Northern Trust Securities: 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 +0.28% (2105.3), D +0.27% (17838.6), N +0.25% (4531.3), CL1 +0.10% (49.06), Copper -0.24% (206.80), Gold +0.00% (1210.95) 10YrYld -0.04 (1.7989), DXY +0.09% (95.54), Vix -4.01% (13.63).

The S&P closed up 50bps from the European close to go out at session highs. Volume continues below avg, falling slightly today to 6.4bln, 500mm shares below avg. Dollars traded down just under 2% to $237bln, $15bln below avg. Just over 60% of volume printing to the upside.

5th straight session of less than 50bps move net, net either way on the S&P though the last 4 days all see good late day intraday performance. We do close above the April highs on the S&P today, about 1.2% from all-time highs though in total-return terms we’re already making new highs. Despite the more defensive SHUT Index extending its winning streak over TIME Index to 5 straight days and 6 of last 7 interesting to note small-caps making a move vs. large caps, generally a ‘risk-on’ sign: RTY vs S&P best relative level this year. Today small-cap growth a strong outperformer along w/ most-shorted names. Healthcare strong w/ XLV up 1.3% in the large cap space, XBI (equal weighted biotech etf) +2.9%. Retailers, Autos also strong. Energy (all-caps) the weakest spot in stocks today on another OPEC mtg come and gone w/ no output deal (though crude does rally 2% from lows to flat). Worth noting bellwethers Lg-cap Software, Transports, Tech Hardware the other main laggards today despite the new high for move in the broader mkt. With the all important payrolls # tomm morning the 10yr out at lows <1.8% along w/ the 2yr which is now <0.88% as the curve flattens again to new multi-year low. Dollar little changed today still more or less in 2 week holding pattern. Single-stock movers today on #s: CIEN +12.8%, JOY +21.9%, BOX -11.5%, HOV -11.4%, CONN -26.6%. Also in the news APPLE (NTS Sell) -75bps continuing renewed underperformance as an influential industry reports highlights slowing smartphone growth and sees a #s cut away today. In the wake of yesterday’s auto sales we step off our GENERAL MOTORS +3bps long as we believe sentiment for the group is turning negative enough that GM won’t be able to sufficiently stand out on its own merits. We would add to SHIRE (NTS Buy) -65bps on weakness associated w/ Baxalta deal close: co. w/ growth & scale going forward. In retail L BRANDS (QCC) +4.3% on monthly comps. We see further upside in the name as it works to close early May gap, a compounder that was temporarily mispriced in the s/t by the market. Speaking of compounders, semi-annual refresh today of our QCC basket after v1 outperformed ytd. 20 new names out of the 50 in the basket. Off to a good start today outperforming the S&P by 25bps today. Call for more details.

OUTPERFORMERS: Dept Stores +3.7%, Managed Healthcare +1.7%, Chemicals +1.3%, Healthcare +1.1%, Pharma +1%

UNDERPERFORMERS: Coal -2.1%, Drillers -1.9%, Oil Services -1.5%, Integrated Oil -90bps, Asset Mgrs -80bps

COMMODS: Soybeans +4.1%, Sugar +3.9%, Wheat +2.5%, Lean Hogs +2%, OJ +1.8%……Cotton -0.5%, Gold -10bps, Copper -10bps, Crude unch’d, Cattle +20bps

ECON: ADP Employment Change 173k inline, Initial Jobless Claims 267k vs 270k est, ISM New York 37.2

AFTER-HRS NEWS/MOVES:

BROADCOM +6.3% q2 beat, forecast better than est
COOPER COS +5.1% q2 beatt, raises fy view
GAP INC +5.1% May sales beat
ZUMIEZ -9.4% q1 loss, q2 seen below est
AMBARELLA +11.8% q1 beat

ACTIVE TODAY:

TMT
QLIK TECHNOLGIES +3.8% to be acq’d for $3bln by p/e
BOX -11.5% q1 beat but billings light
ORACLE -4% whistleblower suite on acc’ting practices, d/g @ JG Capital
CIENA +12.8% q2 beats, q3 revs midpoint better than est
APPLE -75bps #s cut @ Goldman
TRIBUNE PUBLISHING -1.8% falls as GANNETT -25bps said to lean towards dropping bid

CONSUMER
CST BRANDS +18.2% reports of bids submitted for co
KATE SPADE -4.6% speaks at conf, defended on weakness @ Citi
SIGNET -6.6% negative mention @ Grant’s Interest Rate Observer
HILTON +3.2% updates real estate spin-off plans
L BRANDS +4.3% May comps improve
COSTCO -65bps May comps miss
HOVANIAN -11.4% posts q2 loss, cuts top end of fy view
CONN’S -26.3% q1 loss unexpected

HEALTHCARE
CATALENT -5.4% CFO sells shares
HUMANA +5.6% trades higher as AETNA +4.1% makes move to close deal
SAREPTA -26.6% FDA announces new procedures for compassionate use requests

FINANCIALS
FRANKLIN RESOURCES -2.8% d/g @ UBS

CAPITAL GOODS
DONALDSON +7.3% q3 beat
JOY GLOBAL +21.9% q2 eps beat, sales small miss but orders show improvement

MATERIALS
CHEMOURS +70bps negative report @ Citron Research
MONSANTO -55bps Bayer said to secure financing per German press

ENERGY
WEATHERFORD +6.5% prices $1.1bln of exchangeable sr notes

SERVICES
DEVRY -13% CFO change following last week’s CEO change