Thursday, November 14, 2013


December E-mini S&Ps (ESZ13 +0.11%) this morning are up +0.15% at a record high and European stocks are up +0.40%. Asian stocks closed higher: Japan +2.12%, Hong Kong +0.82%, China +0.72%, Taiwan +0.38%, Australia +0.68%, Singapore +0.77%, South Korea +0.16%, India +1.02%. Dovish comments Wednesday evening from outgoing Fed Chair Bernanke and incoming Fed Chair Yellen lifted global stocks on signs the Fed will maintain its pace of asset purchases. Japan's Nikkei Stock Index climbed to a 5-1/2 month high on speculation the BOJ will increase its stimulus measures after Japan Q3 GDP slowed from Q2. Commodity prices are mixed. Dec crude oil (CLZ13 -0.35%) is down -0.22%. Dec gasoline (RBZ13 +0.88%) is up +0.85 at a 3-week high. Dec gold (GCZ13 +1.02%) is up +1.17% and Dec copper (HGZ13 -0.22%) is down -0.47% at a 3-1/4 month low. Agricultural and livestock prices are mixed. The dollar index (DXY00 +0.23%) is up +0.26%. EUR/USD (^EURUSD) is down -0.38%. USD/JPY (^USDJPY) is up +0.73% at a 2-month high as the slowdown in Japan Q3 GDP undercut the yen and bolstered speculation the BOJ will increase its asset purchases to stimulate growth. December T-note prices (ZNZ13 +0.15%) are up +7 ticks.
In prepared remarks released Wednesday afternoon after U.S. markets closed, Fed Chair nominee Yellen signaled the Fed will maintain QE3 at current levels when she said "supporting the recovery today is the surest path to returning to a more normal approach to monetary policy."
Speaking at a town hall meeting Wednesday evening, Fed Chairman Bernanke said the Fed is falling short on its dual mandate to ensure price stability and full employment and that "we need a stronger, more rapidly moving economy."
UK Oct retail sales ex autos fell -0.6% m/m and rose +2.3% y/y, weaker than expectations of -0.1% m/m and +3.1% y/y. Oct retail sales including autos fell -0.7% m/m and rose +1.8% y/y, also weaker than expectations of unch m/m and +3.1% y/y.
Eurozone Q3 GDP rose +0.1% q/q and fell -0.4% y/y, slightly less than expectations of +0.1% q/q and -0.3% y/y.
German Q3 GDP rose +0.3% q/q and +0.6% y/y, right on expectations.
Japan Q3 GDP rose +1.9% q/q annualized, better than expectations of +1.7% q/q annualized, but slower than the +3.8% q/q annualized in Q2. The Q3 GDP deflator fell -0.3% y/y, less than expectations of -0.5% y/y. Q3 GDP consumer spending rose +0.1% q/q, less than expectations of +0.2% and Q3 GDP business spending rose +0.2% q/q, also less than expectations of +1.0% q/q.
Japan Sep industrial production was revised down to +1.3% m/m and +5.1% y/y from the originally reported +1.5% m/m and +5.4% y/y.
Today’s weekly initial unemployment claims report is expected to show a decline of -6,000 to 330,000, adding to last week’s decline of -9,000 to 336,000. Meanwhile, today’s continuing claims series is expected to show a small increase of +2,000 to 2.870 million, adding to last week’s increase of +4,000 to 2.868 million. Today’s Sep trade deficit report is expected to widen slightly to -$39.0 billion from -$38.8 billion in August. The Treasury today will sell $16 billion in 30-year T-bonds, concluding this week’s $70 billion refunding operation. There are 8 of the S&P 500 companies that report earnings today: Viacom (consensus $1.44), Tyco (0.52), Wal-Mart (1.13), Helmerich & Payne (1.40), Kohl's (0.86), Agilent Technologies (0.76), Applied Materials (0.18), and Nordstrom (0.67).
