Америка сегодня. ВВП, Мичиган и заказы на товары длительного пользования.

Neurocrine Biosci upgraded to Outperform from Perform at Oppenheimer  (39.86)

 Clovis Oncology initiated with a Buy at BofA/Merrill; tgt $74  (61.69)

 

 TIER REIT initiated with a Mkt Outperform at JMP Securities; tgt $21  (18.30)

 Wynn Resorts upgraded to Neutral from Reduce at Instinet  (95.50)

 

 Liberty Broadband upgraded to Outperform from Neutral at Macquarie  (85.91)

 

 Eros International: Temasek Holdings lowers passive stake to 11.3% (Prior 16.8%)  (11.80)

 Early premarket gappersGapping up: LTRX +14.2%, EPE +9.9%, SMCI +9.8%, GLF +7.1%, WYNN +7%, CVEO +6.4%, IMGN +6.2%, SYNA +5.8%, GHL +5.1%, MTL +4.3%, MXIM +4.2%, VMW +4%, EMCI +3.8%, CMRE +3.4%, KLAC +3.3%, OSIS +3.2%, DQ +3.1%, SBGL +2.2%, IBN +2.2%, VVV +1.8%, SXL +1.7%, INFY +1.7%, MSFT +1.5%, MGM +1.3%, BCR +1.1%, INTC +1%, MPEL +0.7%, VLO +0.6%, LVS +0.6%, LRN +0.6%, DCOM +0.5%

Gapping down: ATHX -27%, WKHS -13.5%, ANY -5.9%, JNPR -5.5%, RHI -4.9%, APD -4.6%, PFPT -4.3%, SBUX -3.8%, ERIC -3.6%, CS -3.3%, FLEX -3.3%, CAFD -3.1%, UBS -3%, SWFT -2.7%, DCIX -2.5%, MSCC -2.4%, GOOG -1.6%, PUK -1.4%, PYPL -1.4%, DB -1.3%, BBVA -1.3%, BCS -1.2%, CLS -1.2%, HON -1.2%, CLS -1.2%, BP -1.1%, SDRL -1%, ABX -0.8%, FFHL -0.6%, RDS.A -0.6%, FFIN -0.6%, KEYW -0.6%, FB -0.5%

 

 Amedisys initiated with a Hold at The Benchmark Company; tgt $50  (47.60)

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

Major European indices trade in the red, but losses have been limited. The euro is higher by 0.1% against the dollar at 1.0688 while the pound has slid 0.4% to 1.2551. French Finance Minister Michel Sapin cautioned that time to reach an agreement on the next installment of the Greek bailout is running out. Greek officials have reportedly been asked to implement more austerity measures past 2018, but there has been pushback from the Greek side. On a separate note, British Prime Minister Theresa May is scheduled to meet with US President Donald Trump to discuss trade policy and the current state of NATO.

• In economic data:
  • Eurozone December M3 Money Supply +5.0% year-over-year (consensus 4.9%; last 4.8%)
  • Germany's December Import Price Index +1.9% month-over-month (expected 1.3%; last 0.7%); +3.5% year-over-year (consensus 2.7%; previous 0.3%)
  • France's January Consumer Confidence ticked up to 100 from 99, as expected
  • Italy's January Consumer Confidence 108.8 (expected 110.6; last 110.9) and January Business Confidence 104.8 (consensus 103.5; last 103.7). December Wage Inflation 0.0% month-over-month (last 0.1%); +0.4% year-over-year (last 0.4%)
  • Spain's December Retail Sales +2.9% year-over-year (consensus 3.3%; previous 3.2%)

---Equity Markets---

• UK's FTSE is lower by 0.1% with select financials among the laggards. Prudential, Barclays, Lloyds Banking, RBS, Standard Chartered, and Standard Life are down between 0.8% and 1.1%. Energy names also trade in negative territory with BP down 0.6% and Royal Dutch Shell lower by 0.3%.
• Germany's DAX has slipped 0.2% amid weakness in heavyweight components like Deutsche Bank, Daimler, BMW, and Continental. The four names are down between 0.4% and 1.2%. Air carrier Lufthansa leads with a gain of 2.3%.
• France's CAC has surrendered 0.5%. Nokia is down 2.1% while consumer names like Carrefour, Kering, Danone, and Louis Vuitton show losses between 0.5% and 1.2%. Financials trade mostly lower with Societe Generale, BNP Paribas, and Credit Agricole down between 0.6% and 1.0%.

 Overnight Treasury Summary

Treasuries Edge Lower Ahead of U.S. GDP Report

• U.S. Treasuries are ticking lower this morning ahead of the first official estimate of Q4 U.S. GDP growth (Briefing.com consensus 2.2%). The international economic data was mixed as consumer price inflation in Japan ran hotter than expected according to both national and Tokyo CPI data. In Germany, import prices rose faster than expected but Spanish retail sales missed expectations. Italian consumer confidence fell more than expected but business confidence increased. Italy's 10-year BTP yield went as high as 2.28% this morning but has stabilized and declined by six basis points since then. A ruling from Italy's highest constitutional court on Thursday increased the chance of early elections there and sent eurozone periphery debt yields skywards. The S&P 500 is set to open up 0.06% to 2,298.1 and the U.S. Dollar Index is adding 0.24% to 100.62. WTI crude is down 0.71% to $53.40/bbl. and gold is down 0.56% to $1,183.1/troy oz., a two-week low
• Yield Check:
  
  • 2-yr: unch at 1.23%
  • 5-yr: +1 bp to 1.97%
  • 10-yr: +1 bp to 2.51%
  • 30-yr: +1 bp to 3.10%

• News:
  
  • Japan's National CPI grew by 0.3% y/y in December, beating estimates but slowing from November's 0.5% rate
    
    • The National Core CPI fell 0.2% y/y after declining 0.4% in November
    • The Tokyo CPI grew 0.1% y/y in January, beating both forecasts and December's change of 0.0%
      
      • The Tokyo Core CPI fell 0.3% y/y in January after sliding 0.6% in December
  • Australia's producer price index jumped by 0.5% q/q in the fourth quarter (0.7% y/y), topping estimates after 0.3% growth in Q3
  • German import prices rose 1.9% m/m in December (3.5% y/y), beating forecasts and accelerating from November's 0.7% growth
  • France's Consumer Confidence Index rose to 100 for January from 99 for December, as expected
  • Italian Business Confidence unexpected jumped to 104.8 for January from 103.7 for December
    
    • The Consumer Confidence Index fell more than expected to 108.8 from 110.9
    • Separately, Italian wages were unchanged m/m in December (+0.4% y/y), slowing from November's 0.1% growth
  • Spanish retail sales increased by 2.9% y/y in December, missing estimates and slowing from November's 3.2% pace
  • The eurozone's broad money supply, as measured by M3, grew 5.0% y/y in December. That was a touch faster than economists had predicted and faster than November's 4.8%
    
    • Eurozone household income grew by 0.2% in the third quarter of 2016, matching Q2's growth rate but slowing from Q1's 0.8% pace
  • The Norwegian krone hit a 17-month high today of EUR8.89

• Data out Friday:
  
  • Q4 GDP and GDP Deflator — Advanced Estimate (08:30 ET)
  • December Durable Goods Orders and Durable Goods Orders ex-transportation (08:30 ET)
  • January Michigan Sentiment — Final (10:00 ET)

 WestRock upgraded to Buy from Neutral at BofA/Merrill  (54.42)

 

 

 Rayonier Adv. Materials upgraded to Neutral from Underperform at BofA/Merrill  (16.05)

 8point3 Energy Partners LP downgraded to Mkt Underperform from Mkt Perform at Avondale  (14.75)

 Splunk initiated with a Hold at Argus  (57.73)

 ShoreTel downgraded to Hold from Buy at Craig Hallum  (7.25)

 JetBlue Airways downgraded to Hold from Buy at Argus  (21.10)

 Stonegate Mortgage shares halted for news pending

 VMware target raised to $92 at Maxim Group — Strong results & guidance on temporary tailwinds  (84.22)Maxim Group raises their VMW tgt to $92 from $83 noting co reported strong results on acceleration in compute license bookings. They also felt guidance was strong as mgmt expects ongoing strength with vCAN, NSX, vSAN & EUC. Tgt goes higher on temporary DELL-driven tailwind but maintain Hold rating as progress on automation and mgmt tools still too slow; Hold.

