Barchart Morning Call
Barchart.com - Fri Dec 8, 6:43AM CST
OVERNIGHT MARKETS AND NEWS
Mar E-mini S&Ps (ESH18 +0.12%) this morning are up +0.16% as the U.S. government averted a shutdown after the House and Senate late Thursday both approved a continuing resolution (CR) lasting through Dec 22. That vote averted the possibility of a U.S. government shutdown tonight at midnight when the current CR expires. Stocks are also higher on optimism for a healthy U.S. Nov employment report this morning. European stocks are up +0.83% at a 1-week high, led by a rally in bank stocks, after the Basel Committee on Banking Supervision issued new rules on how banks estimate the risk of mortgages, loans and other assets. The new rules will cause no significant increase to banks' overall capital requirements and in some big banks, their capital demands will decline. Asian stocks settled higher: Japan +1.39%, Hong Kong +1.19%, China +0.55%, Taiwan +0.41%, Australia +0.28%, Singapore +1.08%, South Korea +0.34%, India +0.91%. Chinese stocks rallied on strong trade data after China Nov exports and imports both increased more than expected. Japanese stocks climbed on signs of stronger economic growth after Japan Q3 GDP was revised higher. Also, Japanese exporters rose after the yen fell to a 3-week low against the dollar, which boosts the earnings prospects of exporters.
The dollar index (DXY00 +0.20%) is up +0.23% at a 2-week high. EUR/USD (^EURUSD) is down -0.31% at a 2-week low. USD/JPY (^USDJPY) is up +0.39% at a 3-week high.
The dollar index (DXY00 +0.20%) is up +0.23% at a 2-week high. EUR/USD (^EURUSD) is down -0.31% at a 2-week low. USD/JPY (^USDJPY) is up +0.39% at a 3-week high.
The German Oct trade balance was in surplus by +18.9 billion euros. narrower than expectations of +21.9 billion euros and the smallest surplus in 6-months. Oct exports unexpectedly fell -0.4% m/m, weaker than expectations of +1.0% m/m. Oct imports rose +1.8% m/m, stronger than expectations of +1.0% m/m.
The China Nov trade balance was in surplus by +$40.21 billion, wider than expectations of +$35.00 billion. Nov exports rose +12.3% y/y, stronger than expectations of +5.3% y/y and the biggest increase in 8-months. Nov imports rose +17.7% y/y, stronger than expectations of +13.0% y/y.
Japan Q3 GDP was revise upward to +2.5% (q/q annualized), stronger than expectations of +1.5% (q/q annualized), as Q3 business spending was revised upward to +1.1% q/q, stronger than expectations of +0.4% q/q.
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) Nov non-farm payrolls (expected +198,000, Oct +261,000) and Nov unemployment rate (expected unch at 4.1%, Oct -0.1 to 4.1%), (2) Nov avg hourly earnings (expected +0.3% m/m and +2.7% y/y, Oct unch m/m and +2.4% y/y), (3) Oct wholesale trade sales (expected +0.3%, Sep +1.3% m/m), and (4) preliminary-Dec University of Michigan U.S. consumer sentiment index (expected +0.5 to 99.0, Nov -2.2 to 98.5).
Notable Russell 1000 earnings reports today include: none.
U.S. IPO's scheduled to price today: none.
Equity conferences this week: none.
OVERNIGHT U.S. STOCK MOVERS
Trivago (TRVG +0.76%) jumped nearly 8% in pre-market trading after it was upgraded to 'Buy' from 'Hold' at Deutsche Bank who said the "worst is likely behind the company."
Ingersoll-Rand (IR +0.05%) was upgraded to 'Buy' from 'Neutral' at Goldman Sachs.
Science Applications International (SAIC +3.23%) gained nearly 3% in after-hours trading after it reported Q3 revenue of $1.15 billion, better than consensus of $1.11 billion.
United Continental Holdings (UAL +2.15%) rose over 1% in after-hours trading after the company announced a new $3 billion share buyback program.
Flowserve (FLS +2.01%) was downgraded to 'Sell' from 'Neutral' at Goldman Sachs.
Dover (DOV +0.45%) lost 1% in after-hours trading after it said it will spin off its "Wellsite" oilfield services business into a standalone, publicly-traded company.
Sage Therapeutics (SAGE +70.04%) rose 2% in after-hours trading, on top of the 70% the stock surged in Thursday's session, on positive data from a Phase 2 trial of its SAGE-217 that met primary endpoint, provided rapid, profound and durable effects in the treatment of post-partum depression.
United Natural Foods (UNFI +0.24%) fell 1% in after-hours trading after it reported Q1 EPS of 60 cents, right in expectations.
Cloudera (CLDR +1.72%) rose 5% in after-hours trading after it reported Q3 revenue of $94.6 million, above consensus of $91.3 million, and said it sees Q4 revenue of $97 million to $99 million, the mid-point above consensus of $97.3 million.
ForeScout Technologies (FSCT +0.35%) rallied almost 6% in after-hours trading after it reported Q3 revenue of $64.4 million, better than consensus of $64.0 million, and then said it sees Q4 revenue of $61 million-$63 million, higher than consensus of $58.1 million.
