Америка сегодня. Запасы сырой нефти.

Asian MarketsNikkei...19057.50...+269.50...+1.40%.  Hang Seng...23049.12...+99.30...+0.40%.

 European MarketsFTSE...7168.95...+18.60...+0.30%.  DAX...11740.73...+145.80...+1.30%.

 Polaris Industries downgraded to Hold from Buy at Wunderlich  (86.41)

 Extended Stay America upgraded to Buy from Hold at Stifel  (16.16)

 CenturyLink upgraded to Hold from Underperform at Jefferies  (25.57)

 Popular downgraded to Mkt Perform from Outperform at Keefe Bruyette  (45.13)

 RPC beats by $0.03, beats on revs  (21.66)

• Reports Q4 (Dec) loss of $0.10 per share, $0.03 better than the Capital IQ Consensus of ($0.13); revenues fell 17.6% year/year to $221 mln vs the $207.3 mln Capital IQ Consensus. 
• EBITDA for the quarter was $15.7 million compared to EBITDA of $9.0 million in the prior year.
• «The average U.S. domestic rig count during the fourth quarter of 2016 was 589, a decrease of 21.8 percent compared to the same period in 2015, but a 21.9 percent increase compared to the third quarter of 2016. The average price of natural gas during the fourth quarter was $3.04 per Mcf, an increase of 46.9 percent compared to the prior year and a 5.6 percent sequential increase. The average price of oil during the fourth quarter was $49.25 per barrel, a 17.0 percent increase compared to the prior year and a 9.6 percent increase compared to the third quarter of 2016.»

 Asian Markets Close: Nikkei +1.4%, Hang Seng +0.4%, Shanghai +0.2%

Equity indices across the Asia-Pacific region ended the midweek session on a higher note, taking a cue from Tuesday's Wall Street rally. Australia's ‘AAA' rating was affirmed by Moody's and the rating agency expects Australia's GDP will grow between 2.5% and 3.0% in 2017. The Australian dollar is down 0.4% at 0.7550 against the US dollar after cooler than expected Australian inflation data was released overnight.

• In economic data:
  • Japan's December trade surplus narrowed to JPY360 billion from JPY470 billion (expected surplus of JPY220 billion). December Imports -2.6% year-over-year (consensus -0.8%; last -8.8%) and December Exports +5.4% (expected 1.2%; last -0.4%)
  • South Korea's Q4 GDP +0.4% quarter-over-quarter (expected 0.3%; last 0.6%); +2.3% year-over-year (consensus 2.2%; last 2.6%)
  • Australia's Q4 CPI +0.5% quarter-over-quarter (expected 0.7%; previous 0.7%); +1.5% year-over-year (consensus 1.6%; last 1.3%). Q4 Trimmed Mean CPI +0.4% quarter-over-quarter (expected 0.5%; last 0.4%). MI Leading Index +0.4% (last 0.0%)
  • New Zealand's Credit Card Spending +8.5% year-over-year (last 4.1%)

---Equity Markets---

• Japan's Nikkei climbed 1.4%, snapping a two-day skid. Yen weakness boosted exporters with Alps Electric, Fanuc, Komatsu, Honda, and Nikon climbing between 2.2% and 6.5%. Toshiba continued its recent woes, falling 2.3%.
• Hong Kong's Hang Seng added 0.4%, returning near its January high. Gaming names and financials outperformed with Galaxy Entertainment, Tencent Holdings, HSBC, Sands China, and Hang Seng Bank posted gains between 0.6% and 2.5%.
• China's Shanghai Composite ticked up 0.2%. Tianjin Global Magnetic Card, Aluminum Corp of China, Gemdale, Giti Tire, Henan Oriental Silver Star Investment, and Insigma Technology rallied between 3.3% and 4.1%.
• India's Sensex jumped 1.2% to levels not seen since early November. Financials had a good showing with Housing Development Finance, AXIS Bank, HDFC Bank, and ICICI Bank rising between 1.0% and 4.3%. Wipro lost 1.6% ahead of its quarterly report.

---FX---

• USDJPY -0.2% to 113.55
• USDCNY +0.4% to 6.8828
• USDINR -0.1% to 68.090

 Overseas Research Calls

Upgrades: 

• Land Securities (LSGOF) upgraded to Buy from Neutral at Goldman
• Swatch (SWGAY) upgraded to Buy from Hold at Deutsche Bank
• Ashmore Group (AJMPF) upgraded to Buy from Neutral at UBS
• Electricite de France (ECIFY) upgraded to Hold from Reduce at HSBC
• ProSiebenSat.1 (PBSFF) upgraded to Overweight from Equal Weight at Barclays
• Axel Springer (AXELF) upgraded to Equal Weight from Underweight at Barclays
• Zurich Insurance Group (ZURVY) upgraded to Outperform from Neutral at Exane BNP Paribas
• Telenor ASA (TELNY) upgraded to Hold from Sell at Berenberg
• Reckitt Benckiser (RBGLY) upgraded to Buy from Hold at Berenberg
• Reckitt Benckiser (RBGLY) upgraded to Outperform from Sector Perform at RBC Capital Mkts
• Schneider Electric (SBGSY) upgraded to Outperform from Sector Perform at RBC Capital Mkts
• ABB Ltd (ABB) upgraded to Outperform from Sector Perform at RBC Capital Mkts
• SKF (SKFRY) upgraded to Sector Perform from Underperform at RBC Capital Mkts
• Vale S.A. (VALE) upgraded to Outperform from Market Perform at Bernstein

Downgrades: 

• KingFisher plc (KGFHY) downgraded to Underperform from Neutral at Exane BNP Paribas
• AXA SA (AXAHY) downgraded to Neutral from Outperform at Exane BNP Paribas
• Alumina (AWCMY) downgraded to Sell from Hold at Deutsche Bank
• Snam SPA (SNMRY) downgraded to Hold from Buy at HSBC
• Hammerson (HMSNF) downgraded to Neutral from Buy at Goldman
• BT Group plc (BT) downgraded to Hold from Buy at Berenberg
• Legal & General Group (LGGNY) downgraded to Market Perform from Outperform at Bernstein
• Publicis (PUBGY) downgraded to Equal Weight from Overweight at Barclays
• Vivendi (VIVHY) downgraded to Underweight from Equal Weight at Barclays

Miscellaneous: 

• BTG plc (BTGGF) initiated with a Hold at Peel Hunt
• Hikma (HKMPF) initiated with a Buy at Peel Hunt
• The Weir Group PLC (WEIGF) resumed with a Sector Perform at RBC Capital Mkts

 GenVec downgraded to Neutral at Rodman & Renshaw; tgt lowered to $7  (6.57)Rodman & Renshaw downgrades GNVC to Neutral from Buy and lowers their tgt to $7 from $15. Yesterday, Intrexon (XON; not rated) and GenVec announced the agreement for Intrexon to acquire GenVec. Pursuant to the agreement, GenVec stockholders would receive 0.297 of a share of Intrexon common stock upon the closing of the transaction in exchange for each share of GenVec common stock. The exchange ratio represents $7.00 of value per share of Genvec's common stock. GenVec stockholders would also receive a right to contingent consideration equal to 50% of any milestone or royalty payments received within 36 months after the closing of the transaction under GenVec's license agreement with Novartis (NVS; not rated). Mgmt expects the deal to close in 2Q17. Firm feels, though the approximate $15M valuation of GenVec's AdenoVerse technology platform in this deal may undervalue the potential of the company's CGF166 in treating hearing loss, it is nevertheless a decent offer at the present time considering the relative lack of visibility in the clinical trial status and development time frame of the ongoing Phase 1/2 study of CGF166 from Novartis.

