Friday, January 10th, 2014View Older Reports
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OVERNIGHT MARKETS AND NEWS
March E-mini S&Ps (ESH14 +0.38%) this morning are up +0.34% at a 1-week high and European stocks are up +0.87% ahead of this morning's U.S. Dec payrolls report. Asian stocks closed mixed: Japan +0.20%, Hong Kong +0.26%, China -0.78%, Taiwan +0.17%, Australia -0.23%, Singapore -0.05%, South Korea -0.45%, India +0.22%. Gains in European stocks were limited after UK industrial and manufacturing production unexpectedly stagnated in Nov. China's Shanghai Stock Index fell to a 5-1/4 month low after China Dec exports rose less than expected. Commodity prices are mostly higher. Feb crude oil (CLG14 +1.04%) is up +1.09%. Feb gasoline (RBG14 +0.53%) is up +0.64%. Feb gold (GCG14 +0.25%) is up +0.28%. March copper (HGH14 +0.35%) is up +0.36%. Agriculture and livestock prices are mixed. The dollar index (DXY00 +0.03%) is up +0.02%. EUR/USD (^EURUSD) is down -0.08%. USD/JPY (^USDJPY) is up +0.18%. March T-note prices (ZNH14 +0.04%) are down -0.5 of a tick.The China Dec trade balance shrank to a +$25.64 billion trade surplus, smaller than expectations of a +$32.15 billion surplus. Dec exports rose +4.3% y/y, weaker than expectations of +5.0%, while Dec imports climbed +8.3% y/y, stronger than expectations of +5.0% y/y.
Speaking Thursday evening, Minneapolis Fed President Kocherlakota suggested he favors keeping Fed stimulus measures in place when he said "By easing monetary policy relative to its current stance, the FOMC cold facilitate a more rapid fall in unemployment and more rapid return to 2% inflation."
UK Nov industrial production was unch m/m and up +2.5% y/y, weaker than expectations of +0.4% m/m and +3.0% y/y. Nov manufacturing production was unch m/m and up +2.8% y/y, also weaker than expectations of +0.4% m/m and +3.3% y/y.
UK Nov construction output unexpectedly fell -4.0% m/m, weaker than expectations of +0.8% m/m and the sharpest decline in 17-months. On a year-over-year basis, Nov construction output rose +2.2% y/y, weaker than expectations of +7.5% y/y.
The Japan Nov leading index CI rose +1.0 from Oct to 110.8, right on expectations and the highest in 6-1/3 years. The Nov coincident index rose +0.1 to 110.5, slightly less than expectations of +0.2 to 110.6 but still the highest in 5-1/3 years.
U.S. STOCK PREVIEW
Today’s Dec payroll report is expected to show an increase of +195,000, which would be a bit below November’s +203,000 gain and the 4-month average of +204,000. Today’s December unemployment rate is expected to be unchanged from November’s level of 7.0%. There are no major earnings reports today. There are no equity conferences today.
OVERNIGHT U.S. STOCK MOVERS
Tiffany (TIF +0.34%) said holiday sales were up 6% y/y and that it sees fiscal 2013 EPS ex-items $3.65-$3.75, well above consensus of $3.52.Microsoft (MSFT -0.64%) was upgraded to 'Overweight' from 'Equal Weight' at Barclays.
Infosys (INFY +0.70%) rose 3% in pre-market trading after it reported Q3 EPS of 81 cents, better than consensus of 75 cents, and raised its fiscal 2014 revenue growth outlook to 11.5%-12% from 9%-10%.
Target (TGT +1.04%) was upgraded to 'Buy' from 'Neutral' at Goldman.
Eli Lilly (LLY +1.12%) was downgraded to 'Underweight' from 'Equal Weight' at Barclays.
Citigroup raised its price target on Monsanto (MON -2.90%) to $133 from $122 and keeps its 'Buy' rating on the stock.
ESPN reported that Notre Dame will sign an equipment deal with Under Armour (UA +1.14%) to wear the company's gear in all sports when the university's current deal with Adidas (ADDYY -1.37%) expires at the end of the school year.
Abercrombie & Fitch (ANF +0.88%) jumped over 13% in after-hours trading after it hiked its fiscal year adjusted EPS view to $1.55-$1.65 from $1.40-$1.50, above consensus of $1.47.
Royce & Associates reported a 7.17% passive stake in GSE Holding (GSE -5.50%) and a 6.65% passive stake in Genesco (GCO -0.55%) .
Sears (SHLD -3.18%) plunged 14% in after-hours trading after it said it sees a full year adjusted EPS loss of -$7.64 to -$8.61, a larger loss than consensus of -$6.20.
Paychex (PAYX -0.51%) was downgraded to 'Underperform' from 'Sector Perform' at RBC Capital.
