Atlassian Corp. (TEAM 1/18

Atlassian Corp. (TEAM) shares rallied in the extended session Thursday after the business productivity software company's results and outlook topped Wall Street estimates. Atlassian shares surged 5.1% after hours, following a 1.5% decline to close the regular session at $92.92. The company reported fiscal second-quarter net income of $45.2 million, or 18 cents a share, compared with a loss of $64.2 million, or 28 cents a share, in the year-ago period. Adjusted earnings were 25 cents a share. Revenue rose to $299 million from $214.6 million in the year-ago quarter. Analysts surveyed by FactSet had forecast earnings of 21 cents a share on revenue of $288.3 million. For the third quarter, Atlassian expects earnings of about 18 cents a share on revenue of $303 million to $305 million, while analysts forecast 17 cents a share on revenu e of $300.7 million.

10 year treasury yield (TNX

The 10 year treasury yield (TNX) has ticked up to 2.72% following the implications of the Brexit defeat. Mortgage applications surged 13.5% last week thanks to the recent relief in interest rates as some buyers return to the market after painfully slow holiday inaction.  Refinances primarily drove the welcomed result with a 19% increase in new applications. 

Natural Gas futures (/NG) 1/15

Forecasts of much colder weather, sent Natural Gas futures (/NG) to their biggest one day gain in two months.  Nat. gas futures for February surged 16% higher to $3.5910.  The natural gas market is 22% higher in 2019.  After a milder than normal December and early January, prices could continue to be volatile. The Energy Information Administration (EIA) will report on gas storage on Thursday.

Bed Bath & Beyond Inc. (BBBY)

Bed Bath & Beyond Inc. (BBBY) shares rocketed higher in the extended session Wednesday after the home-furnishings retailer's outlook topped Wall Street estimates. Bed Bath & Beyond shares rallied 22% after hours, following a 4.1% rise to close the regular session at $12.26. In a statement, the company said it expects "fiscal 2019 net earnings per diluted share will be about the same as fiscal 2018." Bed Bath & Beyond estimates fiscal 2018 earnings of "about $2" a share. Analysts surveyed by FactSet expect earnings of $1.99 a share for fiscal 2018, and $1.56 a share for fiscal 2019. The company reported fiscal third-quarter net income of $24.4 million, or 18 cents a share, compared with $61.3 million, or 44 cents a share, in the year-ago period. Revenue rose to $3.03 billion from $2.95 billion in the year-ago quarter. Analysts surveyed by FactSet had forecast earnings of 18 cents a share on revenue of $3.05 billion.

Crude oil prices 1/8

U.S. Crude oil prices rose for a sixth straight session yesterday, which marks the longest daily rally since July 2017.  U.S. Crude oil futures (/CL) had reached an intraday high of $49.79, after it was reported that Saudi Arabia was planning to make new cuts to its crude oil exports.  U.S. Natural Gas futures (/NG) fell to their lowest level in almost four months.  Warmer than average temperatures and a bearish report on the amount of natural gas in storage has weighed on the market.  February Natural gas futures lost 3.3% on Monday, to close at $2.949.

Gold Futures (/GC) 1/3

Gold Futures (/GC) are still climbing yet another 0.5% near $1290 an ounce with a 5^th day of gains looking viable with additional concerns over risk-based assets. The precious metal has been unable to touch above $1300 an ounce since June of last year with the strengething dollar.  Oil Futures (/CL) are showing preliminary signals of possibly turning the corner with an attempt at a 3^rd positive session after a strong reversal to the upside occurred on the first trading session of the new year. 

Equities: 12/18

Equities:
U.S. equities moved sharply lower in mass, with three of the major indices losing more than 2% yesterday.  A common question is:  Why are stocks down?  While there can be many explanations,  such as trade tensions with China or uncertainty about interest rates going forward, it all boils down to one thing.  There are more sellers than buyers.  This market is probing to find an equilibrium between sellers and buyers.  Some of the best performing sectors lately have been defensive sectors such as real estate and utilities, but yesterday they were some of the worst performers, both losing more than 3%.  That may be a sign of exhaustion to the downside when they give up the fight.  On the day, the Dow Jones Industrials ($DJI) lost 2.1% to 23592.98, the Nasdaq Composite (COMP) fell 2.3% to 6753.73, and the S&P 500 (SPX) dropped 2.1% to 2545.94.

