Tuesday, January 21st, 2014View Older Reports
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OVERNIGHT MARKETS AND NEWS
March E-mini S&Ps (ESH14 +0.26%) this morning are up +0.27% and European stocks are up +0.45%. Asian stocks closed mostly higher: Japan +0.99%, Hong Kong +0.45%, China +0.99%, Taiwan -0.25%, Australia +0.69%, Singapore +0.16%, South Korea +0.60%, India +0.22%. Global stocks found support on a plunge in Chinese money-market rates after the PBOC added funds and expanded access to a lending facility after the 7-day repurchase rate had surged 153 bp to a 1-month high of 6.32% on Monday. Another positive for European stocks is reduced sovereign-debt concerns after the yield on Portugal's 10-year government bond fell below 5.00% for the first time since Aug 2010. Gains in European stocks were muted, though, after German Jan investor confidence unexpectedly dropped for the first time in 6 months. Commodity prices are mixed. Feb crude oil (CLG14 +0.37%) is up +0.33%. Feb gasoline (RBG14 +1.69%) is up +1.56%. Feb gold (GCG14 -0.62%) is down -0.45%. March copper (HGH14 -0.60%) is down -0.45%. Agriculture prices are mixed. The dollar index (DXY00 +0.12%) is up +0.13% at a 2-1/4 month high as EUR/USD (^EURUSD) fell -0.22% when German investor confidence unexpectedly fell. USD/JPY (^USDJPY) is up +0.48% after Japanese Economy Minister Amari warned that his country still faced the risk of falling back into deflation, which undercut the yen on speculation the BOJ may press ahead with additional stimulus. March T-note prices (ZNH14 -0.21%) are down -10.5 ticks.In an attempt to alleviate a liquidity squeeze, the PBOC added more than 255 billion yuan ($42 billion) into the financial system and will allow small and medium-sized Chinese banks to access its Standing Lending Facility for loans of up to 2-weeks on a trial basis before China's Lunar New Year holiday begins on Jan 31.
German Jan ZEW survey expectations unexpectedly slipped -0.3 to 61.7, weaker than expectations of +2.0 to 64.0. Jan ZEW survey current situation rose +8.8 to 41.2, stronger than expectations of +2.6 to 35.0 and the best level in 20-months.
UK Jan CBI trends total orders slipped -14 to -2, weaker than expectations of -2 to 10. Jan CBI trends selling prices rose +9 to a 1-year high of 20, a bigger increase than expectations of +1 to 12. Jan CBI business optimism unexpectedly fell -3 to 21, weaker than expectations of +1 to 25.
German Dec PPI rose +0.1% m/m and fell -0.5% y/y, stronger than expectations of unch m/m and -0.6% y/y.
China Q4 GDP rose +7.7% y/y, a faster pace than expectations of +7.6% y/y.
China Dec industrial production climbed +9.7% y/y, slower than expectations of +9.8% y/y, while China Dec retail sales rose +13.6% y/y, right on expectations.
Japan Nov industrial production was revised downward to -0.1% m/m and +4.8% y/y from the originally reported +0.1% m/m and +5.0% y/y.
U.S. STOCK PREVIEW
Attention this week will mainly focus on earnings reports given the dearth of U.S. economic reports. There are only a few important economic reports this week, all of which will be released on Thursday. Thursday’s reports include the Nov FHFA housing price index (expected +0.3% m/m), Dec existing home sales (expected +1.0%), and Dec leading indicators (expected +0.2%). The Treasury on Thursday will sell $15 billion of 10-year TIPS. The markets will be looking ahead to next week’s FOMC meeting on Tue/Wed where the consensus is that the FOMC will taper QE3 by another $10 billion to $65 billion per month.There are 13 of the S&P 500 companies that report earnings today with notable reports including IBM (consensus $6.00), Texas Instruments (0.46), Halliburton (0.89), Baker Hughes (0.61), Johnson & Johnson (1.20), Verizon (0.65), Rockwell Collins (0.94), Travelers (2.15). Equity conferences during the remainder of this week include: World Future Energy Summit on Tue-Wed, 13th Annual Pharma Contact Centers Conference on Wed-Thu, World Economic Forum Annual Meeting 2014 on Wed-Thu, and SMi Social Media in the Pharmaceutical Industry on Thu.
