Америка сегодня. Заявки на пособия и объемы товарных запасов.

Equity indices in the Asia-Pacific region ended Thursday on a mostly higher note while Japan's Nikkei (-0.5%) underperformed. The index responded to an uptick in the yen during yesterday's Wall Street session, but the Japanese currency (112.36) has retraced the bulk of yesterday's advance, trading lower by 0.4% against the greenback. The People's Bank of China decided to forego reverse repurchase operations for the fifth consecutive session while the Reserve Bank of New Zealand left its key interest rate at 1.75%, as expected.

• In economic data:
  • Japan's December Core Machinery Orders +6.7% month-over-month (expected 3.1%; last -5.1%); +6.7% year-over-year (expected 4.6%; previous 10.4%). M2 Money Stock +4.1% year-over-year (consensus 4.0%; last 4.0%). Machine Tool Orders +3.5% year-over-year (last 4.4%)
  • Australia's December HIA New Home Sales +0.2% month-over-month (last 6.1%)
  • New Zealand's December Building Consents -7.2% month-over-month (last -9.6%)

---Equity Markets---

• Japan's Nikkei lost 0.5%, returning to its closing level from Tuesday. Hitachi, Ebara, Fuji Heavy Industries, JTEKT, Yokohama Rubber, Nissan Motor, Toyota Motor, Honda, and Mazda Motor posted losses between 1.9% and 8.1%. On the upside, SUMCO, Konami, DeNa, and J Front Retailing added between 1.7% and 6.2%.
• Hong Kong's Hang Seng added 0.2% even though more than half of its components ended lower. Belle International jumped 5.1% while property names like China Resources Land, Sino Land, China Overseas, and Cheung Kong Property Holdings added between 0.2% and 4.7%.
• China's Shanghai Composite climbed 0.5%. Tibet Urban Development & Investment, Chengdu Xuguang Electronics, Shaanxi Baoguang Vacuum Electronic Apparatus, and Luenmei Quantum rose between 5.4% and 7.4%.
• India's Sensex ticked up 0.1%. Infosys, ITC, and Wipro all gained near 1.0% apiece. Tata Consultancy jumped 2.7% while financials lagged. ICICI Bank, AXIS Bank, SBI, and HDFC Bank all lost near 0.5%.

---FX---

• USDJPY +0.4% to 112.36
• USDCNY -0.1% to 6.8657
• USDINR -0.2% to 66.846

Jones Energy's year-end 2016 proved reserves based on SEC pricing and definitions were 105.2 MMBoe, of which 59% were classified as proved developed reserves.

• Total proved oil reserves at year-end 2016 were 23.6 MMBbl compared to year-end 2015 proved oil reserves of 25.4 MMBbl.

Co has established an initial capital budget of $275 million for 2017, comprised of $232 million drilling and completion capital expenditures and the remainder allocated to workovers, leasing and field maintenance projects.

• Of the total D&C budget, 47% is dedicated to ongoing drilling activity in the Merge.

Co produced 1.8 MMBoe (~19,200 Boe/d) in 4Q16 and an estimated 7.0 MMBoe (~19,200 Boe/d) for the full year.

• Oil volumes comprised 23% of production for Q4 and 24% for the full year.
• NGL volumes accounted for 32% of the fourth quarter production and full year volumes.
• Production in 4Q16 was within guidance, but was negatively affected by weather, completion delays, and mechanical issues.
• Jones Energy met production forecasts for the fourth quarter and full year of 2016 despite these delays and impacts.
• ~seven wells were carried into 1Q17 for completion.

• Q4 adj. EPS $0.40 vs. $0.33 consensus and $0.30 last year; revenue +7% to $105.4 mln vs. $108.4 mln consensus.
• Remained on track to close the transaction with CBOE Holdings (CBOE) by the end of the first quarter of 2017.

• Net asset value per share of $10.86.
• FSFR's Board of Directors determined the fair value of our investment portfolio at December 31, 2016 to be $540.1 million, as compared to $573.6 million at September 30, 2016. Total assets were $590.2 million at December 31, 2016, as compared to $622.4 million at September 30, 2016.

Stocks with favorable mention: AAPL, AGN, AMZN, BLK, CSCO, DIS, GE, GOOGL, PLAY, PNRA, TTWO

Stocks with unfavorable mention: AUO, ELY, PFE

Upgrades: 

• Neste Oyj (NTOIF) upgraded to Buy from Neutral at UBS
• Tod's SpA (TDPAY) upgraded to Neutral from Underperform at Exane BNP Paribas
• Software AG (STWRY) upgraded to Hold from Reduce at Kepler

Downgrades: 

• Thomas Cook (TCKGY) downgraded to Reduce from Hold at Numis
• Hugo Boss AG (BOSSY) downgraded to Neutral from Outperform at Exane BNP Paribas
• Banco Santander (SAN) downgraded to Underperform from Outperform at Exane BNP Paribas
• Danone (DANOY) downgraded to Neutral from Outperform at Davy Research

Miscellaneous: 

• None of note

Major European indices trade higher across the board even though Greece-related concerns have returned to the surface in recent days. The International Monetary Fund has maintained that debt relief for Greece will be needed, but European officials remain against reducing the troubled country's debt burden. Yesterday afternoon, German Finance Minister Wolfgang Schaeuble said Greece would have to leave the euro in order to win a debt cut. Greece is due to make its next debt payment in July, but will be unable to do so if it doesn't receive the next installment of its bailout from the eurozone. The disbursement of the bailout tranche will not occur until the Troika completes a review of the Greek fiscal situation, which has been delayed.

• In economic data:
  • Germany's December trade surplus EUR18.40 billion (expected surplus of EUR21.40 billion; last surplus of EUR21.80 billion). December Imports 0.0% month-over-month (expected -1.0%; last 3.5%) and December Exports -3.3% month-over-month (consensus -1.1%; last 3.9%)
  • Swiss January Unemployment Rate held at 3.3%, as expected

---Equity Markets---

• UK's FTSE is higher by 0.3% with financials and energy-related names showing relative strength. BP and Royal Dutch Shell hold respective gains of 1.3% and 0.9% while Provident Financial, Prudential, Standard Life, Barclays, RSA Insurance, RBS, and HSBC are up between 0.7% and 1.4%.
• Germany's DAX trades up 0.7% as gains in most components offset losses in financials. Bayer leads with a gain of 2.7% while automakers Daimler and BMW show respective gains of 1.3% and 0.9%. Volkswagen trails its peers, hovering near its flat line. On the downside, Deutsche Bank is down 0.2% and Commerzbank has slid 3.1% in reaction to disappointing results.
• France's CAC outperforms with a gain of 0.9%. Societe Generale and AXA show respective gains of 2.6% and 2.1% after SocGen reported above-consensus results. BNP Paribas and Credit Agricole are both up near 0.8%. Automakers Peugeot and Renault have given up 1.0% apiece.

• Wi-LAN (WILN) announced that the Toronto Stock Exchange had accepted its Notice of Intention to Make a Normal Course Issuer Bid. Pursuant to the Notice, WiLAN may purchase for cancellation up to 4,000,000 issued and outstanding WiLAN common shares representing approximately 3.46% of the 115,633,550 Common Shares in the public float as of December 31, 2016 through the facilities of the TSX and/or alternative Canadian trading platforms.
• Houston American Energy (HUSA) acquires a 25% working interest in two lease blocks covering 717.25 acres in Reeves County, Texas. The interest was acquired from Founders Oil & Gas III, LLC for a purchase price of $5,500 per net mineral acre, or a total of $986,000. Additional adjacent acreage is expected to be acquired in the coming weeks by Founders, with Houston American acquiring an interest in the same, to bring the total acreage position to approximately 800 gross acres.
• Volvo Buses (VLVLY) has secured its largest ever order for complete solutions for electric bus traffic. The Belgian cities of Charleroi and Namur have together ordered 90 Volvo 7900 Electric Hybrid buses as well as 12 charging stations. The buyer is public transport company TEC Group. The charging stations will be delivered by ABB.  The order from TEC Group covers 55 buses for Charleroi and another 35 buses for Namur. ABB will supply 4 charging stations to Charleroi and 8 charging stations for Namur. Delivery and installation will get under way this autumn. After the delivery, the TEC Group will have ordered in total 101 Volvo electric hybrids and 15 ABB charging stations.

