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OVERNIGHT MARKETS AND NEWS
September E-mini S&Ps (ESU13 unch) this morning are up +0.07% as the market awaits U.S. data on Q2 GDP and the FOMC policy statement later today. European stocks are up +0.04% and received a boost after German unemployment unexpectedly dropped last month, a sign of economic strength. Asian stocks closed mixed: Japan -1.45%, Hong Kong -0.32%, China +0.17%, Taiwan -0.68%, Australia +0.09%, Singapore -0.72%, South Korea -0.32%, India -0.01%. Chinese stocks eked out a gain after China's ruling Politburo pledged to stabilize growth while pressing on with economic reforms. Commodity prices are mixed. Sep crude oil (CLU13 +0.19%) is up +0.19%. Sep gasoline (RBU13 -1.12%) is down -1.01%, Aug gold (GCQ13 +0.35%) is up +0.60%, and Sep copper (HGU13 +0.94%) is up +0.92%. Agricultural prices are mixed. The dollar index (DXY00 +0.02%) is little change, up +0.03%. EUR/USD (^EURUSD) is down -0.08% and USD/JPY (^USDJPY) is down -0.40% at a 1-month low. September T-note prices (ZNU13 -0.09%) are down -1 tick.The Eurozone July CPI estimate climbed +1.6% y/y, right on expectations, while the July core CPI rose at a +1.1% y/y pace, slower than expectations of +1.2% y/y.
German July unemployment unexpectedly fell -7,000, when expectations were for no change, while the July unemployment rate remained unchanged at 6.8%, right on expectations.
German Jun retail sales unexpectedly fell -1.5% m/m and -2.8% y/y, weaker than expectations of +0.2% m/m and +0.5% y/y, the biggest decline in 6 months.
The Japan July Markit/JMMA manufacturing PMI fell -1.6 from Jun to 50.7, its slowest pace of expansion in 4 months.
Japan Jun labor cash earnings rose +0.1% y/y, weaker than expectations of +0.2% y/y, while May was revised lower to a decline of -0.1% y/y from the originally reported unch y/y.
Japan Jun housing starts rose +15.3% y/y to 976,000, slightly weaker than expectations of +16.0% y/y to 982,000.
The Xinhua News Agency reported that China's Politburo said it will maintain steady second-half expansion amid "extremely complicated domestic and international conditions" and that China will keep a prudent monetary policy and a proactive fiscal stance.
U.S. STOCK PREVIEW
Today’s July ADP employment report is expected to show an increase of +180,000, which would be mildly below the +188,000 increase seen in June. Today’s Q2 GDP report is expected to decelerate to +1.0% (q/q annualized) from +1.8% in Q1. Today’s July Chicago purchasing managers index is expected to show a +2.4 point increase to 54.0, recovering somewhat after the -7.1 point plunge to 51.6 seen in July. The FOMC today concludes its 2-day policy meeting. The last conference of the week is today's Keefe, Bruyette & Woods Community Bank Investor Conference.There are 33 of the S&P 500 companies that report earnings today. Notable reports today include PG&E (consensus $0.73), Exelon (0.54), Humana (2.47), Comcast (0.63), Hess (1.40), Southern Company (0.68), Mastercard (6.29), Phillips 66 (1.81), Williams Companies (0.14), Allstate (0.98), CBS (0.72), Marriott (0.57), Murphy Oil Company (1.54), Whole Foods (0.37), Lincoln National (1.15), MetLife (1.33).
OVERNIGHT U.S. STOCK MOVERS
American Tower (AMT +0.35%) reported Q2 EPS of 92 cents, better than consensus of 91 cents.ADT Corp. (ADT +2.26%) reported Q3 EPS of 53 cents, stronger than consensus of 43 cents.
Comcast (CMCSA -1.59%) reported Q2 EPS of 65 cents, better than expectations of 63 cents.
Humana (HUM -1.52%) reported Q2 EPS of $2.63, well ahead of consensus of $2.47.
PolyOne (POL +2.12%) reported Q2 adjusted EPS of 37 cents, better than consensus of 35 cents.
Genworth (GNW +0.60%) reported Q2 adjusted EPS of 27 cents, lower than consensus of 29 cents.
Cubist (CBST +1.86%) said it will acquire Optimer (OPTR -1.12%) for $10.75 per share in cash or $535 million on a fully diluted basis, and Cubist said it will also acquire Trius Therapeutics (TSRX +2.27%) for $13.50 per share in cash or $707 million on a fully diluted basis.
CBOE Holdings (CBOE +0.53%) raised its quarterly dividend to 18 cents per share from 15 cents per share.
