From Briefing.com: Following a better than expected U.S. Nonfarm Payrolls (NFP) report that indicated the addition of 280,000 jobs in May, major indices closed relatively flat on Friday. The S&P 500 closed just 0.2% lower, which is somewhat of a surprise considering how strong the NFP report was. The combination of an increase in average hourly earnings by 0.3%, and a slight increase in the unemployment rat, driven by discouraged workers returning to the labor force, adds fuel to the argument in favor of a rate hike taking place sooner rather than later.
The S&P 500 information technology sector (-0.21%) performed essentially in-line with the broader market, although a few names were able to outperform, such as: First Solar (FSLR 51.30, +1.63, +3.3%), SanDisk (SNDK 68.67, +1.57, +2.3%), Salesforce.com (CRM 73.55, +1.34, +1.9%), and Avago Technologies (AVGO 143.81, +2.61, +1.9%), and Autodesk (ADSK 54.61, +0.88, +1.6%). With that said, you'll notice that two out of the top five performers are Semiconductors, a sub-subsector that displayed notable strength today, with the Philadelphia SOX Index gaining +0.07%.
Notable news items from sector components included the following:
Computer Sciences (CSC 67.69, -0.02, -0.03%): SEC charges CSC and former executives with accounting fraud; company to pay $190 mln penalty. CSC agreed to pay a $190 million penalty to settle the charges, and five of the eight charged executives agreed to settlements
Apple (AAPL 128.65, -0.71, -0.6%): Financial Times article reportes that Apple plans to change App pricing structure that may result in lower subscription related fees
Elsewhere in the technology space:
China Mobile Games (CMGE 19.90, -0.06, -0.3%): Reported Q1 (Mar) earnings of $0.42 per share, excluding non-recurring items, $0.03 better than the two est avg of $0.39. Revenues rose +107% to $71.3 mln vs. $71.5 mln consensus. Additionally, total paying user accounts for social games were 5.9 million, compared with 3.6 million in 1Q14 and 6.3 million in Q4, and average monthly active users (MAUs) for the first quarter of 2015 were 106.5 million, compared with 18.2 million in 1Q14 and 71.5 million in Q4.
Ixys (IXYS 12.56, +0.04, +0.3%): Reported Q4 (Mar) earnings of $0.24 per share, $0.05 better than the single est of $0.19, on revenues that fell 7.8% year/year to $82.9 mln vs the $81.41 mln single est.
TrueCar (TRUE 13.59, +0.08, +0.6%): Reported volume of vehicles sold through its branded TrueCar channel surged 63% YoY in May. Moreover, U.S. sales of new light vehicles grew 1.6% in May to 1.64 mln units, an all-time record for the month.
HTC (HTCKF 13.25): Revised 2Q 2015 guidance to be NT$33-36 billion in revenue,. The change for revenue outlook is due to slower demand for high-end Android devices, and weaker than forecast sales in China. At the same time, increased competition has raised operating costs for product promotion; HTC is enacting measures to further improve operating efficiency.
Wowo (WOWO 10.99, -1.00, -8.3%): Enters into a definitive agreement with Join Me Group, whereby shareholders of WoWo and JMU will each hold 50% stake in the merged company.
Analyst Action:
Cohu (COHU 12.91, -0.86, -6.3%): Downgraded to Neutral from Buy at Sidoti
Diodes (DIOD 25.36, -0.63, -2.4%): Downgraded to Neutral from Buy at Longbow
Hubspot (HUBS 50.25, +0.80, +1.6%): Price target raised to $56 from $50 at UBS; Buy
Proofpoint (PFPT 62.47, +3.62, +6.2%): Price target raised to $75 from $65 at Piper Jaffray; Overweight
LinkedIn (LNKD 213.80, +0.97, +0.5%): Price target raised to $275 from $250 at Sun Trust; Buy
Ciena (CIEN 25.00, +0.36, +1.5%): Price target raised to $30 from $25 at Argus; Buy... price target raised to $30 from $26 at Needham; Buy
Stratasys (SSYS 37.99, +2.34, +6.6%): Resumed with Market Perform at FBR Capital; price target $42
Weekly Recap - Week ending 05-Jun-15The stock market ended the week on a flat note, locking in its second consecutive weekly decline. The S&P 500 shed 0.1%, losing 0.7% for the week while the Nasdaq Composite (+0.2%) outperformed, ending essentially unchanged (-0.03%) in the first week of June.