 Mateon Therapeutics initiated with a Buy at Maxim Group; tgt $2  (0.39)Maxim Group initiates MATN with a Buy and price target of $2. The anti-angiogenic (AA) market generates over $15B annually (Avastin=$6B). Recall that Avastin is approved not just for ovarian cancer, but also glioblastoma, lung cancer, and other indications. Thus, if a CA4P combination with Avastin is successful, even just slightly (beginning with OC), there is upside at the current valuation given the market size, in firm's view.

 Red Rock Resorts initiated with a Buy at Buckingham Research; tgt $27  (23.69)

 

 

 Rogers Comms upgraded to Buy from Market Perform at Cormark  (42.81)

 X

 

 Peoples Bancorp, Inc. increases quarterly dividend to $0.20/share from $0.17/share  (32.19)

 

 Golar LNG downgraded to Hold from Buy at Nordea  (27.83)

 Gapping up

Gapping up
In reaction to strong earnings/guidance:

• LTRX +14.2%, SMCI +10.3%, SYNA +8.4%, WYNN +7.6%, CVEO +6.4%, GHL +5.1%, (ticking higher), MXIM +4.2%
• VMW +3.9%, (also authorizes an additional $1.2 bln share repurchase), EMCI +3.8%, CMRE +3.4%, KLAC +3.3%, OSIS +3.2%
• AAL +2.8%, MSFT +2%, VVV +1.8%, ETFC +1.6%, GNTX +1.6%, BCR +1.1%, INTC +1.1%, BT +0.8%, GLOP +0.7%, LRN +0.6%

Other news:

• EPE +9.9% (light volume, EP Energy enters into a drilling JV w/ Wolfcamp Drillco Operating to fund future oil and natural gas development in its Wolfcamp program)
• GLF +7.1% (continued strength)
• IMGN +6.2% (ticking higher; announces that the first patient has been dosed in FORWARD I, the Co's Phase 3 clinical trial evaluating mirvetuximab soravtansine as a single-agent therapy for the treatment of platinum-resistant ovarian cancer)
• SXL +1.7% (increases quarterly distribution to $0.52/share from $0.51/share)
• MGM +1.3% (rebounding following WYNN results)
• MRCY +1% (prices/increases offering of 6 mln shares at $33/share)
• LVS +1% (rebounding following WYNN results)
• VLO +0.7% (increases quarterly dividend to $0.70/share from $0.60/share)
• MPEL +0.7% (rebounding following WYNN results)

Analyst comments:

• DQ +3.1% (initiated with Buy at Craig Hallum)
• WHLR +2.9% (initiated with a Buy at Wunderlich)
• LUX +0.7% (upgraded to Buy from Hold at HSBC)
• F +0.6% (upgraded to Outperform at RBC Capital Mkts)
• FTI +0.5% (initiated with a Buy at UBS)

 Gapping down

Gapping down
In reaction to disappointing earnings/guidance:

• JNPR -8.5%, CAFD -7.3%, RHI -4.9%, (light volume), APD -4.6%, SBUX -4.3%, DCOM -3.4%, FLEX -3.3%, UBS -2.9%, SWFT -2.7%, MSCC -2.4%, PFPT -1.9%
• CLS -1.6%, PYPL -1.3%, GOOG -1.2%, HON -1%, AZPN -0.7%, FFIN -0.6%, KEYW -0.6%, (also announces 8.5 mln common stock offering ), SSB -0.5%

Select EU financial related names showing weakness in sympathy with UBS earnings:

• CS -3.3%, BBVA -1.3%, PUK -1.3%, BCS -1.2%, ING -1%, DB -0.8%

Select oil/gas related names showing early weakness:

• STO -1.4%, BP -1.1%, SDRL -0.7%, TOT -0.7%, RDS.A -0.5%

Other news:

• ATHX -27% ( to offer for sale shares of its common stock)
• WKHS -14.4% (commences common stock offering; size undisclosed)
• PER -11.4% (decreases quarterly distribution to $0.12/unit from $0.134/unit)
• ANY -5.9% (completes approx. $5 mln private placement of 16,906,666 units at $0.390/unit; Each Unit consists of one common share and one warrant from each of two series of warrants)
• DCIX -2.5% (files for $250 mln mixed securities shelf offering)
• SRCL -1.2% (expects to write-down $65-75 mln in pre-tax income for Q4)

Analyst comments:

• ERIC -4.1% (downgraded to Reduce from Hold at Kepler)

 Microsoft: Color on Quarter  (64.27)

• Citigroup upgraded to Neutral from Sell.
• RBC Capital Mkts raises their MSFT tgt to $71 from $65 on higher estimates. MSFT beat F2Q17 expectations and guided above (!) RBC/ Street on revs/ EPS for F3Q17. The pieces are falling into place as thwy are starting to see an important shift in the model, with improving profitability in growth segments. This provides confidence in durability of earnings growth.
• Stifel raises tgt to $68 from $66. Overall, this quarter continues to reinforce their bullish thesis, namely that Microsoft 1) is well positioned around its Commercial Cloud (Office 365 and Azure) and that cloud profits and cash flow should inflect this year, 2) will continue strong expense discipline even while investing in higher growth and differentiated areas, and 3) newer products will continue scaling leading to gross profit and operating income growth, and ultimately FCF growth, in coming years. Given this backdrop, along with shareholder-friendly activities (>$14B in annual dividends/buybacks; ~2.4% dividend yield), they remain Buyers.
• BMO raises tgt to $71 from $69. They believe MSFT had a very strong quarter on many metrics. Their key focus remains on growth of operating income dollars, and MSFT's consolidated operating income grew by 11% y/y in CC excluding LinkedIn vs. their estimates (which did not include LinkedIn) of 10% y/y growth. Lowering estimates for LNKD. Since mid-2016, MSFT has been designated as our top pick. At the turn of the new year, we added Adobe (ADBE, $114.25, Outperform) as their co-top pick. Given more limited upside for MSFT, they are taking MSFT off their top pick designation and leaving ADBE.
• MSFT +1.8% at all time highs premarket.

 Gapping up/down: WYNN +8%, VMW +4%, KLAC +3%, AAL +3%, MSFT +2% and INTC +1% after earnings, F +0.6% after upgrade; JNPR -8%, SBUX -4%, UBS -3% and GOOG -1% after eanings

Gapping up
In reaction to strong earnings/guidance:

• LTRX +14.2%, SMCI +10.3%, SYNA +8.4%, WYNN +7.6%, CVEO +6.4%, GHL +5.1%, (ticking higher), MXIM +4.2%
• VMW +3.9%, (also authorizes an additional $1.2 bln share repurchase), EMCI +3.8%, CMRE +3.4%, KLAC +3.3%, OSIS +3.2%
• AAL +2.8%, MSFT +2%, VVV +1.8%, ETFC +1.6%, GNTX +1.6%, BCR +1.1%, INTC +1.1%, BT +0.8%, GLOP +0.7%, LRN +0.6%

Other news:

• EPE +9.9% (light volume, EP Energy enters into a drilling JV w/ Wolfcamp Drillco Operating to fund future oil and natural gas development in its Wolfcamp program)
• GLF +7.1% (continued strength)
• IMGN +6.2% (ticking higher; announces that the first patient has been dosed in FORWARD I, the Co's Phase 3 clinical trial evaluating mirvetuximab soravtansine as a single-agent therapy for the treatment of platinum-resistant ovarian cancer)
• SXL +1.7% (increases quarterly distribution to $0.52/share from $0.51/share)
• MGM +1.3% (rebounding following WYNN results)
• MRCY +1% (prices/increases offering of 6 mln shares at $33/share)
• LVS +1% (rebounding following WYNN results)
• VLO +0.7% (increases quarterly dividend to $0.70/share from $0.60/share)
• MPEL +0.7% (rebounding following WYNN results)

Analyst comments:

• DQ +3.1% (initiated with Buy at Craig Hallum)
• WHLR +2.9% (initiated with a Buy at Wunderlich)
• LUX +0.7% (upgraded to Buy from Hold at HSBC)
• F +0.6% (upgraded to Outperform at RBC Capital Mkts)
• FTI +0.5% (initiated with a Buy at UBS)

Gapping down
In reaction to disappointing earnings/guidance:

• JNPR -8.5%, CAFD -7.3%, RHI -4.9%, (light volume), APD -4.6%, SBUX -4.3%, DCOM -3.4%, FLEX -3.3%, UBS -2.9%, SWFT -2.7%, MSCC -2.4%, PFPT -1.9%
• CLS -1.6%, PYPL -1.3%, GOOG -1.2%, HON -1%, AZPN -0.7%, FFIN -0.6%, KEYW -0.6%, (also announces 8.5 mln common stock offering ), SSB -0.5%

Select EU financial related names showing weakness in sympathy with UBS earnings:

