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Markets Morning Briefing

Markets Morning Briefing

Daily Morning Prep

26th November 2019

Even-keeled tone sets stage for flattish open

The S&P 500 futures trade roughly in-line with fair value after another record-setting day on Wall Street yesterday. Futures were up as much as 0.4% above fair value after China’s Xinhua News Agency reported that top trade negotiators held a phone call last evening. 

Both the U.S. and China reportedly reached an agreement in that call to continue to work toward resolving key issues for a Phase One trade agreement. The market, which already expects both sides to talk until a deal is reached, has justifiably tempered its initial enthusiasm but will likely continue to react to trade headlines moving forward. 

On the data front, investors will receive the Advance reports for International Trade in Goods, Retail Inventories, and Wholesale Inventories at 8:30 a.m. ET, followed by the FHFA Housing Price Index for September and the S&P Case-Shiller Home Price Index for September (Briefing.com consensus 2.6%) at 9:00 a.m. ET.

After the open, investors will receive the Conference Board’s Consumer Confidence Index for November (Briefing.com consensus 126.9) and the New Home Sales report for October (Briefing.com consensus 710,000) at 10:00 a.m. ET. 

U.S. Treasuries have extended yesterday’s modest advance, pushing yields slightly lower again this morning. The 2-yr yield is down two basis points to 1.59%, and the 10-yr yield is down one basis point to 1.75%. The U.S. Dollar Index is little changed at 98.30. WTI crude is up 0.2%, or $0.13, to $58.14/bbl. 

In U.S. Corporate news:

  • Best Buy (BBY 77.45, +3.20): +4.3% after beating earnings estimates. 
  • Dollar Tree (DLTR 104.00, -8.39): -7.5% after missing earnings estimates and providing soft earnings guidance. 
  • Dick’s Sporting Goods (DKS 44.79, +5.36): +13.6% after beating top and bottom-line estimates and guiding FY20 EPS above consensus. 
  • Burlington Stores (BURL 211.67, +3.41): +1.6% after beating earnings estimates and raising its FY20 EPS guidance above consensus. 

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region ended Tuesday on a mixed note. Japan’s Nikkei +0.4%, Hong Kong’s Hang Seng -0.3%, China’s Shanghai Composite UNCH, India’s Sensex -0.2%, South Korea’s Kospi -0.1%, Australia’s ASX All Ordinaries +0.8%.
    • In economic data:
      • Japan’s October Corporate Services Price Index +2.1% yr/yr (last 0.5%)
      • Singapore’s October Industrial Production +3.4% m/m (expected -0.5%; last 4.0%); +4.0% yr/yr (expected -1.7%; last 0.7%)
      • Hong Kong’s October trade deficit HKD30.60 bln (last deficit of HKD31.60 bln)
      • New Zealand’s Q3 Retail Sales +1.6% qtr/qtr (last 0.2%) and Core Retail Sales +1.8% qtr/qtr (last 0.3%)
    • In news:
      • Xinhua reported that Chinese trade negotiators held a phone call with their U.S. counterparts, agreeing to keep working toward a partial trade deal.
      • Japan’s Finance Minister, Taro Aso, said that Japan needs to maintain the market’s trust in government finances, adding that trust is the key reason why JGB yields have not increased significantly.
  • Major European indices trade near their flat lines. STOXX Europe 600 UNCH, Germany’s DAX -0.2%, U.K.’s FTSE 100 +0.1%, France’s CAC 40 -0.1%, Italy’s FTSE MIB UNCH, Spain’s IBEX 35 -0.1%.
    • In economic data:
      • Germany’s December GfK Consumer Climate 9.7 (expected 9.6; prior 9.6)
      • U.K.’s October Gross Mortgage Approvals 41,200 (expected 43,100; prior 42,300)
      • Swiss Q3 Employment Level 5.137 mln (prior 5.109 mln)
    • In news:
      • European Central Bank policymaker Francois Villeroy de Galhau said that low rates will continue supporting the economy and that countries like Germany and Netherlands should increase their fiscal spending.
      • Meanwhile, German Finance Minister, Olaf Scholz, said that Germany’s budget for 2020 is very expansionary.

U.S. equity futures:

  • S&P 500 Futures unch @ 3133
  • DJIA Futures +18 @ 28056
  • Nasdaq Futures +1 @ 8378

Overseas:

  • Europe: DAX -0.2%, FTSE +0.1%, CAC -0.1%
  • Asia: Nikkei +0.4%, Hang Seng -0.3%, Shanghai unch

Commodities: 

  • Crude Oil +0.19 @ 58.12
  • Nat Gas -0.06 @ 2.52
  • Gold +0.20 @ 1457.10
  • Silver unch @ 16.89
  • Copper unch @ 2.65

U.S. Summary:

  • Earnings/Guidance:
    • Abercrombie & Fitch (ANF) misses by $0.01, reports revs in-line; Q3 comps flat
    • Agilent (A) beats by $0.03, beats on revs; guides Q1 EPS below consensus, revs below consensus; guides FY20 EPS below consensus, revs below consensus
    • Ambarella (AMBA) beats by $0.11, beats on revs; guides Q4 revs above consensus
    • American Woodmark (AMWD) beats by $0.10, reports revs in-line
    • Beacon Roofing Supply (BECN) misses by $0.17, misses on revs; CFO to depart
    • Best Buy (BBY) beats by $0.10, reports revs in-line; guides Q4 EPS in-line, revs in-line; Q3 enterprise comps +1.7%
    • Bitauto Holdings (BITA) misses by $0.27, misses on revs; guides Q4 revs below consensus
    • Burlington Stores (BURL) beats by $0.15, misses on revs; guides Q4 EPS below consensus; raises FY20 EPS above consensus, revs in-line
    • Caleres (CAL) misses by $0.05, misses on revs; sees FY20 EPS at low end of range
    • Chico’s FAS (CHS) beats by $0.02, beats on revs, comps -2.2%
    • Dick’s Sporting Goods (DKS) beats by $0.14, beats on revs; guides FY20 EPS above consensus
    • Dollar Tree (DLTR) misses by $0.05, reports revs in-line; guides Q4 revs in-line; guides FY20 revs in-line
    • Dycom (DY) beats by $0.16, beats on revs; guides Q4 EPS below consensus, revs below consensus
    • Hewlett Packard Enterprise (HPE) beats by $0.03, misses on revs; guides Q1 EPS in-line; reaffirms FY20 guidance
    • Hormel Foods (HRL) reports EPS in-line, revs in-line; guides FY20 EPS in-line, revs in-line; increases annual dividend 11%
    • Momo (MOMO) beats by $0.08, beats on revs; guides Q4 revs above consensus
    • Movado Group (MOV) misses by $0.21, misses on revs; slashes FY20 EPS, revs guidance
    • Nutanix (NTNX) beats by $0.04, beats on revs; guides Q2 EPS in-line, revs below consensus; guides FY20 revs in-line
    • Palo Alto Networks (PANW) beats by $0.02, reports revs in-line with billings above guidance; guides Q2 revs in-line; reaffirms FY20 revs guidance; increases billings slightly, guides down EPS
    • PVH (PVH) beats by $0.11, beats on revs; guides Q4 EPS below consensus, revs in-line; guides FY20 EPS above consensus, revs in-line
    • Tech Data (TECD) beats by $0.03, misses on revs
    • Titan Machinery (TITN) misses by $0.03, misses on revs; lowers FY20 EPS below consensus
  • General News:
    • China and US spoke by phone regarding trade: China says two sides “reached consensus on how to resolve related issues and agreed to maintain communication on the remaining issues”; US side acknowledges phone call took place but declines to comment on what was discussed
    • Fed Chair Powell says in speech, “Monetary policy is now well positioned to support a strong labor market and return inflation decisively to our symmetric 2 percent objective. If the outlook changes materially, policy will change as well. At this point in the long expansion, I see the glass as much more than half full.”
    • House Speaker Nancy Pelosi (D-CA) says a version of USMCA that Democrats can support is “within range”, but a final review is needed, according to Reuters
    • Dallas Fed President Robert Kaplan (voting FOMC member in 2020) said in CNBC interview that Q4 will be weak because of inventory adjustments but expects economy to grow at 2% next year
    • ChemoCentryx (CCXI) and Vifor Fresenius Medical announce ‘positive’ topline data from pivotal Phase III ADVOCATE trial of avacopan
    • Dell Technologies (DELL) considering sale of RSA Security for at least $1 bln, according to Bloomberg
    • Disney (DIS) Plus streaming service is averaging 1 mln new subscribers a day, according to New York Post
    • Hanesbrands (HBI) announces process to appoint new CFO in connection with the departure of CFO Barry A. Hytinen
    • Intel (INTC) is looking for buyers for its connected home division, according to Bloomberg
  • M&A:
    • Acuity Brands (AYI) acquires LocusLabs; terms not disclosed
    • Amedisys (AMED) to acquire Asana Hospice; terms not disclosed
    • American Intl (AIG) to sell majority interest in Fortitude Re to Carlyle Group (CG) and T&D Holdings for approx. $1.8 bln
    • Armstrong World Industries (AWI) acquires MRK Industries; terms not disclosed
    • Eagle Materials (EXP) to acquire Kosmos Cement plant and related assets for $665 mln
    • CEMEX, S.A. (CX) announced that its U.S. affiliate, Kosmos Cement Company, a partnership with a subsidiary of BUZZI UNICEM S.p.A. in which CEMEX holds a 75% interest, has signed a definitive agreement for the sale of certain assets to Eagle Materials (EXP) for approximately $665 mln.
    • Newmont Goldcorp (NEM) agrees to sell Red Lake complex to Evolution Mining (CAHPF) for $375 mln in cash and up to $100 mln in contingent payments
  • Syndicate:
    • Fortis (FTS) announces offerings of C$1.1 bln of common shares
    • Fortress Biotech (FBIO) prices underwritten public offering of 262,500 shares of its 9.375% Series A Cumulative Redeemable Perpetual Preferred Stock at a price of $20 per share
    • X4 Pharmaceuticals (XFOR) commences underwritten public offering of shares of its common stock (or pre-funded warrants to purchase its common stock in lieu thereof) and Class B warrants to purchase its common stock
  • IPOs:
    • No IPOs scheduled at this time

Gapping Up/Down

  • Gapping up:  CCXI +324.8%, NTNX +21.4%, KIN +8.6%, CBAY +6%, ARDX +5.8%, AMBA +5.1%, SAFE +4.5%, GBT +3.5%, ORIT +2.3%, CRH +2.3%, TITN +2.3%, AMWD +1.6%, BCRX +1.5%, MOMO +1.1%, BURL +1.1%, PVH +0.7%
  • Gapping down:  MOV -12.7%, XFOR -9.4%, PANW -8.1%, CAL -6.7%, CLVS -4.9%, BITA -4.4%, BECN -4.1%, HPE -4%, A -3.4%, HBI -3%, ACAD -2.9%, FTS -1%

Analyst Research:

  • Upgrades:
    • Camden Property (CPT) upgraded to Sector Outperform from Sector Perform at Scotiabank
    • Cantel Medical (CMD) upgraded to Buy from Hold at Needham; tgt $94
    • Chipotle Mexican Grill (CMG) upgraded to Outperform from Market Perform at Cowen; tgt raised to $970
    • Dynex Capital (DX) upgraded to Outperform from Mkt Perform at Keefe Bruyette; tgt raised to $17.50
    • Healthcare Realty (HR) upgraded to Buy from Hold at Stifel; tgt raised to $35
    • Healthcare Trust of America (HTA) upgraded to Buy from Hold at Stifel; tgt raised to $33
    • Kennametal (KMT) upgraded to Buy from Neutral at UBS; tgt raised to $42
    • Mid-America Aptmt (MAA) upgraded to Sector Perform from Sector Underperform at Scotiabank
    • Physicians Realty Trust (DOC) upgraded to Buy from Hold at Stifel; tgt raised to $21
  • Downgrades:
    • Adamis Pharma (ADMP) downgraded to Mkt Perform from Outperform at Raymond James
    • Airgain (AIRG) downgraded to Neutral from Buy at B. Riley FBR; tgt lowered to $11.50
    • CenterPoint (CNP) downgraded to Market Perform from Outperform at Wells Fargo; tgt $26
    • CONMED (CNMD) downgraded to Hold from Buy at Needham
    • CymaBay Therapeutics (CBAY) downgraded to Mkt Perform from Strong Buy at Raymond James
    • Molson Coors Brewing (TAP) downgraded to Market Perform from Outperform at BMO Capital Markets; tgt lowered to $55
  • Others:
    • Allscripts Healthcare (MDRX) initiated with a Neutral at UBS; tgt $11.50
    • Alteryx (AYX) initiated with a Neutral at Piper Jaffray; tgt $112
    • BlackLine (BL) initiated with a Neutral at Piper Jaffray; tgt $60
    • BP (BP) resumed with an Overweight at Piper Jaffray
    • Brookline Bancorp (BRKL) initiated with a Mkt Perform at Raymond James
    • Camden National Corp. (CAC) initiated with a Mkt Perform at Raymond James
    • CBRE Group (CBRE) resumed with a Buy at BofA/Merrill; tgt $62
    • Cerner (CERN) initiated with a Buy at UBS; tgt $84
    • Commercial Metals (CMC) initiated with a Market Perform at BMO Capital Markets; tgt $23
    • Fortress Transportation and Infrastructure (FTAI) initiated with a Buy at Stifel; tgt $22
    • Fortress Transportation and Infrastructure (FTAI) initiated with a Buy at B. Riley FBR; tgt $23
    • Gladstone Land (LAND) initiated with a Buy at B. Riley FBR; tgt $13.50
    • HubSpot (HUBS) initiated with an Overweight at Piper Jaffray; tgt $186
    • Jones Lang LaSalle (JLL) initiated with a Neutral at BofA/Merrill; tgt $175
    • Marathon Oil (MRO) initiated with a Neutral at Guggenheim
    • McDonald’s (MCD) initiated with a Hold at Deutsche Bank; tgt $193
    • Meridian Bancorp (EBSB) initiated with an Outperform at Raymond James; tgt $22
    • People’s United Financial (PBCT) initiated with a Mkt Perform at Raymond James
    • Purple Innovation (PRPL) initiated with an Outperform at Raymond James; tgt $11
    • Royal Dutch Shell (RDS.A) resumed with a Neutral at Piper Jaffray
    • Spirit Aerosystems (SPR) initiated with a Neutral at Susquehanna; tgt $96
    • Total S.A. (TOT) resumed with an Overweight at Piper Jaffray
    • Univest Corp. of PA (UVSP) initiated with an Outperform at Raymond James; tgt $29
    • Walt Disney (DIS) initiated with an Overweight at Consumer Edge Research; tgt $175
    • Zendesk (ZEN) initiated with an Overweight at Piper Jaffray; tgt $94

