You are on page 1of 5

Closing Recap 4:10PM EST

Monday, October 13, 14


Index Up/Down % Last
DJ Industrials -223.16 1.35% 16,320
S&P 500 -31.33 1.64% 1,874
Nasdaq -62.58 1.46% 4,213
Russell 2000 -3.54 0.37% 1,049


Equity Market Recap
U.S. stocks fell early, taking out lows of Friday, as the S&P Index traded below its 200-day average
(1905) for the first time in two years (selling exacerbated into the end of the day). Transport
stocks were lower (outside of rails) led by weakness in airlines (Ebola fears/slowing economy
overseas); financials were stronger into earnings this week (most of the major banks/regionals
report this week), while health-care shares slumpedgroups that stood out to downside today:
airlines (Bloomberg airline index falls over 6% most since August last year6
th
straight daily
shop), energy as oil prices keep falling with Saudi Arabia saying earlier they were comfortable
with markedly lower oil prices for an extended periodchemicals fall, led by WLK, LYB, HUN and
EMN(it was broad based selling into the close) VIX up 8% over 23
S&P traded to its lowest level since May before bouncing, while the Russell 2000 Index, which has
drastically underperformed other averages (-8% YTD vs. S&P up 3%), outperformedNasdaq
huge swings (down as much as -1.4% before turning positive in the afternoonthen negative
again as semis still weigh on group, as well as high-beta plays). Overall quiet and late volume
due to holiday, to pick up with earnings going forward (tomorrow WFC, JPM, C, INTC, CSX). You
can look at stock stories below broken down by sector, but it was a broad macro based pullback
for major averages late day as technicals breaking down (and many charts)

Commodities
Gold prices ended higher by $8.30, settling at $1,230 an ounce, helped by a combination of a
softer dollar on the day, better China export data overnight, and as a defensive play given the
volatility in the stock market over the past week
Oil prices finished lower, but well off worst levels (were down 2% at bottom), with WTI crude
closing at $85.74 (low of day $84.07 per barrel), while Brent fell over $1.00 to $88.68 (low $87.93
4-year low), amid oversupply and slowing demand; global growth slowdown concerns having a
negative effect on energy prices/stocks (OXY, APA, MRO, DVN, BHI, HAL at lows)


Currencies
U.S. dollar weaker, as the dollar index (DXY) dropped about -0.40 to 85.54 (held around that
level for most of the afternoon); it was the first drop in the dollar in three days, after Fed officials
said a worldwide economic slowdown may delay interest-rate increases, damping demand for
the U.S. currency (so overall cautious tone from Fed officials of late, especially with them noting
the concerns of a global slowdown made in last weeks Minutes); the euro was higher at 1.2681,
while the dollar fell against the yen to 107.35

Bond Market
Bond market was closed due to Columbus Day Holiday


Macro Up/Down Last
WTI Crude -0.08 85.74
Brent -1.32 88.89
Gold 8.30 1,230.00
EUR/USD 0.0062 1.2691
JPY/USD -0.55 107.10
10-Year Note closed Closed


Sector News Breakdown
Consumer
Retailers; JCP names HD executive Marvin Ellison as next CEO (shares also downgraded to sell
with $5 target at UBS); LULU cautious mention at ITG; SHLDs K-Mart offers free credit
monitoring after Cyber-attack; VFC positive mention in Barrons
Auto movers; suppliers BWA, DLPH, GNTX mentioned positively in Barrons over the weekend;
LAD cuts forecast for both Q3 and year EPS view (weighs on ABG, SAH, AN, PAH); Fiat Chrysler
trades in New York, moving to NYSE today from Milan stock exchange (FCAU); CTB upgraded to
buy at SunTrust (and defends shares of GT); TSLA downside momentum remains
Building Material/Products: Barclays upgraded TILE and USG to Overweight citing its preference
for commercial building products exposure and the company's strong cash flows (downgrades
MAS to Equal-weight)
Quiet news in restaurant space/consumer staples ahead of earnings season (watch for effects of
stronger dollar on future earnings); Leisure/Casinos names underperform early

Energy
Oil service stocks cannot get a lift, with shares of HAL, BHI, WFT falling (names down between
10%-15% over the last 5 trading days); energy space in general remains down, though the heavily
beaten offshore drillers (RIG, NE, ESV, DO) with relief rally, but overall, just another mess of a day
for energy stocks with GDP, APA, MRO, APC, APA, ROSE down day after day
Pipelines; TRGP and Targa Resources Corp. agreed to buy APL and ATLS for a total of about $7.7
billion, including debt; holders of Atlas Pipeline will receive $1.26 in cash and 0.5846 units of
Targa Resources Partners for each unit they own, a value of $38.66. Atlas Energy will spin off
some assets before its acquired by Targa Resources for $1.87B http://goo.gl/nRavfZ
Coal producer ACI guides Q3 adjusted Ebitda to $70M-$74M above est. $68.4M




