After Hours Summary: YELP +19%, WTW +14%, GPRO +13%, ANET +12%, MDRX +11% higher and AAOI -27%, PI -21%, CFMS -21%, ABTL -20%, SYNA / FLR -11%, VIAB -8% lower following earnings / guidanceAfter Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: PDLI +19.8% (also says evaluating the possibility of a new stock repurchase program), YELP +18.9% (also GrubHub and Yelp announce long-term partnership d- GRUB to acquire Eat24), WTW +14.1%, GPRO +12.6%, ANET +12.2%, MDRX +11.4% (also Allscripts Healthcare to acquire McKesson's hospital and health system IT business, Enterprise Information Solutions, for $185 million in cash), HDP +8.8%, ETSY +8.6%, MX +7.4%, MTZ +7.1%, WING +6.3%, FIVN +6%, GEVO +5.5%, WU +4.7%, CARA +4.1%, KDMN +4%, ELY +3.8% (also Callaway Golf to acquire TravisMathew a golf and lifestyle apparel company, for $125.5 million in an all-cash transaction ), NBIX +3.2%, UNIT +2.7%, SRC +2.7% (also announced the planned spin-off of a separate publicly traded REIT), WTI +2.6%
Companies trading higher in after hours in reaction to news: AMC +2% (ticking higher; announces $100 million share repurchase program), GBT +1.5% (initiated after the close with Outperform and $53 tgt at Oppenheimer)
After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: AAOI -27.4%, PI -21.3%, CFMS -20.6%, ABTL -20%, EFII -18.4%, NGVC -16.5%, CHUY -14.1%, SYNA -11%, FLR -10.6%, INFN -10.6%, CARB -9.9%, MEET -8.9%, YRCW -8.6%, MELI -8.6%, VIAB -7.6%, INFI -7.4%, BGS -7.1%, NPTN -6.5%, APPN -6.4%, GRUB -5.2% (GrubHub and Yelp announce long-term partnership - GRUB to acquire Eat24), AG -5.2%, AXDX -4.3%, INTT -4.3%, NE -4.1%, SM -3%, ATVI -1.9%, UE -1.9% (also to sell 6.25 mln common shares to Cohen & Steers)
Companies trading lower in after hours in reaction to news: DVAX -9.7% (provided regulatory update on HEPLISAV-B( following FDA Advisory Committee Meeting -- FDA requested more detailed information about the company's proposed post-marketing study for HEPLISAV-B ), APLP -7.8% (prices offering of 4 mln common units representing limited partner interests at $13.75 per common unit), AAXN -3.1% (ticking lower after Digital Ally confirmed 'yet another significant victory in its legal battles against Axon Enterprise'), BAS -1.7% (commenced at-the-market public offering of up to $50 million of its common stock pursuant to an effective shelf registration statement), DIS -1% (following VIAB results)
Optical names are pulling back following AAOI / NPTN / ACIA earnings: LITE -2.7%, OCLR -2.3%, FNSR -1.2%, IIVI -0.6%
Asia Mid-Session Market Update: Asia Equities trade cautiously ahead US payrolls report and Toyota earnings, USD/JPY remains near 110; RBA reiterates concerns about gains in the Aussie
***Asia Summary***
- Asian equity markets are currently trading mixed, in line with what was seen during the New York session. Overall markets have traded cautiously ahead of the later release of US monthly employment data and quarterly earnings out of auto giant Toyota.
- In Singapore, shares of large banking name DBS have declined by over 1.5% after its quarterly profits missed expectations.
- The Reserve Bank of Australia (RBA) issued its quarterly monetary policy statement in which it lowered its 2017 GDP growth forecast, but kept underlying inflation forecasts unchanged. The central bank also reiterated its concerns about the recent gains in the Australian dollar, after it suggested in its Aug 1st policy decision that the gains in the Aussie could impact growth and inflation.