OVERNIGHT U.S. STOCK MOVERS
Verizon Communications (VZ -0.37%) reported Q4 EPS of 66 cents, higher than consensus of 65 cents.Delta Air Lines (DAL -1.61%) reported Q4 EPS of 65 cents, stronger than consensus of 63 cents.
Rockwell Collins (COL +0.69%) reported Q1 EPS of 91 cents, below consensus of 94 cents.
Halliburton (HAL -0.47%) reported Q4 EPS of 93 cents, better than consensus of 89 cents.
Travelers (TRV -0.88%) reported Q4 EPS of $2.68, well ahead of consensus of $2.16.
Regions Financial (RF +0.86%) reported Q4 EPS of 21 cents, stronger than consensus of 20 cents.
Baker Hughes (BHI +0.76%) reported Q4 EPS of 62 cents, better than consensus of 61 cents.
YRC Worldwide (YRCW +2.26%) rose more than 8% in after-hours trading after the Teamsters Union announced a tentative agreement with thwe company.
D. E. Shaw & Co reported a 5.1% passive stake in Tesoro (TSO -0.34%) .
Litespeed reported an 8.1% passive stake in RadioShack (RSH unch) .
Schlumberger (SLB +1.81%) was upgraded to 'Outperform' from 'Neutral' at Credit Suisse.
JoS. A. Bank (JOSB +0.66%) board rejected the tender offer from Men's Wearhouse (MW -1.25%) to acquire all outstanding common shares of Jos A. Bank at a price of $57.50 per share in cash, saying the offer is inadequate from a financial point of view and not in the best interest of Jos. A. Bank's stockholders.
Southpaw Asset reported 6.8% passive stake in Comtech (CMTL -1.58%) .
Luxor Capital reported a 6.1% passive stake in AMC Entertainment (AMC -0.30%) .
MARKET COMMENTS
Mar E-mini S&Ps (ESH14 +0.26%) this morning are up +5.00 points (+0.27%). The S&P 500 on Friday closed lower after mixed U.S. economic data kept prices fairly contained. U.S. Dec housing starts fell -9.8% to 999,000 from an upward revised 1.017 million in Nov, slightly less than expectations of -9.7% to 985,000, although Dec building permits fell -3.0% to 986,000, a bigger decline than expectations of -0.3% to 1.014 million. Also, U.S. Jan University of Michigan consumer confidence unexpectedly fell -2.1 to 80.4, weaker than expectations of a +1.0 point increase to 83.5. Closes: S&P 500 -0.39%, Dow Jones +0.25%, Nasdaq 100 -0.55%.Mar 10-year T-notes (ZNH14 -0.21%) this morning are down -10.5 ticks. Mar 10-year T-note futures prices on Friday closed higher after U.S. Dec building permits, a proxy for future home building, fell more than expected, and after the U.S. Jan University of Michigan consumer confidence unexpectedly declined. Closes: TYH4 +5.0, FVH4 +2.25.
The dollar index (DXY00 +0.12%) this morning is up +0.105 (+0.13%) at a 2-1/4 month high. EUR/USD (^EURUSD) is down -0.0030 (-0.22%). USD/JPY (^USDJPY) is up +0.50 (+0.48%). The dollar index on Friday posted a 2-1/4 month high and closed higher after stronger-than-expected U.S. Dec housing starts bolstered the prospects for the Fed to continue to taper QE3. EUR/USD tumbled to a 1-3/4 month low after the 3-month Euribor rate rose to 0.302%, above the ECB's 2-week refinancing rate of 0.25%, which fueled speculation the ECB may take additional easing measures after ECB President Draghi said earlier this month that the ECB would act to counter an "unwarranted tightening of short-term money markets." Closes: Dollar index +0.315 (+0.39%), EUR/USD -0.0081 (-0.60%), USD/JPY -0.052 (-0.05%).
Feb WTI crude oil (CLG14 +0.37%) this morning is up +31 cents (+0.33%) and Feb gasoline (RBG14 +1.69%) is up +0.0408 (+1.56%). Feb crude oil and gasoline prices on Friday closed higher with Feb crude at a 2-week high on signs of strength in the U.S. economy after Dec housing starts fell less than expected and after Dec industrial production gained for a fifth month. Prices fell back from their best levels after the dollar index rallied up to a 2-1/4 month high. Closes: CLG4 +0.13 (+0.14%), RBG4 +0.0253 (+0.97%).
