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OVERNIGHT MARKETS AND NEWS
December E-mini S&Ps (ESZ15 +0.05%) are up +0.02% ahead of speeches today by Fed Chair Yellen and several other FOMC members who are all expected to discuss monetary policy and may provide a clue as to the certainty of an interest rate hike next month. European stocks are down -0.55%, led by a 20% plunge in Rolls-Royce Holdings Plc after the company warned ifs 2016 profit may take a nearly $1 billion hit from lower demand for aircraft engines. Stocks also fell after ECB President Draghi warned that downside economic risks from global growth are "clearly visible." Asian stocks settled mixed: Japan +0.03%, Hong Kong +2.40%, China -0.48%, Taiwan +0.16%, Australia +0.06%, Singapore -0.76%, South Korea -0.29%, India closed for holiday. Japan's Nikkei Stock Index eked out a new 2-1/2 month high as USD/JPY remains near a 2-1/2 month high and the weak yen boosted Japanese exporters as their earnings prospects improve. China's Shanghai Composite closed lower after a gauge of new credit in China rose by the least in 15 months last month.
The dollar index (DXY00 +0.14%) is up +0.16%. EUR/USD (^EURUSD) is down -0.29% on comments from ECB President Draghi that signal the ECB may expand stimulus. USD/JPY (^USDJPY) is up +0.13%.
ECB President Draghi signaled that he may step up stimulus measure when he said that "signs of a sustained turnaround in core inflation have somewhat weakened" and that "downside risks stemming from global growth and trade are clearly visible."
China Oct new yuan loans rose by 513.6 billion yuan, less than expectations of 800 billion yuan and the smallest gain in 15 months. Oct aggregate financing, the broadest measure of new credit, rose by 476.7 billion yuan, less than half expectations of 1.050 trillion yuan and also the smallest increase in 15 months.
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) weekly initial unemployment claims (expected -6,000 to 270,000, previous +6,000 to 276,000) and continuing claims (expected -8,000 to 2.155 million, previous +17,000 to 2.163 million), (2) St. Louis Fed President James Bullard's speech on monetary policy at a conference hosted by the Caito Institute, (3) Fed Chair Janet Yellen's opening remarks at a Fed policy conference on “Monetary Policy Implementation and Transmission in the Post-Crisis Period,” (4) Sep JOLTS job openings (expected +30,000 to 5.400 million, Aug -298,000 to 5.370 million), (5) Chicago Fed President Charles Evans' speech on monetary policy and the economic outlook at the National Communities Council Fall Leadership Forum, (6) New York Fed President William Dudley's speech on the economic outlook and what it means for monetary policy at an Economic Club of New York luncheon, (7) the Treasury's auction of $16 billion of 30-year T-bonds, (8) Oct monthly budget statement (expected -$130.00 billion, Sep +$91.06 billion), and (9) Fed Vice Chair Stanley Fisher's speech on incorporating financial stability into monetary policy at a conference hosted by the Fed Board.
There are 8 of the S&P 500 companies that report earnings today: Cisco (consensus $0.56), Viacom (1.55), Applied Materials (0.29), Helmerich & Payne (0.05), Advance Auto Parts (2.09), Kohl's (0.69), Nordstrom (0.72), Fossil Group (1.19).
U.S. IPO's scheduled to price today: Extended Stay Amercia (STAY), Mesoblast (MBLTY), Instructure Inc (INST), LoanDepot (LDI), American CareSource (GNOW).
Equity conferences during the remainder of this week include: none.
OVERNIGHT U.S. STOCK MOVERS
Kohl's (KSS-5.35%) reported Q3 EPS of 75 cents, higher than consensus of 69 cents.
Advanced Auto Parts (AAP +0.29%) reported Q3 EPDS of $1.95, below consensus of $2.09.
Viacom (VIAB +1.96%) reported Q4 EPS of $1.54, less than consensus of $1.55.
Helmerich & Payne (HP-5.31%) reported Q4 EPS of 4 cents, below consensus of 5 cents.
Flower Foods (FLO-1.19%) dropped over 3% in after-hours trading after it reported Q3 EPS of 23 cents, right on consensus, but then lowered guidance on fiscal 2015 EPS to 96 cents-98 cents from an Aug estimate of 96 cents-$1.01, below consensus of $1.00.
NetEase (NTES +2.01%) climbed 2% in after-hours trading after it reported Q3 net revenue of $1.05 billion, higher than consensus of $883.8 million.
NCR Corp. (NCR +0.26%) rose over 4% in after-hours trading after Dow Jones reported that Blackstone is near a deal to pay $800 million for a 15% stake in the company.
Popeyes Louisiana Kitchen (PLKI-1.56%) jumped over 5% in after-hours trading after it reported Q3 adjusted EPS of 47 cents, better than consensus of 45 cents.
Shell Midstream Partners LP (SHLX-1.73%) slid over 4% in after-hours trading after it announced that it plans a 8 million-unit offering to fund its Pecten deal.
JetBlue Airways (JBLU +0.08%) reported that preliminary passenger revenue per available mile (PRASM) for the month of October fell -2% y/y.