Friday morning featured a whirlwind of global and economic developments, but they barely registered with the market when the dust settled.
Starting in Europe, Greece did not make today's debt payment to the International Monetary Fund, opting instead to bundle all June payments into a single installment of EUR1.60 billion, to be paid on June 19. This will allow discussions to continue, but the developments weighed on investor sentiment in Europe. After European markets closed, Greek Prime Minister Alexis Tsipras addressed the Greek parliament, saying the proposals received from the lenders are unrealistic and that debt restructuring must be included in any potential agreement.
Staying in Europe, the Organization of the Petroleum Exporting Countries met in Vienna, electing to maintain its current production target at 30 million barrels per day. Crude oil struggled in the early going, revisiting last week's lows, but ended higher by 1.9% at $59.13/bbl. Meanwhile, the energy sector (+0.7%) ended in the lead while only two other groups-financials (+0.6%) and industrials (+0.1%)-registered gains. Going back to oil, the energy component overcame greenback strength that sent the Dollar Index higher by 0.9%, which resulted from a better than expected Nonfarm Payrolls Report for May.
Specifically, the strong report revealed the addition of 280,000 jobs while the Briefing.com consensus expected a reading of 225,000. More notably, average hourly earnings increased 0.3% (Briefing.com consensus 0.2%), which boosted aggregate earnings by 0.5% in May.
The Fed has stated multiple times that the first fed funds rate hike will be contingent on data trends that show the inflation rate gradually moving toward its 2.0% target. The 0.3% increase in hourly wages and the 0.5% increase in aggregate earnings place the economy on that path.
Treasuries plunged in immediate reaction to the report with the 10-yr yield spiking as many as 13 basis points to 2.44% before ending at 2.40% (+9 bps). Also of note, selling in the 2-yr note pushed its yield up to 0.71% (+5 bps), its highest level since 2010. For the week, the benchmark 10-yr yield jumped 28 basis points.
Eight sectors registered losses with defensively-oriented utilities (-1.3%) and consumer staples (-1.4%) ending behind other groups. Both sectors were pressured by high-yielding members as they lost some attractiveness relative to Treasuries. For the week, the utilities sector lost 4.2%.
Elsewhere among countercyclical groups, the health care sector (unch) settled just below its flat line, but that masked afternoon strength in biotechnology. The iShares Nasdaq Biotechnology ETF (IBB 367.04, +4.25) gained 1.2% and helped the Nasdaq Composite end ahead of the broader market while the S&P 500 hit resistance at its 50-day moving average (2,100) early on, and retreated into the afternoon amid weakness in most sectors.
Also contributing to the Nasdaq's strength was the high-beta chipmaker group. The PHLX Semiconductor Index added 0.1%, but losses among large cap members like Intel (INTC 31.84, -0.47) and ASML (AMSL 109.10, -1.49) offset gains in 21 of 30 index components. Smaller index components displayed continued strength amid speculation more mergers and acquisitions could be in the works; however, the broader technology sector (-0.3%) ended among the laggards.
Unlike technology, the second largest sector by weight-financials (+0.6%)-spent the day in positive territory with banks expected to benefit from rising rates at the longer end of the curve. For the week, the financial sector gained 0.8%.
Also of note, the industrial sector (+0.1%) eked out a slim gain thanks to newfound strength among transportation names. The Dow Jones Transportation Average climbed 0.9%, extending its weekly advance to 2.5%.
Today's participation was ahead of recent averages with more than 766 million shares changing hands at the NYSE floor.