GLOBAL EVENT CALENDAR01/21/2014
| US | 0930 ET | IMF releases revisions to its world economic outlook. |
| 1100 ET | USDA weekly grain export inspections. | |
| GER | 0500 ET | German Jan ZEW survey expectations of economic growth expected +2.0 to 64.0, Dec 62.0. Jan ZEW survey current situation expected +2.6 to 35.0, Dec 32.4. |
| UK | 0600 ET | UK Jan CBI trends total orders expected -2 to 10, Dec 12. Jan CBI trends prices expected +1 to 12, Dec 11. Jan CBI business optimism expected +1 to 25, Dec 24. |
| JPN | 2330 ET | Japan Nov all-industry activity index expected +0.3% m/m, Oct -0.2% m/m. |
U.S. STOCK CALENDAR01/21/2014
| Company Name | Ticker | Time | Event Description | Period | Estimate |
|---|---|---|---|---|---|
| Halliburton Co | HAL US | Bef-mkt | Q4 2013 Earnings Release | Q4 2013 | 0.885 |
| Johnson & Johnson | JNJ US | Bef-mkt | Q4 2013 Earnings Release | Q4 2013 | 1.203 |
| Baker Hughes Inc | BHI US | 6:00 | Q4 2013 Earnings Release | Q4 2013 | 0.61 |
| Regions Financial Corp | RF US | 7:00 | Q4 2013 Earnings Release | Q4 2013 | 0.2 |
| Forest Laboratories Inc | FRX US | 7:00 | Q3 2014 Earnings Release | Q3 2014 | 0.031 |
| Verizon Communications Inc | VZ US | 7:30 | Q4 2013 Earnings Release | Q4 2013 | 0.651 |
| Rockwell Collins Inc | COL US | 7:30 | Q1 2014 Earnings Release | Q1 2014 | 0.943 |
| Delta Air Lines Inc | DAL US | 7:30 | Q4 2013 Earnings Release | Q4 2013 | 0.626 |
| Baker Hughes Inc | BHI US | 8:00 | Q4 2013 Earnings Call | Q4 2013 | |
| Verizon Communications Inc | VZ US | 8:30 | Q4 2013 Earnings Call | Q4 2013 | |
| Johnson & Johnson | JNJ US | 8:30 | Q4 2013 Earnings Call | Q4 2013 | |
| Rockwell Collins Inc | COL US | 9:00 | Q1 2014 Earnings Call | Q1 2014 | |
| Travelers Cos Inc/The | TRV US | 9:00 | Q4 2013 Earnings Call | Q4 2013 | |
| Halliburton Co | HAL US | 9:00 | Q4 2013 Earnings Call | Q4 2013 | |
| Delta Air Lines Inc | DAL US | 10:00 | Q4 2013 Earnings Call | Q4 2013 | |
| Forest Laboratories Inc | FRX US | 10:00 | Q3 2014 Earnings Call | Q3 2014 | |
| Regions Financial Corp | RF US | 11:00 | Q4 2013 Earnings Call | Q4 2013 | |
| CA Inc | CA US | 16:30 | Q3 2014 Earnings Release | Q3 2014 | 0.711 |
| Texas Instruments Inc | TXN US | 16:30 | Q4 2013 Earnings Release | Q4 2013 | 0.464 |
| International Business Machines Corp | IBM US | 16:30 | Q4 2013 Earnings Call | Q4 2013 | |
| CA Inc | CA US | 17:00 | Q3 2014 Earnings Call | Q3 2014 | |
| Xilinx Inc | XLNX US | 17:00 | Q3 2014 Earnings Call | Q3 2014 | |
| Texas Instruments Inc | TXN US | 17:30 | Q4 2013 Earnings Call | Q4 2013 | |
| International Business Machines Corp | IBM US | Aft-mkt | Q4 2013 Earnings Release | Q4 2013 | 5.999 |
| Travelers Cos Inc/The | TRV US | Q4 2013 Earnings Release | Q4 2013 | 2.152 | |
| Xilinx Inc | XLNX US | Q3 2014 Earnings Release | Q3 2014 | 0.542 |
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