• CS -3.3%, BBVA -1.3%, PUK -1.3%, BCS -1.2%, ING -1%, DB -0.8%

Select oil/gas related names showing early weakness:

• STO -1.4%, BP -1.1%, SDRL -0.7%, TOT -0.7%, RDS.A -0.5%

Other news:

• ATHX -27% ( to offer for sale shares of its common stock)
• WKHS -14.4% (commences common stock offering; size undisclosed)
• PER -11.4% (decreases quarterly distribution to $0.12/unit from $0.134/unit)
• ANY -5.9% (completes approx. $5 mln private placement of 16,906,666 units at $0.390/unit; Each Unit consists of one common share and one warrant from each of two series of warrants)
• DCIX -2.5% (files for $250 mln mixed securities shelf offering)
• SRCL -1.2% (expects to write-down $65-75 mln in pre-tax income for Q4)

Analyst comments:

• ERIC -4.1% (downgraded to Reduce from Hold at Kepler)

 European Summary

European Yields See Mixed Results Ahead of U.S. GDP Report

• European sovereign debt yields are little changed this morning after a week that saw many countries' yields move to one-year highs. German import prices rose at the fastest year-on-year pace in almost five years in December although higher energy prices are largely to blame. Other reports out today showed that business confidence in Italy improved in January while consumer confidence weakened. European yields will almost certainly respond to today's U.S. GDP report. On Thursday, data showed that the U.K.'s GDP grew by 0.6% q/q in Q4 2016 (2.2% y/y), beating estimates. The U.K. 10-year Gilt is on track for its worst week of 2017, or alternatively, its worst week in four
• European Economic Data:
  
  • German import prices rose 1.9% m/m in December (3.5% y/y), beating forecasts and accelerating from November's 0.7% growth
  • France's Consumer Confidence Index rose to 100 for January from 99 for December, as expected
  • Italian Business Confidence unexpected jumped to 104.8 for January from 103.7 for December
    
    • The Consumer Confidence Index fell more than expected to 108.8 from 110.9
    • Separately, Italian wages were unchanged m/m in December (+0.4% y/y), slowing from November's 0.1% growth
  • Spanish retail sales increased by 2.9% y/y in December, missing estimates and slowing from November's 3.2% pace
  • The eurozone's broad money supply, as measured by M3, grew 5.0% y/y in December. That was a touch faster than economists had predicted and faster than November's 4.8%
    
    • Eurozone household income grew by 0.2% in the third quarter of 2016, matching Q2's growth rate but slowing from Q1's 0.8% pace
• Yield Check:
  
  • France, 10-yr OAT: unch at 1.03%
  • Germany, 10-yr Bund: -1 bp to 0 .48%
  • Greece, 10-yr note: +21 bps to 7.05%
  • Italy, 10-yr BTP: unch at 2.23%
  • Portugal, 10-yr PGB: -3 bps to 4.10%
  • Spain, 10-yr ODE: +3 bps to 1.60%
  • U.K., 10-yr Gilt: -3 bps to 1.49%

 Peabody Energy: Mangrove Partners lowers active stake to 0.01% (Prior 5.2%)  (2.85)

 On The Wires

• Aurinia Pharmaceuticals Inc. (AUPH) announced that it has selected Worldwide Clinical Trials («Worldwide») as its Clinical Research Organization (CRO) for the AURORA Phase 3 study of volcosporin for the treatment of active lupus nephritis (LN).
• Mitsubishi Tanaba Pharma announced that Biogen (BIIB) and the company reached an agreement to terminate the license agreement for MT-1303, a therapeutic agent for autoimmune diseases, discovered and developed by Mitsubishi Tanaba. In Otober, Biogen announced it would discontinue its development plan for MT-1303 due to its strategic objectives.
• Knight Therapeutics announced that it has acquired 6,200,000 common shares of Israeli based Protalix BioTherapeutics (PLX) at an average price of $0.57 per share. Knight now owns approximately 5% of the outstanding common shares of Protalix. Knight acquired the Shares for investment purposes.

 Starbucks defended at RBC, Wedbush following sales miss, guide down  (58.46)

• RBC notes that although near-term SSS growth may fall below the mid-single-digit range, new procedures can ultimately unlock MO&P capacity, while innovation, improved personalized marketing, and a broadening of the Rewards user base can accelerate SSS growth later in 2017; $66 tgt.
• Wedbush expects Americas comp momentum, accelerating CAP unit growth, a successful EMEA turnaround, and multiple CPG and emerging market opportunities to drive consistent mid-to-high teens annual EPS growth; $65 tgt.
• Q1 comps grew 3% vs. 4% ests
• SBUX -4% premarket.

 LHC Group initiation details — Buy at The Benchmark Company; tgt $55  (46.96)The Benchmark Company initiates LHCG with a Buy and price target of $55. As one of the largest scale players in home health, LHCG is positioned to benefit from emerging healthcare delivery trends. Financial incentives are increasingly focused on low cost/high quality care — and home health is often the most viable post-acute alternative. Competitive advantages for LHCG include its long history of large hospital partnerships; heavy concentration in CON states; strong clinical systems driving high quality scores necessary for new Medicare payments, and a sterling financial condition to support continued M&A.

 

 Filings, Offerings and Pricings

Filings:

• Celldex Therapeutics (CLDX) files for approx 18.4 mln share common stock offering by selling stockholders
• Diana Containerships (DCIX) files for $250 mln mixed securities shelf offering
• McKesson (MCK) files for mixed securities shelf offering; size undisclosed

Offerings:

• Athersys (ATHX) proposes common stock offering; size not disclosed
• K2M Group (KTWO) announces offering of 4 mln shares of its common stock by Welsh, Carson, Anderson & Stowe XI, L.P. and certain related affiliates
• Workhorse Group (WKHS) commences common stock offering; size undisclosed

Pricings:

• Sphere 3D (ANY 0.36) completes approx. $5 mln private placement of 16,906,666 units at $0.390/unit; Each Unit consists of one common share and one warrant from each of two series of warrants
• Howard Bancorp (HBMD 15.40) prices 2.4 mln common stock offering at $15.00/share
• Horizon Global (HZN 18.76) prices 4 mln shares of common stock at $18.50 per share and $110 mln of its 2.75% Convertible Senior Notes due 2022
• KEYW Holding (KEYW 12.09) prices 8,500,000 shares of its common stock at $10.50/share
• Mercury (MRCY 33.45) prices/increases offering of 6 mln shares (from 5 mln) at $33/share
• TPG Specialty Lending (TSLX 18.56) prices offering of $100 mln of its 4.50% Convertible Senior Notes due 2022
• Virtus Investment Partners (VRTS 111.15) prices 910K shares of common stock at $110.00/share and 1 mln shares of its 7.25% mandatory convertible preferred stock at $100.00/share

 

 Aspen Tech upgraded to Mkt Outperform from Mkt Underperform at Avondale  (56.09)

 

 Pinnacle Foods initiated with an Outperform at William Blair  (53.13)

S&P futures vs fair value: +1.50. Nasdaq futures vs fair value: +1.60.

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

Equity indices in the Asia-Pacific region ended the week on a mostly higher note, but participation was reduced due to holiday closures in China, Singapore, and South Korea. The Japanese yen (115.07) is lower by 0.5% against the dollar after slipping in reaction to the Bank of Japan's announcement, indicating purchases of Japanese Government Bonds with maturities between five and ten years will be increased to JPY450 billion from JPY410 billion.

• In economic data:
  • Japan's December National CPI +0.3% year-over-year (expected 0.2%; last 0.5%) and National Core CPI -0.2% year-over-year (consensus -0.3%; last -0.4%). January Tokyo CPI +0.1% year-over-year (expected 0.0%; last 0.0%) and Tokyo Core CPI -0.3% year-over-year (consensus -0.4%; last -0.6%)
  • Australia's Q4 Import Price Index +0.2% quarter-over-quarter (expected -0.5%; last -1.0%) and Q4 Export Price Index +12.4% quarter-over-quarter (consensus 11.0%; previous 3.5%)

---Equity Markets---

• Japan's Nikkei added 0.3% to end the week higher by 1.7%. Bridgestone, Casio, Trend Micro, Hitachi Construction, Mitsubishi Motors, Fast Retailing, and Hino Motors gained between 1.0% and 2.9%. On the downside, Dainippon Screen Manufacturing, Konami, Komatsu, and Nissan Motor lost between 0.5% and 1.9%.
• Hong Kong's Hang Seng shed 0.1%, but gained 2.1% for the week. Energy-related names like China Petrol & Chemical and PetroChina lost near 1.0% apiece while financials were mixed. Bank of China, China Construction Bank, and Ping An Insurance lost between 0.2% and 0.6% while HSBC and Hang Seng Bank added 0.1% and 0.9%, respectively.
• China's Shanghai Composite was closed for Lunar New Year. The index gained 1.2% for the week.
• India's Sensex climbed 0.6%, extending its weekly gain to 2.4%. Bank shares had a solid showing with ICICI Bank, SBI, AXIS Bank, and HDFC Bank rising between 0.5% and 4.7%. Tata Motors and Hero MotoCorp both lost near 0.7% while ITC was the weakest performer, falling 2.8%.

