From Briefing.com: 4:07 pm Oracle misses by $0.03, reports revs in-line (ORCL) :
Reports Q1 (Aug) earnings of $0.55 per share, excluding non-recurring items, $0.03 worse than the Capital IQ Consensus of $0.58; revenues rose 1.9% year/year to $8.61 bln vs the $8.69 bln Capital IQ Consensus.
SaaS and PaaS revenue +82% y/y; expected to grow 75-80%.
Software and Cloud 5% y/y; expected to grow 5-7%.
Non-GAAP Operating Margin 39%
Short-term deferred revenues were $9.5 billion, up 4% in U.S. dollars and up 5% in constant currency compared with a year ago. Operating cash flow on a trailing twelve-month basis was $13.7 billion.
Co expects gross margins to climb toward 62% in Q3 (Long term target remains 80%)
"Next week at Oracle OpenWorld, we will introduce the second generation of our Infrastructure as a Service," said Larry Ellison, Oracle Chairman and CTO.Co guides on its conference call at 5pm ET.
4:15 pm : The stock market ended the Thursday affair on a broadly higher note as participants dialed back rate hike expectations following a barrage of economic data. Today's rally also featured continued strength from top-weighted Apple (AAPL 115.57, +3.80), a rebound in crude oil futures, and another mixed performance from the Treasury complex. The Nasdaq Composite (+1.5%) settled ahead of the S&P 500 (+1.0%) and the Dow Jones Industrial Average (+1.0%). The major averages shook weakness in the opening hour of trade as a weaker-than-expected reading of the Retail Sales Report for August stymied rate hike expectations for the coming months. The report indicated that retail sales declined 0.3% (Briefing.com consensus -0.1%) in August while retail sales excluding autos fell 0.1% (Briefing.com consensus +0.3%). Softening in discretionary spending will likely negatively impact third quarter GDP forecasts.
The Producer Price Index (PPI) for August also appeared to ease fears regarding a sooner-than-expected fed funds rate hike. The report showed that the PPI was flat in August (Briefing.com consensus +0.1%) while core PPI rose an in-line 0.1% over that time. The reading signaled some firming in inflation at the producer level, but also that inflation rates continue to tread below the Fed's target. On a side note, the Consumer Price Index (Briefing.com consensus +0.1%) is slated to cross the wires at 8:30 ET tomorrow.
Equities rallied throughout the session, reveling in diminished rate hike odds. The fed funds futures market estimates the odds of a rate hike at the September meeting at 12.0%, falling from 15.0% in the previous session. The implied probability of a rate hike at the December meeting fell to 46.2% from 52.9%. Additionally, the Bank of England failed to rock the boat when it opted to maintain its monetary policy stance. It is worth noting, however, that the central bank indicated that further easing could be on the way.
The S&P 500 (+1.0%) settled near its session high, testing resistance near the 2150 price level. All ten sectors ended in the green with telecom services (+1.1%), health care (+1.1%), energy (+1.1%), and technology (+1.7%) leading the advance. Conversely, materials (+0.6%) and financials (+0.7%) ended at the bottom of the leaderboard.
The heavily-weighted technology sector (+1.7%), outperformed as Dow component Apple (AAPL 115.57, +3.80) extended its recent winning streak. The stock rallied 3.4% after the company confirmed that it sold out of first run models of the iPhone 7 plus. Credit Suisse also increased its iPhone 7 sales estimates and restated its "Outperform" designation on the stock. Separately, the PHLX Semiconductor Index (+2.3%) outperformed as iPhone supplier Skyworks (SWKS 77.02, +4.62) rallied 6.4%. The price-weighted index sports a week-to-date gain of 4.4%.
Biotechnology settled ahead of the health care group (+1.1%), evidenced by the 1.5% gain in the iShares Nasdaq Biotechnology ETF (IBB 290.15, +4.22). In the ETF, Vertex Pharmaceuticals (VRTX 93.10, +2.98) led after Stifel raised its price target on the stock to $109 from $105. Meanwhile, Mylan Labs (MYL 41.49, +0.65) trimmed its month-to-date loss to 2.1%. The broader sector has jumped 1.1% this week, which compares to a gain of 0.9% in the benchmark index.
In the financial sector (+0.7%), Wells Fargo (WFC 46.15, -0.37) underperformed following yesterday's report that Federal prosecutors in California and New York are investigating the bank's sales practices. Conversely, MetLife (MET 44.50, +0.72) jumped 1.6% amid continued steepening in the yield curve. The broader sector erased a modest year-to-date loss and now sports a gain of 0.1% over that time.
