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OVERNIGHT MARKETS AND NEWS
September E-mini S&Ps (ESU13 +0.12%) this morning are up +0.09% and European stocks are up +0.15%. Asian stocks closed mostly higher: Japan +3.29%, Hong Kong +0.46%, China +0.08%, Taiwan +0.54%, Australia +1.09%, Singapore +0.33%, South Korea +0.18%, India -0.79%. Expectations for a strong U.S. July non-farm payrolls report today along with Thursday's data that showed factory output from the U.S. to China and Europe expanded in July is lifting global stocks. Commodity prices are mixed. Sep crude oil (CLU13 -0.29%) is down -0.24% as it retreated from a 2-week high. Sep gasoline (RBU13 -0.46%) is down -0.51%, Dec gold (GCZ13 -1.71%) is down -1.69% at a 2-week low as improving U.S. economic data boosts expectations the Fed will curb stimulus, and Sep copper (HGU13 +0.49%) is up +0.55%. Agricultural and livestock prices are mixed. The dollar index (DXY00 +0.12%) is up +0.12% at a 1-1/2 week high. EUR/USD (^EURUSD) is down -0.01% and USD/JPY (^USDJPY) is up +0.26%. September T-note prices (ZNU13 -0.14%) are down -4 ticks at a 3-week low on expectations that today's U.S. July non-farm payrolls will be strong enough to prompt the Fed to taper its bond buying.UK July nationwide house prices rose +0.8% m/m, double expectations of +0.4% m/m and the biggest monthly gain in 11-months, while prices also rose +3.9% y/y, stronger than expectations of +3.1% y/y and the biggest annual gain in 3-years.
UK July PMI construction jumped +6.0 points to 57.0, stronger than expectations of +0.5 to 51.5 and its fastest pace of expansion in 3-years.
Eurozone Jun PPI was unch m/m and rose +0.3% y/y, right on expectations.
Spain’s Labor Ministry reported that Spain July jobless claims fell -64,900, smaller than expectations of a -75,000 decline.
U.S. STOCK PREVIEW
Today’s July non-farm payroll report is expected to show an increase of +185,000, which would be just below the increases of +195,000 or above seen in the previous 3 months (April +199,000, May +195,000, June +195,000). Meanwhile, today’s July unemployment rate is expected to fall -0.1 point to 7.5% after being unchanged at 7.6% in June. Today’s June personal income and spending reports are expected to be relatively strong at +0.4% m/m and +0.5%, following the May reports of +0.5% and +0.3%, respectively. Today's June core PCE deflator, which is the Fed’s preferred inflation measure, is expected to be unchanged from the April and May reports of +1.1% y/y, thus remaining at the record low for the series. Today’s June factory orders report is expected to show an increase of +2.3%, adding to the +2.1% increase seen in May. There are no equity conferences today.There are 9 of the S&P 500 companies that report earnings today. Reports today include Pinnacle West Capital (consensus $1.14), Cablevision (0.05), Chevron (2.96), Eaton (1.11), Host Hotels & Resorts (0.42), Sealed Air (0.25), Berkshire Hathaway ($2165), Viacom (1.30), Washington Post.
OVERNIGHT U.S. STOCK MOVERS
CBOE Holdings (CBOE +1.40%) reported Q2 adjusted EPS of 54 cents, better than consensus of 51 cents.Honda (HMC -0.51%) was upgraded to "Outperform" from "Neutral" at Credit Suisse.
Broadcom (BRCM +0.22%) was downgraded to "Neutral" from "Buy" at UBS.
Alliant Energy (LNT +1.45%) reported Q2 EPS of 59 cents, stronger than consensus of 55 cents.
GameStop (GME +1.88%) was downgraded to "Neutral" from "Outperform" at Credit Suisse.
Viacom (VIAB +2.18%) reported Q3 EPS of $1.29, weaker than consensus of $1.30, and also boosted its share buyback program by $10 billion to $20 billion.
Consolidated Edison (ED +0.72%) reported Q2 EPS of 59 cents, better than consensus of 57 cents.
Berry Plastics (BERY +1.26%) reported Q3 adjusted EPS of 35 cents, lower than consensus of 37 cents.