Economic data released included Nonfarm Payrolls and Consumer Credit:
- Nonfarm payrolls added 280,000 jobs in May after adding a downwardly revised 221,000 (from 223,000) in April while the Briefing.com consensus expected an increase of 225,000
- Nonfarm private payrolls increased by 262,000 jobs (Briefing.com consensus 225,000), up from a 206,000 increase in April
- Average hourly earnings increased 0.3% in May (Briefing.com consensus 0.2%) after increasing only 0.1% in April. The May increase, combined with increase in payrolls, pushed aggregate earnings up 0.5%
- The average workweek was flat at 34.5 hours
- The unemployment rate increased to 5.5% in May from 5.4% in April while the consensus expected no change at 5.4%
- The entire increase in the unemployment rate was due to discouraged workers returning to the labor force. If the labor force remained at its April level, the unemployment rate would have declined to 5.3%
- The Consumer Credit report for April showed an increase of $20.50 billion, which was higher than the Briefing.com consensus estimate of $16.80 billion
- The prior month's credit growth was revised to $21.40 billion from $20.50 billion
There is no economic data on Monday's schedule.
Week in Review: Global Bond Yields Spike
The stock market began June on a modestly higher note with the S&P 500 adding 0.2%. Index futures spiked just before 7:00 ET, reacting to chatter that a deal between Greece and its creditors would be announced shortly. That rumor was struck down within 15 minutes of making the rounds, but equity futures did not retrace that morning spike until the cash market opened for action. The major averages returned to their flat lines once the cash session began, but persistent relative strength among influential groups like health care (+0.4%), technology (+0.3%), consumer discretionary (+0.3%), and industrials (+0.4%) helped the market climb to a fresh high during the afternoon. However, it is worth noting that the Monday advance occurred amid light volume with just 665 million shares changing hands at the NYSE floor. Eight sectors registered gains with industrials (+0.4%) ending atop the leaderboard thanks to a rebound in transport stocks. The Dow Jones Transportation Average rallied 1.1% with airlines pacing the move.
The market registered a slim loss on Tuesday, making for a near carbon copy of Monday's affair with the S&P 500 shedding 0.1%. Equities faced some selling pressure at the start after the overnight session was filled with more speculation about Greece's future in the eurozone. With Greece remaining in limbo, a short squeeze in the euro sent the single currency higher by 2.0% against the dollar to 1.1145. Contributing to the euro strength was some chatter that the European Central Bank could stop its quantitative easing program early due to inflationary pressures. To that point, eurozone CPI rose 0.3% year-over-year in May (expected 0.2%) while core CPI increased 0.9% (consensus 0.7%). Germany's 10-yr bund tumbled in response, sending its yield higher by 17 basis points to 0.72%. Similarly, the U.S. 10-yr note retreated overnight and continued backtracking into the afternoon. The benchmark note settled just above its worst level of the day with its yield higher by eight basis points at 2.26%. As for stocks, the S&P 500 found early support in the neighborhood of its 50-day moving average (2,100) and returned to its flat line shortly after noon ET.
Equity indices ended the midweek session on a modestly higher note, but once again, investor participation was on the light side with fewer than 670 million shares changing hands at the NYSE floor. The S&P 500 added 0.2% while the Nasdaq Composite (+0.5%) outperformed. Stocks began the day on a modestly higher note and extended their gains in the early going; however, a return to their opening levels followed once selling pressure appeared in the neighborhood of this week's highs. Meanwhile, another day went by without an agreement between Greece and its creditors. The lack of progress did not stop the euro from rallying 1.1% against the dollar to 1.1270. To be fair, today's euro strength followed a set of better than expected Services PMI readings with the Eurozone Services PMI climbing to 53.8 from 53.3 (expected 53.3). Also of note, the European Central Bank made no changes to its policy stance, but ECB President Mario Draghi warned that low rates invite high volatility. Fittingly, Germany's 10-yr bund extended this week's plunge, sending its yield higher by 17 basis points to 0.89%. Similarly, U.S. Treasuries sold off with the 10-yr yield rising 11 basis points to 2.37%. Six of ten sectors registered gains with a few cyclical groups holding the lead throughout the day. Specifically, consumer discretionary (+0.7%), financials (+0.7%), and industrials (+0.5%) kept the market afloat with the industrial sector receiving support from transport stocks.