«We believe it's time for video data to move to the center of public safety records systems, with far richer and more transparent information than historic text-only systems,» said Rick Smith, CEO and co-founder of TASER. «Axon AI is focused on extracting usable information from these video records, automatically populating our new RMS system. AI will significantly streamline these business processes so officers can focus on what matters: their operational environment. Axon AI will also greatly reduce the time spent preparing videos for public information requests or court submission. This will lay the foundation for a future system where records are seamlessly recorded by sensors rather than arduously written by police officers overburdened by paperwork,» concluded Smith.

• TASER acquired Dextro, Inc, the first computer-vision and deep learning system to make the visual contents in video searchable in real time. Agencies and departments will have the ability to quickly isolate and analyze the most important seconds of footage from massive amounts of video data. This acquisition will form the technology backbone of the new Axon AI platform.
• The company also acquired from Fossil Group, Inc. the computer vision team that was part of Fossil Group's acquisition of Misfit, Inc. The team includes machine-vision researchers focused on improving the accuracy, efficiency and speed of processing images and video.
• Together, these acquisitions will broaden TASER's industry-leading DEMS (Digital Evidence Management System) to enable customers to gain more insight from video, photos and audio to improve training, operations and community engagement.

• Co reported Q4 EPS of (EUR 0.31) vs (EUR 0.29) last year; revs +10.2% YoY to EUR 3.626 bln, up 7.1% YoY.
• The operating result grew by 30.2% to € 14.1 million. This development is a result of the increase of sales and the improvement of the gross profit margin in the quarter.
• The Asia/Pacific region was also a strong driver of the overall growth of PUMA in 2016. Sales were up by 8.5% currency adjusted to € 904.5 million (+10.5% reported).
• The gross profit margin improved 20 basis points from 45.5% last year to 45.7% for the full year 2016.
• FY17: 
  • For the full year 2017 we expect that currency-adjusted net sales will increase at a high single-digit rate. The gross profit margin is forecasted to improve to approximately 46.0% (2016: 45.7%). Operating expenses are expected to increase at a mid to high single-digit rate, as PUMA will continue to invest in marketing, in the modernization and expansion of the owned and operated retail store network and in IT-infrastructure. At the same time, management will continue to place a strong emphasis on strict control of other operating costs.
  • At the current exchange rate levels, PUMA's management expects that the operating result will improve significantly in 2017, thanks to operating leverage, as sales will increase stronger than OPEX, combined with a slightly improved gross profit margin. EBIT for the full year 2017 is therefore expected to come in between € 170 million and € 190 million. Net earnings will also continue to improve significantly in 2017.

• Tata Steel (TATLY) has signed a definitive sale agreement to sell its Specialty Steels business to Liberty House Group for a total consideration of GBP 100 mln.
• Fortinet (FTNT) together with Ixia (XXIA) announced the results of Ixia's CloudStorm and BreakingPoint testing solutions used to validate the performance of Fortinet's recently announced FortiGate 3980E and 7060E enterprise firewalls. Ixia's rigorous testing methodology resulted in Fortinet's FortiGate 3980E enterprise firewall demonstrating 1 Tbps (Terabit per second) firewall performance, and the FortiGate 7060E enterprise chassis firewall delivering 100 Gbps (Gigabit per second) of NGFW throughput. The testing results, along with the first public demonstration of the performance testing, will be available in the Fortinet booth #3627 during the RSA Conference scheduled for February 13th — 17th, 2017.
• Earlier this year, PREIT (PEI) announced it had reached agreement with Sears (SHLD) to recapture three stores, Capital City, Woodland and Magnolia Malls. The Company has executed leases for all three of these locations as part of a continued portfolio improvement effort. The following details relate to the extensive Woodland Mall repositioning plans.

• Ekso Bionics Holdings (EKSO) announced the worldwide launch of EksoPulse, an advanced cloud-based information technology platform that enhances the clinician, institutional and patient experience with the Ekso GT robotic exoskeleton. EksoPulse operates in conjunction with technologies from leading global companies to support the new system with EksoPulse Analytics.
• Rolls-Royce (RYCEY) has won a $1.7bn order from Singapore Airlines for Trent 1000 engines to power 19 Boeing 787 Dreamliner aircraft. The engines will be covered by Rolls-Royce's flagship engine service, TotalCare, which improves engine reliability, increases time on wing, and maximises the engine's contribution to business performance.
• Halcón Resources Corporation (HK) announced that it has commenced a cash tender offer for any and all of its outstanding $700 million 8.625% Senior Secured Notes due 2020. The tender offer is being made on the terms and subject to the conditions set forth in the offer to purchase dated February 9, 2017 and the related letter of transmittal and notice of guaranteed delivery.
• Genius Brands International, Inc. «Genius Brands» (GNUS) has signed Fisher-Price, a subsidiary of Mattel, Inc. (NASDAQ: MAT), as global master toy partner for the Company's all-new original CGI-animated preschool series, Rainbow Rangers, marking the first licensing partnership as Genius Brands develops its global licensing program and content distribution strategy.
• Varian Medical Systems (VAR) announced it won a competitive bid to provide advanced radiotherapy technology and its Eclipse treatment planning system to six major hospitals in Shanghai. The company is scheduled to install its Edge radiosurgery suite in five affiliate hospitals of Shanghai Jiao Tong University this year. Varian will also install its Trilogy system within the Longhua Hospital Shanghai University of Traditional Chinese Medicine.

Gapping up
In reaction to strong earnings/guidance:

• SKYS +65.8%, (thinly traded), OSUR +23.4%, AVNW +15.9%, (thinly traded), TZOO +11.6%, PAYC +11%, ZEN +10.1%, MPAA +9.8%, CLF +9.8%, PCMI +9.5%
• IMPV +9.3%, (also agrees to sell its Skyfence technology and service to Forcepoint, financial details not disclosed; acquires the assets of Camouflage Software)
• WSTL +8.4%, FLT +7.8%, PRLB +6.5%, SCSS +6.2%, MDSO +6.1%, LLNW +5.4%, CXW +5.2%, LIVE +4.4%, ARRY +3.5%, ALNY +3.4%, RLGT +3.4%
• VIA +3%, CMP +2.9%, FONR +2.7%, AOSL +2.5%, GPRE +2.2%, CVS +2.2%, MFC +2%, EFX +1.9%, TU +1.9%, CETX +1.9%, FORM +1.6%, CMI +1.6%
• PTN +1.4%, WWE +1.4%, BGCP +1.3%, ROP +1.2%, RAI +1.1%, PSEC +1%, TOT +1%, RMR +0.9%, OHI +0.8%, CRAY +0.8%, AFG +0.7%, YUM +0.6%, PRU +0.5%

M&A news:

• JAGX +69% (Jaguar Animal Health to merge with Napo Pharmaceuticals)
• NOK +1.4% (to acquire Comptel for EUR 347 mln)

Other news:

