Consumer
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News and Views
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Macro/Technicals
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Earnings
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Sector News, M&A, Capital Raises
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Research Away
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Cantor Research
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Top Events/Earnings Calendar
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Cantor Flows
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News and Views
Volumes were the worst that they have been all year registering only 790 million shares on the NYSE. There was no real conviction in the market as it stocks moved up toward the 1130 resistance again. Everyone is waiting for the wording with the Fed today. Consumer Discretionary outpaced the markets while Consumer Staples mirrored the broad market.
Apparel Stocks outperformed the markets as LTD, TJX, URBN, ANF all fared well.
FOSL beats on EPS and guidance this morning and should help MOV and COH
BBY downgrade will pressure RSH as well.
M upgrade will help the Department Store sector and it seems like the JCP downgrade is a little late as it is already down 20% lately. We will buy M, SKS and JCP.
Macro/Technicals
SP Futures: 1119.10; -6.50;SPX: 1127.79; +.55%
SPX Cash Resistance: 1130, 1136, 1148;
RLX: 418.45; +.91
RTH: 91.56; +.95%
XLY: 32.34; +.97%
XLP: 27.23; +.52%
VIX: 22.14; +1.84%
Leaders: TA, DGI, ACAT, CHRS, KMX, FRED, GPI, SCS
Laggards: SYUT, GAP, SKX, LBY, TSN, FRZ, MDS
Earnings
FOSL Fossil reports Q2 EPS $0.80 ($42.47)
Company reports revenues of $412.6M vs Reuters $382.9M.
- Includes of an unfavorable $0.06 per diluted share impact related to the stronger U.S. dollar and a favorable $0.22 per diluted share benefit as a result of the lower effective tax rate.
- Reuters consensus is $0.33
- Gross margin 57.4% vs year-ago 52.9%
- Effective tax rate 12.1% vs year-ago 36.6%
- Guides Q3 EPS to $0.68-0.72, includes $0.02 of unfavorable currency impact vs Reuters $0.64; guides net sales to increase in a range of 25% to 27% with constant dollar net sales increasing in a range of 27% to 29%
- Guides Q4 EPS to $1.12-1.18, includes an unfavorable currency impact of approximately $0.06 per diluted share vs Reuters $1.12; guides net sales to increase in a range of 14% to 16% with constant dollar sales increasing in a range of 18% to 20%.
- Guides full year EPS to $3.13-3.23 vs prior $2.55-2.65 vs Reuters $2.62.
ADAM A.D.A.M. Software reports Q2 EPS $0.10 vs year-ago ($0.05) ($3.28). Reports Q2: Revenues $6.7M vs year-ago $7.1M
SMG Scotts Miracle-Gro reports Q3 EPS $2.61 vs Reuters $2.45 ($46.37). Company reports revenues of $1.24B vs Reuters $1.26B.
Sector News, M&A, Capital Raises
NFLX Netflix and Epix working on major digital partnership - L.A. Times ($116.90)
Citing sources, the L.A. Times Company Town blog reports that start-up pay-TV channel Epix is in "serious negotiations" to give Netflix exclusive online rights to films from its three equity partners (Paramount Pictures, Lionsgate and Metro-Goldwyn-Mayer) in a 5-year deal for which Netflix is expected to pay nearly $1B in licensing fees. Among the issues still being discussed at when Epix would allow Netflix to start streaming its movies. The Times speculates that the agreement would make Netflix a formidable competitor to Time Warner's HBO and could transform the landscape for digital movie distribution.
BLT Blount International files $300M mixed securities shelf
ZQK Quiksilver exchanges $140M of debt for equity ($4.57)
ZQK announced that it has completed a transaction with Rhone to exchange $140M of the outstanding principal amount of ZQK's senior secured term loans for an aggregate of approximately 31.1M shares of its common stock at an exchange price of $4.50 per share.
SYUT Synutra International reports Q1 EPS $0.19 vs Reuters $0.18 -- 2 estimates
IPAR Inter Parfums reports Q2 EPS $0.18 vs Reuters $0.17; raises 2010 guidance ($18.86). Company reports revenues of $107.8M vs Reuters $95.2M. Guides full year EPS to $0.82 vs prior $0.80 and Reuters $0.83; guides revenues to $445M vs prior $440M and Reuters $453.6M.
RRD RR Donnelley awarded multi-year agreement to provide enterprise-wide promotional and marketing materials to pharmaceutical company Eisai Inc. ($18.05)
RRD announced that it has been awarded a multi-year agreement to provide enterprise-wide promotional and marketing collateral materials to Eisai. An on-site RR Donnelley service team will coordinate print production.
Research Away
BBY ($35.58) Best Buy downgraded to neutral from buy at Goldman Sachs Target cut to $40 from $43. The firm cies weaker TV trends and reduces estimates.
DGI ($31.44) DigitalGlobe downgraded to neutral from buy at Bank of America Merrill Lynch
WFMI ($36.47) Whole Foods upgraded to buy from neutral at UBS Target remains $45. Firm notes the pull back in shares following Q3 results.
Bank of America Merrill Lynch upgrades M; downgrades JCP
- Upgrade:
- Macy's (M) upgraded to buy from neutral
- Downgrade:
- JC Penney (JCP) downgraded to underperform from buy
Cantor Research
Click the followg link for Pado’s Perceptions and the Cantor Morning News
Top Events/Earnings Calendar
Today
Events
SAH, HAR, KAR— JP Morgan Auto Conference
CORE, DMND, DOLE, FAST, LZB, SVU, SWY-- BB&T Capital Markets San Francisco 1 on 1 Conference in SF, Ritz-Carlton
Cantor Flows
Consumer Staples: DMND, GAP, GMCR, PBH,
Consumer Discretionary: ORLY, SPLS
Consumer Services: TIVO, CXW, ABTL
Pre-Market Movers
UP— FOSL +7%; M +1.5%; NFLX +2%; WFMI +1.1%
DOWN— FEED -7.61%; JCP -1.95%