Thursday ended on a lower note following a daylong retreat that sent the S&P 500 (-0.9%) below its 50-day moving average (2,100). Equities struggled from the start as continued uncertainty surrounding Greece weighed on investor sentiment in Europe and the U.S. The International Monetary Fund made headlines in the morning, urging the Federal Reserve to delay its first rate hike until the first half of 2016. A lowered growth forecast was cited to support that argument with the IMF now expecting 2015 GDP growth of 2.5%, down from the previous forecast of 3.1%. Treasuries marked fresh highs following the outlook change at the IMF, and built on their gains in the afternoon with the 10-yr yield falling six basis points to 2.31%. All ten sectors ended in the red with most growth-sensitive groups showing relative weakness. Energy (-1.2%) and materials (-1.3%) spent the bulk of the session behind other groups with energy pressured by a 2.8% drop in crude oil, which ended the pit session at $58.00/bbl ahead of the semiannual OPEC meeting.| Index | Started Week | Ended Week | Change | % Change | YTD % | | DJIA | 18010.68 | 17849.46 | -161.22 | -0.9 | 0.1 | | Nasdaq | 5070.03 | 5068.46 | -1.57 | -0.0 | 7.0 | | S&P 500 | 2107.39 | 2092.83 | -14.56 | -0.7 | 1.6 | | Russell 2000 | 1246.53 | 1261.01 | 14.48 | 1.2 | 4.7 |
This week's top 20 % gainers
Healthcare:IMGN (14.66 +63.25%),HRTX (26.11 +32.14%),JUNO (68.48 +30.08%),DRRX (3.23 +24.23%),AXDX (27.21 +21.91%),ONTY (4.08 +19.31%),RVNC (30.51 +19.16%),BRLI (39.47 +18.81%),MNKD (6.12 +18.18%),PRTA (46.59 +18.13%),BCRX (13.01 +16.06%),BLCM (28.68 +15.93%),AFMD (12.09 +15.91%)
Materials:OMG (34.58 +30.29%)
Industrials:EHIC (17.66 +15.65%)
Consumer Discretionary:GIII (68.49 +20.45%),BOOT (28.76 +17.58%),QUNR (51.58 +16.98%)
Information Technology:SINA (56.09 +37.71%),QIHU (62.94 +20.92%)
This week's top 20 % losers
Healthcare:PBYI (138.79 -28.99%),RGLS (10.54 -25.35%),OCUL (21.52 -10.96%),FPRX (22.85 -10.88%),MDVN (118.13 -10.54%)
Industrials:ESL (94.35 -12.78%)
Consumer Discretionary:CZR (6.49 -30.66%),VNCE (12.27 -22.93%),LE (24.99 -15.03%),NEWM (18.72 -14.99%),BOJA (24.5 -10.97%),AXL (22.49 -10.43%)
Information Technology:VMEM (2.71 -19.1%),DATE (7.92 -14.65%),BZUN (10.93 -10.56%)
Financials:IRM (32.65 -10.47%)
Energy:MHR (1.64 -10.38%)
Telecommunication Services:GSAT (2.32 -12.45%),MBT (9.33 -10.8%)
Utilities:FGP (22 -10.97%)
4:08 pm Applied Materials announces the election of Willem Roelandts as Chairman of the Board, effective immediately; Roelandts is currently Applied Materials' lead independent director ( AMAT) :
2:47 pm Earnings Preview for the week of June 8 - 12 (:SUMRX) : Of the companies reporting earnings for the week of June 8 - 12 some of the bigger names include:
Monday:
Pre Market - SHLD, MTN, BRLI, DATE, PRGN
After Hours - HRB, UNFI, PBY, PLAY, LAYN, TPLM, CBK, FCEL, KANG, SB, HQY
Tuesday:
Pre Market - HDS, BURL, SAIC, FGP, HOV, LULU, ZQK, CMN
After Hours - GEF, MFRM, OXM, SIGM, LMNR, SURG, APIC
Wednesday:
Pre Market - FRAN
After Hours - MW, DDC, KKD, BOX, BV
Thursday:
After Hours - BOJA, XONE1:16 pm Notable movers of interest (:SCANX) : The following are some of today's most notable movers of interest, categorized by market capitalization (large cap over $10 billion and mid cap between $2-10 billion) and ranked by % change (all stocks over 100K average daily volume).
