1. US Stock Market:
U.S. stocks rose on Thursday, with the advance gaining momentum throughout the session as financial shares rallied in response to a positive read on economic growth. The Dow Jones Industrial Average DJIA, +0.20% rose 88 points, or 0.4%, to 20,747. The S&P 500 index SPX, +0.19% added 9 points, or 0.4%, to 2,370. The Nasdaq Composite Index COMP, +0.07% climbed 18 points, or 0.3%, at 5,915. All three saw a lackluster start to trading, posting small moves on the day, but strengthened throughout the morning.
“U.S. equities traded higher on Thursday as investors digested some economic data and kept an eye on oil prices. The Dow Jones industrial average rose about 90 points, with Goldman Sachs and UnitedHealth contributing the most gains. The S&P 500 gained 0.36 percent, with financials outperforming. Lifting the sector were bank stocks, as the SPDR S&P Bank ETF (KBE) and the Regional Banking ETF (KRE) popped around 2 percent. Energy stocks were also among the best performers, with the sector rising 0.8 percent, as they received a lift from oil prices. Crude rose 1.31 percent to $50.16 per barrel, building on Wednesday’s gains after better-than-expected inventories data.”
“U.S. stock index futures were slightly lower on Thursday as investors awaited key economic data, including a final reading on fourth-quarter GDP numbers, and speeches by a host of Federal Reserve officials. The market has been choppy in the past few days as investors look for new catalysts and ahead of first-quarter corporate earnings. Investors have been assessing what the Republicans’ failure to pass a healthcare bill means for tax reform and the rest of President Donald Trump’s pro-growth agenda, hopes for which have helped drive stocks to record highs.”
2. US Bond Market:
“U.S. government debt prices erased slight gains on Thursday as investors parsed through key economic data while they awaited remarks from Federal Reserve officials. Initial jobless claims fell by 3,000 to 258,000. Meanwhile, the final read on fourth-quarter GDP showed growth of 2.1 percent, above a preliminary read of 1.9 percent. The yield on the benchmark 10-year Treasury note was higher at around 2.387 percent, while the yield on the 30-year Treasury bond was also higher at 2.994 percent. Yields move inversely to prices.”
“Managed money also takes account of longer-term returns, particularly the yield on 10-year Treasury notes. Auctions of the 10-year notes are also closely watched by policymakers as the yield theoretically indicates the confidence that investors have in economic growth. The positive correlation normally in evidence between bond prices and equity valuations has broken down on occasions since the global financial crisis due to fears over deflation. However, with deflationary risks supposedly easing fund managers are trying to determine the point at which yields on the 10-year notes render equities expensive or ‘rich’ relative to treasuries.”
“We are not sure the yield on the 10-year note has bottomed. It’s off the worst level but hardly back to the pre-Fed high around 2.60% or the high last December at 2.639%. The WSJ says “The 10-year Treasury yield was headed for the first quarterly decline in three quar-ters. It was 2.446% at the end of 2016.” What does it say if Q1 this year ends with a lower yield than the year before? It can mean demand for the safe-haven asset is far higher, or it can mean inflation expecta-tions have fallen sharply, or both.”
3. FX Markets:
“The U.S. weekly jobless claims for the week ended March 24 and the third estimate of GDP data for the fourth quarter have been released at 8:30 am ET Thursday. The greenback traded mixed against its major rivals after the data. While the greenback rose against the franc, yen and the euro, it changed little against the pound. The greenback was trading at 1.0736 versus the euro, 111.34 against the yen, 0.9965 against the franc and 1.2458 against the pound around 8:31 am ET.”
“THE dollar edged up to a nine-day high against a basket of currencies on Thursday, with the euro sagging as the European Central Bank showed no sign of stepping away from monetary easing anytime soon. The U.S. currency was up 0.3 percent at 111.385 yen, putting some distance between the four-month low of 110.110 it plumbed on Monday. The euro dipped 0.2 percent to $1.0745, having drifted down from a 4-1/2-month high of $1.0906 scaled on Monday.”
“The price of copper slipped Thursday, surrendering its overnight gains as supply-side problems in Indonesia appeared to be close to ending. Copper prices fell 0.66% to $5,866.00 a metric ton in midmorning London trading. Gold also traded lower, by 0.20% to $1,249.90 a troy ounce, continuing to come off its political risk-driven gains seen earlier in the week.”