Treasuries ended on a mixed note with the short end of the curve demonstrating relative strength. The yield on the 2-yr note fell two basis points to 0.74% while the yield on the 10-yr note finished flat at 1.70%. The spread between the 2-yr and 10-yr note expanded to 96 basis points from 89 on Friday.
Today's participation was above the recent average as more than 819 million shares changed hands on the NYSE floor.
Today's economic data included weekly initial claims, retail sales for August, PPI for August, the Philadelphia Fed Survey for September, the second quarter current account balance, Empire Manufacturing for September, Industrial Production and Capacity Utilization, and Business Inventories for July:
Jobless claims for the week ending September 10 were 260,000 (Briefing.com consensus 263,000), up 1,000 from the prior week and the 80th straight week they have been below 300,000.
Continuing claims for the week ending September 3 were 2.143 million, also up 1,000 from the prior week.
Total retail sales declined 0.3% in August (Briefing.com consensus -0.1%) after increasing a revised 0.1% (from 0.0%) in July.
Excluding autos, retail sales declined 0.1% (Briefing.com consensus +0.3%) after declining a downwardly revised 0.4% (from -0.3%) in July.
Total PPI was unchanged (Briefing.com consensus +0.1%) after declining 0.4% in July. Core PPI, which excludes food and energy, was up 0.1% (Briefing.com consensus +0.1%) after declining 0.3% in July.
Producer pricing trends are improving, yet inflation rates still remain comfortably below the Fed's comfort level.
The Philadelphia Fed Index checked in at 12.8 (Briefing.com consensus 0.0) versus 2.0 in August. That marked the first time since last August that the index has registered two consecutive positive readings.
The current account deficit for the second quarter totaled $119.9 billion while the Briefing.com consensus expected the deficit to hit $122.8 billion. The first quarter deficit was revised to $131.8 billion from $124.7 billion.
The Empire Manufacturing Survey was little changed at -2.0 in September (Briefing.com consensus 0.0) versus -4.2 in August. The dividing line between expansion and contraction is 0.0.
Industrial production declined 0.4% in August (Briefing.com consensus -0.3%), which wasn't a complete surprise, after increasing a downwardly revised 0.6% (from +0.7%) in July.
The capacity utilization rate dropped to 75.5% (Briefing.com consensus 75.7%) from 75.9%.
Total business inventories were unchanged in July (Briefing.com consensus +0.1%) following an unrevised 0.2% increase in June. Sales were down 0.2% after increasing 1.0% in June.
Inventory-to-sales ratio for July held steady at 1.39
For more on these economic releases, be sure to visit Briefing.com's Economic Calendar page.
Tomorrow's economic data will include CPI for August (Briefing.com consensus +0.1%) and the preliminary reading of the Michigan Sentiment Index for September (Briefing.com consensus 91.5), which will cross the wires at 8:30 ET and 10:00 ET, respectively. Separately, Net Long-Term TIC Flows for July will be released at 16:00 ET.
Russell 2000: +7.9% YTD
S&P 500: +5.1% YTD
Nasdaq: +4.8% YTD
Dow Jones: +4.5% YTD
DJ30 +177.71 NASDAQ +75.92 SP500 +21.49 NASDAQ Adv/Vol/Dec 2095/1.777 bln/764 NYSE Adv/Vol/Dec 2255/819.8 mln/712 3:30 pm :
Commodities, as measured by the Bloomberg Commodity Index, turned positive in the afternoon, +0.5% around the 83.08 level
Crude oil saw a volatile session, swinging between gains and losses before ending near the midpoint of session highs ahead of tomorrow's rig count data
October crude oil futures rose $0.27 (+0.6%) to $43.85/barrel
Baker Hughes rig count data will be released tomorrow at 1 pm ET
The next OPEC meeting is scheduled to take place in Algiers, Algeria from Sept 26-28
Natural gas ended pit trading higher on the heels of EIA storage data which showed a smaller-than-expected build vs. Consensus
October natural gas closed $0.03 higher (+1.0%) at $2.92/MMBtu
EIA highlights:
Natural gas inventory showed a build of +62 bcf vs expectations for inventory to be a build of approximately +63 bcf.
Working gas in storage was 3,499 Bcf as of Friday, September 9, 2016, according to EIA estimates.
Stocks were 184 Bcf higher than last year at this time and 299 Bcf above the five-year average of 3,200 Bcf.
At 3,499 Bcf, total working gas is above the five-year historical range.