Lockheed Martin (LMT +1.71%) was awarded a firm-fixed-price governemnt contract woth up to $223.31 million for the procurement of Modernized-Target Acquisition Designations Sight pilot night vision sensors and related services.
MRC Global (MRC +1.23%) reported Q2 adjusted EPS of 43 cents, stronger than consensus of 38 cents.
Leap Wireless (LEAP -0.30%) reported a Q2 EPS loss of -$2.09, much weaker than consensus of -$1.12.
Activision Blizzard (ATVI +1.17%) reported Q2 EPS of 8 cents, better than consensus of 7 cents.
Intuit (INTU +0.89%) lowered guidance on fiscal 2013 EPS to $3.16-$3.18 vs. prior view of $3.31-$3.35.
LinkedIn (LNKD +4.52%) rose over 7% in after-hours trading after it reported Q2 adjusted EPS of 38 cents, better than consensus of 31 cents.
Kraft Foods (KRFT +0.99%) reported Q2 EPS ex-gain of 76 cents, stronger than consensus of 66 cents.
MARKET COMMENTS
Sep E-mini S&Ps (ESU13 +0.12%) this morning are up +1.50 points (+0.09%). The S&P 500 index on Thursday rallied to a new record high. Bullish factors included (1) reduced global growth concerns after the China July manufacturing PMI unexpectedly rose +0.2 to 50.3 and the Eurozone July PMI manufacturing was revised upward to a 2-year high of 50.3, and (2) strength in U.S. economic data after weekly initial unemployment claims unexpectedly fell -19,000 to a 5-1/2 year low of 326,000 and after the U.S. July ISM manufacturing index climbed +4.5 to a 2-year high of 55.4. Closes: S&P 500 +1.25%, Dow Jones +0.83%, Nasdaq 100 +1.17%.Sep 10-year T-notes (ZNU13 -0.14%) this morning are down -4 ticks at a new 3-week low. Sep 10-year T-note prices on Thursday closed sharply lower as stronger-than-expected U.S. economic data on weekly initial unemployment claims boosted expectations for the Fed to cut its bond purchases, while the surge in the S&P 500 to a record high reduced the safe-haven demand for Treasuries. Closes: TYU3 -1-2.00, FVU3 -16.75.
The dollar index (DXY00 +0.12%) this morning is up +0.098 (+0.12%). EUR/USD (^EURUSD) is down -0.0001 (-0.01%) and USD/JPY (^USDJPY) is up +0.26 (+0.26%). The dollar index on Thursday closed higher on stronger-than-expected U.S. economic data (weekly jobless claims and the July ISM manufacturing index), which bolsters expectations the Fed will taper QE3 within a few months. EUR/USD fell back after ECB President Draghi said that risks to the economic outlook for the Eurozone “continue to be on the downside.” Closes: Dollar index +0.884 (+1.09%), EUR/USD -0.0095 (-0.71%), USD/JPY +1.664 (+1.70%).
Sep WTI crude oil (CLU13 -0.29%) this morning is down -0.26 (-0.24%) and Sep gasoline (RBU13 -0.46%) is down -0.0155 (-0.51%). Sep crude oil and gasoline prices on Thursday rose to 1-week highs and closed higher. Bullish factors included (1) stronger than expected U.S. economic data on weekly jobless claims and July ISM manufacturing, (2) expansion in China’s and the Eurozone’s July manufacturing PMIs, and (3) ECB President Draghi’s pledge to maintain accommodative monetary policy. Closes: CLU3 +2.86 (+2.72%), RBU3 +0.0321 (+1.07%).
