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Futures

Blue Line Futures - Midday Market Minute


What to look for in the markets ahead of the weekend.

Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.

Visit our website at www.bluelinefutures.com to open an account and stay up to date with our research.

Bill Baruch is President and founder of Blue Line Futures. Bill has more than a decade of trading experience. Working with clients he focuses on developing trading strategies that present a clear objective for both long and short-term trading approaches. He believes that in order to properly execute a trading strategy, there must be a well-balanced approach to risk and reward.

Prior to Blue Line, Bill was the Chief Market Strategist at iiTRADER which followed running a trade desk at Lind Waldock and MF Global.

Bill is a featured expert on CNBC, Bloomberg and the Wall Street Journal as well as other top tier publications. 

Blue Line Futures is a leading futures and commodities brokerage firm located at the Chicago Board of Trade. We work with clients that range from institutional to professional to novice and from self-directed to broker-assisted. No matter what type of trader you are, our mission is simple; to put the client first. This means bringing YOU strong customer service, consistent and reliable research and state of the art technology. 

Information posted on IBKR Traders’ Insight that is provided by third-parties and not by Interactive Brokers does NOT constitute a recommendation by Interactive Brokers that you should contract for the services of that third party. Third-party participants who contribute to IBKR Traders’ Insight are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.

This material is from Blue Line Futures and is being posted with Blue Line Futures’ permission. The views expressed in this material are solely those of the author and/or Blue Line Futures and IB is not endorsing or recommending any investment or trading discussed in this material. This material is for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad-based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation by IB to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.


19230




Macro

FTSE - Russell - The LIBOR Market Moves Towards Alternatives - By Waqas Samad


“We shape our tools and thereafter our tools shape us.” - Marshall McLuhan

Around $200 trillion.[1] That’s the Alternative Reference Rates Committee's (ARRC) estimate on the size of notional in contracts linked to USD LIBOR across a range of asset classes. But much like the famous choice of colour for Henry Ford’s Model-T, this dependency has grown to an impressive scale without many options for selecting the right tool for the job at hand. With that in mind, efforts are now underway to take a coordinated approach to deprecating the use of that most (in)famous of benchmarks.

The scale is daunting, but it’s not the size that matters, it’s the complexity and the interconnectedness. LIBOR (the London Inter-bank Offered Rate) represents the average of interest rates estimated by each of the leading banks in London and is widely used for short term interest rates. Swap markets, loan markets, bond markets, even some agency mortgage backed markets depend on LIBOR in a way that connects issuers, investors, intermediaries, tools providers, regulators and lawyers alike. Arguably, LIBOR’s use as a reference rate has grown beyond its original intended use as a measure of the market for unsecured term lending to banks, but that’s a matter for the history books. What concerns regulators and others in the industry now is finding a way to reduce the dependency on a benchmark whose underlying markets are less active than before.

In July 2017, Andrew Bailey—then Chief Executive of the Financial Conduct Authority—made it clear that the UK regulator would no longer seek to persuade or compel banks to submit to the publication process of LIBOR after 2021. The market needs to band together to find alternatives and work to integrate them into the complex system of transactions, clearing, settlement and risk management processes that has grown up over the last 40 years.

One year on, working groups manned by buy side, sell side, CCPs and others chaired by regulators on both sides of the Atlantic as well as in many other jurisdictions are well underway in examining the ideas for alternative rates and working on building an ecosystem of transactions that will bring liquidity to them. The UK and the US have already chosen the “alternative reference rates” SONIA (reformed) and SOFR, both representing overnight index swap (OIS) rates. One is based on unsecured funding transactions and the other on the near-trillion dollar-a-day treasury repo market. Swaps are already trading and liquidity is building. Three-month futures linked to these rates have recently been announced, and there is an expectation that liquidity should build in line with the swaps market. From the sell side’s perspective, the basic hedging building blocks appear to be falling into place. Most recently, on June 28, the ECB announced the launch of ESTER, a new unsecured OIS to be published by October 2019.

But questions remain, such as whether there is a need for term rates that are based on these alternative reference rates? Many on the buy side seem to think so, but is this a need or just a perception of a need? The only way to determine that is for the buy side, including the asset owners, to raise their awareness of these initiatives and express their views in the numerous consultations and working groups that are out there on these topics.[2] And what of the existing book of business linked to LIBOR? How can those transactions be marked to market in a post-2021 world where it is estimated that a significant proportion (30-40%[3]) will continue to be extant even when LIBOR has been deprecated? This is as much a matter for revision of contractual provisions as it is for clearing, marking to market and hedging. ISDA is already looking at new protocols for fallback provisions and other working groups are studying contractual positions in earnest in a variety of markets.