In precious metals, gold erased all of yesterday's gains, silver traded lower as the dollar index traded nearly flat
December gold ended today's session down $7.90 (-0.6%) to $1318.10/oz
December silver closed today's session $0.03 lower (-0.2%) at $19.04/oz
Base metal copper extended yesterday's gains in afternoon pit trading
December copper closed $0.01 higher (+0.5%) at $2.16/lb
Equities began the day on a choppy note as investors poredover a raft of economic data. The Retail Sales Report for August came in weakerthan expected, adding to concerns surrounding third quarter GDP. Retail salesdeclined 0.3% in August while retail sales excluding autos fell 0.1%.Meanwhile, the Producer Price Index (PPI) continues to signal a tepid inflationtrend. PPI was flat in August while core PPI rose an in-line 0.1%.
The two readings took their toll on rate hike expectationsfor the coming months. The fed funds futures market indicates that the impliedprobability of a rate hike at the September meeting fell to 12.0% from 15.0% inthe previous session. The odds of a rate hike at the December meeting havedeclined to 47.4% from 52.9%. However, the U.S. Dollar Index (95.30, -0.04 -0.04%) treaded water amid a downturn in the pound. Sterling has been underpressure as investors respond to the Bank of England's latest policy decision.The central bank opted to maintain its monetary policy stance, but indicatedthat further easing could be on the way. In addition, the dollar has beenresilient against the euro after a morning decline.
Additionally, market data today included jobless claims forthe week ending September 10 which were 260,000, up 1,000 from the prior weekand the 80th straight week they have been below 300,000. As mentioned, totalretail sales declined 0.3% in August after increasing a revised 0.1% (from0.0%) in July. Total PPI was unchanged after declining 0.4% in July. Core PPI,which excludes food and energy, was up 0.1% after declining 0.3% in July. ThePhiladelphia Fed Index checked in at 12.8 versus 2.0 in August. That marked thefirst time since last August that the index has registered two consecutivepositive readings. The current account deficit for the second quarter totaled$119.9 billion while the first quarter deficit was revised to $131.8 billionfrom $124.7 billion. Also, the Empire Manufacturing Survey was little changedat -2.0 in September versus -4.2 in August. The dividing line between expansionand contraction is 0.0. Industrial production declined 0.4% in August, whichwasn't a complete surprise, after increasing a downwardly revised 0.6% (from+0.7%) in July. Lastly, total business inventories were unchanged in July followingan unrevised 0.2% increase in June. Sales were down 0.2% after increasing 1.0%in June.
In general, the broader market jogged higher as the sessionprogressed today ending barely below highs. Leading the way to the upside today, the Nasdaq Composite enjoyed gains of 75.92 points (+1.47%) to 5249.69. The S&P 500 was up 21.49 points (+1.01%) to 2147.26, and the Dow Jones Industrial Average added 177.71 points (+0.99%) to 18212.48. Halfway through September, the three major US indices stand +4.8%, +5.1% and +4.5% respectively.
Technology (XLK 47.58, +0.77 +1.64%) was again the best performer among S&P sectors as Apple (AAPL 115.57, +3.80 +3.40%) continued to fresh nine month highs as investors pushed the stock on continued iPhone pre-order commentary. Component Global Payment (GPN 76.05, +2.53 +3.44%) was among the best performers today following a premarket upgrade at Goldman to a Buy rating from a Neutral. Other sectors as measured by the S&P closed ThursdayIYZ +1.35%, XLE +1.26%, XLV +0.99%, XLFS +0.91%, XLP +0.81%, XLI +0.79%, XLU +0.76%, XLRE +0.76%, XLY +0.73%, XLF +0.67%, XLB +0.64%.
In the S&P 500 Information Technology (794.66, +13.31 +1.70%) sector, trading held pace with the broader market step higher. Component Intel (INTC 36.56, +0.94 +2.64%) was higher today on the back of a collaboration deal with pharmaceutical name Teva (TEVA 51.90, -0.05 -0.10%) to develop a wearable device for use in Huntington disease. Every current S&P 500 IT component finished the day in the green, led by SWKS +6.38%, NVDA +3.79%, HPE +3.60%, EA +3.14%, MU +3.07%, ADSK +2.87%, ADI +2.84%, QRVO +2.58%, WDC +2.48%, AMAT +2.45%, PYPL +2.18%.
Other notable news items among sector components:
Accenture (ACN 110.72, +0.92 +0.84%) has agreed to purchase a 47.4% shareholding in OCTO Technology (ISIN code FR0004157428), a technology consultancy specializing in digital transformation and software development, with the intention to acquire the remaining shares. Under the terms of the agreement, Accenture will purchase the shareholding in OCTO from Franois Hisquin, founder and CEO of OCTO, other OCTO partners and Financire Arbevel at a price of 22.50 per share and 1.7222 per equity warrant. Following the closing of the acquisition, Accenture will make a voluntary cash tender offer to acquire the remaining shares and equity warrants at the same prices.