Chicago Bridge & Iron (CBI +0.42%) reported Q2 EPS with items 98 cents, below consensus of $1.03.
Buffalo Wild Wings (BWLD -0.71%) reported Q2 EPS of 88 cents, stronger than consensus of 79 cents.
Aflac (AFL -0.26%) reported Q2 adjusted EPS of $1.62, well ahead of consensus of $1.51, and said it intends to repurchase $600 million of its own stock for 2013.
Hanesbrands (HBI -0.55%) reported Q2 EPS of $1.19, stronger than consensus of 94 cents, and raised its 2013 EPS outlook to $3.50-$3.65 from $3.25-$3.40.
Amgen (AMGN +1.67%) reported Q2 EPS of $1.89, well ahead of consensus of $1.74, and said it sees fiscal 2013 EPS at the upper end of $7.30-$7.45, better than consensus of $7.29.
Fiserv (FISV +0.12%) reported Q2 adjusted EPS of $1.50, better than consensus of $1.44.
Symantec (SYMC +1.16%) rose nearly 4% in pre-market trading after it reported Q1 EPS of 44 cents, stronger than consensus of 36 cents.
MARKET COMMENTS
Sep E-mini S&Ps (ESU13 unch) this morning are up +1.25 points (+0.07%) . The S&P 500 index on Tuesday closed slightly higher. Gains were limited by concern that Wednesday’s FOMC statement may be on the hawkish side and by the -1.8 point decline to 80.3 in the U.S. July consumer confidence index, which was weaker than expectations of -0.1 to 81.3. Stocks gained support from positive Q2 stock earnings results as 73% of the 302 S&P 500 companies that have reported earnings results so far have beaten expectations. Closes: S&P 500 +0.04%, Dow Jones -0.01%, Nasdaq 100 +0.53%.Sep 10-year T-notes (ZNU13 -0.09%) this morning are down -1 tick. Sep 10-year T-note prices on Tuesday closed lower as the market awaited Wednesday’s FOMC statement. T-notes found support from the weaker-than-expected U.S. July consumer confidence index. Closes: TYU3 -3.5, FVU3 -2.25.
The dollar index (DXY00 +0.02%) this morning is up +0.026 (+0.03%). EUR/USD (^EURUSD) is down -0.0011 (-0.08%) and USD/JPY (^USDJPY) is down -0.39 (-0.40%) at a 1-month low. The dollar index on Tuesday closed higher. USD/JPY was boosted by a weaker yen on the -3.3% m/m decline in Japanese Jun industrial production, which was the biggest monthly decline in 2-1/4 years. EUR/USD climbed to a 5-week high after Eurozone July economic confidence rose +1.2 to 92.5, a 1-1/4 year high. Dollar strength was curbed by the decline in U.S. July consumer confidence. Closes: Dollar index +0.166 (+0.20%), EUR/USD +0.0002 (+0.01%), USD/JPY +0.075 (+0.07%).
Sep WTI crude oil (CLU13 +0.19%) this morning is up +20 cents (+0.19%) and Sep gasoline (RBU13 -1.12%) is down -0.0300 (-1.01%). Sep crude oil and gasoline prices on Tuesday closed lower with Sep crude falling to a 3-week low. A stronger dollar and weaker-than-expected U.S. July consumer confidence undercut energy prices, along with concern that Wednesday’s data on U.S. Q2 GDP will show a slowdown in economic growth. Closes: CLU3 -1.47 (-1.41%), RBU3 -0.0030 (-0.10%).
