Monday, December 29th, 2014View Older Reports
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OVERNIGHT MARKETS AND NEWS
March E-mini S&Ps (ESH15 -0.18%) this morning are down -0.14% and European stocks are down -0.83% after Greek Prime Minister Samaras failed in a third and final attempt to get his presidential candidate, Stavros Dimas confirmed, which will trigger early elections in late Jan or early Feb. Greece's stock market plunged over 7% to a 2-year low and the 10-year German bund yield fell to a record low of 0.563% on heightened sovereign debt concerns. Greece's parliament will now be dissolved and general elections called, which raises concern that Syriza, an anti-austerity party that seeks to renegotiate Greek's debt, comes to power just before the EU's 240 billion euro ($292 billion) bailout to Greece expires. Asian stocks closed mixed: Japan -0.50%, Hong Kong +1.82%, China +0.28%, Taiwan +0.74%, Australia +1.47%, Singapore +0.42%, South Korea -1.50%, India +0.57%. China's Shanghai Stock Index climbed to a 4-3/4 year high after a plunge in China Nov industrial profits bolstered speculation that the government will boost steps to spur lending and economic growth. Commodity prices are mixed. Feb crude oil (CLG15 +1.15%) is up +1.32%. Feb gasoline (RBG15 +0.63%) is up +0.99%. Feb gold (GCG15 -0.24%) is down -0.18%. Mar copper (HGH15 +0.05%) is down -0.07% at a 4-1/2 year low after China industrial profits fell the most in 2-1/4 years last month, which fueled speculation that demand from China, the world's largest copper consumer, will weaken. Agriculture prices are mixed. The dollar index (DXY00 -0.08%) is down -0.06%. EUR/USD (^EURUSD) is up +0.07%. USD/JPY (^USDJPY) is up +0.11%. Mar T-note prices (ZNH15 +0.20%) are up +6.5 ticks on carryover support from a rally German bunds to a record high.China Nov industrial profits fell -4.2% y/y, twice as much as the -2.1% y/y decline in Oct and the biggest drop in 2-1/4 years.
ECB Governing Council member Liikanen said the ECB will assess the impact of monetary stimulus, balance sheet growth, and price developments when it meets on Jan 22 and that "we must be ready for new measures if exceptionally low inflation is prolonged and increases risks to price stability and the economy."
U.S. STOCK PREVIEW
There are no U.S. economic reports today. None of the Russell 3000 companies report earnings today. There are no equity conferences this week.
OVERNIGHT U.S. STOCK MOVERS
Endologix (ELGX +0.20%) and Towers Watson (TW -0.47%) were identified as top picks at Piper Jaffray for 2015.MarkWest Energy (MWE +0.33%) was upgraded to 'Overweight' from 'Equal Weight' at Stephens.
Manitowoc (MTW +4.29%) jumped over 10% in pre-market trading after activist investor Carl Icahn reported a 7.7% stake in the company.
Macquarie reiterates its 'Outperform' rating on Live Nation (LYV -0.34%) and raises its price target on the stock to $30 from $28.
Gilead ({=GILD =})was upgraded to 'Overweight' from 'Equal Weight' at Morgan Stanley who raised their price target on the stock to $104 from $100.
RF Micro Devices (RFMD +0.84%) and MacLinear (MXL +0.55%) were both downgraded to 'Hold' from 'Buy' at Needham.
China Mobile selects Ericsson (ERIC +0.24%) as the sole supplier for its LTE FDD/TDD network.
A weekend article in Barron's said that CarMax (KMX unch) looks to have become a momentum stock and investors should consider buying General Motors (GM +0.90%) or Ford (F +0.98%) instead.
MARKET COMMENTS
Mar E-mini S&Ps (ESH15 -0.18%) this morning are down -3.00 points (-0.14%). The S&P 500 index on Friday posted a fresh record high and closed higher: S&P 500 +0.33%, Dow Jones +0.13%, Nasdaq +0.72%. Bullish factors included (1) carry-over support from a rally in Chinese stocks on speculation the Chinese government will expand measures to spur economic growth, and (2) strength in retailer stocks after the International Council of Shopping Centers reported that early retail estimates showed the best holiday sales in 3 years.Mar 10-year T-notes (ZNH15 +0.20%) this morning are up +6.5 ticks. Mar 10-year T-note futures prices on Friday closed slightly higher: TYH5 +2, FVH5 +0.75. T-notes found carry-over support from a rally in Japan JGBs to a record high on speculation the BOJ may be forced to expand stimulus since Japan Nov CPI was weaker than expected. Limiting gains in T-notes was the rally in the S&P 500 to a new record high, which cut safe-haven demand.
The dollar index (DXY00 -0.08%) this morning is down -0.053 (-0.06%). EUR/USD (^EURUSD) is up +0.0008 (+0.07%). USD/JPY (^USDJPY) is up +0.13 (+0.11%). The dollar index on Friday closed higher. Closes: Dollar index +0.160 (+0.18%), EUR/USD -0.00404 (-0.33%), USD/JPY +0.275 (+0.23%). Bullish factors included (1) strength in USD/JPY which rose on speculation the BOJ may expand stimulus after Japan Nov CPI rose at its slowest pace in 8 months and after Nov industrial production unexpectedly declined, and (2) weakness in EUR/USD on expectations for the ECB to start QE next year while the Fed begins to raise interest rates.
Feb WTI crude oil (CLG15 +1.15%) this morning is up +72 cents (+1.32%) and Feb gasoline (RBG15 +0.63%) is up +0.0151 (+0.99%). Feb crude and Feb gasoline prices on Friday closed lower with Feb gasoline at a contract low. Closes: CLG5 -0.70 (-1.25%), RBG5 -0.0040 (-0.26%). Bearish factors included (1) a stronger dollar, and (2) a -17.7% y/y decline in Japan Nov oil imports. Losses were limited after fighting intensified between Libyan troops and Islamist militants at the Es Sider oil terminal, Libya’s largest petroleum port.
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