News 3/28/18

News 3/28/18
Market Closing Prices Yesterday
·      The S&P 500 Index dropped -45.93 points, or 1.73%, to 2,612.62
·      The Dow Jones Industrial Average fell -344.89 points, or 1.43%, to 23,857.71
·      The Nasdaq Composite plunged -211.74 points, or 2.93%, to 7,008.81
·      The Russell 2000 Index declined -30.15 points, or 1.95% to 1,513.57
 
Events Calendar for Today
·      7:00 AM EST       MBA Mortgage Applications Data
·      8:30 AM EST       Gross Domestic Product (Annualized) for Q4…est. 2.7%
·      8:30 AM EST       Personal Consumption for Q4…est. 3.8%
·      8:30 AM EST       GDP Price Index for Q4…est. 2.3%
·      8:30 AM EST       Core PCE QoQ, for Q4…est. 1.9%
·      8:30 AM EST       Advance Goods Trade Balance for February…est. (-$74.4B)
·      10:00 AM EST     Pending Home Sales MoM for February…est. up 2%
·      10:30 AM EST     Weekly DOE Inventory Data
·      12:00 PM EST     Fed’s Bostic speaks to financial professionals in Atlanta
   
World News
·      North Korean leader Kim Jong Un paid a surprise visit to China this week, in his first known overseas trip since taking power in late 2011. During a three-day stop in Beijing, Kim met Chinese President Xi Jinping and other senior officials, where they discussed bilateral ties and Korean peninsula tensions, Chinese state media said
·      Investor Intelligence Poll shows the newsletter writers classified as bulls slip after 3-weeks of gains, tumble to 49.5% vs 55.5% last week; those considered bearish climb a 4th week to a 6-month high of 17.5% vs 16.8% last week and those expecting a correction snaps three week decline, rises to 3-week high of 33.0% from 27.7%
 
Sector News Breakdown
Consumer
·      Lululemon (LULU) Q4 EPS $1.33/$928.8M vs. est. $1.27/$912.4M; total comparable sales increased 12% vs. est. 8.6% or increased 11% on a constant dollar basis vs. est. 8.6%; comparable store sales increased 2% or increased 1% on a constant dollar basis; sees FY18 EPS $3.00-$3.08 vs. est. $3.02; sees FY18 revenue $2.985B-$3.022B vs. est. $2.94B
·      RH (RH) Q4 EPS $1.69/$670.3M vs. est. $1.55/$672.61M; Q4 comparable brand revenue growth 2% YoY vs. est. 6.9%; sees FY18 adjusted EPS $5.45-$6.20 vs. est. $5.53 while cuts FY18 revenue view to $2.53B-$2.57B from $2.58B-$2.62B (est. $2.6B); sees Q1 EPS 95c-$1.05 on revs $555M-$565M vs. est. 59c/$590.4M; says remain confident in long term goal of $4 to $5 billion in North American revenues - full RH recap
·      Sonic (SONC) Q2 EPS 17c/$88.1M vs. est. 15c/$94.2M; Q2 franchise comparable sales -2.8% vs. estimate +0.5% and Q2 system-wide comparable sales -2.9%, vs. Bloomberg estimate +0.5%; sees FY18 adjusted EPS $1.43-$1.50 vs. est. $1.52 and sees FY18 system SSS growth (1%)-1%
·      Shoe Carnival (SCVL) Q4 adjusted EPS 11c/$243.2M vs. est. 9c/$248.21M; Q4 comp sales fell (-0.5%); sees year EPS $1.85-$2.00 vs. est. $1.94
·      Moody's Investors Service downgraded Tesla, Inc.'s (TSLA) Corporate Family Rating (CFR) to B3 from B2, unsecured note rating to Caa1 from B3, and Speculative Grade Liquidity rating to SGL-4 from SGL-3. The outlook is negative
·      General Mills (GIS) 22.7M share Secondary priced at $44.00
·      At Home Group (HOME) 6M share Secondary priced at $30.00
·      OneSmart Education (ONE) 16.3M share IPO priced at $11.00
 
Energy
·      Concho Resources Inc (CXO) said it would buy smaller rival RSP Permian Inc (RSPP) for an equity value of about $8 billion; under the all-stock deal, RSP shareholders will get 0.320 of CXO shares valued at $50.24 per share, a 29% premium to yesterday close
·      The American Petroleum Institute (API) reported that U.S. crude supplies rose by 5.3M barrels for the week ended March 23, showed a drop of -5.8M barrels in gasoline stockpiles, while inventories of distillates shed -2.2M barrels
·      Dominion (D) commences registered direct offering of 20M shares of common stock; backs FY18 operating EPS view $3.80--$4.25 vs. est. $4.04; will seek divestiture of non-core assets that could include stake in Blue Racer Midstream, an unregulated natural gas gathering and processing joint venture focused on the Utica natural gas basin
 
Financials
·      BGC Partners (BGCP) said it sees Q1 results above high end of previously (Q1 EPS consensus is 29c for EPS and $906.35M for revenue)
·      Genworth (GNW) & Oceanwide extend merger pact to allow CFIUS review – Bloomberg; extends the April 1 deadline to July 1 to allow additional time for regulatory reviews
·      OP Bancorp (OPBK) 2M share IPO priced at $11.00
 
Healthcare
·      Japan's Takeda Pharmaceutical Co. said that it is considering making an offer for Shire PLC (SHPG); Takeda said it hasn't approached Shire's board and the proposal is at a "preliminary and exploratory" stage. Takeda didn't disclose any financial details
·      Homology Medicines, Inc. (FIXX) priced 9M shares IPO at $16.00 per share
·      PTC Therapeutics (PTCT) commences offering of 4M shares of common stock
 
Industrials & Materials
·      Celanese Corporation (CE) announced it will increase the price of vinyl acetate-based emulsions sold in Greater China by RMB200/MT effective March 27, 2018, and Asia outside of China by $50/MT effective March 27, 2018
·      Rio Tinto (RIO) sells 80% interest in Kestrel coal mine for $2.25B
·      Jacobs Engineering (JEC) upgraded to Buy from Neutral at MKM Partners
 
Technology, Media & Telecom
·      Facebook Inc. (FB) will delay the unveiling of its upcoming smart speaker with a digital assistant, Bloomberg News reported late Tuesday. The device was set to be previewed at Facebook's upcoming developers conference in May, but will be put on hold
·      NXP Semiconductors NV (NXPI), the target of a $44 billion takeover by Qualcomm Inc (QCOM) that is awaiting approval by Chinese anti-monopoly regulators, has sold its stake in a Chinese chip-design joint venture
·      Apple (AAPL): Goldman Sachs cuts its March and June quarter iPhone units estimate by 1.7m and 3.2m, to 53.0m and 40.3m units, respectively; also reduces ASP estimate for June quarter by 2.3% due to above-average forecast inventory burn of 6.0m units
·      Bilibili (BILI) prices 42M ADS IPO at $11.50 per ADS
·      Viacom (VIAB) upgraded to neutral at Citigroup and raise tgt to $30