Monday, July 31, 2017


Barchart Morning Call

Sep E-mini S&Ps (ESU17 +0.12%) this morning are up +0.06% and European stocks are up +0.18% as raw-material producing stocks gain on optimism the global economy is gathering momentum. Sep COMEX copper (HGU17 +0.82%) is up +0.78% at a new 2-year high and is giving mining stocks a boost after China Jul manufacturing PMI expanded and after Japan Jun industrial production rose more than expected. Another supportive factor was the decline in Eurozone Jun unemployment to an 8-1/3 year low of 9.1%. Gains in European stocks were limited on concern the ECB may be closer to tapering QE after Eurozone Jul core CPI rose a more than expected +1.2% y/y pace and matched the largest increase in 4-years. Asian stocks settled mixed: Japan -0.17%, Hong Kong +1.28%, China +0.61%, Taiwan +0.04%, Australia +0.31%, Singapore -0.04%, South Korea +0.15%, India +0.63%. China's Shanghai Composite rallied to a 3-1/2 month high and the yuan accelerated to a 9-1/2 month high against the dollar after data showed Chinese manufacturing activity expanded for a 12th consecutive month. Japan's Nikkei Stock Index fell to a 3-week low as exporter stocks sold-off on reduced earnings prospects as USD/JPY slid to a 1-1/2 month low.
The dollar index (DXY00 +0.23%) is up +0.22%. EUR/USD (^EURUSD) is down -0.16%. USD/JPY (^USDJPY) is down -0.10% at a 1-1/2 month low.
Sep 10-year T-note prices (ZNU17 -0.02%) are little changed, down -0.5 of a tick.
The Eurozone Jul CPI estimate rose +1.3% y/y, right on expectations. The Jul core CPI rose +1.2% y/y, stronger than expectations of +1.1% y/y and matched April's gain as the fastest pace of increase in 4 years.
The Eurozone Jun unemployment rate fell -0.1 to 9.1%, stronger than expectations of -0.1 to 9.2% and the lowest in 8-1/3 years.
The China Jul manufacturing PMI fell -0.3 to 51.4, weaker than expectations of -0.2 to 51.5.
Japan Jun industrial production rose +1.6% m/m, stronger than expectations of +1.5% m/m.
Key U.S. news today includes: (1) Jul Chicago PMI (expected -5.7 to 60.0 Jun +6.3 to 65.7), (2) Jun pending home sales (expected +1.0% m/m, May -0.8% m/m and +0.5% y/y), (3) Jul Dallas Fed manufacturing activity (expected -2.0 to 13.0, Jun -2.2 to 15.0), (4) USDA weekly grain export inspections, (5) USDA crop conditions and planting progress.
Notable S&P 500 earnings reports today include: Loews (consensus $0.76), Affiliated Managers Group (3.24), Roper Technologies (2.22), Alexandria Real Estate Equities (1.49), Vornado Realty Trust (1.25).
U.S. IPO's scheduled to price today: none.
Equity conferences this week: Keefe, Bruyette, & Woods Community Bank Investor Conference on Tue, Wells Fargo Boston Biotech Corporate Access Day on Tue, UBS Transport Conference on Thu.

