Thursday, January 23rd, 2014View Older Reports
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OVERNIGHT MARKETS AND NEWS
March E-mini S&Ps (ESH14 -0.33%) this morning are down -0.44% and European stocks are down -0.17% as global stocks retreat after a gauge of manufacturing activity in China unexpectedly contracted last month. Asian stocks closed mostly lower: Japan -0.79%, Hong Kong -1.51%, China -0.53%, Taiwan -0.35%, Australia -1.07%, Singapore -1.07%, South Korea -1.30%, India +0.17%. Losses in European stocks were limited after the Eurozone Jan PMI composite index expanded at the fastest pace in 2-1/2 years. Commodity prices are mixed. Mar crude oil (CLH14 +0.24%) is up +0.07%. Mar gasoline (RBH14 -0.12%) is down -0.25%. Feb gold (GCG14 +0.75%) is up +0.61%. March copper (HGH14 -0.84%) is down -0.73%. Agriculture and livestock prices are mostly higher with Feb cattle up +0.31% at a new record high. The dollar index (DXY00 -0.41%) is down -0.37%. EUR/USD (^EURUSD) is up +0.64% and USD/JPY (^USDJPY) is down -0.37%. March T-note prices (ZNH14 +0.20%) are up +9.5 ticks on increased safe-haven demand with the slide in global stocks.The China Jan HSBC/Markit flash manufacturing PMI fell -0.9 to 49.6, weaker than expectations of -0.2 to 50.3 and the first time the index has moved below 50.0, or contracted, in 6-months.
German Jan PMI manufacturing rose +2.0 from Dec to 56.3, stronger than expectations of +0.3 to 54.6 and the fastest pace of expansion in 2-1/2 years. German Jan PMI services rose +0.1 to 53.6, slower than expectations of +0.5 to 54.0.
The Eurozone Jan PMI composite index climbed +1.1 from Dec to 53.2, stronger than expectations of +0.4 to 52.5 and the fastest pace of expansion in 2-1/2 years.
UK Jan CBI reported sales slumped -20 to 14, weaker than expectations of -9 to 25.
U.S. STOCK PREVIEW
Today’s weekly initial unemployment claims report is expected to show a small +4,000 increase to 330,000, more than reversing last week’s -2,000 decline to 326,000. Weekly continuing claims are expected to show a decline of -100,000 to 2.930 million, reversing part of last week’s +174,000 surge to 3.030 million. Today’s Dec existing home sales report is expected to show a small increase of +0.6% to 4.93 million, stabilizing after the fairly sharp drop of -4.3% to 4.90 million seen in November. Today’s Nov FHFA house price index is expected to show another solid increase of +0.4% m/m, adding to the +0.5% m/m increase seen in October.There are 20 of the S&P 500 companies that report earnings today. Notable reports include: Microsoft (consensus $0.69), Starbucks (0.69), McDonalds (1.39), Lockheed Martin (2.11), Baxter (1.25), Johnson Controls (0.70), Discover (1.18). Equity conferences during the remainder of this week include: 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
Fifth Third Bancorp (FITB +0.46%) reported Q4 EPS of 41 cents, weaker than consensus of 42 cents.Precision Castparts (PCP +0.14%) reported Q3 EPS of $2.95, below consensus of $3.03.
Lockheed Martin (LMT +1.65%) reported Q4 EPS of $2.38, well ahead of consensus of $2.11.
IBM (IBM -3.28%) rose +0.4% in pre-market trading after it announced that Lenovo Group Ltd. will buy its server business for $2.3 billion.
Microsoft (MSFT -0.66%) was upgraded to 'Buy' from 'Hold' at Deutsche Bank who also raised their price target on the stock to $40 from $32.
Oracle (ORCL -0.34%) was upgraded to 'Buy' from 'Hold' at Deutsche Bank who also raised their price target on the stock to $45 from $33.
Salesforce.com (CRM +0.31%) and Citrix (CTXS -0.47%) were both downgraded to 'Hold' from 'Buy' at Deutsche Bank.
Raymond James (RJF -0.83%) reported Q1 EPS of 81 cents, well ahead of consensus of 73 cents.
United Rentals (URI +0.10%) reported Q4 adjusted EPS of $1.59, better than consensus of $1.47.
Western Digital (WDC -0.88%) fell 2% in after-hours trading after it reported Q2 EPS of $2.19, stronger than consensus of $2.08, but then lowered guidance on Q3 EPS to $180-$1.90, below consensus of $1.95.
eBay (EBAY +0.48%) gained over 5% in after-hours trading after it reported Q4 adjusted EPS of 81 cents, higher than consensus of 80 cents, although Q4 revenue of $4.53 billion was slightly below consensus of $4.54 billion.
SanDisk (SNDK +0.42%) reported Q4 adjusted EPS of $1.71, well ahead of consensus of $1.58.
Varian Medical (VAR +0.77%) reported Q1 EPS of 91 cents, stronger than consensus of 90 cents.
Stryker (SYK -0.01%) reported Q4 adjusted EPS of $1.23, higher than consensus of $1.22.
