From Briefing.com: 4:15 pm : The stock market ended the Tuesday affair on a higher note as a reversal in the economically-sensitive financial (+0.9%) sector fostered a rebound in the broader market. Other factors impacting today's trade included regrouping after last evening's U.S. presidential debate and strong sector leadership from heavily-weighted consumer discretionary (+1.0%) and technology (+1.2%). The Nasdaq Composite (+0.9%) led the Dow Jones Industrial Average (+0.7%) and the S&P 500 (+0.6%).
Equity indices rose at the start of the session as investors eyed a rebound in the financial space (+0.9%). The group fell 1.5% on Monday as a downturn in European banking names weighed. Deutsche Bank (DB 11.92, +0.07) plunged 7.1% in the prior session after German Chancellor Angela Merkel indicated that the bank would not be eligible for state aid in the event of a capital shortfall. The news continued to weigh on the stock during the overnight session, but shares erased today's losses by afternoon trade. U.S.-listed issues of Deutsche Bank finished higher by 0.6%.
The turnaround in beleaguered financials helped boost risk appetite in the broader market while heavily-weighted industrials (+0.8%), consumer discretionary (+1.0%), and technology (+1.2%) also displayed strength. The broader market was in rally mode after the first U.S. presidential debate went off without major surprises. The CBOE Volatility Index (VIX 13.11, -1.39, -1.23%) declined more than one point after carving out a session high of 14.63% on Monday.
Oil prices remained a weak spot for the second day in a row as the energy component was pressured by developments from Algiers, Algeria. Reports from the International Energy Forum indicated that OPEC and non-OPEC producers were unable to reach a supply control agreement. Furthermore, Saudi Energy Minister Khalid al-Falih stated that he does not expect to reach an agreement during tomorrow's meeting. The energy minister did indicate that the topic could be revived in time for the oil cartel's November 30 meeting. WTI crude finished the day lower by 2.6% ($44.67/bbl; -$1.18).
The benchmark index narrowed its week-to-date loss to 0.2% as eight sectors finished in the green with consumer discretionary (+1.0%) and technology (+1.2%) leading the pack. Conversely, defensively-oriented utilities (-1.3%) and real estate (-0.8%) trailed energy (-0.5%) on the bottom of the leaderboard.
In the technology sector (+1.2%), Alphabet (GOOG 783.01, +8.80) and Microsoft (MSFT 57.95, +1.05) finished higher by 1.1% and 1.9%, respectively. The two names rose following recent speculation that they are mulling takeover offers for Twitter (TWTR 23.72, +0.35). Recall that Salesforce.com (CRM 70.05, -0.14) and Disney (DIS 91.72, -0.24) have also been identified as parties expressing interest in Twitter. Separately, the PHLX Semiconductor Index ended higher by 1.7%, erasing a modest monthly loss.
The consumer discretionary space (+1.0%) also displayed relative strength as F.A.N.G. members Amazon (AMZN 816.11, +16.95) and Netflix (NFLX 97.07, +2.51) outperformed after receiving target price increases from JP Morgan. Separately, Dow component Nike (NKE 55.34, +0.94) rallied 1.7% ahead of this evening's quarterly earnings report.
Domestic banking names paced the advance in the financial sector (+0.9%) as Citigroup (C 46.37, +0.48) and Bank of America (BAC 15.29, +0.20) rebounded 1.1% and 1.3%, respectively. Meanwhile, Wells Fargo (WFC 45.09, +0.21) inched higher by 0.5% after multiple sources signaled that the company is considering executive compensation clawbacks. On a related note, CEO John Stumpf is slated to appear before the House Financial Services Committee on Thursday.
Treasuries ended on a higher note with the long end of the curve outperforming. The yield on the 2-yr note finished flat (0.75%) while the yield on the 10-yr note finished lower by two basis points (1.56%).
Today's participation was below the recent average as fewer than 827 million shares changed hands on the NYSE floor.
Today's economic data included the Case-Shiller 20-city Index for July and Consumer Confidence for September:
The Case-Shiller 20-city Home Price Index for July rose 5.0%, which was below the Briefing.com consensus of 5.1%. This followed the previous month's unrevised reading of 5.1%.