Upcoming Events:

  • Econ Data:
    • 08:30 ET: Advance October Intl. Trade in Goods (prior -$70.40 bln)
    • 08:30 ET: Advance October Retail Inventories (prior 0.3%)
    • 08:30 ET: Advance October Wholesale Inventories (prior -0.3%)
    • 09:00 ET: September FHFA Housing Price Index (prior 0.2%)
    • 09:00 ET: September S&P Case-Shiller Home Price Index (Briefing.com consensus 2.6%; prior 2.0%)
    • 10:00 ET: October New Home Sales (Briefing.com consensus 710,000; prior 701,000)
    • 10:00 ET: November Consumer Confidence (Briefing.com consensus 126.9; prior 125.9)
  • Earnings:
    • Monday (November 25)
      • Pre-Market: JEC 
      • After-Hours: A AMBA BECN CAL GBDC HPE MTSC NTNX PANW PVH SR
    • Tuesday (November 26)
      • Pre-Market: ANF AMWD ADI BNS BBY BITA BURL CHS CBRL DKS DLTR DY EV HRL MOMO MOV TECH TITN
      • After-Hours: ADSK BOX CENT DELL GES HPQ KEYS QADA VEEV VMW
    • Wednesday (November 27)
      • Pre-Market: DAKT DE DOYU FRO UXIN
      • After-Hours: None of note
    • Thursday (November 28)
      • Market closed for Thanksgiving holiday
    • Friday (November 29)
      • Pre-Market: None of note
      • After-Hours: None of note

Asia & Europe detail:

Asia: Nikkei +0.4%, Hang Seng -0.3%, Shanghai unch

Equity indices in the Asia-Pacific region ended Tuesday on a mixed note. Xinhua reported that Chinese trade negotiators held a phone call with their U.S. counterparts, agreeing to keep working toward a partial trade deal. Japan’s Finance Minister, Taro Aso, said that Japan needs to maintain the market’s trust in government finances, adding that trust is the key reason why JGB yields have not increased significantly.

  • In economic data:
    • Japan’s October Corporate Services Price Index +2.1% yr/yr (last 0.5%)
    • Singapore’s October Industrial Production +3.4% m/m (expected -0.5%; last 4.0%); +4.0% yr/yr (expected -1.7%; last 0.7%)
    • Hong Kong’s October trade deficit HKD30.60 bln (last deficit of HKD31.60 bln)
    • New Zealand’s Q3 Retail Sales +1.6% qtr/qtr (last 0.2%) and Core Retail Sales +1.8% qtr/qtr (last 0.3%)

—Equity Markets—

  • Japan’s Nikkei: +0.4%
  • Hong Kong’s Hang Seng: -0.3%
  • China’s Shanghai Composite: UNCH
  • India’s Sensex: -0.2%
  • South Korea’s Kospi: -0.1%
  • Australia’s ASX All Ordinaries: +0.8%

—FX—

  • USD/JPY: UNCH at 108.95
  • USD/CNH: +0.2% to 7.0389
  • USD/INR: -0.2% to 71.52

Europe: DAX -0.2%, FTSE +0.1%, CAC -0.1%

Major European indices trade near their flat lines. European Central Bank policymaker Francois Villeroy de Galhau said that low rates will continue supporting the economy and that countries like Germany and Netherlands should increase their fiscal spending. Meanwhile, German Finance Minister, Olaf Scholz, said that Germany’s budget for 2020 is very expansionary.

  • In economic data:
    • Germany’s December GfK Consumer Climate 9.7 (expected 9.6; prior 9.6)
    • U.K.’s October Gross Mortgage Approvals 41,200 (expected 43,100; prior 42,300)
    • Swiss Q3 Employment Level 5.137 mln (prior 5.109 mln)

—Equity Markets—

  • STOXX Europe 600: UNCH
  • Germany’s DAX: -0.2%
  • U.K.’s FTSE 100: +0.1%
  • France’s CAC 40: -0.1%
  • Italy’s FTSE MIB: UNCH
  • Spain’s IBEX 35: -0.1%

—FX—

  • EUR/USD: +0.1% to 1.1018
  • GBP/USD: -0.2% to 1.2872
  • USD/CHF: +0.1% to 0.9969

_________________________________________________

25th of November

Positive bias on back of M&A and trade news

The S&P 500 futures trade nine points, or 0.3%, above fair value to begin this holiday-shortened trading week. Trade headlines and confirmed M&A deals may be contributing to some risk sentiment this morning. 

On the trade front, Bloomberg News reported that the Chinese government outlined a plan to better protect and enforce intellectual property, which could help both sides reach a “Phase One” deal. “U.S. and Beijing officials, lawmakers and trade experts,” however, told Reuters that a “Phase Two” trade deal before the 2020 election is looking less likely. 

In M&A activity, TD Ameritrade (AMTD 48.85, +0.72, +1.5%) will be acquired by Charles Schwab (SCHW 47.60, -0.60, -1.2%) for about $26 billion in an all-stock transaction. Tiffany & Co. (TIF 132.79, +7.28, +5.8%) will be acquired by LVMH (LVMUY) for $135/share, or about $16.2 billion, in cash. The Medicines Co. (MDCO 83.98, +15.43, +22.5%) will be acquired by Novartis (NVS 90.36, -0.12, -0.1%) for $85.00/share in cash.

U.S. Treasuries have edged lower, pushing yields higher across the curve. The 2-yr yield is up one basis point to 1.64%, and the 10-yr yield is up two basis points to 1.79%. The U.S. Dollar Index is little changed at 98.31. WTI crude is down 0.2%, or $0.11, to $57.65/bbl. 

Separately, Fed Chair Powell will be speaking at an annual dinner in Rhode Island at 7:00 p.m. ET. 

