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 +1.45% (2073.1), D +1.28% (17749.1), N +1.46% (4664.6), CL1 -4.39% (35.71), Copper +0.73% (207.15), Gold +1.18% (1073.70) 10YrYld +0.03 (2.2977), DXY +0.17% (98.39), Vix -14.75% (17.86).

The S&P closed up 130bps from the European close ending the day just off session highs with of course just about all those gains post-Fed. Volumes up 5% to 8.5bln vs 7.1bln est, dollars traded up 3.5% to $330bln, $60bln above avg. A little better than 80% of volume to the upside.

Markets rallied post Fed announcement, closing on session highs. Rate rise inline with expectations, more hawkish than many expected. Normalization likely to proceed gradually. Most Short +3.8%. DXY/Rates initially sold off but came back to levels pre Fed; 2yr breaks above 1%. Banks rallied 2%. XLF +1.6% / KRE +1%. HYG +80bps/JNK +90bps, Yellen played down Third Ave blowup. EEM +2%. Oil back to flat on the week following big Inventory Build; BHI -4% / HAL -3%. Solar continues to squeeze as tax credits extended; FIRST SOLAR +10% tops S&P, making a new 52 week high. Homebuilders trade well on better Housing Starts; PULTE +4%. On Earnings/guide; JOY GLOBAL +6%, HONEYWELL +6%, DOVER -1%, NUCOR -4%. HILTON +5% looking to spin off hotel properties into REIT (DJ). GE (Buy) +2%, new 52 week high, currently hosting annual outlook meeting, guide broadly inline; full thoughts in the morning. LIFT OFF….DELTA +2% hits new all time high ahead of tomorrow’s Investor Day, full details below.

OUTPERFORMERS: Solar +9%, Gold Miners +4%, Homebuilders +2.6%, Utils +2.6%, Autos +2.3%

UNDERPERFORMERS: Explorers -2.5%, Oil Services -1%, Drillers -90bps

COMMODS: Silver +3.5%, Nickel +2.3%, Gold +1.3%, Copper +90bps, Ally +70bps, Nat Gas -40bps, Wheat -1.9%, WTI -4.2%

ECO: Housing Starts 1173k, est 1130k; MoM +10.5%, est +6.6%. Building Permits MoM +11%, est -1%. IP -0.6%, est -0.2%. Man PMI 51.3, est 52.6.

AFTER-HRS NEWS/MOVES:

JABIL CIRCUIT +2.9% q1 eps beat, raises core ’16 eps guide
PANDORA -1.2% postpones crb decision conf call
FEDEX +4.1% q2 beats, reaffirms fy
ORACLE +1.6% q2 eps beats, revs touch light
PIER 1 IMPORTS -13.5% q3 eps beats but comps/revs miss & reduces outlook

ACTIVE TODAY:

ENERGY
BAKER HUGHES -3.7% / HALLIBURTON -3.3% deal seeing –ve broker commentary
CHEVRON +75bps raised to Buy at Argus
FIRST SOLAR +9.7% short covering across the space following tax credit extension

FINANCIAL
MASTERCARD +1.6% New Buy at UBS
VISA +1.6% New Buy at UBS

HEALTHCARE
AMGEN +1.2% raised Div
DANAHER +1.7% Sees FY EPS at lower end
SHIRE +5.2% Cowen Best Idea list
SPARK THERAPEUTICS -6.1% priced 3m shares at $47
VALEANT +8.1% hosts Investor Day, cuts guidance, not exploring break up

HOMEBUILDERS
PULTE +3.6% buying $430-450m of assets from John Wieland Homes

INDUSTRIAL
CATERPILLAR +1.5% Cut to Hold at DBK
DOVER -1.1% cuts FY guidance, seeing downgrades
JOY GLOBAL +6.1% cuts Div and EPS guide, suspends Buyback
GE +2.2% Investor meeting ongoing
GENERAL DYNAMICS +1.2% cut to Neutral at JPM
HONEYWELL +5.7% raised FY16 EPS guidance
KENNAMETAL -12.3% seeing downgrades post warning
NORTHRUP GRUMAN +1% raised to Overweight at JPM
TEREX +2.3% cut to Hold at DBK
TEXTRON +3% raised to Overweight at JPM
SOLAR CITY +34.1% 2 key fed tax credits extended

TMT
ALPHABET +80bps to make driverless car unit a standalone business next year
APPLE +80bps GS trims estimates
DISNEY +1.5% Star Wars reviews positive
GLOBAL PAYMENTS -8% paying $100/share for HEARTLAND
GRUBHUB -1.7% cut to Market Perform at Northland
MINDBODY -1.3% lock up expiry
MOBILEYE -7.2% top short idea at Citron

TRANSPORTS
CANADIAN PACIFIC +2.9% improves NORFOLK SOUTHERN -1.4% offer

CONSUMER
HILTON +5.2% reports could spin properties into reits