Tuesday, February 18th, 2014View Older Reports
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OVERNIGHT MARKETS AND NEWS
March E-mini S&Ps (ESH14 +0.14%) this morning are down -0.08% and European stocks are down -0.42% after German Feb investor confidence slid more than forecast. Asian stocks closed mixed: Japan +3.13%, Hong Kong +0.23%, China -1.26%, Taiwan +0.43%, Australia +0.18%, Singapore +0.05%, South Korea +0.01%, India +0.83%. Japanese stocks surged over 3% after the BOJ boosted lending programs and pledged to continue easing, while Chinese stocks slumped on fears of PBOC tightening after the central bank drained funds from the financial system. The PBOC conducted a 48 billion yuan ($7.9 billion) of 14-day repurchase contracts, the first time since June that it drained money from the financial system. Commodity prices are mixed. Mar crude oil (CLH14 +0.88%) is up +0.87%. Mar gasoline (RBH14 +0.48%) is up +0.43%. Apr gold (GCJ14 -0.20%) is down -0.32%. March copper (HGH14 +0.37%) is up +0.38%. Agriculture prices are higher. The dollar index (DXY00 +0.03%) is up +0.01%. EUR/USD (^EURUSD) is up +0.16% at a 3-week high. USD/JPY (^USDJPY) is up +0.56% at a 2-week high after the yen weakened when the BOJ boosted lending programs. March T-note prices (ZNH14 +0.09%) are up +4.5 ticks.The German Feb ZEW survey of expectations for economic growth fell -6.0 to 55.7, a bigger decline than expectations of -0.2 to 61.5. The Feb ZEW survey current situation rose +8.8 to 50. 0, better than expectations of +2.8 to 44.0 and the highest in 2-1/2 years.
The BOJ kept interest rates unchanged as expected, but doubled a lending program to 7 trillion yen ($68 billion) and said individual banks could borrow twice as much low-interest money as previously under a second lending facility. The BOJ also said the loan programs, which were scheduled to expire at the end of March, will be extended for another year.
Japan Q4 GDP rose +0.3% q/q and +1.0% q/q annualized, weaker than expectations of +0.7% q/q and +2.8% q/q annualized. The Q4 GDP deflator fell -0.4% y/y, a faster pace of decline than expectations of -0.2% y/y. Q4 GDP consumer spending rose +0.5% q/q, weaker than expectations of +0.8% q/q and Q4 GDP business spending rose +1.3% q/q, less than expectations of +1.8% q/q.
Eurozone Jan new car registrations rose +5.5% y/y, the fifth consecutive monthly increase.
UK Jan CPI fell -0.6% m/m and rose +1.9% y/y, slower than expectations of -0.5% m/m and +2.0% y/y, with the +1.9% y/y increase the slowest annual gain in 4-1/4 years. The Jan core CPI rose +1.6% y/y, slower than expectations of +1.9% y/y and the smallest increase in 4-1/2 years.
China Jan new yuan loans were +1320.0 billion yuan, more than expectations of +1100.0 billion yuan and the most in 4-years.
U.S. STOCK PREVIEW
Today’s Feb Empire manufacturing index is expected to show a -3.51 point decline to 9.00, reversing part of the +10.29 point increase to 12.51 seen in January. Today’s Feb NAHB housing market index is expected to be unchanged at 56, stabilizing after the -1 point decline to 56 seen in January. There are 12 of the S&P 500 companies that report earnings today: Genuine Parts (consensus 0.91), NiSource (0.47), Duke Energy (0.95), DENTSPLY International (0.61), Medtronic (0.91), Waste Management (0.61), Coca-Cola (0.46), Flowserver (1.05), Nabors Industries (0.20), Fluor (0.98), Analog Devices (0.49), CF Industries (4.41). Equity conferences during the remainder of this week include EnerCom Oil & Services Conference on Tue-Wed, Mitsubishi Tokyo Utility Conference on Tue-Wed, Consumer Analyst Group of New York Conference on Tue-Fri, and Barclays Industrial Select Conference on Wed-Thu.
OVERNIGHT U.S. STOCK MOVERS
Waste Management (WM +0.78%) reported Q4 adjusted EPS of 56 cents, below consensus of 61 cents.Wolverine World Wide (WWW -0.60%) reported Q4 adjusted EPS of 22 cents, higher than consensus of 20 cents.
Kansas City Southern (KSU -2.60%) was downgraded to 'Neutral' from 'Overweight' at JPMorgan.
Weight Watchers (WTW -27.73%) was downgraded to 'Underweight' from 'Equal Weight' at Barclays.
The WSJ reports that Actavis (ACT +0.13%) is expected to buy Forest Labs (FRX +1.49%) for $89.48 a share in cash and stockin a deal valued at $25 billion.
Medtronic (MDT +0.49%) reported Q3 EPS of 91 cents, right on expectations.
Coca-Cola (KO +0.72%) reported Q4 EPS of 46 cents, right on expectations.
Duke Energy (DUK +0.03%) reported Q4 EPS of $1.00, better than consensus of 95 cents.
NiSource (NI +1.15%) reported Q$ EPS of 47 cents, right on expectations.
Moody's Investors Service has upgraded its outlook on Italy's Baa2 government bond rating to stable from negative.
