From Briefing.com: Equities surged out of the gate after reports from last evening indicated that Greek officials sent a bailout request to the country's creditors, seeking EUR53.50 billion to cover loan obligations until June 2018. Interestingly, the proposal was very similar to the one that was rejected by 61.3% of voters in the Greek referendum on July 5. According to reports from Athens, the Greek parliament is expected to ratify the offer, but there was no official statement from the Eurogroup before the closing bell.
All ten sectors posted gains with eight groups adding more than 1.0%. The S&P information technology sector led the pack, gaining 1.6% on the day as chipmakers bounced back from a multi-session selloff.
Notable performances in the sector: Avago Tech (AVGO 129.84, +5.16, +4.14%), Broadcom (BRCM 52.06, +141, +2.8%), Apple (AAPL 123.28, +3.21, +2.7%), and Micron Tech (MU 17.57, +0.42, +2.5%)
Notable news items from sector components included the following:
Office of Personnel Management (OPM) announced steps to protect federal workers and others from cyber threats. The team has now concluded with high confidence that sensitive information, including the Social Security Numbers of 21.5 million individuals, was stolen from the background investigation databases. This includes 19.7 million individuals that applied for a background investigation, and 1.8 million non-applicants, predominantly spouses or co-habitants of applicants. In the coming months, the Administration will work with Federal employee representatives and other stakeholders to develop a proposal for the types of credit and identity theft monitoring services that should be provided to all Federal employees in the future -- regardless of whether they have been affected by this incident -- to ensure their personal information is always protected.
Elsewhere in the technology space:
HubSpot (HUBS 50.46, +0.46, +0.9%): T. Rowe Price Associates disclosed 10.4% passive stake in 13G filing; T. Rowe Price also discloses 12.3% passive stake in Lantheus Holdings (LNTH 6.91, -0.09, -1.3%)
InterCloud Systems (ICLD 2.51, +0.15, +6.4%): Announced it was awarded a series of contracts from new and existing clients valued at over $1.5 mln to provide engineering and design services for next gen wireless networks
CGI Group (GIB 38.93, +0.77, +2%): Reported that it joint venture LTC-Otso Oy, has extended its ITC outsourcing agreement with LhiTapiola Group; new agreement valid until 2021 and valued at EUR 180 mln
Digital Turbine (APPS 2.96, +0.37, +14.3%): Issued upside guidance for Q1 (Jun), sees Q1 (Jun) revs of $18.6-18.7 mln from $17-19 mln. The company also released the following statement, "Our preliminary first quarter results demonstrate accelerating sequential revenue growth driven by DT Media's advertising revenue ramp... In addition, we have made meaningful progress with multiple global Tier 1 wireless carriers for deployment of DT Ignite and DT IQ across their subscriber bases and anticipate having multiple announcements over the coming weeks and months. Co will report in early August."
Analyst Action:
Fabrinet (FN 18.52, +0.64, +3.6%): Upgraded to Buy from Hold at Needham; price target $24
Applied Materials (AMAT 18.77, +0.25, +1.4%): Upgraded to Neutral from Negative at Susquehanna
Inphi (IPHI 22.36, +1.41, +6.7%): Upgraded to Outperform from Market Perform at Northland Capital; price target lowered to $26 from $27
Box (BOX 16.71, -0.10, -0.6%): Initiated Neutral at BofA/Merrill; price target $20
Cohu (COHU 12.71, +0.35, +2.8%): Initiated Hold at Needham
Cyber-Ark Software (CYBR 58.55, -0.75, -1.3%): Initiated Market Perform at Wells Fargo
LinkedIn (LNKD 209.95, +2.39, +1.2%): Initiated Buy at Mizuho; price target $240
Microsoft (MSFT 44.59, +0.07, +0.2%): Price target raised to $52 from $50 at UBS; Buy
Barracuda Networks (CUDA 31.55, -7.57, -19.4%): Price target lowered to $47 from $52 at Imperial Capital; Outperform
Perficient (PRFT 15.90, +0.68, +4.5%): Price target lowered to $21 from $24 at Needham; Buy
QLogic (QLGC 11.48, +0.48, 4.4%): Price target lowered to $17 from $19 at Argus; Buy
Google A (GOOGL 556.11, +11.46, +2.1%): Price target raised to $700 from $690 at Credit Suisse; Outperform
Weekly Recap - Week ending 10-Jul-15Dow +211.79 at 17760.41, Nasdaq +75.30 at 4997.70, S&P +25.31 at 2076.62
The major averages ended the week on an upbeat note with the S&P 500 climbing 1.2%. Thanks to the advance, the benchmark index returned above its 200-day moving average (2,056), ending the week little changed.