Are we moving to a world where multiple alternative rates exist in a given currency so that there is a choice of the most appropriate rate to use for a given purpose? If so, that strikes us as a positive development and, for our part, FTSE Russell is following closely the discussion in the market about the need for a term rate. Whatever the rates are that are selected and used, governance will be a crucial piece of the puzzle and so, as a Benchmark Administrator, we aim to bring to bear all the robust governance processes and procedures that apply in all our widely used benchmarks, in line with the highest standards out there.

For more information on FTSE Russell's role as a Benchmark Administrator authorised by the FCA pursuant to the European Benchmark Regulation, please visit this link.

---------------

[1]  Reuters, 3/5/18

[2] These include the Financial Conduct Authority (FCA), International Capital Markets Association (ICMA), the Loan market Association (LMA), the Association of Corporate Treasurers (ACT), the Interrnational Swaps and Derivatives Association (ISDA),and the Securities Industry and Financial Markets Association (SIFMA), and others.

[3] FSBOliver Wyman

© 2018 London Stock Exchange Group plc and its applicable group undertakings (the “LSE Group”). The LSE Group includes (1) FTSE International Limited (“FTSE”), (2) Frank Russell Company (“Russell”), (3) FTSE Global Debt Capital Markets Inc. and FTSE Global Debt Capital Markets Limited (together, “FTSE GDCM”), (4) MTSNext Limited (“MTSNext”), (5) Mergent, Inc. (“Mergent”), (6) FTSE Fixed Income LLC (“FTSE FI”) and (7) The Yield Book Inc (“YB”). All rights reserved.

FTSE Russell® is a trading name of FTSE, Russell, FTSE GDCM, MTS Next Limited, Mergent, FTSE FI and YB. “FTSE®”, “Russell®”, “FTSE Russell®”, “MTS®”, “FTSE4Good®”, “ICB®”, “Mergent®”, “WorldBIG®”, “USBIG®”, “EuroBIG®”, “AusBIG®”, “The Yield Book®”,  and all other trademarks and service marks used herein (whether registered or unregistered) are trademarks and/or service marks owned or licensed by the applicable member of the LSE Group or their respective licensors and are owned, or used under licence, by FTSE, Russell, MTSNext, FTSE GDCM, Mergent,  FTSE FI or YB. “TMX®” is a registered trademark of TSX Inc. FTSE International Limited is authorised and regulated by the Financial Conduct Authority as a benchmark administrator.

All information is provided for information purposes only. All information and data contained in this publication is obtained by the LSE Group, from sources believed by it to be accurate and reliable. Because of the possibility of human and mechanical error as well as other factors, however, such information and data is provided "as is" without warranty of any kind. No member of the LSE Group nor their respective directors, officers, employees, partners or licensors make any claim, prediction, warranty or representation whatsoever, expressly or impliedly, either as to the accuracy, timeliness, completeness, merchantability of any information or of results to be obtained from the use of the FTSE Russell Products or the fitness or suitability of the FTSE Russell Products for any particular purpose to which they might be put. Any representation of historical data accessible through FTSE Russell Products is provided for information purposes only and is not a reliable indicator of future performance.

No responsibility or liability can be accepted by any member of the LSE Group nor their respective directors, officers, employees, partners or licensors for (a) any loss or damage in whole or in part caused by, resulting from, or relating to any error (negligent or otherwise) or other circumstance involved in procuring, collecting, compiling, interpreting, analysing, editing, transcribing, transmitting, communicating or delivering any such information or data or from use of this communication or links to this communication or (b) any direct, indirect, special, consequential or incidental damages whatsoever, even if any member of the LSE Group is advised in advance of the possibility of such damages, resulting from the use of, or inability to use, such information.

FTSE Russell is a leading global provider of benchmarks, analytics, and data solutions with multi-asset capabilities.

FTSE Russell’s expertise and products are used extensively by institutional and retail investors globally. Approximately $15 trillion is currently benchmarked to FTSE Russell indexes. For over 30 years, leading asset owners, asset managers, ETF providers, and investment banks have chosen FTSE Russell indexes to benchmark their investment performance and create investment funds, ETFs, structured products and index-based derivatives. FTSE Russell indexes also provide clients with tools for asset allocation, investment strategy analysis and risk management.

