>>> After Hours Summary: CRC +11%, CVNA +10%, BILI +6%, BOX -24%, T


After Hours Summary: CRC +11%, CVNA +10%, BILI +6%, BOX -24%, TDOC -16.5%, WIFI -15%, FIT -14%, HPQ -12%, BKNG -9% among notable earnings/guidance movers

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: RUBI +14.8%, CRC +11.1%, CVNA +10%, COLL +9%, TWNK +8.7%, MNST +6.4%, SOI +6.2% (light volume), RGNX +6.1%, BILI +5.7%, TPC +5.5%, ANSS +4.1%, FGEN +4%, JCAP +3.7% (light volume), HGV +3.5%, XLRN +2.4% (light volume), APA +1.4%

Companies trading higher in after hours in reaction to news: TTOO +33% (granted Breakthrough Device designation for the T2Resistance Panel by FDA), SRRA +7.1% (announces late-breaking oral and poster presentations for SRA737 and SRA141 preclinical data at AACR 2019), IMGN +5.7% (modestly rebounding), WBC +5.2% (confirms it has been approached by ZF Friedrichshafen AG and has engaged in preliminary discussions concerning a potential transaction), SXI +3.9% (to sell its Cooking Solutions Group to Middleby for cash purchase price of $105 mln), BMY +3.9% (Bristol-Myers Squibb 8% shareholder Wellington Management says does not support proposed acquisition of Celgene), GH +2.4% (light volume; announces positive results from NILE study), KPTI +2.3% (Point72 Asset Management increases passive stake), RYN +2% (still looking), WES +1.3% (Western Gas Partners unitholders approve to adopt the Contribution Agreement and Agreement and Plan of Merger with Western Gas Equity Partners, LP [WGP]), CVET +0.5% (initiated with Outperform at Raymond James)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: BOX -24%, TDOC -16.5%, WIFI -15.3%, FIT -14.4%, HPQ -11.9%, BKNG -9.3%, ORBC -8.8%, PRAH -6.9%, SQ -6.3%, AYX -6.1%, LB -6.1%, PRGO -4.6%, ESTC -4.1%, WING -3.9%, LADR -3.7%, AMED -3.4% (light volume), SRPT -2.1%, FSK -1.8% (ticking lower)

Companies trading lower in after hours in reaction to news: SYNH -27% (delayed previously announced earnings release/call to allow additional time to complete its Form 10-K), TBIO -14.3% (light volume; provides update on cystic fibrosis and ornithine transcarbamylase deficiency programs; FDA to require additional preclinical toxicology data for MRT5201), CELG -9.3% (Bristol-Myers Squibb 8% shareholder Wellington Management says does not support proposed acquisition of Celgene), AAOI -8.9% (announces proposed private offering of $70 mln of Convertible Senior Notes due 2024), SKY -5.9% (announces secondary offering of 10,750,202 shares of common stock by selling shareholders), NOVT -1.6% (after closing 8% higher on the day; files for debt securities and common share shelf offering), EXPE -1.1% / TRIP -0.7% (following BKNG results), UNIT -0.8% (postpones Q4 release to assess the impact of the bankruptcy petition by Windstream Holdings)

>>> Closing Stock Market Summary


Closing Stock Market Summary

The S&P 500 lost 0.1% on Wednesday as investors weighed a handful of headlines on the political, monetary, and geopolitical fronts, as well as the latest batch of earnings reports. The benchmark index was down as much as 0.7% in early trading action but climbed back to its flat line in the afternoon, where it faced some continued resistance near the 2800 level. 

The Dow Jones Industrial Average lost 0.3%. The Nasdaq Composite (+0.1%) and the Russell 2000 (+0.2%), however, finished higher. 

The S&P 500 health care (-0.5%), real estate (-0.4%), and communication services (-0.4%) sectors underperformed the broader market. Conversely, the energy (+0.4%), financials (+0.4%), and industrial (+0.4%) sectors outperformed.

Particular attention this morning was placed on congressional testimony from Fed Chair Jerome Powell, U.S. Trade Representative Robert Lighthizer, and President Trump's former personal lawyer, Michael Cohen.