Large Cap Gainers
UA (81.18 +4.03%): Upgraded to Buy from Neutral at DA Davidson; tgt $91.
SCHW (33.1 +2.6%): Brokerage stocks outperforming on jump in yields; also was assumed/upgraded to Buy at Goldman.
PANW (172.22 +2.06%): Cyber-security names higher following yesterday's breach of the U.S. governments personnel data system.
Large Cap Losers
VIP (5.57 -6.7%): European stocks underperforming following weakness in Europe's exchanges (ALU, TTM, NOK, FCAU also lower).
MO (48.46 -2.85%): Rate sensitive names under pressure as treasury yields jump (FTE, RAI, PPL, ED also lower).
VOD (37.16 -1.46%): Confirmed that it is discussing a possible exchange of assets with Liberty Global (LBTYA), but not in discussions concerning a potential combination.
Mid Cap Gainers
QIHU (59.89 +8.89%): Chinese internet names soaring after China's Shanghai index continued its surge, gaining 1.5% over night (SINA, QUNR, WB, BITA, YY also higher).
PFPT (61.3 +4.16%): Price target raised to $75 from $65 at Piper Jaffray.
DWA (28.51 +3.81%): Upgraded to Buy at Stifel; tgt $34.
Mid Cap Losers
ESL (92.76 -13.32%): Missed Q2 (Apr) consensus EPS estimates by $0.13, missed on revs; lowered FY15 guidance.
THO (58.12 -5.42%): Reported Q3 (Apr) earnings of $1.19 per share, $0.01 worse than the Capital IQ Consensus Estimate of $1.20; revenues rose 12.2% year/year to $1.17 bln vs the $1.17 bln consensus.
PAY (37.54 -2.11%): Beat Q2 (Apr) consensus EPS estimates by $0.02, reported revs in-line; guided Q3 EPS in-line, revs in-line; guided FY15 EPS in-line, revs in-line.
12:52 pm Stocks/ETFs that traded to new 52 week highs/lows this session - New lows (201) outpacing new highs (132) (:SCANX) : Stocks that traded to 52 week highs: ADPT, AGEN, AIG, ALDR, ALJ, ALN, AMBA, AMED, AMTD, AMWD, ANTH, ASB, BANC, BBNK, BBT, BKYF, BLOX, BOH, CATY, CBF, CBSH, CBYL, CDNS, CFG, CMT, CNTY, COLB, COMM, CRF, CRTO, CSFL, CVBF, DSKX, DWA, DXJS, EBAY, EGBN, EGRX, EMKR, ENTG, EROS, ETFC, EWBC, EXPR, FCB, FEYE, FFNM, FHN, FII, FMBI, FNFG, FRC, FTNT, GGAC, GIII, GKNT, GRBK, GS, HILL, HOMB, HRTX, HTH, IBKR, IMPV, IMS, INNL, INSM, JPM, JUNO, KE, KEY, LEG, LGND, LMAT, LTM, LXFT, MBFI, MMAC, MMI, MORN, MS, MSLI, NFLX, NPBC, NPTN, NWFL, OMCL, OMG, ONFC, OPY, PANW, PBCT, PBHC, PGTI, PNC, PTN, PVTB, QABA, RALY, RBA, RDVY, REGN, RELY, RJF, RLGT, RPTP, RTRX, RXDX, SAGE, SCHW, SEIC, SGMS, SINA, SIVB, SKX, SNV, SPWH, STNR, SUPN, SUSQ, TANH, TFX, UCBI, VOYA, VRTU, WAL, WFC, WIBC, WINA, WMS, YOKU, ZION