• ETRM +17.8% (publication of three-year data from the Company's VBLOC DM2 Study of vBloc Neurometabolic Therapy)
• AQMS +16.1% (announces that Johnson Controls (JCI) finalized an agreement covering North America, China and Europe for its technology)
• RELV +14.7% (thinly traded; announced that CardioSentials heart health supplement has earned a U.S. patent)
• ACOR +12.3% (announces 'positive' Phase 3 data of CVT-301 'showing a statistically significant improvement in motor function in people with Parkinson's disease experiencing OFF periods)
• VKTX +11.7% (announces 'positive' initial results from a proof-of-concept study of VK2809)
• PPHM +9.9% (announces the publication of positive proof-of-concept data for a novel exosome-based cancer detection platform)
• BANC +5.6% (Banc of California appoints Richard Lashley, co-founder of 6.9% holder PL Capital Advisors, to the Board and approves certain enhancements to corporate governance policies)
• URRE +3.8% (announces its Special meeting not convened, nor adjourned to later date; RCF debt to be repaid from treasury)
• STB +3.2% ( awarded new record $187 million contract )
• SNY +2.3% (Regeneron Pharma confirms appeals court grants stay of permanent injunction for Praluent (alirocumab) during appeals process)
• TSLA +2.1% (Reuters details that Tesla (TSLA) plans to pause factory production in California to prepare for Model 3)
• XGTI +2.1% (prices offering of 1.75 mln shares of common stocks and warrants of up to 1.3 mln shares at $2.00 per share)
• ETP +1.7% (received US Army Corps of Engineers easement to construct N Dakota pipeline (as expected — see Feb 7 comments); Dakota Access has now received all federal authorizations necessary to proceed)
• BP +1.1% (in sympathy with TOT earnings)
• RDS.A +1.1% (in sympathy with TOT earnings)
• DECK +0.9% (following late move higher on Marcato active stake disclosure)
• BA +0.8% (confirms that Singapore Airlines has commited to purchase 20 777-9s and 19 787-10 Dreamliners)

Analyst comments:

• RMBS +2.8% (upgraded to Overweight from Neutral at JP Morgan)
• FNV +0.7% (upgraded to Neutral from Sell at Goldman)
• ALV +0.6% (upgraded to Overweight from Sector Weight at KeyBanc Capital Mkts)

Gapping down
In reaction to disappointing earnings/guidance:

• SNCR -15.9%, LPSN -15.2%, FSC -13.4%, MTRX -10.6%, MB -10.5%, QLYS -9.1%, TWTR -8.9%, IRBT -8.8%, BGC -8%, VSTO -7.6%, SON -7.5%, OII -7%
• MXL -6.9%, LQDT -6.8%, GLUU -6%, STRL -5.8%, (sees Q4 net loss of $5.5-6.5 mln and revs of $165-170 mln vs. $157.25 mln two analyst estimate; says results are 'very disappointing')
• ECHO -5.3%, COTY -5.2%, ENSG -5%, TYL -4.8%, CDE -4.2%, TBI -3.6%, KS -3.4%, ENTA -3.3%, UHAL -3%, MC -3%, SNN -2.9%, FSFR -2.8%, FISV -2.6%
• PPC -2.1%, KO -2.1%, GLAD -1.7%, AGTC -1.5%, MAS -1.5%, CTL -1.4%, PDS -1.3%, DTE -1.2%, REGN -1.2%, JE -1%, CX -0.6%, SEE -0.5%

Other news:

• SRRA -9.1% (to offer shares of its common stock in an underwritten public offering; size not disclosed)
• CREE -5.5% (CFIUS informed Infineon and Cree that the Wolfspeed transaction poses a risk to the national security of the United States)
• AMGN -1.4% (Regeneron Pharma confirms appeals court grants stay of permanent injunction for Praluent (alirocumab) during appeals process)
• REGN -1.2% (Regeneron Pharma confirms appeals court grants stay of permanent injunction for Praluent (alirocumab) during appeals process)
• TM -1.2% (traded ~2% lower in Japan overnight)
• HLI -1.1% (prices offering of 8 mln shares of common stock by co and selling shareholders at $29.25 per share)
• FSLR -1% (awarded module supply contract for the 140 megawatt DC Sun Metals Solar Farm in North Queensland)
• PYPL -0.9% (discloses that it has received subpoenas from the DOJ seeking the production of certain information related to the company's historical anti-money laundering program)
• KR -0.9% (WFM sympathy)

Analyst comments:

• SLW -1% (downgraded to Neutral from Buy at Goldman)
• FCX -1% (resumed with a Neutral at JP Morgan)

Gapping up
In reaction to strong earnings/guidance:

• SKYS +65.8%, (thinly traded), OSUR +23.4%, AVNW +15.9%, (thinly traded), TZOO +11.6%, PAYC +11%, ZEN +10.1%, MPAA +9.8%, CLF +9.8%, PCMI +9.5%
• IMPV +9.3%, (also agrees to sell its Skyfence technology and service to Forcepoint, financial details not disclosed; acquires the assets of Camouflage Software)
• WSTL +8.4%, FLT +7.8%, PRLB +6.5%, SCSS +6.2%, MDSO +6.1%, LLNW +5.4%, CXW +5.2%, LIVE +4.4%, ARRY +3.5%, ALNY +3.4%, RLGT +3.4%
• VIA +3%, CMP +2.9%, FONR +2.7%, AOSL +2.5%, GPRE +2.2%, CVS +2.2%, MFC +2%, EFX +1.9%, TU +1.9%, CETX +1.9%, FORM +1.6%, CMI +1.6%
• PTN +1.4%, WWE +1.4%, BGCP +1.3%, ROP +1.2%, RAI +1.1%, PSEC +1%, TOT +1%, RMR +0.9%, OHI +0.8%, CRAY +0.8%, AFG +0.7%, YUM +0.6%, PRU +0.5%

M&A news:

• JAGX +69% (Jaguar Animal Health to merge with Napo Pharmaceuticals)
• NOK +1.4% (to acquire Comptel for EUR 347 mln)

Other news:

• ETRM +17.8% (publication of three-year data from the Company's VBLOC DM2 Study of vBloc Neurometabolic Therapy)
• AQMS +16.1% (announces that Johnson Controls (JCI) finalized an agreement covering North America, China and Europe for its technology)
• RELV +14.7% (thinly traded; announced that CardioSentials heart health supplement has earned a U.S. patent)
• ACOR +12.3% (announces 'positive' Phase 3 data of CVT-301 'showing a statistically significant improvement in motor function in people with Parkinson's disease experiencing OFF periods)
• VKTX +11.7% (announces 'positive' initial results from a proof-of-concept study of VK2809)
• PPHM +9.9% (announces the publication of positive proof-of-concept data for a novel exosome-based cancer detection platform)
• BANC +5.6% (Banc of California appoints Richard Lashley, co-founder of 6.9% holder PL Capital Advisors, to the Board and approves certain enhancements to corporate governance policies)
• URRE +3.8% (announces its Special meeting not convened, nor adjourned to later date; RCF debt to be repaid from treasury)
• STB +3.2% ( awarded new record $187 million contract )
• SNY +2.3% (Regeneron Pharma confirms appeals court grants stay of permanent injunction for Praluent (alirocumab) during appeals process)
• TSLA +2.1% (Reuters details that Tesla (TSLA) plans to pause factory production in California to prepare for Model 3)
• XGTI +2.1% (prices offering of 1.75 mln shares of common stocks and warrants of up to 1.3 mln shares at $2.00 per share)
• ETP +1.7% (received US Army Corps of Engineers easement to construct N Dakota pipeline (as expected — see Feb 7 comments); Dakota Access has now received all federal authorizations necessary to proceed)
• BP +1.1% (in sympathy with TOT earnings)
• RDS.A +1.1% (in sympathy with TOT earnings)
• DECK +0.9% (following late move higher on Marcato active stake disclosure)
• BA +0.8% (confirms that Singapore Airlines has commited to purchase 20 777-9s and 19 787-10 Dreamliners)