Equities surged out of the gate after reports from last evening indicated that Greek officials sent a bailout request to the country's creditors, seeking EUR53.50 billion to cover loan obligations until June 2018. Interestingly, the proposal was very similar to the one that was rejected by 61.3% of voters in the Greek referendum on July 5. According to reports from Athens, the Greek parliament is expected to ratify the offer, but there was no official statement from the Eurogroup before the closing bell.
Furthermore, the Greek proposal includes a requirement for the creditors' commitment to restructure long-term debt; however, securing that commitment will be very difficult considering Germany's Finance Minister Wolfgang Schaeuble was quoted yesterday by Reuters as saying debt restructuring is not possible because it would "infringe the system of the European Union."
The lack of a response from the creditor side did not stop global equities from rallying with France's CAC leading European markets higher with a 3.3% advance. Meanwhile, selling in Germany's 10-yr bund sent its yield higher by 17 basis points to 0.89% while U.S. Treasuries also retreated with the 10-yr yield rising ten basis points to 2.42%.
Treasuries extended their losses during the early afternoon after Federal Reserve Chair Janet Yellen spoke in Cleveland, reiterating that the Fed still believes it will be appropriate to raise rates later this year. That being said, the Fed Chair said the outlook for the economy and inflation remains uncertain with unanticipated events having the potential to delay or accelerate the first rate hike.
All ten sectors posted gains with eight groups adding more than 1.0%. Most notably, the top-weighted technology sector (+1.6%) held the lead throughout the session while the second-largest group by market cap-financials (+1.2%)-followed not far behind.
The technology sector rallied behind its largest components like Apple (AAPL 123.30, +3.23), Google (GOOGL 556.11, +11.46), and Facebook (FB 87.95, +2.07) while high-beta chipmakers also displayed relative strength with the PHLX Semiconductor Index spiking 1.9%. To be fair, the index ended the week lower by 3.9% after both Advanced Micro Devices (AMD 1.96, -0.02) and QLogic (QLGC 11.48, +0.48) issued cautious guidance.
Elsewhere, the industrial sector (+1.0%) settled a bit behind the broader market, but that masked broad strength among transport stocks. The Dow Jones Transportation Average gained 1.9% to end the week higher by 1.0%. Airlines led today's advance with Alaska Air (ALK 70.55, +4.01) spiking 6.0% in reaction to upbeat traffic flow data.
For the week, four sectors registered gains with countercyclical consumer staples (+1.1%) and utilities (+0.5%) logging respective weekly gains of 2.0% and 1.7%. On the flip side, growth-sensitive energy (+0.6%) and materials (+1.5%) both lost near 1.5% for the week.
Today's participation was roughly in-line with recent totals as 720 million shares changed hands at the NYSE floor.
Monday's data will be limited to the 14:00 ET release of the Treasury Budget for June.
Week in Review: China and Greece in the Spotlight
Monday was a busy day for equities across the globe, beginning with an overnight slide in the futures market after the Greek referendum produced 61.3% 'no' vote, rejecting the bailout terms previously proposed by eurozone creditors. The results of the referendum allowed Greece's Syriza party to stay in power, but Finance Minister Yanis Varoufakis stepped down with Oxford-educated Euclid Tsakalotos assuming Mr. Varoufakis' place. The continued uncertainty about Greece's future in the eurozone pressured European markets with Germany's DAX and Italy's MIB losing 1.5% and 4.0%, respectively. Domestically, the S&P 500 (-0.4%) began the session just above its 200-day moving average (2,055), but an aggressive bid lifted the index back to its flat line about an hour after the opening bell. However, that rebound was short-lived, fading into the afternoon.