“Silver prices declined slightly on Thursday, as investors kept an eye on the economic calendar and a string of upcoming speeches from Federal Reserve officials. May silver futures were down 6 cents, or 0.3%, at $18.19 a troy ounce at 7:45 a.m. ET. Prices hovered within a narrow range of $18.14 and $18.26 through the overnight session. The grey metal has gained nearly 4% since last Friday’s close and is on track for its second consecutive weekly advance. Prices have recovered more than 7% since the March 15 low. June gold futures were down $3.90, or 0.3%, at $1,252.50 a troy ounce in early trade. The yellow metal also experienced limited price activity through the morning.”
“WTI (West Texas Intermediate) crude oil (USO) (UCO) (XLE) futures contracts for May delivery rose 2.4% and settled at $49.51 per barrel on March 29, 2017. Broader markets (SPY) (SPX-INDEX) also rose 0.1% to 235.5 on March 29, 2017. Oil and gas are major parts of the energy sector. The energy sector contributed to ~6.5% of the S&P 500 as of March 24, 2017. US crude oil prices rose to almost a three-week high due to the following factors: short covering from almost a four-month low. Larger-than-expected fall in gasoline and distillate inventories. Less-than-expected fall in US crude oil inventories from March 17–24, 2017. Higher compliance among OPEC producers with major producers’ production cut deal in March 2017—Reuters survey shows 95% and 94% compliance in March 2017 and February 2017 with targeted production cuts. Supply outage in Libya. Possible extension of major producers’ production cut deal.”
5. Market Movers:
EOG Resources Inc (NYSE:EOG) is in the spotlight today after William Featherston of UBS upgraded the E&P to ‘Buy’ from ‘Neutral’, with the analyst commenting that the sector weakness in recent weeks is an opportunity for long term investors to buy quality at attractive prices. In addition to upgrading the stock, Featherston also raised his target price to $109 from the previous $105. Like that of other E&P’s, EOG Resources Inc (NYSE:EOG) shares have retraced due to lower WTI prices, which fell from the mid-$50’s to around $49 per barrel today. The price of crude has fallen in the previous sessions due to concern that oil inventories around the world are still high and that there is a chance that OPEC might not extend its production cuts past June. (Insider Monkey)
Freeport-McMoRan Inc (NYSE:FCX) shares have jumped 5% after Reuters reported that Freeport’s Indonesian segment ‘is close to reaching a deal’ to temporarily resume exports of copper concentrate for the next six months from the giant Grasberg mine. Indonesia had previously halted Freeport’s exports of copper concentrate in January due to the nation wanting to renegotiate contracts to benefit the country. Some bulls think the event signals that Freeport-McMoRan could be closer to an agreement with Indonesia in terms of Grasberg. Uncertainty over the Grasberg mine has hurt sentiment around Freeport-McMoRan Inc (NYSE:FCX), whose shares have arguably lagged behind some other potential ‘Trump infrastructure plays’. (Insider Monkey)
United States Steel Corporation (NYSE:X) shares have popped by 4% in midday action after Seth Rosenfeld of Jefferies hiked his price target on the steel producer to $50 from the previous $45 per share. Rosenfeld believes the cyclical recovery in the energy sector could drive more steel demand beyond just simple rig counts. Due to his belief, the analyst thinks that there is possible upside to United States Steel Corporation (NYSE:X)’s current outlook. Jefferies has a ‘Buy’ rating. (Insider Monkey)
Shares of Corbus Pharmaceuticals Holdings, Inc. (NASDAQ:CRBP) have been moving lower in early trading. At the time of writing, the stock had slid down -10.56% since the open. This downward move has put the stock in the top loser category moving into the second half of the trading period.Corbus Pharmaceuticals Holdings, Inc. (NASDAQ:CRBP) is seeing declines so far in today’s trading session. Shares are moving -10.56% lower on solid volume. The stock has landed on the top loser list for the day according to Finviz data. (Aiken Advocate)
Session activity on Athersys, Inc. (NASDAQ:ATHX) shares bumps the stock on today’s most active list. After a recent spot-check, the stock has touched $1.87 which represents a change from the open of 24.67%. Company shares have been seen trading -28.08% off of the 52 week high and 83.33% away from the 52 week low. Narrowing in, the stock is at a distance of 21.43% from the 50 day high and 83.33% off of the 50 day low. Analyst Recap: Covering sell-side analysts have recently weighed in on shares of Athersys, Inc. (NASDAQ:ATHX). At the time of writing, the First Call consensus price target for the company is $7.00. The current consensus recommendation provided by covering analysts is 1.50. (Melville Review)