Equity conferences during the remainder of this week include: Goldman Sachs Industrials Conference on Wed-Thu, Morgan Stanley Global Chemicals and Agriculture Conference on Wed-Thu, UBS Building and Building Products CEO Conference on Thu, Barclays Software Defined Data Center Forum on Thu, SunTrust Robinson Humphrey Financial Technology, Business and Government Servic on Thu, Morgan Stanley Asia Pacific Summit on Thu, and Mexico Investors Forum 2013 on Fri.
Wal-Mart (WMT +0.24%) reported Q3 EPS of $1.14, higher than consensus of $1.13.
Kohl's (KSS +1.15%) reported Q3 EPS of 81 cents, weaker than consensus of 86 cents, and then lowered guidance on fiscal 2013 EPS view to $4.08-$4.23 from $4.15-$4.35, less than consensus of $4.23.
Viacom (VIAB +1.23%) reported Q4 EPS of $1.55, well ahead of consensus of $1.44.
Helmerich & Payne (HP +0.31%) reported Q4 EPS of $1.47, better than consensus of$1.40.
Sally Beauty (SBH +1.02%) reported Q4 EPS of 38 cents, less than consensus of 39 cents.
Cardinal Health (CAH +1.48%) was awarded a maximum $1.02 billion government contract modification for prime vendor medical and surgical supplies.
Kinross Gold (KGC +1.63%) reported Q3 adjusted EPS of 5 cents, higher than consensus of 4 cents.
Tetra Tech (TTEK -0.30%) reported Q4 EPS of 39 cents, better than consensus of 36 cents.
BorgWarner (BWA +0.46%) announced a two-for-one stock split to all shareholders of record as of the close of business on December 2.
SeaWorld (SEAS +2.82%) reported Q3 EPS of $1.33, mauch better than consensus of $1.21.
Cisco (CSCO +1.14%) tumbled 11% in after-hours trading after it reported Q1 adjusted EPS of 53 cents, higher than consensus of 51 cents, but then lowered guidance on fiscal 2014 adjusted EPS to $1.95-$2.05, below consensus of $2.10.
NetApp (NTAP +2.71%) fell 3% in after-hours trading after it reported Q2 EPS of 66 cents, better than consensus of 63 cents, but reported Q2 revenue of $1.55 billion, below consensus of $1.6 billion.
Dec E-mini S&Ps (ESZ13 +0.11%) this morning are up +2.75 points (+0.15%). The S&P 500 index on Wednesday shook off early losses and rallied to a new all-time high. Bullish factors included (1) comments from Janet Yellen, the next Fed Chair, who said the economy and labor markets are performing “far short of their potential” and must improve before the Fed can begin cutting monetary stimulus, and (2) strength in retail stocks after Macy’s surged 9% on better-than-expected earnings and fueled optimism about the holiday shopping season. Closes: S&P 500 +0.81%, Dow Jones +0.45%, Nasdaq 100 +1.20%.
Dec 10-year T-notes (ZNZ13 +0.15%) this morning are up +7 ticks. Dec 10-year T-note prices on Wednesday closed higher. The major supportive factor was the dovish statement from Janet Yellen that fueled speculation the Fed will maintain the current pace of bond buying when she said the economy must improve before the Fed can begin tapering bond purchases. Closes: TYZ3 +14.50, FVZ3 +8.75.
The dollar index (DXY00 +0.23%) this morning is up +0.209 (+0.26%). EUR/USD (^EURUSD) is down -0.0051 (-0.38%). USD/JPY (^USDJPY) is up +0.72 (+0.73%) at a 2-month high. The dollar index on Wednesday closed lower on speculation that Fed will maintain QE3 into next year on dovish comments from Janet Yellen, the next Fed Chair. Gains in EUR/USD were limited after ECB Executive Board member Praet said the ECB is prepared to take additional steps to prevent the Eurozone from slipping into deflation. Closes: Dollar index -0.266 (-0.33%), EUR/USD +0.00509 (+0.38%), USD/JPY -0.396 (-0.40%).
