Professional Documents
Culture Documents
Index
Up/Down
Last
DJ Industrials
-81.65
0.45%
18,132
S&P 500
-6.26
0.30%
2,104
Nasdaq
-24.36
0.49%
4,963
Russell 2000
-3.88
0.47%
1,235
Economic Data
The U.S. economy grew a revised 2.2% in Q414, mainly as companies restocked warehouse
shelves at a slower pace than previously reported (GDP was down from prior 2.6% view, but
slightly above estimates for a 2% reading). Inventories increased by $88.4B instead of $113.1B
(which adds to GDP). Consumer spending remained strong, rising 4.2% in the quarter, after rising
3.2% prior quarter
February Chicago Purchasing Managers Index (PMI) plunged to 45.8 vs. 58 consensus and below
59.4 in January (first time in contraction since April 2013 and lowest reading since July 2009).
Supplier deliveries was the only component to increase in February, with the port strike no doubt
to blame. New Orders suffered its largest monthly decline on record
Consumer confidence eased in February to 95.4, down from an 11-year high of 98.1 (est. was for
94.0 reading and 93.6 in preliminary). It was also the first decrease in seven months. The
expectations index fell to 88.0 vs. 91.0 last month
Pending home sales rose 1.7% MoM slightly below est. for up 2% - the move followed a 1.5%
drop the prior month that was smaller than initially estimated. The Midwest fell (-0.7%), while
the Northeast, South and West all advanced
NY Feds Dudley cautioned on raising rates too soon, in his prepared remarks at the Chicago
University's Booth School of Business annual monetary policy conference in NY. He noted
lingering headwinds from the financial crisis, and still low inflation as rationale for not acting
prematurely. But he added it is harmful if inflation expectations are allowed to rise too far above
2%, and said don't over-emphasize uncertainty to justify low rates
Commodities
Energy prices ended strong, closing near the highs in a late day rally. WTI crude closed higher by
$1.59 or about 3% to $49.76 close, while Brent prices outperformed once again. April Brent crude
rose more than 4%, and posted its biggest monthly gain since May 2009 (rising over 16%). For the
week Brent rallied over 3%. Back to WTI crude, another weekly drop in the Baker Hughes rig
count, falling 43 to 1,267, helped alleviate concerns late day of additional supply as companies
make efforts to help stem the build in inventories. The spread between Brent/WTI widened to
more than $12, its biggest disparity in over a year (was at parity in mid-January). WTI crude
posted its first monthly gain (3%) since June 2014
Gold futures ended higher by $3 to settle at $1,213.10 an ounce, ending the week higher, but
declined by (-5%) for the month of February. Gains came this week after China Lunar week
concluded and mixed commentary from Fed Chairperson Yellen this week in her testimony to
Senate/House. She kept options open, but appears no need intention to rush rate hikes. The 5%
decline in Feb followed an 8% increase in January
Currencies
Is the dollar that strong? Or are other currencies that weak? The dollar reversed higher late day,
ending around yesterdays close (DXY 95.317, up small), bouncing from earlier lows 94.905. The
euro faded late day, dropping back below the 1.12 mark (fell 1% yesterday), while the dollar
extended recent gains against the yen
Bond Market
Treasury markets advanced late dayending with weekly gainsbut declined for the month. The
benchmark 10-year Treasury yield dropped about 12 bps for the week, but was up about 35 bps
for the month of Feb, rising from 1.673% on Jan. 30. Treasuries with first weekly gain since
January after Federal Reserve Chair Janet Yellen said this week she wont lock policy makers into
a timetable for raising interest rates. The February drop in Treasury prices, has come as the S&P
500 has gained nearly 6% for the month
Macro
Up/Down
Last
WTI Crude
1.59
49.76
Brent
2.20
62.25
Gold
3.00
1,213.10
EUR/USD
-0.0006
1.1192
JPY/USD
0.22
119.64
-0.016
2.00%
10-Year Note
Financials
Large Cap banks; BAC downgraded to neutral at UBS saying disclosures in the bank's recent
annual filing raise the risk of a qualitative failure this year; ZION with an analyst upgrade in
regional bank sector
Mortgage finance; WAC downgraded to Underperform at both Keefe Bruyette and Credit Suisse
after weaker earnings yesterday; OCN was downgraded to sell at Compass Point; OCN said
midday that two holders of trusts to terminate OCN as servicer (but said effect immaterial to
overall financial condition
Healthcare
Large Cap Pharma; healthcare was among worst sector performers today (one of best yesterday),
with a few individual news stories; MYL fell late day after registering up to 110M shares for
selling shareholders
Biotech; group underperformed today (still not far off record closing highs for XBI/IBB); Deutsche
Banks removed AMGN, CELG, GILD and BIIB removed from short-term buy list; ACOR declined,
trading to lowest level since Nov, after Kyle Bass coalition filed petition seeking to invalidate
patent 8077826 owned by ACOR; SRPT cut at Cowen amid uncertainty ahead of 2Q meeting with
FDA on eteplirsen filing plans; NVAX posted a wider than expected Q4 loss on lower revs
Med Tech; ISRG weaker after Evercore noted investor concerns may arise around the company
on UnitedHealths decision to require doctors to obtain prior authorization for hysterectomies;
SNN shares jumped midday after an article in TheDealPipeline http://goo.gl/fccNSu
Services; MDRX falls on analyst downgrade after quarterly revenue and bookings miss; AIRM
among best performers after strong results and indications that the Companys payer mix is
beginning to stabilize
Industrials & Materials
Transports; FDX was upgraded to Outperform at Credit Suisse with $203 tgt to reflect the shift in
capex focus towards U.S. Ground Network capacity, a higher margin business and less capital
intensive than Express; in airlines, ALK upgraded to Strong buy at Raymond James with $80 tgt on
attractive valuation, strong domestic mkt exposure and potential for upside revs; in rails, CSX was
upgraded to Outperform at BMO Capital (note rails have come under pressure of late)
Metals & Mining; gold miners ended a good week higher, helped as gold prices ended up 0.3%
today and up for the week; steel stocks underperform again, Bank America said low steel prices
may get buyers off the sidelines, but upside limited by imports amid strong USD
E&C sector5; KBR falls as Q4 revs miss estimates (weighed on FLR/CBI); Bank America said sees
view ACM and JEC as the biggest beneficiaries of their positive outlook on public non-res
recovery; MTZ shares rise after better Q4 results (though lowered its year profit outlook)
Tankers & Shippers; SB downgraded to neutral at Credit Suisse ; the Baltic Dry Index advanced
1.3% to 540 Points in London, bouncing off all-time record lows this week
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