Calebra Capital

Monday, December 17, 2018                                                         Trading Desk: (312) 236-8907

 

TODAY’S GAME PLAN:  

DATA/HEADLINES:   8:30ET Housing Starts; 9:45ET Industrial Production, Cap Utilization; 10:00ET JOLTS job openings; 12:30ET Fed’s Rosengren, Williams speak

US finalizing initial batch of rules to limit exports of sophisticated technology to China, other countries – RTRS Citing Document.  Progress of U.S.-China trade talks remain in focus, and further details emerged on how China will increase imports from the U.S. as part of its commitments under first phase of the agreement.  Beijing plans to restart purchases of ethanol by lifting or waiving trade war tariffs. China is also considering re-routing trade that currently passes through Hong Kong to mainland ports that could enable around $10 billion a year in goods transshipped there from the U.S. to be directly booked in the mainland. China will also grant more regular waivers on retaliatory tariffs to local buyers of U.S. farm products including soybeans and pork.

TODAY’S HIGHLIGHTS:   

Eli Lilly forecasts 2020 earnings above Wall Street estimates.

EQUITIES:   pre market movers at bottom of this page

E-mini S&P is flat,  Nasdaq +0.01%, RTY -0.04%, Dow future +0.01%. ES will remain positive today above 3186 area. SPX looking for its fifth straight gain…

The momentum behind the now five-day rally in emerging-market equities may soon depend on comments from central banks and economic releases. Hungary’s central bank, seen as one of the most dovish in Europe, is expected to hold its key rate. Brazil’s central bank is scheduled to release minutes of its December meeting where it cut policy rates to a record low. EM futures are higher by 0.9% this morning.

Energy sector ETF (XLE) is making another run at its 200dma which has been key resistance. XLE remains negative relative to S&P below the 100dma in XLE/SPY.

Nasdaq has been outperforming with QQQ vs SPY back at the late April significant top in the pair.

Healthcare sector has been outperforming since early October with XLV up over 17% from the Oct 3 low. Getting overextended short term.

In Europe, the Stoxx 600 Index is 0.7% lower with banks and consumer discretionary stocks among the biggest losers. European equities dropped from a record high after four straight days of gains, with Unilever dragging down shares of personal and household goods after forecasting sales growth below guidance. DAX future is lower by 0.68%, Eurostoxx future down 0.5%

Benchmark MSCI Asia Pacific Index gained as much as 0.9% to its highest level since June 2018, led by shares in previously beaten-down markets like South Korea and Hong Kong. The Kospi index jumped to a seven-month high as semiconductor companies rallied. India’s Sensex headed for a record close. The Shanghai Composite gained 1.3%, nearly back to the early July highs (gap). China will provide retaliatory tariff waivers to buyers of U.S. farm products on a more regular basis.

FIXED INCOME:   30 year auction today

Treasuries are holding gains paced during London morning by gilts, which gapped higher from the open as U.K. Prime Minister Boris Johnson revived the prospect of a no-deal Brexit.  Gilts advance, outperforming bunds and US Treasuries, as PM Boris Johnson revives the risk of a no-deal Brexit with plans to change the law to stop an extension to the U.K.’s 2020 transition period.

10 year future is holding within its 50dma and 200 day moving average.  30 year held its 200dma late last week. 30 year yield has its 200dma up at 2.5%.

METALS: 

Gold is slightly higher as investors weigh the implications of the partial U.S.-China trade deal, with the dollar rising slightly from near a five-month low.

February Gold future holding above the .382 retracement support, has 1495 area as initial resistance.

ENERGY

Oil held near $60 a barrel on optimism the partial U.S.-China trade pact will bolster demand, while analysts estimated a pullback in American crude stockpiles. If the analyst survey is confirmed by EIA data due Wednesday, it would be only the third weekly decline in inventories this quarter and would help to reduce concern over ample supply. However, the EIA said Monday that it expected American shale production to rise by 30,000 barrels a day. 

Feb WTI has key short term resistance and initial target at the 60.95 area.  Brent has more room, with next key resistance at 67.70

CURRENCIES:    

The dollar advanced against all Group-of-10 peers as the pound led losses on renewed no-deal Brexit fears.  The pound erased gains made since the election as PM Boris Johnson spooked markets by putting the threat of a no-deal Brexit back on the table.  Johnson plans to put the divorce part of the Brexit deal to a vote as soon as Friday and moved to introduce legislation to guarantee no extension to the post-Brexit transition period.  Aussie under pressure after the December meeting minutes re-iterated the central bank’s preparedness to ease monetary policy further.

March US$ Index has initial resistance at the October low.  USDJPY has bullish Golden Cross potential

The 200dma in AUDUSD continues to be pivotal resistance. .6837 is initial support.

EURJPY is holding a positive tone as it climbs back above its 200dma for the first time since October, 2018.

