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 -0.85% (2046.6), D -1.05% (17535.3), N -0.37% (4326.5), CL1 -0.71% (46.37), Copper +0.12% (207.70), Gold +0.74% (1273.07) 10YrYld -0.05 (1.7001), DXY +0.49% (94.61), Vix +4.37% (15.04).

The S&P closed down close 1% from the European close, which coincided w/ the day’s highs, to end the session just fractionally off lows. Volumes lighter on the move lower, though, 8% less than yesterday to 6.6bln shares, 500mm below avg. Dollars traded off 7% today to $240bln, falling $20bln below avg. Broad-based move this afternoon with more than 80% of volume for the day to the downside.

The day started off with what looked like some come consolidation of risk, esp w/ shorts being covered and most shorted initially outperforming. As positions were squared into the European close ahead of a long weekend in some countries there, selling resumed in the US with autos, financials, cap goods, durables, retailers, tech hardware (a pretty broad list) leading the market lower in the second half of the day and closing just 20bps from the April lows, down 50bps for the week and down 3rd week in a row – first time for that since January. 2nd half of the day move in stocks seemed to mirror the fall of the dollar vs the yen. Headlines that Abe is to delay a scheduled tax increase there. Despite being weaker against the yen this afternoon, DXY with its strongest move of the week up about 50bps today. Yields however moving in the opposite direction: 45 degree angle to the lower right all day to 1.7% on the 10yr, levels last seen more than a month ago. Some better economic data in retail sales which had the Atlanta Fed and NY Fed raise their GDP tracker estimates not enough to convince the market. Yield curve to flattest since late 2007 taking its toll on financials. Crude backs off a bit after a strong move mid week that finally saw the golden cross and continued rig count drops in the US. In stocks despite the better than expected retail data, shoppers sure weren’t headed to malls this past qtr with NORDSTROMS -13.4% on #s as retail continued a disastrous week. XRT off another 1.4% today, -4.6% for the week. On the ideas front NVIDIA (NTS Buy) +15.2% delivers on their results. Drivers in artificial intelligence, gaming, and virtual reality firmly in place. Related note ACTIVISION +1% and FACEBOOK -40bps (both NTS Buys) end the week making new relative highs vs the mkt: as we like to say, stay long (new) addiction. The retail rude awakening this week reminds us all of the sheer scale of the “Amazon effect”. We continue to see disruption/challenged business models in GRUBHUB +2.3%, NETLIX +15bps , UPS -1.1% , and FEDEX -1% (all NTS Sells). The e-volution plays right into the hands of VISA -1.4% & MA -50bps (NTS Buys). Next week’s earnings calendar anchored by CISCO (NTS Sell) where we see the negatives piling up.

OUTPERFORMERS: Gold Miners +1.4%, Social Media +70bps, Refiners +60bps, Semis +50bps, Pharma unch’d

UNDERPERFORMERS: Metas/Mining -5.6%, Dept Stores -3%, Oil Services -2.5%, Drillers -2.3%, Railroads -2.2%

WEEKLY OUTPERFORMERS: Packaged Foods +1.8%, Commercial/Prof Services +1.1%, Social Media +95bps, Insurance +90bps, Food/Bev/Tobacco +85bps

WEEKLY UNDERPERFORMERS: Dept Stores -16.4%, Metals/Mining -11.7%, Drillers -7.4%, Oil Services -6.4%, Solar -5.2%

COMMODS: Wheat +1.4%, Heating Oil +1.8%, Corn +45bps, Gasoline +35bps, Gold +30bps…..NatGas -2.6%, Cocoa -1.8%, Sugar -1.4%, OJ -1.1%, Lean Hogs -85bps

ECON: Retail Sales Advance m/m +1.3% vs 0.8% est, ex-auto/gas +0.6% vs 0.3% est, PPI ex-food/energy m/m +0.2% vs 0.3% est, y/y flat vs 0.2% est, Business Inventories +0.4% vs 0.2% est, U of Mich Sentiment 95.8 vs 89.5 est

ACTIVE TODAY:

TMT
NVIDIA +15.2% q1 eps/revs beat, q2 revs seen above street
SYMANTEC -65bps q4 inline w preannouncement
FACEBOOK -40bps p/t raised @ MKM Partners
VEECO +5.6% init o/w @ Pacific Crest
CYBERARK +1.4% u/g @ BofA/Merrill
NOKIA unch’d: u/g @ BofA/Merrill
APPLE +20bps $1bln investment in Chinese rideshare co
VOXELJET -2.8% q1 loss wider than est
WESTERN DIGITAL -2.5% d/g @ BofA/Merrill

CONSUMER
NORDSTROM -13.4% q1 miss, lowers guidance
SHAKE SHACK +9.8% q1 beat, boosts fy revs view
DILLARDS -1.3% q1 eps/revs/comps miss
RED ROCKS RESORTS -1.7% 1st report since recent ipo
HONDA -4.8% q4/fy miss, further airbag recalls, f/x headwind
WHITEWAVE -10bps p/t raised @ Wells Fargo
DECKER’S OUTDOOR -5.4% d/g @ BB&T
CALLWAY GOLF +65bps u/g @ SunTrust
TIFFANY -2.9% CFO resigns for new co.
JC PENNEY -2.8% q1 miss, cuts view
BRIGHT HORIZONS +10bps 2.1mm share offering for holders, co to b/b 1mm shares
TAILORED BRANDS -7.9% neg comments from short seller
PEPSICO -1.8% Trian out of the name

CAPITAL GOODS
LOCKHEED MARTIN -1.2% d/g @ Stifel

HEALTHCARE
PERRIGO -75bps p/t lowered @ Leerink
JOHNSON & JOHNSON -60bps d/g @ BTIG
MYLAN +1.4% d/g off conviction buy list @ Goldman
ALLERGAN +3.4% u/g to conviction buy @ Goldman

FINANCIALS
XL GROUP +1.4% $1bln b/b
COMERICA -1.7% d/g @ Wells Fargo
CITIZENS FINANCIAL -1.7% u/g @ Wells Fargo
UBS -1.9% d/g @ SocGen

MATERIALS
DARLING -1.5% q1 miss
FREEPORT MCMORAN -5.6% $540mm for NOBLE CORP
LYONDELLBASELL -65bps to b/b 10% of shares outstanding

ENERGY
INTEROIL -1.8% q1 loss wider than est
TRANSOCEAN -4.4% u/g @ Seaport Global