Monday, January 13th, 2014View Older Reports
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OVERNIGHT MARKETS AND NEWS
March E-mini S&Ps (ESH14 -0.24%) this morning are down -0.37%, although European stocks are up +0.08%, led by a rally in bank stocks, after the Basel Committee on Banking Supervision eased rules linked to minimum-capital requirements for lenders. Asian stocks closed mixed: Japan was closed for Coming-of-Age-Day holiday, Hong Kong +0.19%, China -0.51%, Taiwan +0.43%, Australia -0.38%, Singapore -0.27%, South Korea +0.63%, India +1.81. China's Shanghai Stock Index fell to a 5-1/4 month low on concern that a liquidity squeeze ahead of the Lunar New Year holiday in China will slow economic growth. Commodity prices are mostly lower. Feb crude oil (CLG14 -0.81%) is down -0.84%. Feb gasoline (RBG14 -0.25%) is down -0.28%. Feb gold (GCG14 -0.02%) is down -0.10%. March copper (HGH14 -0.52%) is down -0.55%. Agriculture prices are mixed. The dollar index (DXY00 -0.06%) is down -0.07% at a 1-week low. EUR/USD (^EURUSD) is down -0.02%. USD/JPY (^USDJPY) is down -0.79% at a 3-week low. March T-note prices (ZNH14 +0.04%) are up +1.5 ticks.The Basel Committee on Banking Supervision diluted a planned debt leverage ratio after some banks complained the rule would penalize low-risk financial activities and curtail lending. The committee also modified a rule on liquidity-coverage ratios or LCRs, to widen the possibility for banks to use committed liquidity facilities from central banks to meet the ratio.
The Chinese yuan climbed to 6.0443 per dollar, the highest since China unified the official and market exchange rates in 1993, after the PBOC strengthened the yuan's daily fixing by 0.1% to 6.0950 per dollar, the highest since the peg to the dollar was ended in 2005.
The UK Dec Lloyds consumer barometer of employment confidence rose +2 points to -12 from -14 in Nov.
U.S. STOCK PREVIEW
This will be a busy week with a full slate of economic reports and the first significant week of Q4 earnings reports. There are 30 of the S&P 500 companies that report earnings this week with a heavy focus on the big banks. There are no major earnings reports today. Equity Conferences this week include: Macquarie Oil and Gas Explorers Conference on Mon, FMI Midwinter Executive Conference on Mon-Tue, North American (Detroit) International Auto Show-NAIAS 2014 on Mon-Tue, ICR Exchange Conference on Mon-Tue, Biotech Showcase Investor Conference on Mon-Wed, J.P. Morgan Healthcare Conference on Mon-Thu, BMO Unconventional Resource Conference on Tue, Deutsche Bank Global Auto Industry Conference on Tue-Wed.
OVERNIGHT U.S. STOCK MOVERS
Symantec (SYMC -0.17%) was downgraded to 'Underweight' from 'Equal Weight' at Morgan Stanley.MGM Resorts (MGM +1.52%) were upgraded to 'Buy' from 'Neutral' at BofA/Merrill.
Lululemon (LULU +3.92%) dropped 5% to $56.50 in pre-market trading after the compnay cut its outlook for Q4 EPS to 71 cents-78 cents from 78 cents-80 cents, below consensus of 79 cents.
Jacobs Engineering (JEC +0.76%) was upgraded to 'Buy' from 'Neutral' at UBS.
Cree (CREE +0.81%) was downgraded to 'Hold' from 'Buy' at Stifel.
Express (EXPR +2.26%) cuts fiscal 2013 EPS view to $1.37-$1.41 from $1.46-$1.51, below consensus of $1.50, due to 'deeper than anticipated' traffic drop in Q4.
Marsh & McLennan (MMC -0.74%) was downgraded to 'Neutral' from 'Outperform' at Credit Suisse.
Marriott (MAR +0.59%) was downgraded to 'Underperform' from 'Hold' at Jefferies.
General Motors (GM -1.14%) is recalling 370,000 of its 2014 model-year Chevrolet Silverado and GMC Sierra pickup trucks, citing software that could pose a fire risk.
