Tuesday, December 2nd, 2014View Older Reports
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OVERNIGHT MARKETS AND NEWS
December E-mini S&Ps (ESZ14 +0.23%) this morning are up +0.17% and European stocks are unchanged after falling back from a 2-1/4 month high as China led a rally in emerging markets on speculation a slowdown in growth will prod China into expanding stimulus. The Russian ruble held near a record low against the dollar on speculation Russia may enter its first recession since 2009 after Deputy Economy Minister Vedev said Russia 2015 GDP may contract -0.8%, weaker than previous projections of +1.2% growth. Asian stocks closed mostly higher: Japan +0.42%, Hong Kong +1.23%, China +3.69%, Taiwan -0.91%, Australia +1.41%, Singapore +0.50%, South Korea -0.07%, India -0.40%. China's Shanghai Stock Index climbed to a 3-1/3 year high on speculation the PBOC may be preparing the markets for additional stimulus after it refrained from draining funds from the financial system today. The PBOC halted sales of repos used to withdraw funds on Nov 27 for the first time in 4 months, and refrained again today after conducting operations every Tuesday and Thursday. Japan's Nikkei Stock Index rose to a 7-1/3 year high despite Moody's cut to Japan's credit rating yesterday on speculation the slide in crude oil to a 4-1/3 year low and with the plunge in the yen to a 7-1/3 year low against the dollar will boost the profits of Japanese exporters. Commodity prices are mostly lower. Jan crude oil (CLF15 -1.67%) is down -1.17%. Jan gasoline (RBF15 -1.24%) is down -0.98%. Feb gold (GCG15 -1.90%) is down -1.83%. Mar copper (HGH15 -1.10%) is down -1.35%. Agriculture prices are weaker. The dollar index (DXY00 +0.41%) is up +0.34%. EUR/USD (^EURUSD) is down -0.26%. USD/JPY (^USDJPY) is up +0.46%. Mar T-note prices (ZNH15 -0.12%) are down -4.5 ticks.Eurozone Oct PPI fell -0.4% m/m, more than expectations of -0.3% m/m and the largest monthly decline in a year. On an annual basis, Oct PPI fell -1.3% y/y, right on expectations.
The UK Nov Markit/CIPS construction PMI fell -2.0 to 59.4, a bigger decline than expectations of -0.4 to 61.0 and the slowest pace of expansion in 13 months.
Japan Oct labor cash earnings rose +0.5% y/y, less than expectations of +0.8% y/y and the smallest increase in 8 months.
U.S. STOCK PREVIEW
Today’s Nov total vehicle sales report is expected to edge higher to 16.55 million units from 16.35 million units in October. Today’s Nov New York ISM index is expected to show a small +0.2 point increase to 55.0, recovering a bit after the sharp -8.9 point drop seen in October. There is one of the Russell 1000 companies that reports earnings today: Ascena Retail Group (consensus $0.26).Equity conference this week include: Deutsche Bank BioFEST Conference on Mon-Tue, NASDAQ OMX Investor Program on Mon-Wed, Cowen Ultimate Energy Conference on Tue, Real Estate Mexico Forum on Tue, Bank of America Merrill Lynch Leveraged Finance Conference on Tue-Wed, Big Data & Analytics for Banking Summit on Tue-Wed, Citi Basic Materials Conference on Tue-Wed, Piper Jaffray Health Care Conference on Tue-Wed, Credit Suisse Global Industrials Conference on Tue-Wed, Credit Suisse Technology Conference on Tue-Thu, Goldman Sachs Global Automotive Conference on Thu, and SEMICON Japan 2014 on Thu.
OVERNIGHT U.S. STOCK MOVERS
Stryker (SYK +0.05%) was upgraded to 'Conviction Buy' from 'Buy' at Goldman Sachs.Travelers (TRV -0.01%) was downgraded to 'Neutral' from 'Buy' at BofA/Merrill Lynch.
Apache (APA -0.44%) was downgraded to 'Neutral' from 'Buy' at Mizuho.
Parker-Hannifin (PH -1.06%) was downgraded to 'Neutral' from 'Buy' at Goldman Sachs.
Citigroup keeps a 'Buy' rating on FedEx (FDX -0.27%) as it raises ts price target on the stock to $210 from $190.
Walmart (WMT -1.51%) announced that Cyber Monday was the biggest online day in its history for orders.
Piper Jaffray reiterates an 'Overweight' rating on Electronic Arts (EA -1.78%) as it raises its price target on the stock to $47 from $44.
Xcel Energy (XEL +0.97%) was upgraded to 'Neutral' from 'Underweight' at JPMorgan Chase.
Cubic (CUB +2.70%) was downgraded to 'Neutral' from 'Overweight' at JPMorgan Chase.
Avanir (AVNR +0.54%) will be acquired by Otsuka Pharmaceutical for $3.5 billion.
Royal Caribbean (RCL -1.97%) will replace Bemis (BMS +0.33%) in the S&P 500 as of the close of trading this Thursday.
Thor Industries (THO -1.58%) reported Q1 EPS of 73 cents, less than consensus of 81 cents.
Glenview Capital reported a 7.59% passive stake in PHH Corp. (PHH unch) .
