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Heron Therapeutics prices 12.3 mln shares at $12.20/share  (12.80)

 On The Wires

• The International Olympic Committee and Alibaba Group (BABA) jointly announced a long-term partnership through 2028. Joining The Olympic Partner worldwide sponsorship programme, Alibaba will become the official «Cloud Services» and «E-Commerce Platform Services» Partner, as well as a Founding Partner of the Olympic Channel.  The partnership was announced today at the World Economic Forum in Davos, Switzerland, with IOC President Thomas Bach, Alibaba Group Founder and Executive Chairman Jack Ma and Alibaba Group Chief Executive Officer Daniel Zhang.
• Evotec AG (EVOTF) announced it has entered into an integrated drug discovery collaboration on an ion channel target with Asahi Kasei Pharma Corporation, a wholly owned subsidiary of Asahi Kasei Corporation, Tokyo, Japan. Under the terms of the agreement, Evotec will apply its integrated drug discovery platform including medicinal chemistry, computational chemistry and in vitro pharmacology to optimise hit compounds identified and selected from the Evotec compound library collection through a recent successful high-throughput screening campaign executed at Evotec.
• Smiths Group plc (SMGZY) issued a statement saying that it welcomes the European Commission's clearance of the proposed acquisition of Morpho Detection. Completion of the acquisition of Morpho Detection by Smiths Group remains conditional upon approval from the relevant authorities in the United States and certain other territories, among other conditions. Smiths Group continues to engage with these authorities in order to secure the necessary clearances as soon as possible.

 BNY Mellon prelim Q4 $0.77 vs $0.77 Capital IQ Consensus Estimate

 Tesla Motors upgraded to Overweight from Equal Weight at Morgan Stanley; tgt $305  (238.36)TSLA +3% premarket.

 OFS Outlook to 2020; Downgrade PTEN, RES, NR and TESO — Cowen  (34.22)Cowen, assuming $60 WTI, sees 2020 U.S. onshore spending returning to just 70% of 2014 levels and find most NAm stocks already reflecting a recovery to this level or above. At the same time sentiment for int'l is depressed as market enters final months of bottoming. They downgrade PTEN, RES, NR and TESO on valuation and see an emerging opportunity to pivot to internationally levered stocks, notably SLB.

 Overnight Summary — Global markets content to wait on ECB release

• The global equities gave traders little reason to participate with small net changes across the board, with the exception of Japan. This has been the general tone for overnight trading for the year so far.
• On that same token, Japan's movement continued to be contingent on what the yen does. Although the USDJPY did very little overnight, the move throughout Wednesday set the stage for a rally in Nikkei (+0.9%). China remained non-eventful with nothing of significance stemming from the Mainland as far as news or economic data was concerned.
• European bourses are towing the line, trading within an extremely tight range so far. This can be attributed to traders taking a cautious approach ahead of today's ECB announcement. The FTSE is the laggard within the region, which is witnessing pressure particularly in the energy sector, which two of the index's heavyweights, Shell and BP are trading down in neighborhood of 0.5-0.9%. This comes on the back of yesterday's sell off in Crude oil.

Market updates:

• S&P Futures vs Fair Value: -1.00 
• 10 yr Note: 2.4370% 
• USD/JPY: 114.69 -0.03 
• EUR/USD: 1.0655 +0.0026
• Europe: FTSE -0.4% DAX Unch CAC -0.1% 
• Asia: Hang Seng -0.2% Shanghai -0.4% Nikkei +0.9% 
• Commodities: Gold (1202.60 -9.50) Silver (16.96 -0.31) crude (52.30 +0.41) 

US Econ Data

• Initial Claims, December Housing Starts & Building Permits, January Philadelphia Fed (8:30am)
• Fed's Williams speaks (10am)
• Natural Gas Inventories (10:30am)
• Crude Inventories (11am)
• Fed's Yellen speaks (8pm)

 Southwestern Energy upgraded to Neutral from Sell, EP Energy (EPE) downgraded to Sell from Neutral at UBS  (9.69)

 FMC Corp among stocks with favorable commentary on Wednesday's Mad Money  (58.55)

Stocks with favorable mention: ASML, AVGO, BAC, BBT, CSX, EPD, FMC, HOG, NFLX, SPLK, SWKS, WHR

Stocks with unfavorable mention: AKAO, CMRE, GILD, M, PRGO, PSEC, TGT, WMT

 Transdigm Group, AJRD, BWXT, MRCY, KLXI, HEI, ESL, AIR, KTOS initiated with Buy ratings at SunTrust  (250.89)

 Devon Energy upgraded to Neutral from Sell, Exxon Mobil (XOM) downgraded to Sell from Neutral at UBS  (46.36)

 Apogee Enterpr initiated with a Buy at Craig Hallum  (56.71)

 PPG Industries prelim Q4 $1.19 vs $1.18 Capital IQ Consensus Estimate; revs $3.5 bln vs $3.55 bln Capital IQ Consensus Estimate

 

Rockwell Collins, SPR, CW, ATRO, FLIR, WWD, B, MOG.A, TGI initiated with Hold ratings at SunTrust  (89.60)

 

Hilton Grand Vacations upgraded to Buy from Neutral at Goldman  (25.19)

 

Host Hotels downgraded to Sell from Neutral at Goldman  (18.31)

 Royal Caribbean downgraded to Sell from Neutral at Goldman  (85.51)

 HP upgraded to Buy from Neutral at UBS  (14.58)

 U.S. Steel downgraded to Neutral from Buy at Citigroup  (34.93)

 Sprouts Farmers Market downgraded to Neutral from Buy at Goldman  (20.20)

 GNC Holdings downgraded to Sell from Neutral at Goldman  (11.15)

 

Kate Spade downgraded to Neutral from Buy at BofA/Merrill  (18.28)

 Check Point Software is up 4% at new all time highs in the premarket after a strong Q4 report; co will guide for Q1 on the call at 8:30  (89.61)HACK

 Vitamin Shoppe downgraded to Sell from Neutral at Goldman  (22.95)

 Asian Markets Close: Nikkei +0.9%, Hang Seng -0.2%, Shanghai -0.4%

Equity indices in the Asia-Pacific region ended Thursday on a mixed note. Japan's Nikkei (+0.9%) displayed relative strength, climbing as the yen held its ground after sliding during the Wednesday session on Wall Street. Employment data from Australia showed the third consecutive month of growth, but the pace of growth slowed down notably. Elsewhere, Nikkei discussed falling rents in Japan, which will make it more difficult for inflation to reach 2.0%.

• In economic data:
  • Australia's December Employment Change 13,500 (expected 10,000; last 37,100) and December Unemployment Rate 5.8% (expected 5.7%; last 5.7%). December Participation Rate 64.7% (consensus 64.6%; last 64.6%)
  • New Zealand's November Building Consents -9.2% month-over-month (last 2.0%). December Business NZ PMI 54.5 (last 54.5)
  • Hong Kong's December Unemployment Rate held at 3.3%, as expected

---Equity Markets---

• Japan's Nikkei gained 0.9% with help from most components. Growth-sensitive names like Fanuc, Yaskawa Electric, Furukawa Electric, Honda, Komatsu, Toho, SUMCO, and Mitsubishi UFJ gained between 2.1% and 3.7%. Toshiba plunged 16.7% amid speculation the company's write-down of a U.S. nuclear could be as much as $8 billion.
• Hong Kong's Hang Seng shed 0.2%. Cathay Pacific Air fell 4.5% while property names like Sino Land, Henderson Land, New World Development, SHK Properties, and China Resources Land posted losses between 0.7% and 2.3%. Want Want China outperformed, climbing 2.0%.
• China's Shanghai Composite surrendered 0.4%. Harbin Dongan Auto Engine, Jiangxi Changjiu Biochemical Industry, China United Network Communications, and HuNan Tyen Machinery lost between 4.6% and 7.3%.
• India's Sensex added 0.2% even though most components ended lower. GAIL surged 5.3% after announcing its Board of Directors will consider issuing bonus shares and fundraising through private placement bonds. Power Grid, Oil & Natural Gas, Tata Motors, and Infosys also outperformed, gaining between 0.8% and 1.8%.

---FX---

• USDJPY -0.1% to 114.57
• USDCNY +0.4% to 6.8664
• USDINR -0.3% to 68.147

AK Steel downgraded to Sell from Neutral at Citigroup  (10.07)

 

Commercial Metals downgraded to Neutral from Buy at Citigroup  (20.87)

 

Verizon initiated with a Buy at HSBC Securities  (52.25)

 

Comcast initiated with a Buy at HSBC Securities  (72.29)

 

Charter Comm initiated with a Hold at HSBC Securities  (303.69)

 Basic Energy Services upgraded to Buy from Hold at Deutsche Bank  (38.89)

 

Edison upgraded to Buy from Hold at Evercore ISI  (72.30)

 Panera Bread upgraded to Buy from Neutral at Goldman  (213.15)

 Bloomin' Brands downgraded to Neutral from Buy at Goldman  (16.98)

 Coca-Cola downgraded to Market Perform from Outperform at Wells Fargo  (41.29)

 

ASML downgraded to Neutral from Buy at Citigroup  (122.97)

 

CSX upgraded to Equal-Weight at Morgan Stanley  (36.88)

 PACCAR upgraded to Neutral from Underperform at Longbow  (66.31)

 Cummins upgraded to Buy from Neutral at Longbow  (139.90)

 Aaron's downgraded to Mkt Perform from Strong Buy at Raymond James  (32.31)

 

Transenterix downgraded to Mkt Perform from Outperform at Raymond James  (1.47)

 Natl Oilwell Varco upgraded to Buy, Baker Hughes (BHI) downgraded to Hold at Societe Generale   (37.42)

 Mobileye N.V. upgraded to Buy from Neutral at Goldman  (42.02)

 

Infinera initiated with a Neutral at Piper Jaffray  (8.43)

 

CSX upgraded to Sector Outperform at Scotia  (36.88)

 

Capital Product Partners upgraded to Buy from Hold at Evercore ISI  (3.35)

 

InterActiveCorp target raised to $70 from $65 at Stifel; Hold  (70.40)

 Early premarket gappersGapping up: SSH +21%, CSX +15.3%, OCLR +9.3%, NFLX +8.2%, GALT +6.9%, SYN +6.1%, MNK +4%, CHKP +3.8%, TSLA +3.2%, TAL +2.8%, WTFC +2.7%, MBLY +2.3%, VRX +1.9%, LQ +1.7%, PSO +1.7%, BK +1.7%, HPQ +1.5%, FNSR +1.3%, MTG +1.3%, MTG +1.3%, ACIA +1%, MJN +1%, BHP +1%, SWN +0.9%, KEY +0.9%, KSU +0.6%, BBT +0.6%

Gapping down: AMDA -22.4%, RCII -12.7%, ZYNE -10.3%, VNOM -7.6%, KMI -4.6%, AAN -4.4%, HRTX -3.1%, HTGC -3%, EPE -2.9%, AKS -2.9%, GNC -2.6%, PLXS -2.3%, X -1.8%, ASML -1.6%, VALE -1.5%, FCX -1.2%, CP -1.2%, CP -1.2%, SBNY -0.9%, SBGL -0.8%, RDS.A -0.8%, ERIC -0.8%, PTC -0.8%, PTC -0.8%, SLM -0.8%, AA -0.5%

 Netflix upgraded to Neutral from Underperform at Macquarie  (133.26)

 Covanta, Cerner (CERN) downgraded to Equal Weight from Overweight at Barclays  (16.35)

 

Target downgraded to Sell rom Neutral at Goldman  (66.85)

 European Markets Update: DAX -0.1%, CAC -0.2%, FTSE -0.5%

Major European indices trade close to their flat lines while the UK's FTSE (-0.5%) underperforms as the pound (1.2327) adds 0.6% against the dollar. The European Central Bank will release its policy statement shortly, but the market does not expect any dovish or hawkish surprises. However, as usual, participants will pay close attention to remarks from ECB President Mario Draghi, whose comments could lead to movement in the euro. The euro is currently up 0.3% at 1.0663 against the dollar.