Major European indices trade mixed, with the UK's FTSE (+0.1%) showing relative strength. The euro is higher by 0.1% against the dollar at 1.0688 while the pound has slid 0.4% to 1.2551. French Finance Minister Michel Sapin cautioned that time to reach an agreement on the next installment of the Greek bailout is running out. Greek officials have reportedly been asked to implement more austerity measures past 2018, but there has been pushback from the Greek side. On a separate note, British Prime Minister Theresa May is scheduled to meet with US President Donald Trump to discuss trade policy and the current state of NATO.

• In economic data:
  • Eurozone December M3 Money Supply +5.0% year-over-year (consensus 4.9%; last 4.8%)
  • Germany's December Import Price Index +1.9% month-over-month (expected 1.3%; last 0.7%); +3.5% year-over-year (consensus 2.7%; previous 0.3%)
  • France's January Consumer Confidence ticked up to 100 from 99, as expected
  • Italy's January Consumer Confidence 108.8 (expected 110.6; last 110.9) and January Business Confidence 104.8 (consensus 103.5; last 103.7). December Wage Inflation 0.0% month-over-month (last 0.1%); +0.4% year-over-year (last 0.4%)
  • Spain's December Retail Sales +2.9% year-over-year (consensus 3.3%; previous 3.2%)

---Equity Markets---

• UK's FTSE is higher by 0.1% despite select financials residing among the laggards. Prudential, Barclays, Lloyds Banking, RBS, Standard Chartered, and Standard Life are down between 0.3% and 0.8%. Energy names also trade in negative territory with BP down 0.5% and Royal Dutch Shell lower by 0.1%.
• Germany's DAX has slipped 0.2% amid weakness in heavyweight components like Deutsche Bank, Daimler, BMW, and Continental. The four names are down between 0.5% and 1.1%. Air carrier Lufthansa leads with a gain of 2.2%.
• France's CAC has surrendered 0.5%. Nokia is down 2.3% while consumer names like Carrefour, Kering, Danone, and Louis Vuitton show losses between 0.4% and 1.8%. Financials trade mostly lower with BNP Paribas and Credit Agricole down 0.3% and 0.9%, respectively.

 

 8point3 Energy Partners LP downgraded to Neutral from Buy at ROTH Capital  (14.75)

 Novan shares halted for news pending

 

 Theravance Biopharma initiated with a Sell at Empire; $16 tgt  (28.90)

 Workhorse Group prices 6.5 mln common stock offering at $3.00/share  (3.47)

 American Airlines on call with stock up 2% near 20 month high premarket  (49.59)

• First increase in unit revenue since 4Q14. Sees positive unit rev each quarter of 2017.
• Unit costs were higher than expected due to almost entirely to employee expense.
• Feels good about moderating investments after this year but that could change.
• Like every other airline, co saw increased demand since the election.
• LatAm was positive, lead by Brazil. Atlantic remains weak due to low cost competition and FX with GBP exposure. Pacific was also down.
• Fuel cost will be up ~$1.4 bln Y/Y.
• Will roll out basic economy slowly in to early 2018.
• JETS +% AAL +1.88% RYAAY +0.68% ALK +0.52% LUV +0.43% DAL +0.39%

 S&P futures vs fair value: +2.00. Nasdaq futures vs fair value: +5.60.

Investors have not been particularly active on Friday morning, as the S&P 500 futures trade two points (+0.1%) above fair value.

A batch of high-profile technology names reported between Thursday's close and Friday's open, including Alphabet (GOOGL 855.00, -1.98), Microsoft (MSFT 65.10, +0.81), and Intel (INTC 37.89, +0.33). Microsoft and Intel are both up in pre-market trade after beating on their top and bottom lines, adding 1.4% and 0.9%, respectively, while Alphabet has slipped 0.2% after the company missed earnings expectations.

Starbucks (SBUX 56.25, -2.21) also reported quarterly results, dropping 3.8% after the coffee retailer reported disappointing revenues. Chevron (CVX 113.49, -3.13) is also down in pre-market trade, losing 2.7%, after the company missed top and bottom line estimates.

U.S. Treasuries have hit their overnight highs in recent action, with the 10-yr yield two basis points lower at 2.49%. The recent uptick came in the wake of the latest economic reports, which came in worse than expected.

Advance fourth quarter GDP pointed to an expansion of 1.9%, while the Briefing.com consensus expected a reading of 2.2%. The fourth quarter GDP Deflator came in at 2.1%, which is what the Briefing.com consensus expected.

December durable goods orders declined 0.4%, while the Briefing.com consensus expected a 3.0% increase. The prior month's reading was revised to -4.8% (from -4.6%). Excluding transportation, durable orders rose 0.5% (Briefing.com consensus +0.5%) to follow the prior month's revised gain of 1.0% (from 0.5%).

Today's last economic report, the final reading of the Michigan Sentiment Index for January (Briefing.com consensus 98.0), will cross the wires at 10:00 am ET.

 KLA-Tencor: Color on quarter — Stifel & Needham  (83.25)

• Stifel — While Stifel anticipated strength in foundry & logic to remain key drivers for the co, the co drove record bookings ($1.1 bln) led by memory investments. The co could have seen a pickup in some metrology applications, but longer term, the co noted that it would introduce an inspection product targeting this market. Inspection generally is the co's highest ASP and margin biz. With 3D NAND being the key growth driver near term & over the next few years, Stifel notes new wins in this segment could provide some sustainability to the growth prospects. Stifel believes the co will see strong orders & shipments for its solutions related to the current 10nm ramp in the industry & for 7nm development later this year and into 2018. Stifel states this combined node (10/7nm) could emerge as the next big node, similar to what the 28nm node was for the industry (and when KLA saw its last spike in growth in 2012); maintains Hold.
• Needham -With increasing yield-driven demand for process control at the leading edge coupled with broader investments in C2017, Needham expects KLAC to avoid a C2H17 fall-off vs other peers. Strong memory bookings in the quarter highlights an increase to memory process control intensity, with further potential growth when KLAC launches a new 3D NAND offering. New product rampups should enable KLAC to continue outperforming WFE beyond CY17. KLAC is still trading at a discount to its avg historical P/E of ~16x, but with the improved margin profile, Needham states they expect the stock to march higher; reiterates Strong Buy.

— Shares of KLAC +3.3% pre-market.

 

 Rockwell Automation downgraded to Sell at Gabelli & Co; $150 2018 PMV  (152.92)Gabelli & Co downgrades ROK to Sell from Hold and sets a 2018 PMV of $150. Firm is lowering their recommendation on the heels of a strong 1Q FY'17 and an even more favorable reaction in the stock price. While fiscal scope springs eternal & heavy industries are showing signs of stabilization, they are not sure ROK is as levered to Trump economics as some hope, and view having to look out to 2019 to support a stock's valuation as worthy of a Sell recommendation, particularly for a cyclical stock. They continue to like mgmt, the business and ROK's ability to stay one step ahead of competitors, but recommend investor take some chips off the table.

 State Bank Financial upgraded to Buy at Gabelli & Co before the open; tgt $30 following M&A activity  (27.49 +0.88)Gabelli & Co upgrades STBZ to Buy from Hold and sets target price at $30. Given the announcement & commentary surrounding Pinnacle Financial's (PNFP) desire to acquire Bank of North Carolina (BNCN) on Jan 22, 2017 (see our note); firm is changing their recommendation. STBZ operates in very-attractive Atlanta (and now Savannah) geography, has demonstrated excellent credit performance, and gained meaningful scale at $4B in assets by closing the two acquisitions in the quarter. If larger banks with strong stock currencies wish to move into the market, they think STBZ presents a compelling mix of CRE lending & growing noninterest verticals.

