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OVERNIGHT MARKETS AND NEWS
September E-mini S&Ps (ESU13 -0.08%) this morning are down -0.14% and European stocks are down -0.70%. Asian stocks closed mixed: Japan -0.18%, Hong Kong +0.65%, China +2.13%, Taiwan +0.28%, Australia +0.24%, Singapore -0.14%, South Korea +0.96%, India +0.21%. UK markets are closed for a banking holiday today. European stocks fell back after ECB Council members meeting at the Fed's annual meeting of global central bankers in Jackson Hole, Wyoming showed division among council members over the prospects of additional stimulus. Meanwhile, Fed members at the meeting rebuffed international calls to take into account the plunge in emerging markets when tapering stimulus. Commodity prices are mostly higher. Oct crude oil CLV13 +0.17%) is up +0.02% and Oct gasoline (RBV13 -0.16%) is down -0.22%. Dec gold (GCZ13 -0.09%) is down -0.17% and Sep copper (HGU13 +0.66%) is up +0.51% at a 2-1/2 month high. Agricultural prices are sharply high with corn and soybean prices up over +4.0% at 1-month highs as hot, dry weather in the Midwest threatens U.S. crops. The dollar index (DXY00 +0.09%) is up +0.09%. EUR/USD (^EURUSD) is down -0.10% and USD/JPY (^USDJPY) is down -0.09%. September T-note prices (ZNU13 +0.04%) are up +2 ticks.Fed members meeting at the Fed symposium in Jackson Hole, Wyoming showed little sympathy that their actions to taper stimulus may exacerbate the recent plunge in emerging markets when Atlanta Fed President Lockhart said, "You have to remember that we are a legal creature of Congress and that we only have a mandate to concern ourselves with the interest of the U.S. Other countries simply have to take that as a reality and adjust to us if that's something important for their economies."
ECB Council members are split over the prospects of additional stimulus after council member and Bundesbank President Weidmann said the ECB has already made a significant contribution to preventing the Eurozone debt crisis from escalating and that "policy makers have entered unknown and dangerous territory" and must continue to focus on its primary mandate of price stability. Meanwhile, fellow ECB council member and Central Bank of Cyprus Governor Demetriades said at an interview Saturday at the Fed's annual symposium in Jackson Hole, Wyoming that a rate cut "is still in the cards" and policy members still can't rule out additional rate cuts.
The Japan July corporate service price index rose +0.4% y/y, right on expectations as it matched June's increase as the biggest gain in 4-3/4 years.
U.S. STOCK PREVIEW
Today’s July durable goods orders report is expected to show a sharp -4.0% decline, almost exactly reversing June’s +3.9% increase. None of the Russell 1000 companies report earnings today. Equity conferences this week include Shale Gas World Argentina Conference on Wed, Jefferies Semiconductor and Hardware Midwest Corporate Access Summit on Wed, Simmons European Energy Conference on Wed-Thu, Robert W. Baird & Co. Consumer Corporate Access Day on Thu, and 6th International Financial and Capital Markets Conference on Thu.
OVERNIGHT U.S. STOCK MOVERS
Raytheon (RTN +1.30%) was downgraded to "Hold" from "Buy" at Stifel due to valuation.Amgen (AMGN -0.65%) was upgraded to "Overweight" from "Neutral" at Piper Jaffray.
Dollar General (DG -0.72%) and Wal-Mart (WMT -0.03%) should be bought at current levels, according to Citigroup.
Aeropostale (ARO -20.22%) was upgraded to "Hold" from "Sell" at Brean Capital due to valuation.
Health Net (HNT +0.34%) was upgraded to "Positive" from "Neutral" at Susquehanna who also raised their price target on the stock to $40 from $35.
Hasbro (HAS +1.88%) was upgraded to "Buy" from "Sell" at Citigroup who also raised their price target on the stock to $53 from $40.
Family Dollar (FDO -0.40%) was downgraded to "Hold" from "Buy" at Deutsche Bank.
Big Lots (BIG -0.74%) was upgraded to "Neutral" from "Underweight" at JPMorgan.
Tyson Foods (TSN +0.25%) was downgraded to "Neutral" from "Buy" at BofA/Merrill.
Boeing (BA +0.32%) was awarded a multi-year government contract worth $904.42 million for 36 new Block III Apache Helicopters for the Republic of Korea.
MARKET COMMENTS
Sep E-mini S&Ps (ESU13 -0.08%) this morning are down -2.25 points (-0.14%). The S&P 500 index on Friday shook off a weak U.S. July new home sales report and closed higher. Strength in European data bolstered stocks after UK Q2 GDP was revised up to +1.5% y/y from +1.4% y/y and after Eurozone Aug consumer confidence climbed by +1.8 to a 2-year high of -15.6. U.S. July new home sales fell -13.4% to 394,000, much weaker than expectations of -2.0% to 487,000 and the slowest pace of sales in 9 months. Closes: S&P 500 +0.39%, Dow Jones +0.31%, Nasdaq 100 +0.72%.Sep 10-year T-notes (ZNU13 +0.04%) this morning are up +2 ticks. Sep 10-year T-note prices on Friday rallied sharply and closed higher after U.S. July new home sales fell more-than-expected to a 9-month low, which bolstered speculation the Fed may not taper its bond buying next month. Closes: TYU3 +19.00, FVU3 +7.50.
The dollar index (DXY00 +0.09%) this morning is up +0.075 (+0.09%). EUR/USD (^EURUSD) is down -0.0014 (-0.10%) and USD/JPY (^USDJPY) is down -0.09 (-0.09%). The dollar index on Friday closed lower after U.S. July new home sales fell more than expected to a 9-month low. EUR/USD rose after Eurozone Aug consumer confidence climbed to a 2-year high and after ECB Governing Council member Nowotny said the recent “stream of good news” from the Eurozone economy has removed any need to cut interest rates further. Closes: Dollar index -0.127 (-0.16%), EUR/USD +0.0021 (+0.16%), USD/JPY -0.002 (unch).
Oct WTI crude oil (CLV13 +0.17%) this morning is up +2 cents (+0.02%) and Oct gasoline (RBV13 -0.16%) is down -0.0064 (-0.22%). Oct crude oil and gasoline prices on Friday closed higher with Oct gasoline at a 3-week high. Bullish factors included (1) the larger-than-expected increase in Eurozone Aug consumer confidence to a 2-year high, (2) weakness in the dollar, and (3) unscheduled refinery shutdowns in New Brunswick, Louisiana and Texas that may reduce gasoline supplies ahead of the Labor Day holiday. Closes: CLV3 +1.18 (+1.14%), RBV3 +0.0240 (+0.85%).
GLOBAL EVENT CALENDAR08/26/2013
| US | 0830 ET | July durable goods orders expected -4.0% and +0.5% ex-transportation, Jun +3.9% and -0.1% ex-transportation. |
| 1100 ET | USDA weekly grain export inspections. | |
| 1600 ET | USDA Crop Progress. | |
| UK | n/a | UK markets closed for Summer Bank Holiday. |
| CHI | 2130 ET | China July industrial profits year-to-date, Jun +11.1% y/y. |
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