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OVERNIGHT MARKETS AND NEWS
September E-mini S&Ps (ESU13 -0.56%) this morning are down -0.45% at a 2-1/2 week low and European stocks are down -0.56%. Asian stocks closed lower: Japan -2.12%, Hong Kong -0.01%, China -1.17%, Taiwan -0.81%, Australia -0.10%, Singapore -0.85%, South Korea and India closed for holiday. Technology and retail stocks are leading declines in equity markets as Cisco is down over 8% in pre-market trading after the company said revenue for the current quarter through October will be $12.2 billion to $12.5 billion, below consensus of $12.5 billion. Wal-Mart is down over 2% after it cut its full-year EPS forecast. Commodity prices are mostly higher. Sep crude oil (CLU13 +0.61%) is up +0.70% and Sep gasoline (RBU13 +0.23%) is up +0.31%, both at 1-1/2 week highs, after Egypt's army-backed government declared a state of emergency following police clashes with protesters that left hundreds dead and fueled concern that the flow of oil through the Suez Canal could be at risk. Dec gold (GCZ13 +0.24%) is up +0.22% at a 3-week high, and Sep copper (HGU13 -1.27%) is down -1.06%. Agricultural and livestock prices are higher. The dollar index (DXY00 -0.24%) is down -0.18%%. EUR/USD (^EURUSD) is up +0.23% and USD/JPY (^USDJPY) is up +0.03%. The British pound climbed to a 1-1/2 month high against the dollar after UK July retail sales rose more than forecast. September T-note prices (ZNU13 -0.30%) are down -7.5 ticks.UK July retail sales ex autos climbed +1.1% m/m and +3.1% y/y, stronger than expectations of +0.6% m/m and +2.7% y/y, with the +3.1% y/y increase the largest annual gain in 5-years. July retail sales including autos rose +1.1% m/m and +3.0% y/y, better than expectations of +0.7% m/m and +2.4% y/y.
Egypt declared a month-long state of emergency as an escalation of civil unrest left hundreds dead. Egypt's stock exchange and banks were closed today for the first time other than public holidays since the Jan 2011 civil uprising.
U.S. STOCK PREVIEW
Today’s weekly initial unemployment claims report is expected to show a small increase of +2,000 to 335,000, adding to last week’s +5,000 increase to 333,000. Meanwhile, continuing claims are expected to show a decline of -18,000 to 3.000 million following last week’s +67,000 increase to 3.018 million. Today’s July CPI report is expected to edge higher to +2.0% y/y from +1.8% in June. Meanwhile, the July core CPI is expected to edge higher to +1.7% y/y from +1.6% in June. Today’s July industrial production report is expected to show an increase of +0.3% m/m, matching the +0.3% increase seen in June. Today’s U.S. regional manufacturing data for August is expected to be mixed. The Aug Empire manufacturing index is expected to show a small increase of +0.5 points to 10.0, adding to the +1.6 point increase to 9.5 seen in July. Meanwhile, the Aug Philadelphia Fed manufacturing index is expected to show a -4.8 point decline to 15.0, giving back much of the +7.3 point increase to 19.8 seen in July. Today’s Aug NAHB housing market index is expected to be unchanged at 57, thus sustaining July’s +6 point surge to a 7-3/4 year high of 57.There are 7 of the S&P 500 companies that report earnings today: Wal-Mart (consensus $1.25), Kohl's (1.04), Estee Lauder (0.21), Perrigo (1.56), Applied Materials (0.19), Dell (0.24), and Nordstrom (0.88). There are no equity conferences during the remainder of this week.
OVERNIGHT U.S. STOCK MOVERS
Wal-Mart (WMT -0.60%) fell over 2% in pre-market trading after it reported Q2 EPS of $1.25, right on expectations, but then lowered guidance on fiscal 2013 EPS to $5.10 to $5.30 from $5.20 to $5.40, below consensus of $5.30.Estee Lauder (EL -1.99%) reported Q4 EPS of 24 cents, better than consensus of 21 cents.
