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 +0.60% (2052.3), D +0.38% (17500.9), N +1.10% (4362.9), CL1 -0.85% (47.75), Copper -0.41% (205.25), Gold -0.20% (1252.15) 10YrYld -0.01 (1.8384), DXY +0.03% (95.31), Vix -6.92% (15.20).

The S&P closed down 25bps from the European close, about the high of the day, to close in the middle of the day’s range with a 20bps move higher in the last half hour off afternoon lows. Volumes light despite options expiry, off 9% today to 6.6bln shares vs 7.2bln avg. Dollars traded off more than 5% to $247bln, $15bln below avg. Three-quarters of volume printing to the upside.

The S&P closes up 30bps for the week, stopping a 2 week losing streak, but traded in a 2.2% range with the Fed dominating the week. Today most shorted stocks up strong today, outperforming the S&P by 120bps, SmallCaps by 100bps. S&P 500 Semi/Semi-Equip the best performing sector today led by #s from APPLIED MATERIALS +13.8%. Good read-thru of discipline in DRAM, growth in NAND for MICRON (NTS Buy) +7.3%, trading to its highs for the month. ARM HLDGS +60bps up 3.5% on the week, our preferred semi play as its technology leapfrogs INTEL’s which was up just 80bps this week. Media, Tech Hardware, Autos the other best performing subsets of the S&P though small and mid caps across sectors generally better than those 3 lrg cap pockets of names. Staples, Energy (crude -1% as rig counts unch’d), yield plays and other defensives sectors along w/ lgr cap banks dragging on the day. Retail wasn’t out of the woods completely this week but XRT +50bps for the week with WALMART (NTS Buy) up more than 7.5% on the week w/ #s. We believe FOOT LOCKER (NTS Buy) -6.5% on #s today recovers as the qtr suffered from some delays from suppliers and store renovations: we’d be buying the weakness. ROSS STORES (QCC) -5.5% had a rare merchandising slip up but also should be an opportunity here as discounters are especially well positioned in this environment. Away from stocks the Dollar Index basically flat on the day giving up some early strength but up 80bps for the week on recalculation of the Fed’s intent; still hovering at close to 2 month highs. 10 yr yield off small to 1.84% but rocketed up from 1.7% to start the week though the rate curve not steepening to nearly the same degree and remains just off flattest levels in years. Nonetheless financials strong net, net on the week. Pricing of the odds for a June hike came in a bit today to 26% but was mid single digits to start the week. Much more to go in next 3 and half weeks,though, to get the market pricing in a hike as much as it historically already is when there is one.

OUTPERFORMERS: Semis +3.2%, Solar +2.7%, Drillers +2.5%, Oil Service +2.2%, Dept Stores +2.1%

UNDERPERFORMERS: Packaged Foods -70bps, Food/Bev/Tobacco -60bps, Consumer Services -60bps, Household Products -50bps, Staples -40bps

WEEKLY OUTPERFORMERS: Metals/Mining +6.4%, Semis +5%, Tech Hardware +4.4%, Banks +3.4%, Asset Mgrs +3.1%

WEEKLY UNDERPERFORMERS: Coal -7.7%, Packaged Foods -3.6%, Food/Bev/Tobacco -3%, Real Estate -2.4%, Utilities -2.3%

COMMODS: Sugar +2.2%, Corn +1.2%, Heating Oil +1%, OJ +1%, Cotton +1%…..Crude -1%, Lean Hogs -1%, Cattle -75bps, Copper -30bps, Wheat -20bps

ECON: Existing Home Sales 5.45mm vs 5.40 est, m/m +1.7% vs 1.3% est

ACTIVE TODAY:

TMT
YAHOO -1.4% bids seen lower than initially expected
MENTOR GRAPHICS +7.4% q1 beat
APPLIED MATERIALS +13.8% q2 beat & raise
BROCADE unch’d: q2 inline, guides down q3
SOHU.COM +1.9% press report of possible Google partnership

CONSUMER
FOOT LOCKER -6.5% q1 eps inline, comps miss
CAMPBELL SOUP -6.4% q3 revs miss
JM SMUCKER -40bps positive comments @ Credit Suisse
HIBBETT SPORTS +6.9% q1 revs/comps miss
TESLA +2.4% prices secondary
AMPLIFY BRANDS +13.2% prices secondary
SHOE CARNIVAL -9.1% q1 eps/revs miss
GAP STORES +4.2% q1 inline w/ preannouncement, does not reaffirm fy, closing 75 stores
ROSS STORES -5.5% q1 revs miss, q2 seen below est
STARBUCKS +15bps cautious comments @ Cleveland Research
YUM! BRANDS -60bps $4.2bln b/b, CIC/KKR end discussions on China unit
MCDONALDS -2.2% breaking 9 month uptrend

HEALTHCARE
VALEANT +4.6% receives notice of default from bondholders
PACIFIC BIOSCIENCE -80bps $30mm at the mkt offering
CELLDEX +3.9% $60mm at the mkt offering
ALKERMES +9.5% m&a mkt talk

CAPITAL GOODS
DEERE -5.5% q2 beat but cuts fy outlook

FINANCIAL/REAL ESTATE
JONES LANG LASALLE +5% u/g @ Goldman
AFLAC +20bps d/g @ Keefe Bruyette
CREDIT SUISSE +1.8% d/g @ BofA/Merrill
WISDOMTREE +1.7% removed from franchise pick list @ Jefferies

ENERGY
OCEANEERING +3.8% u/g @ RBC Capital
NOBLE CORP +1.6% d/g @ Argus
INTEROIL +37.7% $2.2bln proposed deal from Oil Search
OCEAN RIG UDW +22.7% q1 eps/revs beat
ABRAXAS PETROLEUM -22.6% 25mm share offering, boosts capex

TRANSPORTATION
DRY SHIPS -16.8% reports q1, talks w lenders to restructure debt