Америка сегодня. Деловая активность в сфере услуг.

Ultimate Software, Paylocity (PCTY) both initiated with Neutral ratings at Mizuho  (194.03)

 Paycom Software initiated with a Buy at Mizuho  (55.20)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Asian Markets Close: Nikkei -0.5%, Hang Seng -0.7%, Shanghai -0.4%

Equity indices in the Asia-Pacific region ended weaker on Friday with equities appearing to decline in tandem with the weakness seen on Wall Street on Thursday. There were a handful of data points out of the region, but most of the news was of no consequence to the markets, with benign reactions to each release. The yen saw modest strength against the dollar during the session, but has since reverted back to just little changed. The volatility in the currency was minimal, with the USDJPY only seeing about a 40 pip range overnight. Traders in China also appeared to take a cautious approach to the equity markets, particularly with the People's Political Consultative Conference starting today (occurs every 5 years). 

• In economic data:
  • Aus
    • Feb AiG Performance of Service Index: 49.0 vs 54.4 in Jan
  • Japan
    • Jan National CPI +0.4% vs +0.4%e
    • Jan Jobless Rate: 3.0% vs 3.0%e
    • Feb Nikkei Services PMI: 52.2 vs 52.3 in Jan
  • China
    • Feb Caixin Services PMI: 52.6 vs 53.1 in Jan

---Equity Markets---

• In Japan, the Nikkei closed out the day down 0.5%, but still managed to post a weekly gain of ~1%. The yen saw modest strength against the dollar during the session, but has since reverted back to just little changed. Major exporters and energy stocks were among the weakest groups with the likes of Toshiba and Japan Petroleum both falling around 2% on the day. On the brighter side, Fast Retailing bucked the sentiment of the broader market, gaining nearly 3% after the co reported that same-store sales for February rose 5.2% YoY.
• In China, the Shanghai declined 0.4%. The People's Political Consultative Conference and a MoM drop in the February Caixin Services PMI set the tone across the mainland, leaving traders uninspired during Friday's session. Weakness in the Energy sector took its toll on the major average. Among the most notables were Sinopec (-2.6%) and China Petro and Chemical (-1.4%) each lagging the benchmark.
• In Hong Kong, the Hang Seng was among the worst performing indices, finishing the day down 0.7%. Financials outpaced the broader market on the downside. Among the most notable laggards were Bank of China and ICBC, both dropping over 1.5% on the day. 
• In India, the Sensex closed flat on the day. Among the sectors in the BSE, the Telecom index rose 1.2%, while Realty sector also witnessed strength with a gain of 0.9%. Other notable movers in India included Reliance Industries (+2%) and Bharti Infratel (+6%), with both companies benefiting from broker upgrades.

---FX---

• USDJPY +0.1% to 114.51
• USDCNY +0.1% to 6.8990
• USDINR +0.1% to 66.8050

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Overnight Treasury Summary

Treasuries Slide Again Ahead of ISM Services

• U.S. Treasuries are set to open lower again this morning as traders brace themselves for the 10:00 ET release of the ISM Non-Manufacturing Index. Overnight, international economic data showed that China's service sector grew at a slower-than-expected rate in February while Japanese household spending exceeded estimates in January. German retail sales unexpectedly dropped in January but service sector purchasing managers' index data showed improvement in Italy and Spain during February. The services PMI in the U.K. missed forecasts for February but survey data across Europe remains generally strong. IHS Markit said that the eurozone economy is «firing on all cylinders.» In addition to the ISM report, Fed Chair Yellen, Fed Vice Chair Fischer, and Chicago Fed President Williams, who all vote on FOMC decisions, are set to speak publicly today. The big story of this week remains the dramatic shift in Fed funds futures to price in an overwhelming probability for a rate hike at the March 14-15 FOMC meeting. The S&P 500 is set to open down 0.13% to 2,378.9 and the U.S. Dollar Index is losing 0.31% to 101.88. WTI crude is up 0.23% to $52.73/bbl. and gold is down 0.47% to $1,227.1/troy oz.
• Yield Check:
  
  • 2-yr: +2 bps to 1.33%
  • 5-yr: +2 bps to 2.04%
  • 10-yr: +3 bps to 2.50%
  • 30-yr: +1 bp to 3.09%

• News:
  
  • China's Caixin Services PMI unexpectedly fell to 52.6 for February from 53.1 in January
  • In Japan, household spending grew by 0.5% m/m in January (-1.2% y/y), beating estimates and reversing most of December's 0.6% slide
    