Oil prices

Oil prices have plummeted more than 25% in the past three months on concerns that economic growth is slowing while oil supplies are increasing. Year-to-date, the average price for WTI crude has been $66 per barrel, just below our forecast of $67, though the current price is in the mid-$50s. That compares with $51 in 2017, $43 in 2016, $49 in 2015, $93 in 2014 and $98 in 2013. We think that oil prices hit an inflection point in 2018, and look for a lower average price of $62 in 2019, with a range of $50-$75. Our forecasts are based on several inputs, including conversations with company managements, and the activity of traders, who generate futures prices and the forward curve. The forecast range is also influenced by slowing global demand growth and increased domestic supply, as the U.S. moves toward energy independence, as well as by OPEC announcements. Finally, trends in the U.S. dollar exert pressure on commodity prices, including crude oil. Given the volatility in oil prices, our investment recommendation on the Energy sector is now Market-Weight.

energy pricing

Oversupply concerns continue to plague energy pricing as Crude Futures (/CL) slipped 1% yesterday while still managing to maintain its posture above $50 a barrel which may be tested anew today. A freshly published contradictory report indicates that OPEC producing countries reached over 33 million barrels a day in November with Saudi Arabia stretching to all-time highs in excess of 11 million barrels pulled from the ground daily which casts doubts on real constraint leading into 2019. 

Pivotal Software Inc. (PVTL)

Pivotal Software Inc. (PVTL) shares rose in the extended session Tuesday after the cloud-computing company topped Wall Street estimates for the quarter. Pivotal Software shares advanced 4.2% after hours, following a 1.3% decline to close the regular session at $17.80 The company reported a third-quarter loss of $34.9 million, or 13 cents a share, compared with a loss of $39.3 million, or 57 cents a share, in the year-ago period. The adjusted loss was 5 cents a share. Revenue rose to $168.1 million from $129 million in the year-ago quarter. Analysts surveyed by FactSet had forecast a loss of 8 cents a share on revenue of $164.1 million. For the fourth quarter, Pivotal expects a loss of 10 cents to 9 cents a share on revenue of $169 million to $171 million, while analysts had forecast a loss of 9 cents a share on revenue of $167.3 million.

Chinese phone maker Huawei CFO

The latest development overnight is the is the arrest of Chinese phone maker Huawei CFO in Canada at the request of U.S. authorities related to U.S. sanctions on Iran.  This is overshadowing the apparent words of truce between the U.S. and China.   Crude oil prices are under pressure this morning as skepticism rises about OPEC’s ability to reach a consensus on a production cut as their meeting begins today.     As of this writing,  U.S crude oil futures (/CL) are 2.7% lower near $51.40 per barrel and S&P 500 futures (/ES) are 1.6% lower near 2657.   

(SMAR) shares

(SMAR) shares rose in the extended session Monday after the cloud-software company's quarterly results and outlook topped Wall Street estimates. Smartsheet shares rose 4.4% after hours, following a 0.6% rise to close the regular session at $27.06. The company reported a third-quarter loss of $15.6 million, or 15 cents a share, compared with a loss of $10.4 million, or 54 cents a share, in the year-ago period. The adjusted loss was 9 cents a share. Revenue rose to $46.9 million from $29.4 million in the year-ago quarter. Analysts surveyed by FactSet had forecast a loss of 13 cents a share on revenue of $39.2 million. For the fourth quarter, Smartsheet expects an adjusted loss of 15 cents to 13 cents a share on revenue of $49 million to $50 million, while analysts had forecast a loss of 16 cents a share on revenue of $44.1 million.