 Strongbridge Biopharma target raised to $18 from $15 at H.C. Wainwright to reflect expected increased rev from Keveyis; Buy  (2.35)

 Coach downgraded to Neutral from Overweight at Atlantic Equities  (36.75)

 Global Eagle initiated with a Buy at Guggenheim  (6.45)

 Gogo initiated with a Buy at Guggenheim  (8.71)

 

 Con Edison, Southern (SO) initiated with Underperform ratings at Credit Suisse  (72.79)

 Exelon, Dominion (D), Black Hills Corp (BKH) initiated with Outperform ratings at Credit Suisse  (35.13)

 Duke Energy, CMS, DTE, NWE, SR, ES initiated with Neutral ratings at Credit Suisse  (77.18)

 Mimecast initiated with a Buy at Brean Capital  (21.81)

 Carter Holdings initiated with a Overweight at Morgan Stanley  (85.08)

 Wal-Mart initiated with a Market Perform at Wells Fargo  (67.40)

 Hyatt Hotels downgraded to Hold from Buy at Berenberg; tgt $60  (54.50)

 Continental Gold initiated with a Buy at Dundee  (3.33)

 Sociedad Quimica y Minera upgraded to Neutral from Sell at Citigroup  (33.59)

 j2 Global downgraded to Neutral from Buy at Citigroup  (86.49)

 

 Ares Management initiated with a Neutral at Credit Suisse  (20.20)

 Early premarket gappersGapping up: ACAT +41.2%, CDTI +23.7%, BOBE +15.7%, LOGI +13.3%, STX +11.4%, WDC +6%, USAP +5%, HK +4.7%, AA +4.1%, FCX +3.5%, AHP +3.4%, QTM +3.3%, CXO +2.8%, SAN +2.7%, MU +2.5%, BBVA +2.5%, AMD +2.5%, CREE +2.5%, TGI +2.4%, CS +2.4%, DB +2.4%, GNW +2.3%, PTEN +2.2%, BLDP +2%, MMP +1.9%, ABB +1.9%, ING +1.9%, UCBI +1.9%, PUK +1.8%, ONVO +1.7%, GM +1.6%, BCS +1.6%, NVS +1.6%, LYG +1.5%, UTX +1.5%, RAD +1.4%, CHK +1.3%, SBGL +1.3%, ISRG +1.3%, RH +1.2%, HSBC +1.2%, ALV +1.2%, CX +1.1%, NVDA +1.1%, GFI +1.1%, SDRL +1%, QGEN +0.9%, BABA +0.8%, MKC +0.7%, ROK +0.7%, TXN +0.5%

Gapping down: HZN -9%, FMBI -6.3%, NCIT -5.9%, NAK -5.7%, MRCY -4.6%, NEWT -4.6%, VOD -2.6%, CA -2.6%, HA -2.5%, VALE -2.3%, MIK -2.2%, AKS -2.1%, RIO -1.5%, OKSB -1.5%, AGN -1.3%, BBL -1.3%, AUY -1.2%, YRCW -1.2%, CLF -1%, SYT -1%, SSI -0.9%, SLV -0.9%, BHP -0.9%, COF -0.9%, DFS -0.9%, TXT -0.8%, ASYS -0.7%, GOLD -0.7%, STLD -0.7%, SC -0.7%, RES -0.7%, ABX -0.6%, HOPE -0.6%, BKU -0.6%, PAA -0.5%, CNI -0.5%

 Pinnacle Finl upgraded to Buy from Hold at Sandler O'Neill  (67.35)

 Alibaba target raised to $100 at Wedbush — Another strong quarter on Singles' Day sales record and continued monetization improvements  (101.43)Wedbush raises their BABA tgt to $100 from $90 as they see Alibaba as a fast-growing global ecommerce market leader, but believe a slowing Chinese economy will cap share appreciation. Firm believes the company is successfully leveraging its investments in digital media to drive user engagement on the platform, the data from which it is using to drive improving monetization rates. Going forward, they expect the company to leverage this trove of user data to help drive their omnichannel commerce initiatives as well; Neutral.

 MarineMax target raised to $22 at Wedbush on small but stellar quarter; Neutral  (20.70)Wedbush raises their HZO tgt to $22 from $19 as bears have been assuming that the deterioration of the boat market is a matter of ‘when' rather than ‘if', and yet firm continues to see strength in the top line. However, they still need to see further evidence of operating leverage improvement to get off the fence, especially given the premium valuation currently afforded these shares relative to other power-sports cos.

 European Markets Update: FTSE +0.3%, CAC +1.0%, DAX +1.4%

Major European indices trade higher across the board with Spain's IBEX (+1.6%) showing relative strength. Regional indices have shrugged off comments from European Central Bank member Sabine Lautenschlaeger, who said the central bank may soon start discussing a reduction in stimulus. Elsewhere, Germany's Economic Ministry updated its GDP forecast, but the overall outlook was little changed, calling for 1.4% growth in 2017. The Federation of German Industry expects growth of 1.5% in 2017.

• In economic data:
  • Germany's January Ifo Business Climate 109.8 (expected 111.3; last 111.0). January Business Expectations 103.2 (consensus 105.8; last 105.5) and January Current Assessment 116.9, as expected (last 116.7)
  • Italy's November Industrial New Orders +1.5% month-over-month (last 1.0%) and Industrial Sales +2.4% month-over-month (last 0.8%)
  • French Business Survey held at 106, as expected
  • Spain's PPI +2.8% year-over-year (last 0.6%)
  • Swiss December Consumption Indicator 1.50 (last 1.45) and February ZEW Expectations 18.5 (last 12.9)

---Equity Markets---

• UK's FTSE is higher by 0.3% as the index looks to avoid its fifth consecutive decline. Financials have contributed to the advance with RBS, Standard Chartered, Old Mutual, Lloyds Banking, Prudential, Barclays, and Standard Life rising between 1.2% and 2.9%. Miners Randgold Resources, Rio Tinto, BHP Billiton, and Anglo American are down between 1.3% and 1.8%.
• France's CAC has risen 1.0%, tracking its second consecutive gain. Financials and growth-sensitive names outperform with Societe Generale, AXA, BNP Paribas, and Credit Agricole gaining between 1.4% and 3.1% while LafargeHolcim, TechnipFMC, Legrand, and Schneider Electric are up between 1.6% and 3.2%.
• Germany's DAX is higher by 1.4% with all but two components trading in the green. Deutsche Bank leads, spiking 2.9%, while exporters Continental, BMW, Daimler, and Volkswagen are up between 1.3% and 2.0%.
• Spain's IBEX trades higher by 1.6%. Financials have fueled today's outperformance with Caixabank, Banco Sabadell, Santander, BBVA, Bankia, and Bankinter showing gains between 1.5% and 4.5%.