Kohl's (KSS +0.02%) reported Q2 EPS of $1.04, right on expectations.
Carnival (CCL +0.87%) was upgraded to "Buy" from "Neutral" at Goldman.
Briggs & Stratton (BGG +0.05%) reported Q4 adjusted EPS of 22 cents, better than consensus of 19 cents.
Intel (INTC +0.22%) was downgraded to "Neutral" from "Outperform" at RW Baird.
CACI International (CACI +0.54%) reported Q4 adjusted EPS of $1.59, slightly below consensus of $1.60.
Dean Foods (DF -2.75%) announced a 1-for-2 reverse stock split of issued Dean Foods common stock that will be effective after the close of trading on Monday, August 26.
Dillard's (DDS -1.10%) reported Q2 EPS of 79 cents, stronger than consensus of 74 cents.
Agilent (A -0.87%) reported Q3 adjusted EPS of 68 cents, better than consensus of 62 cents, and raised guidance on fiscal adjusted 2013 EPS to $2.83-$2.85, higher than consensus of $2.78.
Cisco (CSCO +0.23%) slumped over 8% in after-hours trading even after it reported Q4 EPS of 52 cents, better than consensus of 51 cents, after it said revenue for the current quarter throuh October will be $12.2 billion to $12.5 billion, below consensus of $12.5 billion. The company also said that it will reduce its workforce by approximately 4,000 employees starting in Q1 of 2014.
NetApp (NTAP +0.09%) reported Q1 EPS of 53 cents, stronger than consensus of 49 cents.
MARKET COMMENTS
Sep E-mini S&Ps (ESU13 -0.56%) this morning are down -7.50 points (-0.45%) at a 2-1/2 week low. The S&P 500 index on Wednesday closed lower on speculation that the Fed was close to cutting back its stimulus measures. Declines were limited on signs of strength in the global economy after Eurozone Q2 GDP grew +0.3% q/q, stronger than expectations of +0.2% q/q. Closes: S&P 500 -0.52%, Dow Jones -0.73%, Nasdaq 100 -0.37%.Sep 10-year T-notes (ZNU13 -0.30%) this morning are down -7.5 ticks. Sep 10-year T-note prices on Wednesday closed little changed. T-note prices found support on the July core PPI that rose +0.1% m/m and +1.2% y/y, smaller than expectations of +0.2% m/m and +1.3% y/y, with the +1.2% y/y increase the smallest annual gain in 3-years. Gains in T-note prices were limited on concern the Fed was close to tapering its bond buying program. Closes: TYU3 +1.0, FVU3 +1.25.
The dollar index (DXY00 -0.24%) this morning is down -0.151 (-0.18%). EUR/USD (^EURUSD) is up +0.0030 (+0.23%) and USD/JPY (^USDJPY) is up +0.03 (+0.03%). The dollar index on Wednesday closed slightly lower. EUR/USD gained after Eurozone Q2 GDP expanded more than forecast, while the dollar was undercut on disinflation fears after U.S. July core PPI rose +1.2% y/y, the smallest annual gain in 3-years. Declines in the dollar were limited on speculation the Fed will soon curb QE3. Closes: Dollar index -0.057 (-0.07%), EUR/USD -0.00007 (-0.05%), USD/JPY -0.067 (-0.07%).
Sep WTI crude oil (CLU13 +0.61%) this morning is up +75 cents (+0.70%) and Sep gasoline (RBU13 +0.23%) is up +0.0092 (+0.31%), both at 1-1/2 week highs. Sep crude oil and gasoline prices on Wednesday settled slightly higher. Bullish factors included (1) signs of strength in the global economy after Eurozone Q2 GDP rose +0.3% q/q, stronger than expectations of +0.2% q/q, (2) the -2.812 million bbl decline in weekly EIA crude inventories to a 7-month low of 360.49 million bbl, a bigger drop than expectations of -1.5 million bbl, and (3) the -1.359 million bbl decline in crude oil stockpiles at Cushing, OK, the delivery point for WTI futures, to a 17-month low of 38.51 million bbl. Negative factors included (1) speculation the Fed will soon reduce its stimulus measures and (2) the +0.1% increase in U.S. crude production to 7.57 million barrels a day in the week ended Aug 9, the most in 23-1/2 years. Closes: CLU3 +0.02 (+0.02%), RBU3 +0.0460 (+1.56%).