Box Inc. (BOX)

Box Inc. (BOX) shares rose in the extended session Wednesday after the cloud-storage company topped Wall Street estimates for the quarter. Box shares rose 2.1% after hours, following a 4.5% rise to close the regular session at $18.19. The company reported a third-quarter loss of $40.2 million, or 28 cents a share, compared with $42.9 million, or 32 cents a share, in the year-ago period. The adjusted loss was 6 cents a share. Revenue rose to $155.9 million from $94.8 million in the year-ago quarter. Analysts surveyed by FactSet had forecast a loss of 7 cents a share on revenue of $154.6 million. For the fourth quarter, Box expects adjusted earnings of 2 cents to 3 cents a share on revenue of $163.5 million to $164.5 million, while analysts had forecast 2 cents a share on revenue of $164.2 million.

Salesforce.com Inc. (CRM)

Salesforce.com Inc. (CRM) shares rose in the extended session Tuesday, following an initial dip, after the customer-relations management software company topped Wall Street estimates for the quarter but its fourth-quarter earnings outlook came up a little short. Salesforce shares rose 5% after hours, following an initial 3% dip. Shares rose 0.9% to close the regular session at $127.54. The company reported third-quarter net income of $105 million, or 13 cents a share, compared with $107 million, or 14 cents a share, in the year-ago period. Adjusted earnings were 61 cents a share. Revenue rose to $3.39 billion from $2.70 billion in the year-ago quarter. Analysts surveyed by FactSet had forecast earnings of 50 cents a share on revenue of $3.37 billion.

Crude Futures (/CL) 11/28

Crude Futures (/CL) are trading modestly lower this morning near $51 a barrel albeit off its 52 week trough carved out earlier this week.  Weekly inventory results will be shared an hour after the market open with a 0.6 million barrel build anticipated from the official Energy Information Administration (EIA).  Preliminary results from the American Petroleum Institute (API) report also signaled a strong stockpile over the past 7 days. Any rumblings ahead of next week's OPEC meeting will also garner attention.

economic data today 11/27

The main piece of economic data today will be the Consumer Confidence report which will be released at 9:00am CT.  Equity markets have moved lower overnight, after President Trump told the WSJ that he is likely to raise the tariff level on $200 billion of Chinese imports to 25% from 10% at the beginning of 2019.  He also added he may add tariffs on an additional $267 billion of Chinese goods if there is no deal with China.   At the time of this writing, S&P futures (/ES) are down  0.3% near 2661 and  U.S. Crude oil futures (/CL) are unchanged near $51.75 per barrel.

Earnings 11/26

Earnings will continue to taper off this week with just sporadic reporting expected from a select group of both retail and tech names. Today’s economic data will start out extremely light with only regional data coming out of Chicago and Dallas on the manufacturing front.  Tomorrow will feature consumer confidence readings along with a string of Fed speakers which will be constant through Friday. Mid-week will usher in comments from Chairman Jerome Powell along with a glimpse into key preliminary GDP figures to assess how much the economy may have cooled down after a record pace. Thursday’s most important checkpoint will come from the releasing of the last Fed Meeting Minutes from earlier this month to better extrapolate how likely a hike will occur in December  or into early next year.  Attention will shift towards Buenos Aries at the tail end of the week as The G-20 summit commences with the United States and China squaring off to hopefully pave the way for some type of de-escalation of the ongoing trade war. 

Crude (/CL)

Crude (/CL) continues to take on heavy losses after Wednesday’s 4.9 million weekly barrel build stunned investors as supply quickly reaches over-capacity. Oil is currently trading a staggering 7% lower on the day, now likely securing 7 straight weeks of decline as global demand comes into question.  Natural Gas Futures (/NG) have slipped 1% this morning for a 4^th straight pullback following last week’s record rise. 