• In economic data:
  • Eurozone November Current Account surplus EUR36.10 billion (expected EUR29.30 billion; last surplus EUR28.30 billion)
  • Spain's trade deficit narrowed to EUR1.25 billion from EUR1.80 billion (expected deficit of EUR1.50 billion)
  • Swiss December PPI +0.2% month-over-month, as expected (last 0.1%); 0.0% year-over-year (expected 0.1%; last -0.6%)

---Equity Markets---

• Germany's DAX is lower by 0.1%. Thyssenkrupp and Fresenius weigh, showing respective losses of 1.7% and 1.1%. Exporters are mixed while financials outperform. BMW is down 0.5%, Daimler sits just below its flat line, and Volkswagen has added 0.1%. Deutsche Bank and Commerzbank lead, rising 0.7% and 2.2%, respectively.
• France's CAC has shed 0.2%. Consumer names are mixed with Essilor International, Accor, Danone, and Carrefour down between 0.7% and 2.2% while Pernod Ricard, Louis Vuitton, and Kering are up between 0.7% and 1.1%.
• UK's FTSE trades down 0.5%. Energy-related names like BP and Royal Dutch Shell hold respective losses of 1.1% and 1.9%. Homebuilders also lag with Barratt Developments, Taylor Wimpey, and Persimmon down between 1.1% and 1.4%. Pearson has jumped 2.2% after yesterday's 29.1% plunge.

 Genuine Parts upgraded to Neutral from Sell at Goldman  (99.29)

 

lululemon athletica initiated with a Underperform at CLSA  (68.50)

 

NIKE initiated with a Underperform at CLSA  (53.27)

 Under Armour initiated with a Buy at CLSA  (29.35)

 On The Wires

• The FBI has awarded Accenture Federal Services (ACN) a seven-year blanket purchase agreement with a $100 million ceiling for the provision of application services and the continued introduction of digital solutions to further enhance the bureau's human resources systems capabilities.
• Anavex Life Sciences Corp. (AVXL) and the International Rett Syndrome Foundation, doing business as Rettsyndrome.org today announced that Rettsyndrome.org has committed a financial grant of a minimum of $0.6 million to cover the majority of a planned U.S. multicenter Phase 2 clinical trial of ANAVEX 2-73 for the treatment of Rett syndrome.
• BioTime, Inc. (BTX) and its subsidiary, Cell Cure Neurosciences, Ltd., announced that an abstract evaluating OpRegen in patients with advanced dry Age-Related Macular Degeneration (dry-AMD) based on the ongoing Phase I/IIa clinical trial will be presented at the Association for Research in Vision and Opthalmology meeting taking place from May 7-11, 2017, in Baltimore, Maryland.
• Nintendo (NTDOY) announced that multiple Fire Emblem games from the hit strategy-RPG franchise are in development. These include a new game for smart devices, two games for Nintendo Switch and multiple games for the Nintendo 3DS family of systems. There's no question that this is by far the most fiery, most emblematic Nintendo Direct ever.

 Greenbrier downgraded to Sell from Underperform at CLSA  (48.20)

 

Apple target raised to $140 from $125 at BofA/Merrill  (119.99)

 Precision Drilling upgraded to Buy from Hold at Deutsche Bank  (5.50)

 Tenaris upgraded to Neutral from Underweight at JP Morgan  (35.95)

 Bel Fuse initiated with a Buy at B. Riley & Co.  (31.30)

 

Tahoe Resources downgraded to Neutral at CIBC  (9.23)

 Hilton Hotels upgraded to Outperform from Mkt Perform at Bernstein  (56.95)

 

Dean Foods downgraded to Mkt Perform from Outperform at Bernstein  (21.31)

 Autoliv downgraded to Hold from Buy at Jefferies  (113.66)

 Brookfield Asset Mgmt initiated with a Buy at Citigroup  (33.95)

 

Overnight Treasury Summary Treasuries Slip Ahead of ECB Decision U.S. Treasuries have failed to recover Wednesday afternoon's post-Yellen-speech losses this morning and in fact have even extend them a bit. Fed Chair Yellen said yesterday afternoon that most of her colleagues on the FOMC see a few rate hikes per year until the end of 2019, when the Fed funds rate should be close to 3%. While that forecast is subject to a litany of risk factors, the market interpreted her comments as hawkish and the technical bias for the Treasury complex was already lower so lower we went. Yellen is now assumed to have been one of the FOMC participants who had forecast three rate hikes back at the December FOMC meeting. The international economic data out overnight was limited although the eurozone's current account surplus neared a post-crisis high in November (EUR36.1 bln). The European Central Bank's Governing Council will release its monetary policy decision in just a few minutes. The major U.S. data points today are December housing starts and building permits. The S&P 500 is set to open down 0.11% to 2,269.3 and the U.S. Dollar Index is up 0.14% to 101.07. WTI crude is adding 1.1% to $51.64 ahead of the EIA crude inventory data and gold is off by 0.71% to $1,203.5/troy oz. Yield Check: 2-yr: +1 bp to 1.23% 5-yr: unch at 1.95% 10-yr: +1 bp to 2.44% 30-yr: +1 bp to 3.02% International News: New Zealand's Business NZ PMI was unchnaged at 54.5 in December Building consents fell 9.2% m/m in November, wiping out October's 2.0% increase Australia's economy added 13.5K jobs in December, beating estimates but slowing from November's 37.1K reading The unemployment rate unexpectedly ticked up to 5.8% from 5.7% Switzerland's producer price index rose 0.2% m/m in December (0.0% y/y), meeting forecasts and ticking up from November's 0.1% PPI inflation The U.K.'s RICS House Price Balance unexpectedly fell to 24% in December from 29% in November, indicating that fewer surveyors are seeing a rise in home prices although more see higher prices than lower prices The eurozone's current account surplus increased more than expected in November to a seasonally adjusted EUR36.1 bln from EUR28.4 bln in October. November's surplus was EUR300 mln short of the post-crisis high Spain's trade deficit narrowed to EUR1.25 bln in November from EUR1.8 bln in October Data out Today: ECB Rate Decision (07:45 ET) Initial Jobless Claims for the week ending 1/14 and Continuing Jobless Claims for the week ending 1/7 (08:30 ET) December Housing Starts and Building Permits (08:30 ET) January Philadelphia Fed (08:30 ET) Natural Gas Inventories for the week ending 1/14 (10:30 ET) Crude Inventories for the week ending 1/14 (11:00 ET) TIPS Auction: $13 bln 10-year TIPS auction (results at 13:00 ET) Fed Speakers: San Francisco Fed President Williams (non-FOMC voter) (10:00 ET) Fed Chair Yellen (FOMC voter) (20:00 ET)

 European Central Bank leaves rates unchanged as expected

• Marginal Lending facility 0.25%
• Main refinancing operations 0.00%
• Deposit facility -0.40%

 Nutanix up 8% premarket on M&A speculation (Cisco for Nutanix) from the Street.com after HPE bought hyperconverged peer SimpliVity  (28.17)

 S&P futures vs fair value: -2.80. Nasdaq futures vs fair value: +0.40.

The S&P 500 futures trade three points below fair value as the U.S. and European equity markets digest the latest European Central Bank release, which left rates and stimulus programs unchanged, as was widely expected. ECB President Mario Draghi will host a press conference to discuss the outlook for policy at 8:30 ET, which is more uncertain and could lead to some market volatility.

Crude oil has bounced back from yesterday's decline after the International Energy Agency reported that global oil markets were constricting. The energy component has added 1.1% and currently trades at $51.64/bbl.

U.S. Treasuries have carried Wednesday's bearish trend into this morning. The benchmark 10-yr yield is near its overnight high, up five basis points at 2.44%.

Today's economic data will include Initial Claims (Briefing.com consensus 252,000), Housing Starts (Briefing.com consensus 1.193 million), and Philadelphia Fed (Briefing.com consensus 15.3). All three reports will cross the wires at 8:30 a.m. ET.

In U.S. corporate news of note:

• Netflix (NFLX 144.15, +10.89): +8.2% after beating on earnings and issuing upside Q1 guidance. 
• Kinder Morgan (KMI 21.40, -1.04): -4.6% after missing revenues estimates.
• Coca-Cola (KO 41.05, -0.24): -0.6% after the company's stock was downgraded to 'Market Perform' from 'Outperform' at Wells Fargo.

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region ended Thursday on a mixed note. Japan's Nikkei +0.9%, Hong Kong's Hang Seng -0.2%, China's Shanghai Composite -0.4%, India's Sensex +0.2%.
  • In economic data:
    • Australia's December Employment Change 13,500 (expected 10,000; last 37,100) and December Unemployment Rate 5.8% (expected 5.7%; last 5.7%). December Participation Rate 64.7% (consensus 64.6%; last 64.6%)
    • New Zealand's November Building Consents -9.2% month-over-month (last 2.0%). December Business NZ PMI 54.5 (last 54.5)
    • Hong Kong's December Unemployment Rate held at 3.3%, as expected
  • In news:
    • Employment data from Australia showed the third consecutive month of growth, but the pace of growth slowed down notably.
    • Nikkei discussed falling rents in Japan, which will make it more difficult for inflation to reach 2.0%.

• Major European indices trade close to their flat lines while the UK's FTSE underperforms as the pound (1.2327) adds 0.6% against the dollar. Germany's DAX -0.1%, France's CAC -0.2%, UK's FTSE -0.5%.
  • In economic data:
    • Eurozone November Current Account surplus EUR36.10 billion (expected EUR29.30 billion; last surplus EUR28.30 billion)
    • Spain's trade deficit narrowed to EUR1.25 billion from EUR1.80 billion (expected deficit of EUR1.50 billion)
    • Swiss December PPI +0.2% month-over-month, as expected (last 0.1%); 0.0% year-over-year (expected 0.1%; last -0.6%)
  • In news:
    • The European Central Bank made no changes to its policy stance, keeping its Deposit Facility Rate and Main Refinancing Rate at a respective -0.4% and 0.0%, as expected.
    • The ECB also kept its quantitative easing program intact, but comments from ECB President Mario Draghi could lead to movement in the euro.

 Netflix: Color on Qtr  (133.26)

• Needham Research notes 1) paid sub adds 27% above estimates; 2) higher profit margins than expected; 3) more owned IP (1,000 hours produced) suggests growing library value; and 4) rising profitability as NFLX grows revenue. What worries firm includes: 1) NFLX seems to be priced for perfection, hitting all-time highs; 2) FY16 FCF guidance 90 days ago was for negative $1.5B, yet FY16 came in at $1.6B and guidance is for negative $2B in FY17, implying NFLX must access capital markets to close its funding gap; 3) 1Q17 sub growth guidance & tough comps vs global launch in FY16; 4) no planned price increases implies no ASP growth; and 5) NFLX up only 8% on 27% subscriber over-delivery.
• FBR Capital raises tgt to $144 from $100, retains Market Perform. NFLX accelerated to surprisingly robust sub growth in 4Q16, its second quarter in a row of meaningful upside versus guidance. This argues that the disappointing performance earlier in 2016 from un-grandfathering has run its course and that some of those who dropped the service are coming back. It also, more basically, suggests that NFLX's offer is really resonating with consumers. As great as 4Q16 was, the outlook for 2017 is one of sub growth not accelerating from a high peak-while price hikes decelerate.
• Stifel Research raises tgt to $155. Firm notes Netflix is on track to surpass 100mm subscribers by 2Q:17 and the company remains committed to its long-term strategy of building the most dominant, globally-appealing library of content it can finance. Guidance for 1Q:17 came in slightly below consensus expectations domestically but materially above forecasts internationally. Approximately 47% of total members are now from outside the U.S., and firm expects the international crossover point to occur by 3Q:17.  Netflix guided to 2017 GAAP operating margins of 7% (from ~4% in 2016) with its target of generating «material global profits in 2017 and beyond.»
• RBC Capital is raising its tgt to $175 from $150. Netflix posted better-than-strong Q4 EPS results, beating expectations in terms of subs AND profits. Still firm's #1 Pick. Although it faced elevated churn in mid-‘16 due to price increases, it did succeed with the price increase. The Key Domestic Evidence is accelerating Revenue Growth in Q4 (27%) and record-high Contribution Margin (38%). The Key International Evidence is Record High Sub Adds (5.1MM) and first-ever Contribution Profit ($16MM in Q1). Cash burn remains high but this should be the peak burn year. Meanwhile, Operating Margins are now likely to consistently grind higher (4% in '16, 7% in '17, 9% in '19...).
• Pivotal Research is raising its tgt to $170 from previous street high $155. NFLX continued the strong trends from 3Q, as they have taken advantage of the drawing power of originals to generate strong better than expected subscriber growth while also taking a successful material price hike, a very powerful combination. Reflecting the benefits of their grandfathered price increases ARPU per streaming subscriber rose +12% in-line with consensus. The moderate slowdown in 1Q are reflective of the launch schedule for key original content releases (as an example House of Cards release was moved from 1Q to 2Q) and it appears new content launches are weighted toward 2Q and beyond. The only area that was worse than expectations was free cash flow as NFLX generated a (-$639M) loss in 4Q vs. (-$500M) guidance which appears related to timing. Guidance for free cash flow losses for '17 was also higher than expected reflecting the more upfront nature of the cash costs associated with developing content in-house.  

