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OVERNIGHT MARKETS AND NEWS
September E-mini S&Ps (ESU13 +0.22%) this morning are up +0.28% and European stocks are up +0.34%. Asian stocks closed higher: Japan +2.57%, Hong Kong +1.21%, China +0.27%, Taiwan +1.05%, Australia +0.96%, Singapore +0.37%, South Korea +1.81%, India +1.49%. European and U.S. stocks received a boost after German investor confidence increased more than forecast to its best level in 5 months, while Japanese stocks closed higher after the Nikkei newspaper reported that unidentified government officials said Japanese Prime Minister Abe is considering a corporate-tax cut for companies. Commodity prices are mostly higher. Sep crude oil (CLU13 +0.24%) is up +0.56%, Sep gasoline (RBU13 +0.60%) is up +0.63%, Dec gold (GCZ13 -0.61%) is down -0.58%, and Sep copper (HGU13 +0.53%) is up +0.92% at a 2-month high. Agricultural and livestock prices are higher. The dollar index (DXY00 +0.33%) is up +0.31. EUR/USD (^EURUSD) is down -0.05% and USD/JPY (^USDJPY) is up +1.20%. September T-note prices (ZNU13 -0.36%) are down -13 ticks at a 1-week low on expectations for a strong U.S. July retail sales report today.The German Aug ZEW survey expectations rose +5.7 from July to 42.0, better than expectations of +3.6 to 39.9 and its best level in 5 months. The Aug ZEW current situation survey climbed +7.6 from July to 18.3, better than expectations of +1.4 to 12.0 and its best level in 18 months.
The German July wholesale price index fell -0.3% m/m, its fifth consecutive monthly decline, and was unch y/y.
Eurozone Jun industrial production rose +0.7% m/m, weaker than expectations of +1.0% m/m, but gained +0.3% y/y, right on expectations.
UK July CPI was unch m/m and +2.8% y/y, right on expectations, while July core CPI rose +2.0% y/y, a smaller increase than expectations of +2.2% y/y and matched its smallest year-over-year gain in 3-1/2 years.
UK PPI input prices rose +1.1% m/m, right on expectations, and rose +5.0% y/y, a smaller increase than expectations of +5.5% y/y. July PPI output prices rose +0.2% m/m and +2.1% y/y, right on expectations.
Japan Jun machine orders fell -2.7% m/m and rose +4.9 y/y, stronger than expectations of -7.0% m/m and +2.6% y/y.
U.S. STOCK PREVIEW
Today’s July retail sales report is expected to show a modest increase of +0.3% overall and +0.4% ex-autos following the June report of +0.4% and unchanged ex-autos. Today’s July import price index is expected to show a strong increase of +0.8% m/m, more than offsetting the -0.2% decline seen in June. On a year-on-year basis, July import prices are expected to improve to +1.5% y/y from +0.2% in June. Today’s June business inventories report is expected to show a small increase of +0.2%, adding to the +0.1% increase seen in May. There is only one S&P 500 company that reports earnings today: JDS Uniphase (consensus $0.13).Conferences during the remainder of this week include: Pacific Crest Global Technology Leadership Forum on Mon-Tue, Jefferies Global Industrials Conference on Mon-Thu, EnerCom The Oil & Gas Conference on Mon-Wed, Needham Advanced Industrial Technologies Conference on Tue, UBS Metals & Materials Mini Conference on Tue, Wedbush Life Sciences Management Access Conference on Tue, Oppenheimer Technology, Internet & Communications Conference on Tue-Wed, JP Morgan Auto Conference on Tue-Wed, J.P. Morgan Auto Conference on Tue-Wed, Jefferies Global Clean Technology Conference on Tue-Wed, Avondale 2013 Healthcare Conference on Wed, and Canaccord Genuity Growth Conference on Wed.
OVERNIGHT U.S. STOCK MOVERS
Flowers Foods (FLO +0.04%) reported Q2 adjusted EPS of 24 cents, better than consensus of 23 cents.J.C. Penney (JCP +2.33%) says Bill Ackman has resigned from board.
Valspar (VAL +1.22%) reported Q3 adjusted EPS of $1.07, weaker than consensus of $1.09, and then lowered guidance on fiscal 2013 EPS view to $3.45-$3.55, below consensus of $3.70.