Crude Futures (/CL)

Crude Futures (/CL) dropped 6.6% to $53.43, after President Trump reiterated the strong ties between the U.S. and Saudi Arabia.  Some felt that President Trump’s  comments were an attempt to keep Saudi Arabia from cutting oil production at the OPEC meeting in December.  Besides the comments, concerns over a global slowdown and oversupply have driven crude oil into a bear market.

shortened holiday week

With the shortened holiday week, most of the earnings reports will take place earlier in the week as the markets are closed on Thursday for Thanksgiving and have a shortened session on Friday.  The retail sector will take center stage with earnings from the likes of Best Buy (BBY), Kohl’s (KSS), Loews (LOW) and Target (TGT) will all release their results tomorrow.  As of this writing, U.S. crude oil futures (/CL) are 1% lower near $56 per barrel and S&P 500 futures (/ES) are 0.4% lower near 2731.

Brent crude

Their combined wagers against West Texas Intermediate and Brent crude soared for a seventh straight week, the longest global short-selling streak in data going back to 2011. The bearish bets jumped 14 percent in the week ended Nov. 13 and have tripled since the end of September, according to data from the U.S. Commodity Futures Trade Commission and ICE Futures Europe on Friday.

With oil prices slipping into a bear market, OPEC has promised to do what it takes to cut output. Still, it’s unclear how far the cartel and its allies will go and it may take a reduction well beyond the 1 million barrels a day that’s been publicly discussed to restore faith, said Daniel Ghali,            

UK's FTSE is lower by 1.0%. 11/16

UK's FTSE is lower by 1.0%. Financials and select consumer names are among the laggards with RBS, British American Tobacco, Lloyds Banking, Compass, Persimmon, Prudential, Direct Line Insurance, Barclays, and ITV holding losses between 0.8% and 4.0%. France's CAC is down 0.7% amid losses in most components. Financials Societe Generale, BNP Paribas, and Credit Agricole show losses between 1.1% and 1.6% while STMicroelectronics, Kering, TechnipFMC, Airbus, Renault, Danone, and Louis Vuitton are down between 0.6% and 1.9%. Germany's DAX is down 0.7%. Infineon is down 2.5% while Bayer, Adidas, BMW, SAP, BASF, and Daimler hold losses between 0.6% and 2.5%.

OPEC officials 11/12

Over the weekend, remarks from OPEC officials indicate that they are likely to formally cut output at their next meeting in December.  Concerns of no deal being achieved on Brexit are flaring back up, and Prime Minister May is feeling pressure on all sides.  Reports are surfacing that satellite images of  North Korea, indicate that the country’s  nuclear threat has worsened since the Trump-Kim summit.  This week’s economic calendar will be weighted towards the end of the week with CPI being released on Wednesday and  Jobless Claims, Retail Sales, and Import/Export Prices coming out on Thursday.  Earnings continue to roll on with Home Depot (HD)  results coming out on Tuesday morning and Walmart (WMT) on Thursday morning.  As of this writing, U.S. crude oil futures (/CL) are 1% higher near $60.85 per barrel and S&P 500 futures (/ES) are slightly lower near 2775.

Disney (DIS)

Disney (DIS) – The Mouse beats the house --  The entertainment juggernaut reported earnings of $1.48 per share which was well ahead of the consensus estimate of $1.35 per share.  Revenue figures also beat, with the company reporting revenue of $14.3 billion versus estimates of $13.76 billion.  The shares are trading 1.5% higher, near $118 in the pre-market.

Hologic Inc. (HOLX)

Hologic Inc. (HOLX) shares rose in the extended session Wednesday as the medical technology company's earnings fell short of Wall Street estimates but revenue topped them. Hologic shares rose 4.6% after hours, following a 2% gain to close the regular session at $41.26. The company reported fiscal fourth-quarter net income of $50.5 million, or 18 cents a share, compared with $82.7 million, or 29 cents a share, in the year-ago period. Adjusted earnings were 58 cents a share. Revenue rose to $813.5 million from $802.9 million in the year-ago quarter. Analysts surveyed by FactSet had forecast earnings of 59 cents a share on revenue of $806.3 million. For the year, Hologic expects earnings of $2.38 to $2.42 a share on revenue of $3.29 billion to $3.34 billion, while analysts had forecast $2.42 a share on revenue of $3.31 billion.