Shares of NFLX hit all time highs ($146) in immediate reaction; Shares are up 7% in pre-market trade as it slips back to $143.75.

 Signature Bank: Thoughts following Q4 earnings — FBR Capital  (150.41)FBR notes the SBNY beat was mostly driven by lower expenses, although fee income also came in a bit better than our expectations. They will look for color on the call on the expense drivers as SBNY has, some years, benefited from a 4Q seasonal true-up in comp expenses, which may have been a contributor. Credit costs remain under modest pressure from SBNY's taxi medallion portfolio, but were no worse than expected.  Firm likes SBNY's robust profitability (31.3% efficiency, 1.2% ROAA, 12.8% ROTCE) and strong loan growth (21.8% YOY growth in average loans); and they consider shares very attractive, trading at a discount to DFAST peers despite better growth, profitability, and markets.

 Orbital ATK initiated with a Buy at SunTrust  (87.32)

 On The Wires

• Nova Lifestyle (NVFY) intends to purchase weilai178.com's membership data system which it will incorporate into its training center platform. 
• The Milner Therapeutics Institute announces Pfizer Inc. (PFE) as a partner to the Milner Therapeutics Consortium. Pfizer has agreed to join the Consortium, which enables the efficient transfer of materials between industry and academia and allocation of funds for partnering opportunities in Cambridge. Dr Ron Newbold, Vice President, External R&D Innovation at Pfizer, will join the Milner Innovation Board alongside representatives from Astex, AstraZeneca, GlaxoSmithKline, Shionogi, MedImmune, University of Cambridge, Babraham Institute and Sanger Institute.
• Quaterra Resources Inc. and its subsidiary Singatse Peak Services LLC announced a 2017 drill program of at least 15 drill holes to test targets throughout the Company's 51-square-mile land package located in the historic Yerington District of Nevada.  Freeport-McMoRan Nevada LLC (FCX) has agreed to make accelerated option payments of up to $1.5 million. SPS has determined that these will be used to fund the 2017 drill program. 
• DigiLens Inc., announced the closing of a $22 million Series B investment round. Strategic investors include Sony (SNE), Foxconn (FXCNY), Continental (CTTAY) and Panasonic (PCRFY), along with venture investors Alsop Louie Partners, Bold Capital, Nautilus Venture Partners and Dolby Family Ventures amongst others. The company will leverage these strategic relationships to bring to market several augmented reality displays and sensors for enterprise, consumer and transportation applications.
• NF Energy Saving (NFEC) announced that recently Mr. Shiva, as the director of Indian Flucon International Co. Ltd., has visited the Company. After his visit, Mr. Shiva said that he is interesting in the large scale butterfly and inlet valves and believes that the two companies could cooperate each other.
• NV5 Global, Inc. (NVEE) announced that it has secured a $5 mln contract with Dallas Fort Worth International Airport to provide retro commissioning, infrastructure asset condition assessment and other services to modernize the airport's asset portfolio over five years. The improvements will maximize efficiency and reduce energy use.
• Sunworks (SUNW) announced its partnership with Ecoark Holdings, a technology company based in Bentonville, Arkansas that develops supply chain sustainability products and solutions for large retail clients. The partnership will help Ecoark broaden its offerings portfolio with innovative solar products suited for large-scale, retail clients.
• Airlink, Southern Africa's largest independent regional airline, is joining the E-Jet operator's family. The airline is acquiring five E-Jets — three E170s and two E190s, from ECC Leasing, a wholly-owned Embraer (ERJ) subsidiary. Airlink will start to receive the aircraft in the first half of 2017.
• InVivo Therapeutics Holdings Corp. (NVIV) announced that a new patient has been enrolled into The INSPIRE Study. Travis Dumont, M.D., an INSPIRE Principal Investigator, performed the implantation on January 16, 2017, ~67 hours after the injury occurred.

 GATX beats by $0.09, beats on revs; guides FY17 EPS in-line  (57.21)

• Reports Q4 (Dec) earnings of $1.14 per share, $0.09 better than the Capital IQ Consensus of $1.05; revenues fell 4.4% year/year to $362.1 mln vs the $355.71 mln Capital IQ Consensus.
• Co issues in-line guidance for FY17, sees EPS of $4.40.4.60 vs. $4.53 Capital IQ Consensus Estimate.
• Mr. Kenney, President and CEO stated, «Many of the market challenges we faced in 2016 continue as we move into 2017. As a result, we currently expect 2017 earnings to be in the range of $4.40 — $4.60 per diluted share. Our guidance represents a level of performance that is considerably higher than in prior downturns. This illustrates our success over the last several years of stretching lease terms to lock in attractive lease rates; optimizing the fleet through secondary market acquisitions and divestitures; improving the efficiency of our maintenance network; and, ultimately, focusing our business on our core strengths.

 

European Summary ECB Leaves Rates on Hold Eurozone sovereign debt yields are moving higher this morning after the ECB's Governing Council voted to keep monetary policy on hold. The monetary policy statement reflected an unwavering commitment on the part of the Governing Council to revive inflation. The statement said that short-term rates would not be moved higher until the asset purchases are completed, which will be at the end of December 2017 at the earliest. The German 10-year Bund yield has not closed above 0.40% since January 2016 (0.38% currently) and the technical bias for Bund yields remains higher The European Central Bank's Governing Council elected to maintain monetary policy on its current course, as expected The deposit rate remains at -0.40% and the asset purchase program will continue to buy EUR80 bln/month of public and private sector securities until April, when it will scale down purchases to EUR60 bln/month In his press conference, ECB President Draghi said that the risks to the eurozone remain «tilted to the downside» despite an improving external environment. He said that balance sheet adjustments and slow implementation of structural reforms in the eurozone are weighing on growth The accompanying statement said that the ECB's policy rates will not be hiked until the asset purchase program is completed in December 2017 (at the earliest) New Issuance: France sold EUR4.85 bln of OATs maturing on 2/25/2020 at an average yield of -0.43% with a bid-to-cover ratio of 1.58 France sold EUR3.15 bln of OATs maturing on 5/25/2022 at an average yield of -0.04% with a bid-to-cover ratio of 1.64 Spain sold EUR655 mln of 3-year Bonos at a weighted average yield of of -0.234% and bid-to-cover of 3.98 Spain sold EUR3.2 bln of 5-year Bonos at a weighted average yield of 0.399% and bid-to-cover of 1.36 Spain reopened the ODE maturing on 10/31/2023 for EUR966 mln at a weighted average yield of 0.769% with a bid-to-cover of 2.24 European Economic Data: The eurozone's current account surplus increased more than expected in November to a seasonally adjusted EUR36.1 bln from EUR28.4 bln in October. November's surplus was EUR300 mln short of the post-crisis high Switzerland's producer price index rose 0.2% m/m in December (0.0% y/y), meeting forecasts and ticking up from November's 0.1% PPI inflation The U.K.'s RICS House Price Balance unexpectedly fell to 24% in December from 29% in November, indicating that fewer surveyors are seeing a rise in home prices although more see higher prices than lower prices Yield Check: France, 10-yr OAT: +2 bps to 0.85% Germany, 10-yr Bund: +2 bps to 0.38% Greece, 10-yr note: -4 bps to 7.01% Italy, 10-yr BTP: +4 bps to 1.98% Portugal, 10-yr PGB: unch at 3.82% Spain, 10-yr ODE: +7 bps to 1.47% U.K., 10-yr Gilt: +4 bps to 1.38%

 European Research Calls

Upgrades: 

• Severn Trent (SVTRF) upgraded to Neutral from Underperform at Credit Suisse
• United Utilities Group (UUGRY) upgraded to Outperform from Neutral at Credit Suisse
• HSBC Holdings (HSBC) upgraded to Outperform from Neutral at Exane BNP Paribas
• Intertek Group (IKTSY) upgraded to Buy from Holdd at Berenberg
• G4S plc (GFSZY) upgraded to Equal Weight from Underweight at Barclays
• Coca-Cola Hellenic (CCHGY) upgraded to Buy from Neutral at Goldman
• BASF AG (BASFY) upgraded to Overweight from Underweight at JP Morgan

Downgrades: 

• Severn Trent (SVTRF) downgraded to Sell from Neutral at UBS
• United Utilities Group (UUGRY) downgraded to Sell from Neutral at UBS
• ITV plc (ITVPY) downgraded to Sell from Neutral at UBS
• Premier Foods (PRRFY) downgraded to Hold from Buy at Investec
• Cairn Energy (CRNCY) downgraded to Sector Perform from Outperform at RBC Capital Mkts
• JD Wetherspoon (JDWPY) downgraded to Sell from Hold at Canaccord Genuity
• Rightmove (RTMVY) downgraded to Sell from Neutral at Citigroup
• Hammerson (HMSNF) downgraded to Underperform at Jefferies
• Tullow Oil plc (TUWLF) downgraded to Hold from Buy at HSBC
• Pearson Plc (PSO) downgraded to Hold from Buy at Panmure
• Ericsson (ERIC) downgraded to Sell from Neutral at Goldman
• Cellcom Israel (CEL) downgraded to Equal Weight from Overweight at Barclays

Miscellaneous: 

• Smith & Nephew (SNN) initiated with a Hold at HSBC
• Sage plc (SGPYY) removed from Conviction Buy List at Goldman

 

Gapping up Gapping up In reaction to strong earnings/guidance: OCLR +8.6%, NFLX +6.5%, CHKP +4.3%, MTG +3.7%, UNP +2.9%, TAL +2.8%, WTFC +2.7%, BK +2.6%, PTC +2.4%, KEY +0.7%, BBT +0.6% M&A news: CYTX +14.5% (to acquire certain assets from Azaya Therapeutics; Cytori to issue $2 mln in common stock up front) PIP +4.4% (PharmAthene and privately-held Altimmune announce merger in an all-stock transaction) NTNX +2.4% (M&A speculation (Cisco for Nutanix) from the Street.com afte HPE bought hyperconverged peer SimpliVity) LQ +1.7% (La Quinta Holdings says pursuing the separation of its businesses into two stand-alone publicly traded companies, which could involve spinning off our owned real estate assets as a separate company) Select Rail names showing strength after Hunter Harrison steps down as Canadian Pacific CEO to 'pursue opportunities involving other Class 1 Railroads': CSX +16.8%, NSC +3.6%, UNP +2.9%, KSU +2.4% Other news: SSH +15.3% (continued strength), ABEO +13.7% (EMA has granted Orphan Drug Designation for its gene therapy program ABO-101 for children impacted by Sanfilippo syndrome type B), NVCR +10.1% (announces physicians at 500 cancer treatment centers in the U.S. have been certified to prescribe its Optune to newly diagnosed and recurrent glioblastoma patientsg), SYN +8.5% (confirms plans to initiate a Phase 2b/3 adaptive pivotal trial for SYN-010; anticipates initiating this trial by the end of 1Q17), GALT +6.9% (Richard E. Uihlein discloses 7.89% active stake), MNK +4.2% (modestly rebounding; confirms details regarding FTC / Questcor matter; says no impact on Mallinckrodt net sales and will host call tomorrow at 7:30am ET), TDOC +2.4% (prices 8.25 mln share common stock offering (6.65 mln by Teladoc and 1.6 mln by stockholders) at $16.75/share), PSO +2% (modestly rebounding following yesterday's sell off), BHP +1% (preliminary agreement with federal prosecutors on behalf of Samarco Mineracao SA) Analyst comments: TSLA +4% (upgraded to Overweight from Equal Weight at Morgan Stanley) MBLY +4% (upgraded to Buy from Neutral at Goldman) HPQ +1.5% (upgraded to Buy from Neutral at UBS) PNRA +1.3% (upgraded to Buy from Neutral at Goldman) SWN +1.3% (upgraded at UBS)

 Ideal Power downgraded to Neutral from Buy at ROTH Capital  (2.68)

 NIKE initiated with a Overweight at Atlantic Equities; tgt $65  (53.27)

 

