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 -0.27% (2042.0), D -0.12% (17556.4), N -0.36% (4458.7), CL1 +1.69% (40.39), Copper -0.19% (208.35), Gold +1.40% (1256.75) 10YrYld +0.00 (1.7202), DXY -0.26% (93.99), Vix +5.47% (16.24).

The S&P closed down 40bps from the European close to end the day at session lows. Volumes flat with Friday at 6.3bln shares, still below avg of 7bln. Dollars traded off a couple percent to $220bln vs avg of $250bln. Despite the down close up volume 60% of activity today.

Markets struggled to hold morning rally, closing small down; commod proxies lead, Nasdaq (Biotech) underperforms. DXY finally breaks 94; EM FX breaking higher (BRL/ZAR); JPY 107.91, EUR 1.1408. EEM +1.3%. Rates small up, 10yr 1.72%; Banks +1% as short exposure reduced ahead of this week’s earnings; WELLS FARGO -10bps sees dgrade. Oil back above $40, OPEC meeting 4/17 remains the big catalyst this month, Iraq boosts output; more energy paper SYNERGY RESOURCES -8% raising $150m. CHESAPEAKE +19% agrees new financing. Gold heading back to recent highs; GDX +6.2% breaks to new 52 week highs. Copper continues to lag. Steel names strong globally, Chinese steel spreads making new highs for the move; US STEEL +5%. In M&A, CANADIAN PACIFIC +3.5% ends merger hopes with NORFOLK SOUTHERN -3%, no surprise. HERTZ -11% warning, oversupply adding pricing pressure and weakness to used values, Uber/Lyft continue to disrupt, BMW announced sharing scheme last week; only going to get worse for these guys over time, AVIS -8%. TESLA (unch) lost early gains as 2700 Model X recalled for seat defect. AMERICAN AIRLINES +60bps sees record March traffic and capacity. SAP +20bps, –ve preannouncement on Friday night, cloud growth cant offset all important software licensing numbers; prefer MICROSOFT/ORACLE, both in our QCC Basket. Luxury not expected to have bumper quarter but warning signals picking up; Prada (Sell, full thoughts on today’s Asia note) and LVMH (pink sheet fell 1%) both missed in the last couple days; TIFFANY (Sell) +30bps host Investor Day tomorrow. Earnings expected from CSX and FASTENAL; FACEBOOK (buy) hosting F8 conference.

OUTPERFORMERS: Gold Miners +6%, Materials +4%, Inv Banks +1.4%, Drillers +1.4%, Regional Banks +90bps

UNDERPERFORMERS: Refiners -2.3%, Biotech -1.7%, Apparel -1.2%, Pharma -90bps, Retail -80bps

COMMODS: Silver +3.7%, Gasoline +3.2%, WTI +2%, Gold +1.2%, Nickel +20bps, Copper +5bps, Ally -70bps, Nat Gas -3.3%

ECO: nothing of interest

AFTER HOURS

ALCOA -1% Q1 EPS 5c Beat, Revs 5% light, separation on track
JUNIPER -8% sees q1 eps below prior range
ACTIVE TODAY:

TMT
ALPHABET -25bps u/g @ Pivotal Research
DISNEY -15bps positive comments in Barron’s
MICRON -2.5% cautious comments in Barron’s
WORLD WRESTLING ENTERTAINMENT -3.4% cautious comments in Barron’s
APPLE +35bps positive comments in Barron’s, upbeat commentary on sales @ RBC
NXP SEMI +30bps init buy @ Nomura
FLEETMATICS -5.3% d/g @ Macquarie
SAP +25bps q1 prelim #s light
QLIK TECHNOLOGIES -3.5% d/g @ Citiew
SEAGATE +5.2% u/g @ Cowen
MOBLIEYE +5% positive comments @ Citi

CAPITAL GOODS
XYLEM unch’d: d/g @ Wedbush
CUMMINS unch’d: d/g @ Macquarie

HEALTHCARE
VALEANT -6.9% p/t lowered @ Rodman & Renshaw, cautious note @ Piper, positive comments @ Stifel
EDWARDS LIFESCIENCES +1.5% p/t raised @ JPMorgan

CONSUMER
DIAGEO -25bps Chairman to step down per pressnvo us
RESTAURANT BRANDS +2.9% u/g @ RBC
UNITED NATURAL FOODS -6.2% d/g @ Morgan Stanley
UNITED CONTINENTAL +1.2% March traffic -1.5%
HERTZ -11.4% sees q1, fy US rac revs/eps below view
UNDER ARMOUR -5.5% p/t cut @ Morgan Stanley

FINANCIALS/REIT
AVALONBAY -1.9% d/g @ UBS
HATTERAS FINANCIAL +10.8% to be acq’d by ANNALY CAPITAL for $1.5bln cash
WELLS FARGO -8bps d/g @ Sandler O’Neill

MATERIALS
KINROSS GOLD +7.9%/ ANGLOGOLD +6.9% both u/g @ RBC
GOLDCORP +3.9% d/g @ RBC
OWENS-ILLINOIS +3% postive comments in Barron’s
BEACON ROOFING -75bps u/g @ RBC

ENERGY
NAT’L OILWELL VARCO -6.2% sees revs down 20% q/q, 89% div cut
ALCOA +4% positive comments in WSJ
CHESAPEAKE ENERGY +19.7% amends credit line for covenant relief

TRANSPORTATION
CANADIAN PACIFIC +3.4% officially ends pursuit of NORFOLK SOUTHERN merger
FEDEX -25bps valuation gap over UPS -40bps too much per note @ UBS
Have a good evening.