Marvell (MRVL +0.08%) was upgraded to "Top Pick" from "Outperform" at RBC Capital.
Microsoft (MSFT +0.52%) was downgraded to "Hold" from "Buy" at Stifel.
Xerox (XRX +1.20%) was upgraded to "Buy" from "Neutral" at Citigroup.
Global Brass & Copper (BRSS +0.10%) reported Q2 adjusted EPS of 75 cents, better than consensus of 59 cents.
Lockheed Martin (LMT -0.82%) was awarded a $852.3 million government contract modification for the procurement of special tooling and special test equipment for the U.S. Navy, U.S. Air Force and international partners.
Northern Tier (NTI -1.66%) reported Q2 EPS of 70 cents, stronger than consensus of 47 cents.
The U.S. Food and Drug Administration approved Tivicay, a new drug from GlaxoSmithKline (GSK -0.41%) to treat HIV-1 infection.
Third Avenue reported a 22.78% passive stake in Cavco Industries (CVCO +1.27%) .
Yum! Brands (YUM +0.09%) fell over 3% in after-hours tradng after it reported July same-store sales declined an estimated 13% for its China Division.
Spirit AeroSystems (SPR -1.24%) reported Q2 adjusted EPS of 72 cents, well ahead of consensus of 50 cents.
MARKET COMMENTS
Sep E-mini S&Ps (ESU13 +0.22%) this morning are up +4.75 points (+0.28%). The S&P 500 index on Monday slipped to a 2-week low on signs of slower global growth after Japan Q2 GDP grew +0.6% q/q and +2.6% annualized, weaker than expectations of +0.9% q/q and +3.6% annualized. Stock prices recovered and closed little changed, however, on strong stock earnings results with 72% of the 448 S&P 500 companies that have reported Q2 earnings results beating expectations. Closes: S&P 500 -0.12%, Dow Jones -0.04%, Nasdaq 100 +0.24%.Sep 10-year T-notes (ZNU13 -0.36%) this morning are down -13 ticks at a 1-week low. Sep 10-year T-note prices on Monday posted a 2-week high early but erased their advance and closed lower on concern that Tuesday’s U.S. July retail sales report will be strong enough to prompt the Fed to cut its bond purchases. T-note prices had rallied early on concerns over global economic growth after Japan Q2 GDP grew less than expected. Closes: TYU3 -6.0, FVU3 -2.25.
The dollar index (DXY00 +0.33%) this morning is up +0.250 (+0.31%). EUR/USD (^EURUSD) is down -0.0006 (-0.05%) and USD/JPY (^USDJPY) is up +1.16 (+1.20%). The dollar index on Monday closed higher as USD/JPY strengthened after Japan’s economy grew less than expected in Q2. Another positive for the dollar is the expectation for Tuesday’s U.S. July retail sales to show strength in consumer spending that bolsters the case for the Fed to begin tapering its stimulus. Closes: Dollar index +0.207 (+0.26%), EUR/USD -0.0042 (-0.32%), USD/JPY +0.73 (+0.76%).
Sep WTI crude oil (CLU13 +0.24%) this morning is up +59 cents (+0.56%) and Sep gasoline (RBU13 +0.60%) is up +1.83 cents (+0.63%). Sep crude oil and gasoline prices on Monday closed little changed. Negative factors included a stronger dollar and weaker-than-expected Japan Q2 GDP. Supportive factors include a recovery in equity prices and supply concerns after the 8,000 barrel a day Ekofisk oil field in the North Sea was closed due to mechanical problems. Closes: CLU3 +2.63 (+2.54%), RBU3 +0.0512 (+1.79%).