In U.S. Corporate news:

  • TD Ameritrade (AMTD 48.85, +0.72): +1.5% after announcing it agreed to be acquired by Charles Schwab (SCHW 47.60, -0.60, -1.2%) for approximately $26 billion in all-stock transaction.
  • Tiffany & Co. (TIF 132.79, +7.28): +5.8% after confirming it agreed to be acquired by LVMH (LVMUY) for $135/share, or approximately $16.2 billion, in cash.
  • The Medicines Co. (MDCO 83.98, +15.43): +22.5% after announcing it will be acquired by Novartis (NVS 90.36, -0.12, -0.1%) for $85.00/share in cash. 
  • Uber (UBER 28.22, -1.34): -4.5% after the city of London denied the company’s application for a new private hire operator’s license. 

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region began the week on a higher note. Japan’s Nikkei +0.8%, Hong Kong’s Hang Seng +1.5%, China’s Shanghai Composite +0.7%, India’s Sensex +1.3%, South Korea’s Kospi +1.0%, Australia’s ASX All Ordinaries +0.3%.
    • In economic data:
      • Japan’s September Leading Index 91.9 (expected 92.2; prior 91.9)
      • Singapore’s October CPI +0.4% yr/yr (expected 0.5%; last 0.5%)
    • In news:
      • Sunday elections in Hong Kong produced a big win for pro-democracy candidates, who now hold 86% of all district council seats.
      • Japan’s Ministry of Finance may reportedly increase its issuance of 40-yr JGBs while reducing the supply of 5-yr and 10-yr JGBs.
      • The People’s Bank of China released its financial stability report, noting that the country’s economy is facing bigger downward pressures and is unable to eliminate potential risks in the near term.
      • The Chinese government signaled that penalties for intellectual property infringement will be increased.
  • Major European indices trade in the green. STOXX Europe 600 +0.8%, Germany’s DAX +0.5%, U.K.’s FTSE 100 +0.9%, France’s CAC 40 +0.4%, Italy’s FTSE MIB +0.8%, Spain’s IBEX 35 +0.7%.
    • In economic data:
      • Germany’s November ifo Business Climate Index 95.0, as expected (last 94.7). November Current Assessment 97.9, as expected (last 97.8) and November Business Expectations 92.1 (expected 92.5; last 91.6)
      • U.K.’s November CBI Distributive Trades Survey -3 (expected -10; last -10)
    • In news:
      • European Central Bank chief economist, Philip Lane, said that current ECB policy is positioned for an improvement in overall conditions over the next year or two, but cautioned that additional rate cuts shouldn’t be ruled out.
      • Fitch affirmed Portugal’s BBB rating and Austria’s AA+ rating.
      • Economists from Germany’s ifo Institute expect that the Christmas period will be “good” for business, but the manufacturing sector remains in recession.

U.S. equity futures:

  • S&P 500 Futures +7 @ 3118
  • DJIA Futures +69  @ 27930
  • Nasdaq Futures +25 @ 8306

Overseas:

  • Europe: DAX +0.5%, FTSE +0.9%, CAC +0.4%
  • Asia: Nikkei +0.8%, Hang Seng +1.5%, Shanghai +0.7%

Commodities: 

  • Crude Oil -0.21 @ 57.65
  • Nat Gas -0.07 @ 2.64
  • Gold -6.40 @ 1457.20
  • Silver -0.15 @ 16.85
  • Copper +0.01 @ 2.65

U.S. Summary:

  • Earnings/Guidance:
    • EPR Properties (EPR) lowers FY19 FFO guidance to $5.42-5.46 from $5.44-5.52
    • Jacobs (JEC) in slides guides for FY20 Adj-EPS of $5.30-5.80. Midpoint is above consensus estimate
    • OrganiGram (OGI) misses by CAD0.15; beats on revs
  • General News:
    • China aims to increase penalties for intellectual property theft, according to Bloomberg
    • White House National Security Advisor Robert O’Brien says phase one China trade deal could be done by the end of the year and US will not “turn a blind eye to what’s happening in Hong Kong or what’s happening in the South China Sea”, according to CNBC
    • Hong Kong pro-democracy candidates won local elections, according to New York Times
    • Michael Bloomberg has officially entered the race for the Democratic nomination for president, according to New York Times
    • Cannabis inventories reach almost 400 tons in Canada as marijuana producers overestimated demand for the drug, according to FT
    • Amazon (AMZN) files lawsuit to protest Microsoft’s (MSFT) $10 bln DOD cloud contract award, according to CNBC
    • Disney’s (DIS) Frozen 2 generated $127 mln in US and Canada over the weekend, according to The Wall Street Journal
    • Carl Icahn wants control of Occidental Petroleum (OXY) Board, according to Bloomberg
    • Uber (UBER) denied new private hire operator’s licence in London
  • M&A:
    • Chubb (CB) to purchase additional 15.3% of Huatai Insurance Group Company Limited
    • EPR Properties (EPR) announces sale of charter school portfolio for approximately $454 mln
    • HP (HPQ) sends letter to Xerox (XRX), reiterates rejection of proposal
    • Kirkland Lake Gold (KL) to acquire Detour Gold in C$4.9 bln deal
    • Sorrento Therapeutics (SRNE) says rejects cash acquisition proposal for between $3.00-5.00/share
    • Tallgrass Energy (TGE) appoints William Moler as CEO, effective immediately
    • TD Ameritrade (AMTD) to be acquired by Charles Schwab (SCHW) for approximately $26 bln in all-stock transaction
    • The Medicines Co (MDCO) to be acquired by Novartis (NVS) for $85.00/share in cash
    • Tiffany & Co (TIF) confirms agreement to be acquired by LVMH (LVMUY) for $135/share in cash, or approximately $16.2 bln
    • Unilever (UN) spokesperson has denied reports company’s tea business was up for sale, according to New York Times
    • XPO Logistics (XPO) to purchase all shares in XPO Logistics Europe held by Elliott Capital Advisors, L.P. for a total price of 233,513,280
  • Syndicate:
    • Nothing of note
  • IPOs:
    • No IPOs scheduled at this time

Gapping Up/Down

  • Gapping up:  MDCO +22.9%, TIF +6%, ARWR +5.7%, CLVS +5.7%, TSLA +3.7%, NVDA +2.7%, JD +2.7%, CLF +2.3%, DLTR +2.2%, AMRN +1.9%, NOK +1.7%, DKS +1.7%, VEON +1.6%, TCOM +1.4%, RIO +1.3%, FCX +1.3%, OXY +1.3%, AMTD +1.2%, CCL +1.2%, HAS +1.2%, BIDU +1.2%, HPE +1.2%, BHP +1.1%, MOMO +1%
  • Gapping down:  HIMX -4.1%, AU -2%, SCHW -1.6%, SCOR -1.2%, NFLX -1.1%, AEO -1%, PRU -0.9%, SLV -0.8%, GDX -0.7%, ETFC -0.6%

Analyst Research:

  • Upgrades:
    • CACI Intl (CACI) upgraded to Buy from Hold at SunTrust; tgt raised to $270
    • Deckers Outdoor (DECK) upgraded to Outperform from Market Perform at Wells Fargo; tgt raised to $195
    • Dick’s Sporting Goods (DKS) upgraded to Buy from Neutral at BofA/Merrill; tgt $55
    • Energizer (ENR) upgraded to Neutral from Underweight at JP Morgan; tgt $51
    • EQT Midstream Partners (EQM) upgraded to Outperform from Neutral at Credit Suisse; tgt lowered to $30
    • FirstEnergy (FE) upgraded to Buy from Neutral at Mizuho; tgt raised to $53
    • NVIDIA (NVDA) upgraded to Overweight from Equal-Weight at Morgan Stanley; tgt raised to $259
    • ProSight Global (PROS) upgraded to Buy from Neutral at Goldman; tgt $22
    • Wendy’s (WEN) upgraded to Buy from Hold at Stifel; tgt raised to $25
    • Wingstop (WING) upgraded to Outperform from Neutral at Robert W. Baird; tgt $92
    • ZScaler (ZS) upgraded to Buy from Neutral at BofA/Merrill; tgt $68
  • Downgrades:
    • ManTech (MANT) downgraded to Hold from Buy at SunTrust; tgt $80
    • The Medicines Co (MDCO) downgraded to Neutral from Outperform at Robert W. Baird; tgt $85
    • Netflix (NFLX) downgraded to Underperform from Market Perform at Wells Fargo; tgt lowered to $265
    • Oasis Midstream Partners (OMP) downgraded to Neutral from Outperform at Credit Suisse; tgt lowered to $19
    • Prudential (PRU) downgraded to Sell from Neutral at Citigroup; tgt lowered to $86
    • Public Service (PEG) downgraded to In-line from Outperform at Evercore ISI
  • Others:
    • lululemon athletica (LULU) initiated with an Overweight at Barclays; tgt $257
    • Magellan Midstream (MMP) initiated with a Buy at Goldman; tgt $69
    • ON Semiconductor (ON) initiated with a Market Perform at Wells Fargo; tgt $22
    • Opko Health (OPK) initiated with an Overweight at Piper Jaffray; tgt $2.50
    • Oyster Point Pharma (OYST) initiated with an Outperform at Cowen; tgt $40
    • Oyster Point Pharma (OYST) initiated with an Overweight at JP Morgan; tgt $26
    • Oyster Point Pharma (OYST) initiated with an Overweight at Piper Jaffray; tgt $35
    • RAPT Therapeutics (RAPT) initiated with a Buy at UBS; tgt $26
    • RAPT Therapeutics (RAPT) initiated with an Outperform at Wells Fargo; tgt $33
    • RAPT Therapeutics (RAPT) initiated with an Outperform at BMO Capital Markets; tgt $35
    • Teladoc (TDOC) initiated with a Hold at Stifel; tgt $83

Upcoming Events:

  • Econ Data:
    • No economic data of note today
  • Earnings:
    • Monday (November 25)
      • Pre-Market: JEC 
      • After-Hours: A AMBA BECN CAL GBDC HPE MTSC NTNX PANW PVH SR
    • Tuesday (November 26)
      • Pre-Market: ANF AMWD ADI BNS BBY BITA BURL CHS CBRL DKS DLTR DY EV HRL MOMO MOV TECH TITN
      • After-Hours: ADSK BOX CENT DELL GES HPQ KEYS QADA VEEV VMW
    • Wednesday (November 27)
      • Pre-Market: DAKT DE DOYU FRO UXIN
      • After-Hours: None of note
    • Thursday (November 28)
      • Market closed for Thanksgiving holiday
    • Friday (November 29)
      • Pre-Market: None of note
      • After-Hours: None of note 

Asia & Europe detail:

Asia: Nikkei +0.8%, Hang Seng +1.5%, Shanghai +0.7%

Equity indices in the Asia-Pacific region began the week on a higher note. Sunday elections in Hong Kong produced a big win for pro-democracy candidates, who now hold 86% of all district council seats. Japan’s Ministry of Finance may reportedly increase its issuance of 40-yr JGBs while reducing the supply of 5-yr and 10-yr JGBs. The People’s Bank of China released its financial stability report, noting that the country’s economy is facing bigger downward pressures and is unable to eliminate potential risks in the near term. The Chinese government signaled that penalties for intellectual property infringement will be increased.

  • In economic data:
    • Japan’s September Leading Index 91.9 (expected 92.2; prior 91.9)
    • Singapore’s October CPI +0.4% yr/yr (expected 0.5%; last 0.5%)

—Equity Markets—

  • Japan’s Nikkei: +0.8%
  • Hong Kong’s Hang Seng: +1.5%
  • China’s Shanghai Composite: +0.7%
  • India’s Sensex: +1.3%
  • South Korea’s Kospi: +1.0%
  • Australia’s ASX All Ordinaries: +0.3%

—FX—

  • USD/JPY: +0.2% to 108.84
  • USD/CNH: -0.1% to 7.0313
  • USD/INR: -0.1% to 71.71

Europe: DAX +0.5%, FTSE +0.9%, CAC +0.4%

Major European indices trade in the green. European Central Bank chief economist, Philip Lane, said that current ECB policy is positioned for an improvement in overall conditions over the next year or two, but cautioned that additional rate cuts shouldn’t be ruled out. Fitch affirmed Portugal’s BBB rating and Austria’s AA+ rating. Economists from Germany’s ifo Institute expect that the Christmas period will be “good” for business, but the manufacturing sector remains in recession.

  • In economic data:
    • Germany’s November ifo Business Climate Index 95.0, as expected (last 94.7). November Current Assessment 97.9, as expected (last 97.8) and November Business Expectations 92.1 (expected 92.5; last 91.6)
    • U.K.’s November CBI Distributive Trades Survey -3 (expected -10; last -10)

—Equity Markets—

  • STOXX Europe 600: +0.8%
  • Germany’s DAX: +0.5%
  • U.K.’s FTSE 100: +0.9%
  • France’s CAC 40: +0.4%
  • Italy’s FTSE MIB: +0.8%
  • Spain’s IBEX 35: +0.7%

—FX—

  • EUR/USD: -0.1% to 1.1010
  • GBP/USD: +0.3% to 1.2871
  • USD/CHF: +0.2% to 0.9983

______________________________________________________________________________

Trade headlines give investors pause

The S&P 500 futures trade roughly in-line with fair value, as investors continue to assess the U.S.-China trade situation while also digesting some key corporate news in the financial space.

The Wall Street Journal reported that China’s Vice Premier Liu He invited his U.S. counterparts for another round of trade talks in Beijing. It should be qualified that the invitation was extended last weekend, and the U.S. side would reportedly only make the trek overseas if Beijing says it would make structural commitments on trade. 

Separately, CNBC reported that Charles Schwab (SCHW 50.94, +6.19, +14.5%) is in talks to purchase TD Ameritrade (AMTD 52.13, +10.75, +26.0%). A deal could be announced as soon as today for $26 billion, according to FOX Business. Shares of both companies are up big in pre-market action.

In economic data, investors will receive the Philadelphia Fed Index for November (Briefing.com consensus 5.5) and the weekly Initial Claims (Briefing.com consensus 216,000) and Continuing Claims report at 8:30 a.m. ET, followed by Existing Home Sales for October (Briefing.com consensus 5.50 million) and the Conference Board’s Leading Economic Index for October (Briefing.com consensus -0.1%) at 10:00 a.m. ET. 