Fed Chair Powell in his semi-annual monetary policy acknowledged the Fed is close to agreeing on a plan to end the balance sheet runoff. USTR Lighthizer said that it is too early to predict the outcome of the U.S.-China trade negotiations.  The views expressed by Mr. Cohen before the House Committee on Oversight and Reform ultimately had little, if any, impact on the market.

There were also some geopolitical events to consider. President Trump began a two-day meeting with North Korean leader Kim Jong Un in Vietnam, hoping to take steps toward denuclearizing North Korea. Separately, Pakistan shot down two Indian fighter jets over their contested border, escalating tensions between the two countries.

There was a lot of news for the market to digest Wednesday, including a Medicare-for-All proposal put forth by a Democratic congresswoman that weighed on the health care space.  In the end, neither buyers nor sellers showed much conviction in a market where it was easy to over-analyze things.

The outperformance from retail stocks supported an intraday rebound. Better-than-expected results from Lowe's (LOW 107.62, +2.59, +2.5%), TJX (TJX 51.56, +1.84, +3.7%), and Best Buy (BBY 68.82, +8.51, +14.1%) sparked a retail rally, evidenced by the SPDR S&P Retail ETF (XRT 46.08, +0.46) gaining 1.0%.

On the other hand, disappointing earnings and/or guidance from several companies, including Weight Watchers (WTW 19.37, -10.20, -35.5%) and Mylan N.V. (MYL 26.01, -4.61, -15.1%), helped keep a lid on the broader market. 

U.S. Treasuries were also under pressure, driving yields higher in a curve-steepening trade. The 2-yr yield increased three basis points to 2.51%, and the 10-yr yield increased six basis points to 2.69%. The U.S. Dollar Index increased 0.2% to 96.15. WTI crude rose 2.4% to $56.94/bbl following some bullish inventory data.

Reviewing Wednesday's economic data, which included Pending Home Sales for January, Factory Orders for December, the Advance Reports for International Trade in Goods, Retail Inventories, and Wholesale Inventories for December, and the weekly MBA Mortgage Applications Index:

  • Pending Home Sales increased 4.6% in January (consensus -0.4%). Today's reading follows a revised reading of -2.3% in December (from -2.2%).
  • Factory orders increased 0.1% in December (consensus +1.0%) following an upwardly revised 0.5% decline (from -0.6%) in November.
    • The key takeaway from the report was the understanding that business investment was weak, evidenced by the 1.0% decline in nondefense capital goods orders, excluding aircraft, that followed a 1.1% decline in November. That will compute as a negative input for Q4 GDP forecasts.
  • Advance report for International Trade in Goods for December showed a deficit of $79.5 billion, the Advance report for Wholesale Inventories for December showed an increase of 1.1%, and the Advance report for Retail Inventories for December showed an increase of 0.9%.
  • The weekly MBA Mortgage Applications Index increased 5.3% following a 3.6% increase in the prior week.

Looking ahead, investors will receive the Advance report for fourth quarter GDP, the weekly Initial and Continuing Claims report, and the Chicago PMI for February on Thursday. 

  • Russell 2000 +17.2% YTD
  • Nasdaq Composite +13.9% YTD
  • Dow Jones Industrial Average +11.4% YTD
  • S&P 500 +11.4% YTD

>>> US Gapping down

Gapping down
In reaction to disappointing earnings/guidance:

  • WTW -34.4%, ELF -18.8% (also to exit the stand-alone e.l.f. retail store business, CFO resigns), DF -16.5%, EVH -15.5%, VICR -13.4%, BNFT -10.5% (also announces secondary offering of an aggregate of 5,704,758 shares of common stock), WLL -10.4%, MYL -10.4%, DY -10.2%, BGS -10%, TIVO -9.3%, CLGX -8.9%, INGN -8.6%, IMMR -7.9%, HPR -7.3%, PEN -6.6%, CERS -6.3%, PGTI -5.5%, NBR -4.6%, AAXN -4.1%, RRGB -2.8%, ORA -2.1%, EOG -2%, HMLP -1.9%, AKCA -1.7%, GNL -1.4%, AMRN -1.1%

Other news:

  • WATT -16.4% (prices 3.33 mln shares of common stock at $7.50 per share; also reported earnings)
  • KPTI -13.8% (FDA AdCom votes to delay potential approval of selinexor until results of the randomized phase 3 BOSTON trial are available)
  • ADMP -13% (received Refusal to File letter from the FDA regarding its NDA for its sublingual tadalafil product)
  • ALDR -5.2% (announces proposed public offering of up to $105 mln of shares of its common stock and concurrent private placement)
  • VNOM -4.6% (prices upsized offering of 9.5 mln common unities at $32.00 per share)
  • LPSN -3.4% (intends to offer private offering of $150.0 mln aggregate principal amount of Convertible Senior Notes due 2024)
  • NYMT -2.8% (prices public offering of 15 mln shares of common stock for gross proceeds of approx $90.0 mln)
  • PSEC -1.7% (announces public offering of $150 mln in aggregate principal amount of unsecured convertible notes due 2025)
  • EQIX -1.4% (announces proposed public offering of $900 mln of its common stock)
  • WIT -1.2% (to divest its Workday and Cornerstone OnDemand business to Alight Solutions for up to $110 mln)
  • RARE -0.8% (prices public offering of 5,072,464 shares of common stock at $60.00 per share)

Analyst comments:

  • UN -3.2% (downgraded to Neutral from Outperform at Exane BNP Paribas)
  • HIIQ -2.6% (downgraded to Neutral from Buy at B. Riley FBR)
  • ATHM -1.3% (downgraded to Neutral from Outperform at Credit Suisse)
  • DECK -0.9% (downgraded to Neutral from Positive at Susquehanna)

>>> Office Depot beats by $0.01, reports revs in-line; reaffirms FY19 guidance

Office Depot beats by $0.01, reports revs in-line; reaffirms FY19 guidance (3.27 -0.03)
  • Reports Q4 (Dec) earnings of $0.09 per share, excluding non-recurring items, $0.01 better than the S&P Capital IQ Consensus of $0.08; revenues rose 3.4% year/year to $2.67 bln vs the $2.68 bln S&P Capital IQ Consensus; adjusted EBITDA was $138 million flat with the prior year period, despite increased costs associated with additional investments in the B2B platform.
  • 2019 Guidance: Co reaffirms guidance for FY19 revs of ~$11.1 bln vs. $11.05 bln S&P Capital IQ Consensus, Adjusted EBITDA of $~$575 mln, adj op income of$375 mln, FCF of ~$350 mln. "The actions we took in 2018 to regain sales growth and invest in our business platform showed progress and we are encouraged about the opportunities in 2019 to more fully exploit our key assets. These assets include our nearly 29 million customers; a distribution network that can deliver to 98.5% of the U.S. population next day; and our 1,800 person dedicated B2B sales force. In the year ahead, we are taking actions to improve profitability while continuing to grow our top-line revenue. In addition to leveraging the investments we've made in our business, the actions we are taking to drive greater profitability include realigning our merchandizing organization, pursuing cost efficiencies throughout the entire organization, leveraging our asset base in traditional and non-traditional ways, and enhancing customer penetration and share of wallet.

>>> Best Buy beats by $0.14, reports revs in-line; guides Q1 ~in-line; guides FY

Best Buy beats by $0.14, reports revs in-line; guides Q1 ~in-line; guides FY20 EPS midpoint above consensus, revs in-line; increases dividend 11%; announces new $3B buyback (60.31)
  • Reports Q4 (Jan) earnings of $2.72 per share, excluding non-recurring items, $0.14 better than the S&P Capital IQ Consensus of $2.58; revenues fell 3.7% year/year to $14.8 bln vs the $14.69 bln S&P Capital IQ Consensus.
  • Comps +3% vs. +2% ests. From a merchandising perspective, the company generated comparable sales growth across multiple categories, with the largest drivers being wearables, appliances, smart home and gaming. These positive drivers were partially offset by a decline in the mobile phone category. Domestic online revenue of $2.96 billion increased 9.3% on a comparable basis, primarily due to higher conversion rates and increased traffic. As a percentage of total Domestic revenue, online revenue increased 190 basis points to 21.9% versus 20.0% last year. Domestic gross profit rate was 22.1% versus 22.3% last year.
  • Co issues mixedguidance for Q1, sees EPS of $0.83-0.88, excluding non-recurring items, vs. $0.83 S&P Capital IQ Consensus; sees Q1 revs of $9.05-9.15 bln vs. $9.15 bln S&P Capital IQ Consensus.
  • Co issues guidance for FY20, sees EPS of $5.45-5.65, excluding non-recurring items, vs. $5.48 S&P Capital IQ Consensus; sees FY20 revs of $42.9-43.9 bln vs. $43.39 bln S&P Capital IQ Consensus.
  • The board of directors approved a new $3 billion share repurchase authorization for the company's common stock, replacing the existing authorization dated February 2017, which had $1.5 billion in purchases remaining. The company plans to spend between $750 million and $1.0 billion on share repurchases in FY20.
  • Co announced its board of directors approved an 11% increase in the regular quarterly dividend to $0.50 per share, effective immediately. This is the sixth consecutive year the company has increased the dividend