Analyst comments:

• RMBS +2.8% (upgraded to Overweight from Neutral at JP Morgan)
• FNV +0.7% (upgraded to Neutral from Sell at Goldman)
• ALV +0.6% (upgraded to Overweight from Sector Weight at KeyBanc Capital Mkts)

Gapping down
In reaction to disappointing earnings/guidance:

• SNCR -15.9%, LPSN -15.2%, FSC -13.4%, MTRX -10.6%, MB -10.5%, QLYS -9.1%, TWTR -8.9%, IRBT -8.8%, BGC -8%, VSTO -7.6%, SON -7.5%, OII -7%
• MXL -6.9%, LQDT -6.8%, GLUU -6%, STRL -5.8%, (sees Q4 net loss of $5.5-6.5 mln and revs of $165-170 mln vs. $157.25 mln two analyst estimate; says results are 'very disappointing')
• ECHO -5.3%, COTY -5.2%, ENSG -5%, TYL -4.8%, CDE -4.2%, TBI -3.6%, KS -3.4%, ENTA -3.3%, UHAL -3%, MC -3%, SNN -2.9%, FSFR -2.8%, FISV -2.6%
• PPC -2.1%, KO -2.1%, GLAD -1.7%, AGTC -1.5%, MAS -1.5%, CTL -1.4%, PDS -1.3%, DTE -1.2%, REGN -1.2%, JE -1%, CX -0.6%, SEE -0.5%

Other news:

• SRRA -9.1% (to offer shares of its common stock in an underwritten public offering; size not disclosed)
• CREE -5.5% (CFIUS informed Infineon and Cree that the Wolfspeed transaction poses a risk to the national security of the United States)
• AMGN -1.4%/ REGN -1.2% (Regeneron Pharma confirms appeals court grants stay of permanent injunction for Praluent (alirocumab) during appeals process)
• TM -1.2% (traded ~2% lower in Japan overnight)
• HLI -1.1% (prices offering of 8 mln shares of common stock by co and selling shareholders at $29.25 per share)
• FSLR -1% (awarded module supply contract for the 140 megawatt DC Sun Metals Solar Farm in North Queensland)
• PYPL -0.9% (discloses that it has received subpoenas from the DOJ seeking the production of certain information related to the company's historical anti-money laundering program)
• KR -0.9% (WFM sympathy)

Analyst comments:

• SLW -1% (downgraded to Neutral from Buy at Goldman)
• FCX -1% (resumed with a Neutral at JP Morgan)

• Amazon.com, Inc. (AMZN) announced two new fulfillment centers in Eastvale and Redlands, California, which will create more than 2,000 new full-time associate roles when opened.
• SunLink Health Systems (SSY) announced today that it has extended its previously announced tender offer to purchase up to 3,000,000 of its common shares at a price of $1.50 per share (the «Offer») until 5:00pm ET on Friday, February 24, 2017, unless further extended or terminated by SunLink. Tenders of shares must be made on or prior to the expiration of the Offer and may be withdrawn at any time on or prior to the expiration of the Offer. The tender offer to purchase common shares was previously scheduled to expire at 5:00pm ET on February 8, 2017. As of 5:00 p.m. ET on February 8, 2017, 1,036,239 common shares have been tendered and not withdrawn. Holders of common shares who have already tendered their shares do not have to re-tender their securities or take any other action as a result of the extension of the expiration date of the Offer.
• Granite Construction Incorporated (GVA) announced today that it has been awarded a $25 million Construction Manager/General Contractor (CM/GC) contract by the Utah Department of Transportation for the reconstruction of State Route 108 in Davis County, Utah, approximately 20 miles north of Salt Lake City. The contract will be included in Granite's fourth quarter 2016 backlog.

Filings:

• Atkore International (ATKR) files for 8 mln share common stock offering by selling shareholders
• Bioptix (BIOP) files for $20 mln mixed securities shelf offering
• CNX Coal Resources LP (CNXC) files for $750 mln mixed securities shelf offering and 10.5 mln share secondary offering by selling unitholder CONSOL Energy (CNX)
• Energy Transfer Equity (ETE) files for offering of $1 bln common units representing limited partner interests

Offerings:

• Microchip (MCHP) to offer $1.5 bln of convertible senior subordinated notes due 2027 and $500 mln of convertible junior subordinated notes due 2037 in private placement
• pSivida (PSDV) enters into an At Market Issuance Sales Agreement to create an at the market equity program under which it may offer and sell shares of its common stock having an aggregate offering price of up to $20 mln
• Sierra Oncology (SRRA) intends to offer shares of its common stock in an underwritten public offering; size not disclosed

Pricings:

• Houlihan Lokey (HLI 29.70) prices offering of 8 mln shares of common stock by co and selling shareholders at $29.25 per share
• Moleculin Biotech (MBRX 1.50) prices underwritten public offering of mixed securities for gross proceeds of approx. $5 mln
• Pretium Resources (PVG 12.07) prices offering $90 mln of 2.25% of Convertible Senior Subordinated Notes due 2022
• xG Technology (XGTI 1.87) prices offering of 1.75 mln shares of common stocks and warrants of up to 1.3 mln shares at $2.00 per share

Thursday's session is on track for a slightly higher open as the S&P 500 futures trade three points above fair value.

Conversely, U.S. Treasuries are lower this morning, giving back nearly all of yesterday's gains. The benchmark 10-yr yield is currently three basis points higher at 2.36%.

On the earnings front, Coca-Cola (KO 41.27, -0.74) has slipped 1.9% in pre-market trade as disappointing guidance has outweighed the company's better than expected revenues. Twitter (TWTR 16.78, -1.94) is also lower in reaction to the company's latest earnings report. Shares of TWTR have plunged 10.0% after the company missed revenue expectations and issued below-consensus guidance.

Kellogg (K 74.50, +1.01), on the other hand, is up 1.4% this morning on better than expected earnings per share. CVS Health (CVS 78.69, +1.66), also from the consumer staples sector, is higher by 2.2% after beating earnings estimates and reaffirming 2017 earnings guidance.

Earlier this morning, the latest weekly initial jobless claims count totaled 234,000 while the Briefing.com consensus expected a reading of 250,000. Today's tally was below the unrevised prior week count of 246,000. As for continuing claims, they rose to 2.078 million from the revised count of 2.063 million (from 2.064 million).

Investors will also receive December Wholesale Inventories (Briefing.com consensus 1.0%) on Thursday. The report will cross the wires at 10:00 am ET.

• First Foundation (FFWM), First Foundation Advisors and First Foundation Bank, announced that it entered into a loan agreement with NexBank SSB that provides for a revolving line of credit for up to $25,000,000. The loan agreement matures in five years, with an option to extend the maturity date subject to certain conditions, and bears interest at 90 day LIBOR plus 350 basis points (3.50%). The Company's obligations under the loan agreement are secured by, among other things, a pledge of all of its equity in FFB.
• First Data (FDC) and KeyBank (KEY) announced a new relationship designed to provide enhanced merchant services solutions to KeyBank's commercial, business, and government clients across the country. The partnership will allow KeyBank to offer First Data's entire portfolio of business tools, including the Clover platform which provides next-generation capabilities for business owners to accept payments, manage inventory, track sales, and access revenue-generating analytics and rewards programs.
• Shutterstock (SSTK) and HubSpot (HUBS) announced that they have entered into a strategic partnership that will bring thousands of curated high-quality images from Shutterstock's collection to HubSpot customers worldwide.