GLOBAL EVENT CALENDAR08/15/2013
| US | 0815 ET | St. Louis Fed President James Bullard speaks on the U.S. economy and monetary policy at an event in Louisville, KY. |
| 0830 ET | Weekly initial unemployment claims expected +2,000 to 335,000, previous +5,000 to 333,000. Weekly continuing claims expected -18,000 to 3.000 million, previous +67,000 to 3.018 million. | |
| 0830 ET | July CPI expected +0.2% m/m and +2.0% y/y, Jun +0.5% m/m and +1.8% y/y. July CPI ex food & Energy expected +0.2% m/m and +1.7% y/y, Jun +0.2% m/m and +1.6% y/y. | |
| 0830 ET | Aug Empire manufacturing index expected +0.54 to 10.00, July +1.62 to 9.46. | |
| 0830 ET | USDA weekly Export Sales. | |
| 0915 ET | July industrial production expected +0.3%, Jun +0.3%. July manufacturing production expected +0.2% m/m, June +0.3% m/m. July capacity utilization expected +0.1 to 77.9%, Jun 77.8%. | |
| 1000 ET | Aug NAHB housing market index expected unch at 57, July +6 to 57. | |
| 1000 ET | Aug Philadelphia Fed manufacturing index expected -4.8 to 15.0, July +7.3 to 19.8. | |
| 1100 ET | Treasury announces amount of 5-year TIPS to be auctioned Aug 22 (previous $18 billion). | |
| UK | 0430 ET | UK July retail sales ex autos expected +0.6% m/m and +2.7% y/y, Jun +0.2% m/m and +2.1% y/y. July retail sales including autos expected +0.7% m/m and +2.4% y/y, Jun +0.2% m/m and +2.2% y/y. |
U.S. STOCK CALENDAR08/15/2013
| Company Name | Symbol | Time | Event Description | Period | EPS Est (US$) |
|---|---|---|---|---|---|
| Wal-Mart Stores Inc | WMT US | 7:00 | Q2 2014 Earnings Release | Q2 2014 | 1.25 |
| Wal-Mart Stores Inc | WMT US | 7:00 | Q2 2014 Earnings Call | Q2 2014 | |
| Kohl's Corp | KSS US | 7:00 | Q2 2014 Earnings Release | Q2 2014 | 1.042 |
| Estee Lauder Cos Inc/The | EL US | 7:30 | Q4 2013 Earnings Release | Q4 2013 | 0.214 |
| Ford Motor Co | F US | 8:00 | Analyst Meeting | Y 2013 | |
| Perrigo Co | PRGO US | 8:00 | Q4 2013 Earnings Release | Q4 2013 | 1.562 |
| Kohl's Corp | KSS US | 8:30 | Q2 2014 Earnings Call | Q2 2014 | |
| Estee Lauder Cos Inc/The | EL US | 9:30 | Q4 2013 Earnings Call | Q4 2013 | |
| Perrigo Co | PRGO US | 10:00 | Q4 2013 Earnings Call | Q4 2013 | |
| Applied Materials Inc | AMAT US | 16:30 | Q3 2013 Earnings Call | Q3 2013 | |
| Nordstrom Inc | JWN US | 16:45 | Q2 2014 Earnings Call | Q2 2014 | |
| Applied Materials Inc | AMAT US | Aft-mkt | Q3 2013 Earnings Release | Q3 2013 | 0.191 |
| Dell Inc | DELL US | Aft-mkt | Q2 2014 Earnings Release | Q2 2014 | 0.238 |
| Nordstrom Inc | JWN US | Aft-mkt | Q2 2014 Earnings Release | Q2 2014 | 0.877 |
| Forest Laboratories Inc | FRX US | Annual General Meeting |
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