Things aren’t looking bright for Lululemon and its brand of luxury athletic wear. Lululemon Athletica inc. (NASDAQ:LULU) stock fell 21% Thursday, one day after the company predicted its sales would drop this quarter. The culprit, according to CEO Laurent Potdevin: Its clothes don’t pop online. “We have clearly identified the issues: An assortment lacking depth in color for spring, compounded with visual merchandising that did not powerfully translate our design vision,” Laurent said on a conference call for investors. To stave off the problem, Lululemon will launch more colorful clothes on its website as soon as next week, Potdevin said. The company’s problems aren’t all internal, though. Lululemon faces intense competition from companies like Nike, which is more than 10 times its size. (GANT News)
Cenovus Energy Inc (USA) (NYSE:CVE) shares are sharply lower in morning trading after the company agreed to buy some major assets from ConocoPhillips (NYSE:COP). Specifically, Cenovus Energy Inc (USA) (NYSE:CVE) has agreed to acquire from ConocoPhillips (NYSE:COP) a 50% interest in the FCCL Partnership, the companies’ jointly owned oil sands venture, and the majority of ConocoPhillips (NYSE:COP)’ deep Basin conventional assets in Alberta and British Columbia in exchange for $10.6 billion in cash and 208 million Cenovus common shares. When combined, the assets are expected to produce around 298,000 BOE/day for 2017. The deal is expected to close in the second quarter of 2017. (Insider Monkey)
Prana Biotechnology Limited (ADR) (NASDAQ:PRAN) is enjoying the morning this morning for sure. After announcing positive pre-clinical data the stock started to soar. As is nearly always the case, our partners at Trade Ideas were the first to inform us of the gains on the stock. At the moment (9:52), PRAN is trading at $4.38 per share after a gain of $1.91 per share or 77.33% thus far today. (CNA Finance)
Shares of ConocoPhillips (NYSE:COP) COP 6.52% rose more than 7 percent Thursday after the company announced the sale of its oil sands and western Canadian natural gas assets to Cenovus Energy Inc (USA) CVE 11.16% for C$17.7 billion ($12.74 billion). William Featherston of UBS upgraded ConocoPhillips’ stock to Buy from Neutral after the divestiture announcement. The analyst also boosted his price target to $55 from $51. According to Featherston, ConocoPhillips’ asset sale puts it in a position to “materially exceed” its 2017 and 2018 asset sale target of $5 billion to $8 billion. The asset sale is also consistent with the company’s strategy to reduce its debt to less than $20 billion by the end of 2019 and returning 20 to 30 percent of its operating cash to shareholders. (Benzinga)
PrivateBancorp Inc (NASDAQ:PVTB) and CIBC (CM) announced Thursday morning that they have entered into an amended merger agreement. Shareholders of PrivateBancorp will receive US$24.20 in cash and 0.4176 of a CIBC common share for each share of PrivateBancorp held. PrivateBancorp has gapped open sharply higher Thursday and is now up 3.65 at $59.85 on above average volume. The stock has leaped past resistance and has set a new high for the year. (RTT News)
Shares of networking hardware company Extreme Networks, Inc (NASDAQ:EXTR) surged on Thursday after the company announced that it had agreed to acquire the data center technology business of Brocade Communication Systems (NASDAQ:BRCD). At 11:30 a.m. EDT, Extreme Networks stock was up about 18%. So what? The deal for Brocade’s data center technology business is contingent on the closing of Broadcom‘s (NASDAQ:AVGO) acquisition of Brocade, which was announced late last year. Extreme will pay $55 million in cash, with $35 million paid at closing and $20 million in deferred payments. Extreme will also potentially pay Broadcom performance-based payments over the five-year period following the close of the deal.
The stock of Frontier Communications Corp (NASDAQ:FTR) is a huge mover today! About 17.13M shares traded. Frontier Communications Corp (NASDAQ:FTR) has declined 56.56% since August 23, 2016 and is downtrending. It has underperformed by 64.53% the S&P500.The move comes after 9 months positive chart setup for the $2.57B company. It was reported on Mar, 30 by Barchart.com. We have $2.23 PT which if reached, will make NASDAQ:FTR worth $102.80 million more.
Science Applications International Corporation (NYSE:SAIC) shares are displaying elevated levels of volatility in today’s session. After a recent check, shares have been spotted at $75.12 showing a change in the session of -12.90%. Analyst Views: Based on data provided from analysts polled by Thomson Reuters, Science Applications International Corporation has a current consensus target price of 92.00. The current consensus analyst recommendation is sitting at 2.30 on company shares. Investors will likely be tracking any consensus estimate changes heading into the next earnings period.