With the recent addition of The Yield Book business, FTSE Russell extends its expertise in analytics to a highly respected analytics platform that serves approximately 350 institutions globally including investment management firms, banks, central banks, insurance companies, pension funds, broker-dealers, hedge funds and investment management firms. The Yield Book offers analytical insights into a broad array of fixed income instruments with specific focus on mortgage, government, corporate and derivative securities.

FTSE Russell is also major provider of data solutions, from top down economic and demographic information, to detailed equity, debt and sustainability fundamental data analysis , to corporations, financial institutions, business academics and reference libraries. Through its acquisition of Mergent, a provider of business and financial information on public and private companies globally for more than 100 years, FTSE Russell provides solutions including advanced data collection, cloud-based applications, desktop analytics and print products.

FTSE Russell is a unit of London Stock Exchange Group’s (LSEG) information Services Division.  FTSE Russell is a wholly owned subsidiary of LSEG. 

For more information about our indexes, please visit ftserussell.com.

© 2018 London Stock Exchange Group plc and its applicable group undertakings (the “LSE Group”). The LSE Group includes (1) FTSE International Limited (“FTSE”), (2) Frank Russell Company (“Russell”), (3) FTSE TMX Global Debt Capital Markets Inc. and FTSE TMX Global Debt Capital Markets Limited (together, “FTSE TMX”), (4) MTSNext Limited (“MTSNext”), (5) Mergent, Inc. (“Mergent”), (6) FTSE Fixed Income LLC (“FTSE FI”) and (7) The Yield Book Inc. (“YB”). All rights reserved.

FTSE Russell® is a trading name of FTSE, Russell, FTSE TMX, MTS Next Limited, Mergent, FTSE FI and YB. “FTSE®”, “Russell®”, “FTSE Russell®”, “MTS®”, “FTSE TMX®”, “FTSE4Good®”, “ICB®”, “Mergent®” , “WorldBIG®”, “USBIG®”, “EuroBIG®”, “AusBIG®”, “The Yield Book®”,  and all other trademarks and service marks used herein (whether registered or unregistered) are trademarks and/or service marks owned or licensed by the applicable member of the LSE Group or their respective licensors and are owned, or used under licence, by FTSE, Russell, MTSNext, FTSE TMX, Mergent,  FTSE FI or YB.

All information is provided for information purposes only. All information and data contained in this publication is obtained by the LSE Group, from sources believed by it to be accurate and reliable. Because of the possibility of human and mechanical error as well as other factors, however, such information and data is provided "as is" without warranty of any kind. No member of the LSE Group nor their respective directors, officers, employees, partners or licensors make any claim, prediction, warranty or representation whatsoever, expressly or impliedly, either as to the accuracy, timeliness, completeness, merchantability of any information or of results to be obtained from the use of the FTSE Russell products or the fitness or suitability of the FTSE Russell products for any particular purpose to which they might be put. Any representation of historical data accessible through FTSE Russell products is provided for information purposes only and is not a reliable indicator of future performance.

No responsibility or liability can be accepted by any member of the LSE Group nor their respective directors, officers, employees, partners or licensors for (a) any loss or damage in whole or in part caused by, resulting from, or relating to any error (negligent or otherwise) or other circumstance involved in procuring, collecting, compiling, interpreting, analysing, editing, transcribing, transmitting, communicating or delivering any such information or data or from use of this document or links to this document or (b) any direct, indirect, special, consequential or incidental damages whatsoever, even if any member of the LSE Group is advised in advance of the possibility of such damages, resulting from the use of, or inability to use, such information.

No member of the LSE Group nor their respective directors, officers, employees, partners or licensors provide investment advice and nothing contained in this document or accessible through FTSE Russell products,  including statistical data and industry reports, should be taken as constituting financial or investment advice or a financial promotion.

No part of this information may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior written permission of the applicable member of the LSE Group. Use and distribution of the LSE Group data requires a licence from FTSE, Russell, FTSE TMX, MTSNext, Mergent, FTSE FI, YB and/or their respective licensors.

Information posted on IBKR Traders’ Insight that is provided by third-parties and not by Interactive Brokers does NOT constitute a recommendation by Interactive Brokers that you should contract for the services of that third party. Third-party participants who contribute to IBKR Traders’ Insight are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.

This material is from FTSE Russell and is being posted with FTSE Russell’s permission. The views expressed in this material are solely those of the author and/or FTSE Russell and Interactive Brokers is not endorsing or recommending any investment or trading discussed in the material. This material is for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad-based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation by IB to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

 


19073




Fixed Income

Morningstar - Benz's Retirement Planning Outlook at Midyear


Morningstar’s Director of Content, Susan Dziubinski, chats with Christine Benz about retirement account balances and why pre-retirees and retirees still face challenges.