WSJ Dollar Index

The WSJ Dollar Index, which tracks the dollar against a basket of 16 currencies, was down 0.2% on Friday.
The British pound, meanwhile, gained 0.2% against the dollar to $1.303, its second session of gains amid hopes for progress in Brexit negotiations.
"The Bank of England's statements on Thursday indicated that a Brexit transition deal with the EU could promise upside to its economic projections and make rate hikes likelier," Daniel Trum, a strategist at UBS, wrote in a note to clients. "Indeed, the U.K. economy would justify them already were it not for the Brexit uncertainty."
News from China also helped lift Asian markets, according to some analysts, after Mr. Xi met with Chinese business leaders this week. He pledged to reduce their tax burdens and offered financial support to private companies, according to the official Xinhua News Agency.
Beyond the trade dispute, some market tensions have eased in recent days following a series of steady earnings announcements and renewed hope that the U.S. economy isn't on the verge of a downturn.
"The economic cycle is OK and the selloff in the equities market has meant the valuations are very reasonable," said William Dinning, head of investment strategy and communication at Waverton Investment Management.
"I don't think we have any sign of a recession in the U.S. -- there may be a bit of a slowdown," he added.
Investors were also positioning ahead of October employment data expected Friday, with many anticipating that the U.S. Federal Reserve will tighten monetary policy more quickly if inflationary pressures build.
A Wall Street Journal survey of economists forecast the Labor Department will report that 188,000 jobs were added over the month, while unemployment held at 3.7%.
Investors were watching the U.S. technology sector in particular after Apple posted mixed results following the closing bell on Thursday.
Geoff Yu, head of the U.K. Investment Office at UBS Wealth Management, said last month's selloff may have been caused by investment in technology groups ramping up particularly steeply in recent months.
The 10-year U.S. Treasury yield drifted up to 3.172%, compared with 3.144% on Thursday. Yields move inversely to prices.
In commodities, Brent crude, the global benchmark, gained 0.3% to $73.14 a barrel. Gold fell 0.1% to $1,237.20 an ounce.

Facebook (FB)

Facebook (FB) – Getting Likes –The social media giant reported lower than expected revenue for the third quarter and warned it was in the early stages of a transformation in its core businesses that will lead to slower growth and higher costs in the short term.  All in all, the results and guidance were well received by investors, with many fearing worse results.  In the pre-market , FB is trading 6% higher near $155 per share.

Coka Cola Co. (KO)

Coka Cola Co. (KO) –Bubbling! –The  Atlanta-based company posted a $1.88 Billion profit for the 3^rd quarter as diet soda and a healthier alternative drinks helped to exceed eps estimates. Shares were indicating a modest jump higher pre-market with a 1.5% lift over the past 12 months. The company has been little phased with the recent market volatility likely due to its defensive nature. Management has re-stated that they have no intentions of entering the cannabis space in the latest fad with many competing beverage producers.  

signals to buy USD against sterling

 RBC's month-end hedging model is sending "strong" signals to buy USD against sterling, the Australian dollar, the Norwegian krone and the Canadian dollar. Among those four currencies, dollar strength is for now only evident against sterling, which hit a 10-week low of 1.2756 against the dollar earlier in the session, according to FactSet. The Australian dollar trades up 0.4% against the U.S. dollar at 0.7086, while the U.S. currency is slightly lower against the Canadian dollar, and flat against the Norwegian krone. Meanwhile, EUR/USD is 0.1% lower at 1.1358, helping the DXY dollar index rise 0.2%.

Facebook (FB)

Earnings season will continue to roll on this week, with FAANG members, Facebook (FB) and Apple (AAPL) reporting.  On Friday, energy giants, Chevron (CVX) and Exxon Mobil (XOM) report before the market open.  The recent market volatility has had an effect on what the market feels the probability that the Fed may “pause” on interest rate hikes.  The chance of a December hike is now 71%, and last Monday markets were implying 80%.