GLOBAL EVENT CALENDAR08/02/2013
| US | 0830 ET | July non-farm payrolls expected +185,000, Jun +195,000. July private payrolls expected +195,000, Jun +202,000. July manufacturing payrolls expected +2,000, Jun 6,000. July unemployment rate expected -0.1 to 7.5%, Jun unch at 7.6%. |
| 0830 ET | July avg hourly earnings expected +0.2% m/m and +2.2% y/y, Jun +0.4% m/m and +2.2% y/y. July avg weekly hours expected unch at 34.5, Jun 34.5. | |
| 0830 ET | Jun personal spending expected +0.5%, May +0.3%. Jun personal income expected +0.4%, May +0.5%. Personal income and spending annual revisions. | |
| 0830 ET | Jun PCE deflator expected +0.4% m/m and +1.3% y/y, May +0.1% m/m and +1.0% y/y. Jun core PCE deflator expected +0.1% m/m and +1.1% y/y, May +0.1% m/m and +1.1% y/y. | |
| 1000 ET | Jun factory orders expected +2.3%, May +2.1%. | |
| 1215 ET | St. Louis Fed President James Bullard speaks on the economy at the 2013 Municipal Finance Conference in Boston, MA. | |
| UK | 0200 ET | UK July nationwide house prices expected +0.4% m/m and +3.1% y/y, Jun +0.3% m/m and +1.9% y/y. |
| 0430 ET | UK July PMI construction expected +0.5 to 51.5, Jun 51.0. | |
| EUR | 0500 ET | Eurozone Jun PPI expected unch m/m and +0.3% y/y, May -0.3% m/m and -0.1% y/y. |
| CHI | 2100 ET | China July non-manufacturing PMI, Jun -0.4 to 53.9. |
U.S. STOCK CALENDAR08/02/2013
| Company Name | Symbol | Time | Event Description | Period | EPS Est (US$) |
|---|---|---|---|---|---|
| Pinnacle West Capital Corp | PNW US | Bef-mkt | Q2 2013 Earnings Release | Q2 2013 | 1.139 |
| Cablevision Systems Corp | CVC US | Bef-mkt | Q2 2013 Earnings Release | Q2 2013 | 0.045 |
| Chevron Corp | CVX US | Bef-mkt | Q2 2013 Earnings Release | Q2 2013 | 2.955 |
| Eaton Corp PLC | ETN US | Bef-mkt | Q2 2013 Earnings Release | Q2 2013 | 1.107 |
| Host Hotels & Resorts Inc | HST US | Bef-mkt | Q2 2013 Earnings Release | Q2 2013 | 0.417 |
| Sealed Air Corp | SEE US | 7:30 | Q2 2013 Earnings Release | Q2 2013 | 0.247 |
| American International Group Inc | AIG US | 8:00 | Q2 2013 Earnings Call | Q2 2013 | |
| Viacom Inc | VIAB US | 8:30 | Q3 2013 Earnings Call | Q3 2013 | |
| Tesoro Corp | TSO US | 8:30 | Q2 2013 Earnings Call | Q2 2013 | |
| Morgan Stanley | MS US | 9:00 | Fixed Income Investor Update Call | ||
| Cablevision Systems Corp | CVC US | 10:00 | Q2 2013 Earnings Call | Q2 2013 | |
| Southwestern Energy Co | SWN US | 10:00 | Q2 2013 Earnings Call | Q2 2013 | |
| Eaton Corp PLC | ETN US | 10:00 | Q2 2013 Earnings Call | Q2 2013 | |
| Host Hotels & Resorts Inc | HST US | 10:00 | Q2 2013 Earnings Call | Q2 2013 | |
| Chevron Corp | CVX US | 11:00 | Q2 2013 Earnings Call | Q2 2013 | |
| Sealed Air Corp | SEE US | 11:00 | Q2 2013 Earnings Call | Q2 2013 | |
| Pinnacle West Capital Corp | PNW US | 12:00 | Q2 2013 Earnings Call | Q2 2013 | |
| Public Storage | PSA US | 13:00 | Q2 2013 Earnings Call | Q2 2013 | |
| Apartment Investment & Management Co | AIV US | 13:00 | Q2 2013 Earnings Call | Q2 2013 | |
| Dell Inc | DELL US | 18:00 | Extraordinary Shareholders Meeting (M&A Vote) | ||
| Berkshire Hathaway Inc | BRK/A US | Q2 2013 Earnings Release | Q2 2013 | 2165.8 | |
| Viacom Inc | VIAB US | Q3 2013 Earnings Release | Q3 2013 | 1.298 | |
| AutoNation Inc | AN US | July 2013 Sales and Revenue Release | 2013 | ||
| Washington Post Co/The | WPO US | Q2 2013 Earnings Release | Q2 2013 |
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