The tech sector — XLK — trades modestly behind the broader market. Semiconductors, meanwhile, display relative weakness as the SOX index trades -0.01%. Within the SOX index, AMD (+1.62%) outperforms, while CAVM (-0.56%) lags. Among other major indices, the SPY is trading 0.24% higher, while the QQQ +0.16% and the NASDAQ +0.61% trade modestly higher on the session. Among tech bellwethers, VOD (+1.72%) is showing relative strength, while NTES (-1.29%) lags.

Notable gainers following earnings:

• TYL (+8.1%) reported better than expected Q4 EPS, but worse than expected revs; guided FY17 EPS and revs below market expectations, TRMB (+5.3%), FISV (+1.3%)

Notable laggards following earnings:

• TWTR (-11.5%) reported better than expected Q4 EPS, but worse than expected revs; guided advertising revs «to lag» audience growth; also guided Q1 adj EBITDA well below expectations, TU (-1.5%), CTL (-1.4%)

Gainers on news:

• PAYC (+10.5%) co announced an additional $50 mln is available for repurchases through Jan 2019.
• FSLR (+2.5%) co was awarded module supply contract for the 140 megawatt DC Sun Metals Solar Farm in North Queensland (Australia's largest solar project).
• NOK (+1.0%) co to acquire Comptel for EUR 347 mln.
• LDOS (+0.1%) co was awarded contract by the Defense Threat Reduction Agency to support its Cooperative Biological Engagement Program and Cooperative Threat Reduction Program through a worldwide Scientific & Technical Engagement Partnership program.

Laggards on news:

• CREE (-5.8%) shares lower following Infineon (IFNNY) Wolfspeed update — CFIUS thinks transaction poses a risk to the national security.
• MCHP (-2.4%) co to offer $1.5 bln of convertible senior subordinated notes due 2027 and $500 mln of convertible junior subordinated notes due 2037 in private placement.
• PYPL (-0.2%) co in 10-K disclosed that it has received subpoenas from the DOJ seeking the production of certain information related to the company's historical anti-money laundering program.

Among notable analyst upgrades:

• MU (+2.1%) upgraded to Buy from Underperform at BofA/Merrill
• RMBS (+3.3%) to Overweight from Neutral at JP Morgan

Among notable analyst downgrades:

• CREE (-5.7%) downgraded to Market Perform from Mkt Outperform at JMP Securities
• GRUB (-2.0%) to Neutral from Buy at Mizuho
• VNTV (-0.8%) to Hold from Buy at Jefferies
• SNCR (-9.8%) to Hold from Buy at Deutsche Bank
• QLYS (-3.8%) to Equal Weight from Overweight at First Analysis Sec

Scheduled to report earnings after the bell:

• ATEN ATVI ASYS APDN APTI CARB ECOM CPSI CYBR DTRM EGAN ELLI EXPE HDP INFN JCOM MX MIME MPWR NCR UEPS NVDA P RSYS RPD SWIR TLND UBNT VRSN VSAT WEB WU YELP ZAYO ZIXI ZNGA

Scheduled to report earnings tomorrow morning:

• G

• Trading higher following earnings/guidance: THS +11%, WWE +8.5%, GCI +8.3%, DNKN +7.3%, TZOO +5.8%, VIAB +5.3%, K +3.5%, WFM +2.4%, YUM +1.6%, LGF.A +0.6%, MPAA +0.6%
• Trading lower following earnings/guidance: BZH -7.4%, LE -5.6% (Lands' End reports downside prelim Q4 EPS loss of (1.67)-($1.85) vs $0.51 consensus; sees Q4 revs of $459.3 mln vs $456.98 Consensus estimate), CAA -4.8%, NSANY -2.3%, KO -2%, CVS -1.3%, MNI -0.5%

Earnings/guidance secondary plays:

• Food processing names are higher following K / THS earnings: PF 1.3% KHC 1.2% CPB 1%
• Grocers strength coinciding with WFM reversal: SVU +3.7%, SFM +3.3%, WMK +2.5%, WFM +2.6%, KR +2%, NGVC +0.8%, UNFI +0.5%
• Homebuilders are in the red after BZH / CAA disappointing results: 
• Beverage/soda names are underperforming after Coca-Cola reported in-line qtr with downside guidance: FIZZ -0.5%, DPS flat

• Leaders: PAG 0.8% (increases quarterly dividend), TUES 1.9% (CEO disclosed purchase of 200K shares worth total of $731.8K), SONC 2.5% (Sonic chief marketing officer Todd Smith will resign effective March 9; search is underway to fill the chief marketing position),  ALV 0.4% (upgraded to Overweight from Sector Weight at KeyBanc Capital Mkts)
• Laggards:  GRUB -2.4% (cont weakness following earnings), TWX -0.3% (downgraded to Hold from Buy at Drexel Hamilton)

• For profit education names are seeing modest bounce: UTI +3.9% (announces the U.S. Department of Education approved Universal Technical Institute Welding & CNC Machining Technology Programs), APEI +2.4%, LOPE +2%, DV +1.9%, CECO +1.8%, CPLA +1.5%, STRA +0.7%, EDU +0.4%, GHC +0.3%, BPI +0.2%

Looking ahead:

• On the earnings front: EXPE, P, SKX, ZNGA, YELP, RGC, COLM report today after the close.

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:

• DLTR May 82.5 calls are seeing interest with 5680 contracts trading vs. open int of 3710, pushing implied vol up around 2 points to ~33% — we noted bullish activity in the Mar 77.5 calls late January (see 1/31 13:33 OPTNX). Co is expected to report earnings early March.

Puts:

• LYB Weekly Feb10 are seeing interest with 1560 contracts trading vs. open int of 4150, pushing implied vol up around 3 points to ~31% — co reported earnings earlier this month and is expected to report its next quarterly earnings late April.

Stocks seeing volatility selling:

• DNKN, GCI, TWTR, VIAB, GLUU implied vol is lower following earnings/guidance

Sentiment: The CBOE Put/Call ratio is currently: 0.87… VIX: (11.09, -0.36, -3.1%).
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.

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

• FLT (166.09 +9.81%): Shares rise on Q4 EPS beat.
• VIAB (44.01 +4.6%): Shares rise on Q1 EPS and revenue beats; new strategic plan including focus on six priority flagship brands and deeper integration of Paramount Pictures.
• EFX (127.37 +4.41%): Reports Q4 EPS beat.

Large Cap Losers

• TWTR (17.05 -8.93%): Reports Q4 revenue miss; issues disappointing guidance.
• COTY (18.3 -8.68%): Reports Q2 EPS and revenue miss.
• MAS (32.38 -4.17%): Shares drop on Q4 EPS miss.

Mid Cap Gainers

• ZEN (28.43 +15.9%): Reports Q4 EPS and revenue beats; guides FY17 revs above consensus.
• PAYC (51.1 +12.9%): Shares rise on Q4 EPS and revenue beats; guides Q1 revs above consensus; announces an additional $50 mln is available for repurchases through Jan 2019.
• MDSO (54 +12.5%): Reports Q4 EPS beat.

Mid Cap Losers

• CDE (9.85 -18.06%): Reports Q4 revenue miss.
• DNB (103.61 -15.4%): Shares fall on Q4 EPS miss; FY17 EPS guidance.
• SEE (46.33 -7.76%): Reports Q4 revenue miss; guides FY17 EPS below consensus.

Treasury Auction Preview

• $15 bln 30-year Treasury auction (results at 13:00 ET)
  
  • Prior auction results
    
    • High yield: 2.914%
    • Bid-to-cover: 2.32
    • Indirect bid: 66.7%
    • Direct bid: 4.5%
  • Average results of prior 12 auctions
    
    • High yield: 2.605%
      
    • Bid-to-cover: 2.30
      
    • Indirect bid: 62.2%
      
    • Direct bid: 8.9%

Rumor Activity was slow today.

