After Hours Report

The S&P 500 rose 0.7% and closed at a record high on Thursday, as the market extended Wednesday's relief rally amid gains across all 11 S&P 500 sectors. The Dow Jones Industrial Average (+0.7%) and Nasdaq Composite (+0.8%) also closed at record highs, while the Russell 2000 increased just 0.1%.

The ease in tensions with Iran remained conducive for risk sentiment, even as President Trump and Canadian Prime Minister Trudeau echoed a Newsweek report that Iranian missiles shot down the Boeing (BA 336.34, +4.97, +1.5%) 737-800 jetliner earlier this week. There was no indication the U.S. would reconsider its de-escalation strategy, though.

Other positive factors included 1) upbeat holiday sales results, 2) several analyst upgrades, 3) weekly jobless claims returning to lower levels, and 4) China confirming Vice Premier Liu He will visit Washington from Jan. 13-15 to sign the Phase One trade deal.

Apple (AAPL 309.63, +6.44, +2.1%) led the information technology sector (+1.1%) higher after Reuters reported that iPhone sales increased 18% yr/yr in China last month. Costco (COST 299.42, +4.73, +1.6%) led the consumer staples sector (+0.7%) higher after it reported 9.0% yr/yr comparable sales growth for the five weeks ended Jan. 5.

Advanced Micro Devices (AMD 48.97, +1.14, +2.4%), Goldman Sachs (GS 242.60, +4.84, +2.0%), and Coca-Cola (KO 55.34, +0.99, +1.8%) were among today's stocks that were upgraded to the equivalent of a Buy rating. 

Given the amount of good news today, then, it's easy to see why calls for a pullback remained unanswered. The persistent bullish momentum in the market exacerbated a fear of missing out on further gains amid a lack of detrimental developments.

It's worth noting, though, that Kohl's (KSS 46.15, -3.23, -6.5%) did issue an earnings warning and Bed Bath & Beyond (BBBY 13.45, -3.20, -19.2%) withdrew its full-year guidance on top of reporting disappointing results. The broader market was not surprised or bothered by the news. 

U.S. Treasuries finished the session slightly higher. The 2-yr yield declined one basis point to 1.57%, and the 10-yr yield declined two basis points to 1.86%. The U.S. Dollar Index increased 0.1% to 97.44. WTI crude declined 0.1% to $59.54/bbl. 

Thursday's economic data was limited to the weekly Initial and Continuing Claims report:

• Initial jobless claims for the week ending January 4 decreased by 9,000 to 214,000 (Briefing.com consensus 225,000). Continuing claims for the week ending December 28 increased by 75,000 to 1.803 million.
  • The key takeaway from the report is that initial claims have settled back down at lower levels, which reflect ongoing tightness in the labor market.

Looking ahead, investors will receive the Employment Situation Report for December and Wholesale Inventories for November on Friday.

• Nasdaq Composite +2.6% YTD
• Dow Jones Industrial Average +1.5% YTD
• S&P 500 +1.4% YTD
• Russell 2000 -0.2% YTD

Overseas: 

• Europe: DAX +1.3%, FTSE +0.3%, CAC +0.2%
• Asia: Nikkei +2.3%, Hang Seng +1.7%, Shanghai +0.9%

Commodities: 

• Crude Oil +0.27 @ 59.56
• Nat Gas unch @ 2.14
• Gold -6.40 @ 1554.20
• Silver -0.25 @ 17.94
• Copper -0.01 @ 2.80

• Intuitive Surgical (ISRG) reports preliminary Q4 revenue above expectations; worldwide da Vinci procedures up 19% yr/yr... ISRG +2.2% after hours
• KB Home (KBH) beats by $0.01, misses on revs... KBH down 2.3% after hours
• Kimbell Royalty Partners (KRP) acquires assets of Springbok Energy Partners in $175 mln transaction; announces public offering of 5.0 mln common units... KRP down 8.5% after hours
• Moderna (MRNA) announces additional "positive" Phase 1 data from study of CMV vaccine... MRNA up 12.9% after hours
• Portola Pharma (PTLA) guides Q4 Andexxa global net revenues to approx $28 mln... PTLA down 37.9% after hours
• PriceSmart (PSMT) misses single est by $0.05, misses single est on revs... PSMT up 4.6% after hours
• Sportsmans Warehouse (SPWH) guides Q4 revs to $250-254 mln, which is below consensus... SPWH down 16.7% after hours
• Synnex (SNX) beats by $0.74, beats on revs; guides Q1 EPS above consensus, revs in-line; plans to separate into two publicly traded companies, raises dividend... SNX up 7.9% after hours
• Ultragenyx Pharma (RARE) reports "positive topline cohort 3 results" and "improved cohort 2" results from Phase 1/2 study of DTX301... RARE up 10.2% after hours
• Urban Outfitters (URBN) reports that comparable retail segment sales increased 3% for the two months ended December 31, 2019... URBN down 9.7% after hours
• WD-40 (WDFC) misses by $0.11, misses on revs; guides FY20 EPS in-line, revs in-line... WDFC -5.6% after hours

