Cabrera Update:

Monday, January 13, 2018                                                         Trading Desk: (312) 236-8907

 

TODAY’S GAME PLAN:  

DATA/HEADLINES:   10:00ET Fed’s Rosengren speaks;  12:40ET Fed’s Bostic speaks

Iran admitted it mistakenly shot down a Ukrainian passenger jet carrying 176 people. China and the United States will not fix long-term issues that have the potential to significantly affect the global economy by signing their phase one trade deal this week, said former US Federal Reserve chair Janet Yellen (SCMP).

TODAY’S HIGHLIGHTS:   

Markets are back in risk-on mode as investors turn their focus from a military stand-off between Iran and the U.S. to the new earnings season and the planned signing of the phase one trade deal. Oppenheimer Raises The PT On Tesla To $612 From $385. MSFT pt raised to $180 from $155 at Credit Suisse.  JPMorgan Reiterates Apple At Overweight, PT $296. Nvidia – Evercore ISI Raises PT To $300 From $225.

EQUITIES:   pre market movers at bottom of this page

E-mini S&P is +0.3%, Nasdaq +0.4%, RTY +0.25, Dow future +0.3%. 3278.25 is initial key to start in SPX (.786 s/t).   

Small caps have been underperforming, but we will continue to view IWM as s/t positive above the .786

Banks have been underperforming since mid-December with KBE down for a third straight week.  Tomorrow we get earnings results from C, JPM, WFC.

Financial sector ETF (XLF) relative to S&P 500: look for XLF to outperform this week as the 200dma should hold in the pair (XLF/SPY). 

European equities pared earlier gains and turned negative on Monday as investors weighed the upcoming signing of the U.S.-China trade deal and looked forward to the beginning of the earnings season. The Stoxx Europe 600 Index is down 0.1%, after rising as much as 0.2%, with autos and banks leading the declines while technology stocks rose the most. Technology stocks rose on a clutch of brokerage upgrades and price-target bumps. Eurostoxx Banks Index -0.7% and Germany’s DAX reversed earlier gains and fell as much as 0.4%.

Asian stock markets closed broadly higher Monday, as investors looked ahead to Wednesday’s signing of the Phase 1 China-US trade deal.  Hong Kong and Shanghai posted strong gains, while other regional indexes were mostly higher. Tokyo was closed on holiday.  The S. Korean Kospi rose 1.04%; Shanghai Composite rose 0.75% 

FIXED INCOME:   

Treasuries cheaper by more than 2bp at long-end of the curve, paced by bunds as new-year issuance continues to weigh. Gilts outperform after BOE policy maker Vlieghe said he could support an interest-rate cut. 

10 Yr Yield has key longer term resistance at its 200dma (1.975).   TLT has key support around 134.77* and trend line resistance at 139.20 area.

Bund future has a negative technical formation (Death Cross) forming

METALS: 

Gold prices are lower as tensions eased between Iran and the U.S. and expectations for the trade pact with China reduce safe haven demand.  Gold declined Monday following a sell-off from exchange-traded funds as investors turn to riskier assets. More than $1 billion was withdrawn last week from SPDR Gold Shares, the most since 2016.

Silver has been lagging Gold this year, but March Silver remains positive above 17.78. 

ENERGY

Oil was steady after the biggest weekly drop since July as an easing of geopolitical tension in the Middle East turned attention back to a flood of new supply set to hit the market this year. The situation in Iran remains volatile, however, amid protests against the government’s accidental downing of a commercial airliner.   

Feb WTI as rolling front month contract has key closing support at the vwap from the October low (57.40). Brent has similar support just below $63.    

WTI relative to S&P 500 (weekly chart): holding a negative tone below the 50 week moving average, likely to retest the 2017-2019 lows.

CURRENCIES:   

The pound led Group-of-10 currency losses on dovish remarks by Bank of England officials. GBP/USD slips as much as 0.8%, lower for a fifth straight day, after GDP unexpectedly fell 0.3%. USDJPY climbs 0.4% to its highest level since late May.

A break of the .382 support in GBPUSD would likely see downside momentum shift.

March US$ Index found some resistance at the .382 retracement late last week. We will continue to view this area with the 50 and 200 day moving averages to be short term pivot pt. USDJPY has 110.70 as short term target. 