 Hearing Acuity Brands was downgraded to Sell from Neutral at ROTH Capital  (211.79 -0.23)

 

Hearing Wynn Resorts was upgraded to Buy from Neutral at UBS  (101.87 +6.37)

 Hearing Buffalo Wild Wings was downgraded to Negative at OTR Global  (154.00 -2.75)

 

 Straight Path Comms lower off the open following cautious report from White Diamond Research  (36.30 -0.84)

 Hearing Sprouts Farmers Market was downgraded to Peer Perform from Outperform at Wolfe Research  (18.99 -0.29)

 

 

 

 GATX raises quarterly dividend to $0.42/share from $0.40/share  (60.31 -0.12)

 Novan -79% upon resumption of trade  (3.90 -14.80)

 Hearing Humana was resumed with a Buy at BofA/Merrill  (200.00 -0.13)

 Hearing Diana Shipping was upgraded to Buy from Hold at Nordea  (4.28 +0.16)

 Starbucks (-4%) testing support at the 56 level after missing Q1 sales estimates  (55.96 -2.50)

 Sector Summary: Technology (XLK +0.26%) trading higher today, ahead of the broader market

The tech sector — XLK — trades ahead of the broader market. Semiconductors, meanwhile, display relative strength as the SOX index trades +0.86%. Within the SOX index, TER (+2.50%) outperforms, while NVDA (-0.45%) lags. Among other major indices, the SPY is trading 0.17% lower, while the QQQ -0.10% and the NASDAQ -0.99% also trade down on the session. Among tech bellwethers, INFY (+1.81%) is showing relative strength, while FB (-1.20%) lags.

Notable gainers following earnings:

• VMW (+4.0%), INTC (+2.2%) reported better than expected Q4 EPS and revs; guided Q1 EPS and revs above market expectations; guided FY17 EPS below market expectations, MSFT (+1.7%) reported better than expected Q2 EPS and revs; guided Q3 segment results on the call

Notable laggards following earnings:

• JNPR (-6.9%), PFPT (-6.7%), PYPL (-2.8%) reported in-line Q4 EPS and revs; guided Q1 and FY17 EPS and revs in-line, GOOG (-0.7%) reported worse than expected Q4 EPS and better than expected revs

Gainers on news:

• MTSI (+2.8%) co successfully completed its previously announced acquisition of Applied Micro Circuits Corporation (AMCC).
• HRS (+1.0%) co to sell its IT services business to Veritas Capital for $690 mln in cash; expected to close before the end of FY17.
• TOSBF (+0.9%) co to separate its Memory Business unit by March 31.

Laggards on news:

• KEYW (-17.2%) co reported prelim 2016 results with in-line sales and announced than priced a 8,500,000 shares offering of its common stock at $10.50/share.
• NATI (-2.2%) co increased its quarterly dividend to $0.21/share from $0.20/share.
• LDOS (-0.5%) co received a task order by the Defense Threat Reduction Agency to provide modeling and simulation support to assess chemical, biological, radiological, nuclear and explosives (CBRNE) threats worth $17 mln.
• FDS (-0.2%) co to acquire Interactive Data Managed Solutions from Intercontinental Exchange (ICE) for undisclosed cash consideration.

Among notable analyst upgrades:

• MXIM (+7.3%) upgraded to Buy from Neutral at BofA/Merrill
• MSFT (+1.7%) to Neutral from Sell at Citigroup
• INTC (+2.2%) to Equal Weight from Underweight at Morgan Stanley
• RCI (+1.0%) to Buy from Hold at Canaccord Genuity
• RCI (+1.0%) to Buy from Market Perform at Cormark
• ERIC (-2.1%) to Mkt Perform from Mkt Underperform at Charter Equity
• AZPN (-4.4%) to Mkt Outperform from Mkt Underperform at Avondale

Among notable analyst downgrades:

• P (-1.8%) downgraded to Negative at OTR Global
• SHOR (-2.8%) to Hold from Buy at Craig Hallum

Scheduled to report earnings Monday morning:

• BAH, SILC

 

 Jagged Peak Energy opens for trading at $14.10 after pricing IPO at $15

 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:

• LVS Weekly Jan27 53 calls are seeing interest with 1560 contracts trading vs. open int of 3100, pushing implied vol up around 8 points to ~47% — LVS reported earnings earlier this week and is expected to report its next quarterly earnings report mid-April. LVS shares are rebounding in today's session following peer WYNN earnings last night. Reuters also reported on casino expansion in Japan by many cos. 

Puts:

• ABBV Weekly Jan27 60 puts are seeing interest following earnings before the open with 1030 contracts trading vs. open int of 1010, pushing implied vol up around 5 points to ~64% 

Stocks seeing volatility selling:

• CVX, HON implied vol is lower following earnings/guidance

Sentiment: The CBOE Put/Call ratio is currently: 0.80… VIX: (10.77, +0.14, +1.3%).
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.

 Economic Summary: Q4 GDP below expectations; Durable Orders show unexpected decline

Economic Data Summary:

• Fourth Quarter GDP-Advance 1.9% vs Briefing.com consensus of 2.2%; Q3 — Final was 3.5%
• Fourth Quarter GDP- Deflator 2.1% vs Briefing.com consensus of 2.1%; Q3 — Final was 1.4%
  • The key takeaway from this report is that fourth quarter activity revealed the strong third quarter growth was as an aberration, yet that point aside, the salient takeaway for many is that this is a backward-looking report and the markets have their sights set on a brighter economic outlook for 2017, which is expected to feature deregulation, tax reform, and infrastructure spending among other items.
• December Durable Goods -0.4% vs Briefing.com consensus of 3.0%; November was revised to -4.8% from -4.6%
• December Durable Goods Ex-Trans 0.5% vs Briefing.com consensus of 0.5%; November was revised to 1.0% from 0.5%
  • The key takeaway from this report is that business investment remained on a positive trajectory.
• January Michigan Sentiment — Final 98.5 vs Briefing.com consensus of 98.0; December was 98.1
  • The key takeaway from the report is that consumer confidence is rising on the back of an improved outlook for economic growth, job growth, and personal finances in the year ahead.

Upcoming Economic Data:

• December Personal Income due out Monday at 8:30 (Briefing.com consensus of; November was 0.0%)
• December Personal Spending due out Monday at 8:30 (Briefing.com consensus of; November was 0.2%)
• December PCE Prices — Core due out Monday at 8:30 (Briefing.com consensus of; November was 0.0%)
• December Pending Home Sales due out Monday at 10:00 (Briefing.com consensus of; November was -2.5%)

Other International Events of Interest

• Japan's December National CPI +0.3% year-over-year (expected 0.2%; last 0.5%) and National Core CPI -0.2% year-over-year (consensus -0.3%; last -0.4%). January Tokyo CPI +0.1% year-over-year (expected 0.0%; last 0.0%) and Tokyo Core CPI -0.3% year-over-year (consensus -0.4%; last -0.6%)

 Morning commodities: Crude retreats from yesterday's 3-week high ahead of today's rig count; natural gas snaps its 4-session streak on a warmer weather outlook

• Crude oil retreated from yesterday's 3-week high ahead of today's rig count data scheduled for 1 pm ET
  • Mar 2017 crude oil futures were down about $0.65 (-1.2%) around the $53.12/barrel
  • The U.S. oil rig count increased by 29 to 551 rigs last week.
  • In the week prior, the rig count declined, but that followed 10 consecutive weekly prior increases.
  • The oil rig count is at its highest level in 14 months.
  • It is worth noting that this pick-up in US activity could potentially cap oil price gains in the future.
• Natural gas snapped a 4-session streak on updated warmer-weather forecasts over the next few weeks
  • Mar 2017 natural gas futures were down about $0.08 (-2.3%) around the $3.32/MMBtu level
• In precious metals, gold was on track to close pit trading lower for the 4th consecutive session; on track to close the week lower for first time in 2017
  • Feb 2017 gold futures were down about $3.70 (-0.3%) around the $1186.10/oz level
  • Stronger currency & treasury yields have reduced demand for gold
  • Mar 2017 silver futures were nearly flat around the $16.82/oz level
• The dollar index was +0.1% around the 100.48 level
  • Commodities, as measured by the Bloomberg Commodity Index, were -0.6% around the 87.72 level

 Sector Summary: S&P Consumer Discretionary Index -0.5%, underperforming the broader marketThe consumer discretionary group is underperforming the broader market. The retail group is also in the red with the Retail HOLDRS Trust (RTH) -0.6% and the SPDR S&P Retail ETF (XRT) -0.5%.