    • The National Core CPI was up 0.1% y/y in January, exceeding economists' estimates (-0.2% y/y in December)
    • The Tokyo Core CPI was down 0.3% y/y in February, missing expectations (-0.3% y/y in January)
    • Japan's unemployment rate fell to 3.0% in January from 3.1% in December, as expected
    • An index of household confidence in Japan fell to 43.1 in February from 43.2 in January
  • Russia's Markit Services PMI fell to 55.5 for February from 58.4 in January
  • Turkish consumer price inflation rose to 101.1% in February from 9.2% in January, the highest rate in five years
  • Eurozone retail sales fell by 0.1% m/m in January (+1.2% y/y), missing estimates for growth after a 0.5% slide in December
    
    • The eurozone's services purchasing managers' index was revised down to 55.5 for February from the preliminary reading of 55.6. January's print was 53.7
      
      • On a national basis, big jumps in Italy and Spain were offset by disappointing readings in other countries
  • German retail sales dropped by 0.8% m/m in January (+2.3% y/y), missing forecasts for growth after a 0.9% decline in December
  • Italy's GDP grew by 0.2% q/q in the fourth quarter (1.0% y/y), in line with both expectations and Q3's rate
  • The U.K.'s services PMI fell more than expected to 53.3 for February from 54.5 in January
  • Brazil's IPC-Fipe Inflation Index fell by 0.08% m/m in February after a 0.32% jump in January. Economists had expected a smaller decline

• Data out Today:
  
  • February ISM Services (10:00 ET)
• Fed Speakers:
  
  • Chicago Fed President Evans (FOMC voter) (10:15 ET)
  • Richmond Fed President Lacker (non-FOMC voter, retiring this year) (10:15 ET)
  • Fed Vice Chair Fischer (FOMC voter) (12:00 ET)
  • Fed Chair Yellen (FOMC voter) (13:00 ET)

 Marvell color on quarter  (15.85)

• Needham — Needham noted they are warming up to the story, as the new management team continues to execute on transforming the biz. Margins continue to beat on the upside as management drives a richer product mix, executes on operational efficiencies, & streamlines OPEX. As a result, Needham now sees a clear path to 60% GM & mid-20% OM & possibly higher. Management has also stepped up its capital return program, returning over $155 mln to shareholders in buybacks & dividends in F4Q18. Their long hesitation on MRVL remains rev growth, & they expect this to be a highlight of next week's Analyst Day, in which Needham also noted they anticipate management will expand on potential growth drivers; reiterates Hold.

— Shares of MRVL +3.3% pre-market.

 

 

 Natl Oilwell Varco upgraded to Buy from Hold at Argus  (40.29)

 

 S&P futures vs fair value: -2.00. Nasdaq futures vs fair value: -11.10.

Equity futures trade flat this morning following Thursday's mild pullback and ahead of comments from Fed Chair Janet Yellen, who will speak today at 1:00 pm ET. The S&P 500 futures trade two points below fair value.

The Fed funds futures market now assigns an implied probability of 77.5% to a March rate hike, up from 26.6% last Friday, following hawkish comments from New York Fed President Dudely (FOMC voter) and Fed Governor Brainard (FOMC voter) earlier in the week. All eyes will be on Ms. Yellen this afternoon, looking for her to confirm the possibility of policy tightening before the Fed enters the blackout period ahead of the March 14-15 meeting.

Also of note, Chicago Fed President Evans (FOMC voter), Richmond Fed President Lacker (non-FOMC voter), Fed Governor Powell (FOMC voter), and Fed Vice Chair Fischer (FOMC voter) are also scheduled to speak on Friday.

U.S. Treasuries trade lower this morning along with the U.S. dollar. The benchmark 10-yr yield is two basis points higher at 2.50% while the U.S. Dollar Index (101.86, -0.29) is down 0.3%.

Crude oil trades flat in early action following its 2.3% slide on Thursday. For the week, the energy component shows a loss of 2.5% as an uptick in U.S. drilling has overshadowed strong OPEC supply cut compliance. WTI crude currently trades at $52.64/bbl.

Friday's lone economic report, February ISM Services (Briefing.com consensus 56.5%), will cross the wires at 10:00 am ET.

In U.S. corporate news:

• Costco (COST 171.34, -6.64): -3.7% after missing revenue estimates.
• Big Lots (BIG 55.00, +2.75): +5.3% after reporting better than expected earnings and issuing above-consensus earnings guidance. The company also approved a $150 million share repurchase and raised its dividend.
• Snap (SNAP 24.90, +0.37): +1.5% following the company's much anticipated IPO on Thursday.

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region ended weaker on Friday with equities appearing to decline in tandem with the weakness seen on Wall Street on Thursday. Japan's Nikkei -0.5%, China's Shanghai Composite -0.4%, Hong Kong's Hang Seng -0.7%, India's Sensex unch.
  • In economic data:
    • Australia
      • Feb AiG Performance of Service Index: 49.0 vs 54.4 in Jan
    • Japan
      • Jan National CPI +0.4% vs +0.4%e Jan Jobless Rate: 3.0% vs 3.0%e Feb Nikkei Services PMI: 52.2 vs 52.3 in Jan
    • China
      • Feb Caixin Services PMI: 52.6 vs 53.1 in Jan
  • In news:
    • Traders in China appeared to take a cautious approach to the equity markets with the People's Political Consultative Conference starting today (occurs every 5 years).