 

 

 

 

 Tetra Tech initiated with a Buy at ROTH Capital; tgt $49  (43.20)

 Coach downgraded to Outperform from Buy at CLSA  (36.75)

 Alcoa upgraded to Hold from Sell at Deutsche Bank  (37.50)

 Organovo initiated with a Outperform at Raymond James  (3.49)

 American Eagle initiated with a Neutral at Buckingham Research; tgt $16  (14.98)

 Spartan Motors initiated with a Buy at ROTH Capital; tgt $12  (8.65)

 

 

 Overnight Treasury Summary

Treasuries Steady Themselves as Dollar Sinks

• U.S. Treasuries are mostly unchanged this morning after global equities pushed higher overnight and President Trump said that he will follow through on campaign plans to build a wall along the Mexican border. The German Ifo Business Climate Index unexpectedly fell for January but the euro and the British pound both moved higher and the U.S. Dollar Index is down 0.42% to 99.93. The U.S. economic calendar is very light today but there will be a 5-year Treasury auction. The S&P 500 is set to open up 0.29% to 2,286.3 and WTI crude is down 0.92% to $52.69/bbl. Gold is down 0.40% to $1,205.9/troy oz.
• Yield Check:
  
  • 2-yr: -1 bp to 1.22%
  • 5-yr: unch at 1.93%
  • 10-yr: unch at 2.47%
  • 30-yr: unch at 3.05%

• International News:
  
  • Japan's trade surplus narrowed less than expected to JPY360 bln in December from JPY470 bln in November
    
    • Exports grew by a greater-than-expected 5.4% y/y after sliding 0.4% in November
    • Imports fell by a greater-than-expected 2.6% y/y after declining 8.8% in November
  • Australia's consumer price index rose 0.5% q/q in the fourth quarter (1.5% y/y), missing both expectations and Q3's 0.7% growth
    
    • Australia's Westpac Leading Index was up 0.4% m/m in December after remaining unchanged in November
  • The German Ifo Business Climate Index unexpectedly fell to 109.8 for January from 111.0 in December
    • Business Expectations slipped to 103.2 from 105.5
    • The Current Assessment rose to 116.9 from 116.7
  • Italian Industrial New Orders were up 1.5% m/m in November (0.1% y/y), accelerating from October's 1.0% growth
  • The French Business Survey remained at 106 in January, as expected
  • In the U.K., CBI Industrial Trends Orders jumped more than expected to 5 for January from 0 in December
  • Switzerland's Consumption Indicator rose to 1.50 for December from 1.45 for November

• Data out Wednesday:
  
  • MBA Mortgage Index for the week ending 1/121: Actual +4.0%, Prior +0.8%
    
    • Average 30-year fixed mortgage rate: Actual 4.35%, Prior 4.27%
  • November FHFA Housing Price Index (09:00 ET)
  • Crude Inventories for the week ending 1/21 (10:30 ET)
• Treasury Auction:
  
  • $15 bln 2-year FRN auction (results at 11:30 ET)
  • $34 bln 5-year Treasury auction (results at 13:00 ET)

 Nokia downgraded to Sell from Hold at Danske Bank  (4.67)

 

 

 BT Group plc upgraded to Neutral from Underperform at Macquarie  (19.38)

 

 Vodafone PLC downgraded to Neutral from Buy at BofA/Merrill  (25.45)

 TechnipFMC initiated with a Outperform at Credit Suisse  (34.21)

 On The Wires

• Caladrius Biosciences, Inc. (CLBS) announced that three additional clinical sites, including UCSF Benioff Children's Hospital San Francisco, under the direction of investigator Stephen Gitelman, MD, have opened to enroll subjects for the Company's Phase 2 clinical trial of CLBS03 in type 1 diabetes, The Sanford Project: T-Rex Study. The other clinical sites include University of Florida Diabetes Institute and the Harold Schnitzer Diabetes Health Center at Oregon Health & Science University. These sites will contribute to the continued enrollment of subjects in the trial to meet the total of 111. The study is evaluating CLBS03 (the Company's product candidate consisting of autologous expanded regulatory T cells, or Tregs) as a treatment for recent-onset type 1 diabetes.
• Orexigen Therapeutics (OREX) announced that Laboratorios Farmace´uticos Rovi has launched Mysimba in Spain.

 

 Halcon Resources upgraded to Overweight from Equal Weight at CapitalOne  (8.12)

 Halcon Resources upgraded to Overweight from Equal Weight at a boutique firm  (8.12)

 European Summary

European Yields Jump

• European sovereign debt yields are sharply higher this morning despite some disappointing economic data for Germany. France's 10-year OAT yield is at a one-year high and all major eurozone yields at the 10-year tenor are firmly above their technically significant 50-day moving averages. While the benchmark 10-year German Bund yield was higher than its current level (0.45%) briefly on December 8, after the European Central Bank's rate announcement, it is very near to a one-year high. The economic data out of the eurozone has improved sharply since the November 8 U.S. election and higher oil prices are at least helping nominal inflation move higher, even if core measures remain subdued (0.9% y/y for core CPI)
• ECB Governing Council Member Sabine Lautenschlager said today that the central bank should not overreact to the «first ray of sunshine» as headline inflation jumps because core inflation remains weak
• Greece's primary budget surplus rose to EUR4.4 bln in 2016 from EUR2.27 bln in 2015. The target for the bailout was EUR1.98 bln
• New Issuance:
  
  • Germany sold EUR811 mln of 2046 Bunds with an average yield of 1.20% and a bid-to-cover of 1.4
• European Economic Data:
  
  • The German Ifo Business Climate Index unexpectedly fell to 109.8 for January from 111.0 in December
    
    • Business Expectations slipped to 103.2 from 105.5
    • The Current Assessment rose to 116.9 from 116.7
  • Italian Industrial New Orders were up 1.5% m/m in November (0.1% y/y), accelerating from October's 1.0% growth
  • The French Business Survey remained at 106 in January, as expected
  • In the U.K., CBI Industrial Trends Orders jumped more than expected to 5 for January from 0 in December
  • Switzerland's Consumption Indicator rose to 1.50 for December from 1.45 for November
• Yield Check:
  
  • France, 10-yr OAT: +7 bps to 0.94%
  • Germany, 10-yr Bund: +3 bps to 0.44%
  • Greece, 10-yr note: -11 bps to 6.79%
  • Italy, 10-yr BTP: +3 bps to 2.07%
  • Portugal, 10-yr PGB: +9 bps to 3.93%
  • Spain, 10-yr ODE: +6 bps to 1.51%
  • U.K., 10-yr Gilt: +3 bps to 1.44%

 On The Wires

• AbbVie (ABBV) announced the start of two Phase 2 clinical trial programs to evaluate ABBV-8E12, an investigational anti-tau antibody, in patients with early Alzheimer's disease and progressive supranuclear palsy (PSP). In recognition of the lack of treatment options available to patients with PSP, the U.S. Food and Drug Administration (FDA) granted Fast Track Designation to ABBV-8E12. The FDA and European Medicines Agency (EMA) also granted Orphan Drug Designations to ABBV-8E12 for PSP.1,2
• Daktari Diagnostics announced that it has reached a milestone in its global collaboration with Merck (MRK), known as MSD outside the United States and Canada, for the development of Daktari's rapid point-of-care hepatitis C virus core antigen confirmatory test system. Daktari has successfully completed the design of the cartridge prototype suitable for commercial production, triggering a milestone payment of an undisclosed sum from Merck.
• Esperion Therapeutics (ESPR) announced completion of patient enrollment in the global pivotal Phase 3 long-term safety and tolerability study of bempedoic acid. Enrollment of this study was completed ahead of schedule in approximately 2,000 patients treated with bempedoic acid or placebo at high cardiovascular disease risk with hypercholesterolemia whose LDL-C is not adequately controlled with current lipid-modifying therapies. Top-line results from this study are expected by Q2 2018.
• NTL FCStone (INTL) announced it was responsible for OTC trades totaling approximately $26.6 billion in 2016, +27% over 2015. 
• Williams Partners L.P. (WPZ) and ACMP Finance Corp. announced that they have issued a notice of redemption to holders of the Issuers' 6.125% Senior Notes due 2022, stating that the Issuers will redeem all of the outstanding Notes for cash on Feb. 23, 2017 at a redemption price equal to 103.063% of the principal amount of the Notes, plus accrued and unpaid interest to the Redemption Date.