Dec WTI crude oil (CLZ13 -0.35%) this morning is down -21 cents (-0.22%) and Dec gasoline (RBZ13 +0.88%) is up +2.23 cents (+0.85%) at a 3-week high. Dec crude oil and gasoline prices on Wednesday closed higher on (1) ongoing worker protests in Libya that have disrupted the country’s oil exports, which plunged to 250,000 barrels a day on Nov 10, well below the average of 1.28 million bpd in the first six months of this year, and (2) strength in gasoline which climbed to a 3-week high on speculation that refiners will use more crude to process gasoline after the crack spread, the profit from processing 3 barrels of crude into 2 gasoline and 2 of heating oil, rose to a 3-1/4 month high of $19.94 a barrel. Closes: CLZ3 +0.84 (+0.90%), RBZ3 +0.0416 (+1.61%).
US0830 ETWeekly initial unemployment claims expected -6,000 to 330,000, previous -9,000 to 336,000. Weekly continuing claims expected +2,000 to 2.870 million, previous +4,000 to 2.868 million.
0830 ETSep trade balance expected -$39.0 billion, Aug -$38.8 billion.
0830 ETQ3 non-farm productivity expected +2.2%, Q2 +2.3%. Q3 unit labor costs expected -0.1%, Q2 unch.
0900 ETPhiladelphia Fed President Charles Plosser speaks on monetary policy at the Cato Institute.
1000 ETFed Vice-Chairman Janet Yellen testifies before the Senate Banking Committee regarding her nomination to become the next Fed chair.
1100 ETEIA Weekly Petroleum Status Report.
1100 ETTreasury announces amount of 10-year TIPS to be auctioned Nov 21.
1300 ETTreasury auctions $16 billion 30-year T-bonds.
GER0200 ETGerman Q3 GDP expected +0.3% q/q and +0.6% y/y, Q2 +0.7% q/q and +0.5% y/y.
UK0430 ETUK Oct retail sales ex autos expected -0.1% m/m and +3.1% y/y, Sep +0.7% m/m and +2.8% y/y
0430 ETUK Oct retail sales including autos expected unch m/m and +3.1% y/y, Sep +0.6% m/m and +2.2% y/y.
EUR0500 ETEurozone Q3 GDP expected +0.1% q/q and -0.3% y/y, Q2 +0.3% q/q and -0.5% y/y.
Company NameTickerTimeEvent DescriptionPeriodEstimate
Dillard's IncDDS USBef-mktQ3 2014 Earnings ReleaseQ3 20141.05
Helmerich & Payne IncHP USBef-mktQ4 2013 Earnings ReleaseQ4 20131.404
Kohl's CorpKSS USBef-mktQ3 2014 Earnings ReleaseQ3 20140.855
Wal-Mart Stores IncWMT USBef-mktQ3 2014 Earnings ReleaseQ3 20141.127
Viacom IncVIAB USBef-mktQ4 2013 Earnings ReleaseQ4 20131.438
TransDigm Group IncTDG USBef-mktQ4 2013 Earnings ReleaseQ4 20131.705
Sally Beauty Holdings IncSBH USBef-mktQ4 2013 Earnings ReleaseQ4 20130.392
Wal-Mart Stores IncWMT US7:00Q3 2014 Earnings CallQ3 2014
F5 Networks IncFFIV US8:00Analyst and Investor MeetingY 2013
Kohl's CorpKSS US8:30Q3 2014 Earnings CallQ3 2014
Viacom IncVIAB US8:30Q4 2013 Earnings CallQ4 2013
Mallinckrodt PLCMNK US8:30Investor BriefingY 2013
Progressive Corp/ThePGR US9:00Investor Relations Conferece Call
Nordstrom IncJWN USAft-mktQ3 2014 Earnings ReleaseQ3 20140.665
Applied Materials IncAMAT USAft-mktQ4 2013 Earnings ReleaseQ4 20130.181
Bristol-Myers Squibb CoBMY USFDA Adcomm, tasimelteon, Non-24-Hour Disorder in the totally blind
Questar CorpSTR USRoadshow - West Coast - Day 1Y 2013
Western Digital CorpWDC USAnnual General Meeting
Thomson Reuters CorpTRI CNAnnual General MeetingY 2013

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