Gapping down Gapping down In reaction to disappointing earnings/guidance: RCII -15.6%, (Rent-A-Center sees Q4 EPS loss of ($0.30)-($0.20) vs $0.10 Capital IQ Consensus Estimate) PLXS -2.3%, EGBN -1.4%, CP -1.2%, (also Canadian Pacific announces that Keith Creel will become President and CEO of the company effective January 31, 2017 following E. Hunter Harrison's decision to retire) FUL -0.9%, SBNY -0.9%, SLM -0.8% Other news: AMDA -28.9% ( to offer and sell common stock and warrants in an underwritten public offering; size not disclosed) ZYNE -13.8% (commences common stock offering) VNOM -6.5% (Viper Energy Partners commences public offering of 7,000,000 common units representing limited partner interests; reports prelim Q4 operational results/acquisition update ) AAN -5% (RCII sympathy) HTGC -3% (commences $150 mln offering of its Convertible Senior Notes due 2022) HRTX -1.6% (commenced underwritten public offering of $150 million of shares of its common stock) AA -1% (files for 36,311,767 share common stock offering by selling stockholders) Analyst comments: GNC -4.8% (downgraded to Sell from Neutral at Goldman) SFM -3.5% (downgraded to Neutral from Buy at Goldman) AKS -2.8% (downgraded to Sell from Neutral at Citigroup) RCL -1.9% (downgraded to Sell from Neutral at Goldman) KATE -1.6% (downgraded to Neutral from Buy at BofA/Merrill) X -1.5% (downgraded to Neutral from Buy at Citigroup) ASML -1.2% (downgraded to Neutral from Buy at Citigroup)

 Filings, Offerings and Pricings

Filings:

• Alcoa (AA) files for 36,311,767 share common stock offering by selling stockholders
• Allegiance Bancshares (ABTX) files for $150 mln mixed securities shelf offering
• Amtech Systems (ASYS) files for $50 mln mixed securities shelf offering
• Midstates Petroleum (MPO) files for 14,470,293 share common stock offering by selling stockholders
• TransAlta (TAC) files for $2 bln mixed securities shelf offering

Offerings:

• Amedica (AMDA) to offer and sell common stock and warrants in an underwritten public offering; size not disclosed
• Hercules Capital (HTGC) commences $150 mln offering of its Convertible Senior Notes due 2022
• Liberty Media (LMCA) announces a private offering of Cash Convertible Senior Notes to buy $400m of LMCK (LMCK) Shares to be Held for Formula 1 Teams
• Zynerba Pharma (ZYNE) commences common stock offering; size not disclosed

Pricings:

• AdvancePierre Foods (APFH 27.83) prices secondary offering of 12.5 mln shares of common stock by selling shareholders at $27.00 per share
• Can-Fite BioPharma (CANF 2.25) announces $5 mln registered direct offering at $2.00/share
• Heron Theapeutics (HRTX 12.80) prices 12.3 mln shares at $12.20/share
• Teledoc (TDOC 17.00) prices upsized 8.25 mln share common stock offering (6.65 mln by Teladoc and 1.6 mln by stockholders) at $16.75/share
• ViewRay (VRAY 3.14) raises aggregate gross proceeds of ~$26.1 million through a private placement of its common stock and warrants at $3.00/share
• Viper Energy Partners (VNOM 16.72) prices an 8.5 mln share (upsized from 7 mln shares) offering of common units for gross proceeds of about $131.75 mln; Diamondback (FANG) indicated its interest in purchasing all common units offered that are not purchased in the public offering, up to a total of 2,000,000 common units.

IPO Radar: No IPOs Today; Keane Group (FRAC) Expected to Become First IPO of 2017 Tomorrow

Today's IPOs:

• No IPOs Opening Today.

Upcoming IPOs:

• January 20: Keane Group (FRAC) — The provider of well completion services with a focus on complex oil plays is expected to price its up-sized 22.3 million share IPO within a range of $17-$19. The deal was originally expected to consist of 16.7 million shares.

 Apollo Global Management lower ahead of the open following block trade pricing  (21.20)

 Gapping up/down: OCLR +9%, NFLX +7%, CHKP +4% after earnings, TSLA +4% after upgraade at MS; RCII -15%, PLXS -2% after earnings, X -1.5% and ASML -1% after dg's

Gapping up
In reaction to strong earnings/guidance:

• OCLR +8.6%, NFLX +6.5%, CHKP +4.3%, MTG +3.7%, UNP +2.9%, TAL +2.8%, WTFC +2.7%, BK +2.6%, PTC +2.4%, KEY +0.7%, BBT +0.6%

M&A news:

• CYTX +14.5% (to acquire certain assets from Azaya Therapeutics; Cytori to issue $2 mln in common stock up front)
• PIP +4.4% (PharmAthene and privately-held Altimmune announce merger in an all-stock transaction)
• NTNX +2.4% (M&A speculation (Cisco for Nutanix) from the Street.com after HPE bought hyperconverged peer SimpliVity)
• LQ +1.7% (La Quinta Holdings says pursuing the separation of its businesses into two stand-alone publicly traded companies, which could involve spinning off our owned real estate assets as a separate company)

Select Rail names showing strength after Hunter Harrison steps down as Canadian Pacific CEO to 'pursue opportunities involving other Class 1 Railroads':

• CSX +16.8%, NSC +3.6%, UNP +2.9%, KSU +2.4%

Other news:

• SSH +15.3% (continued strength), ABEO +13.7% (EMA has granted Orphan Drug Designation for its gene therapy program ABO-101 for children impacted by Sanfilippo syndrome type B)
• NVCR +10.1% (announces physicians at 500 cancer treatment centers in the U.S. have been certified to prescribe its Optune to newly diagnosed and recurrent glioblastoma patientsg)
• SYN +8.5% (confirms plans to initiate a Phase 2b/3 adaptive pivotal trial for SYN-010; anticipates initiating this trial by the end of 1Q17)
• GALT +6.9% (Richard Uihlein discloses 7.89% active stake)
• MNK +4.2% (modestly rebounding; confirms details regarding FTC / Questcor matter; says no impact on Mallinckrodt net sales and will host call tomorrow at 7:30am ET), TDOC +2.4% (prices 8.25 mln share common stock offering (6.65 mln by Teladoc and 1.6 mln by stockholders) at $16.75/share)
• PSO +2% (modestly rebounding following yesterday's sell off)
• BHP +1% (preliminary agreement with federal prosecutors on behalf of Samarco Mineracao SA)

Analyst comments:

• TSLA +4% (upgraded to Overweight from Equal Weight at Morgan Stanley)
• MBLY +4% (upgraded to Buy from Neutral at Goldman)
• HPQ +1.5% (upgraded to Buy from Neutral at UBS)
• PNRA +1.3% (upgraded to Buy from Neutral at Goldman)
• SWN +1.3% (upgraded at UBS)

Gapping down
In reaction to disappointing earnings/guidance:

• RCII -15.6%, (Rent-A-Center sees Q4 EPS loss of ($0.30)-($0.20) vs $0.10 Capital IQ Consensus Estimate)
• PLXS -2.3%, EGBN -1.4%, CP -1.2%, (also Canadian Pacific announces that Keith Creel will become President and CEO of the company effective January 31, 2017 following E. Hunter Harrison's decision to retire)
• FUL -0.9%, SBNY -0.9%, SLM -0.8%

Other news:

• AMDA -28.9% ( to offer and sell common stock and warrants in an underwritten public offering; size not disclosed)
• ZYNE -13.8% (commences common stock offering)
• VNOM -6.5% (Viper Energy Partners commences public offering of 7,000,000 common units representing limited partner interests; reports prelim Q4 operational results/acquisition update )
• AAN -5% (RCII sympathy)
• HTGC -3% (commences $150 mln offering of its Convertible Senior Notes due 2022)
• HRTX -1.6% (commenced underwritten public offering of $150 million of shares of its common stock)
• AA -1% (files for 36,311,767 share common stock offering by selling stockholders)

Analyst comments:

• GNC -4.8% (downgraded to Sell from Neutral at Goldman)
• SFM -3.5% (downgraded to Neutral from Buy at Goldman)
• AKS -2.8% (downgraded to Sell from Neutral at Citigroup)
• RCL -1.9% (downgraded to Sell from Neutral at Goldman)
• KATE -1.6% (downgraded to Neutral from Buy at BofA/Merrill)
• X -1.5% (downgraded to Neutral from Buy at Citigroup)
• ASML -1.2% (downgraded to Neutral from Buy at Citigroup)

 S&P futures vs fair value: -1.80. Nasdaq futures vs fair value: +2.00.

The S&P 500 futures trade two points (-0.1%) below fair value.

Equity indices in the Asia-Pacific region ended Thursday on a mixed note. Japan's Nikkei (+0.9%) displayed relative strength, climbing as the yen held its ground after sliding during the Wednesday session on Wall Street. Employment data from Australia showed the third consecutive month of growth, but the pace of growth slowed down notably. Elsewhere, Nikkei discussed falling rents in Japan, which will make it more difficult for inflation to reach 2.0%.

• In economic data:
  • Australia's December Employment Change 13,500 (expected 10,000; last 37,100) and December Unemployment Rate 5.8% (expected 5.7%; last 5.7%). December Participation Rate 64.7% (consensus 64.6%; last 64.6%)
  • New Zealand's November Building Consents -9.2% month-over-month (last 2.0%). December Business NZ PMI 54.5 (last 54.5)
  • Hong Kong's December Unemployment Rate held at 3.3%, as expected

---Equity Markets---

• Japan's Nikkei gained 0.9% with help from most components. Growth-sensitive names like Fanuc, Yaskawa Electric, Furukawa Electric, Honda, Komatsu, Toho, SUMCO, and Mitsubishi UFJ gained between 2.1% and 3.7%. Toshiba plunged 16.7% amid speculation the company's write-down of a U.S. nuclear could be as much as $8 billion.
• Hong Kong's Hang Seng shed 0.2%. Cathay Pacific Air fell 4.5% while property names like Sino Land, Henderson Land, New World Development, SHK Properties, and China Resources Land posted losses between 0.7% and 2.3%. Want Want China outperformed, climbing 2.0%.
• China's Shanghai Composite surrendered 0.4%. Harbin Dongan Auto Engine, Jiangxi Changjiu Biochemical Industry, China United Network Communications, and HuNan Tyen Machinery lost between 4.6% and 7.3%.
• India's Sensex added 0.2% even though most components ended lower. GAIL surged 5.3% after announcing its Board of Directors will consider issuing bonus shares and fundraising through private placement bonds. Power Grid, Oil & Natural Gas, Tata Motors, and Infosys also outperformed, gaining between 0.8% and 1.8%.

Major European indices trade close to their flat lines while the UK's FTSE (-0.4%) underperforms as the pound (1.2327) adds 0.6% against the dollar. The European Central Bank made no changes to its policy stance, keeping its Deposit Facility Rate and Main Refinancing Rate at a respective -0.4% and 0.0%, as expected. During his press conference, ECB President Mario Draghi struck a dovish tone, leading to a slide in the euro, which is currently down 0.2% at 1.0609 against the dollar.

• In economic data:
  • Eurozone November Current Account surplus EUR36.10 billion (expected EUR29.30 billion; last surplus EUR28.30 billion)
  • Spain's trade deficit narrowed to EUR1.25 billion from EUR1.80 billion (expected deficit of EUR1.50 billion)
  • Swiss December PPI +0.2% month-over-month, as expected (last 0.1%); 0.0% year-over-year (expected 0.1%; last -0.6%)

---Equity Markets---

• Germany's DAX is higher by 0.1%. Thyssenkrupp and Fresenius weigh, showing respective losses of 1.6% and 1.1%. Exporters are mixed while financials outperform. BMW is down 0.2%, Daimler sits just above its flat line, and Volkswagen has added 0.5%. Deutsche Bank and Commerzbank lead, rising 1.3% and 4.1%, respectively.
• France's CAC has added 0.2%. Consumer names are mixed with Essilor International, Accor, and Danone down between 0.6% and 2.2% while Pernod Ricard, Louis Vuitton, and Kering are up between 1.1% and 1.5%.
• UK's FTSE trades down 0.4%. Energy-related names like BP and Royal Dutch Shell hold respective losses of 0.9% and 1.5%. Homebuilders also lag with Barratt Developments, Taylor Wimpey, and Persimmon down between 1.3% and 1.6%. Pearson has jumped 3.5% after yesterday's 29.1% plunge.

 

Community Trust Bancorp downgraded to Sell from Hold at Sandler O'Neill  (48.55)

 

On The Wires ViewRay, Inc. (VRAY) announced that the German Research Foundation, a federal institution supporting research in Germany, has purchased a MRIdian Linac for installation and patient treatments at the University Clinic Heidelberg as part of its initiative for MRI-based radiation therapy. S&W Seed Company (SANW) has commenced commercial-scale production of its hybrid grain sorghum and hybrid forage sorghum operations. Mitel (MITL) announced the expansion of its cloud portfolio in South Africa through a partnership with South Africa's largest technology and knowledge service integrator, EOH.