***Key economic data***
- (AU) AUSTRALIA JUNE RETAIL SALES M/M: 0.3% V 0.2%E; Q/Q: 1.5% V 1.2%E
- (AU) RBA QUARTERLY STATEMENT ON MONETARY POLICY: REITERATES RECENT AUD (A$) RISE HAD MODEST EFFECT ON GDP FORECASTS
- (JP) JAPAN JUNE LABOR CASH EARNINGS Y/Y: -0.4% V 0.5%E; REAL CASH EARNINGS Y/Y: -0.8% V 0.1%E
- (PH) PHILIPPINES JULY CPI M/M: 0.3% V 0.2%E; Y/Y: 2.8% V 2.8%E; Core Y/Y: 2.1% v 2.7%e
***Speakers and Press***
Japan
- (JP) Former BoJ Official Kiuchi: Hope other members consider 'serious' policy side effect; may reach limit of JGB purchases in middle of 2018
- (JP) Japan Economic Revitalization Minister Motegi: Reiterates to maintain FY2020 primary balance surplus goal
***Asian Equity Indices/Futures (00:30ET)***
- Nikkei -0.3%, Hang Seng +0.1%, Shanghai Composite +0.2%, ASX200 -0.3%, Kospi +0.2%
- Equity Futures: S&P500 flat ; Nasdaq flat , Dax flat , FTSE100 flat
***FX ranges/Commodities/Fixed Income (00:30ET)***
- EUR 1.1869-1.1888; JPY 109.85-110.19; AUD 0.7934-0.7975; NZD 0.7423-0.7450
- Aug Gold -0.4% at 1,267/oz; Aug Crude Oil -0.4% at $48.86/brl; Sept Copper +0.3% at $2.89/lb
- GLD SPDR Gold Trust ETF daily holdings unchanged at 791.9 metric tons
- (AU) Australia sells A$500M in 1.75% Nov 2020 bonds, avg yield 1.9447%, bid to cover 5.04x
- (CN) PBOC SETS YUAN REFERENCE RATE AT: 6.7132 V 6.7211 PRIOR
- (CN) China PBOC OMO injects CNY120B in 7 and 14-day reverse repos v CNY60B in 7-day reverse repo prior
***Equities notable movers***
Australia
- Sims Metal Management, SGM.AU Announces succession plan for CEO and CFO, along with FY17 guidance; -12.7%
- Commonwealth Bank, CBA.AU Austrac initiated civil penalty proceedings related to anti-money laundering and counter-terrorism financing laws
- Crown Ltd, CWN.AU FY17 profits below estimates; -2%
- Tabcorp, TAH.AU Reported FY17 results; +1.3%
Hong Kong/China
- CK Hutchsion Holdings, 1.HK H1 Profits below estimates; -4.5%
Japan
- Mazda, 7261.JP Speculated capital tie-up with Toyota; +4.5%
***US markets on close: Dow flat, S&P500 -0.2%, Nasdaq -0.4%, Russell -0.6% ***
- Best Sector in S&P500: Utilities, Industrials +0.5%
- Worst Sector in S&P500: Energy -1.4%
- At the close: VIX 10.44 (+0.16 pts); Treasuries: 2-yr 1.34% (-2bps), 10-yr 2.22% (-5bps), 30-yr 2.79% (-6bps)
***US Market Summary***
- Blue chips continued to hit higher ground, with the Dow marking a new all-time high again at 22,040 before trading lower towards day end. Apple and Amazon both lost nearly 1%, putting the most pressure on the S&P. Attention shifts to tomorrow's jobs data. Yesterday's lower than expected ADP weekly increase reduced forecasts for tomorrow's NFP data, with consensus at +178k.
***US Afterhours Movers***
-After Market Movers
-GPRO Reports Q2 -$0.09 v -$0.26e, Rev $296.5M v $271Me; Guides Q3 R$290-310M v $279Me, Gross Margin 36-38% range; +16% afterhours
-YELP Reports Q2 $0.25 v $0.20e, Rev $208.9M v $205Me; authorizes $200M share buyback; +14.8% afterhours
-WTW Reports Q2 $0.67 v $0.50e, Rev $341M v $334Me; Raises FY17 $1.57-1.67 v $1.28e (prior FY17 $1.40-1.50); +14.3% afterhours
-MDRX Reports Q2 $0.15 v $0.15e, Rev $428M v $424Me; Raises FY17 R$1.79-1.82B v 1.72Be; +12.2% afterhours
-FLR Reports Q2 -$0.17* v $0.59e, Rev $4.70B v $4.94Be; -9.0% afterhours
-SYNA Reports Q4 $1.18 v $1.16e, Rev $426.5M v $427Me; Guides Q1 Rev $380-420M v 447Me; -14.6% afterhours
-PI Reports Q2 $0.06 v $0.03e, Rev $34.1M v $33.9Me; Guides Q3 -$0.08 to -$0.01 v $0.08e, R$31.8-33.3M v $38Me, Adj EBITDA -$1.7M to -$0.2M ; -23.3% afterhours
-AAOI Reports Q2 $1.54 v $1.35e, Rev $117.4M v $116Me; Guides Q3 $1.30-1.43 v $1.36e; R$107-115M v $123Me; Sees softer than expected demand for 40G solutions with a large customer; -29.3% afterhours
Closing Market Summary: Stocks Tick Lower on ThursdayEquities ticked down on Thursday, sending the S&P 500 and the Nasdaq lower by 0.2% and 0.4%, respectively. However, the Dow (unch) managed to eke out yet another record close, its seventh in a row.