commodities may be willing to pay a premium

"When inventories are low, users of commodities may be willing to pay a premium for owning a spot commodity relative to futures prices in order to avoid facing a 'stock out,'" says Geert Rouwenhorst, who has conducted extensive research on commodity prices. "You can only heat your building with physical heating oil, not futures on heating oil.  So when inventories are low, you are willing to pay a premium to own spot heating oil to avoid the risk of running out. This premium is sometimes called the convenience yield, and can lead to a backwardated futures curve." A front-month roll implies that a fund invests in the nearest maturity futures contract of their respective commodity.  Traders need to know that during the month, the fund will automatically sell out of its current contract and buy into the next nearest maturity the front month  in order to avoid delivery, you need to be aware that this can cause some big problems if not done right.  Many of the most popular commodity ETPs utilize a front month rolling strategy, which can lead to big losses for a position. The products that employ this strategy are known as "first generation" products, as they were the early entrants to the market.

Index (VIX) now firmly creeping above $26.5

The 10 year yield has reversed course to its lowest level in 3 weeks near 3.08% with renewed buying interest garnered in light of the deepening equity route. Gold Futures (/GC) are also showing more signs of life at $1236 after inching back within highs not seen since July thanks to the Volatility Index (VIX) now firmly creeping above $26.5. Oil Futures (/CL) are staging for a 3^rd weekly decline ahead of a routine rig count with crude back below $67 a barrel over concerns of demand waning should the global economic engine begin to slow further.
Economic news becomes ever more vital with the latest reveal of GDP coming in at 3.5% which was above its forecast of 3.3% to bring some much needed relief to overnight lows. Consumer Confidence will also be on display later this morning with a reading near 99 expected. Europe will be looking for any real direction from a speech from President Draghi momentarily as trouble around both Italy and Brexit are putting a severe strain on any possibility of growth in the region. Major indexes in the Eurozone are all showing daily losses in excess of 1% to add to its worst combined month since August of 2015 after rates were left unchanged due to unremitting stagnancy. Asia has fared slightly better overnight with a $30 billion currency swap agreement between China and Japan luring in some buyers with bilateral cooperation. 

Bank of America (BAC),

This week we will see earnings begin to move into full gear with Bank of America (BAC), Goldman Sachs (GS), Johnson & Johnson (JNJ), Netflix (NFLX), and American Express (AXP) all reporting.  This week’s economic calendar will contain important data concerning the housing industry. Housing starts, existing home sales, and building permits will all be released this week.  In addition,  investors will be looking at Wednesday’s FOMC minutes for clues as to the Federal Reserve’s future movement on interest rates.  As of this writing, U.S. crude oil futures (/CL) are 0.7% higher near $72 per barrel and S&P 500 (SPX) futures (/ES) are down slightly near 2765, after recovering from a drop of $20 earlier this morning. 

American Airlines (AAL)

–Hard Landing? – The airliner saw its lowest intra-day levels touched in more than two years yesterday following an update on the chaos caused by Hurricane Florence. Early estimates indicate that approx.. $55 million was lost in potential revenue after 2,100 flights were cancelled around the storm. The industry will be tested again this week with another Hurricane scheduled to make landfall on the Florida panhandle later today. Shares are indicating a flat open at this point after plummeting over 3% in yesterday’s session. 

Constellation Brands (STZ)

Constellation Brands  (STZ) –Buzzed! – The alcoholic beverage conglomerate saw a 10% jump in sales last quarter to capture $1.15 billion of revenue.  Shares are seeing nearly a 5% improvement pre-market after sliding a disappointing 8% YTD from a high of $236.62 reached back in May. The company has recently enjoyed new publicity surrounding an investment in Canopy Growth Company (CGC) as they attempt to break into the cannabis arena for an untapped source for further growth. 

Tesla (TSLA),

Elon Musk reached a settlement  agreement with the SEC that allows him to remain as chief executive of Tesla (TSLA), but requires him to step away from the position of chairman for three years.  This has sent the shares over 14% higher in the pre-market, erasing much of the loses suffered on Friday.  Late last night, the U.S. and Canada reached a deal revising the terms of the North American Free Trade Agreement, just beating out the midnight deadline.   This morning, General Electric (GE) is up over 14% after it named Lawrence Culp as its new CEO and chairman, replacing John Flannery.   As of this writing,  U.S. crude oil futures (/CL) are little changed near $73 per barrel and S&P 500 futures (/ES) are 0.5% higher and trading near 2934. 