 Apple downgraded to Negative from Mixed at OTR Global  (119.99)

 S&P futures vs fair value: -1.30. Nasdaq futures vs fair value: +2.60.

The S&P 500 futures trade one point below fair value after the European Central Bank decided to keep its current policy stance, as was widely expected. ECB President Mario Draghi made dovish-sounding remarks in his press conference following the ECB decision, leading to a retreat in the euro. The single currency is down 0.3% against the dollar at 1.0603.

U.S Treasuries remain in negative territory, but have seen an uptick in buying interest following the ECB decision. The 10-yr yield is up two basis points at 2.45%.

On the corporate front, Netflix (NFLX 142.35, +9.19) is up 6.9% in pre-market trade after reporting better than expected quarterly results and upside Q1 guidance. The company saw its largest ever quarter of net additions, driven by strong acquisition trends in both US and International segments.

Investors received a batch of economic data earlier this morning, with the Philadelphia Fed Survey deviating furthest from expectations. The report for January rose to 23.6 from a revised 19.7 (from 21.5) while economists polled by Briefing.com had expected a reading of 15.3.

Separately, housing starts increased to a seasonally adjusted annualized rate of 1.226 million units in December, up from a revised 1.102 million units in November (from 1.09 million). The Briefing.com consensus expected starts to increase to 1.193 million units. Building permits decreased to a seasonally adjusted 1.210 million in December from an upwardly revised 1.212 million (from 1.201 million) for November. The Briefing.com consensus expected a reading of 1.217 million.

The latest weekly initial jobless claims count totaled 234,000 while the Briefing.com consensus expected a reading of 252,000. Today's tally was below the revised prior week count of 249,000 (from 247,000). As for continuing claims, they declined to 2.046 million from the revised count of 2.093 million (from 2.087 million).

 On The Wires

• Investopedia (IAC) introduces The Trump Economy, an interactive microsite dedicated exclusively to the 45th President and his administration's impact on investors' money and their financial lives. Users seeking insight on the financial markets under the Trump presidency can find news on the policies shaping the American economic agenda as well as financial analysis of sectors and stocks that will be impacted.
• Biocept (BIOC) announced that it has been awarded Australian Patent No. 2010229924 entitled, DEVICES AND METHODS OF CELL CAPTURE AND ANALYSIS. The issued patent covers the use of antibodies in microchannels for the capture of cancer cells or other cells that can be used for molecular analysis in blood and other biological fluids.
• Orion Energy Systems (OESX) announced that it has been awarded approximately $500,000 in orders for a high-temperature environment retrofit project by Clow Valve, a major manufacturer of waterworks and fire hydrant equipment. Orion will retrofit Clow Valve's machine shop and foundry in Oskaloosa, Iowa, with over 900 APOLLO LED High Bay fixtures. Orion expects the project to be completed by the end of its current fiscal year in March 2017.
• Renal Therapy Services, a Baxter International Inc. (BAX) company, announced that a continuous quality improvement program has reduced peritonitis by 65% over an eight-year period in 49 of its Renal Care Centers located in Colombia. The program is estimated to have prevented approximately 10,400 peritonitis episodes, saved approximately $200,000 per year, and helped achieve an infection rate that is significantly lower than the benchmark set by the International Society of Peritoneal Dialysis (ISPD). These results are included in two retrospective, observational studies published in the journal Peritoneal Dialysis International.
• AquaBounty Technologies (AQB), a majority-owned subsidiary of Intrexon (XON), announces that it has completed the listing of its common shares on the NASDAQ Stock Market and finalized the equity subscription from Intrexon.
• CAE (CAE) announced a series of aviation training contracts valued at more than C$250 million with airlines and business aircraft operators worldwide. The contracts include cadet-to-captain training programs, crew resourcing services, and the sale of 12 full-flight simulators, bringing the total number of FFS sales announced to date this fiscal year to 38.
• L3 Technologies (LLL) announced that it has been awarded a $32 million contract modification from the U.S. Army to supply the M783 Point Detonating/Delay Mortar Fuze. The contract was awarded under a Foreign Military Sales program, and the purchased equipment will be used by an international customer.

 3D Systems strength attributed to renewed General Electric (GE) M&A chatter making the rounds  (16.56 +0.41)

 Edison Correction: Stock was not upgraded at Evercore ISI today  (72.03 -0.27)Prior comment stated EIX was upgraded to a «Buy» rating from a «Hold» at Evercore ISI, and has been removed

 Check Point Software +6% at all time highs leading cybersecurity stocks (HACK +0.9%) higher after strong report/guidance  (95.37 +5.76)CHKP +6.18% PANW +2.53% FTNT +2.23% PFPT +1.76% FEYE +1.55% RPD +1.18% MIME +1.06% CUDA +0.85% HACK +0.90% QQQ +0.29% SYMC +0.27% VRNS +0.17% QLYS +0.15% ZIXI +0.82%

 Economic Summary: Housing Starts above expectations

Economic Data Summary:

• Weekly Initial Claims 234K vs Briefing.com consensus of 252K; Last Week was revised to 249K from 247K
• Weekly Continuing Claims 2.046 M vs Briefing.com consensus of; Last Week was revised to 2.093 M from 2.087 M
  • The key takeaway from the report is that it will drive heightened expectations for nonfarm payroll growth in January as this claims report covers the period in which the household and establishment survey for the Employment Situation report are conducted.
• December Housing Starts 1.226 M vs Briefing.com consensus of 1.193 M; November was revised to 1.102 M from 1.090 M
• December Building Permits 1.210 M vs Briefing.com consensus of 1.217 M; November was revised to 1.212 M from 1.201 M
  • The key takeaway from the report is that residential construction will be computed as a positive input in Q4 GDP forecasts as the fourth quarter average for privately-owned housing units under construction was 1.8% above the third quarter average.
• January Philadelphia Fed 23.6 vs Briefing.com consensus of 15.3; December was revised to 19.7 from 21.5
  • The key takeaway from the report is that it's a first quarter number and it suggests manufacturing activity in the Philadelphia Fed region expanded at an encouraging pace to begin the year.

Upcoming Fed/Treasury Events:

• Fed Chair Janet Yellen to speak today at 20:00 ET

Other International Events of Interest

• Australia's December Employment Change 13,500 (expected 10,000; last 37,100) and December Unemployment Rate 5.8% (expected 5.7%; last 5.7%). December Participation Rate 64.7% (consensus 64.6%; last 64.6%)

 Oclaro (+14%) leading fiber optics stocks higher after raising Q4 guidance  (9.27 +1.14)OCLR +14.02% FN +7.82% LITE +3.89% FNSR +3.57% NPTN +2.30% CIEN +2.05% ACIA +1.14% AXTA +0.83% INFN +0.95%

 Brazil ADRs are outperforming in early trade

• FBR +4.8%, SBS +1.8%, TSU +1.4%, BRFS +1.2%, UGP +1.2%, JBSAY +1.1%, ITUB +0.9%, VIV +1%, ERJ +0.8%, BAK +0.6%, BBD +0.6%, CIG +0.6%, PBR +0.5%, BSBR +0.1%

 Opening Market Summary: Stock Market Opens Thursday Flat

The stock market opened Thursday flat as investors appear to have a wait-and-see mentality preceding Inauguration Day.

Industrials (+1.1%) have jumped out to an early lead with railroad stocks pacing the advance, while non-cyclical sectors populate the bottom of the leaderboard as four of the five are in negative territory.

Energy (-0.4%) has underperformed thus far despite an uptick in crude oil. The commodity currently hovers near its overnight high, up 1.2% at $52.51/bbl after the International Energy Agency reported that global oil markets were constricting.

Treasuries have bounced back from their overnight lows, but remain below their flat lines. The 10-yr yield is up three basis points at 2.46%.

 Early Options Activity

Taking an early look at the options market, we found the following names that may be worth watching throughout the day for further indication of investor expectations given their options volume and implied volatility movement.

Stocks seeing volatility buying (bullish call buying/bearish put buying):

Calls:

• VIAB Jan 39.5 calls are seeing interest with 2160 contracts trading vs. open int of 2510, pushing implied vol up around 72 points to ~111% — earlier this month, Hollywood Reporter discussed speculation that Liberty Media could look to consolidate several media companies including Viacom. Co is confirmed to report earnings February 9 before the open.

Puts:

• CX Jan 8 puts are seeing interest with 1890 contracts trading vs. open int of 9170, pushing implied vol up around 89 points to ~146% — we noted activity in the same strike last week (see 1/10 13:59 OPTNX). Co is expected to report earnings early February. Trinidad Cement Offer period is expected to close on January 24, 2017.

Stocks seeing volatility selling:

• BK, KEY, JBHT, UNP implied vol is lower following earnings/guidance

Sentiment: The CBOE Put/Call ratio is currently: 0.80… VIX: (12.44, -0.04, -0.3%).
Tomorrow is options expiration — Tomorrow, January 20th is the last day to trade January equity options.
*Please use the Talk to Us link at the top of the page to provide feedback on this comment as well as the OPTNX comments.

 Notable movers of interest: NFLX +5.5% on Q1 EPS beat, guidance

The following are some of today's most notable movers of interest, categorized by market capitalization (large cap over $10 billion and mid cap between $2-10 billion) and ranked by % change (all stocks over 100K average daily volume).

Large Cap Gainers

• CSX (43.03 +16.66%): Outgoing Canadian Pacific (CP) CEO Hunter Harrison said to partner with an activist investor to push for changes at CSX, according to the WSJ.
• NFLX (140.6 +5.51%): Trades sharply higher on Q4 earnings beat, guides Q1 EPS above consensus.
• UNP (106.5 +2.63%): Reports Q4 EPS beat.

Large Cap Losers

• BBT (45.05 -2.49%): Reports Q4 EPS and revenue misses.
• BK (45.16 -2.31%): Shares drop despite reporting Q4 EPS in-line.

Mid Cap Gainers

• TAL (79.09 +5.56%): Reports Q3 EPS and revenue beats, guides Q4 revenues above consensus.
• MBLY (44.08 +4.9%): Upgraded to Buy from Neutral at Goldman.
• PTC (49.59 +4.65%): Reports Q1 EPS and revenues in-line, guides Q2 EPS in-line, guides Q2 revenues below consensus; lowers FY17 rev guidance & narrows EPS guidance.

Mid Cap Losers

• AAN (30.03 -7.06%): Shares trade lower in sympathy with Rent-A-Center (RCII); RCII shares are lower following yesterday evening's Q4 EPS guidance that was below consensus.
• AKS (9.53 -5.33%): Downgraded to Sell from Neutral at Citigroup.
• X (33.22 -4.9%): Downgraded to Neutral from Buy at Citigroup.

Hearing Wesco Aircraft was initiated premarket with a Buy at SunTrust; tgt $18  (15.25 +0.40)

 Metals, REITs, retail, biotech and semis lagging in early trade with transports, energy and cybersecurity strong vs. SPY -0.1%  (226.50 -0.25)

• SLV -1.54% XME -1.36% IYR -0.81% XLRE -0.77% XRT -0.65% IBB -0.60% XBI -0.58% XBI -0.58% GLD -0.53% SMH -0.50%
• IYT +1.20% XLI +0.92% HACK +0.89% USO +0.87% OIH +0.47%

 Sector Summary: Technology (XLK -0.02%) trading modestly lower today, modestly ahead of the broader market

The tech sector — XLK — trades modestly ahead of the broader market. Semiconductors, meanwhile, display relative strength as the SOX index trades +0.13%. Within the SOX index, AMD (+2.63%) outperforms, while MU (-1.52%) lags. Among other major indices, the SPY is trading 0.14% lower, while the QQQ +0.07% and the NASDAQ -0.07% trade opposite on the session. Among tech bellwethers, TMUS (+2.46%) is showing relative strength, while AMX (-0.89%) lags.

Notable gainers following earnings:

• CHKP (+7.7%) reported better than expected Q4 earnings and revs; guided Q1 and FY17 better than market expectations on the call, NFLX (+5.6%) reported better than expected Q4 earnings and gave strong Q1 guidance, PTC (+5.4%)

Gainers on news:

• ANY (+33.3%) co to acquire HVE and Unified ConneXions, terms not disclosed; transaction expected to be accretive to ANY in Q1.
• COUP (+0.4%) co announced a 'significant' manufacturing customer in Germany.
• LDOS (+0.3%) co received a prime contract by the U.S. Army Program Executive Office — Simulation, Training and Instrumentation; total contract value of approx. $22 million.
• ORCL (+0.1%) co to acquire Apiary; terms not disclosed.