IAC/InterActiveCorp offered to buy Angie's List (ANGI +1.02%) for $8.75 a share, a 10% premium to Wednesday's closing price of $7.92.
Freshpet (FRPT-4.99%) slumped over 15% in after-hours trading after it reported a Q3 EPS loss of -5 cents, wider than consensus of a -3 cent loss, and then lowered its 2015 sales estimate to $115.5 million-$117 million from a previous estimate of $117 million-$119.5 million, below consensus of $118.4 million.
Mast Therapeutics (MSTX unch) vepoloxame drug to treat sickle cell disease may be on the market in the U.S. by 2017 and 2018 in Europe according to Maxim.
Dec E-mini S&Ps (ESZ15 +0.05%) this morning are up +0.50 of a point (+0.02%). Wednesday's closes: S&P 500 -0.32%, Dow Jones -0.32%, Nasdaq-0.10%. The S&P on Wednesday closed lower on weakness in retailers led by a 14% plunge in Macy's after it cut its profit forecast for this year. In addition, energy and commodity producers showed weakness after crude oil dropped to a 2-week low and copper sank to a 6-1/3 year low. Stocks found underlying support from reduced concern about China's economy after China Oct retail sales rose +11.0% y/y, stronger than expectations of +10.9% y/y and the fastest pace of increase since Dec 2014. Stocks also found support from increased M&A activity after Anheuser-Busch InBev NV submitted a formal offer to buy SABMiller Plc for $107 billion.
Dec 10-year T-notes (ZNZ15 +0.06%) this morning are up +3 ticks. Wednesday's closes: TYZ5 -7.50, FVZ5 -4.25. Dec T-notes on Wednesday closed lower on hawkish comments from San Francisco Fed President Williams who said there's a "very strong case" for the Fed to raise interest rates if the economy continues to improve. T-notes also saw supply pressures before the Treasury auctions $16 billion of 30-year T-bonds on Thursday.
The dollar index (DXY00 +0.14%) this morning is up +0.157 (+0.16%). EUR/USD (^EURUSD) is down -0.0031 (-0.29%). USD/JPY (^USDJPY) is up +0.16 (+0.13%). Wednesday's closes: Dollar Index -0.280 (-0.28%), EUR/USD +0.0019 (+0.18%), USD/JPY -0.29 (-0.24%). The dollar index on Wednesday closed lower on strength in EUR/USD after ECB Executive Board member Coeure said the ECB is not committed to further easing at its December meeting and will decide based on economic data. In addition, ECB Governing Council member Hansson dampened speculation that the ECB might cut the deposit rate when it meets in December when he said there's no need for the ECB to cut policy rates at the moment.
Dec crude oil (CLZ15-0.54%) this morning is down -7 cents (-0.16%) and Dec gasoline (RBZ15-0.35%) is up +0.0017 (+0.13%). Wednesday's closes: CLZ5 -1.28 (-2.90%), RBZ5 -0.0296 (-2.17%). Dec crude oil and gasoline prices on Wednesday closed lower with Dec cruse at a 2-week low and Dec gasoline at a 1-1/2 week low. Crude oil prices were undercut by Tuesday's late API data showing that U.S. crude supplies rose 6.3 million bbl last week. Crude oil prices were also hurt by comments from two unnamed OPEC delegates who said the cartel may consider raising its production target by +1.0 million bpd at the Dec 4 OPEC meeting to accommodate production from new OPEC member Indonesia.
GLOBAL EVENT CALENDAR11/12/2015
Weekly initial unemployment claims expected -6,000 to 270,000, previous +6,000 to 276,000. Weekly continuing claims expected-8,000 to 2.155 million, previous +17,000 to 2.163 million.
St. Louis Fed President James Bullard speaks on monetary policy at a conference hosted by the Caito Institute.
Fed Chair Janet Yellen delivers opening remarks at a Fed policy conference on Monetary Policy Implementation and Transmission in the Post-Crisis Period.
Sep JOLTS job openings expected +30,000 to 5.400 million, Aug -298,000 to 5.370 million.
Chicago Fed President Charles Evans speaks on monetary policy and the economic outlook at the National Communities Council Fall Leadership Forum.
EIA Weekly Petroleum Status Report.
Treasury announces amount of 10-year TIPS to be auctioned on Nov 19.
New York Fed President William Dudley speaks on the economic outlook and what it means for monetary policy at an Economic Club of New York luncheon.
Treasury auctions $16 billion 30-year T-bonds.
Oct monthly budget statement expected -$131.50 billion, Sep +$91.06 billion.
Fed Vice Chair Stanley Fisher delivers a speech on incorporating financial stability into monetary policy at a conference hosted by the Fed Board.
Revised German Oct CPI (EU harmonized), previous unch m/m and +0.2% y/y.
Eurozone Sep industrial production expected -0.1% m/m and +1.3% y/y, Aug -0.5% m/m and +0.9% y/y.
Revised Japan Sep industrial production, previous +1.0% m/m and -0.9% y/y. Sep capacity utilization, Aug 0.9% m/m.
Japan Sep tertiary industry index expected +0.1% m/m, Aug +0.1% m/m.