Thursday, December 5th, 2013View Older Reports
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OVERNIGHT MARKETS AND NEWS
December E-mini S&Ps (ESZ13 unch) this morning are down -0.03% and European stocks are down -0.18%. Stock losses were limited ahead of the ECB interest rate decision and after the UK Office for Budget Responsibility raised its 2013 and 2014 growth estimates for the UK, the first upgrades in 3-years. As expected, the BOE maintained its benchmark interest rate at a record low of 0.50% and held its asset purchase target at 375 billion pounds. Asian stocks closed mostly lower: Japan -1.50%, Hong Kong -0.07%, China -0.28%, Taiwan -0.50%, Australia -1.44%, Singapore -1.15%, South Korea -0.15%, India +1.20%. Commodity prices are mixed. Jan crude oil (CLF14 +0.20%) is up +0.34%. Jan gasoline (RBF14 -0.11%) is down -0.04%. Feb gold (GCG14 -1.15%) is down -1.25%. March copper (HGH14 -0.46%) is down -0.42%. Agricultural and livestock prices are mixed. The dollar index (DXY00 -0.02%) is unchanged after it fell to a 4-week low. EUR/USD (^EURUSD) is down -0.05% and fell back from a 1-month high ahead of the ECB rate decision later today. USD/JPY (^USDJPY) is down -0.27%. March T-note prices (ZNH14 -0.01%) are up +1.5 ticks.The UK Office for Budget Responsibility (OBR) raised its 2013 UK GDP forecast to 1.4% from 0.6%, its first growth-forecast upgrade since 2010, and also raised its UK 2014 GDP estimate to 2.4% from a Mar estimate of 1.8%.
UK Nov Lloyds employment confidence slipped -3 points to -14, falling back from an 8-1/3 year high in Oct of -11.
UK Nov new car registrations rose +7.0% y/y, a bigger increase than the +4.0% y/y gain from Oct.
U.S. STOCK PREVIEW
Today’s weekly initial unemployment claims report is expected to show an increase of +5,000 to 321,000, reversing half of last week’s decline of -10,000 to 316,000. Meanwhile, continuing claims are expected to show an increase of +24,000 to 2.800 million following last week’s decline of -91,000 to 2.776 million. Today’s Q3 GDP report is expected to be revised higher to +3.1% (q/q annualized) from +2.8% due to a larger buildup of inventories. Today’s Oct factory orders report is expected to show a decline of -1.0% after the +1.7% increase seen in September.There are 5 of the Russell 1000 companies that report earnings today: Kroger (consensus $0.53), Dollar General (0.70), Toro (0.03), Cooper Companies (1.80), and Ulta Salon (0.74). Equity conferences during the remainder of this week include: Credit Suisse Technology Conference on Tue-Thu, Credit Suisse Business Services Conference on Tue-Thu, Janney Industrials Conference on Thu.
OVERNIGHT U.S. STOCK MOVERS
Union Pacific (UNP -0.66%) was upgraded to 'Strong Buy' from 'Outperform' at Raymond James.Tiffany (TIF +0.18%) was upgraded to 'Conviction Buy' from 'Neutral' at Goldman.
Kohl's (KSS -1.57%) was upgraded to 'Buy' from 'Neutral' at BofA/Merrill.
Celgene (CELG +0.09%) was upgraded to 'Buy' from 'Neutral' at UBS.
CF Industries (CF +10.68%) was upgraded to 'Neutral' from 'Sell' at Goldman.
Exxon Mobil (XOM +0.30%) was downgraded to 'Outperform' from 'Strong Buy' at Raymond James after recent shae price gains.
Reuters reported that Ford's (F +0.36%) November China auto sales jump 47% y/y.
Dollar General (DG -0.19%) reported Q3 EPS of 72 cents, better than consensus of 70 cents.
Apple (AAPL -0.23%) rose nearly 2% in pre-market trading after three Chinese mobile phone carriers received government approval to start service on China's 4-G wireless network. This will allow China Mobile Ltd., the world's largest phone company, to beging selling Apple's iPhone to its 759 million subscribers.