The Conference Board's Consumer Confidence Index for September checked in at 104.1 (Briefing.com consensus 98.0) after an upwardly revised 101.8 reading (from 101.1) for August.
The September number is the highest since August 2007.
Tomorrow's economic data will include the weekly MBA Mortgage Index and Durable Orders for August (Briefing.com consensus -1.9%), which will cross the wires at 7:00 ET and 8:30 ET, respectively. The Department of Energy will release its weekly inventory report tomorrow at 10:30 ET.
Russell 2000: +9.6% YTD
Nasdaq: +6.0% YTD
S&P 500: +5.7% YTD
Dow Jones: +4.6% YTD
DJ30 +133.47 NASDAQ +48.22 SP500 +13.83 NASDAQ Adv/Vol/Dec 1886/1.601 bln/977 NYSE Adv/Vol/Dec 1752/826.8 mln/1232
3:30 pm :
Commodities, as measured by the Bloomberg Commodity Index, were -0.9% around the 84.14 level
Crude oil ended near 1-week lows after comments from the joint conference in Algiers squashed hopes for a production freeze/cut at this particular meeting
November crude oil futures fell $1.18 (-2.6%) to $44.67/barrel
This morning, Goldman Sachs lowered their 4Q16 oil forecast to $43/bbl from $50/bbl previously.
Highlights of the joint conference in Algiers:
The Saudi Energy minister stated he does not expect an agreement to be reached during tomorrow's talks, notes agreement possible by November
Notes the gap in views between OPEC nations is narrowing
Saudi Arabia can withstand the current oil environment with oil at current price levels
Doesn't think there is a need for a significant adjustment or cut
Russia & Saudi Arabia will meet again in October to discuss the oil markets and any potential actions needed
Saudi Energy minister commented that once Consensus is reached between production in Iran, Lybia, & Nigeria then a freeze can happen
Russian oil supply to remain flat
Data reminders:
The next OPEC meeting will take place in Vienna, Austria on November 30
Weekly EIA data will be released tomorrow at 10:30 am ET
Baker Hughes rig count data will be released Friday at 1 pm ET
API data will be released tonight after the bell
Monthly IEA data will be released Oct 11
Natural gas ended nearly unchanged ahead of Thursday's inventory number
November natural gas closed $0.01 lower (-0.3%) at $3.05/MMBtu
Weekly EIA natural gas storage data will be released Thursday at 10:30 am ET
In precious metals, silver's decline outpaced gold, the gold:silver ratio increased for the third consecutive session
December gold ended today's session down $14.00 (-1.0%) to $1330.20/oz
December silver closed today's session $0.42 lower (-2.1%) at $19.17/oz
The gold:silver ratio is ~69.4 vs. yesterday's ~68.6 level
Base metal copper extended its early morning decline, closed at fresh session lows
December copper closed $0.03 lower (-1.4%) at $2.17/lb
The major averages advanced at the start of the session, shrugging off weakness from the oil pit. The energy component has been under pressure as participants reassess expectations for a potential supply control deal at the International Energy Forum. Officials from both Iran and Saudi Arabia have downplayed the forum today, characterizing the event as a "consultative" meeting. However, the energy forum will run through tomorrow and volatility in the energy complex is expected to remain elevated. To that end, when the bell rang, November crude oil futures were down by $1.18 (-2.6%) to $44.67/barrel
Economic data today included the Case-Shiller 20-city Home Price Index for July, which rose 5.0%. This followed the previous month's unrevised reading of 5.1%. The Conference Board's Consumer Confidence Index for September checked in at 104.1 after an upwardly revised 101.8 reading (from 101.1) for August.
The broader market rebounded today off recent weakness, driven by the Tech sector. The Nasdaq Composite was the best performer today, adding 48.22 points (+0.92%) to 5305.71. The Dow Jones Industrial Average was up 133.47 points (+0.74%) to 18228.30, and the S&P 500 gained 13.83 points (+0.64%) to 2159.93.