Fair Value for Friday, January 10:

• S&P 500: 3275
• Nasdaq 100: 9006
• DJIA: 28921

Today's News Summary:

For a full rundown of today's market and after hours developments, see Live In Play

• Earnings/Guidance (Full Earnings Calendar):
  • Acuity Brands (AYI) misses by $0.08, misses on revs; remains cautious about overall market conditions within the lighting industry for the remainder of FY20
  • Amicus Therapeutics (FOLD) sees Q4 revs above expectations
  • AT&T (T) reaffirms FY20 guidance at investor conference
  • Axonics Modulation (AXNX) sees Q4 revs above expectations
  • AZZ (AZZ) beats by $0.04, beats on revs; reaffirms FY20 EPS guidance, revs guidance
  • Bed Bath & Beyond (BBBY) misses by $0.41, misses on revs; comps -8.3%; withdraws full year guidance but maintains dividend; plans to reveal new strategic vision in early 2020
  • Chico's FAS (CHS) raises Q4 outlook
  • Costco (COST) reports total company comparable sales growth of 9.0% for five weeks ended January 5, 2020
  • Evolus (EOLS) sees Q4 revs above consensus
  • Globus Medical (GMED) guides Q4 revenue slightly above the consensus expectation; issues FY20 guidance below consensus expectation
  • Helen of Troy (HELE) beats by $0.63, beats on revs; raises FY20 EPS above consensus, revs above consensus
  • Humana (HUM) reaffirms 2019 adjusted EPS guidance; provides membership estimates for 2020
  • J. C. Penney (JCP) reports holiday comparable store sales -7.5% (adj comps -5.3%); reaffirms 2019 guidance
  • Kohl's (KSS) reports holiday comps -0.2%, expects FY 19 EPS to be at the low end of its previously announced guidance range of $4.75 to $4.95
  • L Brands (LB) sees Q4 EPS below prior guidance and consensus
  • Lindsay Corp (LNN) beats by $0.22, misses on revs
  • Pacira Pharma (PCRX) sees Q4 revs above consensus
  • Park Aerospace (PKE) reports Q3 results; declares special dividend of $1.00 per share
  • PNM Resources (PNM) details fincial goals in investor slides: targets 5-6% earnings and dividend growth through 2023
  • SI-BONE (SIBN) sees Q4 (Dec) revs above consensus and 2020 revs in-line
  • Simply Good Foods (SMPL) beats by $0.02, misses on revs
  • Tufin Software (TUFN) lowers revenue and operating profit guidance for Q4
  • United Micro (UMC) reports December revenues +17.4% yr/yr to NT 13.37 bln
• General News:
  • Two rockets landed in the Green Zone in Baghdad. There were no reports of casualties and it is not clear where the rockets came from, according to CNN
  • Chinese Vice Premier Liu He will travel to Washington, DC to sign phase one trade deal next week according to Bloomberg
  • Ukraine International Airlines Boeing (BA) plane that crashed earlier this week was on fire prior to hitting the ground and investigators are considering a hostile act took down the plane, according to Wall Street Journal
  • Canadian Prime Minster Justin Trudeau says intelligence shows that Iranian missile shot down plane earlier this week and it may be "unintentional"
  • Fed Vice Chair Richard Clarida says in speech that the current stance of monetary policy likely will remain appropriate
  • Acuity Brands (AYI) appoints Neil M. Ashe as CEO, effective January 31
  • Apple (AAPL) December China iPhone sales increased 18% yr/yr, according to Reuters
  • Bristol-Myers (BMY): New England Journal of Medicine publishes results of pivotal phase 3 Reblozyl MEDALIST trial; achieved a statistically significant improvement in the primary endpoint of red blood cell transfusion independence
  • DBV Technologies (DBVT) reports "positive" top-line results for three-year, open-label extension of Phase III PEPITES trial
  • Equinox Gold (EQX) announces gold production of 201,000 ounces for 2019, achieving guidance
  • Hawaiian Holdings (HA) reports system-wide traffic statics for December and the fourth quarter
  • HP (HPQ) sends letter to Xerox (XRX), saying Xerox bid significantly undervalues company
  • JPMorgan Chase (JPM) introduces new partnership with Lyft (LYFT) and DoorDash
  • Merck (MRK) announces FDA approval of KEYTRUDA for certain patients with BCG-unresponsive, high-risk NMIBC
  • Uber (UBER) recalculated its California fares following new gig-economy law, according to Wall Street Journal
  • Verizon (VZ) aims to eliminate traditional cable bundles, according to The Wall Street Journal