Laggards on news:

• ITUS (-18.1%) co's Board approved a rights offering for shareholders of up to $12 mln.
• TOSBF (-13.0%) shares lower in response to report that company might have a JPY 700 bln/$6 billion writedown on nuclear unit.
• SBAC (-1.2%) co amended/restated bylaws became effective upon closing of merger on January 13 — included changes to proxy access provisions.
• SNCR (-0.2%) co completed tender offer to acquire all outstanding shares of Intralinks (IL).

Among notable analyst upgrades:

• HPQ (+2.2%) upgraded to Buy from Neutral at UBS
• NFLX (+5.6%) to Neutral from Underperform at Macquarie
• MBLY (+4.8%) to Buy from Neutral at Goldman
• DBD (+0.2%) to Outperform from In-Line at Imperial Capital

Among notable analyst downgrades:

• AAPL (-0.2%) downgraded to Negative from Mixed at OTR Global
• NTCT (-1.5%) to Sector Perform from Outperform at RBC Capital Mkts
• ASML (-1.7%) to Neutral from Buy at Citigroup
• ERIC (-1.9%) to Sell from Neutral at Goldman
• CEL (-0.8%) to Equal Weight from Overweight at Barclays

Scheduled to report earnings after the bell:

• TEAM, IBM, SWKS

 Moneygram shares see small pop as peer Western Union (WU) gets halted  (11.75 +0.06)

 Sector Summary: The Healthcare sector (-0.37%) is trading lower today, in-line w/ the S&P 500 (-0.26%)Gainers on news:

• Biocept (BIOC +9.93%) Awarded Patent in Australia for the Use of Antibodies in Microchannels to Capture Circulating Tumor Cells and Other Rare Cells
• ViewRay (VRAY +13.99%) raised aggregate gross proceeds of approximately $26.1 million through a private placement of its common stock and warrants
• Catabasis Pharma (CATB +12.77%) announces the publication of Phase 1 data on Edasalonexent in adult subjects in the Journal of Clinical Pharmacology; data demonstrates that edasalonexent was safe, well tolerated, and inhibited activated NF-kB in adult

Decliners on news:

• Amedica (AMDA -31.6%) prices public offering of common stock/warrants at $0.51 for one share of common stock and 0.45 warrants for gross proceeds of approx $4.5 mln
• Zynerba Pharma (ZYNE -14.56%) prices underwritten public offering of 2.8 million shares of its common stock at a price of $18.00 per share for proceeds of about $50.4 mln
• Can-Fite Biopharma (CANF -6.22%) announces $5 mln registered direct offering at $2.00/share

Upgrades/Downgrades:

• Mallinckrodt plc (MNK +3.93%) Expect MNK to recover post-company update; Buy, $85 tgt — Mizuho
• BioLife Solutions (BLFS +1.75%) initiated with a Buy at Maxim Group; tgt $3
• Transenterix (TRXC -1.37%) downgraded to Mkt Perform from Outperform at Raymond James
• Covanta (CVA -3.36%) downgraded to Equal Weight from Overweight at Barclays
• Cerner (CERN -1.22%) downgraded to Equal Weight from Overweight at Barclays

 Today's biggest point gainers/losersBiggest point gainers: NFLX 140.95(7.69), CHKP 96.04(6.43), CSX 43.19(6.31), TSLA 244.4(6.04), CP 150.26(5.04), TAL 79.39(4.47), NSC 114.39(4.42), CI 145.82(3.85), UNP 106.88(3.11), MHK 206.97(2.88), UNH 160.36(2.62), PANW 141.25(2.49), ACIA 62.5(2.49), NVDA 105.39(2.44), BTI 116.44(2.29), CLVS 58.86(2.24), PTC 49.5(2.12), GATX 59.14(1.93), TDOC 18.93(1.93), EMR 59.13(1.91), HUM 208(1.89), MBLY 43.85(1.83), LMT 255.84(1.77), FNSR 30.5(1.68), ALK 94.46(1.53)

Biggest point losers: ALGN 90.99(-3.43), BIIB 280.36(-3.25), ZYNE 19.24(-3.22), GS 231.81(-2.48), SPG 184.23(-2.34), AGN 214.4(-2.16), ASML 120.81(-2.16), AAN 30.2(-2.11), X 32.84(-2.09), ALXN 133.82(-2.05), FUL 48.39(-2.04), FLT 150.43(-1.95), CELG 113.3(-1.92), PVH 91.63(-1.73), NUE 60.66(-1.73), SHPG 164.72(-1.69), TSO 79.98(-1.65), BIDU 174.98(-1.56), AMT 104.14(-1.53), NVS 70.42(-1.47), XOM 84.91(-1.37), MPET 11.95(-1.21), JBHT 96.83(-1.2), CCI 86(-1.2), STLD 36.08(-1.19)

 Sector Summary: S&P Consumer Discretionary Index -0.1%, faring better than the broader marketThe consumer discretionary group is slightly outperforming the broader market in early trade. The retail group is mixed with the Retail HOLDRS Trust (RTH) flat and the SPDR S&P Retail ETF (XRT) -1.3%.

Notable earnings/guidance: 

• Trading higher following earnings/guidance: NFLX +5.4%, BSET +0.9%
• Lower following guidance: RCII -14.6% (Rent-A-Center sees Q4 EPS loss well below the consensus estimate)

In the news:

• Leaders:  LQ 0.6% (La Quinta Holdings says pursuing the separation of its businesses into two stand-alone publicly traded companies)
• Laggards: AAN -6.8% (RCII sympathy), INN -2.6% (appointed President and Chief Executive Officer, Daniel Hansen, to the additional post of Chairman of the Board), MDLZ -0.9% (Mondelez Int'l to sell most of its grocery business in Australia and New Zealand to Bega Cheese for A$460 mln), PIR -1.1% (Alden Global lowers active stake to 4.3%; continues to believe there is substantial upside), KORS -1.6% (lower despite renewed M&A chatter making the rounds)
• Nearly unchanged:  AMZN (EU says welcomes steps taken by Amazon/Audible and Apple (AAPL) to improve competition in audiobook distribution)

Other notable trends:

• QSR/restaurant names are under pressure: RUTH -3.3%, NDLS -2.3%, RT -2.3%, SONC -2.1%, FOGO -1.7%, TAST -1.8%, DFRG -1.7%, PBPB -1.7%, PLKI -1.8%, BWLD -1.6%, TXRH -1.4%, LOCO -1.4%, EAT -1.4%, DIN -1.3%, QSR -1.3%, BLMN -1.1% (downgraded to Neutral from Buy at Goldman), FRSH -1.1%, CAKE -1%, SHAK -1.1%, ZOES -0.8%, JACK -0.7%, FRGI -0.7%, RRGB -0.7%

Analyst related:

• Upgrades: GPC 0.1% (upgraded to Neutral from Sell at Goldman), PNRA 0.3% (upgraded to Buy from Neutral at Goldman), HGV +4% (upgraded at Goldman)
• Downgrades: GNC -15.7% VSI -5.6% SFM -2.2% (downgraded at Goldman), RCL -1.5% (downgraded to Sell from Neutral at Goldman), KATE -3.2% (downgraded to Neutral from Buy at BofA/Merrill), HST -0.9% (downgraded to Sell from Neutral at Goldman), TGT -0.5% (continued weakness following downside guidance; also downgraded to Sell rom Neutral at Goldman), DF -4% (downgraded to Mkt Perform from Outperform at Bernstein), KO flat (downgraded at Wells Fargo)
• Misc: DLTR -0.7% (removed from Conviction Buy List at Goldman), CMCSA 0.1% (initiated with a Buy at HSBC Securities), MAR 1.5% (added to Conviction Buy List at Goldman), RH -2.5% (removed from Conviction Buy List at Goldman), COST flat (added to Conviction Buy List at Goldman), UAA -0.5% (initiated with a Buy at CLSA), LULU -1.5% (initiated with a Underperform at CLSA), NKE -0.2% (initiated with a Underperform at CLSA; initiated with a Overweight at Atlantic Equities; tgt $65)

 

Canadian Pacific target raised to $173 from $164 at Cowen following last night's earnings  (150.91 +5.69)

 CMS Energy increases quarterly dividend to $0.3325/share from $0.31/share  (42.27 +0.08)

 Rumor Round Up

Rumor Activity was very active today.

• Toshiba (TOSBF 2.18 -0.29) weakness attributed to report that company might have a JPY 700 bln/$6 billion writedown on nuclear unit.
• General Electric (GE 31.20 -0.03) for 3D Systems (DDD 18.86 +0.76) M&A speculation circulated.
• Michael Kors (KORS 42.66 -0.57) renewed M&A speculation made the rounds.
• NY Post reported that that a US judge will move to block Cigna's (CI 144.98 +3.01) proposed merger with Anthem (ANTM 144.69 +2.47).
• Reuters discussed that Aon (AON 114.65 +0.60) near a deal to sell its employee benefits outsourcing unit.
• Intereconomia reported that Teva (TEVA 33.85 -0.25) might acquire Perrigo (PRGO 76.24 -0.22).
• WSJ reported that activists might request merger between Nanometrics (NANO 25.60 +0.05) and Rudolph Tech (RTEC 23.03 +0.03).

While many rumors circulate during the day, and the validity of the source of these rumors can be questionable, the speculation may increase volatility in the near term.

 

Stocks/ETFs that traded to new 52 week highs/lows this session — New highs (106) outpacing new lows (36)Stocks that traded to 52 week highs: ABY, AGCO, AGO, AHL, AM, AMAT, ANTM, APOG, ARTX, ASMB, ATKR, AVGO, AXL, BEAV, BERY, BGB, BKEP, BST, BWXT, CBT, CENX, CEQP, CGNX, CHE, CHKP, CLC, CLCD, CLVS, CMO, COHR, CSX, CWEI, DSCI, DXGE, ECPG, EMR, EXFO, FMSA, FORM, GDOT, GGG, GMZ, GNTX, HCAC, HQY, HRI, IAC, INFO, JGH, LECO, LOXO, LQ, LRCX, MASI, MBI, MBT, MCHP, MNTX, MPG, MTOR, NANO, NFLX, NOA, NSC, NSH, OUT, PLXS, PSB, PTC, QQEW, QQQ, QQQX, QTEC, RAI, RE, RTEC, S, SHLO, SHOP, SKYY, SLB, SLCA, SMLP, SN, SNOW, SYUT, TGP, TGS, TMUS, TNAV, TQQQ, TRGP, TSE, TTWO, UNP, UNVR, URI, UTHR, UVV, VMW, VONG, VR, VSH, WHF, WIX, WNC Stocks that traded to 52 week lows: AMDA, ANTH, AVGR, BONT, BPTH, CASC, COYN, DCTH, DIN, DRYS, ECYT, EMG, EVC, EYES, FIT, FLKS, GBSND, GMAN, GNC, HIMX, HOTR, ICLD, IPWR, JRJC, KONA, LTBR, MACK, MARK, RNVA, RXII, SQQQ, TWER, VLRS, VNCE, VSI, VSTO Thinly-Traded Stocks (ADV below 45k) that traded to 52 week highs on High Volume: CIVB, ENFC, FTCS, GFY, GRVY, GSH, LARK, MIND, NTIC, NVEC, OPOF, OVLY, OXBR, PACEU, PBBI, PBNC, PPSI, QQXT, RILY, RUSHB, SHI, UPLD, USAP Thinly-Traded Stocks (ADV below 45k) that traded to 52 week lows on High Volume: ATAI, CGG, DFBG, GSIH, SPI ETFs that traded to 52 week highs: IWF, QQQ, SKYY, XLK

 Today's biggest % gainers/losersThe following are today's top 20 percentage gainers and top 20 percentage losers, categorized by sectors (over $300 mln market cap and 100K average daily volume).