Mattress Firm (MFRM -1.99%) reported Q3 EPS ex-items of 70 cents, right on consensus, although Q3 revenue of $464.3 million was better than consensus of $431.01 million.
Shoe Carnival (SCVL -3.16%) reported Q3 EPS of 54 cents, better than consensus of 48 cents.
MARKET COMMENTS
Dec E-mini S&Ps (ESZ14 +0.23%) this morning are up +3.50 points (+0.17%). The S&P 500 index on Monday fell to a 1-week low and closed lower: S&P 500 -0.68%, Dow Jones -0.29%, Nasdaq -1.15%. Bearish factors included (1) global economic concerns after the China Nov manufacturing PMI fell -0.5 to a 9-month low of 50.3 and after Eurozone Nov Markit manufacturing PMI was revised lower to a 17-month low of 50.1, and (2) a slide in retail stocks after a report from the National Retail Federation said that U.S. consumers spent -11% less than last year over the 4 days of Black Friday holiday sales.Mar 10-year T-notes (ZNH15 -0.12%) this morning are down -4.5 ticks. Mar 10-year T-note futures prices on Monday fell back from a 5-week high and closed lower: TYH5 -4.00, FVH5 -1.75. The main bearish factor was the stronger-than-expected Nov ISM manufacturing index. T-notes had rallied early Monday on bullish factors that included (1) reduced inflation expectations after the 10-year U.S. break-even inflation expectations rate fell to the lowest level in 3 years, and (2) deflation concerns after the Nov ISM prices paid sub-index fell -9.0 to a 2-1/3 year low of 44.5.
The dollar index (DXY00 +0.41%) this morning is up +0.298 (+0.34%). EUR/USD (^EURUSD) is down -0.0032 (-0.26%). USD/JPY (^USDJPY) is up +0.54 (+0.46%). The dollar index on Monday fell back from a 4-1/3 year high and closed lower. Closes: Dollar index -0.410 (-0.46%), EUR/USD +0.00187 (+0.15%), USD/JPY -0.270 (-0.23%). Bearish factors included (1) strength in the yen after USD/JPY fell back from a 7-year high when Moody’s Investors Service downgraded Japan’s credit rating one notch to A1 from Aa3, and (2) a rally in the commodity currencies such as the Russian ruble and Australian dollar after crude oil prices recovered from a 4-1/3 year low and closed higher.
Jan WTI crude oil (CLF15 -1.67%) this morning is down -81 cents (-1.17%) and Jan gasoline (RBF15 -1.24%) is -0.0185 (-0.98%). Jan crude and Jan gasoline on Monday recovered from 4-1/4 year lows and closed sharply higher. Closes: CLF5 +2.85 (+4.31%), RBF5 +0.0572 (+3.13%). Bullish factors included (1) a weaker dollar, (2) the stronger-than-expected Nov ISM manufacturing index, which is positive for energy demand and consumption, and (3) fund short-covering after crude plunged over $14 a barrel (-18%) in the past week.
GLOBAL EVENT CALENDAR12/02/2014
| US | 0810 ET | Fed Vice Chairman Stanley Fischer speaks on a panel discussion at the 2014 Wall Street Journal CEO Council Annual Meeting. |
| 0945 ET | Nov ISM New York expected +0.2 to 55.0, Oct -8.9 to 54.8. | |
| 1000 ET | Oct construction spending expected +0.6% m/m, Sep -0.4% m/m. | |
| n/a | Nov total vehicle sales expected 16.58 million, Oct 16.35 million. Nov domestic vehicle sales expected 13.30 million, Oct 13.12 million. | |
| UK | 0430 ET | UK Nov Markit/CIPS construction PMI expected -0.4 to 61.0, Oct 61.4. |
| EUR | 0500 ET | Eurozone Oct PPI expected -0.3% m/m and -1.3% y/y, Sep +0.2% m/m and -1.4% y/y. |
| CHI | 2000 ET | China Nov non-manufacturing PMI, Oct 53.8. |
U.S. STOCK CALENDAR12/02/2014
| Company Name | Ticker | Time | Event Description | Period | Estimate |
|---|---|---|---|---|---|
| Intel Corp | INTC US | 7:30 | Bloomberg Lunch With Intel's Director of IR (Trey Campbell) | ||
| Johnson Controls Inc | JCI US | 8:00 | Analyst Meeting - Strategic Review | Y 2014 | |
| UnitedHealth Group Inc | UNH US | 8:00 | Investor Conference | Y 2014 | |
| CH Robinson Worldwide Inc | CHRW US | 8:30 | Acquisition of Freightquote.com, Inc by C.H. Robinson Call | ||
| Ford Motor Co | F US | 9:30 | November 2014 Sales and Revenue Release | 2014 | |
| Ford Motor Co | F US | 10:00 | November 2014 Sales and Revenue Call | 2014 | |
| Ascena Retail Group Inc | ASNA US | 16:00 | Q1 2015 Earnings Release | Q1 2015 | 0.26 |
| Ascena Retail Group Inc | ASNA US | 16:30 | Q1 2015 Earnings Call | Q1 2015 | |
| Kennametal Inc | KMT US | Investor Meeting - Day 2 | Y 2014 |
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