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 -1.94% (2012.4), D -1.76% (17265.2), N -2.27% (4537.6), CL1 -3.97% (35.30), Copper +1.54% (210.45), Gold +0.28% (1074.59) 10YrYld -0.10 (2.1305), DXY -0.39% (97.56), Vix +26.11% (24.39).

The S&P closed down 50bps from the European close ending the day basically at session lows. Volume jumped more than 20% to 8.2bln vs avg of 7bln. Dollars traded up 28% to $330bln vs $268bln avg. Over 90% of volume to the downside today.

As the fed approaches next week, markets came for sale throughout the session, closing on lows of the week -3.8% after two weeks of essentially flat trading. Most Short -3.4% for the day . DXY -33bps as Euro tests 1.10. Yuan hits new low. Rates hit hard, 10yr now given back 6 weeks of wor, XLF -2.2%, GOLDMAN -3.1% a new short for Riccardo this week. HYG/JNK -2% more today raising further credit concerns. EEM -2.8% ETF testing 52 week lows. Copper +2% catching a bid on vague reports of China coming back to market; FREEPORT off more than 6% though, -12% for the week and 9 straight weeks. Gold +35bps also catching a little interest as people forced to scramble a bit. No love in Oil -4% out squarely at the low, off nearly 12% for the week; XLE -3.7% getting very close to late September lows. On Earnings; FINISAR +23%, ADOBE +2.8% , RESTORATION HARDWARE -4.3% , VINCE -18.6%. DOW/DUPONT merger completed and but price action disappointing down 2.8% And 5.5% respectively though the long-term view on the strategy here makes sense to us. Last night’s NPD data adds further positives to ACTIVISION -3% call, today’s weakness an opportunity to add. Great consol sales, downloads not captured in data even further enhances, Call of Duty #1 game. ELECTRONIC ARTS +1.2% announced plans to create eSports division. Rails bouncing small on renewed M&A hopes, but we continue to fade any rally; UNION PACIFIC -20bps one we would circle. APPLE -2.6%coming for sale on Yuan concerns and –ve channel checks ou there; also hurting supply chain, SKYWORKS -4%, CIRRUS -4.7%. BAXALTA rallying midday but falls 1.7% in the end on hopes SHIRE -2.5% will be back with improved offer in the coming weeks. Looking into next week, focus of course remains on the Fed, one and done remains consensus and given the moves this week it could be done for a while! The question of how much “turmoil” it would take to defer once again surely to be a topic early next week. Earnings light, FEDEX and LENNAR the highlights for us.

OUTPERFORMERS: Railroads +1.1%, Goldminers +20bps, Managed Care +15bps, Utilities -30bps, Real Estate -35bps

UNDERPERFORMERS: Coal -7.5%, Metals/Mining -6.3%, Refiners -5.1%, Asset Mgrs -4.6%, Explorers -4.2%

WEEKLY OUTPERFORMERS: Chemicals +1.2%, Managed Care -35bps, Packaged Foods -65bps, Household Products -70bps, Healthcare Equip/Services -1.4%

WEEKLY UNDERPERFORMERS: Metals/Mining -12.1%, Coal -9.6%, Asset Mgrs -9.1%, Refiners -8.3%, Explorers -8.2%

COMMODITIES: Lean Hogs +2.2%, Copper +1.6%, OJ +1%, Gold +40bps, Sugar +20bps…..Heating Oil -6.5%, Coffee -4.1%, Crude -3.6%, NatGas -1.8%, Nickel -1.8%

ECON: Adv Retail Sales m/m +0.2% vs 0.3% est, ex-autos +0.4% vs 0.3% est, ex-autos/gas +0.5% vs 0.4% est, PPI m/m +0.3% vs unch’d est, y/y -1.1% vs -1.4% est, Business Inventories unch’d vs +0.1% est, Univ of Mich Sentiment 91.8 vs 92.0 est

ACTIVE TODAY:

TMT
ADOBE +2.8% q4 beat, q1 revs guide inline
FINISAR +22.3% q2 beat
SPLUNK -6.3% init neutral @ Goldman
TERADATA -5.5% init sell @ Goldman
TAIWAN SEMI -2.1% u/g @ Credit Suisse
MICRON -4.2% #s reduced, below street @ Goldman
ELECTRONIC ARTS +1.2% appoints eSports head
GOPRO +1.7% d/g @ Citi
AMERICA MOVIL -2.1% u/g @ Morgan Stanley
CABLEVISION +95bps u/g @ JPMorgan

CONSUMER
RESTORATION HARDWARE -4.3% q3 eps beat, revs/comps miss, raises low end of fy view
VINCE HLDGS -18.6% q3 beat but comps miss
JETBLUE -7.9% sees q4 prasm down 2-3% y/y
WHOLE FOODS +8.6% positive comments @ ITG
THE CONTAINER STORE -19.6% d/g @ BofA/Merrill
CHIPOTLE -1.8% d/g @ Argus
PIER 1 IMPORTS -7.2% d/g @ Credit Suisse
YUM! BRANDS -2.6% authorizes $1bln b/b after cut to junk by S&P

HEALTHCARE
PUMA BIOTECH -5.9% disappointing study update
HORIZON -6.9% makes $510mm acq
ARIAD -4.6% cuts Iclusig rev view

FINANCIALS/REAL ESTATE
FRANKLIN RESOURCES -6% concerns for high yield funds
PIPER JAFFRAY -7.4% d/g @ Keefe Bruyette
AVALONBAY +65bps u/g @ Baird

SERVICES
WILLIS GROUP +3.8% deal approved by TOWERS WATSON +4.4% hldrs

MATERIALS
DOW -2.8% / DUPONT -5.5% deal becomes official, intends to split into 3 co’s
CORNING +5.6% getting bought out of j/v interest with Dow
STILLWATER MINING -14% d/g @ CIBC

ENERGY
MARATHON OIL -2.7% d/g @ Argus

TRANPORTATION
GENESEE & WYOMING -5.8% lowers q4 view
NORFOLK SOUTHERN +2% Berkshire indicates interest in consolidation play