• Upgrades:
  • Advanced Micro (AMD) upgraded to Buy from Neutral at Mizuho; tgt raised to $55
  • Apache (APA) upgraded to Equal Weight from Underweight at Barclays; tgt $34
  • BMW Group (BMWYY) upgraded to Outperform from Neutral at Exane BNP Paribas
  • CDK Global (CDK) upgraded to Overweight from Equal Weight at Wells Fargo; tgt $65
  • Chipotle Mexican Grill (CMG) upgraded to Perform from Underperform at Oppenheimer
  • Coca-Cola (KO) upgraded to Outperform from Neutral at Credit Suisse; tgt raised to $64
  • Cognizant Tech (CTSH) upgraded to Overweight from Equal Weight at Wells Fargo; tgt $70
  • Danone (DANOY) upgraded to Neutral from Sell at Goldman
  • DBV Technologies (DBVT) upgraded to Buy from Hold at Stifel; tgt raised to $18
  • Devon Energy (DVN) upgraded to Overweight from Equal Weight at Barclays; tgt $37
  • Eaton Vance (EV) upgraded to Neutral from Underperform at BofA/Merrill
  • Goldman Sachs (GS) upgraded to Buy from Neutral at BofA/Merrill; tgt raised to $270
  • Halozyme Therapeutics (HALO) upgraded to Outperform from Market Perform at BMO Capital Markets; tgt raised to $24
  • Kellogg (K) upgraded to Outperform from Market Perform at BMO Capital Markets; tgt raised to $79
  • MacQuarie Infrastructure (MIC) upgraded to Overweight from Equal Weight at Wells Fargo; tgt $45
  • Macy's (M) upgraded to Neutral from Underweight at Atlantic Equities; tgt $18
  • Madrigal Pharmaceuticals (MDGL) upgraded to Buy from Neutral at UBS; tgt raised to $127
  • Natl Instruments (NATI) upgraded to Outperform from Neutral at Robert W. Baird; tgt $50
  • Nordstrom (JWN) upgraded to Accumulate from Hold at Gordon Haskett; tgt raised to $48
  • O'Reilly Auto (ORLY) upgraded to Outperform from In-line at Evercore ISI
  • Snap (SNAP) upgraded to Outperform from Market Perform at Cowen; tgt raised to $20
  • Snap (SNAP) upgraded to Buy from Hold at Jefferies; tgt $21
  • Starbucks (SBUX) upgraded to Overweight from Equal Weight at Barclays; tgt $107
• Downgrades:
  • ASML (ASML) downgraded to Neutral from Buy at BofA/Merrill
  • Bank of N.T. Butterfield & Son (NTB) downgraded to Neutral from Buy at Citigroup; tgt raised to $39
  • Bilibili (BILI) downgraded to Outperform from Buy at Daiwa Securities; tgt raised to $25
  • BJ's Wholesale (BJ) downgraded to Hold from Buy at Gordon Haskett; tgt lowered to $25
  • Boeing (BA) downgraded to Hold from Buy at Berenberg; tgt lowered to $350
  • Constellation Pharmaceuticals (CNST) downgraded to Market Perform from Outperform at BMO Capital Markets; tgt lowered to $42
  • Dollar Tree (DLTR) downgraded to Reduce from Accumulate at Gordon Haskett; tgt lowered to $85
  • DXC Technology (DXC) downgraded to Underweight from Equal Weight at Wells Fargo; tgt $30
  • eBay (EBAY) downgraded to Underperform from Hold at Jefferies; tgt $31
  • ExlService (EXLS) downgraded to Underweight from Equal Weight at Wells Fargo; tgt $72
  • Fate Therapeutics (FATE) downgraded to Market Perform from Outperform at BMO Capital Markets; tgt $22
  • First Bancorp (FBP) downgraded to Neutral from Buy at Citigroup
  • First Republic Bank (FRC) downgraded to Neutral from Buy at Citigroup
  • Five Below (FIVE) downgraded to Accumulate from Buy at Gordon Haskett; tgt lowered to $135
  • Hawaiian Electric (HE) downgraded to Underweight from Equal Weight at Wells Fargo; tgt $43
  • Henry Schein (HSIC) downgraded to Underperform from Neutral at BofA/Merrill
  • Home Bancshares (HOMB) downgraded to Neutral from Buy at Citigroup
  • Kohl's (KSS) downgraded to Neutral from Buy at BofA/Merrill
  • Leidos (LDOS) downgraded to Equal Weight from Overweight at Wells Fargo; tgt $102
  • Lumentum (LITE) downgraded to Neutral from Buy at UBS; tgt raised to $85
  • ManTech (MANT) downgraded to Underweight from Equal Weight at Wells Fargo; tgt $76
  • Marathon Oil (MRO) downgraded to Equal Weight from Overweight at Barclays; tgt $16
  • McCormick (MKC) downgraded to Sell from Neutral at UBS; tgt lowered to $147
  • Navient (NAVI) downgraded to Equal Weight from Overweight at Barclays; tgt $16
  • Northwest Natural (NWN) downgraded to Underweight from Equal Weight at Wells Fargo; tgt $66
  • Southwest Air (LUV) downgraded to Hold from Buy at Vertical Research
  • Tesla (TSLA) downgraded to Neutral from Outperform at Robert W. Baird; tgt raised to $525
• Others:
  • Adient (ADNT) initiated with a Hold at The Benchmark Company
  • Aerie Pharma (AERI) initiated with a Buy at SunTrust; tgt $32
  • American Express (AXP) initiated with a Neutral at Robert W. Baird; tgt $124
  • Aptiv (APTV) initiated with a Buy at The Benchmark Company; tgt $110
  • Aptose Biosciences (APTO) initiated with an Overweight at Piper Sandler; tgt $10
  • AutoNation (AN) initiated with a Hold at The Benchmark Company
  • Bank of America (BAC) initiated with a Neutral at DA Davidson; tgt $36
  • Best Buy (BBY) target raised to $100 from $90 at Guggenheim and added to Best Ideas List
  • BioDelivery Sciences (BDSI) initiated with an Overweight at Piper Sandler; tgt $9
  • Black Stone Minerals (BSM) resumed with a Buy at Stifel; tgt $16
  • Carvana (CVNA) initiated with a Hold at The Benchmark Company
  • Citigroup (C) initiated with a Buy at DA Davidson; tgt $96
  • Cooper-Standard (CPS) initiated with a Hold at The Benchmark Company
  • Cummins (CMI) initiated with a Market Perform at Cowen; tgt $173
  • Falcon Minerals (FLMN) resumed with a Buy at Stifel; tgt $7.80
  • Ford Motor (F) initiated with a Hold at The Benchmark Company
  • General Motors (GM) initiated with a Buy at The Benchmark Company; tgt $49
  • Goldman Sachs (GS) initiated with a Buy at DA Davidson; tgt $272
  • JPMorgan Chase (JPM) initiated with a Neutral at DA Davidson; tgt $140
  • Kimbell Royalty Partners (KRP) resumed with a Buy at Stifel; tgt $21
  • Lear (LEA) initiated with a Buy at The Benchmark Company; tgt $170
  • Lithia Motors (LAD) initiated with a Buy at The Benchmark Company; tgt $185
  • Lyft (LYFT) initiated with a Sell at The Benchmark Company; tgt $35
  • Morgan Stanley (MS) initiated with a Buy at DA Davidson; tgt $62
  • Mylan N.V. (MYL) initiated with a Neutral at Piper Sandler; tgt $21
  • Shake Shack (SHAK) initiated with an Underperform at Raymond James
  • Spotify (SPOT) initiated with an Underperform at Bernstein; tgt $127

