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Thursday February 15, 2018

In This Newsletter

Investors Aren't Getting the Full Story on Cyberthreats, Regulator Says

House Backs Bill That Would Benefit Fintech Partnerships With Banks

U.S. to Block Tax-Law Loophole on 'Carried Interest'

Analysis: Fed May Lift Rates With Confidence as Inflation Shows Signs of Life

Plus: Today In Canada

Market Snapshot

OPENING CALL

U.S. stock futures moved higher Thursday, setting the Dow on course for its fifth up day in a row, as the equity market keeps rebounding from its tumble earlier this month.

Cisco Systems is the biggest premarket winner among Dow components, in the wake of its quarterly results.

Investors are due to get a raft of economic reports, including readings on producer prices and the housing market.

On Wednesday, the Dow, S&P and Nasdaq Composite all closed higher by 1% or more, advancing for a fourth straight session, as investors shook off their initial concerns about a higher-than-expected reading on inflation.

The three gauges stand between 4.8% and 6.5% below last month's alltime highs, recovering from their drop in the first half of February. The selloff was sparked in part by rising bond yields amid signs of an uptick in inflation, with the higher yields luring money out of equities. Strategists have said the selloff was overdue, but it became overdone.

DJIA Futures S&P 500 Futures NASDAQ Futures FTSE 100 Xetra DAX

25121 2715 6735

7257.78 12453.41

258 "Whilst the market is showing signs of carving out a bottom, and the volatility index or fear gauge has dropped back below 20, after peaking at

18 over 50 just last week, it is unlikely that this is the last we have seen of the volatility," said Jasper Lawler, head of research at London Capital Group, in

48 a note on Thursday.

43.81

A report on weekly jobless claims is slated to hit at 8:30 a.m. Eastern Time, 114.25 with economists polled by MarketWatch forecasting 230,000 claims.

CAC40 Nikkei 225 Hang Seng Euro NYMEX Crude

5238.22 21464.98 31115.43

1.2481 60.8

72.96 310.81 599.83

At that same time, investors are due to get February releases for producer prices, the Empire State Manufacturing Survey and the Philadelphia Federal Reserve's business-outlook survey.

0.0029

A January report on industrial production is scheduled to arrive at 9:15 a.m. Eastern, with 0.3% growth expected, and a February figure for a housing-

0.2 market index is slated to come at 10 a.m. Eastern.

10-Year Note

98.445

2.929 No Federal Reserve speeches are expected Thursday.

As of 6:30 a.m. ET

Today's Calendar

1:30 p.m. 02/10 Unemployment Insurance Weekly Claims Report - Initial Claims

European stocks were scoring gains, while Asian markets closed sharply higher though volumes in much of the region were capped by the coming Lunar New Year holiday. Some Asian markets were closed Thursday for the holiday.

The ICE U.S. Dollar Index was lower, oil futures advanced, and gold futures

Claims Report - Initial Claims 1:30 p.m. Jan PPI 1:30 p.m. U.S. Weekly Export Sales 1:30 p.m. Feb Empire State Manufacturing Survey 1:30 p.m. Feb Philadelphia Fed Business Outlook Survey 2:15 p.m. Jan Industrial Production & Capacity Utilization 2:30 p.m. IMF regular press briefing 2:45 p.m. Bloomberg Consumer Comfort Index 3:00 p.m. Feb NAHB Housing Market Index 3:00 p.m. U.S. Treasury Sec Mnuchin testifies to House Ways and Means Committee on FY'19 budget 3:30 p.m. 02/09 EIA Weekly Natural Gas Storage Report 9:00 p.m. Dec Treasury International Capital Data 9:30 p.m. Federal Discount Window Borrowings 9:30 p.m. Money Stock Measures 9:30 p.m. Foreign Central Bank Holdings N/A U.S: Susan B. Anthony Day state holiday in Florida

The ICE U.S. Dollar Index was lower, oil futures advanced, and gold futures were little changed.

Shares in Cisco Systems jumped 7.5% in premarket action for the biggest gain among Dow components. The tech giant's earnings and outlook topped Wall Street estimates late Wednesday and the company also showed revenue growth for the first time in more than a year and a half.