The energy sector tumbled 1.3% on Thursday in its worst one-day performance since July 6. Just about all energy components finished in negative territory with Dow component Chevron (CVX 109.43, -1.03) dropping 0.9%. Crude oil held a gain of around 0.7% in the morning session, but dropped sharply around midday. WTI crude settled lower by 0.7% at $49.26/bbl.
In total, seven of the eleven sectors settled in negative territory. The top-weighted technology (-0.4%) and financials (-0.5%) sectors struggled to keep pace with the broader market throughout the day. The lightly-weighted materials space (-0.7%) also exhibited relative weakness while the remaining laggards finished with losses of no more than 0.3%.
At the opposite end of the leaderboard, the health care (+0.2%), industrials (+0.5%), utilities (+0.4%), and telecom services (unch) groups finished with modest victories. Aetna (AET 158.54, +3.80) helped keep the health care group afloat, climbing 2.5% after beating both top and bottom line estimates and raising its guidance for the fiscal year.
Transports were among the top performers in the industrial sector, pushing the Dow Jones Transportation Average higher by 0.3%. Dow components General Electric (GE 25.76, +0.24) and 3M (MMM 207.62, +2.21) also outperformed, adding 0.9% and 1.1%, respectively.
Meanwhile, the rate-sensitive utilities group benefited from broad strength as a rally in the Treasury market left interest rates lower across the yield curve; the benchmark 10-yr yield dropped four basis points to 2.23% while the 2-yr yield slipped two basis points to 1.34%.
The Treasury market moved higher after the Bank of England voted 6-2 in favor of holding the key rate at 0.25% and lowered the UK's 2017 GDP growth forecast to 1.7% from 1.9%. The previous BoE meeting featured three calls for a rate hike, but, despite the slight change in voting, the Monetary Policy Committee noted that the key rate may need to rise more than the market currently expects.
In the currency market, the U.S. dollar climbed 0.6% against the British pound to 1.3144, but the U.S. Dollar Index (92.62, -0.13) still finished lower by 0.1% as the Japanese yen showed relative strength (109.99, -0.6%). The U.S. Dollar Index settled at a 15-month low.
Reviewing Thursday's economic data, which included the weekly Initial Claims Report, June Factory Orders, and the July ISM Services Index:
- The latest weekly initial jobless claims count totaled 240,000 while the consensus expected a reading of 242,000. Today's tally was below the revised prior week count of 245,000 (from 244,000). As for continuing claims, they increased to 1.968 million from the revised count of 1.965 million (from 1.964 million).
- The key takeaway from the report is that initial claims were in-line with their longstanding trend of signaling a tight labor market.
- The Factory Orders Report for June showed an increase of 3.0%, which is above the consensus of 2.9%. The May reading was revised to -0.3% (from -0.8%).
- The key takeaway from the report is that order activity outside the transportation sector was relatively weak in June. Nondefense capital goods orders, excluding aircraft -- a proxy for business spending -- were unchanged in June.
- The ISM Services Index for July declined to 53.9 from an unrevised reading of 57.4 in June. The consensus expected a reading of 56.9.
- The key takeaway from the report is that the non-manufacturing sector's expansion saw a notable deceleration in July, which isn't an uplifting consideration as it relates to the third quarter growth outlook. According to the ISM, the past relationship between the NMI and the overall economy indicates the NMI for July corresponds to a 1.9% increase in real GDP on an annualized basis.
On Friday, investors will receive the Employment Situation Report for July at 8:30 ET. Economists polled by expect the jobs report to show the addition of 181,000 nonfarm payrolls, an unemployment rate of 4.3%, and an increase of 0.3% in average hourly earnings.
The only other report on Friday's economic calendar is the June Trade Balance (consensus -$44.9 billion), which will also be released at 8:30 ET.
- Nasdaq Composite +17.8% YTD
- S&P 500 +10.4% YTD
- Dow Jones Industrial Average +11.5% YTD
- Russell 2000 +3.5% YTD