General Growth Properties (GGP +0.10%) jumped over 3% in pre-market trading after it was anoounced that it will replace Molex (MOLX +0.13%) in the S&P 500 as of the 12/9 close.
Safeway (SWY -2.17%) fell nearly 3% in pre-market trading after Jana Partners LLC said it reduced its holdings in the stock to 4.1% from 6.2%.
Citigroup (C -0.17%) and Morgan Stanley (MS +0.52%) were both downgraded to 'Hold' from 'Buy' at Deutsche Bank.
Avago (AVGO -0.63%) reported Q4 EPS of 89 cents, well above consensus of 82 cents.
Synopsys (SNPS -0.46%) reported Q4 adjusted EPS of 56 cents, higher than consensus of 55 cents, and then raised guidance on fiscal 2014 adjusted EPS to $2.55-$2.60, above consensus of $2.54.
Guess (GES -1.62%) reported Q3 adjusted EPS of 42 cents, higher than consensus of 38 cents.
Aeropostale (ARO -3.90%) reported a Q3 EPS ex-items loss of -29 cents, a wider loss than consensus of -24 cents.
MARKET COMMENTS
Dec E-mini S&Ps (ESZ13 unch) this morning are dpwn -0.50 of a point (-0.03%). The S&P 500 index on Wednesday slipped to a 1-1/2 week low on concern the Fed may taper QE3 sooner rather than later after (1) the Nov ADP employment change rose +215,000, stronger than expectations of +170,000 and the most jobs created in a year, and (2) the Fed’s Beige Book that stated that the U.S. economy continues to expand at a “modest to moderate” pace. Stocks partially recovered on reports that U.S. budget negotiators are near a budget compromise that would boost user fees rather than end corporate tax breaks. Closes: S&P 500 -0.13%, Dow Jones -0.16%, Nasdaq 100 +0.11%.Mar 10-year T-notes (ZNH14 -0.01%) this morning are up +1.5 ticks. Mar T-notes on Wednesday closed lower with the 10-year T-note yield at a 2-1/2 month high of 2.848%. Bearish factors included (1) the Nov ADP employment change that showed companies hired the most people in a year, and (2) the Fed’s Beige Book that stated the U.S. economy expanded at “modest to moderate” pace, which fueled speculation the Fed will cut its monthly bond purchases sooner rather than later. Closes: TYH4 -15.50, FVH4 -8.75.
The dollar index (DXY00 -0.02%) this morning is unchanged. EUR/USD (^EURUSD) is down -0.0007 (-0.05%) and USD/JPY (^USDJPY) is down -0.28 (-0.27%). The dollar index on Wednesday closed higher after the Nov ADP employment change showed companies boosted hiring by the most in a year, which bolstered the outlook for the Fed to taper QE3 sooner rather than later. EUR/USD fell back ahead of Thursday’s ECB meeting and after Eurozone Oct retail sales unexpectedly declined. Closes: Dollar index +0.005 (+0.01%), EUR/USD -0.00097(-0.07%), USD/JPY -0.153 (-0.15%).
Jan WTI crude oil (CLF14 +0.20%) this morning is up +33 cents (+0.34%) and Jan gasoline (RBF14 -0.11%) is down -0.0010 (-0.04%). Jan crude oil and gasoline prices on Wednesday closed mixed. Jan crude posted a 5-week high after weekly EIA crude inventories plunged -5.59 million bbl, the first decline since Sep and a larger draw than expectations of -500,000 bbl. Jan gasoline fell back from a 2-3/4 month high after weekly EIA gasoline stockpiles showed a larger-than-expected rise of +1.828 million bbl to a 1-month high. Closes: CLF4 +1.16 (+1.21%), RBF4 -0.0045 (-0.17%).