U.S. Treasuries have edged lower, pushing yields higher across the curve. The 2-yr yield is up two basis points to 1.59%, and the 10-yr yield is up one basis point to 1.75%. The U.S. Dollar Index down 0.1% to 97.91. WTI crude is up 0.3%, or $0.15, to $57.16/bbl. 

In U.S. Corporate news:

  • Charles Schwab (SCHW 50.94, +6.19): +14.5% after CNBC reported that the company is in talks to purchase TD Ameritrade (AMTD 52.13, +10.75, +26.0%). Shares of E*Trade (ETFC 44.45, -1.41, -3.1%) are trading lower in response. 
  • Macy’s (M 14.10, -0.92): -6.1% after missing revenue estimates and cutting its FY20 guidance. 
  • L Brands (LB 16.48, +0.59): +3.7% after reporting in-line results and guiding Q4 EPS above consensus.  

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region ended Thursday on a lower note. Japan’s Nikkei -0.5%, Hong Kong’s Hang Seng -1.6%, China’s Shanghai Composite -0.3%, India’s Sensex -0.2%, South Korea’s Kospi -1.4%, Australia’s ASX All Ordinaries -0.7%.
    • In economic data:
      • Japan’s September All Industry Activity Index +1.5% m/m, as expected (last 0.0%)
      • Singapore’s Q3 GDP +2.1% qtr/qtr, as expected (last 0.6%); +0.5% yr/yr, as expected (last 0.2%)
      • Hong Kong’s October CPI +3.1% yr/yr (expected 3.3%; last 3.2%)
    • In news:
      • China’s Vice Premier, Liu He, said overnight that he remains cautiously optimistic about reaching a partial trade agreement but he is confused about demands made by the U.S.
      • The Wall Street Journal reported this morning that U.S. negotiators have been invited for another round of talks in Beijing.
      • An early look at South Korea’s November exports showed that overall exports were down 9.6% yr/yr during the first 20 days of the month with semiconductor exports falling 23.6%.
      • There has been continued speculation that the Bank of Japan is quietly tapering its purchases of ETFs.
  • Major European indices trade near their flat lines while the U.K.’s FTSE (-0.7%) underperforms. STOXX Europe 600 -0.4%, Germany’s DAX -0.1%, U.K.’s FTSE 100 -0.7%, France’s CAC 40 -0.2%, Italy’s FTSE MIB UNCH, Spain’s IBEX 35 -0.1%.
    • In economic data:
      • U.K.’s Public Sector Net Borrowing GBP10.51 bln (expected GBP8.50 bln; last GBP7.26 bln)
      • France’s November Business Survey 100, as expected (last 99)
      • Spain’s September trade deficit EUR4.26 bln (last deficit of EUR3.99 bln)
    • In news:
      • Germany’s Finance Ministry released its monthly report, which noted that while exports regained some momentum at the end of Q3, sentiment surveys continue pointing to subdued overall activity.
      • The OECD lowered its 2019 global GDP growth forecast to 2.9% from 3.0% and called for more proactive fiscal policy.

U.S. equity futures:

  • S&P 500 Futures -1 @ 3108
  • DJIA Futures -9 @ 27791
  • Nasdaq Futures -10 @ 8280

Overseas:

  • Europe: DAX -0.1%, FTSE -0.7%, CAC -0.2%
  • Asia: Nikkei -0.5%, Hang Seng -1.6%, Shanghai -0.3%

Commodities: 

  • Crude Oil +0.15 @ 57.16
  • Nat Gas -0.004 @ 2.555
  • Gold -4.10 @ 1470.00
  • Silver -0.055 @ 17.060
  • Copper -0.0195 @ 2.630

U.S. Summary:

  • Earnings/Guidance:
    • Anaplan (PLAN) beats by $0.05, beats on revs; guides Q4 revs above consensus
    • Baozun (BZUN) misses by RMB 0.01, misses on revs; guides Q4 revs below consensus  
    • Berry Global (BERY) beats by $0.17, misses on revs; reaffirms FY20 guidance
    • BJ’s Wholesale (BJ) beats by $0.01, misses on revs; narrows FY20 EPS guidance; lowers FY20 revenue/comp guidance; Q3 comps -0.4%; approves $250 mln repurchase program  
    • Brady (BRC) beats by $0.07, misses on revs; raises FY20 EPS in-line  
    • BrightViewbeats (BV) by $0.02, reports revs in-line; guides FY20 revs in-line  
    • CIGNA (CI) to reaffirm projected full year 2019 consolidated adjusted income from operations, which remains in the range of $6.38 billion to $6.46 billion, in upcoming meetings with investors  
    • Copart (CPRT) beats by $0.06, beats on revs  
    • Cubic (CUB) misses by $0.08, beats on revs; guides FY20 EPS below consensus, revs in-line, elects to buy remaining stakes in Pixia and Delerrok  
    • Energizer (ENR) to provide update on long-term strategy at investor day; expects FY22 adjusted EBITDA and FY22 adjusted free cash flow to be greater than $700 mln and greater than $400 mln, respectively  
    • Evoqua Water (AQUA) misses by $0.12, beats on revs; guides FY20 revs, Adj-EBITDA below consensus  
    • Green Thumb (GTBIF) misses by $0.02, beats on revs  
    • Hoegh LNG (HMLP) beats by $0.20, reports revs in-line  
    • Intel (INTC) reaffirms Q4 guidance; apologizes to customers/partners for product delays related to tight supplies in the PC business  
    • Inter Parfums (IPAR) provides initial 2020 guidance below consensus  
    • Jack In The Box (JACK) misses by $0.01, reports revs in-line; Q4 system same-store comps were +3.0%; authorizes additional $100 mln share repurchase program  
    • L Brands (LB) reports EPS in-line, revs in-line; guides Q4 EPS above consensus  
    • La-Z-Boy (LZB) misses by $0.03, misses on revs, increases dividend by 8%  
    • Macy’s (M) beats by $0.08, misses on revs, comps -3.9%; cuts FY20 guidance  
    • Netease (NTES) reports Q3 – misses on revs; approves share repurchase program   
    • Nuance Communications (NUAN) beats by $0.05, misses on revs  
    • Ship Finance (SFL) reports Q3 results, revs in-line  
    • Sonos (SONO) misses by $0.06, beats on revs; guides FY20 revs towards the high end of estimates, EBITDA below including tariff impact, above ex-tariffs; acquires AI voice platform Snips for $37.5 mln in cash  
  • General News:
    • House passes Hong Kong Rights Bill by 417-1 margin
    • Chinese Vice Premier Liu He invited US to China for trade talks, but US is reluctant to make the trip unless China makes various commitments, according to the Wall Street Journal
    • Chinese Vice Premier Liu He says he is “cautiously optimistic” about reaching phase one trade deal with US, according to Bloomberg
    • Democrats spoke about impeachment of President Trump, healthcare, climate change, and other issues at last night’s NBC/Washington Post presidential debate
    • OPEC and its allies are likely to extend oil productions supply cuts through June of 2020, according to Reuters
    • White House trade adviser Peter Navarro accused China of “exploiting” a loophole that shields some solar panels from tariffs, according to Bloomberg
    • Alphabet (GOOG) updates political ads policy – to limit election ads audience targeting
    • Apple (AAPL) exemption from tariffs on imports from China being considered by President Trump, according to Reuters
    • Fiat Chrysler Automobiles (FCAU) confirms that it will defend itself vigorously against the lawsuit filed yesterday by General Motors (GM)
    • Sanofi (SNY) is considering options for $30 bln consumer health business, according to Bloomberg
    • SoftBank (SFTBY) is in discussions to get $2.8 bln in financing from various Japanese banks for regular financing, according to Bloomberg
  • M&A:
    • Albany Intl (AIN) acquires privately-held CirComp GmbH; terms not disclosed  
    • American Water (AWK) agrees to sell its regulated operations in New York for $608 mln  
    • Americold Realty (COLD) to acquire Nova Cold Logistics for CAD $337 mln from Brookfield Business Partners L.P. (BBU)
    • Amgen (AMGN) completes acquisition of worldwide rights to Otezla, updates guidance accordingly  
    • Bristol Myers (BMY) completes acquisition of Celgene (CELG) – to transfer the listing of Celgene’s contingent value rights related to Celgene’s ABRAXANE product  
    • Charles Schwab (SCHW) is in discussions to purchase TD Ameritrade (AMTD), according to CNBC
    • Cott’s (COT) Eden Springs acquired water supplier in the Netherlands Viteau International; terms not disclosed  
    • Fortress Transportation (FTAI) to sell Central Maine & Quebec Railway to Canadian Pacific
    • Hasbro (HAS) : UK’s CMA launches merger inquiry into the anticipated acquisition by Hasbro of the production company Entertainment One Ltd.   
    • Meta Financial (CASH) to sell community bank division to Central Bank; announces new common stock share repurchase program; reits guidance  
    • PayPal (PYPL) to acquire Honey Science Corporation for approx. $4 bln  
    • S&P Global (SPGI) to acquire the ESG Ratings Business from RobecoSAM  
    • Teck Resources (TECK) hires advisor to assist in sale of assets in Peru, according to Reuters sources  
    • Tiffany (TIF) in continued M&A talks with LVMH, according to reports 
    • Universal Corp (UVV) to acquire FruitSmart; terms not disclosed  
  • Syndicate:
    • CRISPR Therapeutics (CRSP) prices 4.25 mln share offering at $64.50 per share
    • Diamond S-Shipping (DSSI) announces public secondary offering of 4.7 mln common shares by selling shareholders  
    • Invitation Homes (INVH) prices 57.6 mln share secondary offering by holders at $30.10 per share  
    • Karuna Therapeutics (KRTX) prices 2.6 mln share common stock offering at $96.00 per share  
    • Molecular Templatesprices (MTEM) 6 mln common stock offering at $8.00 per share and 250 shares of its newly designated Series A convertible preferred stock at a public offering price of $8,000 per share  
    • OptiNose (OPTN) announces proposed public offering of common stock by the company and certain selling stockholders; size not disclosed  
    • Performance Food (PFGC) prices 10.12 mln share offering at $44.25 per share on forward basis
    • SunPower Corp (SPWR) prices offering of 22 mln shares of common stock at $7.00 per share
  • IPOs:
    • Priced to trade:
      • Canaan (Nasdaq: CAN): China-based provider of high performance computing ASICs prices 10.0 million share IPO at $9.00 per share, at the low end of the initial price range of $9.00-11.00 per share
      • SiTime (Nasdaq: SITM): Provider of silicon timing systems solutions prices 4.3 million share IPO at $13.00 per share, the low end of the initial price range of $13.00-15.00 per share
    • Expected to trade this week:
      • Alpine Income Property Trust (NYSE: PINE): REIT that owns and operates portfolio of single-tenant commercial properties. 7.5 million shares. Initial price range $19.00-21.00
      • YX Asset Recovery (NYSE: YXR): Business service provider focusing on delinquent consumer debt collection in China. 9.3 million shares. Initial price range $7.75-$9.75

Gapping Up/Down


  • Gapping up
    AMTD +19.6%, ACB +11.4%, DVAX +7.3%, NUAN +6.3%, CRON +5.4%, CLLS +5%, LB +4.5%, TIF +3.8%, CGC +3.7%, HARP +3.7%, CPRT +3.6%, SFL +3.1%, FOSL +3%, UBER +2.8%, JACK +2.8%, SONO +2%, DAO +1.9%, BMY +1.5%
  • Gapping downBZUN -13.1%, CUB -11.4%, LZB -9.5%, OPTN -6.4%, XERS -4.7%, M -4.5%, MTEM -3.3%, AMAT -3%, KLAC -2.9%, LRCX -2.6%, CRSP -1.8%, PYPL -1.5%

Analyst Research:

  • Upgrades:
    • Alliant Energy (LNT) upgraded to Overweight from Equal Weight at Barclays; tgt raised to $58
    • Duke Energy (DUK) upgraded to Overweight from Equal Weight at Barclays; tgt lowered to $98
    • First Quantum Minerals (FQVLF) upgraded to Outperform at BMO Capital Markets
    • Kimco Realty (KIM) upgraded to Sector Perform from Sector Underperform at Scotiabank
    • NorthWestern (NWE) upgraded to Outperform from Market Perform at Wells Fargo; tgt $76
    • Pinnacle West (PNW) upgraded to Overweight from Equal Weight at Barclays; tgt lowered to $98
    • PNM Resources (PNM) upgraded to Equal Weight from Underweight at Barclays; tgt lowered to $51
  • Downgrades:
    • Advanced Micro (AMD) downgraded to Market Perform from Outperform at Northland Capital; tgt $36 
    • Applied Materials (AMAT) downgraded to Sell from Neutral at UBS; tgt lowered to $48
    • CenterPoint (CNP) downgraded to Equal Weight from Overweight at Barclays; tgt lowered to $26
    • Con Edison (ED) downgraded to Underweight from Equal Weight at Barclays; tgt lowered to $88
    • Cubic (CUB) downgraded to Neutral from Overweight at JP Morgan; tgt lowered to $67
    • KLA Corporation (KLAC) downgraded to Sell at UBS; tgt lowered to $140
    • Lam Research (LRCX) downgraded to Sell from Neutral at UBS; tgt $240
    • MacroGenics (MGNX) downgraded to Underweight from Equal-Weight at Morgan Stanley; tgt lowered to $6
    • Public Service (PEG) downgraded to Equal Weight from Overweight at Barclays; tgt lowered to $65
    • RH (RH) downgraded to Hold from Buy at Loop Capital; tgt $190
    • Teck Resources (TECK) downgraded to Market Perform at BMO Capital Markets