 On The Wires

• FIBRIA CELULOSE S.A. (FBR) hereby informs its shareholders and the market in general that as approved by its Board of Directors in the meeting held on November 30, 2016, the execution, on February 27th, 2017, of an affreightment agreement of 5 vessels (Consecutive Voyage Contract — CVC) with Pan Ocean Co. Ltd at a total estimated amount of approximately $636 million, diluted over the period the service is provided. The Contract will come into force on the date of its execution with provision for its termination in 2035, and may be extended for a period of 5 or 10 years at Fibria's sole discretion.
• As previously disclosed, Geron (GERN) and certain of its officers have been named as defendants in a consolidated class action securities lawsuit pending in the United States District Court for the Northern District of California. On March 2, 2017, the parties to the Securities Class Action, through their respective counsel, executed a Stipulation and Agreement of Settlement and related documents formalizing an agreement to settle the Securities Class Action. Under the Stipulation, in exchange for the dismissal with prejudice of all claims against all defendants in connection with the Securities Class Action, the Company has agreed to settle the Securities Class Action for $6.25 million in cash. The Company expects $6.0 million of the settlement amount to be paid by the Company's insurance providers and the remaining $250,000 to be paid by the Company.

 

 

 European Summary

Eurozone Service Sector Activity Remains Strong

• European sovereign debt is trading lower this morning as the euro remains relatively firm in the face of a hawkish turn this week at the U.S. Federal Reserve. Purchasing managers' indices for the eurozone service sector are showing robust growth there and euro-currency bears should surely be disappointed that the euro has failed to break its January 2 low despite fresh signs of interest rate policy divergence. Germany's two-year schatz yield is up to -0.82% today from a low of -0.95% on Friday. In the French presidential contest, support for Francois Fillon is falling and this should help anti-Marine Le Pen voters to coalesce around Emmanuel Macron. Of course, France's election will have a run-off round in May following the first round in April, so there is no spoiler role for third place candidates. Any boost for Macron would be more like that of a U.S. presidential candidate avoiding a drawn out primary
• European Economic Data:
  
  • Eurozone retail sales fell by 0.1% m/m in January (+1.2% y/y), missing estimates for growth after a 0.5% slide in December
    • German retail sales dropped by 0.8% m/m in January (+2.3% y/y), missing forecasts for growth after a 0.9% decline in December
  • The eurozone's services purchasing managers' index was revised down to 55.5 for February from the preliminary reading of 55.6. January's print was 53.7
    
    • France: revised down to 56.4 from 56.7 (54.1 in January)
    • Germany: confirmed at 54.4 (53.4 in January)
    • Italy: 54.1 (52.4 in January)
    • Spain: 57.0 (54.2 in January)
  • Italy's GDP grew by 0.2% q/q in the fourth quarter (1.0% y/y), in line with both expectations and Q3's rate
  • The U.K.'s services PMI fell more than expected to 53.3 for February from 54.5 in January
• Yield Check:
  
  • France, 10-yr OAT: +2 bps to 0.95%
  • Germany, 10-yr bund: +4 bps to 0.36%
  • Greece, 10-yr note: +3 bps to 6.96%
  • Italy, 10-yr BTP: unch at 2.13%
  • Portugal, 10-yr PGB: unch at 3.94%
  • Spain, 10-yr ODE: +2 bps to 1.70%
  • U.K., 10-yr gilt: -2 bps to 1.12%

 Autodesk target raised to $99 from $94 at Griffin Securities following the Q4 print  (87.32)

 Autodesk: Color on Quarter  (87.32)

• RBC raises their price target to $87 from $84, reiterates Sector Perform.  They note that Fourth quarter results were slightly ahead while lower revenue, profitability and subscriber targets for FY/18 are likely to be more in focus. We still look for the transition and numbers to be someone volatile over the near term, though additional incentives should help drive subscription adoption as the company remains confident in longer-term targets. 
• Wedbush reduces their price target to $78 from $80, reiterates Neutral.  They note ADSK's 4Q results and commentary contained both positives and negatives. They're encouraged by key metrics and management commentary on the opportunity to convert maintenance customers to product subscriptions, as well as upcoming maintenance price increases over the next several years and the opportunity to convert «unconscious» piracy (e.g. pirated use of ADSK by 1.2M users at known customer accounts). More negative, guidance for headline revenue and EPS was surprisingly weak, and well below levels suggested by the company's last full presentation of its future trajectory 16 months ago. Given improvements in global PMIs, potential U.S. infrastructure investments, and the likelihood that ADSK results will now be more consistently increasing Q/Q, they would like to be more positive. However, they think ADSK's ability to hit its long-term targets is still more of a leap of faith rather than a modeling exercise with high-confidence inputs, and we're on the sidelines until the company's model transition can settle into a more consistent, predictable pattern.

