Tuesday’s Pre-Market Look: Stocks In The News Before The Open

Chipotle Mexican Grill (CMG) was downgraded to ‘Neutral’ from ‘Overweight’ at JPMorgan Chase with a price target of $375.

Everest Re Group Ltd (RE) was downgraded to ‘Underperform’ from ‘Neutral’ at Macquarie Research with a 12-month target price of $186.

Morgan Stanley (MS) is up nearly 2% in pre-market trading after it reported Q4 EPS of 81 cents, higher than consensus of 65 cents.

AmerisourceBegen (ABC) was upgraded to ‘Outperform’ from ‘Market Perform’ at Leerink Partners with a 12-month target price of $95.

Twitter (TWTR) was downgraded to ‘Neutral’ from ‘Buy’ at UBS with a 12-month target price of $18.

HCA Holdings (HCA) was upgraded to ‘Market Outperform’ from ‘Market Perform’ at Avondale Partners LLC with a 12-month target price of $96.

The Container Store Group (TCS) was downgraded to ‘Underweight’ from ‘Equal-weight’ at Morgan Stanley.

Disney (DIS) was upgraded to ‘Buy’ from ‘Neutral’ at Goldman Sachs who cited Disney’s fiscal year 2018 film slate as its “best ever” as they raised their price target on the stock to $134 from $109.

Concho Resources (CXO) filed a 2.2 million share shelf registration for stock holder Endurance Resources.

Citigroup estimates that Coherus Biosciences (CHRS) could add $7 a share if the U.S. Supreme Court decides that biosimilars don’t need to issue a 180-day marketing notice and Coherus can launch its low-cost alternative to Amgen’s Neulasta 6 months earlier.

Delphi Automotive PLC (DLPH) says it sees a $300 million pretax charge in Q4 related to ongoing litigation from unsecured claims against DPH Holdings resulting from a 2005 bankruptcy filing.

Source: FoxBusiness, BarChart, CNBC, Bloomberg, Reuters

Weekend report!

Random thoughts:

Now entering the midst of earning’s season. Friday’s financial earnings were ok with financials gapping out of range, only to be pulled in. We received a ton of emails that the move was negative. We will hold off until Goldman and the rest report. Financials remain range-bound just like:

The major indices remain range-bound and about as tight as we have seen. In fact, the Dow has been trading within about 1% for the past 5 weeks. Tight ranges are easily identifiable and now we wait for the next move. THE NEXT BIG MOVE WINS. A break above the upside and another leg up. A break below support and we finally get some sort of corrective work. Duh! For the Dow,  use that big round number of 20,000 heading up and 19,718 to the downside, simple as that.  Use 2282 and 2232 for the S&P.

The NASDAQ and NDX continue to get money flows as the FANG has been unleashed since the new year. Mega-cap tech/internet that acted so poorly into the end of the year have all woke up. You can include Tesla, Priceline and a few others to this move. Keep in mind, earnings coming out soon for all.

Sentiment is off the charts bullish…which as a contrary indicator is potentially bearish. When everyone is in and everyone has bought…you get the hint. Keep in mind, sentiment is not a pinpoint indicator. There is usually lag time. It is folly to get too bearish until support gets taken out.

Even though major indices are near highs, the new high list has contracted markedly. Not sure if this is meaningful yet because if major indices break out again, you can expect this number to expand again.

We keep hearing the mantra “buy the election-sell the inauguration.” Maybe this will come to pass but we would rather, as always, let the market decide.

Lastly and we couldn’t help ourselves…we have been writing and talking to you about our expectations for the reaction to the Trump presidency. We told you the media nor the other side would give him any chance whatsoever. We told you the media would be giving him a daily colonoscopy after spending 8 years not curious, not investigating, under-reporting and not reporting on the Obama presidency. Well, it has all come to pass. This made-up Russia stuff is just that…made up. This would not even be a story if the other side won. But now they drive to the hoop with it every day. Why? Simple. It was to enable the other side to delegitimize the new president. And who to lead the charge than Rep Lewis because how dare anyone take issue with what this man says? Does anyone care that he didn’t show up for Bush’s inauguration? Has the media covered what he said about McCain or Romney? Of course not because then everyone would know this has nothing to do with anything but the fact one side lost. This was completely planned out from the get go and now over 30 Dem reps are using all of this to NOT show up. Here’s our thought. Don’t show up. Show who you are! A bunch of whiners who cannot stand the fact your side lost. You say the election was not legitimate. Well, we have read a lot of the wikileaks. We think the DNC head passing debate questions to your candidate is not legitimate. We think sending people to incite violence at the other side’s rallies is not legitimate. Of course, the media dropped that in a nanosecond. It never changes!

Friday’s Pre-Market Look: Stocks In The News Before The Open

Bank of America (BAC) is up +0.5% in pre-market trading after it reported Q4 adjusted EPS of 40 cents, better than consensus of 38 cents

GrubHub (GRUB) rose 2% in pre-market trading after being upgraded by Morgan Stanley to ‘Overweight’ from ‘Equal-weight’

BlackRock (BLK) reported Q4 adjusted EPS of $5.14, stronger than consensus of $5.02.