Leading all S&P sectors today, Technology (XLK 47.73, +0.52 +1.10%) finished the session near highs as the space stepped higher as the day progressed. Component Cisco Systems (CSCO 31.48, +0.41 +1.32%) was the subject of a Bloomberg report which detailed the possible $4 billion investment by the company in Mexico. Other sectors as measured by the S&P ended Tuesday XLY +1.02%, XLFS +0.93%, XLF +0.79%, XLV +0.72%, XLI +0.70%, XLP +0.42%, IYZ +0.37%, XLB +0.30%, XLE -0.65%, XLRE -0.87%, XLU -1.30% with Utilities losing big in an overall up session.
In the S&P 500 Information Technology (799.26, +9.08 +1.15%) sector, the session was higher for the entirety. Components FSLR +4.94% MU +3.69% NVDA +3.42% STX +3.28% WDC +3.25% FFIV +2.85% YHOO +2.55% AVGO +2.50% ADI +2.46% ADBE +2.27% trended higher today.
Other notable news items among sector components:
Oracle (ORCL 39.30, +0.27 +0.69%) received clearance from the Department of Justice to acquire NetSuite (N 109.83, +0.94 +0.86%).
Activision Blizzard's (ATVI 44.21, +0.23 +0.52%) Blizzard Entertainment, Inc. and NetEase (NTES 244.15, +2.94 +1.22%) jointly announced the extension of their collaboration in mainland China to January 2020. The renewed operation agreement includes Blizzard's World of Warcraft, StarCraft II, Diablo III, Hearthstone, Heroes of the Storm, and Overwatch, as well as new content for these games during the agreement period.
Cognizant (CTSH 54.40, +0.25 +0.46%) will establish a Cognizant Digital Works Collaboratory in Melbourne, Australia.
The European Agency for the operational management of large-scale IT systems in the area of freedom, security and justice (eu-LISA) has selected Accenture (ACN 116.13, +2.40 +2.11%), Safran Identity & Security and Atos to provide application and infrastructure services for the E.U. Visa information System (VIS) and for the Biometric Matching System (BMS) underpinning VIS.
Fiserv (FISV 100.61, +0.36 +0.36%) partnered with FCTI Inc., a nationwide ATM network company, to provide transaction processing for nearly 8,000 ATM terminals at franchise- and corporate-owned 7-Eleven stores across the United States.
Microsoft (MSFT 57.95, +1.05 +1.85%) and Bank of America (BAC 15.29, +0.20 +1.33%) will collaborate on blockchain technology.
Workday (WDAY 89.79, +1.47 +1.66%) and Microsoft (MSFT) announced a partnership between Office 365 and WDAY's finance and HR applications.
Visa (V 82.16, +0.35 +0.43%) in partnership with Oracle (ORCL), introduced Visa Advertising Solutions, a new suite of products to help merchants understand whether their digital advertising efforts are influencing consumer purchase decisions online and in-stores.
Salesforce (CRM 70.05, -0.14 -0.20%) announced that Eli Lilly (LLY 80.88, +1.36 +1.71%) has expanded its use of the Salesforce Platform to develop more innovative and intuitive apps that are designed to personalize patient support programs, unite care teams and ultimately improve patient outcomes.
Hewlett Packard Enterprise (HPE 22.92, +0.13 +0.57%) unveiled details of its upcoming HPE | Microsoft (MSFT) Azure Stack solution, which is expected to become available in mid-2017.
According to Bloomberg, Cisco Systems (CSCO) plans a $4 billion investment in Mexico.
Elsewhere in the tech space:
WebMD Health (WBMD 50.25, -0.15 -0.30%) announced that the Board of Directors has appointed Blake DeSimone, its SVP of Finance, as its CFO. Mr. DeSimone succeeds Peter Anevski who is leaving the company. WebMD also announced that it expects its financial results for Q3 and full year of 2016 to be around the high end of its financial guidance issued on August 8, 2016.
Turtle Beach (HEAR 1.42, +0.03 +2.16%) announced plans to restructure the Hypersound business to substantially lower operating costs.
Ubisoft (UBSFY 7.50, +0.04 +0.54%) acquired mobile publisher Ketchapp. Financial terms of the deal were not disclosed.
