Morning Note – 5/21/19 U.S. Backs Off Huawei Shutdown

Corporate Actions IPOs on deck for This Week: A busy week with 5 IPOs this week.  No hot deal of the week. IPOs on deck for Today:  GX Acquisition Unit (GXGXU) of note. Secondaries on deck: SCON of note. Notes Priced:  None of note. Other Filings of Note: files mixed shelf offering.  CVNA files senior notes.   MRCY INSM…

Corporate Actions

IPOs on deck for This Week: A busy week with 5 IPOs this week.  No hot deal of the week.

IPOs on deck for Today:  GX Acquisition Unit (GXGXU) of note.

Secondaries on deck: SCON of note.

Notes Priced:  None of note.

Other Filings of Note: files mixed shelf offering.  CVNA files senior notes.   MRCY INSM SWI CVNA GH files common stock offering.

Courtesy of IPO Financial

Earnings After The Close:

Beat: None of note.

Flat:  None of note.

Missed: NDSN (0.06).

Still To Report: 

News After The Close:

Ascnea Retail Group (ASNA) to close Dressbarn.

General Dynamics (GD) wins $500 million Navy contract.

Index Changes: Kontoor Brands (KTB) and Arrowhead Pharmaceuticals (ARWR) to join S&P 600 before trading on Friday.

Stock Repurchase: 

Dividend Increase: 

Hourly Action This  Week:

This week now sees 4 hours  that are positive and 3 that are negative. 3:00-4:00 was higher!

Courtesy of Quantitative Partners, Inc.

What’s Happening This Morning: Futures on the S&P 500 rose until 8:00 p.m. EDT then trading slightly down into 4 a.m. EDT before collapsing.

U.S. futures: S&P +14.50, Dow Jones +111 NDX +51.75 and Russell 2000 +6.90 with fair values LOWER ADDING TO GAINS.  Asia mixed and Europe higher, click through for details by country.

Gold and silver lower with copper higher. WTI Crude and Brent Oil Futures higher. Natural Gas is lower. $ is higher vs Euro, higher vs. Pound and higher vs. Yen. US 10 year Treasury price $124.11 from $124.52  with yields higher since Monday morning with the yield at 2.432% from 2.393%. Prices as of 8:25 a.m. EDT.

Top Sectors Monday: Utilities.

Weakest Sectors Monday: All others leads down by Technology, Consumer Goods and Services.

One Month Winners: Conglomerates and Utilities.

Three Month Winners:  Conglomerates, Services, Technology, Consumer Goods and Utilities.

Six Month Winners: Utilities,Technology, Services, Industrials and Conglomerates.

Twelve Month Winners: Utilities, Services, Healthcare and Conglomerates

Year to Date: All higher led by Conglomerates, Services, Industrials, Technology and Consumer Goods.

Upcoming Earnings Of Note (sorted by market cap, highest to lowest)

Today After The Close: SE JWN TOL PSTG URBN SKY CRMT OOMA of note.

Tuesday Before The Open:  LOW ADI TGT CM VFC AAP CSWI PLAB of note.

Earnings This Morning Of Note 

Beat:  AZO +0.90, DY +0.11, HD +0.08, SFL +0.06, DAVA +0.02 of note.

Flat:  MNRO +0.00 of note.

Missed: JCP (0.07), KSS (0.06) of note.

Still To Report: CBRL, EV, TJX, UXIN of note.

Rags & Mags: Highlighted Stories may be clicked through to the original story.

Top Story: Department of Commerce announces limited exemptions on Huawei products.

Five Things You Need To Know To Start Your Day. (Bloomberg)

China may retaliate against U.S. on Huawei. (Bloomberg)

China Eastern Airlines wants to be paid for Boeing (BA) 737 Max being grounded. (Reuters)

U.S. Judge Amit Mehta rules that President Trump must turn over financial records from before he was president. (CNN)

Former White House counsel Don McGahn will not appear before the House Judiciary Committee today. (CNN)

In a speech last night, Federal Reserve Chairman Powell spoke about increasing corporate debt.

Alphabet (GOOGL) tells CNBC will work with Huawei for the next 90 days. (CNBC)

Senators Tim Kaine (D-VA) and Majority Leader Mitch McConnell introduce legislation to raise age to buy all tobacco products to 21 from 18.

Data Points

Several indexes broke several key  moving averages.

Yesterday saw 958  stocks rise and 1887 fall on the NYSE. NASDAQ saw 1069 rise and 2014 fall.

The QPI10 Day Moving Average of Breadth (10DMA) is no longer  invested  and moved to cash on May 8th close. For a move to cash from buy, the 10DMA needed to have two days in row below -200. For now, the best offense is a good defense.

Courtesy of Quantitative Partners, Inc.

YTD 76% (-3% week over week) of stocks are higher and 24% are lower. Updated 5/10/19 close with next update on 5/17/19 close.

Courtesy of Phil Erlanger Research, Inc.

Algo/HFT Trading Levels:

The Erlanger Value Lines track the intraday range of resistance, pivot and support used by Algo/HFT Traders. Each day we show where we closed within the range.

All indexes struggled yesterday.

Courtesy of Phil Erlanger Research

The Value Lines may be accessed via Bloomberg. For a free trial if you are a Bloomberg user go to APPS CS:ERLA

Economic & Related:

April Existing Home Sales are due out at 8:30 a.m. EDT and estimates are for 5.35 million from 5.21 million in March.

API Petroleum Institute Weekly Data is due out at 4:30 p.m. EDT.


The Reserve Bank of Australia (RBA) was out with their latest minutes this morning. They may cut rates next month.

President Trump has lunch with the Vice President and then meets with the Freely Associated States (Marshall Islands, Micronesia and Palau).

Conferences & Analyst Meetings: 

Analyst Meetings/Notable Conference Call:  VRNT HELE ARCC HXL PCAR SNE  (investor day) PVT (investor call on acquistion of KLDiscovery) VAR (conference call) PPG (investor call)

Sellside Conferences: UBS Global Healthcare Conference. UBS Global Global Oil & Gas Conference. UBS 5G Summit. Suntrust Robinson Humphrey Financial Services Conference. Credit Suisse Mortgage REIT Conference.  Needham Emerging Technology Conference. Wolfe Research Annual Transportation Conference. RBC Global Healthcare Conference. Deutsche Bank db Access Asia Conference. Berebberg Conference USA Conference. Suntrust Robinson Humphrey Internet & Digital Media Conference.

Industry Conferences: American Thoracic Society International Conference begin and runs through May 22.

M&A Activity

Marvel Technology (MRVL) to buy Avera Semi for $650 million plus milestones.

Varian Medical (VAR) to buy Cancer Treatment Services International (CTSI).

Crane Co (CR) to buy CIRCOR (CIR) for $45 in cash.

Upgrades & Downgrades

Early Morning Gap Up/Down:

Gap Higher: CIR +45%, VNE +9%, ARWR +6%, CLVS +6%

Gap Lower: OCUL -12%, KSS -10%,  SWI -4%

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