Today's top 20 % gainers

• Healthcare: TDOC (18.98 +11.62%), NVCR (6.8 +5.35%), MNK (48.99 +5.29%), HRTX (13.48 +5.27%),
• Materials: FBR (10.19 +4.84%)
• Industrials: CSX (43.42 +17.72%)
• Consumer Discretionary: XRS (79.39 +5.97%), NFLX (140.45 +5.4%)
• Information Technology: OCLR (9.29 +14.21%), CHKP (95.91 +7.02%), PTC (50.02 +5.57%), FNSR (30.39 +5.45%), DDD (16.9 +4.97%)
• Financials: FNBC (6.3 +9.57%)
• Energy: CCJ (11.74 +8.2%), PDS (5.84 +6.18%), LPG (10.99 +4.67%), UNT (26.79 +4.65%), CPLP (3.5 +4.57%), TGP (17.2 +4.24%)

Today's top 20 % losers

• Healthcare: KERX (5.68 -5.8%), PACB (4.55 -5.51%), CYH (6.47 -5.21%), GNMK (12 -5.14%)
• Materials: LXU (7.23 -6.59%), AKS (9.45 -6.16%), X (32.85 -5.95%), TROX (11.24 -5.94%), FUL (47.62 -5.58%), ZEUS (23.91 -5.27%), TMST (14.34 -4.91%), FTK (9.64 -4.84%)
• Consumer Discretionary: GNC (9.38 -15.88%), RCII (8.7 -14.62%), AAN (29.96 -7.27%), ASNA (4.8 -5.98%), VSI (21.65 -5.66%)
• Information Technology: HIMX (5.42 -5%)
• Energy: EPE (5.56 -6.17%)
• Consumer Staples: DF (19.9 -6.62%)

 Today's most active stocksThe following are today's most active stocks ranked by volume and relative volume, categorized by sectors (over $300 mln market cap and 100K average daily volume).

Today's top 20 volume

• Materials: VALE (11.55 mln -1.31%), X (10.53 mln -5.95%), AKS (9.54 mln -6.16%), MT (8.43 mln -1.64%)
• Industrials: CSX (47.64 mln +17.72%), GE (11.35 mln +0%)
• Consumer Discretionary: NFLX (13.91 mln +5.4%), F (10.61 mln +0.21%)
• Information Technology: AMD (21.03 mln +2.28%), OCLR (17.28 mln +14.21%), MU (16.66 mln -1.72%), AAPL (10.02 mln +0.02%)
• Financials: BAC (37.88 mln -0.15%), KEY (10.77 mln -1.79%), C (10.09 mln -1.06%), WFC (7.62 mln +0.06%), MS (7.2 mln -1.91%)
• Energy: CHK (22.82 mln -3.44%)
• Consumer Staples: RAI (11.17 mln +0.99%)
• Telecommunication Services: S (13.22 mln +2.52%)

Today's top relative volume (current volume to 1-month average daily volume)

• Healthcare: TDOC (7.36x +11.62%), HRTX (3.7x +5.27%), MNK (1.79x +5.29%)
• Industrials: CSX (5.7x +17.72%), CP (3.15x +4.19%)
• Consumer Discretionary: RCII (3.57x -14.62%), FDML (3.02x -0.1%), GNC (2.65x -15.88%), XRS (2.5x +5.97%), NFLX (1.98x +5.4%), PSO (1.73x +1.89%), AAN (1.65x -7.27%)
• Information Technology: OCLR (3.04x +14.21%), PTC (2.66x +5.57%), CHKP (2.61x +7.02%), DDD (1.82x +4.97%)
• Financials: APO (2.22x -3.07%), KCG (1.65x +2.07%)
• Energy: STNG (1.91x +0.46%)
• Consumer Staples: APFH (12.66x -1.8%)

 European Markets Closing PricesEuropean markets are now closed; stock markets across Europe performed as follows:

• UK's FTSE: -0.5%
• Germany's DAX: 0.0%
• France's CAC: -0.3%
• Spain's IBEX: -0.2%
• Portugal's PSI: -0.6%
• Italy's MIB Index: + 0.7%
• Irish Ovrl Index: + 0.6%
• Greece ASE General Index: -0.2%

 Hearing Amec Foster Wheeler was upgraded to Buy from Hold at Societe Generale  (5.59 -0.01)

 Market Internals

The broader market is breaking down at the moment, near lows of the session as the Dow Jones Industrial Average loses about 35 points (-0.17%) to 19770, the S&P 500 is lower by 4 (-0.16%) to 2268, and the Nasdaq Composite is down about 3 (-0.05%) to 5552. Action has come on lower than average volume (NYSE 264 vs. avg. of 345; NASDAQ 789 mln vs. avg. of 806), with decliners outpacing advancers (NYSE 700/2251, NASDAQ 804/1942) and new highs outpacing new lows (NYSE 63/14, NASDAQ 73/30).

Relative Strength:

US Nat Gas-UNG +2.2%, Sugar-SGG +1.2%, Brazil-EWZ +1.0%, Coffee-JO +0.9%, Philippines-EPHE +0.8%, Cotton-BAL +0.8%, Saudi Arabia-KSA +0.6%, New Zealand-ENZL +0.6%, Transportation-IYT +0.6%, Industrials-XLI +0.6%, Australia-EWA +0.5%, Shipping-SEA +0.5%, Latin Am. 40-ILF +0.4%, Australian Dollar-FXA +0.4%.

Relative Weakness:

Egypt-EGPT -4.9%, Cocoa-NIB -3.4%, Metals&Mining-XME -2.1%, Steel-SLX -2.1%, Rare Earth Metals-REMX -1.9%, Turkey-TUR -1.8%, Greece-GREK -1.6%, Silver Miners-SIL -1.3%, Retail-XRT -1.3%, Jr. Gold Miners-GDXJ -1.2%, Vietnam-VNM -1.1%, Thailand-THD -1.0%, Japanese Yen-FXY -0.9%, Russia-RSX -0.9%.

 

United Therapeutics downgraded to Hold from Buy at Standpoint Research  (153.52 +0.72)

 Western Union shares resume trading  (24.58 -0.27)

 Earnings Calendar for Thursday, January 19th

• Today after the close look for the following companies to report:
  • IBM, AXP, SWKS, PBCT, ASB, TEAM, FFBC, BMTC, INDB
• Tomorrow before the open look for the following companies to report:
  • GE, PG, SLB, SYF, STI, RF, CFG, COL, KSU

 Dorchester Minerals decreases quarterly distribution to $0.241475/unit from $0.252224/share  (18.14 -0.21)

 Midday Market Summary: Averages Modestly Lower at Midday

Today's session has been underpinned by a wait-and-see approach with investors unwilling to make a push in either direction before tomorrow's Presidential Inauguration. The mentality has left the major averages relatively flat with the S&P 500 down a modest 0.2%.

President-elect Trump's unexpected victory in the November 8th presidential election sent the stock market on a huge run as participants bought the promises of deregulation and increased infrastructure spending. However, after having a couple of months to price-in said promises, all investors can do is watch as only time will tell if the dream becomes a reality.

However, today's story had the potential to be a bit different as the European Central Bank made their latest policy decision earlier this morning. But all the hype was put to rest as the ECB left rates and stimulus programs unchanged and ECB President Mario Draghi struck a dovish tone in his post-decision press conference. The euro did slide a bit, and is currently down 0.1% against the dollar, trading near 1.0620.

On the sector leaderboard, industrials (+0.5%) have led the way since the opening bell with railroads giving the sector an extra push. CSX (CSX 44.03, +7.13)has spikedfollowing a Wall Street Journal report that Hunter Harrison will pursue changes at CSX after leaving Canadian Pacific (CP 152.54, +7.40). Telecom services (+0.3%) is the only other sector in positive territory.

At the bottom of the leaderboard is energy (-0.7%) amid the Energy Information Administration's report that crude oil inventories had a build of 2.3 million barrels while the consensus called for a draw of 0.342 million barrels. The energy component has fallen from its session high, but remains up 0.3% and $52.06/bbl.

Financials (-0.5%) and health care (-0.5%) are also notable movers with the latter suffering from a disappointing showing from its biotech components. The three largest biotech names, Amgen (AMGN 153.88, -1.88), Gilead Sciences (GILD 71.50, -0.63), and Celgene (CELG 113.64, -1.58) are all down between 1.0% and 1.5%.

U.S. Treasuries have resided in negative territory for the duration of today's action and currently hover near their session lows. The yield curve has steepened as the front end of the curve has held up a bit better than the back end; the 2-yr yield is one basis point higher at 1.23% while the 30-yr yield is up five basis points at 3.06%.

Today's data included Initial Claims, Housing Starts, and Philadelphia Fed Survey:

• The latest weekly initial jobless claims count totaled 234,000 while the Briefing.com consensus expected a reading of 252,000. Today's tally was below the revised prior week count of 249,000 (from 247,000). As for continuing claims, they declined to 2.046 million from the revised count of 2.093 million (from 2.087 million).
  • The key takeaway from the report is that it will drive heightened expectations for nonfarm payroll growth in January as this claims report covers the period in which the household and establishment survey for the Employment Situation report are conducted.
• Housing starts increased to a seasonally adjusted annualized rate of 1.226 million units in December, up from a revised 1.102 million units in November (from 1.09 million). The Briefing.com consensus expected starts to increase to 1.193 million units. Building permits decreased to a seasonally adjusted 1.210 million in December from an upwardly revised 1.212 million (from 1.201 million) for November. The Briefing.com consensus expected a reading of 1.217 million.
  • The key takeaway from the report is that residential construction will be computed as a positive input in Q4 GDP forecasts as the fourth quarter average for privately-owned housing units under construction was 1.8% above the third quarter average.
• The Philadelphia Fed Survey for January rose to 23.6 from a revised 19.7 (from 21.5) while economists polled by Briefing.com had expected a reading of 15.3.
  • The key takeaway from the report is that it's a first quarter number and it suggests manufacturing activity in the Philadelphia Fed region expanded at an encouraging pace to begin the year.

 

Fannie Mae, Freddie Mac (FMCC) see strong decline on heavy volume after Steve Mnuchin at his confirmation hearing (Proposed Secretary of the Treasury) says he never endorsed a recap and release of the GSEs  (3.60 -0.35)

 Muscle Pharm: Arnerop Holdings discloses a 9.0% passive stake  (2.05 +0.05)

 Unusual Options Activity

The following options are exhibiting notable trading, potentially indicating changing sentiment toward the underlying stocks, and/or potentially representing positioning for increased volatility.

Bullish Call Activity:

• COL Jan 90 calls are seeing interest ahead of earnings tomorrow, January 20 before the open (volume: 3930, open int: 12.1K, implied vol: ~153%, prev day implied vol: 44%) — 1500 contracts traded in a single transaction. Co is presenting numerous times from now through March.
• VIAB Jan 39.5 calls (volume: 2190, open int: 2510, implied vol: ~76%, prev day implied vol: 35%)  — earlier this month, Hollywood Reporter discussed speculation that Liberty Media could look to consolidate several media companies including Viacom. Co is confirmed to report earnings February 9 before the open (annual meeting February 6).
• EL Feb 80 calls (volume: 5510, open int: 1260, implied vol: ~29%, prev day implied vol: 4%) — over 3.5K traded on the offer. Co is confirmed to report earnings February 2 before the open.
• NUAN Apr 17 calls (volume: 3180, open int: 150, implied vol: ~34%, prev day implied vol: 31%) — co is expected to report earnings early February (annual general meeting scheduled for January 30).

Bearish Put Activity:

• GNC Feb 7.5 puts are seeing interest after it was downgraded to Sell from Neutral at Goldman  (volume: 3550, open int: 540, implied vol: ~101%, prev day implied vol: 92%) — co is expected to report earnings early February (private equity speculation circulated early December).
• CX Jan 8 puts (volume: 4171, open int: 9170, implied vol: ~76%, prev day implied vol: 68%) — we noted activity in the same strike last week (see 1/10 13:59 OPTNX). Co is expected to report earnings early February. Trinidad Cement Offer period is expected to close on January 24, 2017.

Sentiment: The CBOE Put/Call ratio is currently: 0.86… VIX: (12.53, +0.05, +0.4%).
Tomorrow is options expiration — Tomorrow, January 20th is the last day to trade January equity options.
*Please use the Talk to Us link at the top of the page to provide feedback on this comment as well as the OPTNX comments.

