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OVERNIGHT MARKETS AND NEWS
September E-mini S&Ps (ESU13 unch) this morning are down -0.02% and European stocks are down -0.71%. Asian stocks closed mixed: Japan +0.54%, Hong Kong -0.31%, China -0.16%, Taiwan -0.06%, Australia -0.67%, Singapore -1.29%, South Korea +0.04%, India +1.83%. U.S. and European stocks are under pressure amid concern the U.S. is closer to a military strike against Syria. The U.S. Senate Foreign Relations Committee is due today to vote on a resolution that sets a 90-day limit on military action against Syria. Commodity prices are mostly lower. Oct crude oil (CLV13 -0.41%) is down -0.61% after Russia raised objections to military action against Syria, which further clouds the prospects for an attack, when Russian President Putin said he will only support a UN resolution for military strikes if there's conclusive proof the Syrian government used chemical weapons. Oct gasoline (RBV13 -0.36%) is down -0.48%. Dec gold (GCZ13 -0.59%) is down -0.63% and Dec copper (HGZ13 -1.56%) is down -1.69%. Agricultural and livestock prices are mixed. The dollar index (DXY00 -0.11%) is down -0.15%. EUR/USD (^EURUSD) is up +0.09% and USD/JPY (^USDJPY) is down -0.10%. December T-note prices (ZNZ13 -0.16%) are down -6.5 ticks.China's Aug HSBC services PMI rose +1.5 points from July to 52.8, its fastest pace of expansion in 5-months.
Eurozone Q2 GDP was revised slightly higher to +0.3% q/q and -0.5% y/y from the originally reported +0.3% q/q and -0.7% y/y.
Eurozone Aug PMI composite was revised lower to 51.5 from the originally reported 51.7.
Eurozone July retail sales rose +0.1% m/m and fell -1.3% y/y, weaker than expectations of +0.2% m/m and -0.3% y/y, while Jun retail sales were revised lower to -0.7% m/m and -1.1% y/y from the originally reported -0.5% m/m and -0.9% y/y.
UK Aug PMI services unexpectedly rose +0.3 from July to 60.5, stronger than expectations of a -0.5 point decline to 59.7 and the fastest pace of expansion in 6-1/2 years.
The UK Aug BRC Nielsen shop price index all items fell -0.5% y/y, the fourth consecutive month of declines, the most since data for the series began in 2006.
U.S. STOCK PREVIEW
Today’s July U.S. trade deficit report is expected to widen moderately to -$38.7 billion from -$34.2 billion in June. However, even after today’s expected widening of the trade deficit to -$38.7 billion, the deficit will still be much narrower than the -$44.1 billion level seen in May. The Fed today will release its Beige Book report ahead of the FOMC meeting in two weeks on Sep 17-18. The FOMC in its last Beige Book released on July 17 said that the U.S. economy maintained a “modest to moderate pace.” Today’s Aug U.S. total vehicle sales report is expected to edge higher to 15.80 million from 15.73 million in July. There are 5 of the Russell 1000 companies that report earnings today: Navistar (consensus -$1.30), SAIC (0.21), Dollar General (0.74), Greif (0.91), and Forest City Enterprises (-0.02).Conferences this week include: 16th Annual Asian Shared Services & Outsourcing Week on Tue/Wed, Barclays Capital Back to School Conference on Tue-Wed, Citi Global Technology Conference on Tue-Wed, Barclays CEO Energy Conference on Wed, Barrington Research Growth Conference on Wed, Brean Capital Global Technology Conference on Wed, Pareto Securities Oil & Offshore Conference on Wed, 18th Handelsblatt Annual Conference - Banks in Upheaval on Thu, and Scotiabank Financials Conference 2013 on Thu.
OVERNIGHT U.S. STOCK MOVERS
Prudential (PRU +1.39%) was upgraded to "Overweight" from "Equal Weight" at Barclays who also raised their price target on the stock to $95 from $83.Best Buy (BBY +2.75%) was upgraded to "Neutral" from "Underperform" at BofA/Merrill.
Loews (L +0.16%) was initiated with a "Buy" at Deutsche Bank with a target of $52.
Dollar General (DG -0.17%) reported Q2 EPS of 77 cents, better than consensus of 74 cents.
SAIC (SAI +0.53%) reported Q2 EPS of 13 cents, well below consensus of 21 cents, and lowered guidance on fscal 2014 EPS view to 95 cents-$1.03, below consensus of $1.13.
ZOLL Medical (ZOLL) was awarded a $210 million government contract for defibrillators, monitors, warmers, and infusers.
Hain Celestial (HAIN +0.12%) fell over 3% in after-hours trading after Carl Icahn filed to sell 3.65 million shares of the company.
Cedar Fair Entertainment (FUN +0.33%) raised its fiscal 2013 revenue estimate to $1.10 billion-$1.25 billion, from $1.09 billion-$1.115 billion.
Glenview Capital reported a 9.1% passive stake in J. C. Penney (JCP +1.92%) .
Consolidated Press International Holdings reported a 9.35% passive stake and Cavalane Holdings reported a 9.35% passive stake in Zillow (Z +2.74%) .
Matrix Service (MTRX +1.80%) reported Q4 EPS of 28 cents, better than consensus of 26 cents.
H&R Block (HRB -0.11%) is down 4% in after-hours trading after it reported a Q1 EPS loss of -40 cents, a wider loss than consensus of -37 cents.
Bank of America (BAC +0.92%) sold its remaining stake in China Construction Bank, approxiamtely 2 billion shares, and said it sees a pretax gain of approximately $750 million from the sale.