 S&P futures vs fair value: +7.80. Nasdaq futures vs fair value: +23.40.

The stock market is on track to extend yesterday's gain as the S&P 500 futures trade eight points above fair value.

There have been a batch of earnings reports between yesterday's close and this morning's open with Seagate Technology (STX 42.00, +4.56) and Textron (TXT 46.25, -3.13) being the most notable pre-market movers. Seagate Technology has spiked 12.2% after reporting better than expected top and bottom lines and issuing upbeat guidance, while Textron has slipped 8.0% after missing earnings and revenue estimates and providing disappointing guidance.

Also of note on the earnings front, Dow components Boeing (BA 161.66, +1.11) and United Technologies (UTX 111.00, -0.61) also reported earnings earlier this morning. Boeing has added 1.7% after beating earnings per share estimates. On the other hand, United Technologies has fallen 0.6% despite reporting in-line results and guidance as it appears that investors may be taking a sell-the-news response after the company's big post-election run.

 Gapping up

Gapping up
In reaction to strong earnings/guidance:

• LOGI +13.6%, STX +12.9%, TEL +4.2%, MKTX +4.2%, ROK +4.2%, CREE +3.9%, USAP +3.3%, NAP +3.3%, SAN +2.7%, AA +2.6%, NVS +2%
• UCBI +1.9%, ISRG +1.3%, ISRG +1.3%, (also enters into $2.0 bln accelerated share repurchase program), RO; +1.2%, NSC +1.2%, HBAN +1.1%
• OKSB +0.9%, BA +0.8%, TXN +0.7%, (also promotes Brian Crutcher to COO)

M&A news:

• ACAT +41.1% (to be acquired by Textron (TXT) for $18.50/share in cash)
• NEWR +22.4% (peer of AppDynamics (APPD); following CSCO acquisition of APPD)
• BOBE +12.8% (Bob Evans to sell Bob Evans Restaurants, will acquire Pineland Farms Potato Company; reaffirms FY17 guidance)
• HK +4.1% (confirms purchase/sale agreement to enter Southern Delaware Basin for $705 mln; offers prelim FY17 guidance)
• CXO +2.8% (Concho Resources confirms sale of 100% of their respective ownership interests of Alpha Holding Company to Plains All American Pipeline for a combined total of $1.215 billion)
• CSCO +0.5% (AppDynamics to be acquired by Cisco (CSCO) for approximately $3.7 bln in cash and assumed equity awards)

Select EU financial related names showing strength following SAN earnings:

• BBVA +3.3%, DB +2.8%, CS +2.3%, ING +1.9%, BCS +1.7%, PUK +1.6%, LYG +1.5%, HSBC +1.4%, . 

Select STX/industry peers showing strength after STX earnings:

• WDC +5.8%, AMD +2.9%, MU +2%, NVDA +1.1%

Other news:

• CDTI +23.7% (partnered with DENSO to provide its technology to the North American heavy-duty market )
• TEAR +21.5% (receives approval for the TearLab Osmolarity System from the Comisión Federal para la Protección contra Riesgos Sanitarios in Mexico)
• XXIA +7.3% (in discussions to be acquired by Keysight Technologies (KEYS), according to Reuters),
• AHP +3.4% (ticking higher; enters into an amended and restated advisory agreement with Ashford; refinances three mortgage loans with existing outstanding balances totaling approximately $334 million; increases quarterly dividend)
• QTM +3.3% (following STX earnings/guidance)
• BLDP +3% (signed an initial Equipment Sales Agreement with Zhuhai Yinlong Energy Group for 10 FCveloCity-MD 30-kilowatt fuel cell engines),
• ACX +2.7% (CEMEX S.A. and Grupo Cementos de Chihuahua announce offering to sell up to 23% Stake in Grupo Cementos de Chihuahua)
• TGI +2.4% (Triumph Group will replace LogMeIn in the S&P SmallCap 600; awarded $52 mln contract from Rolls Royce for Trent XWB engine components)
• MMP +2.4% (increases quarterly distribution to $0.855/unit from $0.8375/unit)
• RAD +2.3% (slightly rebounding following late volatility y'day on Walgreens merger concerns)
• GNW +1.7% ( to report Q4 results on February 7; does not plan to host an earnings call due to the pending sale to China Oceanwide)
• PTEN +1.5% (commences an underwritten public offering of 14,800,000 shares of common stock )
• ALV +1.5% (continued strength — speculation y'day co may bid on Takata)
• RH +1.2% (Bioverativ will replace RH in the S&P MidCap 400, and RH will replace Ciber in the S&P SmallCap 600)

Analyst comments:

• JBLU +2.8% (upgraded to Overweight from Neutral at JP Morgan)
• ABB +2.2% (upgraded to Outperform from Sector Perform at RBC Capital Mkts)
• ONVO +1.7% (initiated with a Outperform at Raymond James)
• FTI +1.4% (initiated with a Outperform at Credit Suisse)
• BT +0.9% (upgraded to Neutral from Underperform at Macquarie )
• PSXP +0.8% (upgraded to Buy from Neutral at Citigroup)

 BNC Bancorp downgraded to Equal Weight from Overweight at a boutique firm  (35.40)

 Fluor upgraded to Buy from Hold at Johnson Rice  (54.77)

 

 

 Polaris Industries target raised to $94 at Lake Street  (86.41)Lake Street raises their PII tgt to $94 from $85. Although visibility in the powersports industry remains cloudy, firm believes Polaris is positioned for a return to growth in 2017. Its core ORV business returned to positive growth in Q4 and its Indian motorcycle brand grew about 20% at retail. It also appears the recall activity has settled down after a rough 2016. Cost-cutting moves should also help margins. Initial FY2017 guidance was ahead of expectations as the company faces easier comparisons. Firm raised FY2017 ests and introduced FY2018 ests, looking for continued progress.