• Tempur Sealy Int'l (TPX 45.52 +2.62) M&A speculation circulated.
• Bloomberg discussed that HSBC (HSBC 43.15 +0.57) might consider wealth management acquisitions.
• Dish Network (DISH 60.81 -0.05) M&A speculation circulated.

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

• Healthcare: OSUR (11.16 +26.05%), ACOR (23.55 +15.44%), MDSO (55.25 +15.1%), ARRY (11.81 +10.33%), ALNY (44.73 +10.09%)
• Materials: FTK (12.3 +16.59%), CLF (11.07 +16.28%)
• Industrials: PRLB (57.9 +12.21%)
• Information Technology: NSIT (43.9 +17.76%), ZEN (28.69 +16.96%), BLKB (71.11 +14.58%), PAYC (51.81 +14.47%), TYL (165 +13.02%), CRAY (20.22 +12.96%), FLT (166.78 +10.27%), TDC (33.13 +9.81%), IMPV (46.75 +8.97%)
• Financials: BANC (18.73 +16.3%)
• Consumer Staples: THS (84.32 +11.49%), PPC (20.46 +9.12%)

• Healthcare: ENSG (16.82 -15.9%)
• Materials: CDE (9.78 -18.66%), SEE (45.66 -9.08%)
• Industrials: DNB (102.06 -16.67%)
• Consumer Discretionary: VSTO (20.03 -22.18%), IRBT (53.98 -11.85%), BZH (12.92 -7.85%), SPWH (6.25 -5.73%)
• Information Technology: GLUU (2.11 -15.3%), SNCR (31.54 -10.85%), TWTR (16.83 -10.1%), CREE (26.21 -6.23%), QLYS (34.57 -6.19%), MXL (25.27 -5.85%), VRNS (28.7 -5.12%)
• Financials: FSC (4.85 -13.55%)
• Energy: MTRX (18.1 -14.82%)
• Consumer Staples: COTY (18.47 -7.83%)
• Utilities: JE (5.66 -5.98%)

• Dealers are restocking inventories from healthy levels — green light for continued momentum.
• Sees industry hitting 500K units in coming years.
• Drivers: RVs enable more economical vacations; demographics are favorable and events like tailgating increasing in popularity.
• Non-RV sales were 34% of sales last year
• Will implement more automation as market for manufacturing jobs is tight.
• See healthy pipeline for M&A; sees oppty overseas in RV and other markets like marine.

RV suppliers: LCII +3.7%, PATK +2.7%… RVs: WGO +1.9%, THO +1.2%… retailer: CWH

The broader market surges into midday, led up now by the Dow Jones Industrial Average which gains 139 points (+0.69%) to 20193, the Nasdaq Composite is higher by 37 (+0.64%) to 5719, and the S&P 500 adds 14 (+0.62%) to 2308. As it were, all three major US indices have made new all-time highs today intraday. Action has come on mostly higher than average volume (NYSE 320 vs. avg. of 321; NASDAQ 821 mln vs. avg. of 775), with advancers outpacing decliners (NYSE 1994/988, NASDAQ 2035/692) and new highs outpacing new lows (NYSE 134/6, NASDAQ 160/23).

Relative Strength:

Reg. Banking-KRE +1.9%, Poland-EPOL +1.8%, Steel-SLX +1.7%, Banking-KBE +1.7%, US Broker/Dealers-IAI +1.7%, Oil&Gas E&P-XOP +1.6%, Turkey-TUR +1.5%, Russell 2K-IWM +1.5%, Retail-XRT +1.5%, China Lg. Cap-FXI +1.3%, Emrg. Mkts. M. East&Africa-GAF +1.3%, Mexico-EWW +1.1%, Spain-EWP +0.9%, Israel-EIS +0.8%.

Relative Weakness:

Silver Miners-SIL -3.1%, Gold Miners-GDX -2.2%, Jr. Gold Miners-GDXJ -2.2%, Short-Term Futures-VXX -1.6%, 20+ Yr. Treas. Bond-TLT -1.1%, Social Media-SOCL -1.1%, Japanese Yen-FXY -1.0%, Cocoa-NIB -1.0%, Swiss Franc-FXF -0.6%, Sweden-EWD -0.5%, Thailand-THD -0.5%, New Zealand-ENZL -0.4%, Australian Dollar-FXA -0.2%, British Pound-FXB -0.1%.

Treasury Auction Results

• $15 bln 30-year Treasury auction
  
  • Auction results
    
    • High yield: 3.005% (mostly on screws)
      
    • Bid-to-cover: 2.25
      
    • Indirect bid: 66.2%
      
    • Direct bid: 4.9%
  • Average results of prior 12 auctions
    
    • High yield: 2.605%
    • Bid-to-cover: 2.30
    • Indirect bid: 62.2%
    • Direct bid: 8.9%

The Industrials sector (XLI) is trading +0.9% higher today, higher than the broader market (SPY +0.6%). In the Industrial Sector, airlines (JETS +1.9%) are leading the sector after President Trump meets with airline execs and repeats that airline regulations will be rolled back, and spoke about US need for fast transit systems.

Notable airlines moving today: DAL +2.6% LUV +2.3% AAL +2.9% UAL +1.6% ALK +1.3% JBLU +3.2% LFL +1.6% SAVE +2.2%

Earnings/Guidance

• Cummins (CMI +3.8%) reports Q4 earnings of $2.02 per share, excluding non-recurring items, $0.02 better than the consensus of $2.00; revenues fell 5.6% year/year to $4.5 bln vs the $4.34 bln consensus.
  • Co issues in-line guidance for FY17, sees FY17 revs of flat to down 5% between $16.63-17.5 bln, vs. the $16.95 bln consensus.
• Roper (ROP +5.3%) reports Q4 earnings of $1.86 per share, excluding non-recurring items, $0.02 better than the consensus of $1.84; revenues rose 6.6% year/year to $1.01 bln vs the $1.01 bln consensus.
  • Co issues upside guidance for Q1, sees EPS of $1.92-2.00, excluding non-recurring items, vs. $1.73 consensus.
  • Co issues guidance for FY17, sees EPS of $8.82-9.22, excluding non-recurring items, vs. $7.41 consensus; sees FY17 revs of +20-22% (Approx $4.54-4.62 bln) vs. $4.58 consensus.
• Willis Towers Watson (WLTW -1.2%) reports Q4 earnings of $1.88 per share, excluding non-recurring items, $0.27 better than the Capital IQ Consensus of $1.61; revenues rose 0.3% year/year to $1.93 bln vs the $1.97 bln consensus.
  • Co issues in-line guidance for FY17, sees EPS of $8.40-8.55, excluding non-recurring items, vs. $8.51 consensus
  • Sees constant currency revenue growth of 2-3%
• FleetCor (FLT +10.7%) reports Q4 earnings of $1.90 per share, $0.04 better than the consensus of $1.86; adj revenues was $489.4 mln while total revs were $515 mln vs the $509.44 mln consensus.
  • Co issues in-line guidance for FY17, sees EPS of $8.10-$8.30 vs. $8.16 consensus; sees FY17 revs of $2.17-$2.23 bln vs. $2.17 bln consensus. Expects weighted fuel prices equal to $2.43 per gallon average in the U.S. for those businesses sensitive to the movement in the retail price of fuel for 2017 compared to $2.15 per gallon average in the U.S. in 2016, up approximately 13%.