Teva Pharma (TEVA) announced a collaboration with Intel (INTC) to develop a unique wearable device and machine learning platform for use in Huntington disease.
Salesforce.com (CRM 73.99, +0.17 +0.23%) to acquire GravityBank. Financial terms of the deal were not disclosed.
Activision Blizzard (ATVI 44.59, +0.93 +2.13%) priced $650 million of 2.300% senior notes due 2021 and $850 million of 3.400% senior notes due 2026.
Elsewhere in the tech space:
Pandora Media (P 13.31, flat) launched Pandora Plus for $4.99 per month. Service includes more skips, replays and solution for offline listening.
Viavi Solutions' (VIAV 7.47, -0.04 -0.53%) Board authorized an increase to its stock repurchase program from up to $100 million to up to $150 million of the common stock through open market or private transactions before December 31, 2017. The company also reaffirmed 1Q17 EPS and revenue guidance of $0.06-0.08 and $201-217 million, respectively.
Agilent (A 45.44, +0.58 +1.29%) announced an offering of a series of senior notes under an automatic shelf registration statement.
Sequans Communications (SQNS 1.71, -0.19 -10.00%) announced and later priced an offer of newly issued American Depositary Shares in an underwritten public offering of about 15.2 million ordinary shares, at a price of $1.65 per ADS for net proceeds of about $22.9 million.
Violin Memory (VMEM 0.90, -0.05 -6.15%) filed 10-Q with going concern qualification. The company expects to incur net losses and negative cash flows from operations for at least the next twelve months.
PC-TEL (PCTI 5.01, -0.05 -0.99%) Chairman and CEO Marty Singer to retire. David Neumann will become CEO in 2017.
Telus (TU 32.01, +0.41 +1.30%) to offer $600 million notes with 2.80% interest rate maturing in 2027.
JinkoSolar Holding's (JKS 15.94, +0.38 +2.44%) JinkoSolar entered into a Master Module Supply Agreement with Con Edison Development. Financial details were not not disclosed.
Fabrinet (FN 42.56, +1.18 +2.85%) acquired Exception Global CEM Solutions for about $13.5 million in cash.
RADA Electronic Industries (RADA 1.13, +0.20 +21.52%) received new orders totaling over $11 million since the beginning of 2016.
According to the IDC, worldwide smartwatch market will see modest growth in 2016 before swelling to 50 million units in 2020.
Analyst actions:
GPN was upgraded to Buy from Neutral at Goldman,
EXTR was upgraded to Buy from Neutral at DA Davidson;
CTSH was downgraded to Neutral from Buy at Goldman,
SYNT was downgraded to Underperform from Market Perform at William Blair,
APIC was downgraded to Sector Weight at Pacific Crest, to Neutral at Credit Suisse, and to Neutral at Roth Capital;
PYPL was initiated with a Buy at Craig Hallum,
ADSK and PTC were initiated with Buy ratings at Evercore ISI,
ANSS was initiated with a Hold at Evercore ISI,
CYBR was initiated with a Sector Weight at Pacific Crest,
ACXM was initiated with a Buy at Cantor Fitzgerald,
SYMC and NOW were initiated with Buy ratings at Guggenheim,
CHKP was initiated with a Neutral at Guggenheim
6:34 pm Agilent prices series of senior notes in an aggregate principal amount of $300 mln in public offering conducted under automatic shelf registration statement (A) : The notes will mature in September 2026 and will bear interest at an annual rate of 3.050 percent. The offering is expected to close on September 22, 2016, subject to customary closing conditions. Agilent intends to use the proceeds from the offering to repay all amounts outstanding under its revolving credit facility and for general corporate purposes thereafter.
6:18 pm Sprint confirms Samsung (SSNLF) Galaxy Note7 customers can get replacement devices beginning next week (S) :
4:16 pm Samsung to recall ~1 mln Galaxy Note7 smartphones (SSNLF) :
Name of Product: Samsung Galaxy Note7 smartphones sold prior to September 15, 2016Description: This recall involves the Samsung Galaxy Note7 smartphone sold before September 15, 2016.Hazard: The lithium-ion battery in the Galaxy Note7 smartphones can overheat and catch fire, posing a serious burn hazard to consumers.Remedy: Replace, RefundUnits: About 1 million