TECHNICAL LEVELS:  (futures)  

 

ESH

TYH

Feb Gold

CLG

DXH

Resistance

3258.50

130’24*

1540.5

65.00

99.000

 

3250.00

130’03*

1526.4

63.97

98.735

 

3230.00

129’16+

1520.4*

63.00*

97.275

 

3213/14

129’09

1500.0

60.95

97.825

 

3203.50

128’23-26

1495.2

60.37

97.265

Settlement

3198.50

128’13+

1480.5

59.98

96.580

 

3186.00

128’11

1476.9

58.30

96.215

 

3175/76

*127’30*

1461.3

57.07

95.365

 

3160/61

127’12/14

1450/52*

56.59

95.100

 

3152.00*

127’00

1426.5

55.42

94.050

Support

3136/37

126’22*

1420/21

55.00

93.500

Colors within the report: Green is always the 200 period (day, week). Red is always 21, Blue = 50, Brown = 100  *Stars have more emphasis, meaning 2 or more technical pts line up; cl = closing key 

Equity movers in early trading, as of 8:05am EST:

Advancers

  • TGE +20.8% (+$3.80); Blackstone, Sponsors to Buy Tallgrass Energy Class A Shares (2)
  • IMGN +17% (+$0.66); ImmunoGen Sees Accelerated Pathway for Ovarian Cancer Treatment
  • REGI +11.3% (+$2.24)
  • PRVL +9.3% (+$1.43)
  • BHVN +8.8% (+$4.87); Biohaven Rises as Vazegepant Meets Goal in Migraine Study (1)
  • ZYNE +8.8% (+$0.57)
  • JBL +7% (+$2.85); Jabil FY Core EPS View Midpoint Beats Est.; Shares Rise 2.6%
  • PCG +5.2% (+$0.50); PG&E Creditor Groups Urge Judge to Reject Fire Claimants Deal
  • GES +5% (+$0.98); Guess and Vera Bradley Raised as Cowen Sees Upside to Estimates
  • ALNY +4.9% (+$5.88); Alnylam’s Kidney Disorder Drug Hits Main Goal in Phase 3 Study
  • SYBX +4.4% (+$0.1)
  • PD +4% (+$0.93)
  • MDR +3.8% (+$0.03)
  • OII +3.4% (+$0.49); Oceaneering Raised to Buy at Goldman; PT $20
  • CNR +3.1% (+$0.27)
  • OBSV +3% (+$0.1)
  • SCYX +2.7% (+$0.02)
  • ONVO +2.4% (+$0.01)
  • BILL +2.4% (+$0.87)
  • VRAY +2.2% (+$0.1)
  • GOSS +2.2% (+$0.35)
  • CLSD +2% (+$0.05)
  • SBGL +4.8% (+$0.44)
  • AVDL +3.7% (+$0.25)
  • TME +3.1% (+$0.36); Tencent Music Announces $400m Share Buyback

Indicated Higher

  • NEX $6.87-$6.94 vs $6.64 close; Nextier Names Kenneth Pucheu as CFO
  • PI $27.10-$28.00 vs $26.17 close; Impinj Raised to Buy at Needham; PT $32
  • ATEC $7.15-$7.40 vs $6.91 close
  • PRQR $10.84-$11.49 vs $10.51 close
  • XAIR $4.20-$4.41 vs $4.11 close; Beyond Air Inc CEO Lisi Buys Over $690,000 of Shares
  • NBEV $1.90-$1.94 vs $1.86 close
  • AFMD $2.65-$2.76 vs $2.59 close
  • TKKS $10.16-$10.19 vs $9.75 close

Decliners

  • PTI -39.1% (-$1.70); Proteostasis’s 470% Rally Met With a Thud After Combo Data (1)
  • MEIP -21% (-$0.48); MEI Pharma to Offer Shares via Stifel, Wells Fargo Securities
  • CLVS -9.1% (-$1.10); Clovis Oncology Sinks 9.1% After $250m Mixed Securities Shelf
  • NAV -5.7% (-$1.85); Navistar Cuts 2020 Revenue Forecast, Misses Lowest Estimate
  • MEET -4.3% (-$0.23); Meet Group Likely Worth $6.50-$7/Shr in a Sale, Canaccord Says
  • SYNA -4.3% (-$2.82); Synaptics Cut as Rosenblatt Expects Falling China Market Share
  • NLSN -3.4% (-$0.67); Nielsen Holdings Cut to Underweight at Barclays; PT $20
  • SESN -3.3% (-$0.03)
  • PRTY -3.2% (-$0.06)
  • GRPN -3% (-$0.08); Groupon Cut to Sell at Goldman; PT $2.40
  • ROKU -2.9% (-$4.07); Roku Analysts Say CFO Departure Doesn’t Represent Long-Term Risk
  • PERI -2.7% (-$0.16)
  • AXSM -2.3% (-$1.80)
  • UL -7.6% (-$4.68)
  • LYG -7% (-$0.25)
  • UN -6.2% (-$3.80)
  • RBS -5.3% (-$0.37)
  • BCS -3.4% (-$0.34)
  • TEF -2.5% (-$0.19)