 Gapping up/down: LOGI +13%, STX +13%, AA +3%, NVS +2% after earnings, ACAT +41% after M&A news, VIVO -9%, EAT -6%, FCX -3% after earnings, VZ -5% and COH -1% after dg's

Gapping up
In reaction to strong earnings/guidance:

• LOGI +13.6%, STX +12.9%, TEL +4.2%, MKTX +4.2%, ROK +4.2%, CREE +3.9%, USAP +3.3%, NAP +3.3%, SAN +2.7%, AA +2.6%, NVS +2%
• UCBI +1.9%, ISRG +1.3%, ISRG +1.3%, (also enters into $2.0 bln accelerated share repurchase program), RO; +1.2%, NSC +1.2%, HBAN +1.1%
• OKSB +0.9%, BA +0.8%, TXN +0.7%, (also promotes Brian Crutcher to COO)

M&A news:

• ACAT +41.1% (to be acquired by Textron (TXT) for $18.50/share in cash)
• NEWR +22.4% (peer of AppDynamics (APPD); following CSCO acquisition of APPD)
• BOBE +12.8% (Bob Evans to sell Bob Evans Restaurants, will acquire Pineland Farms Potato Company; reaffirms FY17 guidance)
• HK +4.1% (confirms purchase/sale agreement to enter Southern Delaware Basin for $705 mln; offers prelim FY17 guidance)
• CXO +2.8% (Concho Resources confirms sale of 100% of their respective ownership interests of Alpha Holding Company to Plains All American Pipeline for a combined total of $1.215 billion)
• CSCO +0.5% (AppDynamics to be acquired by Cisco (CSCO) for approximately $3.7 bln in cash and assumed equity awards)

Select EU financial related names showing strength following SAN earnings:

• BBVA +3.3%, DB +2.8%, CS +2.3%, ING +1.9%, BCS +1.7%, PUK +1.6%, LYG +1.5%, HSBC +1.4%, . 

Select STX/industry peers showing strength after STX earnings:

• WDC +5.8%, AMD +2.9%, MU +2%, NVDA +1.1%

Other news:

• CDTI +23.7% (partnered with DENSO to provide its technology to the North American heavy-duty market )
• TEAR +21.5% (receives approval for the TearLab Osmolarity System from the Comisión Federal para la Protección contra Riesgos Sanitarios in Mexico)
• XXIA +7.3% (in discussions to be acquired by Keysight Technologies (KEYS), according to Reuters),
• AHP +3.4% (ticking higher; enters into an amended and restated advisory agreement with Ashford; refinances three mortgage loans with existing outstanding balances totaling approximately $334 million; increases quarterly dividend)
• QTM +3.3% (following STX earnings/guidance)
• BLDP +3% (signed an initial Equipment Sales Agreement with Zhuhai Yinlong Energy Group for 10 FCveloCity-MD 30-kilowatt fuel cell engines),
• ACX +2.7% (CEMEX S.A. and Grupo Cementos de Chihuahua announce offering to sell up to 23% Stake in Grupo Cementos de Chihuahua)
• TGI +2.4% (Triumph Group will replace LogMeIn in the S&P SmallCap 600; awarded $52 mln contract from Rolls Royce for Trent XWB engine components)
• MMP +2.4% (increases quarterly distribution to $0.855/unit from $0.8375/unit)
• RAD +2.3% (slightly rebounding following late volatility y'day on Walgreens merger concerns)
• GNW +1.7% ( to report Q4 results on February 7; does not plan to host an earnings call due to the pending sale to China Oceanwide)
• PTEN +1.5% (commences an underwritten public offering of 14,800,000 shares of common stock )
• ALV +1.5% (continued strength — speculation y'day co may bid on Takata)
• RH +1.2% (Bioverativ will replace RH in the S&P MidCap 400, and RH will replace Ciber in the S&P SmallCap 600)

Analyst comments:

• JBLU +2.8% (upgraded to Overweight from Neutral at JP Morgan)
• ABB +2.2% (upgraded to Outperform from Sector Perform at RBC Capital Mkts)
• ONVO +1.7% (initiated with a Outperform at Raymond James)
• FTI +1.4% (initiated with a Outperform at Credit Suisse)
• BT +0.9% (upgraded to Neutral from Underperform at Macquarie )
• PSXP +0.8% (upgraded to Buy from Neutral at Citigroup)

Gapping down
In reaction to disappointing earnings/guidance:

• TXT -8.9%, (also acquired ACAT for for $18.50/share) VIVO -8.8%, FMBI -6.3%, EAT -5.6%, FCX -3.3%, CA -2.9%
• MIK -2.9%, (Michaels Stores sees Q4 EPS of $0.94-0.96 vs $0.96 Capital IQ Consensus Estimate; announces secondary offering of 18 mln shares)
• HA -2.5%, APH -1.8%, UTX -1.2%, STLD -1%, COF -0.9%, DFS -0.9%, TRCO -0.9%, SC -0.7%, RES -0.7%, HOPE -0.6%, BKU -0.6%

Select metals/mining stocks trading lower:

• AUY -1.8%, RIO -1.3%, BBL -1.2%, SLV -1%, GFI -0.6%, CLF -0.5%

Other news:

• HZN -10.2% ( to offer 3.5 mln shares of common stock and $100.0 mln Convertible Senior Notes due 2022 in separate registered public offerings; updates guidance to reflect impact from Westfalia acquisition)
• NAK -7.2% (modestly pulling back following strength early this week)
• NCIT -5.9% (NCI says that numerous prior financial statements should no longer be relied upon in connection with the previously disclosed internal investigation), NEWT -5.2% (announces 1.5 mln share common stock offering)
• MRCY -2.7% (to offer 5 mln shares of its common stock pursuant to an underwritten public offering )
• SSI -2.5% (Varex Imaging will replace Stage Stores in the S&P Small Cap 600)
• BHP -0.9% (releases 1H op update; full year production guidance maintained for petroleum, iron ore and coal (copper reduced))
• ABX -0.8% (announces preliminary full-year gold production)
• ASYS -0.7% (after 45% move higher on Tuesday)
• PAA -0.5% (Plains All American announces agreements to acquire Permian Basin gathering system for $1.2 bln and to sell assets for $380 mln; sees Q4 EBITDA near midpoint of guidance; guides FY17 cap-ex)

Analyst comments:

• VZ -5.3% (downgraded to Mkt Perform from Outperform at Raymond James)
• AKS -4.1% (downgraded to Neutral from Overweight at JP Morgan)
• VOD -2.7% (downgraded to Neutral from Buy at BofA/Merrill)
• NOK -1.9% (downgraded to Sell from Hold at Danske Bank)
• CONE -1.6% (downgraded to Sell from Neutral at Citigroup)
• LUV -1.3% (downgraded to Neutral from Overweight at JP Morgan)
• COH -1.2% (downgraded to Outperform from Buy at CLSA)

 Filings, Offerings and Pricings

Filings:

• Liberty Media (LMCA) files for shelf offering of 2,547,788 shares of Liberty Formula One Corporation Series C Liberty Formula One common stock by holders 
• InspireMD (NSPR) files for offering of approx 1.1 mln shares of Series C Convertible Preferred Stock, warrants to purchase approx 4.56 mln shares (and shares issuable upon conversion of Preferred Stock/warrants)
• Patterson-UTI (PTEN) files for common stock shelf offering; size not disclosed

Offerings:

• CNX Coal Resources LP (CNXC) intends to file a universal shelf registration statement on Form S-3 after it files its Annual Report on Form 10-K for the year ended December 31, 2016
• Horizon Global (HZN) to offer 3.5 mln shares of common stock and $100.0 mln Convertible Senior Notes due 2022 in separate registered public offerings
• Kingstone (KINS) commences 2.95 mln common share underwritten public offering (2.5 mln by company, 450K by shareholders)
• Michaels (MIK) announces 18 mln share secondary offering by stockholders (8 mln will be repurchased by company)
• Mercury (MRCY) to offer 5 mln shares of its common stock pursuant to an underwritten public offering
• Newtek (NEWT) announces 1.5 mln share public common stock offering 

Pricings:

• Halcon Resources (HK 8.12) prices offering of 5,518 shares of automatically convertible preferred stock for anticipated gross proceeds of $400 mln, or $7.25 per common share  
• Patterson-UTI (PTEN 27.00) upsizes offering by 1 mln shares and prices 15.8 mln shares of common stock at 26.45 per share 

 S&P futures vs fair value: +9.80. Nasdaq futures vs fair value: +27.10.