EnPro (NPO +4.28%) surged over 34% in after-hours trading Friday after a judge in the EnPro case says $12 million satisfies the company's liability obligation.
PVH (PVH -0.67%) cut its Q4 revenue view to $2.06 billion from $2.08 billion, and lowered guidance on fiscal 2013 to $8.22 billion from $8.24 billion.
St. Denis J. Villere & Company reported a 8.44% passive stake in Sanchez Energy (SN +1.43%) .
Select Medical (SEM -7.37%) lowered guidance on fiscal 2014 EPS to 84 cents-93 cents, weaker than consensus of 96 cents.
MARKET COMMENTS
Mar E-mini S&Ps (ESH14 -0.24%) this morning are down -6.75 points (-0.37%). The S&P 500 on Friday closed slightly higher on speculation that the weaker-than-expected Dec payrolls report will keep the Fed from aggressively tapering QE3. U.S. Dec non-farm payrolls rose +74,000, much weaker than expectations of +197,000 and the smallest monthly gain in nearly 3 years, although Nov was revised higher to a gain of +241,000 from the originally reported +203,000. Closes: S&P 500 +0.23%, Dow Jones -0.06%, Nasdaq 100 +0.35%.Mar 10-year T-notes (ZNH14 +0.04%) this morning are up +1.5 ticks. Dec 10-year T-note futures prices on Friday rallied sharply to a 3-week high after the below-forecast Dec non-farm payrolls fueled speculation the Fed may pause before it further tapers QE3. Another supportive factor for T-notes was the dovish comment from Minneapolis Fed President Kocherlakota who said he favors keeping Fed stimulus measures in place to facilitate a more rapid fall in unemployment and more rapid return to 2% inflation. Closes: TYH4 +31.0, FVH4 +19.25.
The dollar index (DXY00 -0.06%) this morning is down -0.057 (-0.07%) at a 1-week low. EUR/USD (^EURUSD) is down -0.0003 (-0.02%). USD/JPY (^USDJPY) is down -0.82 (-0.79%) at a 3-week low. The dollar index on Friday closed lower after the weaker-than-expected U.S. Dec payrolls report bolstered speculation the Fed will take its time as it winds down its asset purchases. Closes: Dollar index -0.347 (-0.43%), EUR/USD +0.0060 (+0.44%), USD/JPY -0.69 (-0.66%).
Feb WTI crude oil (CLG14 -0.81%) this morning is down -78 cents (-0.84%) and Feb gasoline (RBG14 -0.25%) is down -0.0076 (-0.28%). Feb crude oil prices and Feb gasoline prices on Friday closed higher as the dollar weakened on reduced concern the Fed will further cut its asset purchases after U.S. Dec non-farm payrolls rose less than expected. Another bullish factor for crude is strong Chinese demand after China Dec crude imports rose +10% m/m and +13% y/y to a record 6.31 million bpd. Closes: CLG4 +1.06 (+1.16%), RBG4 +0.0265 (+1.00%).
GLOBAL EVENT CALENDAR01/13/2014
| US | 1100 ET | USDA weekly grain export inspections. |
| 1240 ET | Atlanta Fed President Dennis Lockhart speaks on the economic outlook to the Rotary Club of Atlanta. | |
| 1400 ET | Dec monthly budget statement expected +$44.0 billion, Nov -$135.2 billion. | |
| UK | 0430 ET | UK Dec Lloyds employment confidence, Nov -14. |
| JPN | 2330 ET | Japan Dec bankruptcies, Nov -10.58% y/y. |
U.S. STOCK CALENDAR01/13/2014
| Company Name | Ticker | Time | Event Description | Period | Estimate |
|---|---|---|---|---|---|
| Wendy's Co/The | WEN US | 8:00 | Q4 2013 Guidance Call | Q4 2013 | |
| CapitalSource Inc | CSE US | 13:00 | Extraordinary Shareholders Meeting - M&A Vote | Y 2014 | |
| American Airlines Group Inc | AAL US | 15:00 | Decision Due on Cantor Fitzgerald LP vs. American Airlines 9/11/01 Case | ||
| Yum! Brands Inc | YUM US | December 2013 Sales and Revenue Release | 2013 |
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