GLOBAL EVENT CALENDAR07/31/2013
| US | 0700 ET | Weekly MBA mortgage applications, previous -1.2% with purchase sub-index -2.1% and refi sub-index -0.7%. |
| 0815 ET | July ADP employment change expected +180,000, Jun +188,000. | |
| 0830 ET | Q2 employment cost index expected +0.4%, Q1 +0.3%. | |
| 0830 ET | Q2 GDP expected +1.0% (q/q annualized), Q1 +1.8%. Q2 personal consumption expected +1.6%, Q1 +2.6%. Q2 GDP price index expected +1.0%, Q1 +1.2%. Q2 core PCE expected +1.1%, Q1 +1.3%. Annual GDP revisions. | |
| 0900 ET | Treasury releases its quarterly refunding statement outlining its funding needs for the next two quarters and announces amounts of 3-year T-notes (previous $32 billion), 10-year T-notes (previous $21 billion), and 30-year T-bonds (previous $13 billion) to be auctioned Aug 6-8 in the quarterly refunding. | |
| 0900 ET | July Milwaukee ISM manufacturing index expected 52.0, June 51.6. | |
| 0945 ET | July Chicago purchasing managers index expected +2.4 to 54.0, Jun -7.1 to 51.6. | |
| 1030 ET | EIA Weekly Petroleum Status Report. | |
| 1400 ET | FOMC interest rate decision. | |
| JPN | 0100 ET | Japan Jun housing starts expected 982,000 (+16.0% y/y), May 1.027 million (+14.5% y/y). |
| 0100 ET | Japan Jun construction orders, May +26.0% y/y. | |
| GER | 0200 ET | German Jun retail sales expected +0.2% m/m and +0.5% y/y, May +0.7% m/m and +0.4% y/y. |
| 0355 ET | German July unemployment change expected unchanged, Jun -12,000. July unemployment rate expected 6.8%, Jun 6.8%. | |
| EUR | 0500 ET | Eurozone July CPI expected +1.6% y/y, Jun +1.6% y/y. July core CPI, Jun +1.2% y/y. |
| 0500 ET | Eurozone Jun unemployment rate expected 12.2%, May 12.2%. | |
| CHI | 2100 ET | China July manufacturing PMI expected -0.3 to 49.8, Jun -0.7 to 50.1. |
| 2145 ET | China final-July HSBC manufacturing PMI expected unrevised from early-July flash of 47.7 (-0.5 from 48.2 in June). |
U.S. STOCK CALENDAR07/31/2013
| Company Name | Symbol | Time | Event Description | Period | EPS Est (US$) |
|---|---|---|---|---|---|
| PG&E Corp | PCG US | Bef-mkt | Q2 2013 Earnings Release | Q2 2013 | 0.73 |
| Hospira Inc | HSP US | Bef-mkt | Q2 2013 Earnings Release | Q2 2013 | 0.511 |
| Exelon Corp | EXC US | Bef-mkt | Q2 2013 Earnings Release | Q2 2013 | 0.544 |
| Hudson City Bancorp Inc | HCBK US | Bef-mkt | Q2 2013 Earnings Release | Q2 2013 | 0.101 |
| Wisconsin Energy Corp | WEC US | Bef-mkt | Q2 2013 Earnings Release | Q2 2013 | 0.466 |
| Delphi Automotive PLC | DLPH US | Bef-mkt | Q2 2013 Earnings Release | Q2 2013 | 1.137 |
| ADT Corp/The | ADT US | 6:00 | Q3 2013 Earnings Release | Q3 2013 | 0.434 |
| Humana Inc | HUM US | 6:00 | Q2 2013 Earnings Release | Q2 2013 | 2.469 |
| NiSource Inc | NI US | 6:30 | Q2 2013 Earnings Release | Q2 2013 | 0.23 |
| Multiple Companies | OMC US | 7:00 | Business Update Call | ||
| American Tower Corp | AMT US | 7:00 | Q2 2013 Earnings Release | Q2 2013 | 0.905 |
| Comcast Corp | CMCSA US | 7:00 | Q2 2013 Earnings Release | Q2 2013 | 0.63 |
| Garmin Ltd | GRMN US | 7:00 | Q2 2013 Earnings Release | Q2 2013 | 0.651 |
| Hess Corp | HES US | 7:30 | Q2 2013 Earnings Release | Q2 2013 | 1.402 |
| Southern Co/The | SO US | 7:30 | Q2 2013 Earnings Release | Q2 2013 | 0.679 |
| Invesco Ltd | IVZ US | 7:30 | Q2 2013 Earnings Release | Q2 2013 | 0.514 |
| AGL Resources Inc | GAS US | 8:00 | Q2 2013 Earnings Release | Q2 2013 | 0.266 |
| Mastercard Inc | MA US | 8:00 | Q2 2013 Earnings Release | Q2 2013 | 6.291 |
| Genworth Financial Inc | GNW US | 8:00 | Q2 2013 Earnings Call | Q2 2013 | |