The S&P 500 futures trade ten points (0.4%) above fair value.

Equity indices across the Asia-Pacific region ended the midweek session on a higher note, taking a cue from Tuesday's Wall Street rally. Australia's ‘AAA' rating was affirmed by Moody's and the rating agency expects Australia's GDP will grow between 2.5% and 3.0% in 2017. The Australian dollar is down 0.4% at 0.7550 against the US dollar after cooler than expected Australian inflation data was released overnight.

• In economic data:
  • Japan's December trade surplus narrowed to JPY360 billion from JPY470 billion (expected surplus of JPY220 billion). December Imports -2.6% year-over-year (consensus -0.8%; last -8.8%) and December Exports +5.4% (expected 1.2%; last -0.4%)
  • South Korea's Q4 GDP +0.4% quarter-over-quarter (expected 0.3%; last 0.6%); +2.3% year-over-year (consensus 2.2%; last 2.6%)
  • Australia's Q4 CPI +0.5% quarter-over-quarter (expected 0.7%; previous 0.7%); +1.5% year-over-year (consensus 1.6%; last 1.3%). Q4 Trimmed Mean CPI +0.4% quarter-over-quarter (expected 0.5%; last 0.4%). MI Leading Index +0.4% (last 0.0%)
  • New Zealand's Credit Card Spending +8.5% year-over-year (last 4.1%)

---Equity Markets---

• Japan's Nikkei climbed 1.4%, snapping a two-day skid. Yen weakness boosted exporters with Alps Electric, Fanuc, Komatsu, Honda, and Nikon climbing between 2.2% and 6.5%. Toshiba continued its recent woes, falling 2.3%.
• Hong Kong's Hang Seng added 0.4%, returning near its January high. Gaming names and financials outperformed with Galaxy Entertainment, Tencent Holdings, HSBC, Sands China, and Hang Seng Bank posted gains between 0.6% and 2.5%.
• China's Shanghai Composite ticked up 0.2%. Tianjin Global Magnetic Card, Aluminum Corp of China, Gemdale, Giti Tire, Henan Oriental Silver Star Investment, and Insigma Technology rallied between 3.3% and 4.1%.
• India's Sensex jumped 1.2% to levels not seen since early November. Financials had a good showing with Housing Development Finance, AXIS Bank, HDFC Bank, and ICICI Bank rising between 1.0% and 4.3%. Wipro lost 1.6% ahead of its quarterly report.

Major European indices trade higher across the board with Spain's IBEX (+1.8%) showing relative strength. Regional indices have shrugged off comments from European Central Bank member Sabine Lautenschlaeger, who said the central bank may soon start discussing a reduction in stimulus. Elsewhere, Germany's Economic Ministry updated its GDP forecast, but the overall outlook was little changed, calling for 1.4% growth in 2017. The Federation of German Industry expects growth of 1.5% in 2017.

• In economic data:
  • Germany's January Ifo Business Climate 109.8 (expected 111.3; last 111.0). January Business Expectations 103.2 (consensus 105.8; last 105.5) and January Current Assessment 116.9, as expected (last 116.7)
  • Italy's November Industrial New Orders +1.5% month-over-month (last 1.0%) and Industrial Sales +2.4% month-over-month (last 0.8%)
  • French Business Survey held at 106, as expected
  • Spain's PPI +2.8% year-over-year (last 0.6%)
  • Swiss December Consumption Indicator 1.50 (last 1.45) and February ZEW Expectations 18.5 (last 12.9)

---Equity Markets---

• UK's FTSE is higher by 0.5% as the index looks to avoid its fifth consecutive decline. Financials have contributed to the advance with RBS, Standard Chartered, Old Mutual, Lloyds Banking, Prudential, Barclays, and Standard Life rising between 1.1% and 2.7%. Miners Randgold Resources, Rio Tinto, BHP Billiton, and Anglo American are down between 0.5% and 1.8%.
• France's CAC has risen 1.1%, tracking its second consecutive gain. Financials and growth-sensitive names outperform with Societe Generale, AXA, BNP Paribas, and Credit Agricole gaining between 1.8% and 3.7% while LafargeHolcim, TechnipFMC, Legrand, and Schneider Electric are up between 1.4% and 3.6%.
• Germany's DAX is higher by 1.6% with all but two components trading in the green. Deutsche Bank leads, spiking 3.9%, while exporters Continental, BMW, Daimler, and Volkswagen are up between 1.7% and 2.2%.
• Spain's IBEX trades higher by 1.8%. Financials have fueled today's outperformance with Caixabank, Banco Sabadell, Santander, BBVA, Bankia, and Bankinter showing gains between 1.5% and 4.5%.

 Arconic: Elliott Associates increases active stake to 11.9% (Prior 11.1%)  (22.17)

 

On The Wires

• DelMar Pharmaceuticals (DMPI) announced the opening of enrollment of a Phase II study of VAL-083 at the University of Texas MD Anderson Cancer Center in Houston, Texas.
• WellCare Health Plans, Inc. (WCG) announced that the National Committee for Quality Assurance has awarded an accreditation status of Commendable to its Medicaid health plans in New York. WellCare also received an Accredited designation for its Medicare Advantage plan in the state.
• JPMorgan Chase (JPM) and Intuit Inc. (INTU) have signed an agreement to give customers greater control of their financial information to help them make better financial decisions, the companies announced today. This agreement sets the bar for how banks and technology companies can work together to serve their shared customers.  The companies will use technology that will allow customers to authorize Chase to electronically share financial data securely with Intuit's financial management applications, such as Mint, TurboTax Online and QuickBooks Online.
• Datawatch Corporation (DWCH) announced an enhanced partnership with AquaQ Analytics, which will deliver advanced trading analytics and consulting services to leading banks, brokers and fund managers. Joint customers will now benefit from Datawatch Panopticon with kdb+(TM), as well as the availability of consulting resources in New York and London to support firms making tick databases the center of their trading data warehouse, and central to their MiFID- and MiFIR-based reporting and analytics.

 Gevo regains compliance w/ Nasdaq's minimum bid price continued listing requirement  (3.05)

 

 S&P futures vs fair value: +9.30. Nasdaq futures vs fair value: +26.90.

The equity market is on track to begin Wednesday's session higher as the S&P 500 futures trade nine points (0.4%) above fair value.

