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 +0.20% (2016.7), D +0.06% (17158.7), N -0.30% (4484.2), CL1 -1.69% (36.12), Copper +0.75% (209.50), Gold +0.33% (1078.07) 10YrYld -0.01 (2.2357), DXY +0.51% (99.38), Vix -6.57% (19.34).

The S&P closed up 15bps from the European close ending the day with a nominal gain. Volumes much lighter than yesterday though -18% to 6.9bln shares falling just below the December daily avg. Dollars traded off more than 25% to $26bln, a couple percent below avg as well. Up/Down volume nearly paired with slightest edge to up volume.

Bit of a lackluster response to yesterday’s negative start to the year with mixed performance today on lighter volumes and less than 1% range in the S&P. Very small positive bounce in rates/curve today as well, but Dollar makes a move higher to best levels in a month, EUR 1.075. Oil resumes back still on its 2015 form, continuing its slide after yesterday’s failed rally, off the better part of another 2.5% today back down to levels last seen 2 weeks ago with inventories due still. And like last year, energy shares weak save refiners. A few themes in focus today.. first autos, with while the majors seem to have mostly missed Dec sales estimates fy total looks to be a record, though short of the mythical 18mm. AAPL off 2.5% for a new low for the move inline with summer lows. Been a Riccardo short. Press reports that the co. is looking for 30% iPhone 6 prod cuts (vs. flat orders last year). Seems we’re at peak phone and the market needs a new product category as watches not moving the needle for them. Weakness even more pronounced in the Apple supply chain. Despite a bit of a rebound in financials, another Riccardo short, GOLDMAN SACHS -1.7% trailing badly also a new low for the move. In tech outside of Apple weakness, connectivity the buzz from CES. One of our longs, NVIDIA +1.6% in the middle of a lot being talked about at the conference (cars, virtual reality, and drones) making a splash with its new processor technology. Also good for the l/t in AT&T +70bps and CROWN CASTLE +2.1%, backbones to the connected world. HARMAN up 3% another early winner as a cybersecurity acq reminds investors of its imbedded position in the connected car. Market looking for new ideas with FANG stocks falling again vs the S&P to mid-Nov levels now, NETFLIX off > 2% today doing most of the damage for the small group. DISNEY -2% weighs on media, still one to avoid as despite StarWars, poor college football bowl ratings add to the woes at ESPN on top of sub concerns and acquisition costs.

OUTPERFORMERS: Metals/Mining +2.5%, Real Estate +2%, Dept Stores +1.4%, Aero/Def +1%, Steel +1%

UNDERPERFORMERS: Drillers -3.3%, Autos -2.1%, Oil Services -1.9%, Tech Hardware -1.6%, Solar -1.5%

COMMODS: Lean Hogs +2.6%, Silver +90bps, Copper +80bps, Wheat +70bps, Corn +40bps…..Nickel -3.6%, Sugar -2.6%, Gasoline -2.6%, Crude -2.3%, Aluminum -2.3%

ECON: ISM New York 62.0, Wards Total Vehicle Sales 17.22mm vs 18.0 est

AFTER-HRS NEWS/MOVES:

SIRIUS XM +40bps sees 2016 revs about $4.9bln vs 4.93 est
CONATUS PHARMA +12% positive trial results
PIONEER NATURAL -3.3% sees ’15 prod growth 12% vs 11% prior view, 10.5mm share offering
SONIC CORP +2.5% q1 revs/comps beat

ACTIVE TODAY:

TMT
APPLE -2.5% said to be cutting iPhone6 prod 30% per press
CIRRUS LOGIC -5.9% Apple supply chain under pressure
SPLUNK -80bps 2016 best software idea @ DA Davidson
ARISTA +1.1% named a top storage pick @ Oppenheimer
JUNIPER +50bps / F5 NETWORKS -40bps d/g @ Oppenheimer
DISNEY -2% d/g @ Macquarie
NVIDIA +1.6% p/t raised @ JMP Securities
IAC +80bps added to best ideas, EXPEDIA -70bps removed @ Guggenheim
MOBILEYE -9.5% erases early gains on GM exploring use of their technology
HARMAN +3.1% makes cybersecurity acq, connected car in focus at CES

CAPITAL GOODS
FIRST SOLAR +8% u/g @ Goldman, p/t raised @ Oppenheimer
SPIRIT AEROSYSTEM +3.4% u/g @ Bernstein
FLIR SYSTEMS +5.4% u/g @ Raymond James

HEALTHCARE
ELI LILLY +1.5% reduces 2016 view below est

CONSUMER
FORD -1.8% US Dec sales +0.7% vs 4.9% est
FIAT CHRYSLER +80bps Dec +4.5% vs 11.3% est
GENERAL MOTORS -2.6% Dec (1.8%) vs 3.8% est
TOYOTA -25bps Dec +2.9%
HONDA -75bps Dec +2.1%
DELTA -20bps December PRASM (5%)
SPIRIT AIRLINES +5.9% new CEO
SMITH & WESSON +11.1% boots q3 view above est as admin unveils gun control actions
ROYAL CARIBBEAN -1.6% d/g @ Morgan Stanley
NORDSTROM -30bps d/g @ Citi
JC PENNEY +2.9% u/g @ Citi
FITBIT -18.4% falls despite new prod launch on competing products introduced

ENERGY
WHITING PETROLEUM -5.1% d/g @ Evercore ISI
HOLLYFRONTIER +2.2% u/g @ BofA/Merrill
APACHE -2% d/g @ BofA/Merrill
BAKER HUGHES -2.8% u/g @ KeyBanc
NATIONAL OILWELL VARCO -2.9% d/g @ KeyBanc
CONTINENTAL RESOURCES +1.6% u/g @ BofA/Merrill

FINANCIALS
METLIFE -1.9% d/g @ Citi

SERVICES
PROGRESSIVE WASTE +7.2% co confirms exploring alternatives

MATERIALS
AIR PRODUCTS -1.8% d/g @ Citi
DUPONT +1.9% d/g @ Citi