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 +0.02% (2047.6), D -0.02% (17526.6), N +0.36% (4338.2), CL1 -0.25% (48.19), Copper -0.50% (207.85), Gold -0.02% (1258.30) 10YrYld +0.08 (1.8538), DXY +0.69% (95.19), Vix +2.44% (15.95).

The S&P closed down 25bps from the European close ending the day essentially flat gaining back about half its post-Fed minute losses. Volumes up again today, another 5% to 8bln shares, about 10% above avg. Dollars traded flat at $290bln, also about 10% above avg. Close to 2:1 down volume to up volume despite the S&P closing unchanged.

Fed minutes of course the driver of the action today with the market continuing to close that gap between its expectations and that of the Fed that we were warned about by the Wall Street Journal earlier this week. The minutes having much more of an influence than the official statement from the same meeting: expectations of a June hike spiking to 32% per latest pricing today, up from 6% early yesterday and 14% this morning. Note Vice Chair Fischer & NY Fed President Dudley both speaking tomorrow morning, probably the two most powerful members other than the Chair herself. 10yr yield jumping to its highest level in two and half weeks on its biggest move in 2 and a half months. While yesterday saw just the large cap banks outperform w/ some short covering likely part of that, today saw broad-based financial strength (see outperforming sectors below) as the yield curve steepened in kind. KRE Regional Bank ETF +4.2%. Dollar Index +70bps out at highs helping push crude down 1%, gold/silver/copper all down too. Energy/Material stocks the weakest of the lot along w/ all yield plays. New low for the move in retail today with XRT off 1.4%, TARGET -7.6% the latest retailer reporting poor #s. Our QCC retailers continue to buck the trend though: LOWES +3.3% on its #s. Common thread is a unique/defensible business model and not taking on AMAZON +30bps. We do maintain that WALMART (NTS Buy) -3% has re-rated to an attractive level and has the scale to compete. TIFFANY (NTS Sell) -1.4% not a compounder, and we remain sellers with bearish measures of Chinese tourism this week. In tech as the APPLE (NTS Sell) +1.1% charm offensive continues we still see negatives, most recently price cuts at TAIWAN SEMI +2.5%, not what you would see ahead of a major build, and poor consumer segment results from ANALOG DEVICES +80bps within their numbers. We are buyers, though, of ARM HLDGS (NTS Buy) +2.9% amid press reports it is working on 7nm chip production with TSM following impressive progress at 10nm, surpassing INTEL (NTS Sell) +5bps which doesn’t expect any 10nm production until well into next year.

OUTPERFORMERS: InvBanks +4.1%, Banks +3.7%, Asset Mgrs +2.2%, Div Financials +2%, Insurance +1.7%

UNDERPERFORMERS: Metals/Mining -8.4%, Gold Miners -7.8%, Coal -6.7%, Oil Services -3.3%, Drillers -2.8%

COMMODS: Cocoa +1.1%, Heating Oil +70bps, Corn +65bps, Gasoline +40bps, Cattle +15bps…..Silver -2.2%, NatGas -2%, Coffee -2%, Lean Hogs -1.8%, Gold -1.5%

ECON: MBA Mortgage Applications -1.6%

AFTER-HRS NEWS/MOVES:

AMERICAN EAGLE OUTFITTERS +13.2% q1 beat
SALESFORCE.COM +6.4% q1 beat & raise
CISCO SYSTEMS +6.3% q3 beat, forecast tops est
TAKE-TWO INTERACTIVE +50bps q4 beat
URBAN OUTFITTERS +3.1% q1 beats on record sales for the qtr
L BRANDS -4.2% q1 inline w/ preannouncement, cuts q2 view
TESLA MOTORS -1.3% $2bln offering
FLOWERS FOODS -2.1% q1 miss

ACTIVE TODAY:

TMT
SALESFORCE.COM +1.4% cautious comments in WSJ ahead of #s
SCRIPPS NETWORKS -3.4% d/g to sell @ Citi
QIWI +4.2% q1 eps beat
HP INC +35bps positive comments post-3D printer launch @ Piper
ELECTRONIC ARTS -90bps reit fy in slideshow, p/t raised @ Oppenheimer
FITBIT -30bps positive comments @ Citi
ANALOG DEVICES +80bps q2 beats, q3 revs seen light
ZILLOW +2.8% loses trade secret case against rival
VIPSHOP -12.2% q1 inline, q2 revs seen below est
ACXIOM -12.1% q4 beats but fy view dissapoints

HEALTHCARE
QUEST DIAGNOSTICS +75bps lowers fy rev view reflecting sale
VALEANT -4.2% exploring asset sales of up to $1bln per press
MCKESSON +3.7% holds investor call

CONSUMER
TARGET -7.6% q1 beats but lowers guidance
LOWE’S +3.3% q1 beats
DICK’S SPORTING GOODS -3.6% pushed @ Brean Capital
CITI TRENDS -10.4% q1 miss
TESLA +3.2% u/g @ Goldman
URBAN OUTFITTERS -3.3% cautious comments @ Baird
SONIC -8.6% sees q3 comp growth below tgt
HORMEL FOODS -8.6% q2 inline, margin concerns
CHURCH & DWIGHT +1.5% m&a mkt talk still swirls

CAPITAL GOODS
EMERSON ELECTRIC -3% trailing 3-mos orders down 3%

FINANCIALS
XL GROUP +1.1% p/t lowered @ UBS
CHARLES SCHWAB +4.9% brokers surge on rates move
FIFTH THIRD BANK +4.6% regionals outperform too
BANK OF AMERICA +4.9% liking hike prospects

ENERGY
EXXON MOBIL -20bps u/g @ Argus
APACHE +2.7% t/o speculation though denied by OCCIDENTAL

MATERIALS
ALLEGHENY TECHNOLOGIES -18.4% converts offering

SERVICES
BOOZ ALLEN HAMILTON +5.2% q4 eps beat