American Outdoor Brands (AOBC +4.85%) tumbled 12% in after-hours trading after it said it sees full-year adjusted EPS of 57 cents to 67 cents, well below consensus of $1.09.
Tellurian (TELL +1.35%) dropped over 10% in after-hours trading after it announced that it intends to sell 8.0 million shares of its common stock in an underwritten public offering.
DavidsTea (DTEA +1.23%) gained 2% in after-hours trading after the company said it plans to hire financial advisers "in the near-term" to evaluate strategic alternatives, including a possible sale.
Verastem (VSTEM) jumped over 6% in after-hours trading after Director Tim Barberich reported buying 60,500 shares of VSTEM at $3.95 on Dec 5.
MARKET COMMENTS
Mar S&P 500 E-mini stock futures (ESH18 +0.12%) this morning are up +4.25 points (+0.16%). Thursday's closes: S&P 500 +0.29%, Dow Jones +0.29%, Nasdaq +0.375%. The S&P 500 on Thursday closed higher on carry-over support from a rally in European stocks after Eurozone Q3 GDP was revised upward to +2.6% y/y from +2.5% y/y, the strongest pace of expansion in 6-1/2 years. Stocks also found some support from the unexpected decline in U.S. weekly initial unemployment claims to a 5-week low of 236,000, better than expectations of +2,000 to 240,000.
Mar 10-year T-note prices (ZNH18 -0.04%) this morning are down -2.5 ticks. Thursday's closes: TYH8 +8.00, FVH8 +5.50. Mar 10-year T-notes on Thursday closed higher on carry-over support from a rally in German 10-year bunds to a 5-1/4 month high, and on the +30.1% y/y rise in the U.S. Nov Challenger job cuts, the largest increase in 11 months.
The dollar index (DXY00 +0.20%) this morning is up +0.216 (+0.23%) at a 2-week high. EUR/USD (^EURUSD) is down -0.0037 (-0.31%) at a 2-week low and USD/JPY (^USDJPY) is up +0.44 (+0.39%) at a 3-week high. Thursday's closes: Dollar Index +0.162 (+0.20%), EUR/USD -0.0023 (-0.19%), USD/JPY +0.80 (+0.71%). The dollar index on Thursday climbed to a new 2-week high and settled higher on expectations for a Fed rate hike next week and on weakness in EUR/USD which fell to a 2-week low as the fall in the German 10-year bund yield to a 5-1/4 month low undercut the euro's interest rate differentials.
Jan crude oil (CLF18 +1.57%) this morning is up +73 cents (+1.29%) and Jan gasoline (RBF18 +0.92%) is +0.0106 (+0.62%). Thursday's closes: Jan WTI crude +0.73 (+1.30%), Jan gasoline +0.0391 (+2.35%). Jan crude oil and gasoline on Thursday closed higher on the unexpected decline in U.S. weekly jobless claims to a 5-week low, which shows economic strength that is positive for energy demand, and on the upward revision to Eurozone Q3 GDP to 2.6% y/y, the strongest pace of growth in 6-1/2 years. Crude oil prices were undercut by the rise in the dollar index to a new 2-week high.
Metals prices this morning are mixed with Feb gold (GCG18 -0.27%) -4.5 (-0.36%), Mar silver (SIH18 +0.30%) +0.013 (+0.08%) and Mar copper (HGH18 +0.40%) +0.010 (+0.32%). Thursday's closes: Feb gold -13.0 (-1.03%), Mar silver -0.153(-0.96%), Mar copper +0.0030 (+0.103%). Metals on Thursday settled mixed with Feb gold at a 4-1/2 month low and Mar silver at a 4-3/4 month low. Metals prices were undercut by the rally in the dollar index to a 2-week high and by fund selling of precious metals ahead of an expected Fed interest rate increase next Wednesday. Copper closed higher on signs of stronger global copper demand after Eurozone Q3 GDP was revised upward to +2.6% y/y, the strongest pace of growth in 6-1/2 years.
GLOBAL EVENT CALENDAR12/08/2017
| Friday, Dec 8 | ||
| US | 0830 ET | Nov non-farm payrolls expected +198,000, Oct +261,000. Nov private payrolls expected +200,000, Oct +252,000. Nov manufacturing payrolls expected +15,000, Oct +24,000. Nov unemployment rate expected unch at 4.1%, Oct -0.1 to 4.1%. |
| 0830 ET | Nov avg hourly earnings expected +0.3% m/m and +2.7% y/y, Oct unch m/m and +2.4% y/y. Nov avg weekly hours all-employees expected unch at 34.4 hours, Oct unch at 34.4 hours. | |
| 1000 ET | Oct wholesale trade sales expected +0.3%, Sep +1.3% m/m. Final-Oct wholesale inventories expected +0.1%, prelim -0.4%. | |
| 1000 ET | Preliminary-Dec University of Michigan U.S. consumer sentiment index expected +0.5 to 99.0, Nov -2.2 to 98.5. | |
| Monday, Dec 11 | ||
| US | 1000 ET | Oct JOLTS job openings, Sep +3,000 to 6.093 million. |
| 1100 ET | USDA weekly grain export inspections. | |
| 1130 ET | Treasury auctions $24 billion 3-year T-notes. | |
| 1300 ET | Treasury auctions $20 billion 10-year T-notes. |
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