Opinions and estimates offered constitute our judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. We believe the information provided here is reliable, but do not warrant its accuracy or completeness. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The views and strategies described may not be suitable for all investors. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, accounting, legal, or tax advice. References to future returns are not promises or even estimates of actual returns a client portfolio may achieve. Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation.

Information posted on IBKR Traders’ Insight that is provided by third-parties and not by Interactive Brokers does NOT constitute a recommendation by Interactive Brokers that you should contract for the services of that third party. Third-party participants who contribute to IBKR Traders’ Insight are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.

This video is from Morningstar and is being posted with Morningstar's permission. The information provided in this video is from Morningstar and IB is not endorsing or recommending any investment or trading discussed in the article. This material is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.


19033




Technical Analysis

Sentieo - What's For Lunch? Trending Foods with Growth Potential: Part 1- By Denise Martinez


Like other segments of the consumer sector, the food industry follows trends and changing consumption habits that can benefit one company over another. Particularly in the recent years, we have seen changing attitudes towards health, community and the environment, which have affected consumption habits and translated into the growing popularity of specific foods and drinks.

Foods without artificial additive products, colors, flavors, sweeteners, and hydrogenated fats have become increasingly popular, and the acquisition of Whole Foods by a high-tech growth giant like Amazon is indicative of the growth potential seen in this market. In this post, we use Sentieo’s tools to look at a few interesting trends in the food industry.

Protein-Rich Grains Gain Popularity

With the World Health Organization warning about the potential danger of eating too much meat, the vegetable sources of proteins have become increasingly popular, and not only among fitness and body-building enthusiasts. They are also popular among vegetarians and, above all, vegans, who need non-animal sources of proteins. Protein-Rich seeds and grains have become increasingly popular as standalone foods and as add-ons to yogurt, oatmeal, and peanut butter. Let’s take a look at a few of them a bit more in detail.

2013 was named the official year of quinoa, but it seems that the grain has become even more popular since then. We used Sentieo’s Mosaic tool, which offers users the ability to find and visualize alternative datasets. The number of mentions of quinoa in company filings and transcripts has basically tripled since 2013:

Consumer interest in quinoa, which we measured using Google Trends data, has also increased substantially since then, but was basically flat during the past three years as other vegetable sources of proteins started to gain market share. In the chart below, you can see Google Trends data for the word “quinoa” (blue line). We have also added a 13-week moving average of the Y/Y variation of Google Trends data (yellow line), which makes the underlying trend more visible and neutralizes seasonal effects:

The increasing popularity of hemp is even more evident. Like quinoa, hemp is a protein-rich plant and is considered a complete protein source, which means it provides all the essential amino acids (an extremely rare characteristic for vegetables). Hemp’s popularity has skyrocketed in the past few years, as the growing number of mentions in company documents and transcripts shows:

Also, consumers’ interest in hemp — and hemp seeds in particular — has skyrocketed:

Another protein-rich grain that is becoming increasingly popular is sorghum. Although it’s not a complete source of amino acids, there are many interesting ways it can be used. It is a good sweetener and can be used as a substitute for wheat flour. However, it has no gluten, so it requires a binding agent in some recipes, such as a xanthan gum or cornstarch. It can also be popped like popcorn. Sorghum’s popularity has grown consistently since 2010-2011:

This is confirmed by the growing interest from consumers:

Sentieo’s tools help us identify, analyze and compare industry trends quickly and effectively. We used Document Search and alternative data from Mosaic to analyze a few interesting trends in the food industry, a segment of the consumer space that is experiencing significant changes due to increasing health consciousness, changing consumption habits, and the rising adoption of specific diets for ethical reasons.

We can easily see what’s driving customers’ interest, such as the increasing popularity of protein-rich grains, and how the companies are responding to them. We have also detected which companies can benefit from these trends very easily by monitoring how many times certain keywords have been mentioned in a company’s documents. However, Sentieo’s tools can be used to run ad-hoc searches on a virtually unlimited number of topics, allowing us to gain important insights into any industry that are not available anywhere else. Next week, we’ll feature more trending foods.

---

To learn more about the companies, industries, and regions where crypto and other themes are being most discussed, download the full report, which covers this sector and many more. To find out more about how to run your own sentiment analysis with Sentieo, sign up here for a free trial.