Stocks that traded to 52 week lows: ACST, AFB, AGNC, AHT, AIQ, AIRM, ANR, ARR, AWF, AXE, BAX, BBDO, BBN, BGR, BIE, BIOL, BKH, BKK, BLJ, BOTA, BPK, BSMX, BTA, BWG, CAPX, CBD, CEN, CHCT, CHK, CIM, CLUB, CLW, CMU, CNP, CNS, CPN, CRDS, CTL, CTP, CVE, CZR, CZZ, DAVE, DEO, DTF, EARN, EDD, EDE, EGP, EIM, EIV, ENLK, EQGP, ERJ, ESEA, ESIO, ESL, ETSY, EVLV, EVP, FAM, FCO, FHY, FPO, FPT, FSNN, FSYS, GBAB, GIFI, GLF, GPL, GRAM, HCLP, HCP, HGT, HIIQ, HMY, HR, HTS, HWCC, IF, IGOV, IGT, IIM, INF, IPDN, IQI, IRC, ITC, JOUT, KED, KLAC, KTF, KYE, LE, LEO, LF, LFL, LFVN, LOR, LPL, MAV, MCF, MDIV, MFL, MFV, MGCD, MGEE, MHI, MIN, MPA, MQT, MTGE, MUE, MUH, MUI, MUJ, MUR, MZF, NAV, NBD, NCZ, NIO, NMRX, NMY, NOR, NPI, NPM, NPP, NQI, NQP, NQS, NRK, NRP, NTG, NTX, NUM, NUO, NVDQ, NXJ, NXN, NXP, OFC, OGE, OKE, OTEX, OTTR, PAI, PDLI, PDM, PKX, PLTM, PNF, POT, PRI, PSB, RCS, RDS.B, RNO, RSO, RWT, SBGL, SHG, SHIP, SJR, SMT, SNH, SRC, SRET, SRF, SRV, TAC, TAL, TGH, THS, TRMB, TRP, TTM, UBA, UBP, UCP, UK, USEG, VBF, VCIT, VEDL, VIV, VKI, VKQ, VMEM, VNCE, VPV, VRA, VTN, WBK, WHLR, WIA, WIN, YLCO, ZSAN, ZUMZ
ETFs that traded to 52 week highs: IAI, IYG, KBE, KCE, KRE
ETFs that traded to 52 week lows: BND, BWX, EWM, FXY, IDX, KOL, LQD, MUB, PPLT, TIP
9:46 am Intel down for fifth day in a row, probes support zone ( INTC) : The stock is down for the fifth session in a row leaving it off more than 7.5% off last week's peak. The extension this morning has brought support at 32.03/31.94 into play (session low 32.02). This zone marks the 50% retrace of the March-May rally, its May lows and Mid-April gap.
7:30 am Canadian Solar comments on the European Commission's undertaking decision ( CSIQ) : Co stated: "Despite the arbitrary nature of the Undertaking text that caused interpretation confusion and implementation complications, Canadian Solar believes that it has always conducted all its business in the EU in compliance with the Undertaking. The Company strongly believes that this decision lacks merit and is arbitrary without giving due consideration to the Company's cooperation with EU Commission. The Company is currently reviewing its legal options." Co stated that the decision will not impact the Company's second quarter and full year 2015 guidance
7:30 am Solar Power announces board authorization for a $50 million share repurchase program, to take place over the next 6 months ( SOPW) :
7:00 am JA Solar receives non-binding 'going private' proposal for $9.69/share from Chairman and CEO ( JASO) : The co announced that its board of directors has received a preliminary non-binding proposal letter dated June 5, 2015 from Mr. Baofang Jin, its Chairman and Chief Executive Officer, and Jinglong Group Co., Ltd., a British Virgin Islands company of which Mr. Baofang Jin is the sole director, to acquire all of the outstanding shares of the Company not already owned by the Buyer Group in a going private transaction for $9.69 per American Depositary Share.
The Board intends to form a special committee consisting of independent directors to consider this proposal. The Company cautions its shareholders and others considering trading in its securities that the Board just received the non-binding proposal and has not made any decisions with respect thereto. |
