Terrie’s Test for Hammerstone

Scott GreenUncategorized

Early Look

Thursday, April 19, 2018

U.S. stock futures are struggling for direction, currently down slightly after ending mixed yesterday. The three gauges are showing YTD gains ranging from 0.1% to 5.7%, having recovered this month from their slump in March. Stocks ended Wednesday’s session mixed, with energy shares surging as oil prices topped its best levels in more than 3-years, and as transports jumped behind better-than-expected earnings from rail company CSX and airline UAL. The Dow Industrial Average slipped, led by a decline of over 7% in IBM after the company reported weaker gross margins for its most recent quarter. Industrials and materials were also strong, led by gains in metals (steel, aluminum, copper), while Consumer Staples were among the biggest sector decliners. The VIX index snapped its 6-day losing streak, rising just over 2%. The Fed’s Beige Book showed that economic activity remained at a modest to moderate pace, though nine of the 12 regional banks expressed concerns about trade tariffs. In Asian markets overnight, The Nikkei Index gained 32 points to settle at 22,191, the Shanghai Index advanced 25 points to end at 3,117 and the Hang Seng Index jumped 424 points to settle at 30,708. In Europe, the German DAX is down a few points at 12,575, while the FTSE 100 rose over 10 points at 7,330. U.K. stocks climb to 10-week high, as metals prices soar.


Market Closing Prices Yesterday

· The S&P 500 Index inched higher 2.25 points, or 0.08%, to 2,708.64

· The Dow Jones Industrial Average fell -38.56 points, or 0.16%, to 24,748.07

· The Nasdaq Composite gained 14.14 points, or 0.19%, to 7,295.24

· The Russell 2000 Index advanced 3.76 points, or 0.24% to 1,583.56


Events Calendar for Today

· 8:30 AM EST Weekly Jobless Claims…est. 230K

· 8:30 AM EST Continuing Claims…est. 1.845M

· 8:30 AM EST Philly Fed Business Outlook for April…est. 21.0

· 9:45 AM EST Bloomberg Consumer Comfort Index…prior 56.0

· 10:00 AM EST Leading Index for March…est. 0.3%

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


Earnings Calendar:

· Earnings Before the Open: ABB, BBT, BK, BX, DGX, DHR, GWW, HOMB, KEY, NUE, NVS, PBCT, PM, SNA, SON, UN, VMI, WBC, WBS

· Earnings After the Close: ASB, BDN, CHE, CLW, EGP, ETFC, IBKC, LLNW, WAL, WERN


World News

· The recent flattening yield curve is not a signal that the nine-year-long U.S. economic expansion is approaching its end, said Federal Reserve Gov. Randal Quarles. “I’m not viewing the current flattening of the yield curve as a particular signal towards a pending recession,” Quarles said


Sector News Breakdown

· Pier 1 Imports (PIR) shares fell -15%; Q4 adjusted EPS 21c/$512.2M vs. est. 21c/%537.6M; Q4 comparable sales fell (-7.5%) vs. est. loss (2.6%); Q4 gross margin +37%; said to discontinues share repurchase program and dividends (watch WSM, BBBY, RH)

· Sleep Number (SNBR) shares fell -9%; Q1 EPS 52c/$389M vs. est. 56c/$396.69M; sees FY EPS $1.70-$2.00 vs. est. $1.86; Q1 comparable sales fell (-3%) vs. est. (-2%); sees 2018 capex about $50M (watch mattress stocks TPX, LEG)

· Bon-Ton Stores Inc. (BONT) will begin closing down its remaining stores and go out of business after a bankruptcy judge said she would approve the sale of the retailer’s assets. The judge cleared the way for a sale to a group of bondholders and a pair of liquidators, which will begin closing more than 250 stores across 23 states, putting about 24,000 employees out of work.

· Procter & Gamble Co (PG) has agreed to acquire Merck KGaA’s consumer health unit for 3.4 billion euros ($4.2 billion) https://reut.rs/2qHiWaO


· Kinder Morgan (KMI) Q1 EPS 22c/$3.42B vs. est. 21c/$3.65B; Q1 adjusted Ebitda $1.90B vs. est. $1.86B; still sees FY adjusted Ebitda about $7.5B

· Transocean (RIG) reports company’s contract backlog is $12.5B

· Dover (DOV) announced that its board of directors formally approved the separation of Apergy from Dover through a distribution of all of the common stock of Apergy held by Dover to Dover shareholders

· Xcel Energy (XEL) files automatic mixed securities shelf

· ConocoPhillips (COP) downgraded to Hold from Buy at Jefferies

· South Jersey Industries (SJI) 11.017M share Secondary priced at $29.50



· American Express (AXP) Q1 EPS $1.86/$9.7B vs. est. $1.71/$9.51B; sees FY18 EPS at high end of $6.90-$7.30 view vs. est. $7.12 and sees FY18 revenue growth 8%; Q1 total expenses $6.9B and Q1 provision for loan losses $775M

· The SEC proposed a rule to establish a standard of conduct for broker-dealers, which will require complying with obligations of disclosure, care and conflicts of interest. The new rules also will require registered investment advisers and broker-dealers to provide to retail investors a brief relationship summary that isn’t longer than four pages, with information on issues such as fees and conflicts of interest (watch shares of brokers and online brokers AMTD, ETFC, SCHW)

· BB&T (BBT) Q1 EPS 94c/$2.84B vs. est. 92c/$2.83B; Q1 CET1 capital ratio 10.2% and Q1 net charge-offs 0.41%

· BancorpSouth Bank (BXS) Q1 EPS 58c; Q1 net interest margin 3.67%, Q1 provision for credit losses $1M