Earnings have been this morning's focal point as a bundle of companies have reported quarterly results between yesterday's close and today's open. Boeing (BA 163.00, +2.45), Novartis AG (NVS 71.19, +1.16), Texas Instruments (TXN 77.57, +0.49), Seagate Technology (STX 42.70, +5.26), and Alcoa (AA 38.35, +0.85) have been some of the most notable pre-market advancers, while United Technologies (UTX 111.00, -0.61) and Textron (TXT 45.25, -4.13) have retreated after reporting disappointing results.

The Treasury market is under some selling pressure early this morning, with the 10-yr yield up two basis points at 2.49%. For the week, Treasuries sit just below their flat lines after Tuesday's big loss erased Monday's sizable gain.

Similarly, crude oil has ticked down, losing 0.6% despite a 0.2% retreat in the U.S. Dollar Index (100.06, -0.21). The energy component trades at $52.82/bbl.

Released earlier this morning, the FHFA Housing Price Index for November rose 0.5%, which followed a revised increase of 0.3% in October (from 0.4%).

 Cree target raised to $24 from $23 at Williams Capital Group following earnings; Hold  (27.41)

Capital Product Partners upgraded to Outperform from Market Perform at Wells Fargo  (3.53)

 On The Wires

• Synchrony Financial (SYF) and Belk, a private department store company, today announced they have agreed to a multi-year renewal of Synchrony Financial's consumer financing program. 
• Windstream (WIN) announced a major expansion of its advanced metro fiber network in St. Louis and Cleveland.
• 2U (TWOU) announced a new partnership with the Pepperdine University School of Law and the Pepperdine University Graduate School of Education and Psychology to launch Law@Pepperdine, a new online master of legal studies, and Psychology@Pepperdine, a suite of online degrees in psychology.
• L3 Technologies (LLL) announced that Curtis Brunson, Executive Vice President of Corporate Strategy and Development, and Steve Kantor, Senior Vice President and President of its Electronic Systems business segment, will be transitioning from their roles effective March 1, before retiring in 2Q17. As a part of the leadership transition, the company will realign Electronic Systems into two business segments. The realignment is not expected to have any impact on the company's consolidated 2017 financial guidance. Commencing in the first quarter of 2017, the company will report its results under the realigned business segments.
• State Street Corporation (STT) announced that it has been appointed by Allianz Global Investors (AllianzGI) to provide a wide range of investment services. The agreement expands an existing relationship into a strategic global partnership with State Street delivering a broad spectrum of investment servicing solutions for more than EUR 450 billion in assets under management.  State Street will provide middle and back office solutions including fund administration, depository and trustee services, global custody, transfer agency, share class hedging, and data consolidation services. The mandate remains subject to approvals of applicable funds' boards as well as customary regulatory approvals.

 Dow Jones Industrial Average opens higher to probe the 20,000 benchmark for the first time ever  (200.06 +1.22)

 Hearing Bill Barrett was initiated with a Buy at National Securities; tgt $9  (7.26 +0.12)

 

 Hearing SBA Comm was downgraded to Neutral from Buy at Citigroup  (103.59 -0.51)

 

 Cirrus Logic opens modestly lower; hearing weakness attributed to cautious commentary out of OTR Global  (60.41 -1.33)

 Hearing Fifth Third was upgraded to Neutral from Underperform at Hilliard Lyons  (26.88 +0.28)

 

 

 U.S. Concrete leading materials plays as President Trump is widely expected to sign order today to begin construction of southern border wall (see 1/24 22:51)  (67.20 +1.15)

• Materials names seeing strength include: EXP +3.7%, USG +3.7%, USCR +2.4%, WMS +2.2%, GVA +2.1%, MLM +1.8%, VMC +1.8%, FRTA +1.6%, SUM +1.6%, CX +0.6%.
• Trump Tweet  — Washington Post Article (for additional color)

 AGCO Corp Correction: Stock was not initiated at BWS Financial this morning, prior comment has been removed  (64.09 +0.62)

 Opening Market Summary: Dow Crosses 20,000

The stock market opened Wednesday's session higher with the Dow finally crossing the elusive 20,000 milestone. The index performs in line with its peers, up 0.5%.

The financial sector (+1.0%) has taken the early lead, with its cyclical peers following closely. Technology, industrials, materials, and energy hold gains between 0.2% and 0.7%, while the consumer discretionary sector sits just below its flat line.

On the countercyclical side, consumer staples (+0.2%) and health care (+0.2%) sport modest gains, while the remaining sectors post modest losses.

Treasuries have slipped past their overnight lows, with the 10-yr yield up three basis points at 2.50%.

 Economic Summary: MBA Mortgage Applications higher by 4%; Leading Indicators tomorrow at 10:00 ET

Economic Data Summary:

• Weekly MBA Mortgage Applications 4.0% (Last Week was 0.8%).
• November FHFA Housing Price Index 0.5% (October was 0.4%).

Upcoming Economic Data:

• December Advance International Trade in Goods due out Thursday at 8:30 (Briefing.com consensus of -$65.0 bln; November was -$65.3 bln)
• Weekly Initial Claims due out Thursday at 8:30 (Briefing.com consensus of 246K; Last Week was 234K)
• Weekly Continuing Claims due out Thursday at 8:30 (Briefing.com consensus of; Last Week was 2.046 M )
• December Leading Indicators due out Thursday at 10:00 (Briefing.com consensus of 0.5%; November was 0.0%)
• December New Home Sales due out Thursday at 10:00 (Briefing.com consensus of 589K; November was 592K)

Upcoming Fed/Treasury Events:

• $34 bln in 5 Year Treasury Notes — Wednesday at 13:00 ET
• $28 bln in 7 Year Treasury Notes — Thursday at 13:00 ET

Other International Events of Interest

• Japan's December trade surplus narrowed to JPY360 billion from JPY470 billion (expected surplus of JPY220 billion). December Imports -2.6% year-over-year (consensus -0.8%; last -8.8%) and December Exports +5.4% (expected 1.2%; last -0.4%)

 Tutor Perini upgraded to Buy from Hold at Standpoint Research  (31.45 +2.00)

 Newtek prices 2,250,000 share offering at $15.25/share  (15.26 -0.98)

 

 Homebuilders, oil services, financials, transports, cybersecurity, small caps leading with metals lagging vs. SPY +0.6% at new all time high  (137.27 +1.34)

• ITB +2.55% OIH +1.43% KRE +1.44% KBE +1.38% IYT +1.27% HACK +1.24% IWM +1.03% XLI +1.00% JETS +0.95% XLF +0.90% XOP +0.82%
• SLV -1.29% XME -1.07% GLD -1.02% USO -0.26% IYR -0.15% UUP -0.15% IYZ -0.14%

 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:

• ERIC Feb 6 calls are seeing interest ahead of earnings tomorrow, January 26 before the open with 1510 contracts trading vs. open int of 770, pushing implied vol up around 5 points to ~45% — we noted bearish activity in the Feb 6 puts earlier this week (see 1/23 13:38 OPTNX). 

Puts:

• MFIN Mar 2.5 puts are seeing interest with the underlying stock down 3% with 1710 contracts trading vs. open int of 150, pushing implied vol up around 35 points to ~140% — co is confirmed to report earnings February 27 before the open.

Stocks seeing volatility selling:

• HES, FCX, BA, NVS implied vol is lower following earnings/guidance

Sentiment: The CBOE Put/Call ratio is currently: 0.47… VIX: (10.81, -0.26, -2.4%).
February 17 is options expiration — the last day to trade February 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.