Netflix (NFLX +1.53%) rallied 17% in after-hours trading after it reported Q4 EPS of 79 cents, much better than consensus of 66 cents.
MARKET COMMENTS
Mar E-mini S&Ps (ESH14 -0.33%) this morning are down -8.00 points (-0.44%). The S&P 500 on Wednesday closed little changed on mixed Q4 company earnings results. Stronger-than-expected earnings results from Norfolk Southern were offset by weakness in IBM, which reported a decline in revenue for the seventh consecutive quarter. Stocks failed to garner support from a rally in China’s Shanghai Stock Index to a 1-1/2 week high after China’s money-market rates fell for a second day on the PBOC’s liquidity injections. Closes: S&P 500 +0.06%, Dow Jones -0.25%, Nasdaq 100 +0.28%.Mar 10-year T-notes (ZNH14 +0.20%) this morning are up +9.5 ticks. Mar 10-year T-note futures prices on Wednesday closed lower on speculation the economy is strong enough to allow the Fed to keep tapering its monthly bond purchases. Closes: TYH4 -13.0, FVH4 -8.00.
The dollar index (DXY00 -0.41%) this morning is down -0.303 (-0.37%). EUR/USD (^EURUSD) is up +0.0087 (+0.64%). USD/JPY (^USDJPY) is down -0.39 (-0.37%). The dollar index on Wednesday settled little changed. A rally in the British pound to a 3-week high against the dollar was a negative factor after the UK Nov ILO unemployment rate fell by a larger-than-expected -0.3 to a 4-3/4 year low of 7.1%. The dollar index continues to see underlying support from expectations that the FOMC at its meeting next week will trim QE3 by another $10 billion. Closes: Dollar index +0.069 (+0.09%), EUR/USD -0.00137 (-0.10%), USD/JPY +0.216 (+0.21%).
Mar WTI crude oil (CLH14 +0.24%) this morning is up +7 cents (+0.07%) and Mar gasoline (RBH14 -0.12%) is down -0.0067 (-0.25%). Mar crude oil and gasoline prices on Wednesday closed sharply higher with Mar crude at a 2-1/2 week high and Mar gasoline at a 1-week high on speculation that the severe cold snap to grip the northern U.S. will further reduce distillate supplies as heating oil demand climbs. Thursday’s weekly EIA data is also expected to show distillate supplies, which include heating oil and diesel, fell -500,000 bbl last week. Closes: CLH4 +1.76 (+1.85%), RBH4 +0.0548 (+2.08%).
GLOBAL EVENT CALENDAR01/23/2014
| US | 0830 ET | Weekly initial unemployment claims expected +4,000 to 330,000, previous -2,000 to 326,000. Weekly continuing claims expected -100,000 to 2.930 million, previous +174,000 to 3.030 million. |
| 0830 ET | Dec Chicago Fed national activity index expected +0.30 to 0.90, Nov 0.60. | |
| 0900 ET | Nov FHFA house price index expected +0.4% m/m, Oct +0.5% m/m. | |
| 1000 ET | Dec existing home sales expected +0.6% to 4.93 million, Nov -4.3% to 4.90 million. | |
| 1000 ET | Dec leading indicators expected +0.2%, Nov +0.8% | |
| 1100 ET | EIA Weekly Petroleum Status Report. | |
| 1100 ET | Treasury announces amounts of 2-year T-notes (previous $32 billion) 5-year T-notes (previous $35 billion) and 7-year T-notes (previous $29 billion) to be auctioned Jan 28-30. | |
| 1300 ET | Treasury auctions $15 billion 10-year TIPS. | |
| GER | 0330 ET | German Jan manufacturing PMI expected +0.3 at 54.6, Dec +1.6 to 54.3. Jan PMI services expected +0.5 to 54.0, Dec -2.2 to 53.5. |
| EUR | 0400 ET | Eurozone Jan PMI composite expected +0.4 to 52.5, Dec +0.4 to 52.1. |
| 1000 ET | Eurozone Jan consumer confidence expected +0.6 to -13.0, Dec -13.6, | |
| UK | 0600 ET | UK Jan CBI reported sales expected -9 to 25, Dec 34. |
U.S. STOCK CALENDAR01/23/2014
| Company Name | Ticker | Time | Event Description | Period | Estimate |
|---|---|---|---|---|---|
| Lockheed Martin Corp | LMT US | Bef-mkt | Q4 2013 Earnings Release | Q4 2013 | 2.112 |
| AmerisourceBergen Corp | ABC US | Bef-mkt | Q1 2014 Earnings Release | Q1 2014 | 0.784 |
