Barchart Morning Call 7/2

BARCHART MORNING CALL 

Tuesday, July 2nd, 2013View Older Reports

Everything you need to know about the markets in one free daily newsletter.

E-mail:

You will also receive a free subscription to the Barchart family of newsletters.

OVERNIGHT MARKETS AND NEWS

September E-mini S&Ps (ESU13 +0.25%) this morning are up +0.25% and European stocks are down -0.65%. Asian stocks closed mostly higher: Japan +1.78%, Hong Kong -0.70%, China +0.39%, Taiwan -0.25%, Australia +2.63%, Singapore +1.03%, South Korea -0.10%, India -0.58%. China's overnight money-market rate dropped -71 bp to a 1-month low of 3.71% on speculation the PBOC is using targeted fund injections to ease a record cash squeeze. Commodity prices are mostly higher. Aug WTI crude oil (CLQ13 +0.35%) is up +0.08%. Aug gasoline (RBQ13 +0.84%) is up +0.56%, Aug natural gas (NGQ13 +1.34%) is up +0.81%, Aug gold (GCQ13 +0.12%) is up +0.24% and September copper (HGU13 -0.06%) is down -0.51%. Agriculture prices are higher. The dollar index (DXY00 +0.23%) is up +0.17%. EUR/USD ^EURUSD) is down -0.26% after Eurozone Jun producer prices unexpectedly posted an annual decline, which bolsters speculation the ECB will keep monetary policy accommodative when it meets Thursday. USD/JPY (^USDJPY) is up +0.09% at a 3-1/2 week high. September 10-year T-note futures prices (ZNU13 +0.11%) this morning are up +7 ticks.
Eurozone Jun PPI fell -0.3% m/m, the third consecutive monthly decline and a bigger drop than expectations of -0.2% m/m, while prices unexpectedly fell -0.1% y/y, weaker than expectations of unch y/y.
UK Jun PMI construction climbed +0.2 to a 13-month high 51.0, weaker than expectations of +0.4 to 51.2.
Australia's S&P 200 gained over 2% and the Australian dollar fell to a nearly 3-year low of 91.72 U.S. cents after the RBA as expected kept its overnight cash-rate at a record low of 2.75% and after RBA Governor Stevens said the Aussie dollar "remains at a high level" and may "depreciate further over time, which would help to foster a rebalancing of growth."

U.S. STOCK PREVIEW

Today’s May factory orders report is expected to show an increase of +2.0%, adding to the +1.0% increase seen in April.  Today’s June total vehicle sales report is expected to improve to 15.50 million units from 15.24 million in May.  Constellation Brands is the only company in the Russell 1000 that reports earnings today (consensus $0.40).  There are no major equity conferences this week.

OVERNIGHT U.S. STOCK MOVERS

Newmont Mining (NEM +0.77%) was downgraded to "Underperform" from "Hold" at Jefferies.
DaVita (DVA +0.29%) was downgraded to "Market Perform" from "Outperform" at Raymond James.
JPMorgan (JPM -0.57%) was upgraded to "Strong Buy" from "Outperform" at Raymond James.
CME Group (CME +0.74%) was downgraded to "Market Perform" from "Outperform" at Raymond James.
Las Vegas Sands (LVS +0.08%) was upgraded to "Buy "from "Neutral" at ISI Group.
DigiTimes reported that Samsung (SSNLF +8.57%) will launch a mini version of its Galaxy S4 in Q3.
Transocean (RIG +0.60%) was downgraded to "Neutral" from "Buy" at Citigroup.
Rowan Companies (RDC +1.03%) was upgraded to "Buy" from "Neutral" at Citigroup who raised its price target on the stock to $42 from $36.
Achillion (ACHN +2.20%) plunged nearly 20% in after-hours trading after the FDA placed a clinical hold on development of Achillion's drug sovaprevir after elevations in liver enzymes were noted in a Phase 1 healthy subject drug interaction study.
Lockheed Martin (LMT -0.37%) was awarded a $295 million government contract modification to provide system engineering and program management services to continue development of the Aegis Ballistic Missile Defense System.
Nielsen Holdings (NLSN -0.92%) will replace Sprint Nextel (S +0.71%) in the S&P 500 after the close of trading on July 8.
A. Schulman (SHLM +3.77%) reported Q3 adjusted EPS of 50 cents, well below consensus of 65 cents.