Sentieo organizes the world’s financial information to make you and your team more productive in your fundamental research workflow. We process millions of documents to deliver crucial information in seconds with advanced linguistic search algorithms; organize and centralize your research processes with our notebook and research management system; integrate into your workflow with collaboration in mind; help you build models faster from source documents with zero data entry using our table extraction tools; and allow you to find new information from the same datasets and add new alternative datasets to your arsenal. With Sentieo, spend less time gathering and organizing information and more time generating alpha.

This material is from Sentieo and is being posted with Sentieo’s permission. The views expressed in this material are solely those of the author and/or Sentieo and IB is not endorsing or recommending any investment or trading discussed in the material. This material is for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad-based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation by IB to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.


19221




Stocks

The Hammerstone Report - Mid Morning Look


Index

Up/Down

             %

           Last

 

DJ Industrials

10.06

0.04%

25,075

S&P 500

1.42

0.06%

2,806

Nasdaq

30.63

0.39%

7,856

Russell 2000

-2.86

0.17%

1,698

             

U.S. equities are mixed, as Wall Street deals with another “tweet storm” from President Trump, talking about tariffs, currency manipulation and interest rates over the last 24-hours -- making waves in equity, currency and bond markets. So far, the S&P 500 was trading flat as Microsoft's stronger earnings and guidance results helped offset escalating tariff worries after President Donald Trump said he was ready to impose levies on $500 billion worth of goods from China, saying the U.S. has been taken advantage of for too long. "I’m not doing this for politics. I’m doing this to do the right thing for our country," Trump said in a CNBC interview. "We are being taken advantage of and I don’t like it." The $500 billion figure is about the value of Chinese goods imported into the U.S. last year. Trump also talked about currency manipulation by the EU and China as he continues to get aggressive vs. rivals. Outside of the Trump commentary, earnings and the Fed dominated this week with Fed Chair Powell noting the strength of the economy and rising inflation, while week one of earnings was mostly better (transports CSX, UAL, tech MSFT), outside of a few negative outliers (NFLX, and regional banks), though the heavy dose of corporate results coming in the next 2-3 weeks.

 

Treasuries, Currencies and Commodities

  • In currency markets, the U.S. dollar tumbles, with the dollar index (DXY) dropping more than -0.6% below 94.60 (a day after hitting its 2018 highs of 95.65) after President Donald Trump called China and the European Union currency and interest rate manipulators in a tweet. The Canadian dollar spikes on strong inflation, retail readings as inflation hit its highest level in nearly 6½ years in June, lending further credence to the Bank of Canada’s case for hiking interest rates last week. After taking a drubbing on Thursday in the wake of UK retail sales data (falling below $1.30), the pound was calmer on Friday, holding comfortably above $1.31. The euro also rising vs. the buck, topping the 1.17 level while the dollar falls to 111.70 vs. the Japanese yen.
  • Precious metals rise, bouncing off 1-year lows yesterday (around $1,210 an ounce) after U.S. President Donald Trump criticized the strength of the dollar and interest rate increases by the Federal Reserve, pushing the greenback sharply lower and making metals more attractive. Oil prices hold steady, little changed after late yesterday move higher
  • Treasury markets slip as yields rise after Trump says China and EU manipulate their currencies, rates, even as the U.S.'s dollar and rates were rising, hurting the U.S.'s "competitive edge." The 10-year Treasury note yield rose nearly 2 bps to 2.866%, though the shorter-term 2-yr yield slips under 2.59% amid impact fears of the ongoing trade/tariff/currency dispute between the US and rivals

 

Macro

         Up/Down

               Last

 

WTI Crude

0.06

69.52

Brent

0.22

72.79

Gold

5.40

1,229.40

EUR/USD

0.0066

1.1708

JPY/USD

-0.75

111.72

10-Year Note

0.033

2.869%

           

 