Japanese Nikkei

The Japanese Nikkei has now seen eight straight session of gains to pierce through 24K for the first time since 1991 with the Shanghai also tacking on nearly 1%. Europe is seeing more mixed conditions as details around various Brexit deadlines continue to surface. Volatility remains fairly constant just above the $12 handle in the CBOE Volatility Index (VIX) which is still below its monthly average. Any new developments on the trade front may drive markets as Canada looks to possibly be the one left out of a North American deal between the U.S. and Mexico if it fails to meet some concessions by this weekend. The polarizing effects of the Supreme Court Nominee will also certainly keep audiences captivated as the showdown is scheduled for tomorrow due to its far-reaching implications.

Amazon (AMZN)

 –Amazon 3K! – It has been rumored that the online behemoth intends to open up to 3K new cashier-less stores over the next couple of year as retail trends continue to quickly evolve. Both Walmart (WMT) and Target (TGT) slipped as a result with little detail being concrete. The stock value of the company has fallen nearly $60 billion since reaching the $1 Trillion benchmark at the beginning of September but shares are up fractionally as a result ahead of the opening bell. 

FED EX (FDX)–

FED EX (FDX)–Boxed In! – The global shipper saw higher hourly wages and bonuses take a bite out of earnings the previous quarter.  Last night’s quarterly report also stated that ill effects of a cyberattack on a subsidiary also dented expectations despite an impressive $16.88 billion in revenue being generated. Shares are down 3% pre-market as a wave of downgrades have begun to surface. 

U.S crude oil prices

U.S crude oil prices rebounded on Friday, after a sharp drop on the prior day. Investors have reacted positively to the overall landscape of shrinking crude exports from Iran, strong global demand, and low U.S. inventories.  U.S. crude oil futures (/CL) rose 0.6% on Friday to $68.99,  and posted a 2% gain for the week.  Last Wednesday, the Energy Information Administration (EIA) reported that U.S. crude oil inventories dropped by 5.3 million barrels the prior week to their lowest level since 2015.

Adobe (ADBE)

Adobe  (ADBE) – Picturesque! –Software maker, Adobe saw $2.29 billion in revenue generated over the last quarter which was a 24% jump from the same time last year. Net income topped $666 million which was well ahead of analyst estimates.  A major shift from product purchases to a subscription model has helped to accelerate growth over the past few years. Shares are currently trading near yesterday’s close despite a projected market maker move of =/- $9.00 and several analyst price target raises overnight. 

Progenics Pharmaceuticals Inc. (PGNX)

Progenics Pharmaceuticals Inc. (PGNX) shares fell in the extended session Wednesday after the cancer drug company said one of its imaging agents was not sensitive enough to detect prostate cancer in a clinical study. Progenics shares fell 19% after hours, following a 1.6% decline to close the regular session at $7.30. The company said a late-stage clinical trial found its so-called "1404" imaging agent needed to positively detect prostate cancer with a 60% or more sensitivity but did so with a 47% to 51% range. The imaging agent, however, was able to detect the absence of prostate cancer correctly with a specificity of 71% to 75% compared with the study target of 60% or more.

Intel Corp (INTC)

Intel Corp (INTC) –Death Cross? – The chip maker just captured its 6^th consecutive losing session yesterday to slip into bearish territory for the 1^st time in 2 years. An 18 year high of $57.08 was tapped on June 1^st before plummeting over 20% since.  INTC became the Dow’s worst performer on Tuesday with a 3% setback.  Others in the space are experiencing similar weakness as of late despite robust economic growth being touted overall.

Five Below (FIVE)

Five Below (FIVE) – High Five!  – The discount retailer is trading significantly higher at record highs pre-market after soundly beating quarterly estimates by $0.04 a share.  Same Store Sales increased by 2.7% to see a 23% jump in revenue overall with a rosy outlook also conveyed. The positive move was somewhat surprising considering a rapid decline from competitors in the space like Dollar Tree (DLTR) in recent days. 