Expedia's (EXPE 113.10, +4.01 +3.68%) HomeAway brand issued a press release announcing that John Kim will become president of HomeAway while its co-founder and current CEO, Brian Sharples, will move into the role of Chairman through January 2017.
In relation to the CBOE (CBOE 66.91, +0.32 +0.48%) and Bats Global Markets (BATS 30.28, -0.07 -0.23%) merger agreement, a wholly-owned subsidiary of KCG Holdings (KCG 15.44, -0.02 -0.13%) holds 13,233,742 shares of BATS Common Stock (or approximately 13.8% of the total outstanding shares of Bats Common Stock based on 95,679,427 shares outstanding as of the April 15, 2016 initial public offering). In connection with its sale of shares in the initial public offering of BATS in April 2016, KCG agreed to a lock-up agreement that restricts KCG's ability to transfer shares of BATS Common Stock for a period of time following the initial public offering. Pursuant to the terms of the lock-up agreement, about 4.4 million shares of BATS Common Stock held by KCG will be released from the lock-up on October 13, 2016.
Sonus Networks (SONS 8.75, +0.29 +3.43%) announced its acquisition of Taqua, LLC in an all-cash transaction for an initial cash consideration of $20 million with the potential for additional cash payments if certain annual revenue thresholds are exceeded. SONS also reconfirmed certain Q3 guidance. For Q3, the company sees EPS of $0.08-0.09 on revenues of $63-65 million.
Perion Network (PERI 1.24, -0.01 -0.80%) announced that Josef Mandelbaum will be leaving his position as CEO after a transition period of up to several months. The Board of Directors has begun a search for the company's next CEO and the Board and Josef are committed to a seamless transition. The Board of Directors has begun a search for the next CEO and the Board and Josef are committed to a seamless transition.
In reaction to quarterly results:
FactSet (FDS) reported worse than expected Q4 EPS of $1.69 on revenues which were in-line with market expectations and rose 9.7% compared to a year ago to $287.3 million. FDS also guided Q1 EPS of $1.68-1.72 and revenues of $286-292 million.
Synnex (SNX) reported better than expected Q3 EPS and revenues of $1.73 and $3.67 billion, respectively. For Q4, SNX sees better than expected EPS and revenues of $2.06-2.11 and $3.83-3.93 billion, respectively.
Analyst actions:
SSNC was upgraded to Overweight from Equal Weight at Morgan Stanley,
BATS was upgraded to Sector Perform from Underperform at RBC Capital Markets,
ORAN was upgraded to Outperform from Neutral at Credit Suisse,
SKYAY was upgraded to Buy from Hold at Kepler;
CBOE was downgraded to Sector Perform from Outperform at RBC Capital Markets,
FDS was downgraded to Underperform from Mkt Perform at Raymond James;
EFII was initiated with a Buy at Needham,
NNDM was initiated with a Buy at Lake Street,
GIB was initiated with a Neutral at Macquarie
4:19 pm TerraForm Global reaches agreement with subsidiaries of SunEdison (SUNEQ) to buy certain assets from a third party buyer (GLBL) :
The third party sale transaction is being conducted in connection with SunEdison's (SUNEQ) bankruptcy process and includes the 425 MW India portfolio of solar energy projects for which the Company made a prepayment to SunEdison in the fourth quarter of 2015.
The Third Party Sale Transaction also includes the Bora Bora project in India and certain assets in Uruguay that were previously committed to be transferred to the Company by SunEdison but were not transferred prior to SunEdison's filing for bankruptcy protection. The Company has agreed not to pursue claims against a third-party buyer relating in any way to the assets included in the Third Party Sale Transaction.
However, the Company has retained all of its claims against SunEdison and its affiliated persons. As a condition to the Company's consent to the Third Party Sale Transaction, the Company and certain subsidiaries of SunEdison that directly or indirectly own the assets to be subject to the Third Party Sale Transaction have entered into a proceeds sharing arrangement pursuant to which the Company is entitled to receive a portion of the cash proceeds received by the SunEdison parties in the Third Party Sale Transaction. The amount of cash proceeds the Company will receive from this arrangement is dependent on various factors and is limited; the Company does not expect the proceeds to exceed $10 million.
