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 -1.31% (1990.3), D -1.47% (16906.5), N -0.90% (4444.0), CL1 -5.23% (34.09), Copper -0.38% (208.75), Gold +1.55% (1094.34) 10YrYld -0.07 (2.1702), DXY -0.19% (99.21), Vix +6.46% (20.59).

The S&P closed down 50bps from the European close inclusive of a 60bps rally off the lows of the day over the last hour. Volumes up 15% over yesterday’s flat day at 8.1bln shares, 1bln above avg. Dollars traded up 15% to $311bln, $40bln above avg. About 85% of volume printing to the downside.

Market gets more to worry about with a Chinese devaluation and a North Korean nuclear test enough to set a bearish tone for the day taking stocks to the lowest level since mid-October. Crude still getting its share of the headlines making new lows making yet new lows for the move to lowest since March 2009. Data today showed gasoline inventories building and US production up. Also today were Fed minutes. The well telegraphed move was called a “close call” by some mtg participants, perhaps a bit of a surprise given the strong mkt consensus into the hike. Concerns on the total lack of progress towards a 2% inflation goal tempering enthusiasm for liftoff. Given the economic data since the mtg, oil, and China exporting deflation doesn’t seem any momentum building there. Not a surprise to see rates then out at lows of the day and in the bottom half of the trading range of last couple months. The curve, though, making lows for the move match lowest level of the last year. Dollar closer to recent highs than rates but also out at the lows today. As the big picture gets messier gold continues to rise up third day in a row, highest in 2 months breaking out of a range. In stocks worth noting after yesterday’s Dec auto numbers the sector under pressure today in part of AutoNation -10.5% as they see a margin hit in q4. Financials poor performers as well per the curve move noted, semi’s fall out of it’s range to October levels on concerns of global capex. Most shorted being sold aggressively -2.9% closing below mid-Dec prior low to works level since Oct 2009. Bulls holding on to fact that mkt up 70bps, flat, up 60bps in last hour so far this year.

OUTPERFORMERS: Gold Miners +2.3%, Food/Bev/Tobacco unch’d, Media -15bps, Packaged Food -15bps, Utilities -20bps

UNDERPERFORMERS: Coal -11%, Metals/Mining -8%, Drillers -6.7%, Explorers -6.7%, Oil Services -4.9%

COMMODS: OJ +2.2%, Gold +1.3%, Soybeans +90bps, Hogs +35bps, Wheat +30bps…..Gasoline -7.6%, Crude -5.5%, Heating Oil -3.4%, Cocoa -2.6%, Coffee -2.5%

ECON: ADP Employment 257k vs 198k est, ISM Non-Manf 55.3 vs 56 est, Factory Orders -0.2% inline, Durable Goods unch’d, Cap Goods Non-Def Ex-Air -0.3%

AFTER-HRS NEWS/MOVES:

ZUMIEZ +14.3% q4 sales/eps beat
MACY’S +5% after trading down as much as 5% after-hrs as warns for q4, closing stores/job cuts, still looking at value creation through real estate

ACTIVE TODAY:

TMT
WESTERN DIGITAL -2.2% a 2016 best idea @ Pacific Crest
T-MOBILE US -40bps q4 prelim net adds beats est
NETFLIX +9.3% details int’l expansion plans, defended @ RBC
YAHOO -15bps Starboard new letter to board calling for mgmt changes
REALOGY -2% u/g @ Credit Suisse
ORACLE +50bps u/g @ Evercore ISI
ARISTA NETWORKS -6.1% init neut @ UBS
TERADATA -4.1% d/g @ Barclays
MOBILEYE +5.3% defended @ Deutsche
RACKSPACE -7.2% Amazon Web Services cuts prices
LAM RESEARCH -5.9% semis under pressure on industry capex concerns

CAPITAL GOODS
LOCKHEED MARTIN -30bps u/g @ RBC
MSC INDUSTRIAL +6.6% on better than est #s
IROBOT -2% u/g @ JPMorgan

CONSUMER
KROGER -10bps postive comments @ Oppenheimer
AUTONATION -10.5% sees q4 margin declines
RITE AID -15bps d/g @ Evercore ISI
WALGREENS BOOSTS ALLIANCE -1.5% u/g @ Evercore ISI
HYATT -6.2% d/g @ JPMorgan
CHIPOTLE -5% poor sss, subpoena
SONIC -6.6% off on #s

HEALTHCARE
CARDINAL HEALTH -2.7%/ AMERISOURCEBERGEN -1.5% / MCKESSON -1.2% d/g @ Raymond James
HCA -70bps u/g @ Raymond James
PATTERSON unch’d u/g @ Evercore ISI
BIOMARIN -2.9% p/t lowered @ Piper Jaffray
BIOGEN -1% p/t raised @ Jefferies
VALEANT +1.5% app’ts interim ceo as Pearson remains hospitalized
BAXALTA -5.3% press reports of SHIRE -2.2% talks stumbling on tax issues

FINANCIALS
DEUTSCHE BANK -1.5% added to focus list @ JPMorgan

MATERIALS
RPM INT’L -1.1% #s beats, guide unch’d

ENERGY
PIONEER ENERGY -7.2% secondary offering