Additional Industrials reporting earnings/guidance: RLGT +10.7% TBI +1.9% STRL -4.6% DNB -16.49% ENS +1.8% EFX +4.2% UHAL +0.5% BGC +1.7% FWRD +6.6% HNI +1% AIN +2.8% GWW +0.1% ALLE +5.4% VSTO -21.9% MAS -3.3% DLAKY +2% LCII +3.2% CETX +10.8% HDNG +7.4% CETX +10.8% DNB -16.5%

News

• Alaska Air (ALK +1.3%) reports January 2017 results
  • On a combined basis, Air Group reported a 6.9% increase in traffic on a 7.6% increase in capacity compared to January 2016. Load factor decreased 0.5 points to 78.1%.
  • Alaska reported a 5.9% increase in traffic on a 6.4% increase in capacity compared to January 2016. Load factor decreased 0.3 points to 79.3%.
  • Virgin America traffic increased 10.3% on an 11.9% increase in capacity compared to January 2016. Load factor decreased 1.0 point to 76.2%.
  • Regional traffic increased 5.3% on a similar increase in capacity compared to January 2016. Load factor was flat at 74.2%.
• Delta Air Lines (DAL +2.6%) announces plan to hire 25,000 people over the next five years following meeting with President Trump. 

Broker Research

Upgrades

• Engility (EGL +4.4%) upgraded to Buy from Hold at Noble Financial

Downgrades

• Sterling Construction (STRL -5.8%) downgraded to Sector Weight from Overweight at KeyBanc Capital Mkts.
• Star Bulk Carriers (SBLK +0.9%) downgraded to Hold from Buy at Pareto Securities; $9 tgt. 

Other

• Cowen raises their Alaska Air (ALK +1.4%) tgt to $100 from $95.
• Cowen raises their Triton International (TRTN +4.8%) tgt to $30 from $23; Outperform.
• Cowen raises their Genesee & Wyoming (GWR +0.4%) tgt to $77 from $72 following the Q4 print.
• Williams Capital Group initiates 8point3 Energy Partners LP (CAFD -0.73%) with a Hold and price target of $14.
• Needham raises their Trimble (TRMB +5.4%) tgt to $33 from $27 following the Q4 print and Q1 guidance.

• Today after the close look for the following companies to report:
  • ATVI, AGU, MHK, NWSA, NVDA, EXPE, NCR, WU, CERN, LPLA, CSL, CCJ, RGC, COLM, SKX, KMPR, ATR, ZAYO, BFAM, NE, VSAT, P, WTS, CUB, CATM, VRSN, NUVA, VVI, JCOM, UBNT, YELP, ZNGA, WEB, MX, FFG, INFN, TCO, UEPS, SWIR, EGN, OFC, FET, NR, CXP, SGEN, MPWR, ELLI, QUOT, CPSI, CYBR, MN, ATEN, CTRL, MCFT, CARB, HDP, MIME, RPD, APTI, RSYS, INVA, VCRA, ECOM, TLND, ARCW, ASYS, MCC, SANW, CPST, EGAN, ZIXI, DTRM, APDN
    
• Tomorrow before the open look for the following companies to report:
  • MT, CBG, AON, IPG, CPN, AXL, VTR, BPL, G, FSV, ESNT

Events and conferences of interest for tomorrow, February 10th include:

• China Trade Balance at 2:00 ET
• IZEAFest (Feb 10-11th)
  • Scheduled to appear: GOOG, HPE, VRA, CMG, IZEA

Conference in progress:

• Keefe Bruyette and Woods Winter Financial Services Symposium (February 9-10th)
  • Scheduled to appear: ABCB, BANC, BANR, BMTC, BNCN, BOFI, BPFH, BRKL, UBNK, UBSI, SRCE, APO, ASB, BXS, OZRK, BHLB, BOKF, CBOE, CSFL, NBHC, ONB, CHFC, PACW, CNS, COLB, CBSH, CBU, CFR, CUBI, ETFC, EGBN, FCB, FBNC, FCF, FFBC, FHB, FHN, FIBK, FMBI, FBC, FULT, GCAP, GBCI, GBDC, GWB, GHL, HBHC, HAFC, HOMB, PNFP, HOPE, HLI, IBKC, INDB, IBKR, ICE, ISBC, LBAI, LAZ, MKTX, MBFI, NDAQ, NYCB, PBCT, PJC, RNST, BPOP, PFS, RJF, SFNC, SSB, SBSI, STL, SF, SYBT, SGBK, SIVB, SNV, TCB, TCBI, TOWN, TCAP, TRMK, UMBF, UMPQ, UBSH, UBNK, VLY, WD, WBS, WAL, WTFC, WSFS, FBP, WSBC, HTH, HAFC

General Commentary:

• Oil is trading lower by +1.5% in today's session
• Gold prices are lower by -0.2%, while copper is -0.4%
• There is no notable M&A news in the sector today

Earnings:

• Gainers:
  • PRLB +15%, FTK +14.3%, CX +2.2%, WMS +1.5%
• Decliners:
  • CDE -20%, CLW -6%, KS -4%

News:

• Decliners:
  • PKG -2% confirms explosion at DeRidder paper mill; current assessment indicates that annual outage work is expected to be delayed by up to one week
  • PVG -2% prices offering $90 mln of 2.25% of Convertible Senior Subordinated Notes due 2022

Analyst Actions:

• Gainers:
  • WLK +2% l initiated with a Buy at Citigroup; tgt $72
• Decliners:
  • SCCO -4% downgraded to Underweight from Equal Weight at Barclays
  • SLW -3.2% downgraded to Neutral from Buy at Goldman

• Mar crude oil futures rose $0.62 (+1.2%) to $52.98/barrel
  • Baker Hughes rig count data will be released tomorrow at 10:30 am ET
• Mar natural gas closed $0.02 higher (+0.6%) at $3.14/MMBtu
  • EIA highlights:
    • Natural gas inventory showed a draw of -152 bcf vs expectations for inventory to be a draw of approx. -153 bcf.
      
    • Working gas in storage was 2,559 Bcf as of Friday, February 3, 2017, according to EIA estimates.
    • Stocks were 325 Bcf less than last year at this time and 45 Bcf above the five-year avg of 2,514 Bcf.
    • At 2,559 Bcf, total working gas is within the five-year historical range.
• Mar RBOB gasoline closed $0.02 higher (+1.3%) at $1.57/gallon
• Mar heating oil futures closed flat at $1.64/gallon

The Energy Sector (XLE, +1.3%) leads the broader market (SPY, +0.7%) higher as the last hour of the trading day draws near. Crude oil (USO, +1.0%) futures extend yesterday's surprise post-EIA gains, despite EIA reporting a notably larger-than-expected build in crude yesterday. Lastly, natural gas (UNG, +0.1%) futures closed pit trading modestly higher after EIA reported a draw in-line with expectations. The data is summarized below:

EIA natural gas highlights:

• Natural gas inventory showed a draw of -152 bcf vs expectations for inventory to be a draw of approx. -153 bcf.
  
• Working gas in storage was 2,559 Bcf as of Friday, February 3, 2017, according to EIA estimates.
• Stocks were 325 Bcf less than last year at this time and 45 Bcf above the five-year avg of 2,514 Bcf.
• At 2,559 Bcf, total working gas is within the five-year historical range.

Baker Hughes (BHI, +0.5%) rig count data will be released tomorrow at 1 pm ET.

• Last week's data showed a US oil rig count increase for the third consecutive week in a row.
• US oil rigs have been added for 13 out of the past 14 weeks.
• The number of active U.S. rigs drilling for oil rose by 17 to 583 rigs last week.
• The rig count is at its highest level since Oct 2015.

Factors affecting the price of oil:

• Crude oil extended yesterday's post-EIA gains ahead of tomorrow's rig count data, shrugging off yesterday's builds in both crude & gasoline stocks.
• Oil prices saw a boost from Energy Information Administration data published yesterday showing gasoline inventories in the U.S. fell by 0.9 mln barrels in the most recent week, vs expectations for an increase.
• Gasoline implied demand rebounded last week, up 631k barrels a day to 8.941 mln barrels a day.
• The latest EIA data also showed U.S. crude production increased by 63k barrels a day last week to 8.98 mln barrels.
• Reminder: On Tuesday, the EIA predicted U.S. production growth of ~100k barrels a day this year from 2016, and another 500k barrels a day by 2018.

