Aviate US Summary

The authors of the content on this page from Sept 2012 to June 2017 are:
Market Commentaries: Gary Paulin, Ameet Patel, Paul Moran, Douglas Morton, Oliver Sherman, Ben Brownette, Rob Arnott, James Santo, Neil Campling
Research: Ameet Patel, Paul Moran, Douglas Morton, Oliver Sherman, Rob Arnott, Neil Campling

S&P -0.19% (1948.1), D -0.34% (16640.0), N -0.13% (4235.6), CL1 -0.57% (32.89), Copper +2.12% (211.70), Gold -0.80% (1223.16) 10YrYld +0.04 (1.7606), DXY +0.82% (98.09), Vix +3.66% (19.81).

The S&P closed down 35bps from the European close to slide into negative territory and end the day just about at session lows with a modest loss. Volume up just under 10% to 7.9bln shares still 1bln below avg. Dollars traded up in similar proportion to $270bln, about $50bln below avg. Despite a negative close up volume was 60% activity on more of a flurry of activity in the first part of the day before losing momentum.

A stronger start to the day on economic data before the mkt ran out of steam though materials, financials, e&p names, and most shorted names held on for a strong day. Defensives and especially gold names/utilities bearing the brunt of the selling today. The S&P does end the week though still above the 50 day avg which it closed above yesterday for the first time this year, up 1.6% for the week. The data today, specifically GDP and measures of inflation, all posted beats. The initial positive reaction in stocks was telling of the current sentiment that, for now at least, the market is more assured by signs of strengthening economy that could lead to another rate hike than anything that supports the idea of a dovish Plan B needed from the Fed. For some perspective the market is pricing in a 12% chance of a hike in March up from 6% a week ago (though was 20% a month ago, 50% 2 months ago). Perhaps leading to a falloff of sustained enthusiasm today, despite the better economic data, the Atlanta Fed reduced their q1 GDPNow forecast for the 2nd time in 2 days from 2.5% to 2.1% on concerns that the inventory component which supported this morning’s # would swing to a drag in the current qtr. Rates, though, largely held up their gains today with the strongest rally in a week and a half back over 1.76% on the 10 year. But with the hint of inflation the front end of the curve moved even more, with breakeven estimates moving strongly higher, causing the 2/10 curve to actually flatten and close at lowest level since the end of 2007 after flirting with that level at points intraday through much of the week. A close to 6% range in crude today unable to hold gains and closing down half a percent but nonetheless up 11% for the week, the most since the last full week of August.

OUTPERFORMERS: Metals/Mining +4.4%, Drillers +4.4%, Oil Services +3.5%, Coal +2.8%, Inv Banks +2.7%

UNDERPERFORMERS: Gold Miners -3.7%, Utilities -2.7%, Household Products -1.6%, Staples -1.4%, Food/Bev/Tobaco -1.4%

WEEKLY OUTPERFORMERS: Metals/Mining +7.3%, Dept Stores +6.9%, Homebuilders +6.7%, Consumer Durables +6%, Solar +5.7%

WEEKLY UNDERPERFORMERS: Integrated Oil -1.3%, Household Products -65bps, Coal -20bps, Utilities -15bps, Railroads unch’d

COMMODS: Copper +2.2%, NatGas unch’d, Soybeans -25bps, Cattle -25bps, Corn -30bps……Gasoline -3.7%, Silver -3%, Nickel -2.1%, Cocoa -2%, OJ -1.5%

ECON: GDP q4 1% vs 0.4% est, Personal Consumption 2% vs 2.2% est, GDP Price Index 0.9% vs 0.8% est, Core PCE q/q 1.3% vs 1.2% est, Personal Income 0.5% vs 0.4% est, Personal Spending 0.5% vs 0.3% est, PCE Deflator m/m 0.1% vs b/e est, y/y 1.3% vs 1.1% est, Core m/m 0.3% vs 0.2% est, y/y 1.7% vs 1.5% est, U of Mich Sentiment 91.7 vs 91.0 est

ACTIVE TODAY:

TMT
INTUIT -4.3% q3 beat, midpoint of guidance above est
AUTODESK 3.6% q4 beats but sees q1 revs below est
SBA COMM -2% q4 adj ebitda/revs beat, fy guide touch light
BAIDU +9.9% q4 revs beat
STARZ +4.7% q4 eps light
SPLUNK +7.7% q4 eps/revs beat, q1 revs view above est
INFOBLOX -4.2% q2 inline w/ prev guide, q3 forecast below est
PEARSON +3.2% fy eps small beat, revs miss
58.COM +25bps q4 epads loss less than est, revs beat
EW SCRIPPS -70bps q4 penny light, revs small miss
LIBERTY MEDIA +65bps q4 oibda light, to receive $775mm settlement from Vivendi
PALO ALTO NETWORKS +5.2% continues rally on #s released late session yest
RUCKUS WIRELESS +10bps init buy @ BTIG
SABRE -2.2% 20mm share spot secondary
UNIVERSAL DISPLAY -11.5% q4 #s miss
MERCADOLIBRE -4.9% q4 eps/revs beat

CONSUMER
ZOE’S KITCHEN +19.1% q4 comps/revs beat, fy revs guide midpoint better
HERBALIFFE +20.5% q4 beats but fy eps seen below est
GAP STORES -1.3% q4 eps penny beat, $1bln b/b, fy guide below est
KRAFT HEINZ +3.8% q4 eps/revs beat
MONSTER BEVERAGE -1.7% q4 miss
WEIGHT WATCHERS -29.2% q4 loss vs est for profit
SOTHEBY’S -6.8% q4 eps/revs beat but sees q1 losses
SPIRIT AIRLINES +1.2% u/g @ Raymond James
FOOT LOCKER -4.3% q4 eps beats, revs inline but Feb outlook poor
TRI POINTE unch’d: q4 eps/revs beat
JC PENNEY +14.7% q4 eps beats on strong holiday sales
HILTON +2.5% q4 eps inline, revs small miss, guidance bit light
TUPPERWARE +2.4% d/g @ KeyBanc
COCA-COLA -2.3% d/g @ Sterne Agee
COLGATE-PALMOLIVE -1.7% d/g @ Sterne Agee
PEPSICO -2.3% d/g @ Sterne Agee
REVLON -1.2% q4 sales grow, posts profit
COSTCO -3.3% negative report @ Cleveland Research
MACY’S +15bps increases b/b $1.5bln
RALPH LAUREN -1.2% global brands president departing

CAPITAL GOODS
HONEYWELL -1.1% discloses $108/shr cash/stock bid for UNITED TECHNOLGIES seeking to re-engage

HEALTHCARE
BIOMARIN +4.9% q4 revs beat, fy view below est

MATERIALS
MOHAWK +4.4% q4 eps beats, revs inline
TENARIS +5.5% u/g @ Credit Suisse
GOLD CORP -12.8% q4 surprise loss, writedowns, div cut
NEWFIELD EXPLORATION +6.6% 30mm share spot secondary

REAL ESTATE
BOSTON PROPERTIES -1.1% d/g @ Capital One

CAPITAL GOODS
AMERICAN TOWER +65bps q4 beats

INDUSTRIALS
CHICAGO BRIDGE & IRON +2.4% q4 inline w/ pre-announcement

ENERGY
KBR +9.8% q4 eps beats, revs below est
DELEK +11.6% q4 loss less than est, revs inline
RANGE RESOURCES +2.3% q4 eps beats, revs miss
EOG RESOURCES -1.5% q4 loss less than expected, revs miss
SOUTHWESTERN ENERGY -5.8% sees production drop/fy losses wider than est