GameStop (GME) was downgraded to ‘Neutral’ from ‘Outperform’ at Macquarie Research with a 12-month target price of $23.

Tractor Supply (TSCO) was upgraded to ‘Outperform’ from ‘Neutral’ at Wedbush.

Zillow Group (ZG) was downgraded to ‘Equal-weight’ from ‘Overweight’ at Morgan Stanley.

Independence Realty Trust (IRT) was rated a new ‘Outperform’ at Baird with a 12-month target price of $10.

Signet Jewelers (SIG) slid over 1% in after-hours trading after Corvex Management sold 2.5 million shares in a block trade.

WPX Energy (WPX) lost 1% in after-hours trading after it announced a public offering of 42 million shares of common stock.

Pandora Media (P) jumped 7% in after-hours trading after it said it sees Q4 revenue above its October 25 forecast of $362 million-$374 million citing strong advertising.

Two Harbors Investment (TWO) fell nearly 2% in after-hours trading after it proposed a public offering of $250 million of senior convertible notes due 2022.

Uranium Resources (URRE) slumped 17% in after-hours trading after it proposed a public offering of common stock, although no size or terms of the offering were mentioned.

Nivalis Therapeutics (NVLS) gained 2% in after-hours trading after it announced restructuring plans to “reduce operational costs and preserve cash” while exploring strategic alternatives and named CFO Michael Carruthers as interim president effective Jan 15.

Source: FoxBusiness, Barchart, CNBC, Bloomberg, Reuters

The Closing Look

Stocks rallied on Wednesday after President-Elect Trump held his first press conference of 2017. The tech heavy Nasdaq composite closed at a record high while the Dow Jones Industrial Average continued to trade just below 20,000. Meanwhile, the Mexican Peso hit a fresh record low after Trump reiterated his intention to build a wall.

Gary’s Thoughts: Getting closer on the dow. Rest of market acted well as it sold off on Trump and then rallied. But…message to Trump. Keep ripping on business and eventually you will cause a dislocation. Promise! Yesterday, Trump ripped the drug companies. Immediately, everything drugs sold off hard. We are not defenders of drug companies. We just need to state if Trump has a problem with industry, it would be better to call them out behind closed doors first…because in the wrong kind of market, he will crack the market. He also stated “and other industires!” So there are other industries he does not like or has issue with. Which ones? When will he mention them? What will be the repercussions?

The Morning Look

Market Update:

Stock futures are lower before Thursday’s open as investors wait for a slew of earnings to be released over the next few weeks.

Gary’s Thoughts: Futures down…weaker Europe not helping. Big financials reporting earnings tomorrow…very important to watch. On the gold front, looks like the GDX sets up well just above the 50 day. To watch!

Economic Calendar:

  • Jobless Claims 8:30 AM ET
  • Import & Export Prices 8:30 AM ET
  • EIA Natural Gas Report 10:30 AM ET
  • Dennis Lockhart Speaks 12:30 PM ET
  • Bullard Speaks 1:15PM ET
  • Treasury Budget 2:00PM ET
  • Fed Balance Sheet 4:30PM ET
  • Janet Yellen Speaks 7:00PM ET

Highlights:

  • Trump says pharma ‘getting away with murder,’ stocks slide
    Gary’s Thoughts: Not smart.
  • Obama Says Farewell As His Legacy Unravels
    Gary’s Thoughts: Listen to the first segment of our radio show yesterday.

The Closing Look

On Monday, stocks were mixed as energy dragged the S&P 500 and Dow Jones Industrial Average lower while the Nasdaq hit a fresh record high. We are entering earnings season and investors will, once again, turn their focus to earnings over the next several weeks. Elsewhere, AliBaba Founder, Jack Ma, met with President-Elect Donald Trump and said he plans to create over 1 million new jobs in the U.S. over the next five years.

Gary’s Thoughts: Oils did not help. A few dow names hit. Big cap tech/internet remains with a bid but names like FB,AMZN into massive overhead resistance. Financials were actually down. Never thought that would happen again. This coming Friday…BAC,JPM,PNC,WFC report.

Tuesday’s Pre-Market Look: Stocks In The News Before The Open

American Express (AXP) was upgraded to ‘Outperform’ from ‘Market Perform’ at Oppenheimer with an 18-month target price of $98.

Allstate (ALL) was upgraded to ‘Buy’ from ‘Neutral’ at Goldman Sachs.

Travelers Cos (TRV) was downgraded to ‘Sell’ from ‘Neutral’ at Goldman Sachs.

Williams Cos (WMB) slumped 7% in after-hours trading after it announced a plan to increase its ownership in Williams Partners to 72% from 58% and that it will launch a 65 million share public offering in order to pay for the share purchase.

Kite Pharma (KITE) gained 1% in after-hours trading after it entered into a joint venture licensing deal with Daiichi Sankyo to develop an experimental treatment for an aggressive type of blood cancer and will receive $50 million upfront plus an additional $200 million if developmental and regulatory milestones are met.

