Thursday, October 3rd, 2013View Older Reports
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OVERNIGHT MARKETS AND NEWS
December E-mini S&Ps (ESZ13 -0.21%) this morning are down -0.25% and European stocks are also lower by -0.25% as the partial shutdown of the U.S. government enters a third day. Asian stocks closed mixed: Japan -0.09%, Hong Kong +1.00%, China and South Korea closed for holiday, Taiwan +1.73%, Australia +0.37%, Singapore -0.25%, India +1.97%. The inability of U.S. lawmakers to come up with a continuing resolution or a hike in the debt ceiling is starting to increase the cost of insurance against losses in Treasuries. The price of 5-year credit-default swaps linked to U.S. government debt jumped 2.7 bp on Wednesday to 35.5 bp, the highest in 6-months. On the positive side, the China Sep non-manufacturing index rose to a 6-month high and the Eurozone Sep PMI composite was revised up to a 2-1/4 year high, which signals strength in the global economy. Commodity prices are mixed. Nov crude oil (CLX13 -0.21%) is down -0.20% and Nov gasoline (RBX13 +0.50%)is up +0.48%. Dec gold (GCZ13 -0.95%)is down -1.11% and Dec copper (HGZ13 -0.53%) is down -0.45%. Agricultural and livestock prices are mixed. The dollar index (DXY00 -0.07%) is down -0.06% at a 7-3/4 month low as the continued shutdown of the U.S. government bolsters the case for the Fed to maintain QE. EUR/USD (^EURUSD) is up +0.16% at a 7-3/4 month high on stronger-than-expected Eurozone retail sales and USD/JPY (^USDJPY) is up +0.35%. December T-note prices (ZNZ13 -0.07%) are down -3 ticks.The Eurozone Sep PMI composite was revised up +0.1 to 52.2 from the originally reported 52.1, the fastest pace of expansion in 2-1/4 years.
Eurozone Aug retail sales rose +0.7% m/m and fell -0.3% y/y, stronger than expectations of +0.2% m/m and -1.5% y/y.
The German Sep PMI services was revised down -0.7 to 53.7 from the originally reported 54.4, still the fastest pace of expansion in 7 months.
The China Sep non-manufacturing PMI rose +1.4 points from Aug to 55.4, the fastest pace of expansion in 6 months.
UK Sep PMI services unexpectedly declined -0.2 to 60.3, below expectations of unchanged at 60.5.
UK Sep Halifax house prices climbed +0.3% m/m and +6.2% 3-months/year, below expectations of +0.5% m/m and +6.4% 3-months/year.
U.S. STOCK PREVIEW
A shut-down of nonessential government services goes into its third day today with no end in site. Today’s weekly initial unemployment claims report is expected to show an increase of +9,000 to 314,000, more than reversing last week’s unexpected -5,000 decline to 305,000. Meanwhile, today’s continuing claims report is expected to show a decline of -23,000 to 2.800 million, reversing part of last week’s +35,000 increase to 2.823 million. Today’s Sep ISM non-manufacturing index is expected to show a -1.6 decline to 57.0, reversing part of the +2.6 point increase seen in August to a 7-3/4 year high of 58.6. Today’s Aug factory orders report is expected to show a small increase of +0.3% following the fairly sharp decline of -2.4% seen in July. There is only one of the Russell 1000 companies that reports earnings today: Constellation Brands (consensus $0.88).
OVERNIGHT U.S. STOCK MOVERS
BlackBerry (BBRY +0.51%) was downgraded to "Underperform" from "Market Perform" at Bernstein.DigiTimes reports that global photovoltaic installations are forecast to rise to a 3-year high in 2014 and exceed 40 GW for the first time, which should generate installation revenue of more than $86 billion.
Domino's Pizza (DPZ +0.16%) was downgraded to "Perform" from "Outperform" at Oppenheimer.
Facebook (FB -0.28%) was downgraded to "Hold" from "Buy" at Pivotal Research.
Five Below (FIVE +3.53%) was upgraded to "Buy" from "Neutral" at Sterne Agee.
AllThingsD reported that Lenovo (LNVGY -0.38%) has selected a Qualcomm (QCOM +0.28%) chip for its new K-Series smartphone, a change from the previous version which had used Intel's (INTC +0.26%) Atom chip.
Zsolt Rumy reported a 18.0% stake in Zoltek (ZOLT -0.18%) .
Randal Kirk reported a 26.2% stake in Oragenics (OGEN -1.29%) .
Whitestone REIT (WSR -1.04%) filed to sell 4 million shares of common stock.
MARKET COMMENTS
Dec E-mini S&Ps (ESZ13 -0.21%) this morning are down -4.25 points (-0.25%). The S&P 500 index on Wednesday closed lower on concerns over an economic slowdown as the U.S. government remained shut down for a second day and after the Sep ADP employment change rose less than expected. The Sep ADP employment change increased +166,000, below expectations of +180,000. Closes: S&P 500 -0.07%, Dow Jones -0.39%, Nasdaq 100 +0.01%.Dec 10-year T-notes (ZNZ13 -0.07%) this morning are down -3 ticks. Dec 10-year T-note prices on Wednesday closed higher after the Sep ADP employment change rose less than expected, which may prompt the Fed from reducing its bond purchases. Another positive for T-notes is the ongoing shutdown of the U.S. government, which may further constrict economic growth. Closes: TYZ3 +8.50, FVZ3 +6.00.