MARKET COMMENTS

September E-mini S&Ps (ESU13 +0.25%) this morning are up +4.00 points (+0.25%). The S&P 500 index on Monday climbed to a 1-week high and settled higher. Bullish factors included (1) carry-over support from a rally global stocks after the Japan Q2 Tankan large business conditions rose to 4, its highest level in 2-1/4 years, and after the Eurozone Jun PMI manufacturing index was revised up to a 16-month high of 48.8, and (2) the +1.9 point increase in the Jun ISM manufacturing index, stronger than expectations of +1.5 to 50.5. Prices fell back from their best levels on concerns over Friday's U.S. non-farm payrolls report after the employment sub-index of the Jun ISM manufacturing index fell -1.4 to 48.7, its lowest level in 3-3/4 years. Closes: S&P 500 +0.54%, Dow Jones +0.44%, Nasdaq 100 +0.61%.
September 10-year T-notes (ZNU13 +0.11%) this morning are up +7 ticks. Sep 10-year T-note futures prices on Monday closed little changed. T-notes fell on reduced safe-haven demand as global stocks rallied, but prices came off of their worst levels after the employment sub-index of the Jun ISM manufacturing index fell to its lowest level in 3-3/4 years. Closes: TYU3 -1.00, FVU3 -1.25.

The dollar index (DXY00 +0.23%) this morning is up +0.140 (+0.17%). EUR/USD (^EURUSD) is down -0.0034 (-0.26%) and USD/JPY (^USDJPY) is up +0.09 (+0.09%) at a fresh 3-1/2 week high. The dollar index on Monday closed lower after stronger stocks reduced the safe-haven demand for the dollar. EUR/USD gained after the Eurozone Jun PMI manufacturing index was revised up to a 16-month high, while USD/JPY climbed to a 3-week high as the yen weakened on reduced safe-haven demand after the Japan Q2 Tankan business conditions large manufacturing index rose to its best level in 2-1/4 years. Closes: Dollar index -0.082 (-0.10%), EUR/USD +0.00541 (+0.42%), USD/JPY +0.507 (+0.51%).
Aug WTI crude oil (CLQ13 +0.35%) this morning is up +8 cents (+0.08%) and Aug gasoline (RBQ13 +0.84%) is up +1.52 cents (+0.56%). Aug crude oil and gasoline prices on Monday rallied to 1-week highs and closed higher. Bullish factors included (1) signs of stronger global economic growth after the Jun ISM rose more than expected and the Eurozone Jun PMI manufacturing index was revised higher, and (2) heightened Middle East tensions that may threaten the world supply of crude with the ongoing civil unrests in Syria and Egypt. Closes: CLQ3 +1.32 (+1.37%), RBQ3 +0.0295 (+1.09%).

GLOBAL EVENT CALENDAR07/02/2013

US	1000 ET	May factory orders expected +2.0%, Apr +1.0%.
	1230 ET	New York Fed President William Dudley speaks on regional and national economic conditions to members of the Business Council of Fairfield County in Stanford, CT.
	1630 ET	API weekly U.S. oil statistics.
	1700 ET	Jun total vehicle sales expected 15.50 million, May 15.24 million. Jun domestic vehicle sales expected 12.05 million, May 11.95 million.
UK	0430 ET	UK Jun PMI construction expected +0.4 to 51.2, May 50.8.
EUR	0500 ET	Eurozone My PPI expected -0.2% m/m and unch y/y, Apr -0.6% m/m and -0.2% y/y.
CHI	2100 ET	China Jun non-manufacturing PMI, May 54.3.

U.S. STOCK CALENDAR07/02/2013

Company Name	Symbol	Time	Event Description	Period	EPS Est (US$)
Constellation Brands Inc	STZ US	7/2/2013	Q1 2014 Earnings Release	Q1 2014	0.397
Ford Motor Co	F US	7/2/2013	June 2013 Sales and Revenue Release	2013
Ford Motor Co	F US	7/2/2013	June 2013 Sales and Revenue Call	2013
Constellation Brands Inc	STZ US	7/2/2013	Q1 2014 Earnings Call	Q1 2014
General Motors Co	GM US	7/2/2013	June 2013 Sales and Revenue Call	2013
General Motors Co	GM US	7/2/2013	June 2013 Sales and Revenue Release	2013