200 to 17,600 BOE/d for 4Q19; production rates remain relatively flat quarter over quarter as the pace of capital spending and completions is reduced for the fourth quarter as the company completes its 2019 program.

·     Albemarle (ALB) downgraded to Sector Perform from Outperform at RBC Capita

·     Linde plc (LIN) raises FY19 adj. EPS to $7.25-$7.30 from $6.95-$7.18 vs. est. $7.12 as range includes an estimated full-year currency headwind of 4%

 

Financials

·     Artisan Partners (APAM) reported that its assets under management, or AUM, as of October 31 totaled $114.5B. Separate accounts accounted for $60.1B of total firm AUM, while Artisan Funds and Artisan Global Funds accounted for $54.4B

·     Cushman and Wakefield (CWK) holder to offer 10M shares

·     Cohen & Steers (CNS) reports preliminary AUM $72B as of October 31, an increase of $1.1B from assets under management at September 30. The increase in assets under management from September 30 was due to market appreciation of $967M and net inflows of $333M, partially offset by distributions of $186M

·     Franklin Resources, Inc. (BEN) preliminary month-end assets under management of $693.1 billion at October 31, 2019, compared to $692.6 billion at September 30, 2019. The increase in assets under management was due to market gains that offset net outflows

·     Invesco Ltd. (IVZ) preliminary month-end assets under management (AUM) of $1,195.2 billion, an increase of 0.9% versus previous month-end. The increase was driven by favorable market returns, foreign exchange, and reinvested distributions, partially offset by outflows in long-term AUM, money market, and non-management fee earning AUM. FX increased AUM by $5.0 billion

·     Welltower Inc. (WELL) and Invesco Real Estate formed an $850 million joint partnership that includes 35 medical office buildings

 

Healthcare

·     Apyx Medical (APYX) Q3 EPS loss (13c)/$7.6M vs. est. loss (18c)/$6.78M; raises FY19 revenue view to $27.4M-$27.9M from $26.5M-$27.5M and sees FY19 adjusted EBITDA ($16.9M)-($16.4M).

·     FibroGen (FGEN) Q3 EPS loss (57c) on revs $33.2M vs. est. loss (55c)/$31.6M; 3Q total assets rose 4.5% YoY to $894.0M

·     Kadmon Holding (KDMN) announced positive topline results from the planned interim analysis of ROCKstar KD025-213, the fully enrolled pivotal trial evaluating KD025 in patients with chronic graft-versus-host disease, or cGVHD, who have received at least two prior lines of systemic therapy; trial met the primary endpoint

·     ICU Medical (ICUI) 3Q adj EPS $1.65 vs est $1.62 on revs $307.5Mm vs est $291.3Mm

·     Reata Pharmaceuticals Inc.‘s (RETA) study of bardoxolone methyl in patients with chronic kidney disease caused by Alport syndrome met its primary and key secondary endpoints

·     Rockwell Medical (RMTI) Q3 EPS loss (12c)/$15.4M vs. est. loss (16c)/$16.0M; 3Q cash and cash equivalents $14.4M vs. $4.29M YoY

·     SI-Bone (SIBN) Q3 EPS loss (46c)/$16.2M vs. est. loss (37c)/$16.27M; cash and marketable securities were $101.5M as of September 30; revises FY19 revenue guidance to $65.5M-$66.5M from $65.0M-$66.5M

·     Supernus Pharmaceuticals, Inc. (SUPN) announced that it has submitted a New Drug Application (NDA) to the U.S. FDA for SPN-812 for the treatment of patients with attention deficit hyperactivity disorder (ADHD)

 

Technology, Media & Telecom

·     Kemet Corp. (KEM) to be acquired by Taiwan’s Yageo Corp. for $1.8 billion in cash, with KEM shareholders to receive $27.20 a share https://on.mktw.net/33CPqo9

·     Vodafone Group PLC (VOD) raised its FY20 adjusted earnings guidance, benefiting from its acquisition of certain Liberty Global PLC assets in Europe and the sale of its New Zealand operations; now sees year Ebitda between 14.8B-15B euros above prior 13.8B-14.2B euros

·     Infineon Technologies reported better Q4 revenue and operating profit than forecast, helped by its unit that produces chips for smartphones.

·     DXC Technology (DXC) Q3 adjusted EPS $1.38/$4.85B vs. est. $1.43/$4.91B

·     j2 Global (JCOM) announces private offering of $500M of convertible senior notes

·     Tencent Music (TME) Q3 EPS 74 RMB/$910M vs. est. 65 RMC/$909.1M; Q3 online music Mobile MAUs up 0.9%, Q3 Mobile MAU up 7.6%, Monthly ARPPU up 4.7%; online music paying users reached 35.4 million, indicating an increase of 42.2% year-over-year. On a sequential basis, the number of online music paying users grew by 4.4 million, up from 2.6 million in the second quarter and 1.4 million in the first quarter of 2019

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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.

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