Friday, August 21, 2015

BARCHART MORNING CALL 8/21

OVERNIGHT MARKETS AND NEWS
September E-mini S&Ps (ESU15 -0.23%) are down -0.19% at a 6-1/2 month low and European stocks are down -1.26% at a 6-week low after weaker-than-expected Chinese manufacturing data added to concern that the global economic slowdown is deepening. U.S. and European stocks recovered a majority of their losses after Eurozone manufacturing data showed the European economy picked up momentum after the German Aug Markit/BME manufacturing PMI unexpectedly expanded at its fastest pace in 16 months. Asian stocks closed sharply lower: Japan -2.98%, Hong Kong -1.53%, China -4.27%, Taiwan -3.02%, Australia -1.40%, Singapore -1.29%, South Korea -1.92%, India -0.88%. China's Shanghai Composite and Japan's Nikkei Stock Index fell to 6-week lows after a measure of China's manufacturing activity contracted at the fastest pace in 6-1/3 years. Emerging market currencies also sold off against the dollar as the South African rand fell to a nearly 14-year low, India's rupee declined to a nearly 2-year low and the Malaysian ringgit slumped to a 17-year low.
The dollar index (DXY00 -0.58%) is down -0.66% at a 1-1/2 month low on speculation the turmoil in global financial markets will keep the Fed from raising interest rates. EUR/USD (^EURUSD) is up +0.43% at a 1-3/4 month high after European manufacturing activity expanded at a faster pace than expected. USD/JPY (^USDJPY) is down -0.71% at a 1-1/4 month low as the slump in global stocks boosts the safe-haven demand for the yen.