GLOBAL EVENT CALENDAR12/05/2013
| US | 0730 ET | Nov Challenger job cuts, Oct -4.2% y/y. |
| 0815 ET | Atlanta Fed President Dennis Lockhart speaks on the economy and monetary policy in Fort Lauderdale, FL. | |
| 0830 ET | Weekly initial unemployment claims expected +5,000 to 321,000, previous -10,000 to 316,000. Weekly continuing claims expected +24,000 to 2.800 million, previous -91,000 to 2.776 million. | |
| 0830 ET | Q3 GDP expected to be revised higher to +3.1% (q/q annualized) from +2.8%. Q3 personal consumption expected unrevised at +1.5%. Q3 GDP price index expected unrevised at +1.9%. Q3 core PCE expected unrevised at +1.4%. | |
| 0830 ET | USDA weekly Export Sales. | |
| 1000 ET | Oct factory orders expected -1.0%, Sep +1.7%. | |
| 1100 ET | Treasury announces amount of 3-year T-notes (previous $30 billion), 10-year T-notes (previous $24 billion) and 30-year T-bonds (previous $16 billion) to be auctioned Dec 10-12. | |
| 1215 ET | Dallas Fed President Richard Fisher speaks on Federal Reserve Operations and Economic Update at a community forum at Texas A&M University. | |
| UK | 0430 ET | UK Nov Lloyds employment confidence, Oct -11. |
| 0700 ET | BOE announces interest rate decision and asset purchase target (expected no change to the 0.50% benchmark rate or to the 375 billion pound asset purchase target). | |
| EUR | 0745 ET | ECB announces interest rate decision. |
| 0830 ET | ECB President Mario Draghi speaks at monthly press conference. |
U.S. STOCK CALENDAR12/05/2013
| Company Name | Ticker | Time | Event Description | Period | Estimate |
|---|---|---|---|---|---|
| Kroger Co/The | KR US | Bef-mkt | Q3 2014 Earnings Release | Q3 2014 | 0.533 |
| Dollar General Corp | DG US | Bef-mkt | Q3 2014 Earnings Release | Q3 2014 | 0.699 |
| L Brands Inc | LB US | 7:30 | November 2013 Sales and Revenue Call | 2013 | |
| Toro Co/The | TTC US | 8:30 | Q4 2013 Earnings Release | Q4 2013 | 0.032 |
| Protective Life Corp | PL US | 9:00 | Investor Conference | Y 2013 | |
| Hospira Inc | HSP US | 9:00 | Investor Day | Y 2013 | |
| Kroger Co/The | KR US | 10:00 | Q3 2014 Earnings Call | Q3 2014 | |
| Bank of America Corp | BAC US | 10:00 | Bank of America and the US Government to Argue in Court on Amount of Penalty | ||
| Dollar General Corp | DG US | 10:00 | Q3 2014 Earnings Call | Q3 2014 | |
| Toro Co/The | TTC US | 11:00 | Q4 2013 Earnings Call | Q4 2013 | |
| Cooper Cos Inc/The | COO US | 16:00 | Q4 2013 Earnings Release | Q4 2013 | 1.802 |
| Cooper Cos Inc/The | COO US | 17:00 | Q4 2013 Earnings Call | Q4 2013 | |
| Ulta Salon Cosmetics & Fragrance Inc | ULTA US | 17:00 | Q3 2014 Earnings Call | Q3 2014 | |
| Ulta Salon Cosmetics & Fragrance Inc | ULTA US | Aft-mkt | Q3 2014 Earnings Release | Q3 2014 | 0.741 |
| Gap Inc/The | GPS US | November 2013 Sales and Revenue Release | 2013 | ||
| L Brands Inc | LB US | November 2013 Sales and Revenue Release | 2013 | ||
| Costco Wholesale Corp | COST US | November 2013 Sales and Revenue Release | 2013 | ||
| Bally Technologies Inc | BYI US | Annual General Meeting | |||
| ACE Ltd | ACE US | Investor Meeting - Day 4 | Y 2013 | ||
| Myriad Genetics Inc | MYGN US | Annual General Meeting | |||
| Ameren Corp | AEE US | Investor Meeting - Day 2 | Y 2013 |
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