Wednesday, December 10th, 2014View Older Reports
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OVERNIGHT MARKETS AND NEWS
December E-mini S&Ps (ESZ14 -0.10%) this morning are down -0.06% and European stocks are up +0.56% after Die Zeit reported that ECB President Draghi called German Finance Minister Schaeuble after the Dec 4 ECB meeting in an attempt to garner support in Germany for a government-bond purchase plan to be decided as soon as next month. Asian stocks closed mixed: Japan -2.25%, Hong Kong +0.16%, China +3.69%, Taiwan -1.06%, Australia -0.45%, Singapore +0.18%, South Korea -1.52%, India +0.12%. Chinese stocks rallied nearly 4% after a slowdown in inflation bolstered the case for more monetary easing after China Nov CPI rose less than expected at the slowest pace in 5 years. Commodity prices are mostly lower. Jan crude oil (CLF15 -1.91%) is down -1.93% after OPEC cut its 2015 global demand forecast for its crude to a 12-year low. Jan gasoline (RBF15 -2.09%) is down -2.16% at a fresh 5-year low. Feb gold (GCG15 -0.34%) is down -0.33%. Mar copper (HGH15 -0.92%) is down -0.70%. Agriculture prices are mixed. The dollar index (DXY00 unch) is down -0.02%. EUR/USD (^EURUSD) is unch. USD/JPY (^USDJPY) is down -0.33%. Mar T-note prices (ZNH15 unch) are unch.China Nov CPI rose +1.4% y/y, less than expectations of +1.6% y/y and the smallest pace of increase in 5 years. China Nov PPI fell -2.7% y/y, a larger decline than expectations of -2.4% y/y and the steepest drop in 1-1/2 years.
The Japan Nov consumer confidence index unexpectedly fell -1.2 to 37.7, weaker than expectations of +0.6 to 39.5 and the lowest in 7 months.
The Japan Q4 BSI large all-industry business conditions fell -6.1 to 5.0, a bigger decline than expectations of -1.1 to 10.0. Q4 BSI large manufacturing business conditions fell -4.6 to 8.1.
Japan Nov PPI fell -0.2% m/m, a smaller decline than expectations of -0.3% m/m. On an annual basis, Nov PPI rose +2.7% y/y, more than expectations of +2.6% y/y but still the slowest pace of increase in 8 months.
U.S. STOCK PREVIEW
Today’s Nov monthly Treasury budget statement is expected to show a deficit of -$65.0 billion, which would be substantially better than the -$135.2 billion deficit seen a year ago in Nov 2013. The Treasury today will sell $21 billion of 10-year T-notes in a reopening of last month’s 2-1/4% 10-year note of Nov 2024. There are 2 of the Russell 1000 companies that report earnings today: Toll Brothers (consensus $0.73), Costco (1.09).Equity conferences during the remainder of this week include: Goldman Sachs Financial Services Conference on Tue-Wed, Barclays Capital Global Technology Conference on Tue-Wed, Wells Fargo Energy Symposium on Tue-Wed, Barclays Real Estate Conference on Wed, BMO Technology Conference on Wed, Mitsubishi UFJ Securities Property REIT Conference on Wed, Wells Fargo Securities Research, Economics & Strategy Energy Symposium on Wed, Credit Lyonnais Securities Asia Ltd Americas Innovation Summit on Wed, Oppenheimer Healthcare Conference on Wed, Bank of America Merrill Lynch US Basic Materials Conference on Wed-Thu, Capital One Southcoast Energy Conference on Wed-Thu, Bank of America Merrill Lynch Animal & Dental Health Summit on Thu, and Desjardins Securities Materials Conference on Thu.
OVERNIGHT U.S. STOCK MOVERS
Goldman Sachs (GS +0.14%) was downgraded to 'Neutral' from 'Positive' at Susquehanna.Disney (DIS -0.92%) was downgraded to 'Hold' from 'Buy' at Topeka due to valuation.
Genesco (GCO +1.16%) was upgraded to 'Neutral' from 'Sell' at Goldman Sachs.
British Petroleum (BP -0.90%) was upgraded to 'Buy' from 'Hold' at Deutsche Bank.
Costco Wholesale (COST +0.50%) reported Q1 EPS of $1.12, higher than consensus of $1.09.
Yum! Brands (YUM -1.62%) fell nearly 5% in pre-market trading after the company said 2014 EPS, excluding some items, wil rise by a mid-single-figit percentage, well below a previous forecast of 20% growth.
Krispy Kreme (KKD +0.50%) fell over 4% in after-hours trading after it reported Q3 adjusted EPS of 18 cents, less than consensus of 19 cents.
Korn/Ferry (KFY +1.71%) rose over 3% in after-hours trading after it reported Q2 EPS of 51 cents, better than consensus of 45 ccents.
Lazard reported a 5.072% passive stake in Mobile TeleSystems (MBT -0.31%) .
CHC Group (HELI +7.35%) reported a Q3 EPS loss of -31 cents, a smaller loss than consensus of -38 cents.
