Before the Open (Feb 7)

by admin on February 7, 2019
in Before the Open

Good morning. Happy Thursday.

The Asian/Pacific markets leaned to the upside. New Zealand, Australia, Malaysia, Singapore and the Philippines posted gains while Japan lost ground. Europe, Africa and the Middle East are currently mostly down. Poland, France, Germany, Russia, Greece, South Africa, Hungary, Spain, Italy, Belgium, Portugal are down 1% or more. Futures in the States point towards a moderate gap down open for the cash market.

VIDEO: State of the Market

The dollar is up. Oil and copper are down. Gold and silver are down. Bonds are up.

Stories/News from Seeking Alpha…

A spate of production problems has spurred Subaru (OTCPK:FUJHY) to cut profit guidance for the coming year by 16%. The automaker now expects operating profit of ¥185B (about $1.68B), down from ¥220B. In the December quarter, profits had risen nearly 5% to ¥98.7B amid higher sales. After the new guidance, shares made their best intraday gain in Tokyo in a month.


Theresa May heads to Brussels today for meetings with EU leaders about potential Irish backstop concessions. The backstop allows Northern Ireland to remain tied to EU trading laws. If the talks aren’t successful, the U.K. could be one step closer to a hard Brexit.

The European Commission could cut Italy’s growth estimate today from the 1.2% forecast in November to 0.2%. The populist government took office last summer and pushed an expansive spending program, but now says it’s committed to reducing debt.

India’s central bank unexpectedly cut its benchmark interest rate by 25bps to 6.25%. More cuts could follow as the new government focuses on growth with inflation slowing to an 18-month low in December.

German industrial output unexpectedly dropped in December with a 0.4% decrease compared to the 0.7% increase expected by analysts. The construction sector fell 4% while auto rebounded with a 7% growth. Analysts say the output miss could mean recession after Q3’s GDP drop.


When it comes to fighting higher drug prices, Novartis’ (NYSE:NVS) CEO puts the blame on middlemen and has joined government calls to end rebate payments to pharmacy benefit managers, insurers and others to get drugs covered. Novartis’ prices have been “flat to negative” for three years, Vas Narasimhan says, but he claims the company pays almost 50% of U.S. gross revenues to rebates. The government proposal would end rebates and pass along savings to patients covered by government health plans.

Cable mogul John Malone has a plan for his Liberty Media (NASDAQ:FWONA) to get hold of the Fox regional sports networks, and it’s opposite one pursued by Major League Baseball, the New York Post says. Malone already has the Atlanta Braves (NASDAQ:BATRA) in his corner, along with big stakes in Charter (NASDAQ:CHTR) and Sirius XM (SIRI, LSXMA). He’s reportedly adding team owners with a plan to keep selling games to local broadcasters, vs. MLB’s plan to centralize and repackage games. Disney (NYSE:DIS) must divest the Fox nets (FOX, FOXA) to wrap their $71B media asset deal.

Amazon has cut its stake in Indian e-commerce company Cloudtail to allow 300K of its products to return to Amazon’s (NASDAQ:AMZN) platform. The reorganization follows new foreign direct investment regulations in the region.

Inline guidance: Sanofi (NASDAQ:SNY) guides net income growth of 3% to 5% for 2019 after reporting Q4 income growth of 4.3%. Q4 revenues rose 4% on the strength of rare disease unit Genzyme. The company cites new drugs and reorganization as this year’s income drivers.

Wednesday’s Key Earnings
Chipotle Mexican Grill (NYSE:CMG) +10.4% AH on 66% digital sales growth.
FireEye (NASDAQ:FEYE) -9.4% on downside 2019 guidance.
GoPro (NASDAQ:GPRO) +2% PM after topping Q4 consensus.
NXP Semiconductors (NASDAQ:NXPI) -2.7% PM on Q4 earnings.
National Oilwell Varco (NYSE:NOV) +4.6% AH on Q4 revenue beat.
Zynga (NASDAQ:ZNGA) rises +2.4% PM on strong Q4 bookings growth.
Two Harbors Investment (NYSE:TWO) -2.8% AH due to fall in Q4 total return book value.
MetLife (NYSE:MET) -1.9% AH as Q4 revenue disappoints.
iRobot (NASDAQ:IRBT) +12.6% AH on strong Q4 earnings beat.
Apollo Investment (NASDAQ:AINV) +0.7% AH on Q3 NII beats, authorizing $50M stock buyback.
Fortinet (NASDAQ:FTNT) +4% PM on upside FY outlook.
O’Reilly Automotive (NASDAQ:ORLY) +2.5% AH despite Q4 miss.
Prospect Capital (NASDAQ:PSEC) -1.3% AH on Q2 NAV fall.
Nutrien (NYSE:NTR) -1% AH on 2019 guidance below consensus.
Just Energy (NYSE:JE) +2.9% AH on Q3 revenue beat.

Today’s Economic Calendar
8:30 Initial Jobless Claims
9:15 Fed’s Kaplan Speech
9:30 Fed’s Clarida: “The Global Factor in Neutral Policy Rates”
10:30 EIA Natural Gas Inventory
1:00 PM Results of $19B, 30-Year Note Auction
3:00 PM Consumer Credit
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
7:30 PM Fed’s Bullard: U.S. Monetary and Economic Policy


today’s upgrades/downgrades from

this week’s Earnings from Morningstar

this week’s Economic Numbers/Reports powered by ECONODAY


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