Monday, October 14th, 2013View Older Reports
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OVERNIGHT MARKETS AND NEWS
December E-mini S&Ps (ESZ13 -0.72%) this morning are down -0.63% and European stocks are down -0.16% as the political stalemate in Washington continues with U.S. lawmakers still unable to agree on raising the debt limit three days before the government reaches its debt ceiling. Asian stocks closed mixed: Japan and Hong Kong closed for holiday, China +0.16%, Taiwan -0.90%, Australia -0.44%, Singapore -0.45%, South Korea -0.20%, India +0.38%. Another negative for stock prices is concern over global economic growth after China Sep exports unexpectedly declined. Commodity prices are mixed. Nov crude oil (CLX13 -0.80%) is down -0.61% and Nov gasoline (RBX13 -0.70%) is down -0.64%. Dec gold (GCZ13 +1.11%) is up +1.25% and Dec copper (HGZ13 +0.63%) is up +0.73%. Agricultural prices are mixed. The dollar index (DXY00 -0.07%) is down -0.08%. EUR/USD (^EURUSD) is up +0.14% and USD/JPY (^USDJPY) is down -0.33%. The Chinese yuan strengthened to 6.1073 per dollar, the most since the Chinese government unified the official and market exchange rates in 1993 after the PBOC raised its daily fixing to 6.1406 per dollar, the strongest since the dollar peg was removed in 2005. December T-note prices (ZNZ13 +0.10%) are up +4.5 ticks. The U.S. cash bond market is closed for Columbus Day.The China Sep trade balance shrank to a +$15.21 billion surplus, smaller than expectations of +$26.25 billion and the smallest surplus in 6 months. Sep exports unexpectedly fell -0.3% y/y, weaker than expectations of +5.5% y/y and Sep imports rose +7.4% y/y, better than expectations of +7.0% y/y.
China Sep CPI rose +3.1% y/y, higher than expectations of +2.8% y/y and the fastest pace in 7 months, while Sep PPI fell -1.3% y/y, slightly less than expectations of -1.4% y/y, although prices on the producer level have still fallen for 19 straight months.
China Sep new yuan loans climbed +787.0 billion yuan, more than expectations of +675.0 billion yuan.
Eurozone Aug industrial production rose +1.0% m/m and fell -2.1% y/y, better than expectations of +0.8% m/m and -2.5% y/y.
U.S. STOCK PREVIEW
The markets this week will focus mainly on the battle in Washington over the CR and debt ceiling. The markets are hoping for a debt ceiling increase before Thursday, which is the date on which the Treasury has said it will hit the debt ceiling and will only have about $30 billion left in cash. The CBO has said that the Treasury could start missing payments anytime between Oct 22 and Oct 31. The Treasury has a $5.8 billion interest payment on debt on Oct 31, which if missed would could represent a U.S. sovereign default. Fed Chairman Bernanke this evening is scheduled to speak at the Mexican Central Bank in Mexico City. There are two of the Russell 1000 companies that report earnings today: Brown & Brown (consensus $0.41), and Packaging Corp of America (0.89).Equity conferences this week include: 10/16/2013 on Wed; International Cash and Treasury Management Conference on Wed-Fri; Canaccord Genuity Global Resource Conference on Wed-Fri; Conference Board of Canada: Canada's North Summit 2013 on Wed; Bloomberg Oil & Gas Conference on Thu; Global Automotive Forum Annual Conference on Thu.
OVERNIGHT U.S. STOCK MOVERS
Dunkin' Brands (DNKN +1.02%) was upgraded to "Buy" from "Hold" at Miller Tabak.Williams (WMB +1.12%) was downgraded to "Neutral" from "Buy" at ISI Group.
According to the NYT, Senate Democrats decided yesterday to refuse to agree to any budget deal that locks in funding for next year at sequester levels.
Coach (COH +0.74%) was downgraded to "Hold" from "Buy" at Canaccord.
Merck (MRK -0.42%) was downgraded to "Market Perform" from "Outperform" at Bernstein.
Consolidated Water (CWCO +5.52%) was downgraded to "Hold" from "Buy" at Brean Capital due to valuation.
Iron Mountain (IRM -2.17%) was upgraded to "Outperform" from "Neutral" at RW Baird.