Shares in TripAdvisor soared 17% ahead of the open for the S&P 500's biggest premarket gain after the online travel company posted better-thanexpected earnings late Wednesday.

Shares in Avon are likely to see active trading as the beauty-products seller is among the companies expected to post earnings before the open.

EQUITIES

Cisco is the latest technology giant to bring home huge sums of cash held overseas, a beneficiary of the new U.S. tax law.

The networking-gear maker said Wednesday it would repatriate $67 billion of its foreign cash holdings to the U.S. this quarter, in one of the largest repatriation plans yet revealed.

Cisco plans to spend much of the newly repatriated cash on share buybacks and dividends, it said Wednesday while reporting earnings, amounting to about $44 billion over the next two years,

Accounting firm PricewaterhouseCoopers is selling its U.S. public-sector consulting business to private-equity fund Veritas Capital.

The business, which has about 1,500 PwC partners and staff, provides management and technology consulting and other services to federalgovernment agencies, such as the Departments of Defense, Homeland Security and Veterans Affairs, and to state and local governments. Terms of the deal weren't disclosed.

A top federal regulator on Wednesday recommended approving Space Exploration's plan to provide internet service through huge arrays of earthorbiting satellites, in a move that could expand broadband availability across the U.S. and beyond.

The move gives a boost to the firm, known as SpaceX, and its founder, entrepreneur Elon Musk . SpaceX scored an attention-grabbing success last week with the test-launch of its massive Falcon Heavy rocket.

Recent Analyst Ratings Actions

Aircastle Raised to Equal-Weight From Underweight by Stephens & Co.

Andeavor Raised to Buy From Neutral by Citigroup

aTyr Pharma Cut to Underweight From Neutral by JP Morgan

Avis Budget Group Cut to Sell From Neutral by Goldman Sachs

Brunswick Corp Raised to Outperform From Neutral by Wedbush

Starting on Thursday, Google's Chrome browser will block certain types of online advertisements, a change Google is describing as user friendly. But some in the industry say the ad giant's move is self-serving, and they contend Google overly influenced the process that selected which ad types to block.

Google, a unit of Alphabet, describes the new policy as the work of a collective, industry-wide effort designed to rid the internet of spammy ads like pop-ups, and make other ads more appealing to users.

AT&T is considering an unusual gambit in the coming trial over its $85 billion bid to buy Time Warner Inc.-seeking testimony from the Justice Department's antitrust chief, who wants to block the merger.

In the months since the Justice Department sued to block the deal last November, AT&T has publicly questioned the department's motives in light

From Neutral by Wedbush

Cambrex Cut to Neutral From Buy by Longbow Research

November, AT&T has publicly questioned the department's motives in light of President Donald Trump 's campaign pledge to disallow the merger and his repeated disparagement of CNN , a unit of Time Warner.

Carlyle Group Raised to Buy From Hold by Jefferies

Charles River Labs Raised to Buy From Hold by SunTrust Robinson Humphrey

Chimerix Cut to Underweight From Neutral by JP Morgan

CommScope Holding Raised to Overweight From Equal-Weight by Barclays

CSRA Cut to Hold From Buy by SunTrust Robinson Humphrey

FOREX

The dollar has skidded to session lows, building on yesterday's slide. The greenback fell despite a stronger-than-expected inflation reading Wednesday because "investors might have reduced their confidence in the long-run state of the US economy," said ING. The WSJ Dollar Index is down 0.5% and poised to log another 3-year low if the decline persists through US trading today. Without any new positive US demand or supply shocks that could change the landscape for the country's economy, "it's easy to see the weak dollar story persist," the firm posits. It adds that for the currency to rise with Treasury yields--which it hasn't been doing this year--there needs to be "a return in relative confidence over the mediumterm U.S. economic outlook."

D&B Raised to Overweight From EqualWeight by Barclays

Delek US Raised to Buy From Neutral by Citigroup

BONDS

Government bond yields rose, with the 10-year Treasury yield creeping higher, to 2.929% from 2.913% on Monday.