 Kulicke & Soffa pops on volume after positive mention at Navellier  (17.88 +0.57)

 

 Hearing DNB Financial was upgraded earlier to Outperform from Market Perform at FIG Partners  (29.50 +0.50)

 

 

 Today's biggest point gainers/losersBiggest point gainers: ISRG 686.11(20.06), BOBE 59.79(11.84), GWW 260.89(11.8), ROK 152.44(10.41), STX 45.26(7.82), MLM 241.96(7.46), BA 167.28(6.73), CXO 144.72(5.68), ACAT 18.5(5.41), MDP 60.1(4.85), SPLK 58.65(4.2), EXP 108.48(4.19), NEWR 37.35(4.05), WDC 79.92(3.91), VMC 136.15(3.8), CREE 30.94(3.53), ANTM 153.66(3.43), LOGI 29.01(3.38), BTI 123.14(3.34), IBB 273.11(3.1), WYNN 97.1(3.07), IBM 178.94(3.04), TEL 74.56(2.88), PH 148.33(2.85), WAT 144.98(2.83)

Biggest point losers: CVLT 50.95(-5.85), TXT 44.5(-4.89), VIVO 12.6(-3.85), TDG 221.75(-3.46), STT 77.2(-3.32), HZN 17.93(-2.95), LN 33.34(-2.86), EAT 44.49(-2.67), LMT 250.64(-2.27), UTX 109.57(-2.04), LTXB 40.08(-1.9), CA 31.07(-1.88), STLD 34.58(-1.67), ACIA 65.96(-1.65), CHKP 97.27(-1.62), ITW 125.57(-1.49), APH 67.46(-1.31), CONE 49.62(-1.31), GOLD 83.71(-1.28), CRUS 60.52(-1.22), MIK 20.58(-1.2), X 32.09(-1.13), NYCB 15.02(-1.13), SYT 85.59(-1.12)

 Sector Summary: S&P Consumer Discretionary Index +0.6%, in-line with the broader marketThe consumer discretionary group is in-line with the broader market. The retail group is in the green with the Retail HOLDRS Trust (RTH) 0.7% and the SPDR S&P Retail ETF (XRT) 0.9%.

Notable earnings/guidance: 

• Trading higher following earnings/guidance: MDP +8.6% (also CBS and Meredith announced long-term deal that renews station affiliation agreements for four of its owned-and-operated stations), CAT +1.9% (December 2016 retail data: total machines worldwide fell 12% YoY vs 17% decline in the prior month), MKC +1.6%
• Trading lower following earnings/guidance: MIK -5.5% (sees Q4 EPS of $0.94-0.96 vs $0.96 CapIQ Consensus and comps down 0.9-1.5%; announces 18 mln share secondary offering by stockholders — 8 mln will be repurchased by company), EAT -4.9%, ITW -1%

In the news:

• Leaders: ACAT 41.3% (Arctic Cat to be acquired by Textron (TXT) for $18.50/share in cash, or approximately $247 mln), BOBE 24.8% (Bob Evans to sell Bob Evans Restaurants, will acquire Pineland Farms Potato Company; reaffirms FY17 guidance), HBI 5% (increases quarterly cash dividend to $0.15 per share, up from $0.11 per share), SPB 1.9% (authorizes new 3-year, $500 mln common stock repurchase program and increases quarterly dividend of $0.42/share from $0.38/share prior quarter), RH 1.7% (Bioverativ will replace RH in the S&P 400, and RH will replace Ciber in the S&P 600), SPLS 1.3% (Staples details changes to its governance practices and Board), CCL 1.3% (enters strategic partnership with Wartsila), PVH 1% (PVH to acquire the licensed Tommy Hilfiger men's tailored clothing business for North America from Marcraft Clothes; terms not disclosed), ADDYY 0.4% (Tiger Woods chooses Adidas-owned TaylorMade golf clubs after Nike exited the golf equipment market last week)
• Laggards: SSI -3.1% (making new all-time lows — Varex Imaging will replace Stage Stores in the S&P Small Cap 600) and leading discount retail names lower (SMRT -3%, FRED -2.1%, CATO -0.3%)
• Nearly unchanged: GPS (Gap announces that Andi Owen, global brand president of Banana Republic, will leave the company in late February)

Other notable trends:

• Nearly every restaurant / QSR is higher (along with broader market) despite EAT earnings related weakness. RT +4%, HABT +3.9%, FRSH +3.8%, ZOES +3.7%, BWLD +3.7%, PBPB +3.1%, GRUB +2.7%, SAUC +2.7%, TACO +1.9%, TXRH +1.9%, DFRG +1.7%, CMG +1.5%, FOGO +1.4%, SONC +1.4%, RUTH +1.3%, WING +1.3%, NDLS +0.6%, TAST +1.2%, SHAK +1%, YUM +1%, BJRI +1%, PLKI +0.9%, WEN +0.9%, LOCO +0.8%, BLMN +0.8%, DIN +0.6%, JACK +0.6%
• Homebuilders are higher across the board — along with other materials / infrastructure related names amid anticipated Trump order to begin Mexico border construction (ITB +2.2% / XHB +1.4%). UCP +5%, HOV +4.6%, WLH +3.1%, LGIH +3%, TMHC +2.6%, DHI +2.4%, CAA +2.4%, BZH +2.1%, MTH +1.9%, MHO +1.9%, MDC +1.8%, TOL +1.7%, LEN +1.5%, TPH +1.5%, KBH +1.5%,  CSTE +1.1%, PHM +1%, CHCI +0.4%

Analyst related:

• Upgrades: AEO 2.2% (upgraded to Outperform at Telsey Advisory Group on valuation; tgt $19; initiated with a Neutral at Buckingham Research; tgt $16)
• Downgrades: TEN flat (downgraded to Neutral from Positive at Susquehanna), COH -0.5% (downgraded to Outperform from Buy at CLSA), H flat (downgraded to Hold from Buy at Berenberg; tgt $60), KATE flat (downgraded to Market Perform at Telsey Advisory Group; tgt lowered to $21)
• Misc: ACCO 1.4% (initiated with a Buy at BWS Financial)

Looking ahead:

On the earnings front: CCI, EBAY, ETH report today after the close; F, CMCSA, HGG, LEA, PHM, RCL, SPB, WHR report tomorrow before the open.

 

 Rumor Round Up

Rumor Activity was average today

• CTFN out with a piece stating that Cincinnati Bell (CBB 22.70 +0.00) is not currently for sale.
• Reuters reported that Ixia (XXIA 17.73 +1.18) is in discussions to be acquired by Keysight Technologies (KEYS 37.59 +0.64).
• NY Post detailed that Walgreens (WBA 82.12 +0.89) and Rite Aide (RAD 7.10 +0.16) might still move forward with merger even if it doesn't receive approval this week.
• Svd DE discussed that Sandvik (SDVKY 13.64 +0.28) process systems unit might be sold for SEK 4 billion.

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.

 Hearing Seagate Tech was upgraded earlier to Outperform from Sector Perform at FBN Securities  (44.87 +7.43)

 Lions Gate Entertainment: Kornitzer Capital Management increases passive stake to 6.57% (To approximately 5.38 mln shares vs. approximately 4.66 mln held at the end of Q3)  (28.26 +0.27)