Coke (KO)

Coke (KO) – Coffee Break! – The legendary beverage maker has agreed in earnest to purchase British coffee maker, Costa for a $5.1 Billion price tag. The chain has over 4K outlets as Coke looks to further diversify as trends continue to diminish over their core product line. Costa’s popular Georgia brand is also distributed widely throughout Asia as the battle of the brew continues. Shares of KO are trading modestly higher pre-market with new rival Starbucks (SBUX) down nearly 2% off the initial reaction. 

Domestic energy companies

Domestic energy companies collectively saw 9 rigs taken off line last week which was the largest weekly reduction in over two years as concerns around over-supply begin to set in despite a larger than expected draw last Wednesday. Crude Futures (/CL) are essentially flat just below the $69 a barrel mark with the heaviest driving season quickly coming to an end. The 10 year Treasury has dropped near the 2.815% mark this morning with general applauds surrounding FOMC Powell’s comments out of Jackson Hole last week in a call to gradually reduce rates. There have now been seven rate hikes completed since the financial crisis with two of those occurring just this year. Analysts believe we will see the same number by year’s end should the market continue at the current pace. 

S&P 500 (SPX) 8/24

The S&P 500 (SPX) moved lower as the U.S. and China engaged in a second day of trade talks.  $16 billion of tariffs were put in place early yesterday on a wide ranging list of items, spanning Chinese machinery and chemicals to U.S. engines and fish meal.   Robust corporate earnings and strong economic numbers have helped the S&P 500 rise more than 5% since the end of June, putting it on pace for its best three month stretch of the year.   According to analysts, tariffs have not had a severe negative effect on corporate profits, so far.  Minutes from the latest Fed meeting show that trade tensions have risen to the top of the central bank’s list of concerns.  

U.S. crude oil futures 8/22

U.S. crude oil futures (/CL) are up nearly 1.8%, and are on track to make their fifth consecutive gain as a drop in U.S. oil inventories and a sliding dollar have helped propel oil to trade near $67 a barrel.    Gold (/GC) has also benefited from the weakening dollar and increasing political uncertainty.  Gold futures are up 0.4% this morning, and are trading near $1205 per troy ounce.    Existing Home Sales and the FOMC minutes will be the highlight of today’s economic reports.  Investors will be looking for clues in the minutes for direction on interest rate policy going forward.  As of this writing,  S&P 500 futures (/ES) are 0.2% lower near 2857 and 30yr. Treasury bonds (/ZB) are 0.3% higher near  145’19.

Canadian dollar 8/21

The Canadian dollar has posted small gains in the Tuesday session, continuing the trend seen on Monday. Currently, USD/CAD is trading at 1.3023, down 0.16% on the day. In economic news, Canada releases Wholesale Sales. There are no U.S events on the schedule. On Wednesday, Canada releases retail sales reports, while the U.S will publish Existing Home Sales. As well, the U.S releases Existing Homes and the Federal Reserve will publish the minutes of the July policy meeting.
Will USD/CAD drop below the symbolic 1.30 level? The Canadian dollar has been moving higher since Friday and could drop below 1.30 this week, for the first time since August 7. It’s been a rough August for the Canadian dollar, as the escalating trade war has dampened risk appetite and hurt the Canadian dollar, which is a minor currency. However, the announcement that the U.S and China will hold trade talks in Washington later this week have raised investor confidence and boosted the Canadian currency. If the talks show signs of progress, such as the suspension of a $16 billion tariff scheduled to take effect on August 23, then the Canadian dollar rally could continue.

U.S. crude oil prices

U.S. crude oil prices rose on Friday on the prospect of better relations between the U.S. and China.  September futures (/CL) rose 0.7% to $65.91.  Light sweet crude has been weighed down by signs of weaker demand, the Turkish currency crisis, and a stronger dollar, which helped oil futures drop 2.5% on the week.  After setting a new 52 week low on Thursday, Gold (/GC) has found some footing over the past two days and is currently trading near $1194 per troy ounce.