Other factors to consider:

• On Tuesday, EIA lowered their US crude oil production growth forecast to +0.3%, compared to last month.
  • EIA now expects US production to grow about 100k bpd to 8.98 mln barrels in FY17.
  • EIA also noted they expect US oil production to grow by 550k bpd in 2018.
• It is worth noting that the coordinated OPEC/non-OPEC production cuts call for a total output reduction of 1.8 mln barrels/day.
  • Russia has already cut 100k barrels/day and has committed to cut as much as 300k barrels/day as part of the agreement.
  • The total OPEC portion of the accord is expected to result in a reduction of ~1.2 mln barrels/day.
  • Saudi Arabia is expected to make up the bulk of the OPEC portion of the cut.
• On Monday, Iran reported they found a massive 15 bln barrel oil reserve & expect about 2 bln barrels to be recoverable.
  • Note that Iran has been raising their oil production since international sanctions over its nuclear program were lifted in 2016.

Notable Gainers:

• Oil & Gas Drilling & Exploration: Legacy Reserves (LGCY, +8%)
• Equipment and services: Newpark Resources (NR, +6%)
• Independent oil & gas: Fieldpoint Petroleum (FPP, +8%)
• Major-integrated: Encana (ECA, +6%)
• Refining & Marketing: HollyFrontier (HFC, +3%)
• Pipelines: Blueknight Energy Partners (BKEP, +4%)

Notable Laggards:

• Oil & Gas Drilling & Exploration: Vanguard Natural Resources (VNR, -14%)
• Equipment and services: National-Oilwell Varco (NOV, -0.3%)
• Independent oil & gas: US Energy (USEG, -3%)
• Major-integrated: Mitsui & Co (MITSY, -2%)
• Refining & Marketing: Ferrellgas Partners (FGP, -4%)
• Pipelines: Energy Transfer Equity (ETE, -4%)

Closing Energy Prices:

• Mar crude oil futures rose $0.62 (+1.2%) to $52.98/barrel
• Mar natural gas closed $0.02 higher (+0.6%) at $3.14/MMBtu
• Mar RBOB gasoline closed $0.02 higher (+1.3%) at $1.57/gallon
• Mar heating oil futures closed flat at $1.64/gallon

Earnings/News

• Total (TOT, +1.1%) beat on top and bottom lines; raised dividend by 1.6%
  • Reported a Q4 EPS of $0.96 vs $0.94 Capital IQ consensus; revs increased 14% YoY to $36.87 bln vs $33.68 consensus
• Occidental Petro (OXY, +1.8%) missed by $0.11, reported revs in-line
  
  • Reported a Q4 loss of $0.13 per share, $0.11 worse than the Capital IQ Consensus of ($0.02); revenues fell 0.6% year/year to $2.83 bln vs the $2.84 bln two analyst estimate.
  • Total avg daily production volumes were 607k BOE for the fourth quarter of 2016, compared to 605k BOE for the third quarter of 2016 and 680k BOE for the fourth quarter of 2015. The operations that were exited or sold produced avg daily volumes of 83k BOE for the fourth quarter of 2015, resulting in production volumes from on-going operations of 597k BOE.
• Precision Drilling (PDS, +1.5%) beat by CAD 0.05, beat on revs
  • Reported a Q4 loss of CAD $0.10 per share, excluding non-recurring items, CAD $0.05 better than the Capital IQ Consensus of (CAD $0.15); revenues fell 17.7% year/year to CAD $283.9 mln vs the CAD $265.77 mln Capital IQ Consensus.
• Halcon Resources (HK, +4.0%) commenced a $700 mln offering of senior unsecured notes due 2025
  • Co intends to use the net proceeds from the offering, together with additional borrowings under its senior secured revolving credit facility or cash on hand, to repurchase and/or redeem the co's $700 mln of currently outstanding 8.625% second lien notes due 2020.

Broker Calls

• Transocean (RIG, -0.7%) initiated with a Buy at R. F. Lafferty
• Baker Hughes (BHI, +0.4%) upgraded to Positive at Susquehanna

Treasuries Take Losses as Trump Talks Taxes

• U.S. Treasuries unwound all of Wednesday's gains today as global equities rallied and President Trump said that a tax plan would be announced in two to three weeks. Pessimism about the size and timing of fiscal stimulus has taken the mojo out of the reflation trade in recent weeks and Trump's remarks today, while far from conclusive, prompted Treasury selling, equity buying, and dollar buying. The U.S. economic data was light although initial jobless claims came within a hair of a 43-year low last week (234K). St. Louis Fed President Bullard remains an uber-dovish non-voter (irrelevant) and said that only one rate hike would probably be necessary in 2017. Chicago Fed President Evans (FOMC voter) said that three rate hikes this year may «not be unreasonable» and that inflation is moving towards target but remains too low. The $15 bln 30-year auction came out mostly as expected after the very weak result to Wednesday's 10-year auction. The U.S. Dollar Index is up 0.36% to 100.64 and the S&P 500 is 0.65% higher at 2,309.65, on track for all-time closing high
• Yield Check:
  
  • 2-yr: +3 bps to 1.18%
  • 5-yr: +6 bps to 1.87%
  • 10-yr: +8 bps to 2.40%
  • 30-yr: +6 bps to 3.01%

• News:
  
  • Initial jobless claims fell to within a whisker of their 43-year low of 233K last week. Claims for the week ending February 4 totaled 234K, below the Briefing.com consensus of 250K and the prior week's reading of 246K
    
    • Continuing jobless claims rose to 2078K for the week ending January 28 from the prior week's 2063K
  • U.S. wholesale inventories rose 1.0% m/m in December, matching both the Briefing.com consensus and November's growth
    
    • December marked the second straight month that wholesale inventories increased 1.0%, helping to explain the positive contribution the change in inventories made to Q4 GDP growth
    • Wholesale sales rose 2.6% m/m, the fastest growth since March 2011
  • Chicago Fed President Evans said this afternoon that he supports gradual rate hikes and that inflation needs to hit 2% for the Fed to maintain credibility
    
    • He went on to say that three rate hikes in 2017 «not unreasonable» but that inflation is too low, although it is moving in the right direction
  • St. Louis Fed President James Bullard (non-FOMC voter) said this morning that he does not expect the incoming administration's policies to overheat the U.S. economy in 2017
    
    • Bullard also said that he sees no undue inflation pressure building so far and that most of the undershooting of the Fed's 2% target was due to commodity prices
    • On the subject of the Fed's balance sheet, Bullard said, «A more natural normalization process [than the current Fed funds-based one] would allow the entire yield curve to adjust appropriately as normalization proceeds»
    • He also said that only one rate hike is necessary in 2017 and that no decision is imminent in any sense on balance sheet wind-down
  • $15 bln 30-year Treasury auction
    
    • High yield: 3.005% (when-issued: 3.007%)
    • Bid-to-cover: 2.25
    • Indirect bid: 66.2%
    • Direct bid: 4.9%

• Commodities:
  
  • WTI crude: +1.26% to $53.00/bbl.
  • Gold: -0.53% to $1,232.9/troy oz.
  • Copper: -0.28% to $2.659/lb.

• Currencies:
  
  • EUR/USD: -0.27% to 1.0660
  • USD/JPY: +1.16% to 113.27

• Data out Friday:
  
  • January Export Prices ex-agriculture and Import Prices ex-oil (08:30 ET)
  • February Michigan Sentiment — Preliminary (10:00 ET)
  • January Treasury Budget (14:00 ET)