Shoe Carnival (SCVL -1.90%) fell over 8% in after-hours trading after it lowered guidance on Q4 diluted EPS to 3 cents-6 cents, well below consensus of 21 cents.
SYNNEX (SNX +1.93%) reported Q4 EPS of $1.20, better than consensus of $1.18.
Alcoa (AA -1.29%) fell over 5% in after-hours trading after it reported Q4 adjusted EPS of 4 cents, below consensus of 6 cents.
MARKET COMMENTS
Mar E-mini S&Ps (ESH14 +0.38%) this morning are up +6.25 points (+0.34%) at a 1-week high. The S&P 500 on Thursday closed little changed as price movement was limited ahead of Friday's Dec non-farm payrolls report. Stocks had opened higher after weekly initial unemployment claims fell -15,000 to a 5-week low of 330,000, a bigger decline than expectations of -4,000 to 335,000. Gains in stocks were muted, though, on negative carry-over from Wednesday's Dec 17-18 FOMC minutes that showed that the Fed saw declining benefits from QE3. Closes: S&P 500 +0.03%, Dow Jones -0.11%, Nasdaq 100 -0.42%.Mar 10-year T-notes (ZNH14 +0.04%) this morning are little changed, down -0.5 of a tick. Dec 10-year T-note futures prices on Thursday closed higher due to strong demand for the Treasury's $13 billion 30-year T-bond auction. Short-covering emerged in T-notes after the bid-to-cover ratio for the auction was reported at 2.57, well above the 10-auction average of 2.38 and a sign of strong demand. Closes: TYH4 +7.0, FVH4 +2.75.
The dollar index (DXY00 +0.03%) this morning is up +0.017 (+0.02%). EUR/USD (^EURUSD) is down -0.0011 (-0.08%). USD/JPY (^USDJPY) is up +0.19 (+0.18%). The dollar index on Thursday rose to a 1-1/2 month high, but fell back after stock prices recovered and closed little changed. EUR/USD fell to a 1-month low after ECB President Draghi pledged to “maintain an accommodative stance of monetary policy for as long as necessary.” Closes: Dollar index -0.017 (-0.02%), EUR/USD -0.0033 (+0.24%), USD/JPY -0.04 (-0.04%).
Feb WTI crude oil (CLG14 +1.04%) this morning is up +$1.00 a barrel (+1.09%) and Feb gasoline (RBG14 +0.53%) is up +0.0170 (+0.64%). Feb crude oil prices and Feb gasoline prices on Thursday closed lower as Feb crude posted an 8-month low and Feb gasoline fell to a 4-week low. Negative factors included (1) the rally in the dollar index to a 1-1/2 month high, and (2) negative carry-over from Wednesday's weekly EIA report that showed a +0.3% increase in U.S. oil production to a new 25-1/3 year high of 8.145 million bpd. Closes: CLG4 -1.34 (-1.43%), RBG4 -0.0223 (-0.83%).
GLOBAL EVENT CALENDAR01/10/2014
| US | 0830 ET | Dec non-farm payrolls expected +195,000, Nov +203,000. Dec private payrolls expected +197,000, Nov +196,000. Dec manufacturing payrolls expected +16,000, Nov +27,000. Dec unemployment rate expected unch at 7.0%, Nov -0.3 to 7.0%, Nov 7.0%. Revision of seasonally adjusted household survey data. |
| 0830 ET | Dec avg hourly earnings expected +0.2% m/m, Nov +0.2% m/m and +2.0% y/y. Dec avg weekly hours expected unch at 34.5, Nov 34.5. | |
| 0845 ET | Feds Lacker speaks on the U.S. economic outlook in Raleigh, NC. | |
| 1000 ET | Nov wholesale inventories expected +0.4% m/m, Oct +1.4% m/m. Nov wholesale sales expected +0.7% m/m, Oct +1.0% m/m. | |
| 1200 ET | Jan WASDE crop production report. | |
| 1300 ET | St. Louis Fed President James Bullard speaks about the U.S. economic outlook to the Indiana Bankers Association in Indianapolis. | |
| JPN | 0000 ET | Japan Nov leading index CI expected +1.0 to 110.8, Oct 109.8. Nov coincident index expected +0.2 to 110.6, Oct 110.4. |
| UK | 0430 ET | UK Nov industrial production expected +0.4% m/m and +3.0% y/y, Oct +0.4% m/m and +3.2% y/y. UK Nov manufacturing production expected +0.4% m/m and +3.3% y/y, Oct +0.4% m/m and +2.7% y/y. |
| 0430 ET | UK Nov construction output expected +0.9% m/m and +7.6% y/y, Oct +2.2% m/m and +5.3% y/y. |
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