Boeing (BA -0.77%) said that furloughs possible if the partial government shutdown continues, according to Bloomberg.
Microsoft (MSFT +1.10%) joined in Brazilian antitrust complaint against Google (GOOG +0.43%), according to the Financial Times.
Potbelly ({=PBPB) is 'grossly overvalued', according to a weekend article by Barron's.
EMC (EMC +0.56%) , Cisco (CSCO +1.17%) , and NetApp (NTAP -0.07%) could be threatened by cloud operators like Google (GOOG) and Amazon (AMZN +1.87%), according to a weekend article in Barron's.
Kulicke & Soffa (KLIC +3.07%) looks really cheap, according to a weekend article by Barron's.
Northwest Natural Gas (NWN +0.46%) raised its quarterly dividend to 46 cents per share.
MARKET COMMENTS
Dec E-mini S&Ps (ESZ13 -0.72%) this morning are down -10.75 points (-0.63%). The S&P 500 index on Friday closed higher on optimism that a deal might be forthcoming to reopen the government and pass at least a short-term debt ceiling hike. The stock market was able to shrug off the expected news that the University of Michigan’s early-Oct U.S. consumer confidence index fell by -2.3 points to a 9-month low of 75.2. Closes: S&P 500 +0.63%. Dow Jones +0.73%, Nasdaq 100 +0.83%.Dec 10-year T-notes (ZNZ13 +0.10%) this morning are up +4.5 ticks. Dec 10-year T-note prices on Friday closed mildly higher on (1) the drop in U.S. consumer confidence, and (2) continued safe-haven demand as the political deadlock in Washington continued with the Oct 17 data for a debt ceiling hike approaching. Closes: TYZ3 +4, FVZ3 +4.
The dollar index (DXY00 -0.07%) this morning is down -0.065 (-0.08%). EUR/USD (^EURUSD) is up +0.0019 (+0.14%) and USD/JPY (^USDJPY) is down -0.33 (-0.33%). The dollar index on Friday closed mildly lower after the mid-week rally to a 2-week high. The dollar fell back on the weak U.S. consumer confidence index and the continued deadlock on the CR and debt ceiling. Closes: Dollar index -0.055 (-0.07%), EUR/USD +0.0024 (+0.18%), USD/JPY +0.42 (+0.43%).
Nov WTI crude oil (CLX13 -0.80%) this morning is down -62 cents (-0.61%) and Nov gasoline (RBX13 -0.70%) is down -0.0171 (-0.64%). Nov crude oil and gasoline prices on Friday closed lower as the U.S. political deadlock continued and as the IEA forecasted that non-OPEC oil production in 2014 will rise by a near-record 1.7 million bpd, led by the U.S., Canada and Kazakhstan. Closes: CLX3 -0.99 (-0.96%), RBX3 -0.0300 (-1.11%).
GLOBAL EVENT CALENDAR10/14/2013
| US | n/a | U.S. markets open but government offices closed for Columbus Day. |
| 2100 ET | Fed Chairman Bernanke speaks at Mexican Central Bank in Mexico City. | |
| EUR | 0500 ET | Eurozone Aug industrial production expected +0.5% m/m and -2.4% y/y, July -1.5% m/m and -2.1% y/y. |
| JPN | n/a | Japanese markets closed for Health-sports Day. |
U.S. STOCK CALENDAR10/14/2013
| Company Name | Ticker | Time | Event Description | Period | Estimate |
|---|---|---|---|---|---|
| Chevron Corp | CVX US | 9:30 | Chevron Trial Begins on Alleged Fraud in Ecuador | ||
| Oracle Corp | ORCL US | 12:00 | Business Update Call | ||
| Brown & Brown Inc | BRO US | Aft-mkt | Q3 2013 Earnings Release | Q3 2013 | 0.405 |
| Packaging Corp of America | PKG US | Aft-mkt | Q3 2013 Earnings Release | Q3 2013 | 0.888 |
| Wal-Mart Stores Inc | WMT US | Investment Community Meeting - Day 1 | Y 2013 | ||
| DSW Inc | DSW US | Extraordinary Shareholders Meeting | Y 2013 |
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