  • Others:
    • Allison Transmission (ALSN) initiated with a Outperform at Raymond James; tgt $50
    • Beacon Roofing Supply (BECN) initiated with a Hold at Deutsche Bank; tgt $39
    • BioLife Solutions (BLFS) initiated with a Outperform at Oppenheimer; tgt $22
    • Builders Firstsource (BLDR) initiated with a Buy at Deutsche Bank; tgt $29
    • Cummins (CMI) initiated with a Mkt Perform at Raymond James
    • Datadog (DDOG) initiated with a Perform at Oppenheimer
    • Dell (DELL) initiated with a Neutral at Nomura; tgt $60
    • Fortune Brands Home & Security (FBHS) initiated with a Buy at Deutsche Bank; tgt $76
    • Installed Building Products (IBP) initiated with a Buy at Deutsche Bank; tgt $82
    • International Money Express (IMXI) initiated with an Outperform at Cowen; tgt $17
    • Intuitive Surgical (ISRG) initiated with a Perform at Oppenheimer
    • Lowe’s (LOW) target raised to $135 from $123 at Goldman and added to Conviction Buy List
    • Martin Marietta (MLM) initiated with a Hold at Deutsche Bank; tgt $292
    • Masco (MAS) initiated with a Buy at Deutsche Bank; tgt $52
    • Mohawk (MHK) initiated with a Hold at Deutsche Bank; tgt $158
    • Navistar (NAV) initiated with a Mkt Perform at Raymond James
    • NeuBase Therapeutics (NBSE) initiated with a Outperform at Oppenheimer; tgt $14
    • Noble Energy (NBL) initiated with a Buy at MKM Partners; tgt $27
    • Owens Corning (OC) initiated with a Buy at Deutsche Bank; tgt $75
    • PACCAR (PCAR) initiated with a Strong Buy at Raymond James; tgt $90
    • SiteOne Landscape Supply (SITE) initiated with a Hold at Deutsche Bank; tgt $14
    • Summit Materials (SUM) initiated with a Buy at Deutsche Bank; tgt $32
    • STRATA Skin Sciences (SSKN) initiated with a Outperform at Oppenheimer; tgt $7
    • The Children’s Place (PLCE) removed from Wedbush’s Best Ideas List; still rated Outperform, tgt $130
    • TopBuild (BLD) initiated with a Buy at Deutsche Bank; tgt $129
    • Trex (TREX) initiated with a Hold at Deutsche Bank; tgt $91
    • Tullow Oil plc (TUWLF) removed from Conviction Buy list at Goldman
    • Vulcan Materials (VMC) initiated with a Hold at Deutsche Bank; tgt $166
    • Wabash Natl (WNC) initiated with a Strong Buy at Raymond James; tgt $19
    • Whirlpool (WHR) initiated with a Hold at Deutsche Bank; tgt $153

Upcoming Events:

  • Econ Data:
    • 08:30 ET: Initial Claims for week ending Nov. 16 (Briefing.com consensus 216K; Prior 225K)
    • 08:30 ET: Continuing Claims for week ending Nov. 9 (Prior 1683K)
    • 08:30 ET: Philadelphia Fed Index for November (Briefing.com consensus 5.5; Prior 5.6)
    • 10:00 ET: Existing Home Sales for October (Briefing.com consensus 5.50M; Prior 5.38M)
    • 10:00 ET: Leading Indicators for October (Briefing.com consensus -0.1%; Prior -0.1%)
    • 10:30 ET: EIA Natural Gas Inventories for week ending Nov. 16 (Prior +3 bcf)
  • Earnings:
    • Monday (November 18)
      • Pre-Market: CCMP LX MANU QD 
      • After-Hours: CRMT ASH BILI KRNT WWD ZTO
    • Tuesday (November 19)
      • Pre-Market: WUBA ARMK DAVA PPDF HD JKS KSS MMS MDT NJR TJX TDG
      • After-Hours: ESE PAGS URBN
    • Wednesday (November 20)
      • Pre-Market: AVYA LOW PDD QIWI SR TGT
      • After-Hours: CPRT CUB GTBIF JACK LB LZB NTES NUAN SQM SONO
    • Thursday (November 21)
      • Pre-Market: ASYS PLAN BZUN BERY BJ BRC BV AQUA HMLP M SDRL
      • After-Hours:  ENTA GPS IIIV INTU MATW JWN OOMA POST PSTG ROST SCVL SPLK WSM
    • Friday (November 22)
      • Pre-Market: ATKR BKE FL FUTU HIBB SJM
      • After-Hours: None of note

Asia & Europe detail:

Asia: Nikkei -0.5%, Hang Seng -1.6%, Shanghai -0.3%

Equity indices in the Asia-Pacific region ended Thursday on a lower note. China’s Vice Premier, Liu He, said overnight that he remains cautiously optimistic about reaching a partial trade agreement but he is confused about demands made by the U.S. The Wall Street Journal reported this morning that U.S. negotiators have been invited for another round of talks in Beijing. An early look at South Korea’s November exports showed that overall exports were down 9.6% yr/yr during the first 20 days of the month with semiconductor exports falling 23.6%. There has been continued speculation that the Bank of Japan is quietly tapering its purchases of ETFs.

  • In economic data:
    • Japan’s September All Industry Activity Index +1.5% m/m, as expected (last 0.0%)
    • Singapore’s Q3 GDP +2.1% qtr/qtr, as expected (last 0.6%); +0.5% yr/yr, as expected (last 0.2%)
    • Hong Kong’s October CPI +3.1% yr/yr (expected 3.3%; last 3.2%)

—Equity Markets—

  • Japan’s Nikkei: -0.5%
  • Hong Kong’s Hang Seng: -1.6%
  • China’s Shanghai Composite: -0.3%
  • India’s Sensex: -0.2%
  • South Korea’s Kospi: -1.4%
  • Australia’s ASX All Ordinaries: -0.7%

—FX—

  • USD/JPY: UNCH at 108.63
  • USD/CNH: -0.1% to 7.0286
  • USD/INR: UNCH at 71.74

Europe: DAX -0.1%, FTSE -0.7%, CAC -0.2%

Major European indices trade near their flat lines while the U.K.’s FTSE (-0.7%) underperforms. Germany’s Finance Ministry released its monthly report, which noted that while exports regained some momentum at the end of Q3, sentiment surveys continue pointing to subdued overall activity. The OECD lowered its 2019 global GDP growth forecast to 2.9% from 3.0% and called for more proactive fiscal policy.

  • In economic data:
    • U.K.’s Public Sector Net Borrowing GBP10.51 bln (expected GBP8.50 bln; last GBP7.26 bln)
    • France’s November Business Survey 100, as expected (last 99)
    • Spain’s September trade deficit EUR4.26 bln (last deficit of EUR3.99 bln)

—Equity Markets—

  • STOXX Europe 600: -0.4%
  • Germany’s DAX: -0.1%
  • U.K.’s FTSE 100: -0.7%
  • France’s CAC 40: -0.2%
  • Italy’s FTSE MIB: UNCH
  • Spain’s IBEX 35: -0.1%

—FX—

  • EUR/USD: +0.1% to 1.1083
  • GBP/USD: +0.2% to 1.2953
  • USD/CHF: UNCH at 0.9912
X