Shares are trading 1.6% lower in pre-market trading

 

 

 Wingstop: Color on Quarter  (26.65)

• Wedbush stays at Outperform, maintains $36 PT. The firm expects upside to lowered expectations, driven by both SSS growth and margin outperformance. Moreover, the firm believes a growing understanding of WING's recurring special dividends is poised to drive increased appreciation of Wingstop's unique business model, and a rising premium to peers. Given Q1 quarter-to-date SSS growth of -2.6%, the firm believes 2017 guidance for low single-digit domestic SSS growth is likely to result in a meaningfully lowered consensus estimate relative to the current 3.7%.

WING shares are currently down ~7% around the 25 level following the comps miss. Short interest as % of float was ~23% as of February 15 according to Factset.

 

 

 

 Gapping up

Gapping up
In reaction to strong earnings/guidance:

• HABT +15.9%, BIG +5.3%, SNDX +3.9%, MRVL +3.3%, SYN +3.1%, EVC +2.7%, GWRE +2.4%, ABR +1.2%, SPKE +1.1%

Select EU financial related names showing strength:

• ING +4.4%, BBVA +4%, DB +3.3%, CS +3.3%, SAN +2.4%

Select metals/mining stocks trading higher:

• VALE +5.4%, GFI +2.8%, BBL +1.8%, BHP +1.7%, CLF +1.7%, RIO +1.5%

Other news:

• BIOS +6.8% (enters into a Stock Purchase Agreement for the sale of an aggregate of 3,300,000 shares of its common stock for aggregate gross proceeds of $5,070,780 in a private placement)
• PPHM +6.2% (indicated higher after Ronin Capital discloses 6.8% active stake; may also wish to engage in a dialogue with officers, directors, and other representatives )
• VTTI +3.5% (VTTI Energy Partners receives a proposal from VTTI B.V. pursuant to which VTTI would acquire through a wholly owned subsidiary all publicly held common units of the Partnership in exchange for $18.75/unit )
• OCLR +3.5% (continued strength)

Analyst comments:

• ADSW +1.7% (upgraded to Buy at BofA/Merrill)

 

 

 

 

 S&P futures vs fair value: -1.50. Nasdaq futures vs fair value: -11.40.

The S&P 500 futures trade two points below fair value.

Equity indices in the Asia-Pacific region ended weaker on Friday with equities appearing to decline in tandem with the weakness seen on Wall Street on Thursday. There were a handful of data points out of the region, but most of the news was of no consequence to the markets, with benign reactions to each release. The yen saw modest strength against the dollar during the session, but has since reverted back to just little changed. The volatility in the currency was minimal, with the USDJPY only seeing about a 40 pip range overnight. Traders in China also appeared to take a cautious approach to the equity markets, particularly with the People's Political Consultative Conference starting today (occurs every 5 years). 

• In economic data:
  • Aus
    • Feb AiG Performance of Service Index: 49.0 vs 54.4 in Jan
  • Japan
    • Jan National CPI +0.4% vs +0.4%e
    • Jan Jobless Rate: 3.0% vs 3.0%e
    • Feb Nikkei Services PMI: 52.2 vs 52.3 in Jan
  • China
    • Feb Caixin Services PMI: 52.6 vs 53.1 in Jan

---Equity Markets---

• In Japan, the Nikkei closed out the day down 0.5%, but still managed to post a weekly gain of ~1%. The yen saw modest strength against the dollar during the session, but has since reverted back to just little changed. Major exporters and energy stocks were among the weakest groups with the likes of Toshiba and Japan Petroleum both falling around 2% on the day. On the brighter side, Fast Retailing bucked the sentiment of the broader market, gaining nearly 3% after the co reported that same-store sales for February rose 5.2% YoY.
• In China, the Shanghai declined 0.4%. The People's Political Consultative Conference and a MoM drop in the February Caixin Services PMI set the tone across the mainland, leaving traders uninspired during Friday's session. Weakness in the Energy sector took its toll on the major average. Among the most notables were Sinopec (-2.6%) and China Petro and Chemical (-1.4%) each lagging the benchmark.
• In Hong Kong, the Hang Seng was among the worst performing indices, finishing the day down 0.7%. Financials outpaced the broader market on the downside. Among the most notable laggards were Bank of China and ICBC, both dropping over 1.5% on the day. 
• In India, the Sensex closed flat on the day. Among the sectors in the BSE, the Telecom index rose 1.2%, while Realty sector also witnessed strength with a gain of 0.9%. Other notable movers in India included Reliance Industries (+2%) and Bharti Infratel (+6%), with both companies benefiting from broker upgrades.