Oppenheimer raised its 2017 year-end target for the S&P 500 to 2,650 from a prior forecast of 2,450.
Wells Fargo (WFC -2.58%) was upgraded to 'Market Perform' from 'Underperform' at BMO Capital Markets.
American Airlines Group (AAL +0.98%) was upgraded to 'Outperform' from 'Market Perform' at Cowen with a price target of $57.
Citigroup (C -0.25%) was downgraded to 'Market Perform' from 'Outperform' at BMO Capital Markets.
Hilton Worldwide Holdings (HLT -0.16%) was upgraded to 'Hold' from 'Sell' at Berenberg.
Virtus Investment Partners (VRTS -2.41%) was upgraded to 'Outperform' from 'Neutral' at Credit Suisse with a price target of $147.
Facebook (FB +1.18%) was downgraded to 'Sell' from 'Hold' at Pivotal.
Celgene (CELG -0.04%) was upgraded to 'Buy' from 'Hold' at Argus Research with a price target of $160.
Hertz Global Holdings (HTZ -0.17%) was downgraded to 'Underweight' from 'Equalweight' at Barclays.
ANI Pharma (ANIP +0.89%) was initiated a new 'Buy' at Canaccord Genuity with a price target of $60.
Tesla (TSLA +0.18%) on Friday night delivered its first mass-market Model 3 electric vehicles with a price tag of $44,000 and a higher-than-expected 310-mile range.
Kearny Financial (KRNY -0.34%) reported in-line EPS of 5 cents.
Ironwood Pharma (IRWD +5.71%) rallied 6% on a positive research note by Wells Fargo.
Sep S&P 500 E-mini stock futures (ESU17 +0.12%) this morning are trading up +1.50 points (+0.06%). Friday's closes: S&P 500 -0.13%, Dow Jones +0.15%, Nasdaq -0.12%. The S&P 500 on Friday closed slightly lower on weakness in tech stocks that were undercut by a sharp -2.48% sell-off in on disappointing late-Thursday earnings news. Stocks were also undercut by the failure of Senate Republicans on Thursday night to approve a bill to advance an Obamacare repeal, which had some negative implications for tax reform, and by geopolitical uncertainty after news of a North Korean ICBM missile launch. The U.S. Q2 GDP report of +2.6% was slightly weaker than market expectations of +2.7% and was also slightly bearish for stocks. Stocks found support on a mildly higher close in T-notes and on strength in energy stocks on the +1.37% rally in Sep crude oil.
Sep 10-year T-note prices (ZNU17 -0.02%) this morning are little changed, down -0.5 of a tick. Friday's closes: TYU7 +4, FVU7 +1.75. Sep 10-year T-notes on Friday closed mildly higher on the slightly weaker-than-expected Q2 GDP report of +2.6% and on the slightly weaker-than-expected Q2 ECI report of +0.5%, which was dovish for inflation. T-notes also received a boost from some safe-haven buying after news that North Korea fired another ICBM missile.
The dollar index (DXY00 +0.23%) this morning is up +0.204 (+0.22%) while EUR/USD (^EURUSD) is down -0.0019 (-0.16%) and USD/JPY (^USDJPY) is down -0.11 (-0.10%) at a 1-1/2 month low. Friday's closes: Dollar Index -0.605 (-0.64%), EUR/USD +0.0074 (+0.63%), USD/JPY -0.58 (-0.52%). The dollar index on Friday remained above Thursday's 13-month low but closed the day with a fairly sharp loss. The dollar index was undercut by Washington political uncertainty after Senate Republicans on Thursday night were unable to advance a health care bill and by the slighter weaker-than-expected U.S. Q2 GDP and ECI reports, which were slightly dovish for Fed policy. There was also strength in EUR/USD due to strong European data reported on Friday. The Canadian dollar rallied sharply against the U.S. dollar on Friday due to the +1.37% rally in crude oil prices and the stronger-than-expected Canadian May GDP report of +4.6% y/y.
Sep crude oil this morning (CLU17 -0.02%) is down -21 cents (-0.42%). Sep gasoline (RBU17 +0.95%) is up +0.0121 (+0.74%). Friday's closes: Sep WTI crude +0.67 (+1.37%), Sep gasoline +0.0261 (+1.61%). Sep crude oil and gasoline on Friday closed higher on technical buying with Friday's new 2-month high. There was also carry-over support from the week's bullish news that included strong Chinese crude oil imports, Saudi Arabia's intent to cut exports in August, and Wednesday's weekly EIA report showing a -7.2 mln bbl plunge in U.S. crude oil inventories and a -0.2% w/w decline in U.S. weekly oil production.
Monday, July 31
US0945 ETJul Chicago PMI expected -5.7 to 60.0 Jun +6.3 to 65.7.
1000 ETJun pending home sales expected +1.0% m/m, May -0.8% m/m and +0.5% y/y.
1030 ETJul Dallas Fed manufacturing activity expected -2.0 to 13.0, Jun -2.2 to 15.0.
1100 ETUSDA weekly grain export inspections.
1600 ETUSDA crop conditions and planting progress.
Tuesday, Aug 1
US0830 ETJun personal spending expected +0.1%, May +0.1%. Jun personal income expected +0.4%, May +0.4%.
0830 ETJun PCE deflator expected unch m/m and +1.3% y/y, May -0.1% m/m and +1.4% y/y. Jun core PCE deflator expected +0.1% m/m and +1.4% y/y, May +0.1% m/m and +1/4% y/y.
0945 ETRevised Jul Markit U.S. manufacturing index expected -0.1 to 53.1, prelim-July +1.2 to 53.2.
1000 ETJul ISM manufacturing index expected -1.4 to 56.4, Jun +2.9 to 57.8. Jul ISM new orders, Jun +4.0 to 3.5. Jul ISM employment, Jun +3.7 to 57.2. Jul ISM prices paid expected +1.5 to 56.5, Jun -5.5 to 55.0.
1000 ETJun construction spending expected +0.5% m/m, May unch m/m.
n/aJul total vehicle sales expected 16.80 million, Jun 16.41 million. Jul domestic vehicle sales expected 13.00 million, Jun 12.79 million.
CompanyTickerTimeEvent DescriptionPeriodEstimate
Loews CorpL USBef-mktQ2 2017 Earnings ReleaseQ2 170.763
Affiliated Managers Group IncAMG USBef-mktQ2 2017 Earnings ReleaseQ2 173.241
Roper Technologies IncROP USBef-mktQ2 2017 Earnings ReleaseQ2 172.218
Affiliated Managers Group IncAMG US08:30Q2 2017 Earnings CallQ2 17
Roper Technologies IncROP US08:30Q2 2017 Earnings CallQ2 17
Loews CorpL US11:00Q2 2017 Earnings CallQ2 17
Alexandria Real Estate Equities IncARE USAft-mktQ2 2017 Earnings ReleaseQ2 171.49
Vornado Realty TrustVNO USAft-mktQ2 2017 Earnings ReleaseQ2 171.254

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