Boot Barn Holdings (BOOT) dropped 5% in after-hours trading after it reported preliminary Q3 EPS of 39 cents, weaker than consensus of 43 cents.

Barracuda Networks (CUDA) jumped 7% in after-hours trading after it reported Q3 adjusted EPS of 22 cents, well above consensus of 14 cents, and said Q3 billings for core products were up +30% y/y to $61.6 million.

Nabors Industries Ltd (NBR) fell 4% in after-hours trading after it began an offering of $500 million of exchangeable senior unsecured notes due 2024.

Zeltiq Aesthetics (ZLTQ) lost nearly 3% in after-hours trading after it said CCO and President Keith Sullivan will retire effective Jan 16.

WD-40 (WDFC) fell 6% in after-hours trading after it reported Q1 net sales of $89.2 million, weaker than consensus of $96.3 million.

Cray Inc. (CRAY) lost 4% in after-hours trading after it reported 2016 revenue of $630 million, below consensus if $633.2 million, and said for 2017 it “currently believes it will be difficult to grow over 2016.”

VOXX International (VOXX) rose 3% in after-hours trading after it reported Q3 EPS of 24 cents and said Q3 net sales rose 3.3%.

Atwood Oceanics (ATW) dropped nearly 6% in after-hours trading after it announced a public offering of 13.5 million common shares.

Shoe Carnival (SCVL) fell 2% in after-hours trading after it cut its fiscal-year net sales estimate to $1 billion-$1.003 billion, below a November 28 forecast of $1.002 billion-$1.006 billion

City Office REIT (CIO) slid 3% in after-hours trading after it announced a public offering of 4 million shares of common stock.

Papa Murphy’s Holdings (FRSH) tumbled 7% in after-hours trading after it reported preliminary Q4 revenue of $35.5 million, weaker than consensus of $38.3 million.

Source: FoxBusiness, Barchart, CNBC, Reuters, Bloomberg

The Morning Look

Market Update:

Stock futures are relatively quiet before Tuesday’s open as investors wait for earnings season to officially begin.

Gary’s Thoughts: Very quiet but…a bunch of commodity names up 2-5% on higher commodity prices. Forgot to mention a little fireworks in biotech-land yesterday. No real leadership…stuff off lows with a few spec names moving on drug news.

Economic Calendar:

  • NFIB Small Business Optimism Index 6:00 AM ET
  • Redbook 8:55 AM ET
  • JOLTS 10:00 AM ET
  • Wholesale Trade 10:00 AM ET
  • 4-Week Bill Auction 11:30 AM ET
  • 3-Yr Note Auction 1:00 PM ET

Highlights:

  • Trump Advisers to Meet With Paul Ryan on Tax Reform, Obamacare
    Gary’s Thoughts: We wonder how they are going to cover $15-20 million people on Obamacare.
  • Alibaba job boom: Jack Ma chats with Trump about how to create 1 million US jobs over 5 years
    Gary’s Thoughts: The dude sure knows the big guns of business. Cannot hurt to be speaking with them. Bernard Arnault was also in the house. Look him up!

 

Weekend thoughts!

Just remember…Russia has been a bad player forever. It is only news now because there is a certain someone who will be president soon that both parties do not like. The media couldn’t give a crap about Russia. Russian reset? Ok…we’re in a bad mood as our Giants were whooped!

20,000 Dow. We don’t blame the world for paying attention to the number. It’s a big number. Just remember, it is a testament to the greatness of this country. We lead in just about everything. Nothing can stop us, including the nuts from DC. And yes, we have to give a hand to the fed and central banks around the globe.

The most important part of the equation, so far, is that pullbacks…what’s a pullback? Selling? What’s selling? Of course, eventually, we will get a bout of it but so far, nothing doing. A few other notes:

The big cap tech/internet that were lagging so badly, finally woke up. We are talking”FANG-type” names. In fact, Apple and Google are trying to break out here with Facebook and Amazon turning the corner.

Keep watching Goldman. When it weakened Thursday, markets weakened. When it ramped, markets ramped. Goldman and just about all other financials remain ridiculously strong, setting up in another powerful flag pattern…a rare occurrence.

Chinese ADRs are also waking up as the Chinese Yuan turned. We’ll see how long that manipulation lasts!

The bond market rallied right into the declining 50 day average. A break above furthers the move. Definite improvement in interest-rate sensitive areas recently.

 

The Closing Look

Stocks rallied on Wednesday after the Fed minutes showed they are concerned about a stronger dollar. Mortgage applications fell by 12% last week, from two weeks earlier as rising interest rates hurt. Separately,  Fiat Chrysler, Ford Motor and General Motors all reported better-than-expected auto sales for December, which helped their stocks rally. U.S. auto sales for December came in at 18.4 million, versus an estimate of 17.7 million.

Gary’s Thoughts: Everyone is now bullish…that’s the main complaint…but…steel now looking ready again…financials just sit in another flag with a few names edging out…biotech finally catching a bid…and just not a lot of breaking down. Continuing to also pay attention to gold and gold stocks as the stocks leading the metal again. May just be a counter-trend rally.