Financials
Financials outperformed, with strength in large cap banks (BAC, C, WFC) ahead of earnings this
week, starting with JPM, WFC and C tomorrow morning group will become focus this week,
with many of the large cap and regional banks reporting this week
CME falls after Wells Fargo downgraded to market perform calling the valuation fair, but not
expecting multiple expansion
DRL jumps after winning $229M Puerto Rico tax refund

Healthcare
Ebola leveraged stocks remain volatile after reports a Texas health worker has contracted Ebola
after treating a Liberian who died of the disease at a Dallas hospital last week; shares of
protective suit makers (LAKE/APT), as well as vaccine names (TKMR, BCRX, CMRX) still active; an
experimental Canadian-made Ebola vaccine will begin a clinical trials Monday in what officials are
calling a promising development (NLNK), Bloomberg reported
Stock movers; VRTX upgraded to Overweight at Piper citing likely approval of the company's
Kalydeco; ALNYs investigational RNAi therapeutic, patisiran (ALN-TTR02), demonstrated
effectiveness as a treatment for patients with familial Amyloidotic polyneuropathy (FAP) who
have transthyretin (TTR)-mediated amyloidosis; STE offered to buy Britains Synergy Health Plc
for about $1.9 billion http://goo.gl/m5ZYTm
BMY, PCYC and JNJ in agreement to evaluate safety, tolerability, preliminary efficacy of BMYs
investigational PD-1 immune checkpoint inhibitor Opdivo (Lymphoma combo); NSPH received
510(k) clearance from the FDA for its Verigene EP Nucleic Acid Test

Industrials & Materials
Transports; rails in focus, report in WSJ that CP approached CSX about merging the two rails
http://goo.gl/13nnuU shares of NSC, KSU rallied; airlines lagged the transport index (UAL)
Industrial products; RW Baird downgraded DOV and PH to neutral as softening energy prices are
likely to impact future growth; GE to acquire Milestone Aviation for $1.775B
Metals & Mining; iron ore prices rose $3.93, or 4.9%, to $84.17 per ton, according to a price index
compiled by Metal Bulletin. (Bloomberg) its biggest advance since Oct. 2012 (lifts CLF, VALE,
RIO, as well as metal sentiment in general); CLF cut to Neutral at JPM, cutting tgt to $5; Gold
miners mixed despite a bounce in gold prices earlier; shares of NEM, GG, ABX mixed
Grain prices rise, with corn up 11c to session high $3.45 on short covering - US harvest delays -
RTRS (biggest gains since January) helps ag names (DE, CAT, AGCO)

Technology, Media & Telecom
Top movers; AAPL has remained immune (thus far) to the recent market volatility, holding up as
iPhone 6 and 6 Plus set to be available in 36 additional countries by end of October and available
in China as of Oct 17; WSJ reported Iliad scraps plan to buy TMUS (http://goo.gl/D3US1F) ; CRM
Dreamforce software conference all week
Semis lower; Pacific Crest downgraded shares of FSL, ONNN and SLAB due to evidence of
inventory corrections at distributors (also lowering estimates on several names); says top picks
are AVGO, INTC, MXIM, RFMD, SWKS and SYNA (semis remained weak overall after Friday
pullback following MCHP lower guidance note INTC reports tomorrow night) SOX index down
13% this month alone (so far)
High growth tech sold off early, with shares of DATA, DWRE, FEYE, PANW, SPLK falling; high tech,
security and software related names weak (CSOD, QLIK down); GPRO now down about 18% since
last Tuesday in high-beat sell-off (pares losses in afternoon)


NTCT to merge with communications unit of DHR in $2.6B deal http://goo.gl/19joZ3 (DHR
holders will receive ~62.5M shares of NTCT common stock and own ~60% of the company)
Internet movers mostly to downside as momentum plays remain under pressure amid recent
sell-off; shares of SFLY fell on reports Silver Lake failed to reach a deal to acquire and combine
SFLY w/Snapfish http://goo.gl/C0ia0y ; GPRO downward momentum continues (down as much as
16% from highs) group pared early losses (NFLX, EBAY, YELP lowerFB higher)
Movers; WDAY upgraded to Outperform at Northland ($100 tgt); HIVE falls on lower guidance





Want a free trial to The Hammerstone Report 4x Daily ? Sign-up for a trial today at www.
thehammerstonereport.com



































***DISCLAIMER/LIMITATION OF LIABILITY: Hammerstone Inc. (the Report) provides information and data and does NOT provide any individual investment advice or money management
assistance and does NOT attempt to influence the sale or purchase of securities. The Report is intended for informational purposes only and does not claim to be actionable for investment
decisions. The information contained in the Report has been obtained from sources deemed to be reliable but is not represented to be complete, and it should not be relied upon as such. The
Report does not purport to be a complete analysis of any security, issuer, or industry and is not an offer or a solicitation of an offer to buy or sell any securities. The Report is prepared for
general information purposes only and does not consider the specific investment objectives, financial situation, and particul ar needs of any individual subscriber, person, or entity

You might also like