European bourses opened lower but have managed to pull off of the early session lows. The major indices initially trading with a similar tone as Asia, but buyers stepped in a couple of hours into the session. Although there was no clear catalyst to point to the bid in the markets, traders may have been enticed by a relatively weak set of macro-related releases across the region. Among the most notable events were weaker than expected Services PMI readings, coupled with a miss in German Retail Sales. Corporate earnings slowed down considerably, leaving regional economic data to take center stage overnight.

• In economic data:
  • Germany
    • Jan Retail Sales -0.8% vs +0.3%e
    • Feb Final Services PMI 54.4 vs 54.4 prelim
  • Italy
    • Q4 Final GDP +0.2% vs +1.1%e
  • Eurozone
    
    • Feb Final Services PMI 55.5 vs 55.6 prelim
    • Jan Retail Sales +1.2% vs +1.5%3
  • UK
    • Feb Final Services PMI 53.3 vs 54.0e

---Equity Markets---

• UK's FTSE is down 0.2%, extending losses from yesterday. Old Mutual (+1.7%) is among the day's leaders while WPP (-8.6%) has plummeted after releasing Q4 results.
• Germany's DAX trades lower by 0.3%. Lenders such as Deutsche Bank and Commerzbank trade higher by 1.2% and 3.3%, respectively. The laggards include Merck (-1.2%) and Fresenius Medical Care (-0.7%).
• France's CAC is up 0.5% and leading the charge with the heavily weighted banking stocks representing the biggest gains. Soc Gen has set the tone, gaining by more than 4.0%, while BNP is a close second, trading 3.0% higher. The list of laggards is thin, however Publicis is down over 1.0% in sympathy with WPP. ArcelorMittal is also down, trading lower by 0.8%, after HSBC painted a less than stellar outlook on iron ore prices.

 Nutanix: Color on Quarter  (31.12)

• RBC Capital Mkts lowers their NTNX tgt to $34 from $38. Despite upside to most metrics, large NA deals were a tad light due to lower rep productivity. In the big picture they're not overly concerned as they expect productivity to improve and were impressed with the record customer adds and strong G2K wins. Q3 guidance comes down slightly due to conservatism and increasing component costs. Maintain OP but lower target to $34.'
• Maxim: Despite modest beat & in-line guidance, management candidly discusses disappointing sales performance. Primary concern is that DELL is pushing VMW over NTNX, but data points suggest DELL commitment to NTNX remains as strong as ever.
• Needham notes that it's easy for investors and the Street to be distracted by lower guidance when it involves disruptive hypergrowth cos like Nutanix. However, they believe the issues weighing on F3Q guidance (changes in sales leadership impacting deals >$500K and DRAM pricing) and should not impact the co long term. NTNX remains extremely well run, in their view, and is strategically positioned to continue to innovate their cloud OS platform further into bringing cloud economics and features to the on-prem/hybrid world. Further, NTNX reiterated its plan to achieve SUSTAINED FREE CASH FLOW by the end of C2017, removing a prime concern of investors. They reiterate their Buy and $36 target and believe investors should use any guidance-driven pullbacks to build or add to positions in the name.
• Morgan Stnaley downgraded to Underweight
• NTNX -18% premarket.

 S&P futures vs fair value: +0.30. Nasdaq futures vs fair value: -6.80.

Equity futures point to a flat open this morning as investors await comments from Fed Chair Janet Yellen, who is scheduled to speak this afternoon at 1:00 pm ET. The S&P 500 futures currently trade in line with fair value.

Ms. Yellen's upcoming speech has generated the most buzz this morning as market participants have geared up for a March rate hike as of late following hawkish comments from several Fed policy makers earlier in the week. Investors will be watching Ms. Yellen closely, looking for her to confirm the possibility of policy tightening before the Fed enters the blackout period ahead of the March 14-15 meeting.

Also of note, Chicago Fed President Evans (FOMC voter), Richmond Fed President Lacker (non-FOMC voter), Fed Governor Powell (FOMC voter), and Fed Vice Chair Fischer (FOMC voter) are also scheduled to speak on Friday.

Both the Treasury market and the U.S. dollar trade in the red this morning ahead of today's slew of Fed speakers. The benchmark 10-yr yield is one basis point higher at 2.49% while the U.S. Dollar Index (101.84, -0.32) trades lower by 0.3%.

On the earnings front, Costco (COST 170.92, -7.06) has tumbled 4.0% in pre-market trade after reporting worse than expected earnings. Conversely, Big Lots (BIG 54.85, +2.60) has jumped 5.0% after beating earnings estimates and issuing above-consensus earnings guidance. BIG also approved a $150 million share repurchase and raised its dividend.