Sector Movers Today

  • Autos; industry under pressure with F, GM, FCAU, DDAIF, TM falling on trade war concerns and tariffs on auto industry auto parts/supplier GNTX shares slipped after missing Q2 forecasts saying light vehicle production in North America declined about 3% during the quarter, resulting in lower-than-expected shipments and revenue; HOG sales decelerated in June, citing Goldman Sachs channel checks show, pointing to a slight 2Q EPS miss
  • Oil services; two earnings reports today as BHGE shares slipped after missing Q2 earnings expectations, as demand fell for its oilfield equipment/said while overall revenue rose 2% Y/Y and 3% Q/Q to $5.55B, revenue from BHGE's oilfield equipment business, which includes deepwater drilling, fell 9% Y/Y and 7% Q/Q to $617M, missing estimate around $648M; SLB reported reporting in-line Q2 earnings and revenues, swinging to an unadjusted net income of $430M ($0.31/share) from a loss of $74M YoY/sees Q3 EPS growth of 10%-15% QoQ
  • Casino, Lodging & Leisure; Morgan Stanley updates ests to reflect the latest Macau, Vegas, and state reported data saying broadly 2Q revenue has come in slightly ahead of their forecasts (including Macau) and they raise 2Qe EBITDA for LVS, BYD, and WYNN, leave PENN unchanged, and lower MGM for Macau share (also lower PT to $38). Notes Macau GGR increased 17% in 2Q, above our estimate of 16%, driven by stronger than expected mass (+21%) on weaker VIP (14%)
  • Utility movers; Goldman Sachs upgraded three names and cut one as ETR upgraded to buy from neutral as the stock "continues to trade at a diversified merchant utility multiple despite nearing its transformation to a pure-play regulated utility; AEP upgraded to buy from neutral as sees strong growth at transmission and distribution (T&D) to drive upside; WEC upgraded to neutral from sell on recent renewable project announcements; PEG downgraded to neutral from buy, says upside looks limited after recent outperformance. Citigroup upgraded DUK to neutral staying with $1.6B equity completed and an additional $350m in DRIP planned for 2018-2022, DUK has dealt with their primary concern about its credit following tax reform
  • Optical stocks plunge, led by weakness in LITE; Craig Hallum noted Win Semi (Taiwan: 3105), which is LITE’s manufacturing partner for VCSEL arrays for 3DS, reported 2Q results and offered 3Q sales guidance of -10% q/q, well below consensus growth of +20% q/q, blaming it on inventories (shares of FNSR, AAOI, IIVI, ACIA also fell)

 

Stock GAINERS

  • CLF +5%; Q2 EPS handily topped consensus while revs of $714M also topped ests.
  • COF +3%; reported Q2 EPS of $3.22, well ahead of the $2.63 Street forecast, driven by lower credit costs and OpEx, offset somewhat by lower net interest margins
  • CTAS +4%; among top gainers in the S&P 500 index after earnings/guidance
  • ISRG +1%; trades record highs as Q2 revenue of $909.3M easily tops estimates of $876M and raised procedure growth guidance of 14.5%-16.5% (from 12%-15%)
  • MSFT +2%; trades to all-time record high after quarterly results top expectations and raised guidance on strength across cloud, servers, and PCs
  • STI +2%; helps bounce regional banks as Q2 EPS beat by 18c on lower NCO’s and provisions while NIM of 3.28% was slightly better
  • VFC +3%; boosted its FY19 EPS to $3.52-$3.57 from $3.48-$3.53 and said direct-to-consumer year rev. is now expected to increase between 11% and 13%, up from prior view up 8% to 10%

Stock LAGGARDS

  • GE -4%; as Q2 EPS and revs topped views bu said slumping demand for gas turbines will continue to weigh on results for some time, leading it to cut expectations for 2018 free cash flow
  • GNTX -2%; after missing Q2 forecasts saying light vehicle production in North America declined about 3% during the quarter, resulting in lower-than-expected shipments and revenue
  • LITE -8%; Win Semi (Taiwan: 3105), which is LITE’s manufacturing partner for VCSEL arrays for 3DS, reported 2Q results and offered 3Q sales guidance of -10% q/q, well below consensus growth of +20% q/q, blaming it on inventories according to Craig Hallum
  • SBNY -2%; downgraded at JPMorgan as believes net interest margin pressure will limit share upside (also downgraded at BMO Capital)
  • SKX -23%; following a disappointing outlook and weaker than expected Q2 earnings, prompting downgrades by at least two analysts which no longer have confidence in SKX’s earnings trajectory
  • STT -7%; as expects to suspend about $950M of share repurchases and issue equity to finance deal as they plan to spend $2.6B to acquire investment firm Charles River Systems
  • SWKS -5%; quarter results and guidance ahead of estimates on strong content growth at Apple, but conservative guidance weighs on shares

 

Syndicate

  • Dolphin Entertainment (DLPN) 2M share Spot Secondary priced at $3.00
  • Manhattan Bridge Capital (LOAN) 1.429M share Spot Secondary priced at $7.00
  • Replimune Group (REPL) 6.7M share IPO priced $15.00
  • Zynerba (ZYNE) 4M share Spot Secondary priced at $8.00

 

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