Notable earnings/guidance: 

• Trading higher following earnings/guidance:  LRN +14.6%, WYNN +8.6%
• Trading lower following earnings/guidance: SBUX -4%, GNTX -2.6%

Earnings/guidance secondary plays:

• Casino/gaming names are rebounding following WYNN earnings (group was pressured yesterday after LVS earnings). LVS +2%, PENN +1.9%, BYD +1.3%, PNK +1.3%, MPEL +0.9%, MGM +0.5%, BJK +0.1%, ISLE +0%, CZR +0.3%
• Starbucks (SBUX -4%) is weighing on food/restaurant related names. FRSH -2.5% (announces 2017 development incentive programs), NDLS -2.3%, TACO -1.7%, RRGB -1.6%, FRGI -1.7%, BWLD -1.5% (downgraded to Negative at OTR Global), HABT -1.4%, TAST -1.2%, PBPB -1.1%, FOGO -1.1%, PNRA -1%, WEN -0.9%, DIN -1%, TXRH -1.1%, CMG -0.8%, ZOES -0.7%, SONC -0.6%, PLKI -0.6%, JACK -0.5%, BLMN -0.6%, CBRL -0.5%, WING -0.4%

In the news:

• Leaders: PH +0.4% (increases quarterly cash dividend to $0.66/share from $0.63/share), PHM 0.6% (upgraded to Buy from Underperform at BofA/Merrill)
• Laggards: SMRT -1.6% (appoints MaryAnne Morin as President and promotes its Interim CEO D. Hunt Hawkins to permanent CEO effective immediately), FINL -1.6% (Finish Line confirmed plans to exit the unprofitable JackRabbit business), PII -1.2% (lower despite increasing quarterly cash dividend to $0.58 per share from $0.55 per share), SHLD -4.7% (continued weakness; now at fresh all-time lows), ULTA -0.6% (to implement a holding company reorganization on January 29),  P -1.7% (downgraded to Negative at OTR Global)

Looking ahead:

• On the earnings front: LEG reports Monday after the close; COH, HOG, UAA Tuesday before the open; BOOT, EA Tuesday after the close; MTH, MDC, MTOR, JCI Wed before the open; HI, SFLY Wed after the close; ALV, MHO, NYT, PH, PENN, SBH, RL Thurs before the open; AMZN, DECK, HBI, DV Thursday after the close.
• A handful of retails will be reporting monthly and prelim Q4 sales results on Thursday Feb 2. See our Same Store Sales Calendar for most recent results.
• Auto manufacturers will report N Am monthly sales on Feb 1. 

 Notable movers of interest: WYNN +8.5% on Q4 revenue beat

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

• MXIM (44.97 +7.14%): Reports Q2 EPS and revenue beats; guides Q3 EPS in-line with midpoint above consensus.
• NOC (233.25 +2.77%): Shares rise on Q4 EPS and revenue beats.
• INTC (38.18 +1.65%): Reports Q4 EPS and revenue beats; guides Q1 EPS and revenues above consensus

Large Cap Losers

• APD (137.7 -7.47%): Reports Q1 EPS and revenue misses; guides Q2 EPS below consenus, lowers FY17 EPS below consensus.
• CL (63.66 -6.71%): Reports Q4 revenue miss; expects a low-single digit net sales increase for FY17.
• JNPR (26.4 -4.78%): Shares fall despite reporting Q4 EPS and revenue beats; guides Q1 EPS below consensus.

Mid Cap Gainers

• WYNN (103.65 +8.53%): Shares rise on Q4 revenue beat.
• POL (34.53 +4.49%): Reports Q4 EPS and revenue beats.
• BC (58.7 +1.96%): Shares conitinue to rise after yesterday's Q4 EPS beat; RBC Capital Mkts raises their BC tgt to $65 from $57.

Mid Cap Losers

• RHI (45.85 -8.17%): Reports Q4 EPS and revenue misses.
• HRC (57.84 -3.36%): Reports in-line Q1 after warning two weeks ago; guides Q2 EPS below two analyst estimate; reaffirms FY17 EPS guidance, lowers rev.
• FII (26.27 -3.35%): Reports Q4 revenue miss.

 Homebuilders, energy, banks, airlines weak with semis, tech, biotech and metals strong vs SPY -0.2%

• ITB -1.45% USO -1.30% KRE -1.28% KBE -1.15% OIH -1.10% JETS -1.07% HACK -1.02% XOP -0.98% XRT -0.97% IYR -0.85% IYT -0.79%
• SMH +0.81% SLV +0.75% XLV +0.53% IBB +0.48% XLK +0.42% XBI +0.38% XME +0.27%

 Sector Summary: The Healthcare sector (+0.72%) is trading higher today, outperfomring the S&P 500 (-0.14%)Gainers on news:

• Aurinia (AUPH +6.23%) Selects Worldwide Clinical Trials as its CRO for Phase 3 Lupus Nephritis Trial
• Immunomedics (IMMU +1.53%) issues a statement to stockholders and announced it has filed an investor presentation with the SEC titled «The Right Board and the Right Strategy to Maximize Stockholder Value»

Decliners on news:

• Novan (NOVN -77.01%) announces mixed top-line results from its two Phase 3 trials for SB204 in the treatment of acne vulgaris
• Athersys (ATHX -29.61%) prices underwritten public offering of 19,802,000 shares of its common stock at $1.01/share
• K2M Group (KTWO -4.93%) announces offering of 4 mln shares of its common stock by Welsh, Carson, Anderson & Stowe XI, L.P. and certain related affiliates

Gainers on earnings:

• C.R. Bard (BCR +5.47%) beats by $0.03, beats on revs; guides FY17 EPS above consensus, revs in-line
• Abaxis (ABAX +3.73%) misses by $0.01, reports revs in-line with 1/10/2016 pre-announcement

Decliners on earnings:

• Select Medical (SEM -3.62%) sees Q4 revs $1.05 bln vs $1.05 bln Capital IQ Consensus Estimate; sees Q4 Adjusted EBITDA of $92-102 mln
• OpGen (OPGN -3.24%) sees Q4 revs of ~$1 mln vs $1.10 mln single analyst estimate, sees Q4 net loss in the range of approximately $4.6-5.1 mln
• AbbVie (ABBV -2.35%) reports EPS in-line, misses on revs; guides FY17 EPS in-line

Upgrades/Downgrades:

• Mateon Therapeutics (MATN +7.69%) initiated with a Buy at Maxim Group; tgt $2
• Neurocrine Biosci (NBIX +2.26%) upgraded to Outperform from Perform at Oppenheimer
• Clovis Oncology (CLVS +1.98%) initiated with a Buy at BofA/Merrill; tgt $74
• Theravance Biopharma (TBPH -1.02%) initiated with a Sell at Empire; $16 tgt
• Acadia Healthcare (ACHC -1.31%) downgraded to Neutral from Overweight at Cantor Fitzgerald

 

 

 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: SGYP (6.3 +8.06%), BCR (238.29 +5.18%), ABAX (49.28 +4.41%)
• Materials: RYAM (17.23 +7.35%), VVV (24.06 +6.98%), GSV (2.74 +5.38%), POL (34.55 +4.57%)
• Industrials: TWI (12.75 +7.96%), PRIM (25.1 +4.37%)
• Consumer Discretionary: LRN (19.34 +14.91%), WYNN (103.36 +8.23%)
• Information Technology: CLS (14.26 +11.67%), MXIM (44.94 +7.08%), VMW (88.64 +5.25%), KLAC (87.51 +5.12%), OSIS (77.34 +5.04%), DVMT (62.59 +5%)
• Financials: GNBC (16.98 +6.09%), ISBC (14.74 +4.54%)
• Telecommunication Services: GSAT (1.49 +4.93%)

Today's top 20 % losers

• Healthcare: NOVN (4.49 -76.01%), ATRS (1.86 -6.06%)
• Materials: APD (140.12 -5.84%)
• Industrials: KEYW (10.11 -16.38%), RHI (45.04 -9.79%), GRAM (4.85 -7.79%), GNK (9.88 -7.14%), TPC (30.4 -6.17%), MTZ (39.17 -5.73%), MIC (78.25 -5.54%)
• Consumer Discretionary: SHLD (7.37 -7.41%)
• Information Technology: UIS (12.58 -8.55%)
• Financials: TCB (17.89 -6.63%), SBSI (35.19 -5.91%)
• Energy: EEQ (21.93 -15.56%), EEP (22 -15.07%), EPE (5.4 -6.57%)
• Consumer Staples: RAD (6.3 -7.08%), CL (64.14 -6.01%)
• Utilities: CAFD (13.83 -6.26%)

 

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

• UK's FTSE: + 0.3%
• Germany's DAX: -0.3%
• France's CAC: -0.6%
• Spain's IBEX: -0.1%
• Portugal's PSI: + 0.6%
• Italy's MIB Index: -0.6%
• Irish Ovrl Index: + 0.0%
• Greece ASE General Index: -3.6%

 

 Rumor Round Up

Rumor Activity was active today.