GLOBAL EVENT CALENDAR08/13/2013
| US | 0830 ET | July retail sales expected +0.3% and +0.4% ex autos, Jun +0.4% and unch ex autos. |
| 0830 ET | July import price index expected +0.8% m/m and +1.5% y/y, Jun -0.2% m/m and +0.2% y/y. | |
| 1000 ET | Jun business inventories expected +0.2%, May +0.1%. | |
| 1245 ET | Atlanta Fed President Dennis Lockhart speaks at the Kiwanis Club of Atlanta on the economic outlook. | |
| 1630 ET | API weekly U.S. oil statistics. | |
| GER | 0200 ET | Revised German July CPI (EU harmonized), previous +0.4% m/m and +1.9% y/y. |
| 0200 ET | German July wholesale price index, Jun -0.4% m/m and +0.7% y/y. | |
| 0500 ET | German Aug ZEW survey of economic sentiment expected +3.6 to 39.9, July 36.3. Aug ZEW current situation expected +1.4 to 12.0, July 10.6. | |
| UK | 0430 ET | UK July PPI input prices expected +1.4% m/m and +5.6% y/y, Jun +0.2% m/m and +4.2% y/y. |
| 0430 ET | UK July PPI output prices expected +0.2% m/m and +2.1% y/y, Jun +0.1% m/m and +2.0% y/y. July PPI output core, Jun unch m/m an +1.0% y/y. | |
| 0430 ET | UK July CPI expected unch m/m and +2.8% y/y, Jun -0.2% m/m and +2.9% y/y. UK July core CPI expected +2.2% y/y, Jun +2.3% y/y. | |
| 0430 ET | UK July RPI expected unch m/m and +3.2% y/y, Jun -0.1% m/m and +3.3% y/y. July RPI ex mortgage interest payments expected +3.1% y/y, Jun +3.3% y/y. | |
| EUR | 0500 ET | Eurozone Jun industrial production expected +1.0% m/m and +0.3% y/y, May -0.3% m/m and -1.3% y/y. |
U.S. STOCK CALENDAR08/13/2013
| Company Name | Symbol | Time | Event Description | Period | EPS Est (US$) |
|---|---|---|---|---|---|
| CST Brands Inc | CST US | Bef-mkt | Q2 2013 Earnings Release | Q2 2013 | 0.653 |
| Valspar Corp/The | VAL US | 7:30 | Q3 2013 Earnings Release | Q3 2013 | 1.091 |
| IHS Inc | IHS US | 8:00 | Acquisition of R.L. Polk & Co by IHS Inc Call | ||
| Flowers Foods Inc | FLO US | 8:30 | Q2 2013 Earnings Call | Q2 2013 | |
| Valspar Corp/The | VAL US | 11:00 | Q3 2013 Earnings Call | Q3 2013 | |
| CST Brands Inc | CST US | 11:00 | Q2 2013 Earnings Call | Q2 2013 | |
| Cree Inc | CREE US | 16:00 | Q4 2013 Earnings Release | Q4 2013 | 0.375 |
| Taylor Morrison Home Corp | TMHC US | 16:01 | Q2 2013 Earnings Release | Q2 2013 | 0.321 |
| SeaWorld Entertainment Inc | SEAS US | 16:01 | Q2 2013 Earnings Release | Q2 2013 | 0.41 |
| JDS Uniphase Corp | JDSU US | 16:05 | Q4 2013 Earnings Release | Q4 2013 | 0.131 |
| Myriad Genetics Inc | MYGN US | 16:05 | Q4 2013 Earnings Release | Q4 2013 | 0.438 |
| Myriad Genetics Inc | MYGN US | 16:30 | Q4 2013 Earnings Call | Q4 2013 | |
| Taylor Morrison Home Corp | TMHC US | 16:30 | Q2 2013 Earnings Call | Q2 2013 | |
| Cree Inc | CREE US | 17:00 | Q4 2013 Earnings Call | Q4 2013 | |
| JDS Uniphase Corp | JDSU US | 17:00 | Q4 2013 Earnings Call | Q4 2013 | |
| SeaWorld Entertainment Inc | SEAS US | 17:00 | Q2 2013 Earnings Call | Q2 2013 | |
| Brocade Communications Systems Inc | BRCD US | 17:30 | Q3 2013 Earnings Call | Q3 2013 | |
| Jack Henry & Associates Inc | JKHY US | Aft-mkt | Q4 2013 Earnings Release | Q4 2013 | 0.513 |
| Brocade Communications Systems Inc | BRCD US | Aft-mkt | Q3 2013 Earnings Release | Q3 2013 | 0.12 |
| Computer Sciences Corp | CSC US | Annual General Meeting | |||
| Equifax Inc | EFX US | Investor Meeting | Y 2013 | ||
| Humana Inc | HUM US | Investor Meeting | Y 2013 | ||
| Precision Castparts Corp | PCP US | Annual General Meeting | |||
| Flowers Foods Inc | FLO US | Q2 2013 Earnings Release | Q2 2013 | 0.234 |
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