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 +0.98% (2066.7), D +1.00% (17710.7), N +1.25% (4380.5), CL1 +3.27% (47.72), Copper +0.72% (208.90), Gold -0.03% (1273.86) 10YrYld +0.05 (1.7533), DXY -0.04% (94.58), Vix -2.39% (14.68).

The S&P closed up 30bps from European close, giving up just 20bps from the day’s highs over the last hour. Despite the nice overall move, volumes nothing special, down 3% from the end of last week to 6.5bln shares, 10% below avg. Dollars traded off 3.5% to $233bln, also about 10% below avg. More than 80% of volume printing to the upside.

Strong macro moves pull stocks higher with crude and rates having their best day in 3 and half and weeks, though the dollar index basically flat at the top end of the ytd down trend. High beta names led by energy shares the top performers with small caps, tech hardware/semis getting some love. Most-shorted slightly outperforming the S&P to the upside, a rare feat of late. Yield plays, defensives left behind for a day w/ the Dividend Aristocrats, telcom, staples, utilites all lagging. Interesting so did financials despite the jump in yields: BKX Index lowest relative to the broad mkt in a month. Volumes below avg despite the move with earnings in the late innings though some m&a activity out there to generate some excitement: TPUB +22.8% on an increased hostile bid from GCI +2.2%, ANAC +57.2% on a deal w/ PFE +60bps, MRD +3.1% taking all stock from RRC -10.3%, TEREX +10% sells a unit to Konecranes and continues talks w/ Zoolion, and DLR +3.1% w/ $847mm purchase of European data centers from EQIX +1.2%. In other news WHILRPOOL -70bps misses out on the rally today on worse than expected industry data, APPLE (NTS Sell) +3.7% trades up on a Berkshire Hathaway position as Tim Cook does some publicity in China, and private label packaged foods TREEHOUSE FOODS +2.3% on reports of AMAZON +10bps interest in expanding its private label offerings. In US ideas, speaking of Amazon, we see the threat it poses across multiple industries as very real and have several names we see in the crosshairs. While retail was under pressure last week on poor #s w/ some degree of AMZN overhang there, we are more optimistic when we hear from some of our QCC names in the retail space this week: TJX +3.5% tomorrow, DOLLAR TREE +3.1%, ROSS STORES +2.6% both Thurday as examples. No coincidence in our view the retailers that make the QCC cut tend to be off-price merchants and have different drivers from some of the more bellwether retail names and in fact stand to benefit from excess inventory that needs to be dumped by suppliers and a potential trade down by consumers. QCC also offers up a play on higher crude, which we see continuing, in LYONDELLBASELL +3.2%: a compounder that additionally benefits from a correlation between prices of its products oil prices. On the flip side we continue to be sellers of NETFLIX (NTS Sell) +1.4% as new int’l competition takes shape as highlighted in press reports this weekend. Also CISCO +1.7% (NTS Sell), reporting Wed night, has a growing list of negative indications from other co’s yet just 1 sell rating out of 39 coverage analysts.

OUTPERFORMERS: Metals/Mining -6.1%, Tech Hardware -2.8%, Gold Miners +2.7%, Drillers +2.2%, Chemicals +2.1%

UNDERPERFORMERS: Coal -1.8%, Dept Stores -65bps, Media -30bps, Utilities +10bps, Railroads +20bps

COMMODS: Crude +3.6%, Heating Oil +2.8%, Coffee +2.7%, Gasoline +1.4%, Lean Hogs +1%…..NatGas -3.2%, Cocoa -1.4%, OJ -1.3%, Soybeans -5bps, Wheat unch’d

ECON: Empire Manf -9.02 vs +6.5 est, NAHB Housing Mkt Index 58 vs 59 est

AFTER-HRS NEWS/MOVES:

MERITAGE HOMES +2.3% sees q2/fy at or above est
XILINX +60bps $1bln b/b
AGILENT +3.6% q2 beat, fy raise
AMPLIFY SNACKS -4.4% 10mm share secondary for hldrs

ACTIVE TODAY:

TMT
WEIBO +1.1% d/g @ Goldman
AKAMAI +1.7% positive comments @ Deutsche
TRIBUNE PUBLISHING +22.8% improved all cash offer from GANNETT +2.2%
YAHOO +2.7% Warren Buffet said to finance a potential bid
VIRTUSA -8.7% q4 beat but outlook below est
BITAUTO -8.7% d/g @ Morgan Stanley, cautious comments @ Brean
APPLE +3.7% Berkshire discloses stake, Tim Cook smiles in China
ALPHABET +75bps more press on potential European fines
GLOBALSTAR +12.2% closing in on FCC approval for mobile service over satellite spectrum
NOKIA +60bps u/g @ Canaccord

CONSUMER
FOOT LOCKER +3.2% positive comments @ Susquehanna
LOWE’S +2.7% p/t raised @ Oppenheimer
HOME DEPOT +1.7% positive comments in Wall St Journal
WHIRLPOOL -70bps AHAM data dissapoints
TREEHOUSE FOODS +2.3% up on Amazon interest in private label

CAPITAL GOODS
BOEING +1.5% neg view on sales in Reuters
TEREX +10% selling unit to Konecranes for $1.3bln, to continue talks with Zoomlion

HEALTHCARE
DAVITA +2.2% p/t raised @ Baird
ANACOR +57.2% to be acq’d by PFIZER +55bps for $5.2bln cash
VALEANT +4.4% long position disclosed by Citron
REGENERON +6.1% positive comments in Barron’s

FINANCIALS
BANK OF AMERICA +35bps d/g @ Keefe Bruyette
BB&T +1.2% u/g @ SunTrust
REGIONS FINANCIAL +70bps d/g @ Keefe Bruyette
UBS -55bps d/g @ Keefe Bruyette
DEUTSCHE BANK -10bps d/g to sell @ Berenberg

REIT
DIGITAL REALTY +3.1% 11.5mm share offering, acquiring data centers from EQUINIX +1.2% for $874mm

ENERGY
RANGE RESOURCES 10.3% $4.4bln acq of MEMORIAL RESOURCES +3.1%
WILLIAMS CO +6.4% positive comments @ Bernstein

MATERIALS
FREEPORT MCMORAN +6.1% p/t raised @ Cowen