Friday's lone economic report, February ISM Services (Briefing.com consensus 56.5%), will cross the wires at 10:00 am ET.

 ACI Worldwide downgraded to Market Perform from Outperform at Avondale  (22.81)

 

 

 

 

 On The Wires

• Angsana Molecular & Diagnostics has announced that it will be a partner molecular test laboratory for STARTRK-2 clinical trial sites in Asia working with Ignyta, (RXDX), a biotechnology company focused on precision medicine in oncology. Angsana Molecular & Diagnostics' RNA-based fusions cancer panel will be used for screening TRK, ROS1 and ALK fusions in the STARTRK-2 clinical trial, a registration-enabling global Phase 2 basket clinical trial for entrectinib, Ignyta's investigational, orally available, CNS-active tyrosine kinase inhibitor targeting tumors that harbor TRK, ROS1 or ALK fusions.
• On March 2, 2017, The Bank of Nova Scotia (BNS) entered into a private agreement with an arm's length third party seller to purchase for cancellation 1,000,000 of the Bank's common shares held by such seller for an aggregate purchase price of CAD$70,840,000.
• Trans World Entertainment Corporation (TWMC) Founder, Chairman and former CEO Robert J. (Bob) Higgins died on March 1st, 2017. He was 75 years old. Trans World CEO Mike Feurer stated, «All of us at Trans World were deeply saddened by the passing of our Founder Bob Higgins. Serving as its relentless champion, Bob was very proud of Trans World Entertainment and all of its Associates. His never-ending drive to excellence, determination, and commitment to our Company is the standard that will inspire and stay with us as we honor the legacy he created over the last 45 years. On behalf of our Board of Directors, Management team and all of our Associates across the country, we mark Bob's passing, mourn his loss, celebrate his renown and extend our deepest sympathies to his wife, Anne, and the entire Higgins family.»

 

 

 

 Morning Commodities: Crude oil attempting to recover after yesterday's close below the 50-day moving avg for the continuous contract; rig count on tap 1 pm ET

• Crude oil attempting to recover after yesterday's close below the 50-day moving avg for the continuous contract; rig count on tap at 1 pm
  
  • April crude oil futures were up about $0.38 (+0.7%) around the $52.99/barrel level
  • Baker Hughes rig count data will be released today at 1 pm ET.
  • Reminder: Last week's data showed an increase of 5 oil rigs following the prior week's increase of 6 rigs, bringing the total oil rig count to 602 rigs, & marking a 6th consecutive week of oil rig increases.
• Natural gas inched modestly higher after yesterday's flat close post-EIA
  • April natural gas futures were up about $0.02 (+0.6%) around the $2.82/MMBtu level
• In precious metals, gold dropped to a fresh 1 1/2 week low in morning pit trading, down for the 4th consecutive session despite renewed weakness in the dollar index
  • April gold futures were down about $7.10 (-0.6%) around the $1225.50/oz level
  • May silver futures were up about $0.01 (+0.1%) around the $17.77/oz level
• The dollar index was -0.3% around the 101.87 level
  
  • Commodities, as measured by the Bloomberg Commodity Index, were -0.1% around the 86.87 level.

 Sector Summary: Technology (XLK -0.25%) trading lower today, about in-line with the broader market decline

The tech sector — XLK — trades about in-line with the broader market. Semiconductors, meanwhile, display relative weakness as the SOX index trades -0.48%. Within the SOX index, MU (+2.00%) outperforms, while AMD (-5.61%) lags. Among other major indices, the SPY is trading 0.21% lower, while the QQQ -0.30% and the NASDAQ -0.56% trade modestly lower on the session. Among tech bellwethers, ORAN (+1.33%) is showing relative strength, while ACN (-0.94%) lags.

Notable gainers following earnings:

• GWRE (+2.7%) reported better than expected Q2 EPS and revs; guided Q3 EPS and revs below market expectations; guided FY17 EPS ahead of market expectations, MRVL (+1.1%)

Notable laggards following earnings:

• NTNX (-18.7%) reported better than expected Q2 EPS and revs but guided Q3 EPS below market expectations, IMMR (-18.4%), ADSK (-1.7%)

Gainers on news:

• HPE (+1.3%) co disclosed the board set a record date of Mar 20, 2017 for the previously announced spin-off of its enterprise services business.
• TERP (+0.7%) co secured an additional $86 mln expansion of project financing for power plants in Canada.
• COMM (+0.3%) co priced its offering of $750 million in aggregate principal amount of 5.000% senior unsecured notes due 2027.

Laggards on news:

• EIGI (-3.6%) co disclosed that COO Ronald LaSalvia resigned effective immediately.
• GRUB (-2.9%) co disclosed that on Mar 1, 2017 the Board appointed Stanley Chia to the position of COO.
• ADS (-0.6%) co proposed to offer EUR 300 mln aggregate principal amount of senior notes due 2022.