The dollar index (DXY00 -0.07%) this morning is down -0.047 (-0.06%) at a 7-3/4 month low. EUR/USD (^EURUSD) is up +0.0022 (+0.16%) at an 8-month high and USD/JPY (^USDJPY) is up +0.34 (+0.35%). The dollar index on Wednesday tumbled to a 7-3/4 month low after the smaller-than-expected increase in the Sep ADP employment change bolstered speculation the Fed will refrain from tapering QE. EUR/USD climbed to a 8-month high after the ECB refrained from additional stimulus measures following its policy meeting and on reduced European sovereign debt concerns after Italian Prime Minister Letta won a confidence vote in parliament, which avoids the need for another election. Closes: Dollar index -0.241 (-0.30%), EUR/USD +0.00528 (+0.39%), USD/JPY -0.64 (-0.65%).
Nov WTI crude oil (CLX13 -0.21%) this morning is down -21 cents (-0.20%) and Nov gasoline (RBX13 +0.50%) is up +0.0126 (+0.48%). Nov crude oil and gasoline prices on Wednesday closed sharply higher after the dollar index slumped to a 7-3/4 month low and after TransCanada said it will finish its Keystone pipeline from Cushing, OK to the Texas Gulf Coast by the end of the month. The 700,000 barrel-a-day pipeline will further reduce crude supplies at Cushing, OK, the delivery point for WTI futures. Crude prices shook off the bearish EIA report that showed weekly crude inventories surged +5.472 million bbl, double expectations of +2.5 million bbl, and gasoline stockpiles unexpectedly rose +3.495 million bbl, more than expectations for a -700,000 bbl draw. Closes: CLX3 +2.06 (+2.02%), RBX3 +0.0181 (+0.69%).
GLOBAL EVENT CALENDAR10/03/2013
| US | 0730 ET | Sep Challenger job cuts, Aug +56.5% y/y. |
| 0830 ET | Weekly initial unemployment claims expected +9,000 to 314,000, previous -5,000 to 305,000. Weekly continuing claims expected -23,000 to 2.800 million, previous +35,000 to 2.823 million. | |
| 0830 ET | USDA weekly Export Sales. | |
| 1000 ET | Aug factory orders expected +0.3%, July -2.4%. | |
| 1000 ET | Sep ISM non-manufacturing index expected -1.6 to 57.0, Aug +2.6 to 58.6. | |
| 1100 ET | Treasury announces amounts of 3-year T-notes (previous $31 billion), 10-year T-notes (previous $21 billion) and 30-year T-bonds (previous $13 billion) to be auctioned Oct 8-10. | |
| 1300 ET | Atlanta Fed President Dennis Lockhart delivers welcoming remarks at a conference titles Recent Developments in the U.S. Labor Market: Analysis and Policy Responses. | |
| 1330 ET | Fed Governor Jerome Powell speaks at a St. Louis Fed conference on community banking. | |
| GER | 0355 ET | Revised German Sep PMI services expected no change at 54.4. |
| EUR | 0400 ET | Revised Eurozone Sep PMI composite expected no change at 52.1. |
| 0500 ET | Eurozone Aug retail sales expected +0.2% m/m and -1.5% y/y, July +0.1% m/m and -1.3% y/y. | |
| UK | 0430 ET | UK Sep PMI services expected unch at 60.5, Aug 60.5. |
U.S. STOCK CALENDAR10/03/2013
| Company Name | Ticker | Time | Event Description | Period | Estimate |
|---|---|---|---|---|---|
| Constellation Brands Inc | STZ US | Bef-mkt | Q2 2014 Earnings Release | Q2 2014 | 0.878 |
| Eli Lilly & Co | LLY US | 8:30 | Investment Community Meeting | Y 2013 | |
| Ball Corp | BLL US | 9:30 | Investor Briefing | Y 2013 | |
| Ball Corp | BLL US | 9:30 | Management Briefing | ||
| Constellation Brands Inc | STZ US | 10:30 | Q2 2014 Earnings Call | Q2 2014 | |
| Mosaic Co/The | MOS US | 11:00 | Annual General Meeting | Y 2013 | |
| Clorox Co/The | CLX US | 12:00 | Analyst Day | Y 2013 | |
| Pfizer Inc | PFE US | PDUFA, Aprela, menopause VMS/VVA, prevention of osteoporosis | |||
| Pinnacle West Capital Corp | PNW US | Investor Meeting -Day4 | Y 2013 | ||
| Questar Corp | STR US | Roadshow - Mid Atlantic - Day 1 | Y 2013 | ||
| TECO Energy Inc | TE US | Roadshow - Day 4 | Y 2013 | ||
| Walgreen Co | WAG US | September 2013 Sales and Revenue Release | 2013 |
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