• Weight Watchers (WTW 12.49 +0.54) renewed M&A speculation circulated.
• Reuters reported Austria's OMV to purchase 7% stake in Occidental (OXY 68.56 +0.01) Nafoura oil field.
• CNBC's David Faber said nothing going on [Between Verizon (VZ 49.37 +0.26) & Charter (CTHR 326.04 -7.30)], may have been overture in the past — a potential deal 'seen as going nowhere'.
• Monsanto weakness attributed to German newspaper suggesting potential regulatory hurdles for pending acquisition by Bayer (BAYRY 113.81 +0.04).
• NYTimes reported that McDonalds (MCD 122.85 +0.97) plans to sell Nordic restaurants to Guy Hands.

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.

 Sector Summary: Industrials trade higher than the broader market; General Dynamics +4.7% on Q4 EPS beat

The Industrials sector (XLI) is trading -0.1% today, higher than the broader market (SPY -0.4%). In the Industrial Sector big names like Honeywell (HON +0.5%), General Dynamics (GD +4.7%), and American Airlines (AL -5.4%) report quarterly results. 

Earnings/Guidance

• Honeywell (HON +0.5%) reports Q4 earnings of $1.74 per share, in-line with the Capital IQ Consensus of $1.74; revenues were unchanged from the year-ago period at $9.98 bln.
  • No change to EPS outlook despite the stronger U.S. dollar; Currency headwinds will bring down full year reported sales outlook by about 1.5%.
  • Difference in 2017 sales from outlook call is solely related for FX assumptions.
  • Free cash flow forecast remains in the range of 4.6 to 4.7 that's up 5% to 7% from 2016.
  • Tax rate may be more volatile quarter to quarter depending on the number of employee stock options.
• General Dynamics (GD +4.7%) reports Q4 earnings of $2.62 per share, $0.08 better than the Capital IQ Consensus of $2.54; revenues rose 5.4% year/year to $8.23 bln vs the $8.29 bln Capital IQ Consensus.
  • General Dynamics on call sees FY17 EPS of $9.5-9.55 vs $10.08 Capital IQ Consensus Estimate; sees revs of $31.35-31.4 bln vs $31.98 bln Capital IQ Consensus Estimate
• American Airlines (AAL -5.4%) reports Q4 earnings of $1.48 per share, excluding non-recurring items, $0.57 better than the Capital IQ Consensus of $0.91; revenues rose 1.7% year/year to $9.79 bln vs the $9.74 bln Capital IQ Consensus.
  • 0.4 percent increase in total available seat miles (ASMs).
  • TRASM was 14.90 cents, up 1.3 percent versus the fourth quarter 2015, the first year-over-year increase since the fourth quarter of 2014.
• Sumitomo Mitsui (SMFG -1.8%) reports 9-months EPS of JPY398.07; Ordinary income increased 5.1% YoY to JPY3.76 trln.

Additional Industrials reporting earnings/guidance: SRCL -3.3% RHI -8.8% BDC -2.3% MOG.A +3.8% SWFT -1.1% HTLD -2% ATSG +4.9% MRTN -0.6% CMRE +1.7% GLOP +2.9% KEYW -15.6%

News

• Airbus (EADSY -0.1%) reports helicopter orders increased 5% YoY, in-line with co's targets

Broker Research

Upgrades 

• Caterpillar (CAT +1%) upgraded to Outperform from Market Perform at Wells Fargo.
• Primoris Services (PRIM +4.2%) upgraded to Buy from Hold at Canaccord Genuity.
• Emerson (EMR +0.1%) upgraded to Neutral from Sell at Goldman.
• Safe Bulkers (SB -1.7%) upgraded to Buy from Hold at DNB Markets.

Downgrades

• Willis Towers Watson (WLTW -1.5%) downgraded to Neutral from Buy at BofA/Merrill.
• JetBlue (JBLU -5.6%) Airways downgraded to Underperform from Peer Perform at Wolfe Research.
• JetBlue (JBLU -5.6%) Airways downgraded to Hold from Buy at Argus
• Gabelli & Co downgrades Rockwell Autiomation (ROK -0.5%) to Sell from Hold and sets a 2018 PMV of $150.

Other

• Cowen raises their Southwest (LUV -1%) tgt to $57 from $55.
• Timken (TKR +3.4%) added to Conviction Buy List at Goldman.
• RBC Capital Mkts raises their Caterpillar (CAT +1%) tgt to $85 from $82 They rate CAT SP.
• RBC Capital Mkts raises their CSX (CSX -1.8%) tgt to $65 from $42.
• Tutor Perini (TPC -5.7%) initiated with a Sector Weight at KeyBanc Capital Mkts.
• RBC Capital Mkts raises their Oshkosh (OSK +0.2%) tgt to $79 from $74.
• Stifel raises their Dover (DOV -1.2%) tgt to $85 from $76.
• Stifel raises their L-3 (LLL +1.3%) tgt to $170 from $162 after earnings.

 Earnings Calendar for the week of January 30

• Monday (January 30)
  • Pre-Market: EPD, BAH, AMG, ARLP, AHGP, LPG, SILC
  • After-Hours: BSAC, PFG, RGA, SANM, PKG, LEG, CR, GGP, IEX, WERN, GGG, ARE, UDR, RYAM
• Tuesday (January 31)
  • Pre-Market: XOM, ABC, VLO, UPS, AET, PFE, HCA, IMO, S, CNHI, LLY, TMO, DHR, PCAR, NUE, MA, XRX, ZBH, AXE, SPG, UAA, ALLY, COH, PNR, TMHC, HOG, HUBB, SF, CIT, CNX
  • After-Hours: AAPL, CB, AFL, CHRW, ARNC, X, APC, EA, WRB, OLN, FBHS, AMD, SLGN, BXP, ILMN, EQR, NEU, WNC, RNR, ALGT, MTCH, ALGN
• Wednesday (February 1)
  • Pre-Market: ANTM, MPC, JCI, MO, IR, ADP, GIB, BAX, WEC, SPR, AVY, PBI, MTH, USG, MTOR, MPLX, MDC, TUP, ENR, VNTV, OMN, SLAB
  • After-Hours: MET, FB, ALL, LNC, MUSA, AMP, UNM, NXPI, FNF, XL, TSCO, UGI, OI, WFT, MDU, AFG, SYMC, CACI, TMK, DOX, LSTR, QRVO, IAC, EW, APU, CNXN, HOLX, LM, CBT, AXS, SFLY, WSTC
• Thursday (February 2)
  • Pre-Market: RDS.A, MRK, CI, COP, NOK, BCE, AZN, ETN, DLPH, MMC, EL, BDX, XEL, PH, ALV, GPI, BLL, BSX, HRS, RL, R, INGR, KELYA, SIRI, XYL, SBH, CFX, CME, SNA, TGI, PENN, ODFL, AOS, LAZ, BDC, MMP, EQT
  • After-Hours: AMZN, AMGN, HIG, V, CCK, CSC, MSI, HBI, POST, THG, CMG, BECN, HUBG, DECK, SKYW, MTD, PKI, SIGI, GPRO, OTEX, CY, DV, ESL
• Friday (February 3)
  • Pre-Market: HMC, PSX, LYB, AN, ADNT, HSY, WY, BERY, CLX, APO, MSG, RGS
  • After-Hours: ATW

 SPY down 0.1%; Energy is the worst performing sector and Healthcare and Tech are the only sectors in the green today

 Midday Market Summary: S&P 500 Slightly Lower at Midday

Thursday's wait-and-see attitude has translated into range-bound action thus far in Friday's session, with the major averages having yet to deviate from their flat lines. The S&P 500 currently shows a slim loss of 0.1%.

There is a semblance of caution in the air--cyclical sectors are underperforming and Treasuries are up--but the slight apprehension has had a minimal impact on the market. Conversely, some earnings reports have shaken things up today, with a batch of tech names reporting between yesterday's close and today's open, including Alphabet (GOOGL 850.23, -6.88), Microsoft (MSFT 65.72, +1.45), and Intel (INTC 38.09, +0.52).

The tech sector (+0.4%) has been able to overcome Alphabet's below-consensus earnings, thanks in part to Microsoft's and Intel's better than expected top and bottom lines. Additionally, Intel's 1.3% advance has underpinned its fellow chipmakers thus far, pushing the PHLX Semiconductor Index higher by 0.9%.