| Southwest Airlines Co | LUV US | Bef-mkt | Q4 2013 Earnings Release | Q4 2013 | 0.288 |
| KeyCorp | KEY US | Bef-mkt | Q4 2013 Earnings Release | Q4 2013 | 0.246 |
| Fifth Third Bancorp | FITB US | 6:30 | Q4 2013 Earnings Release | Q4 2013 | 0.42 |
| Baxter International Inc | BAX US | 7:00 | Q4 2013 Earnings Release | Q4 2013 | 1.252 |
| Johnson Controls Inc | JCI US | 7:00 | Q1 2014 Earnings Release | Q1 2014 | 0.695 |
| McDonald's Corp | MCD US | 7:58 | Q4 2013 Earnings Release | Q4 2013 | 1.393 |
| Precision Castparts Corp | PCP US | 8:00 | Q3 2014 Earnings Release | Q3 2014 | 3.034 |
| Union Pacific Corp | UNP US | 8:00 | Q4 2013 Earnings Release | Q4 2013 | 2.486 |
| Baxter International Inc | BAX US | 8:30 | Q4 2013 Earnings Call | Q4 2013 | |
| Union Pacific Corp | UNP US | 8:45 | Q4 2013 Earnings Call | Q4 2013 | |
| Noble Corp plc | NE US | 9:00 | Q4 2013 Earnings Call | Q4 2013 | |
| KeyCorp | KEY US | 9:00 | Q4 2013 Earnings Call | Q4 2013 | |
| Fifth Third Bancorp | FITB US | 9:00 | Q4 2013 Earnings Call | Q4 2013 | |
| Precision Castparts Corp | PCP US | 10:00 | Q3 2014 Earnings Call | Q3 2014 | |
| Citigroup Inc | C US | 10:00 | Q4 2013 Earnings Call - Fixed Income | C4 2013 | |
| Jabil Circuit Inc | JBL US | 10:00 | Annual General Meeting | Y 2014 | |
| Crown Castle International Corp | CCI US | 10:30 | Q4 2013 Earnings Call | Q4 2013 | |
| Micron Technology Inc | MU US | 11:00 | Annual General Meeting | Y 2014 | |
| Intuit Inc | INTU US | 11:00 | Annual General Meeting | ||
| AmerisourceBergen Corp | ABC US | 11:00 | Q1 2014 Earnings Call | Q1 2014 | |
| Jacobs Engineering Group Inc | JEC US | 11:00 | Q1 2014 Earnings Call | Q1 2014 | |
| Johnson Controls Inc | JCI US | 11:00 | Q1 2014 Earnings Call | Q1 2014 | |
| McDonald's Corp | MCD US | 11:00 | Q4 2013 Earnings Call | Q4 2013 | |
| Southwest Airlines Co | LUV US | 11:30 | Q4 2013 Earnings Call | Q4 2013 | |
| Lockheed Martin Corp | LMT US | 15:00 | Q4 2013 Earnings Call | Q4 2013 | |
| Jacobs Engineering Group Inc | JEC US | 15:00 | Annual General Meeting | Y 2014 | |
| E*TRADE Financial Corp | ETFC US | 16:05 | Q4 2013 Earnings Release | Q4 2013 | 0.191 |
| Altera Corp | ALTR US | 16:15 | Q4 2013 Earnings Release | Q4 2013 | 0.307 |
| KLA-Tencor Corp | KLAC US | 16:15 | Q2 2014 Earnings Release | Q2 2014 | 0.798 |
| Intuitive Surgical Inc | ISRG US | 16:30 | Q4 2013 Earnings Call | Q4 2013 | |
| Altera Corp | ALTR US | 16:45 | Q4 2013 Earnings Call | Q4 2013 | |
| Starbucks Corp | SBUX US | 17:00 | Q1 2014 Earnings Call | Q1 2014 | |
| E*TRADE Financial Corp | ETFC US | 17:00 | Q4 2013 Earnings Call | Q4 2013 | |
| Juniper Networks Inc | JNPR US | 17:00 | Q4 2013 Earnings Call | Q4 2013 | |
| KLA-Tencor Corp | KLAC US | 17:00 | Q2 2014 Earnings Call | Q2 2014 | |
| International Game Technology | IGT US | 17:00 | Q1 2014 Earnings Call | Q1 2014 | |
| Discover Financial Services | DFS US | 17:00 | Q4 2013 Earnings Call | Q4 2013 | |
| Microsoft Corp | MSFT US | 17:30 | Q2 2014 Earnings Call | Q2 2014 | |
| Starbucks Corp | SBUX US | Aft-mkt | Q1 2014 Earnings Release | Q1 2014 | 0.691 |
| Intuitive Surgical Inc | ISRG US | Aft-mkt | Q4 2013 Earnings Release | Q4 2013 | 4.017 |
| Juniper Networks Inc | JNPR US | Aft-mkt | Q4 2013 Earnings Release | Q4 2013 | 0.364 |
| Microsoft Corp | MSFT US | Aft-mkt | Q2 2014 Earnings Release | Q2 2014 | 0.685 |
| International Game Technology | IGT US | Aft-mkt | Q1 2014 Earnings Release | Q1 2014 | 0.305 |
| Discover Financial Services | DFS US | Aft-mkt | Q4 2013 Earnings Release | Q4 2013 | 1.183 |
| Leggett & Platt Inc | LEG US | Aft-mkt | Q4 2013 Earnings Release | Q4 2013 | 0.332 |
| Air Products & Chemicals Inc | APD US | Annual General Meeting | Y 2014 | ||
| DR Horton Inc | DHI US | Annual General Meeting |
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