>>> Campbell Soup beats by $0.07, beats on revs; reaffirms FY19 EPS guidance, re

Campbell Soup beats by $0.07, beats on revs; reaffirms FY19 EPS guidance, revs guidance (32.89)
  • Reports Q2 (Jan) earnings of $0.77 per share, excluding non-recurring items, $0.07 better than the S&P Capital IQ Consensus of $0.70; revenues rose 24.4% year/year to $2.71 bln vs the $2.66 bln S&P Capital IQ Consensus.
  • Co reaffirms guidance for FY19, sees EPS of $2.45-2.53, excluding non-recurring items, vs. $2.45 S&P Capital IQ Consensus; sees FY19 revs of $9.975-10.100 bln vs. $9.86 bln S&P Capital IQ Consensus.
  • Note: As previously announced, given the strategy to pursue divestitures, the co provides annual guidance pre-divestitures (above guidance) and pro forma guidance, assuming divestitures. The latter guidance was also reaffirmed at sales of $7.925-8.050 bln and adjusted EPS of $2.40-2.50. It's not entirely clear which guidance is comparable to consensus as perhaps some analysts may be using pro forma modeling. But CPB reaffirms today both sets of numbers

>>> US Gapping up

Gapping up
In reaction to strong earnings/guidance:

  • TNDM +19.6%, PANW +11.4%, BBY +11%, FTR +10.8%, CHK +10.6%, SE +10.5%, OCN +9.9%, MELI +9.6%, GWPH +8.9%, DNR +8.9%, JAZZ +8%, HZNP +7.2%, PUMP +7%, SUPN +6.8%, IMAX +6.5%, INSP +6.4%, WMGI +6.4%, MIDD +6%, OPRX +5.4%, CPB +5.2%, INN +5%, SHOO +4.8%, ODP +4.6%, GTE +4.4%, OAS +4.2%, HEI +4.2%, AXGN +3.4%, PLNT +3.4%, LOW +3.4%, RTRX +3.1%, CPE +3%, IONS +3%, COKE +2.8%, MMSI +2.6%, OUT +2.5%, TOL +2.4%, ARNA +2.3%, VEEV +2.2%, CGBD +2%, MASI +1.8%, PZZA +1.3%, SBGI +1.3%, RIO +1.2%, MED +1.1%, PSA +1%, .

Other news:

  • MAXR +9% (ahead of earnings Feb 28)
  • LTHM +6.6% (to join S&P SmallCap 600)
  • HRTX +3.5% (announces FDA approval for CINVANTI for IV use NDA)
  • REI +3.4% (Ring Energy to acquire North Central Basin Assets from Wishbone Energy Partners)
  • SRPT +2.7% (exercises option to acquire Myonexus Therapeutics; exercise fee is $165 mln)
  • NIO +2.5% (continued strength)
  • VSI +2.4% (files 135.8K share common stock offering by selling stockholders)
  • QURE +2.1% (presents new preclinical data on AMT-130 in Huntington's disease)
  • GE +1.3% (to focus on power, renewable energy, aviation and healthcare segments; from 10-K: Targeting leverage <2.5x and dividend in-line with peers over time)

Analyst comments:

  • PM +1.2% (upgraded to Buy from Neutral at UBS)