Among notable analyst upgrades:

• EXPE (+0.5%) upgraded to Neutral from Sell at Citigroup
• SEDG (+0.4%) to Mkt Outperform from Mkt Perform at JMP Securities

Among notable analyst downgrades:

• CIEN (-2.4%) downgraded to Neutral from Buy at BofA/Merrill
• PANW (-0.8%) to Hold from Buy at Argus
• NTNX (-18.7%) to Underweight from Equal Weight at Morgan Stanley
• IMMR (-18.4%) to Hold from Buy at Craig Hallum
• ACIW (-5.7%) to Market Perform from Outperform at Avondale
• AUO (-1.3%) to Underperform from Mkt Perform at Bernstein
• LPL (+0.2%) to Underperform from Mkt Perform at Bernstein

Scheduled to report earnings tomorrow morning:

• NOVT

 

 

 Economic Summary: ISM Services above expectations; Yellen to speak today at 13:00 ET

Economic Data Summary:

• February ISM Services 57.6 vs Briefing.com consensus of 56.5%; January was 56.5%

Fed/Treasury Events Summary:

• Fed's Lacker said risks in costs of losing control of inflation; sees value in pre-emptive rate hikes
• Commerce Secretary Wilbur Ross expressed support for border adjustment tax in CNBC interview, but fate of tax in Congress is unclear; said he thinks Mexico Peso will increase following sensible trade deal with the United States.

Upcoming Economic Data:

• January Factory Orders due out Monday at 10:00 (December was +1.3%)

Upcoming Fed/Treasury Events:

• Fed's Powell to speak at 12:15 ET
• Fed's Vice Chair Stanley Fischer to speak at 13:00 ET
• Fed's Janet Yellen to speak at 13:00 ET

Other International Events of Interest

• Germany Jan Retail Sales -0.8% vs +0.3%

 Hearing FS Investment was downgraded to Market Perform from Outperform at Wells Fargo  (10.07 -0.28)

 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:

• CIEN Apr 27 calls are seeing interest following downgrade to Neutral at BofA/Merrill with 2860 contracts trading vs. open int of 2330, pushing implied vol up around 3 points to ~43% — over 2200 contracts traded in a single transaction. Co is confirmed to report earnings next week, March 8 before the open.

Puts:

• LDOS Apr 50 puts are seeing interest with 1620 contracts trading vs. open int of 110, pushing implied vol up around 3 points to ~25% — co is expected to report earnings late April (likely outside of expiration).

Stocks seeing volatility selling:

• BIG, LXRX implied vol is lower following earnings/guidance

Sentiment: The CBOE Put/Call ratio is currently: 0.78… VIX: (11.36, -0.45, -3.8%).
March 17 is options expiration — the last day to trade March 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.

 Fred's seeing continued weakness following Feb sales   (16.79 -1.53)

• Adding to today's decline is WBA/RAD concerns. RAD filed Proxy Statement before the open but did not provide specific date for the special meeting of stockholders of Rite Aid Corporation. 
• FRED -8% today (-10.5% over the past two trading days), RAD is -2.4% on the day, WBA -1.2%

 

 

 

 

 Rumor Round Up

Rumor Activity was active today to close out the week.

• GNC Holdings (GNC 8.43 +0.47) private equity chatter circulated.
• Reuters reported that Hudson Bay (HBAYF 8.77 -0.35) has not yet secured financing for Macy's bid.
• Bloomberg reported that Deutsche Bank (DB 20.17 -0.04) is considering options for a capital increase.
• Pandora (P 12.79 +0.36) M&A speculation circulated.
• Netflix (NFLX 139.35 -0.18) strength attributed to renewed M&A /TV deal chatter.
• Reuters discussed that Neiman Marcus has hired restructuring advisers.

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 in-line with the broader market

The Industrials sector (XLI) is trading -0.1% today, in-line with the broader market (SPY -0.1%). In a slow day for the Industrial Sector, In't Consolidated Airlines Group (ICAGY +0%) reports February traffic.

Earnings/Guidance

• Mentor Graphics (MENT +0.1%) reports Q4 earnings of $1.21 per share, excluding non-recurring items, $0.18 better than the consensus of $1.03; revenues rose 41.7% year/year to $478 mln vs the $414.4 mln consensus.
• L.B. Foster (FSTR -2.8%) reports Q4 sales decreased 23.4% YoY to $106.6 mln, net loss per share widened to ($3.97). There are no estimates for L.B. foster. 
• NEFF (NEFF -5.8%) reports Q4 earnings of $0.32 per share, excluding non-recurring items, $0.07 worse than the consensus of $0.39; revenues fell 3.6% year/year to $102.3 mln vs the $102.32 mln consensus.