Conversely, the energy sector (-1.2%) started the trading session in the hole after Chevron (CVX 113.83, -2.73) reported worse than expected top and bottom lines earlier this morning. Crude oil has also worked against the sector, losing 1.7%, as an uptick in U.S. production has outweighed the optimism surrounding OPEC/non-OPEC production cuts. The energy component currently trades at $52.82/bbl.

All-in-all most sectors trade in the red, with health care (+0.8%) and telecom services (+0.3%) the only sectors accompanying technology in the green. In addition to energy, financials (-0.5%), consumer discretionary (-0.5%), consumer staples (-0.7%), and real estate (-1.0%) have contributed to today's modest retreat. 

U.S. Treasuries sit near their overnight highs, with the 10-yr yield down one basis point at 2.50%. However, Treasuries remain in negative territory for the week, having yet to recoup the big losses suffered on Tuesday and Wednesday.

Today's economic data included advance fourth quarter GDP, December Durable Orders, and the final reading of the University of Michigan Sentiment Index for January:

• Advance fourth quarter GDP pointed to an expansion of 1.9%, while the Briefing.com consensus expected a reading of 2.2%. The fourth quarter GDP Deflator came in at 2.1%, which is what the Briefing.com consensus expected.
  • The key takeaway from this report is that fourth quarter activity revealed the strong third quarter growth was as an aberration, yet that point aside, the salient takeaway for many is that this is a backward-looking report and the markets have their sights set on a brighter economic outlook for 2017, which is expected to feature deregulation, tax reform, and infrastructure spending among other items.
• December durable goods orders declined 0.4%, while the Briefing.com consensus expected a 3.0% increase. The prior month's reading was revised to -4.8% (from -4.6%). Excluding transportation, durable orders rose 0.5% (Briefing.com consensus +0.5%) to follow the prior month's revised gain of 1.0% (from 0.5%).
  • The key takeaway from this report is that business investment remained on a positive trajectory.
• The final reading of the University of Michigan Consumer Sentiment Index for January rose to 98.5 (Briefing.com consensus 98.0) from 98.1 in the preliminary reading.
  • The key takeaway from the report is that consumer confidence is rising on the back of an improved outlook for economic growth, job growth, and personal finances in the year ahead.

 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:

• PTCT Apr 20 calls (volume: 2310, open int: 60, implied vol: ~156%, prev day implied vol: 18%) — co reported earnings early November and is expected to report its next quarterly earnings report late February.
• LVS Weekly Jan27 53 calls (volume: 1560, open int: 3100, implied vol: ~47%, prev day implied vol: 39%)  — LVS reported earnings earlier this week and is expected to report its next quarterly earnings report mid-April. LVS shares are rebounding in today's session following peer WYNN earnings last night. Reuters also reported on casino expansion in Japan by many cos.
• KGC Weekly Feb10 4 calls (volume: 16.8K, open int: 380, implied vol: ~63%, prev day implied vol: 56%) — co is confirmed to report earnings February 15 after the close. Co is scheduled to present at several conferences in February and March (all outside of expiration).
• BSX Feb 24 calls are seeing interest ahead of earnings next week, February 2 before the open (volume: 3170, open int: 3640, implied vol: ~28%, prev day implied vol: 26%) 

Bearish Put Activity:

• ABBV Weekly Jan27 60 puts are seeing interest following earnings before the open (volume: 1030, open int: 1010, implied vol: ~64%, prev day implied vol: 59%)
• CBL Feb 10 puts are seeing interest ahead of earnings next week February 1 after the close (volume: 13.2K, open int: 500, implied vol: ~42%, prev day implied vol: 39%) — over 6900 contracts traded in a single transaction. 

Sentiment: The CBOE Put/Call ratio is currently: 0.94… VIX: (13.60, +0.98, +1.0%).
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.

 Events and conferences of interest for next week Events and conferences of interest for next week, January 30th — February 3rd are listed below. For a complete list of next week's events, please see the events calendar.

Monday

• NobleCon13 Conference 2017-Noble Capital Annual Small Cap and Emerging Growth Investor Conference (January 30-31st)
  • Scheduled to appear: EXK, ORN, GALE, SFE, IEC, PRTS, PHX, EGL, PAR, ORBT, DLHC, TRNC, BTX, MXPT, CVU, TSQ, SAUC, SSNT, RAND, ACLS, FSNN, LLEX, MTNB, APDN, CAPC, ITUS, EYEG, INOD, AVXL, RLJE, SEAC, OPRX, UNIR, SRAX, HDYN, MBOT, FNJN, CVSI, TNXP, HTBX, SSP, CTG, DCTH, CRAI, KTOS, AGRX, SYMX, ONCS, BNKL, IDXG, EXCC, QRHC, TRCH, BSTC, NVCR, AYTU, ARTH (List of Attendees)
• Retail Summit 2017 (Jan 30- February 2nd)
  • Scheduled to appear: DBD
• Society for Protective Coatings 2017 Conference (January 30 — February 2nd)
  • Notable co to appear: AXTA

Tuesday

• Metro Connect Conference (January 31st- February 1st)
  • Scheduled to appear: CCOI, CNSL, CCI, FCN, WFC, ZAYO, LMOS
• DistribuTECH 2017 (January 31st — February 2nd)
  • Notable to appear: ACN, T, BDC, CSCO, DGII, ADSK, BBSI, BRKS, GIB, CIEN, CLSH, CPA, DVMT, WIRE, EXPR, HTHIY, HUBB, HON, IBM, INFY, ITRI, KYO, LDOS, LMT, MXWL, MSBHY, MTU, MSI, NCI, NNBR, NOK, ORCL, PCRFY, QTM, RHT, RLH, SAGE, SRTS, SIEGY, SWIR, TESO, TRR, WCC, HRS, XPLR
• Rockwell Collins (COL) Business Aviation Operators Conference at 11:15 ET

Wednesday

• 2017 Cholangiocarcinoma Foundation Annual Conference (February 1st — 3rd)
  • Scheduled to appear: HALO, MRK, ADRO, ARQL, AGIO, GILD, RDHL (Conference Information)
• European Association for Haemophilia and Allied Disorders (February 1st — 3rd)
  • Notable to appear: ONCE
• FOMC Rate Decision at 14:00 ET (no press conference or econ projections).

Thursday

• APIMEC Meeting in Rio
  • Scheduled to appear: VALE
• Emerald Asset Management 24th Annual Emerald Groundhog Day Investment Forum
  • Notable cos to present: TREE, CUBI, OLLI, VG, TRHC, TREX, GSVC, EVA (Conference Information)
• Bioblast Pharma Key Opinion Leader Lunch Focused on Orphan Neurological Diseases
  • Scheduled to appear: ORPN

Friday

• Eurozone Services PMI at 3:00 ET
• Fed's Evans to speak at 9:15 ET
• Among Investor Meetings: Daimler (DDAIF) Investor and Analyst Conference

 Carlos Slim says he is willing to help Mexican President with negotiations with President Trump  (45.15 +0.75)Other Potential Related Stocks/ETFs: STZ, SPY, UUP, XRT, CMG, CX, KSU, CVGW, KR, WFM  …  Carlos Slim related stocks: AMX, AMOV

 Energy Closing Prices: Crude ends near the midpoint of session lows as the rig count extends last week's climb; natural gas snaps its 4-session streak

• Mar crude oil futures fell $0.57 (-1.1%) to $53.18/barrel
• Rig count data highlights:
  • The Baker Hughes total U.S. rig count increased by 18 to 712 following last week's increase of 35.
  • The number of active U.S. rigs drilling for oil rose by 15 to 566 rigs this week.
  • Last week, the U.S. oil rig count increased by 29 to 551 rigs.
  • In the week prior, the rig count declined, but that followed 10 consecutive weekly prior increases.
  • The oil rig count is at its highest level in ~14 months.
    
  • It is worth noting that this pick-up in US activity could potentially cap oil price gains in the future.
• Mar natural gas closed $0.05 lower (-1.5%) at $3.35/MMBtu
• Mar RBOB gasoline closed $0.02 lower (-1.3%) at $1.55/gallon
• Mar heating oil futures closed $0.03 lower (-1.8%) at $1.63/gallon

 Spartan Motors (SPAR) and Supreme Industries (STS) higher following successful IPO from REV Group (REVG)  (9.38 +0.78)

SPAR +9% and STS +5% are strong following comments from REV Group's (REVG) CEO on CNBC this morning, noting the acquisitive history of the company. Rev Group makes specialty vehicles, which seems to have sparked speculation around smaller auto supplier peers Spartan Motors (SPAR) and Supreme Industries (STS) after REVG's IPO.

• REVG's market cap is $1.6 bln vs. $300 mln for SPAR and $324 mln for STS.