TECHNICAL LEVELS:  (futures)       

 

ESH

TYH

Feb Gold

CLG

DXH

Resistance

3314/15

131’16+

1625.0

64.15

99.000

 

3300.00

130’24*

1613.3

62.98

98.625

 

3286.50

130’06

1597.8

62.16

98.100

 

3279/81

129’18

1584.7

61.33

97.460

 

3270.00

129’05+

1568.6

59.80cl

97.285

Settlement

3264.75

129’02+

1560.1

59.04

97.078

 

3261/62

128’12+

1555/57

58.71

96.740

 

3252.00

127’29+*

1535.0

57.40cl*

96.275

 

3246.00

127’00

1518/19

56.25*

95.700*

 

3234.00

126’22*

1501.5*

54.75

95.100

Support

3221.50

124’29

1477.0

53.69*

94.050

Colors within the report: Green is always the 200 period (day, week). Red is always 21, Blue = 50, Brown = 100  *Stars have

Equity movers in early trading, as of 7:35am EST:

Advancers

  • JILL +22.3% (+$0.31); J. Jill Boosts 4Q Comparable Sales View; Shares Rise 18.7%
  • ENLV +17.1% (+$1.44)
  • CYCN +17% (+$0.58)
  • MGTX +13.3% (+$2.59)
  • LCI +12.9% (+$1.06); Lannett Jumps 21% After FDA Approves Cocaine Nasal Solution
  • HOME +12.2% (+$0.62); At Home Sees 4Q Comp Sales High End of View; Shares Rise (1)
  • NVTA +11.4% (+$1.91); Invitae Prelim 4Q Cash and Cash Equivalents Nearly $400M
  • AXGT +9.4% (+$0.47)
  • MBOT +9.3% (+$1.23)
  • TERP +9% (+$1.41); Brookfield Renewable Offers to Buy TerraForm Power in Stock Deal
  • CFRX +7.6% (+$0.08)
  • VSTM +7.4% (+$0.13)
  • PAVM +7.1% (+$0.11)
  • OBSV +6.5% (+$0.23); Obseva: Sublicense Pact to Commercialize Nolasiban Drug in China
  • ADXS +5.8% (+$0.07)
  • VBIV +5.5% (+$0.09)
  • SPCE +5.2% (+$0.67)
  • BYND +4.3% (+$4.13)
  • AXSM +4.2% (+$3.72); Axsome Therapeutics Shares Rise on License Pact With Pfizer
  • BE +4.2% (+$0.38)
  • DDD +4.1% (+$0.41); 3D Systems Raised to Buy at Craig-Hallum; PT $14
  • NKTR +4% (+$1.08); Nektar Prelim Fourth Quarter Cash And Cash Equivalents $1.6 Bln
  • NBRV +4% (+$0.05)
  • NUAN +3.3% (+$0.60); Nuance Upgraded at Morgan Stanley on Expected Earnings Growth
  • CLVS +3.2% (+$0.29)

Decliners

  • SSI -42.1% (-$3.08)
  • AQST -8.5% (-$0.56)
  • ABMD -7.4% (-$14.1); Abiomed Cuts Full Year Revenue Forecast, Misses Lowest Estimate
  • EXAS -6.1% (-$6.41); Exact Sciences Prelim 4Q Revenue $294 Mln To $296 Mln
  • SRNE -5.5% (-$0.26)
  • TIGO -4.7% (-$2.34)
  • MTNB -4.1% (-$0.06)
  • EXEL -3.8% (-$0.69); Exelixis Rated New Buy at SunTrust; PT $31
  • CHK -3.7% (-$0.03); Chesapeake Energy Social Media Volume Quadruples
  • ACRS -3.2% (-$0.07)
  • PTN -3% (-$0.02)
  • SAVA -2.9% (-$0.24); Cassava Sciences Short Interest Rises to 22.1% of Float
  • DNR -2.4% (-$0.03)
  • CHKP -2.3% (-$2.62); Check Point Software Cut to Underweight at Morgan Stanley
  • SLB -2.2% (-$0.88); What to Watch in Commodities: Trade Deal, Oil, Alcoa, Palladium
  • HMY -2.4% (-$0.09)
  • DRD -2.3% (-$0.14)
  • AU -2% (-$0.44)