MARKET COMMENTS
Dec E-mini S&Ps (ESZ14 -0.10%) this morning are down -1.25 points (-0.06%). The S&P 500 index on Tuesday fell to a 3-week low and closed lower, although stocks recovered from their worst levels after energy producers and technology companies rose: S&P 500 -0.02%, Dow Jones -0.29%, Nasdaq +0.38%. Bearish factors included (1) carry-over weakness from a slide in world equity markets after China tightened collateral rules for short-term loans and sparked a sharp sell-off in Chinese stocks, and (2) renewed Greek debt concerns after the Greek government brought forward the process for choosing a new President this month, a move that risks triggering parliamentary elections that could put a party in power that opposes the terms of Greece’s bailout by the EU.Mar 10-year T-notes (ZNH15 unch) this morning are unch. Mar 10-year T-note futures prices on Tuesday closed higher: TYH5 +12.00, FVH5 +6.75. Bullish factors included (1) reduced inflation expectations after the 10-year break-even rate fell to a new low, and (2) increased safe-haven demand for Treasuries after the S&P 500 tumbled to a 3-week low.
The dollar index (DXY00 unch) this morning is down -0.022 (-0.02%). EUR/USD (^EURUSD) is unch. USD/JPY (^USDJPY) is down -0.39 (-0.33%). The dollar index on Tuesday closed lower. Closes: Dollar index -0.351 (-0.39%), EUR/USD +0.00571 (+0.46%), USD/JPY -0.99 (-0.82%). Bearish factors included (1) strength in the yen as USD/JPY fell to a 1-week low after a slide in global equity markets boosted the safe-haven demand for the yen, and (2) strength in EUR/USD which rallied after German Nov exports were a bit stronger than expected.
Jan WTI crude oil (CLF15 -1.91%) this morning is down -$1.23 a barrel (-1.93%) and Jan gasoline (RBF15 -2.09%) is down -0.0372 (-2.16%) at a 5-year low. Jan crude Tuesday rebounded from a 5-1/3 year low and Jan gasoline prices recovered from a 5-year low and closed higher. Closes: CLF5 +0.77 (+1.22%), RBF5 +0.017 (+1.00%). Supportive factors included (1) short covering in most commodities after the dollar index fell, and (2) expectations for Wednesday’s weekly EIA crude inventories to fall -2.7 million bbl.
GLOBAL EVENT CALENDAR12/10/2014
| US | 0700 ET | Weekly MBA mortgage applications, previous -7.3% with purchase sub-index +2.5% and refi sub-index -13.4%. |
| 1030 ET | EIA Weekly Petroleum Status Report. | |
| 1200 ET | USDA Dec WASDE crop production. | |
| 1300 ET | Treasury auctions $21 billion 10-year T-notes. | |
| 1400 ET | Nov monthly budget statement expected -$65.0 billion, Nov-2013 -$135.2 billion. | |
| JPN | 0000 ET | Japan Nov consumer confidence index expected +0.6 to 39.5, Oct 38.9. |
| 1850 ET | Japan Oct tertiary industry index expected -0.2% m/m, Sep +1.0% m/m. | |
| 1850 ET | Japan Oct machine orders expected -1.7% m/m and -0.3% y/y, Sep +2.9% m/m and +7.3% y/y. | |
| UK | 1901 ET | UK Nov RICS house price balance expected 15%, Oct 20%. |
U.S. STOCK CALENDAR12/10/2014
| Company | Ticker | Time | Event Description | Period | Estimate |
|---|---|---|---|---|---|
| Toll Brothers Inc | TOL US | Bef-mkt | Q4 2014 Earnings Release | Q4 2014 | 0.727 |
| Costco Wholesale Corp | COST US | Bef-mkt | Q1 2015 Earnings Release | Q1 2015 | 1.091 |
| BioMarin Pharmaceutical Inc | BMRN US | 8:00 | Investor Day | Y 2014 | |
| Diebold Inc | DBD US | 9:00 | Investment Community Conference | Y 2014 | |
| Tyson Foods Inc | TSN US | 9:30 | Investor Day | Y 2014 | |
| McDonald's Corp | MCD US | 11:00 | Investor Meeting | Y 2014 | |
| Costco Wholesale Corp | COST US | 11:00 | Q1 2015 Earnings Call | Q1 2015 | |
| Brown-Forman Corp | BF/B US | 13:00 | Analyst Meeting | Y 2014 | |
| Pall Corp | PLL US | 13:00 | Annual General Meeting | ||
| Bunge Ltd | BG US | 13:00 | Investor Day | Y 2014 | |
| Toll Brothers Inc | TOL US | 14:00 | Q4 2014 Earnings Call | Q4 2014 | |
| Altera Corp | ALTR US | 16:45 | Q4 2015 Guidance Call | Q4 2015 | |
| Kennametal Inc | KMT US | November 2014 Monthly Orders Release | |||
| Progressive Corp/The | PGR US | November 2014 Sales and Revenue Release | 2014 | ||
| Charles Schwab Corp/The | SCHW US | November 2014 Sales and Revenue Release - Activity Report | 2014 |
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