Sep T-note prices (ZNU15 +0.13%) are up +4 ticks at a 1-week high.
The China Aug Caixin manufacturing PMI unexpectedly fell -0.7 to 47.1, weaker than expectations of +0.4 to 48.2 and the slowest pace of growth in 6-1/3 years.
The German Aug Markit/BME manufacturing PMI unexpectedly rose +1.4 to 53.2, stronger than expectations of -0.2 to 51.6 and the fastest pace of growth in 16 months. The Aug Markit services PMI fell -0.2 to 53.6, weaker than expectations of -0.1 to 53.7.
The Eurozone Aug Markit manufacturing PMI was unch at 52.4, better than expectations of -0.2 to 52.2. The Aug Markit composite PMI unexpectedly rose +0.2 to 54.1, stronger than expectations of -0.2 to 53.7.
U.S. STOCK PREVIEW
Key U.S. news today includes: No economic reports or Fed speakers scheduled for today.
There are 3 of the S&P 500 and Russell 2000 companies that reports earnings today: Deere & Co. (consensus $1.44), Hibbett Sports (0.27), ANN Inc. (0.69).
U.S. IPO's scheduled to price today include: None.
Equity conferences during the remainder of this week include: None.
OVERNIGHT U.S. STOCK MOVERS
Lufthansa (DLAKY -0.39%) was downgraded to 'Sell' from 'Neutral' at Goldman Sachs.
Foot Locker (FL -3.16%) reported Q2 EPS of 84 cents, well above consensus of 69 cents.
Deere & Co. (DE -1.45%) reported Q3 EPS of $1.53, better than consensus of $1.44.
Adidas (ADDDY) was upgraded to 'Neutral' from 'Sell' at Goldman Sachs.
Biogen reported a 8.1% passive stake in Applied Genetic (AGTC -3.42%) .
The Fresh Market (TFM -2.42%) slumped over 10% in after-hours trading after it reported Q2 adjusted EPS of 36 cents, weaker than consensus of 40 cents, and then lowered guidance on fiscal 2015 adjusted EPS view to $1.55-$1.65 from $1.85-$1.93, below consensus of $1.85.
Ross Stores (ROST -0.81%) dropped over 8% in after-hours trading after it reported Q2 EPS of 63 cents, above consensus of 62 cents, but then lowered guidance on fiscal 2015 EPS to $2.40-$2.45, at the lower end of consensus of $2.45.
Hewlett-Packard (HPQ -1.41%) reported Q3 EPS of 88 cents, better than consensus of 85 cents.
Salesforce.com (CRM -5.86%) rose over 3% in after-hours trading after it reported Q2 adjusted EPS of 19 cents, higher than consensus of 18 cents.
Brocade (BRCD -3.19%) jumped 7% in after-hours trading after it reported Q3 adjusted EPS of 27 cents, better than consensus of 22 cents, and then Summit Reasearch upgraded the stock to 'Buy' from 'Hold.'
Intuit (INTU -3.14%) slid 4% in after-hours trading after it reported a Q4 adjusted EPS loss of -5 cents, a smaller loss than consensus of -12 cents, but then lowered guidance on fiscal 2016 adjusted EPS to $3.40-$3.45, below consensus of $3.82.
Gap (GPS -1.29%) reported Q2 EPS ex-items of 64 cents, right on consensus.
MARKET COMMENTS
Sep E-mini S&Ps (ESU15 -0.23%) this morning are down -3.75 points (-0.19%) at a fresh 6-1/2 month low. Thursday's closes: S&P 500 -2.11%, Dow Jones -2.06%, Nasdaq -2.79%. The S&P 500 Thursday plunged to a 6-1/2 month low on concern that global growth will slow as emerging-market stocks plummeted after Kazakhstan stopped supporting its currency. Another negative was the unexpected -0.2% decline in U.S. Jul leading indicators, weaker than expectations of +0.2%. Losses in stocks accelerated after the S&P took out its July low, which spurred technical selling. On the positive side, U.S. Jul existing home sales unexpectedly rose +2.0% to an 8-1/3 year high of 5.59 and the Aug Philadelphia Fed business outlook survey rose +2.6 to 8.3, stronger than expectations of +0.8 to 6.5.
Sep 10-year T-notes (ZNU15 +0.13%) this morning are up +4 ticks at a 1-week high. Thursday's closes: TYU5 +7.50, FVU5 +1.00. Sep T-notes Thursday rose to a 1-week high and closed higher after global equity markets plunged, which fueled safe-haven buying of T-notes, and after the 10-year T-note breakeven inflation rate dropped to a 7-month low, which may delay a Fed rate hike.
The dollar index (DXY00 -0.58%) this morning is down -0.633 (-0.66%) at a 1-1/2 month low. EUR/USD (^EURUSD) is up +0.0048 (+0.43%) at a 1-3/4 month high. USD/JPY (^USDJPY) is down -0.87 (-0.71%) at a 1-1/4 month low. Thursday's closes: Dollar Index -0.379 (-0.39%), EUR/USD +0.0122 (+1.10%), USD/JPY -0.40 (-0.32%). The dollar index Thursday slid to a 1-1/4 month low as global stocks plunged, which increased safe-haven demand for the yen and sent USD/JPY to a 3-week low. Another negative for the dollar was the drop in the 10-year T-note breakeven inflation rate to a 7-month low, which may keep the Fed from raising interest rates.
Oct crude oil (CLV15 -0.34%) this morning is down -24 cents (-0.58%) and Oct gasoline (RBV15 -1.64%) is down -0.0248 (-1.78%). Thursday's closes: CLV5 +0.05 (+0.12%), RBV5 -0.0251 (-1.77%). Oct crude and gasoline sold off Thursday to contract lows as the slump in global equity markets raised concern that global growth and energy demand will slow. Also, the persistent crude supply glut is negative for oil prices with U.S. crude supplies nearly 100 million bbl above their 5-year seasonal average. Oct crude recovered its losses and closed higher, however, after the dollar index tumbled to a 1-1/4 month low.
GLOBAL EVENT CALENDAR08/21/2015
US0945 ETAug Markit manufacturing PMI expected +0.1 to 53.9, Jul 53.8.
1500 ETUSDA Jul Cold Storage.
1500 ETUSDA Jul Cattle on Feed.
GER0200 ETGerman Sep GfK consumer confidence expected unch at 10.1.
0330 ETGerman Aug Markit/BME manufacturing PMI expected -0.2 to 51.6, Jul 51.8. Aug Markit services PMI expected -0.1 to 53.7, Jul 53.8.
UK0430 ETUK Jul public sector net borrowing expected -2.8 billion pounds, Jun +8.6 billion pounds.
EUR0400 ETEurozone Aug Markit manufacturing PMI expected -0.2 to 52.2, Jul 52.4. Aug Markit composite PMI expected -0.2 to 53.7, Jul 53.9.
1000 ETEurozone Aug consumer confidence expected +0.2 to -6.9, Jul -7.1.
U.S. STOCK CALENDAR08/21/2015
CompanyTickerTimeEvent DescriptionPeriodEstimate
Deere & CoDE USBef-mktQ3 2015 Earnings ReleaseQ3 20151.439
Hibbett Sports IncHIBB USBef-mktQ2 2016 Earnings ReleaseQ2 20160.271
ANN INCANN USQ2 2016 Earnings ReleaseQ2 20160.692

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