· Cathay General (CATY) Q1 EPS 78c (in-line with est.); Q1 net interest margin 3.75% vs. Bloomberg estimate 3.67%

· Eagle Bancorp (EGBN) Q1 EPS $1.04 (in-line with est.); Q1 non-interest income $5.30M and Q1 provision for credit losses $1.97M

· RLI Corp. (RLI) Q1 operating EPS 60c vs. est. 53c; 1Q net premiums earned $190.0M and Q1 net premiums written $183.4M

· SL Green (SLG) Q1 FFO $1.66/$301.7M vs. est. $1.65/$346M

· Texas Capital (TCBI) Q1 EPS $1.38 vs. est. $1.34; 1Q net interest income $210.3M and Q1 provision for credit losses $12M

· Torchmark (TMK) Q1 EPS $1.47/$1.07B vs. est. $1.45/$1.07B; sees FY operating EPS $5.93-$6.07 vs. est. $6.03

· Umpqua (UMPQ) Q1 EPS 35c vs. est. 28c; 1Q net interest margin 3.96%, 1Q book value per share $18.21, 1Q tangible book value per share $9.97, 1Q net interest income $223.2M, 1Q total deposits $19.94B and Q1 provision for loan losses $13.7M



· Danaher (DHR) Q1 EPS 99c/$4.7B vs. est. 94c/$4.54B

· Surface Oncology (SURF) 7.2M share IPO priced at $15.00

· Bio-Path Holdings (BPTH) presented pre-clinical data from studies supporting prexigebersen in treating solid tumors in gynecologic malignancies at the annual meeting of the American Association for Cancer Research

· MorphoSys (MOR) 8.3M share IPO priced at $25.04

· Sientra (SIEN) reports FDA approval of the company’s PMA supplement allowing commercialization of its OPUS-branded breast implant products manufactured by Vesta; commercial sale of implants to begin immediately

· Flexion Therapeutics (FLXN) says key results from the previously completed pivotal Phase 3 study of Zilretta have been published in the Journal of Bone and Joint Surgery

· Paratek (PRTK) to sell $125M in convertible senior subordinated notes due 2024


Industrials & Materials

· Alcoa (AA) shares rose 8%; Q1 EPS 77c/$3.09B vs. est. 70c/$3.09B; raised its 2018 adjusted Ebitda ex. special items to $3.5B-$3.7B from prior view $2.6B-$2.8B; says due to delays in projects to expand smelters in China, global aluminum deficit to grow to between 600k metric tons and 1 million metric tons, up from last quarter’s deficit estimate of between 300k metric tons and 700k metric tons; (watch CSTM, KALU, ARNC)

· The U.S. Federal Aviation Administration will order inspections on engines like the one involved in the explosion on a Southwest Airlines (LUV) flight that killed a passenger earlier this week, after investigators said a broken fan blade touched off an engine explosion

· ABB Ltd. (ABB) shares jumped more than 5% after the engineer reported Q1 order growth across all units, as well as increased sales and stronger margins.

· BHP Billiton (BHP) cuts FY18 iron ore production view to 236-238Mt from 239-243Mt and narrows FY18 copper production range to 1.70-1.79t from 1.66-1.79t

· Steel Dynamics (STLD) Q1 EPS 96c/$2.60B vs. est. 92c/$2.58B; says saw improved demand and pricing across platform

· Crown Holdings (CCK) Q1 EPS 94c/$2.2B vs. est. 80c/$2.06B; FY18 EPS view to $5.35-$5.55 from $4.30-$4.50 (est. $4.42)

· Canadian Pacific (CP) Q1 EPS C$2.70/C$1.66B vs. est. C$2.71/C$1.68B; Q1 operating ratio 67.5% up 510 basis points and 190 basis points compared to last year’s operating ratio and adjusted operating ratio, respectively

· United Rental (URI) Q1 EPS $2.87/$1.734B vs. est. $2.43/$1.68B; rental revenue increased 25.1% YoY; Q1 adjusted Ebitda $780.0M and authorizes $1.25B share repurchase plan; Q1 operating income of $340M missed the $361M est.

· Universal Forest (UFPI) Q1 EPS 53c/$993M vs. est. 42c

· KapStone (KS) Q1 EPS 43c/$799M vs. est. 37c/$792.1M; Q1 adjusted Ebitda $115M vs. est. $109.3M

· Ship Finance (SFL) to sell $150M in convertible senior note due 2023


Technology, Media & Telecom

· 21st Century Fox Inc. (FOXA) rejected an acquisition offer for its entertainment assets from Comcast Corp. (CMCSA) largely over antitrust concerns, according to a regulatory filing, even though the bid was 16% higher on a per-share basis than what Walt Disney Co. (DIS) ultimately agreed to pay. https://on.mktw.net/2JSVpvD

· Amazon (AMZN) CEO Jeff Bezos disclosed in an annual letter to shareholders that the e-commerce juggernaut’s Amazon Prime subscription program has topped 100 million members worldwide.

· PTC Inc. (PTC) Q2 EPS 34c/$308M vs. est. 31c/$302.84M; Q2 license and subscription bookings were $99M and subscription mix was 78%; sees Q3 adjusted EPS 30c-34c on revs $310M-$315M vs. est. 34c/$308.16M; raises FY18 EPS view to $1.31-$1.41 from $1.29-$1.39 and revs view to $1.25B-$1.26B from $1.235B-$1.25B

· Crown Castle (CCI) Q1 revs $1.30B vs. est. $1.31B; sees 2Q adjusted Ebitda $757M-$767M and FY AFFO $2.26B-$2.3B

· Helios and Matheson (HMNY) files to sell common stock, warrants on ‘best efforts’ basis



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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