Upcoming Events:

• Econ Data (Friday):
  • 08:30 ET: December Nonfarm Payrolls (Briefing.com consensus 160,000; prior 266,000)
  • 08:30 ET: Nonfarm Private Payrolls (Briefing.com consensus 157,000; prior 254,000)
  • 08:30 ET: Average Hourly Earnings (Briefing.com consensus 0.3%; prior 0.2%)
  • 08:30 ET: Unemployment Rate (Briefing.com consensus 3.5%; prior 3.5%)
  • 08:30 ET: Average Workweek (Briefing.com consensus 34.4; prior 34.4)
  • 10:00 ET: November Wholesale Inventories (Briefing.com consensus 0.2%; prior 0.1%)
• Earnings:
  • Monday (January 6)
    • Pre-Market: CALM, CMC
    • After-Hours: None of note
  • Tuesday (January 7)
    • Pre-Market: ANGO
    • After-Hours: None of note
  • Wednesday (January 8)
    • Pre-Market: STZ, GBX, LEN, MSM, RPM, SCHN, UNF, WBA
    • After-Hours: BBBY, HELE
  • Thursday (January 9)
    • Pre-Market:  AYI, AZZ, LNN, SMPL
    • After-Hours: KBH, PSMT, SNX, WDFC
  • Friday (January 10)
    • Pre-Market:  INFY
    • After-Hours: None of note
    • Full Earnings Calendar