| Phillips 66 | PSX US | 8:00 | Q2 2013 Earnings Release | Q2 2013 | 1.811 |
| ADT Corp/The | ADT US | 8:30 | Q3 2013 Earnings Call | Q3 2013 | |
| American Tower Corp | AMT US | 8:30 | Q2 2013 Earnings Call | Q2 2013 | |
| Comcast Corp | CMCSA US | 8:30 | Q2 2013 Earnings Call | Q2 2013 | |
| Aflac Inc | AFL US | 9:00 | Q2 2013 Earnings Call | Q2 2013 | |
| Allergan Inc/United States | AGN US | 9:00 | Q2 2013 Earnings Release | Q2 2013 | 1.197 |
| NiSource Inc | NI US | 9:00 | Q2 2013 Earnings Call | Q2 2013 | |
| Hospira Inc | HSP US | 9:00 | Q2 2013 Earnings Call | Q2 2013 | |
| AGL Resources Inc | GAS US | 9:00 | Q2 2013 Earnings Call | Q2 2013 | |
| Invesco Ltd | IVZ US | 9:00 | Q2 2013 Earnings Call | Q2 2013 | |
| Mastercard Inc | MA US | 9:00 | Q2 2013 Earnings Call | Q2 2013 | |
| Humana Inc | HUM US | 9:00 | Q2 2013 Earnings Call | Q2 2013 | |
| Equity Residential | EQR US | 10:00 | Q2 2013 Earnings Call | Q2 2013 | |
| Hess Corp | HES US | 10:00 | Q2 2013 Earnings Call | Q2 2013 | |
| CA Inc | CA US | 10:00 | Annual General Meeting | Y 2013 | |
| Boston Properties Inc | BXP US | 10:00 | Q2 2013 Earnings Call | Q2 2013 | |
| Kimco Realty Corp | KIM US | 10:00 | Q2 2013 Earnings Call | Q2 2013 | |
| Delphi Automotive PLC | DLPH US | 10:00 | Q2 2013 Earnings Call | Q2 2013 | |
| Garmin Ltd | GRMN US | 10:30 | Q2 2013 Earnings Call | Q2 2013 | |
| Allergan Inc/United States | AGN US | 11:00 | Q2 2013 Earnings Call | Q2 2013 | |
| ONEOK Inc | OKE US | 11:00 | Q2 2013 Earnings Call | Q2 2013 | |
| PG&E Corp | PCG US | 11:00 | Q2 2013 Earnings Call | Q2 2013 | |
| Exelon Corp | EXC US | 11:00 | Q2 2013 Earnings Call | Q2 2013 | |
| Phillips 66 | PSX US | 11:00 | Q2 2013 Earnings Call | Q2 2013 | |
| Southern Co/The | SO US | 13:00 | Q2 2013 Earnings Call | Q2 2013 | |
| Wisconsin Energy Corp | WEC US | 14:00 | Q2 2013 Earnings Call | Q2 2013 | |
| Williams Cos Inc/The | WMB US | 16:01 | Q2 2013 Earnings Release | Q2 2013 | 0.143 |
| QEP Resources Inc | QEP US | 16:05 | Q2 2013 Earnings Release | Q2 2013 | 0.352 |
| Allstate Corp/The | ALL US | 16:05 | Q2 2013 Earnings Release | Q2 2013 | 0.982 |
| CBS Corp | CBS US | 16:15 | Q2 2013 Earnings Release | Q2 2013 | 0.72 |
| CBS Corp | CBS US | 16:30 | Q2 2013 Earnings Call | Q2 2013 | |
| Lam Research Corp | LRCX US | 17:00 | Q4 2013 Earnings Call | Q4 2013 | |
| Microchip Technology Inc | MCHP US | 17:00 | Q1 2014 Earnings Call | Q1 2014 | |
| Marriott International Inc/DE | MAR US | 17:00 | Q2 2013 Earnings Release | Q2 2013 | 0.569 |
| Electronic Arts Inc | EA US | 17:00 | Annual General Meeting | Y 2013 | |
| Whole Foods Market Inc | WFM US | 17:00 | Q3 2013 Earnings Call | Q3 2013 | |
| Lam Research Corp | LRCX US | Aft-mkt | Q4 2013 Earnings Release | Q4 2013 | 0.713 |
| Murphy Oil Corp | MUR US | Aft-mkt | Q2 2013 Earnings Release | Q2 2013 | 1.535 |
| Pioneer Natural Resources Co | PXD US | Aft-mkt | Q2 2013 Earnings Release | Q2 2013 | 1.111 |
| Microchip Technology Inc | MCHP US | Aft-mkt | Q1 2014 Earnings Release | Q1 2014 | 0.538 |
| Whole Foods Market Inc | WFM US | Aft-mkt | Q3 2013 Earnings Release | Q3 2013 | 0.37 |
| Lincoln National Corp | LNC US | Aft-mkt | Q2 2013 Earnings Release | Q2 2013 | 1.148 |
| MetLife Inc | MET US | Aft-mkt | Q2 2013 Earnings Release | Q2 2013 | 1.329 |
| McKesson Corp | MCK US | Annual General Meeting | |||
| Equifax Inc | EFX US | Investor Meeting | Y 2013 | ||
| BMC Software Inc | BMC US | Q1 2014 Earnings Release | Q1 2014 | 0.786 | |
| Life Technologies Corp | LIFE US | Q2 2013 Earnings Release | Q2 2013 | 0.959 |
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