MARKET COMMENTS
Sep E-mini S&Ps (ESU13 unch) this morning aredown -0.25 of a point (-0.02%). The S&P 500 index on Tuesday closed higher but fell back from its best levels after Speaker of the House Boehner said he will support President Obama’s call for military action against Syria. Bullish factors included (1) reduced concern of an immediate U.S. attack on Syria after President Obama said he will seek authorization from Congress, which is in recess until Sep 9, before ordering a strike against Syria, and (2) signs of strength in the global economy after the Aug ISM manufacturing index expanded by its fastest pace in 2 years and China’s Aug manufacturing PMI rose to a 16-month high of 51.0. Closes: S&P 500 +0.42%, Dow Jones +0.16%, Nasdaq 100 +0.58%.Dec 10-year T-notes (ZNZ13 -0.16%) this morning are down -6.5 ticks. Dec 10-year T-note prices on Tuesday closed lower on bearish factors including (1) reduced safe-haven demand as the threat of an immediate U.S. military attack on Syria declined after President Obama said he will seek authorization from Congress before ordering a military strike against Syria, and (2) the Aug ISM manufacturing index that unexpectedly expanded at its fastest pace in 2 years. Closes: TYZ3 -23.00, FVZ3 -11.00.
The dollar index (DXY00 -0.11%) this morning is down -0.121 (-0.15%). EUR/USD (^EURUSD) is up +0.0012 (+0.09%) and USD/JPY (^USDJPY) is down -0.10 (-0.10%). The dollar index on Tuesday climbed to a 6-week high and closed higher after an unexpected increase in the Aug ISM manufacturing index to its best level in 2 years bolstered speculation the Fed will start cutting bond purchases this month. Closes: Dollar index +0.274 (+0.33%), EUR/USD -0.00498 (-0.38%), USD/JPY +1.465 (+1.49%).
Oct WTI crude oil (CLV13 -0.41%) this morning is down -66 cents (-0.61%) and Oct gasoline (RBV13 -0.36%) is down -0.0138 (-0.48%). Oct crude oil and gasoline prices on Tuesday recovered from 1-week lows and settled mixed after Israel launched missiles into the Mediterranean as part of a missile-defense test, which fueled concern about tensions in the Middle East. Another bullish factor was the sign of strength in global manufacturing after Aug manufacturing PMIs rose in China, the U.S. and Europe. Energy prices were undercut by the rise in the dollar index to a 6-week high. Closes: CLV3 +0.89 (+0.83%), RBV3 -0.0300 (-1.04%).
GLOBAL EVENT CALENDAR09/04/2013
| US | 0700 ET | Weekly MBA mortgage applications, previous -2.5% with purchase sub-index +2.4% and refi sub-index-5.4%. |
| 0730 ET | Aug Challenger job cuts, July +2.3% y/y. | |
| 0830 ET | July trade balance expected -$38.7 billion, Jun -$34.2 billion. | |
| 1230 ET | San Francisco Fed President John Williams delivers a speech on the economy and monetary policy to community leaders in Portland, OR. | |
| 1400 ET | Fed Beige Book. | |
| 1630 ET | API weekly U.S. oil statistics. | |
| 1700 ET | Aug total vehicle sales expected 15.80 million, July 15.73 million. Aug domestic vehicle sales expected 12.30 million, July 12.20 million. | |
| 2000 ET | Minneapolis Fed President Narayana Kocherlakota participates in a town hall forum at the University of Wisconsin Lacrosse. | |
| GER | 0355 ET | Revised German Aug PMI services, pervious 52.4. |
| EUR | 0400 ET | Revised Eurozone Aug PMI composite, previous 51.7. |
| 0500 ET | Revised Eurozone Q2 GDP, previous +0.3% q/q and -0.7% y/y. | |
| 0500 ET | Eurozone July retail sales expected +0.2% m/m and -0.3% y/y, Jun -0.5% m/m and -0.9% y/y. | |
| UK | 0430 ET | UK Aug PMI services expected -0.3 to 59.9, July 60.2. |
U.S. STOCK CALENDAR09/04/2013
| Company Name | Ticker | Time | Event Description | Period | Estimate |
|---|---|---|---|---|---|
| Navistar International Corp | NAV US | Bef-mkt | Q3 2013 Earnings Release | Q3 2013 | -1.295 |
| SAIC Inc | SAI US | Bef-mkt | Q2 2014 Earnings Release | Q2 2014 | 0.212 |
| Dollar General Corp | DG US | Bef-mkt | Q2 2014 Earnings Release | Q2 2014 | 0.74 |
| SAIC Inc | SAI US | 8:00 | Q2 2014 Earnings Call | Q2 2014 | |
| CR Bard Inc | BCR US | 8:30 | Business Update Call | ||
| Navistar International Corp | NAV US | 9:00 | Q3 2013 Earnings Call | Q3 2013 | |
| Ford Motor Co | F US | 10:00 | August 2013 Sales and Revenue Call | 2013 | |
| Biogen Idec Inc | BIIB US | 10:00 | Biogen Tecfidera EU Scenarios Discussed: Patents, Reimbursement, Compounding | ||
| Dollar General Corp | DG US | 10:00 | Q2 2014 Earnings Call | Q2 2014 | |
| Greif Inc | GEF US | Aft-mkt | Q3 2013 Earnings Release | Q3 2013 | 0.908 |
| Forest City Enterprises Inc | FCE/A US | Q2 2014 Earnings Release | Q2 2014 | -0.015 | |
| General Motors Co | GM US | August 2013 Sales and Revenue Release | 2013 |
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