News

• Int'l Consolidated Airlines Group (ICAGY +0.0%) reports February traffic data; Group traffic in February increased by 2.9% YoY.
  • Group traffic in February, measured in Revenue Passenger Kilometres, increased by 2.9% versus February 2016; Group capacity measured in Available Seat Kilometres rose by 2.2 per cent. Group premium traffic for the month of February increased by 4.7 per cent compared to the previous year.
• Commerce Secretary Wilbur Ross says on CNBC that Caterpilar (CAT +0.5%) search was part of an ongoing probe.

Broker Research

Upgrades

• SolarEdge Technologies (SEDG +0.7%) upgraded to Mkt Outperform from Mkt Perform at JMP Securities.
• Advanced Disposal (ADSW +2.7%) upgraded to Buy from Neutral at BofA/Merrill.
• Emerson (EMR +0.1%) upgraded to Hold from Reduce at HSBC Securities.
• Aegean Marine Petrol (ANW +3.3%) upgraded to Buy from Neutral at Clarkson Platou

Other

• Cowen initiates GATX (GATX +0.1%) with a Market Perform and price target of $62.
• Covanta (CVA -6.1%) initiated with a Sell at Goldman; tgt $12.50. 

 

 

 Currency Commentary: Yellen on Deck

• The Dollar Index dipped back below the 102 level but is holding steady at 101.70. Markets are awaiting comments from Fed Chair Janet Yellen as she speaks in Chicago at 1pm ET. So far we have heard from the Fed's Lacker and Evans who both continued the hawkish rhetoric as the Fed primes the market for a potential March rate hike. There has been some early whispers that Fed Chair Janet Yellen may strike a more dovish tune just to provide some wiggle room for the central bank. Fischer and Powell will also be speaking as a busy Fed calendar unwinds. This marks the last comments we will get as we enter the quiet period ahead of the Fed's March meeting.
• The euro is holding the 1.05 support level at the moment. The single currency has been bolstered by the latest polls from France which shows Emmanuel Macron moving ahead of Marine Le Pen in first round voting. Retail Sales data from the region was weak but it is not garnering a lot of attention. The market focus will turn to next Thursday's ECB meeting. Markets will be paying close attention to Draghi comments on inflation. In general, little is expected from the meeting as the ECB is expected to hold steady ahead of the FOMC.
• The pound is attempting to hold the 1.22 area as it remains under pressure. The Service PMI fell short of expectations, hitting a five month low. The focus will remain on when the country initiates Article 50. This is expected at the end of March and is likely to remain a headwind for cable.
• The yen has hit its lowest level in two weeks. At the moment the 50-sma (114.51) is being tested and is showing some signs of potentially cracking. CPI data this morning was mixed to in line and Household Spending fell short of expectations.
• The yuan is testing the low end of its recent ban of 6.80-6.90 as it hits its lowest level in approx seven weeks. The move comes ahead of the National Congress meeting which starts Sunday. The government is expected to provide a growth target of 6.5-7.0% for 2017. Comments around trade and the new U.S. Administration will be of interest (BONDX, FOREX). 

 

 

 

 

 Today's biggest point gainers/losersBiggest point gainers: TSRO 179.26(5.22), NTES 293.23(3.85), AAOI 52.84(3.61), INCY 135.88(3.08), BIIB 296.59(3), SNAP 27.28(2.8), BUD 108.29(2.44), HABT 16.08(2.28), TPX 48.07(2.26), UAL 75.44(2.16), PXD 193.3(2.13), ALK 98.46(2.1), LGND 103.88(1.92), BIG 54.15(1.9), ACIA 53.19(1.89), BITA 21.78(1.82), LECO 87.29(1.81), CLVS 61.63(1.74), GS 252.8(1.74), IONS 55.26(1.7), ALB 104.74(1.68), CSL 105.59(1.61), AVGO 218.9(1.61), XIV 66.26(1.57), GEF 54.77(1.56)

Biggest point losers: COST 170.84(-7.14), NTNX 24.68(-6.44), COO 195.87(-5.27), PLCE 99.3(-3.3), REN 43.94(-3.06), PRTA 57.27(-2.8), KITE 72.39(-2.71), AYI 211.65(-2.36), GKOS 45.37(-2.33), FRED 16.16(-2.16), KPTI 11.75(-2.09), SPG 179.15(-1.99), REG 67.14(-1.99), CHTR 322.03(-1.92), PRGO 73.66(-1.9), AAP 155.49(-1.87), RCL 94.91(-1.79), MLM 217.23(-1.79), M 31.53(-1.7), EDU 49.62(-1.63), ORLY 270.43(-1.55), TDOC 22(-1.55), SHAK 33.66(-1.51), GD 189.58(-1.47), HLT 56.71(-1.46)