On Tuesday, the stock market was on track for a sharp decline in the early going, but the opening weakness became a distant memory by the end of the trading day. The S&P 500 gained 0.6% after being down 1.2% at the start while the Nasdaq Composite (+0.1%) underperformed throughout the day. Equity indices struggled at the start amid rising macroeconomic uncertainty overseas. Greece was in the headlines, but the day's Eurogroup meeting ended rather quickly with Chief Jeroen Dijsselbloem saying the Eurogroup expects Greece to submit a formal request for access to the European Stability Mechanism the following day. As for China, the Shanghai Composite lost 1.3% in the Tuesday session despite Monday's CNY1.80 trillion liquidity injection from the People's Bank of China and other emergency measures undertaken by the government. As a result nearly 25% of A-share listings were halted over the past seven days as companies scrambled to protect their market values. Investors appeared to be concerned with the overseas uncertainty at the start of the session, but the heavy selling abated just as markets across Europe closed for the day. The S&P 500 then returned above its 200-day moving average (2,055) and continued its charge into positive territory.
The major averages ended the midweek session on a lower note following a trading day that featured numerous trading halts at home and abroad. The S&P 500 fell below its 200-day moving average (2,056), ending lower by 1.7% while the Nasdaq Composite (-1.8%) underperformed. Equities slumped at the start of the session in response to the overnight weakness in the futures market that could be traced back to the continued selling efforts in China. The Shanghai Composite lost 5.9% on Wednesday, which resulted in the number of companies suspended from trading for volatility increasing to 50%+. Futures on the S&P 500 held a 30-point decline during the overnight session, but cut their losses in half ahead of the New York open. The rebound took place amid a rally in Europe, following reports that Greek officials have requested a three-year bailout program that includes tax reforms; but the offer was very similar to the one that was rejected by Greek voters during Sunday's referendum.
The market ended Thursday in the green, but not before enduring a daylong retreat from its opening high. The S&P 500 was up more than 1.3% at the start, but narrowed its advance to 0.2% by the closing bell. Equity indices charged out of the gate after the overnight session featured a rebound in China's Shanghai Composite, which climbed 5.8%. The advance occurred as officials in China continued introducing measures aimed at halting the recent market plunge with reports indicating a special taskforce targeting "hostile short-sellers" will be established by China's Public Security Ministry and China Securities Regulatory Commission. Elsewhere, optimistic-sounding remarks from top Eurozone officials also contributed to the opening strength as European Council President Donald Tusk said he expects Greece to submit concrete, realistic reform proposals. The opening spike sent the S&P 500 above its 200-day moving average (2,056), but the index returned below that mark during the afternoon. Cyclical sectors displayed broad strength in the early going, but the top-weighed technology sector (-0.3%) faded from its high during the afternoon, ending among the laggards.
Index Started Week Ended Week Change % Change YTD %
DJIA 17730.11 17760.41 30.30 0.2 -0.4
Nasdaq 5009.21 4997.70 -11.51 -0.2 5.5
S&P 500 2076.78 2076.62 -0.16 -0.0 0.9