 

General Electric Q4 Earnings Preview  (31.18 -0.05) General Electric (GE) is set to report Q4 results before the bell tomorrow (8:30am ET). Cap IQ Consensus estimates Q4 EPS of $0.46 (vs. $0.52 in 4Q16), w/revs of $33.67 bln ( +0.4% y/y). Guidance In a slide presentation from December 14th: Reaffirmed guidance for FY16, seeing EPS of $1.48-1.52 and seeing organic growth of +0-2% Reaffirmed guidance for FY17, seeing EPS of $1.60-1.70 Said its positioned to hit $2 EPS in 2018 despite oil and gas headwinds On the Q4 earnings call investors will be listening for additional color regarding the co's merger with Baker Hughes (BHI) that was announced on October 31st, updates on the co's 2017 plan to build a strong digital initiatives and plans regarding an invest in a GE Store, any new information regarding the co's accounting practices (the WSJ ran a story detailing how the SEC has been critical of GE's non GAAP accounting practices on 11/15, the SEC took no action), and the effect of a potential non-Bank SIFI designation for GE moving forward. Comments from the incoming Administration suggests Any potential new legislation would not allow the Financial Stability Oversight Council. Metlife (MET) won a federal court case to throw out its «too big to fail» label and this would benefit GE and other insurers. Peers Currently GE has a P/E of 35.9x Honeywell (HON) P/E of 18.5x 3M (MMM) P/E of 22.5x Additional Highlights from December 14 Investor Presentation Framing 2017 + 2018 Most optimistic they have been about U.S. economy in many years… reform + general economic growth; in addition, a lot of their markets are quite good. Oil market is tougher than they envisioned on 4/15… has put pressure on their business & some of our markets. 2017 Outlook Build a strong Digital Industrial company Invest in GE Store… a performance & competitive differentiator Position to hit $2 EPS in 2018 despite oil & gas headwinds Highlights from Last Quarter Reports Q3 earnings of $0.32 per share vs. the $0.30 consensus; total segment revenue rose 3.8% year/year to $30.02 bln; consolidated rev +4% to $29.27 bln; unclear which is comparable to $29.68 bln consensus. 3Q'16 orders $26.9B, +16%; (6)% organic Backlog strong at $319B Alstom orders $5.2B with strength across the board Services orders +1% organically Strength in services across Renewables, Aviation & Healthcare Backlog +6% ex. Alstom Slow growth and volatile environment… Challenges continue in resource sector Co issues in-line guidance for FY16, narrows EPS to $1.48-1.52 from $1.45-1.55, excluding non-recurring items, vs. $1.49 consensus (at the time).  Organic growth +0-2% from +2-4%, +4% ex-O&G; CFOA +$32 bln. Bridge to 2018: More challenging environment for Oil & Gas and related markets… still positive on long-term outlook + Sustained performance in rest of GE.  Options Activity Based on COL options, the current implied volatility stands at ~ 23%, which is 146% higher than historical volatility (over the past 30 days). Based on the COL Jan $90 straddle, the options market is currently pricing in a move of ~2% in either direction by January expiration (Friday). Analyst Commentary Upgraded to Outperform from Mkt Perform at Bernstein (December 16). Cowen notes the GE/BHI partnership is a strategic plus, as it bolsters GE's competitive mettle vs. SLB, at an opportune time in the O&G cycle. However, the transaction is only marginally accretive (2%) to GE's C18E EPS despite a sizable use of GE's M&A firepower ($7.4B of $20B utilized); Market Perform. (October 31). Standpoint Research maintains Sell, $26 tgt (October 21).

 IBM Earnings Preview  (167.19 +0.39)

IBM (IBM) will report Q4 results tonight after the bell with a conference call scheduled to start at 5:00 p.m. ET. Usually, IBM reports within the first 10 minutes after the bell.

• As it stands, the current Capital IQ Consensus Estimate calls for Q4 EPS of $4.89 (vs. $4.84 in 2015) and revs of $21.7 bln (-2% Y/Y).
  • IBM has reported revenue down year-over-year eighteen quarters in a row.
• Last quarter, the co reaffirmed FY 16 expectations for adj. EPS of at least $13.50 (Consensus $13.47 on revs of $79.7 bln)
  • Other Guidance:
    
    • Co continues to expect delivering around the high end of its FY free cash flow guidance range of about $12 bln
      
      • co currently has delivered $6.9 bln in free cash flow through 3 quarters
    • Co still sees the 2H improvement pretty much in-line w/ its view from the Q2 call

IBM will guide for FY17 in the press release.

• Consensus estimates FY17 EPS of $13.79 on revs -1.4% to $78.9 bln
• Consensus estimates 1Q17 EPS of $2.49 on revs of $18.6 bln

On October 17, IBM reported Q3 EPS of $3.29 vs $3.23 Consensus Estimate on revs of $19.23 bln (down less than 1% Y/Y) vs $19.0 bln Consensus Estimate. The co also reaffirmed FY 16 EPS guidance.

• Shares gapped down ~3% to open at 150 and fell as low as 148.
  
  • The co ended the day down ~2.5% at 150.72.
• Shares continued drifting upwards even during the 10/25-11/4 correction when the QQQ ETF fell a total of 5% during 9 straight down days.
• On November 10, BofA/Merrill upgraded to Buy from Neutral and the co gapped up 2% to close above its 50 day MA; shares closed the day strongly, up 4% at 157.66.
• Shares rallied w/ the broader market over the next month eventually hitting a 52-week high of 169.95 on December 13.
• Shares have been trading in a 166/170 range in the last month as investors await earnings.

Revs by segment in Q3: Cognitive Solutions — $4.2 bln, +4.5%; Global Business Services — $4.2 bln, -0.4% or -1.6% adj for currency; Tech Services & Cloud Platforms — $8.7 bln, +2.4% or +1.4% adj for currency; Systems — $1.6 bln, -21% or -21.5% adj for currency; Global Financing — $412 mln, -7.9% or -9.2% adj for currency

Other notables from Q3:

• Co noted that over the last 12 months, strategic imperatives (cloud, analytics, mobility, and security) delivered nearly $32 billion in revenue (+16% Y/Y) and now represent 40% of IBM
  
  • Cloud revs were up 44% with annual run rate for cloud as-a-service revenues up to $7.5 bln from $4.5 bln.
  • Analytics revs +15% (+14% adj. for currency)
  • Mobile revs +19%, security revs +11%
• Generated $2.4 bln of free cash flow in the quarter
• Focused on scaling its Watson Health business
• Ended Q3 w/ $3 bln remaining in its share repurchase program (co has repurchased $2.6 bln total in the first 3 quarters so far.)

On January 12, Stifel raised its target to $192 from $165. Stifel notes, «It is difficult to attribute the outperformance (referring to the co's outperformance vs the S&P) to any one thing; however, it most likely reflects some combination of their ability to modestly exceed consensus rev and EPS ests for three consecutive quarters, while tracking to the high end of their annual FCF guide, IBM's commitment to the dividend despite the second consecutive year of earnings declines (8% increase late April, current dividend yield 3.3%), and a belief that the worst is behind them (rev and earnings compression)»

 SPY down 0.2%; Real Estate is worst performing sector and Industrials are the only sector positive on the day

Sector	Ticker	% Change	YTD % Change
Real Estate	XLRE	-1.2%	0%
Materials	XLB	-0.5%	2%
Cons. Staples	XLP	-0.4%	1%
Healthcare	XLV	-0.4%	2%
Utilities	XLU	-0.4%	0%
Energy	XLE	-0.3%	-1%
Financials	XLF	-0.3%	-1%
Telecom	IYZ	-0.2%	2%
Cons. Disc.	XLY	-0.1%	3%
Technology	XLK	0.0%	3%
Industrials	XLI	0.7%	2%

 Century Aluminum downgraded to Hold from Buy at Standpoint Research  (13.00 +0.84)

 Sector Summary: Industrials trade higher than the broader market

The Industrials sector (XLI) is trading +0.6% higheer today, higher than the broader market (SPY -0.3%). In the industrial sector, Canadian Pacific (CP +4.2%) and Union Pacific (UNP +2.5%) report Q4 earnings, Outgoing Canadian Pacific (CP +4.2%) CEO Hunter Harrison said to partner with an activist investor to push for changes at CSX (CSX +20.2%), and Icahn Enterprises (IEP +2%) completes tender offer for shares of Federal-Mogul (FDML -0.1%).  Looking ahead, GE (GE -0.3%) and Rockwell Collins (COL -0.4%) report earnings tomorrow morning.  

Earnings/Guidance

• Canadian Pacific (CP +4.2%) reports Q4 earnings of CC$3.04 per share, excluding non-recurring items, CC$0.07 worse than the Capital IQ Consensus of CC$3.11; revenues fell 3.0% year/year to CC$1.64 bln vs the CC$1.65 bln Capital IQ Consensus.
  • Co expects FY17 adjusted EPS growth in the high single digits. Assuming 8-9% growth on top of CC$10.29 in 2016, that works out to EPS guidance of CC$11.11-11.22 which is below consensus of CC$11.83.
• TAL Education (TAL +6.7%) reports Q3 earnings of $0.26 per share, $0.04 better than the Capital IQ Consensus of $0.22; revenues rose 83.3% year/year to $260.6 mln vs the $230.4 mln Capital IQ Consensus.
  • Co issues upside guidance for Q4, sees Q4 revs of $285.3-288.8 mln vs. $268.54 mln Capital IQ Consensus Estimate.
• JB Hunt Trans (JBHT -3.3%) reports Q4 earnings of $1.05 per share, $0.04 better than the Capital IQ Consensus of $1.01; revenues rose 6.0% year/year to $1.72 bln vs the $1.73 bln Capital IQ Consensus.
• Union Pacific (UNP +2.5%) reports Q4 earnings of $1.39 per share, $0.06 better than the Capital IQ Consensus of $1.33; revenues fell 0.8% year/year to $5.17 bln vs the $5.13 bln Capital IQ Consensus.
  • Fourth quarter business volumes, as measured by total revenue carloads, declined 3% compared to 2015. While shipments of agricultural products grew 8%, volumes declined in the remaining five business groups.
  • Quarterly freight revenue decreased 1% compared to the fourth quarter 2015, as volume declines and lower fuel surcharge revenue more than offset core pricing gains.
  • Ag +8%, Auto -3%, chemicals -5%, coal -9%, industrial -5%, intermodal -1%

Additional Industrials moving on Earnings/guidance: CLC +0%, INN -1.6%, GATX +4.3%

News

• Outgoing Canadian Pacific (CP +4.2%) CEO Hunter Harrison said to partner with an activist investor to push for changes at CSX (CSX +20.2%), according to the WSJ. 
• Icahn Enterprises (IEP +2%) completes tender offer for shares of Federal-Mogul (FDML -0.1%), plans to complete the second and final step of the acquisition as promptly as practicable.

Broker Research

Upgrades

• CSX (CSX +20.2%) upgraded to Equal-Weight at Morgan Stanley.
• CSX (CSX +20.2%) upgraded to Sector Outperform at Scotia.
• PACCAR (PCAR -0.7%) upgraded to Neutral from Underperform at Longbow.
• Cummins (CMI +0.9%) upgraded to Buy from Neutral at Longbow.

Downgrades

• Covanta (CVA -4.5%), Cerner (CERN -1.1%) downgraded to Equal Weight from Overweight at Barclays.
• Greenbrier (GBX -1.1%) downgraded to Sell from Underperform at CLSA.
• Ideal Power (IPWR -5.1%) downgraded to Neutral from Buy at ROTH Capital.

Other

• Transdigm Group (TDG -0.0%) initiated with a Buy rating at SunTrust.
• Apogee Enterpr (APOG +0.7%) initiated with a Buy at Craig Hallum.
• Rockwell Collins (COL -0.4%) initiated with a Hold rating at SunTrust
• Stifel raises their Fastenal (FAST -0.7%) tgt to $50 from $44.
• Orbital ATK (OA +1.2%) initiated with a Buy at SunTrust.
• Canadian Pacific (CP +4.1% ) target raised to $173 from $164 at Cowen following last night's earnings.

 WEC Energy Group increases quarterly dividend to $0.52/share from $0.495/share  (58.38 -0.99)

 Energy Closing Prices: Natural gas closes pit trading near session highs on bullish EIA; crude ends in the green despite EIA reporting builds above Consensus for both crude & gasoline inventories

• Feb crude oil futures rose $0.26 (+0.5%) to $51.37/barrel
  • EIA highlights:
    • Crude oil inventories had a build of +2.3 mln barrels (consensus called for a draw of -0.342 mln barrels).
    • Gasoline inventories had a build of +6.0 mln barrels (consensus called for a build of +2.023 mln barrels).
    • Distillate inventories had a draw of -1.0 mln barrels.
• Feb natural gas closed $0.08 higher (+2.4%) at $3.37/MMBtu
  • EIA highlights:
    • Natural gas inventory showed a draw of -243 bcf vs expectations for inventory to be a draw of approximately -231 bcf.
    • Working gas in storage was 2,917 Bcf as of Friday, January 13, 2017, according to EIA estimates.
    • Stocks were 431 Bcf less than last year at this time and 77 Bcf below the five-year average of 2,994 Bcf.
    • At 2,917 Bcf, total working gas is within the five-year historical range.
• Feb RBOB Gasoline closed $0.02 lower (-1.3%) at $1.53/gallon
• Feb heating oil futures closed $0.01 higher (+0.6%) at $1.62/gallon

 Con Edison raises quarterly dividend to $0.69 from $0.67/share  (73.42 -1.01)

 Hearing Check Point Software was upgraded to Overweight from Neutral at JP Morgan following earnings  (97.08 +7.47)