Digital Realty Raised to Buy From Neutral by Citigroup

Dynavax Cut to Neutral From Overweight by JP Morgan

Farmer Mac Raised to Buy From Neutral by Sidoti & Co.

First Data Raised to Outperform From Neutral by Oppenheimer

FMC Corporation Raised to Buy From Neutral by Citigroup

Generac Raised to Buy From Hold by SunTrust Robinson Humphrey

General Mills Raised to Buy From Hold by Jefferies

COMMODITIES

Oil futures gained in European trading, building on the market's best day of the year amid strong gains in equities and a weakened dollar.

March light, sweet crude on the New York Mercantile Exchange was recently up 0.32% at $60.92 a barrel in the Globex trading session. April Brent climbed 0.06% to $64.40.

Saudi Arabia's oil minister said Wednesday that the biggest producer in the Organization of the Petroleum Exporting Countries would continue to back production cuts even if they "overbalance the market a little bit." Gold was down 1% at $1356.70.

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Hormel Foods Raised to Buy From Hold by Jefferies

Lexicon Pharma Cut to Underweight From Neutral by JP Morgan

Other Top Stories Of The Day

Meritage Raised to Neutral From Underperform by Bank of America

MongoDB Raised to Buy From Hold by Needham

Northrop Grumman Raised to Buy From Hold by Jefferies

Investors Aren't Getting the Full Story on Cyberthreats, Regulator Says

Investors in public companies are ill-served by how firms disclose cybersecurity risks, cuing the need for the government to intervene, a senior federal regulator said this week.

Seattle Genetics Raised to Overweight From Neutral by JP Morgan

Spark Therapeutics Cut to Neutral From Overweight by JP Morgan

Target Raised to Outperform From Neutral by Baird

Union Pacific Raised to Buy From Neutral by Citigroup

Valero Energy Raised to Buy From Neutral by Citigroup

House Backs Bill That Would Benefit Fintech Partnerships With Banks

The House approved a bill that would make the resale of high-interest loans more attractive to third-party buyers such as debt collectors-and bolster fintech firms' partnerships with banks.

U.S. to Block Tax-Law Loophole on 'Carried Interest'

Treasury Secretary Steven Mnuchin said the government will act within two weeks to block a hedge-fund maneuver around part of the new tax law.

Analysis: Fed May Lift Rates With Confidence as Inflation Shows Signs of Life

The Federal Reserve is likely to welcome new signs of firming inflation,

Viacom Raised to Neutral From Underweight by Atlantic Equities

Watts Water Raised to Buy From Neutral by Janney Capital

Western Union Raised to Neutral From Underperform by Mizuho

The Federal Reserve is likely to welcome new signs of firming inflation, which should bolster its resolve to gradually raise interest rates this year.

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Today In Canada Earnings scheduled

Bombardier Inc. (BBD.A.T) 4Q Canadian Tire Corp. (CTC.T) 4Q Cenovus Energy Inc. (CVE.T) 4Q Chorus Aviation Inc. (CHR.T) 4Q CI Fincl Corp. (CIX.T) 4Q Dundee Precious Metals Inc. (DPM.T) 4Q Encana Corp. (ECA.T) 4Q Fairfax Fincl Hldgs Limited (FFH.T) 4Q Fortis Inc. (FTS.T) 4Q Indus Alliance Insur and Fincl Svcs Inc. (IAG.T) 4Q Inter Pipeline Ltd. (IPL.T) 4Q Keyera Corp. (KEY.T) 4Q Lundin Mining Corp. (LUN.T) 4Q MTY Food Grp Inc. (MTY.T) 4Q Obsidian Energy Ltd (OBE.T) 4Q Precision Drilling Corp. (PD.T) 4Q Primero Mining Corp. (P.T) 4Q Sandstorm Gold Ltd. (SSL.T) 4Q Shopify Inc. Class A (SHOP.T) 4Q TransCanada Corp. (TRP.T) 4Q Western Forest Products Inc. (WEF.T) 4Q

Western Forest Products Inc. (WEF.T) 4Q

Yamana Gold Inc. (YRI.T) 4Q

Economic Indicators (all times ET)

0830 Dec Employment Insurance

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