Russell 2000 1248.26 1252.02 3.76 0.3 3.9
Week Ahead:
Monday: June Treasury Budget (13:00 ET); U.S. Representative Neugebauer (Republican from Texas) has scheduled an event to review bond market trading challenges
Tuesday: June Retail Sales and Retail Sales ex-auto (08:30 ET); June Export Prices ex-ag and Import Prices ex-oil (08:30 ET); May Business Inventories (10:00 ET)
Wednesday: MBA Mortgage Index for the week ending 7/11 (07:00 ET); June PPI and Core PPI (08:30 ET); July Empire Manufacturing (08:30 ET); June Industrial Production and Capacity Utilization (09:15 ET); Fed Chair Yellen (FOMC voter) delivers semi-annual testimony before the House Financial Services Committee (10:00 ET); Crude Inventories for the week ending 7/11 (10:30 ET); July Beige Book (14:00 ET); San Francisco Fed President Williams (FOMC voter) speaks on the economic outlook (15:00 ET and 18:00 ET)
Thursday: Initial Jobless Claims for the week ending 7/11 and Continuing Jobless Claims for the week ending 7/4 (08:30 ET); July Philadelphia Fed (10:00 ET); July NAHB Housing Market Index (10:00 ET); Fed Chair Yellen (FOMC voter) delivers semi-annual testimony on monetary policy before the Senate Banking Committee (10:00 ET); Natural Gas Inventories for the week ending 7/11 (10:30 ET); May Net Long-Term TIC Flows (16:00 ET)
Friday: June CPI and Core CPI (08:30 ET); June Housing Starts and Building Permits (08:30 ET); July Michigan Sentiment (10:00 ET)
3:32 pm Earnings Preview for the week of July 13 - 17 (:SUMRX) : Of the companies reporting earnings for the week of July 13 - 17 some of the bigger names include:
Monday: After Hours - OZRK
Tuesday: Pre Market - JPM, WFC, JNJ, FAST, AIR, CBSH, NORD, SKIS
After Hours - YUM, CSX, MRTN, ADTN, PPHM
Wednesday: Pre Market - BAC, DAL, USB, PNC, BLK, ASMLAfter Hours - INTC, KMI, NFLX, UFPI, UMPQ, EWBC, WTFC, CNS
Thursday: Pre Market - TSM, UNH, C, GS, PM, EBAY, PPG, SHW, BBT, BX, SON, MTB, KEY, DPZ, FRC, FCS, MTG, WBS, ANFI, FCFS, PVTB, IIIN, WNS, HOMB, SASRAfter Hours - GOOG, SLB, CE, CTAS, MAT, AMD, CYT, PBCT, ASB, MBFI, RECN, SWI, ANGO, EGP, COBZ
Friday: Pre Market - ERIC, GE, HON, PGR, GWW, SYF, ALV, STI, CMA, KSU, FHN, KNL
11:51 am Stocks/ETFs that traded to new 52 week highs/lows this session - New lows (103) outpacing new highs (96) (:SCANX) : Stocks that traded to 52 week highs: ABCO, ACGL, ADPT, AFMD, AFSI, AIZ, ANAC, ANSS, ASBI, BF.B, BHBK, BMRN, BNCN, BOFI, BOOT, BSET, BYD, CASY, CFNL, CHCO, CHRS, CLGX, CNOB, COKE, CRTO, CVC, CVS, DBVT, DEPO, DIS, DPLO, DPZ, DST, DVAX, DY, EA, EGBN, ELLI, EROS, ESNT, EVI, FAF, FRME, GKOS, GME, GNCMA, HF, HIHO, HZNP, ICCC, IMPV, ITCI, LBAI, LEG, LEN.B, MATW, MDCO, MHLD, MKL, MKTX, MORN, MRH, NEO, NGHC, NTT, NVAX, NVR, NWL, ORLY, PBIP, PGR, PRAH, PZN, Q, RARE, RDUS, RE, RLH, ROCK, RRGB, RYAAY, SREV, SSB, STRS, THG, TISI, TLMR, TPX, TREC, TSO, TSYS, TTPH, TYL, WBA, WING, WOOF
Stocks that traded to 52 week lows: ACI, ADAT, AIXG, ALLT, APA, AQXP, AR, ARCW, ASTI, ATL, AUY, AVP, BRS, BWEN, BWP, CC, CCJ, CECE, CNX, COH, CSTM, CTRL, CVE, DCI, DFRG, DNN, DOV, DSCO, ECA, EGO, ELON, EMR, EOX, ESSX, FLR, FLS, GMCR, GRVY, GULTU, HMY, IRWD, JOY, LINC, LINE, LODE, LTBR, MARPS, MDSY, MEIL, MELA, MGCD, MHI, MUR, MUX, NCQ, NFEC, NOR, NTL, NTN, OII, ONVI, ORC, PAAS, PBM, PERI, PGH, PHIIK, PKX, PNX, POWI, PSAU, PTXP, PVA, PVCT, QUIK, RNN, ROYL, RYAM, S, SAFM, SGI, SHLD, SLW, SNDK, SPNE, SPW, STRI, STX, SU, SWSH, SYNC, TGD, TGP, TMST, TRUE, UPL, URRE, USAP, VET, VII, WDC, XRA, Z
ETFs that traded to 52 week highs: none
ETFs that traded to 52 week lows: none
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