MARKET COMMENTS
Mar E-mini S&Ps (ESH14 +0.14%) this morning are down -1.50 points (-0.08%). The S&P 500 on Friday fell back briefly after U.S. Jan industrial production unexpectedly fell -0.3%, weaker than expectations of +0.2% and the first decline in 6 months, but stocks recovered and pushed up to 3-week highs on speculation that recent weakness in U.S. economic data has been weather related. Stocks also received carry-over support from a rally in European equities after Eurozone Q4 GDP was revised higher. Closes: S&P 500 +0.48%, Dow Jones +0.79%, Nasdaq 100 +0.12%.Mar 10-year T-notes (ZNH14 +0.09%) this morning are up +4.5 ticks. Mar 10-year T-note futures prices on Friday moved higher after U.S. Jan industrial production unexpectedly declined, but T-note prices fell back and closed lower after Dallas Fed President Fisher said he favors tapering QE at each Fed meeting unless he sees "something truly frightening" in the U.S. economy. Closes: TYH4 -3.50, FVH4 -2.75.
The dollar index (DXY00 +0.03%) this morning is up +0.008 (+0.01%). EUR/USD (^EURUSD) is up +0.0022 (+0.16%) to a 3-week high. USD/JPY (^USDJPY) is up +0.57 (+0.56%) to a 2-week high. The dollar index on Friday posted a 1-1/4 month low and closed lower on signs of a slowdown in the U.S. economy after U.S. Jan industrial production unexpectedly declined for the first time in 6-months. EUR/USD climbed to a 3-week high after Eurozone Q4 GDP was revised higher. Closes: Dollar index -0.187 (-0.23%), EUR/USD +0.00129 (+0.09%), USD/JPY -0.385 (-0.38%).
Mar WTI crude oil (CLH14 +0.88%) this morning is up +87 cents (+0.87%) and Mar gasoline (RBH14 +0.48%) is up +0.0121 (+0.43%). Mar crude and gasoline prices Friday settled mixed. A weak dollar boosted energy prices and Mar gasoline posted a 1-1/2 month high on concern that that shutdowns by refiners for seasonal maintenance will limit gasoline supplies. Crude prices fell back after U.S. Jan industrial production unexpectedly declined, a sign of weak energy demand. Closes: CLH4 -0.05 (-0.05%), RBH4 +0.0281 (+1.01%).
GLOBAL EVENT CALENDAR02/18/2014
| US | 0830 ET | Feb Empire manufacturing index expected -3.51 to 9.00, Jan +10.29 to 12.51. |
| 1000 ET | Feb NAHB housing market index expected unch at 56, Jan -1 to 56. | |
| 1100 ET | USDA weekly grain export inspections. | |
| JPN | 0100 ET | Revised Japan Jan machine tool orders. |
| 2330 ET | Japan Dec all-industry activity index expected +0.1% m/m, Nov +0.3% m/m. | |
| n/a | BOJ announces interest rate decision. | |
| EUR | 0200 ET | Eurozone Jan new car registrations, Dec +13.3% y/y. |
| UK | 0430 ET | UK Jan CPI expected -0.5% m/m and +2.0% y/y, Dec +0.4% m/m and +2.0% y/y. Jan core CPI, Dec +1.7% y/y. |
| 0430 ET | UK Jan RPI expected -0.4% m/m and +2.7% y/y, Dec +0.5% m/m and +2.7% y/y. Jan RPI ex mortgage interest payments, Dec +2.8% y/y. | |
| 0430 ET | UK Jan PPI input prices expected +0.2% m/m and -2.3% y/y, Dec +0.1% m/m and -1.2% y/y. | |
| 0430 ET | UK Jan PPI output prices expected unch m/m and +0.7% y/y, Dec unch m/m and +1.0% y/y. Jan PPI output core, Dec +0.1% m/m and +1.0% y/y. | |
| GER | 0500 ET | German Feb ZEW survey expectations of economic growth expected -0.2 to 61.5, Jan 61.7. Feb ZEW current situation expected +2.8 to 44.0, Jan 41.2. |
U.S. STOCK CALENDAR02/18/2014
| Company Name | Ticker | Time | Event Description | Period | Estimate |
|---|---|---|---|---|---|
| Genuine Parts Co | GPC US | Bef-mkt | Q4 2013 Earnings Release | Q4 2013 | 0.912 |
| NiSource Inc | NI US | 6:30 | Q4 2013 Earnings Release | Q4 2013 | 0.465 |
| Duke Energy Corp | DUK US | 7:00 | Q4 2013 Earnings Release | Q4 2013 | 0.951 |
| DENTSPLY International Inc | XRAY US | 7:00 | Q4 2013 Earnings Release | Q4 2013 | 0.61 |
| Medtronic Inc | MDT US | 7:15 | Q3 2014 Earnings Release | Q3 2014 | 0.911 |
| Waste Management Inc | WM US | 7:30 | Q4 2013 Earnings Release | Q4 2013 | 0.605 |
| Coca-Cola Co/The | KO US | 7:30 | Q4 2013 Earnings Release | Q4 2013 | 0.463 |
| Medtronic Inc | MDT US | 8:00 | Q3 2014 Earnings Call | Q3 2014 | |
| DENTSPLY International Inc | XRAY US | 8:30 | Q4 2013 Earnings Call | Q4 2013 | |
| NiSource Inc | NI US | 9:00 | Q4 2013 Earnings Call | Q4 2013 | |
| Coca-Cola Co/The | KO US | 9:30 | Q4 2013 Earnings Call | Q4 2013 | |
| Waste Management Inc | WM US | 10:00 | Q4 2013 Earnings Call | Q4 2013 | |
| Duke Energy Corp | DUK US | 10:00 | Q4 2013 Earnings Call | Q4 2013 | |
| Genuine Parts Co | GPC US | 11:00 | Q4 2013 Earnings Call | Q4 2013 | |
| Analog Devices Inc | ADI US | 17:00 | Q1 2014 Earnings Call | Q1 2014 | |
| Flowserve Corp | FLS US | Aft-mkt | Q4 2013 Earnings Release | Q4 2013 | 1.054 |
| Nabors Industries Ltd | NBR US | Aft-mkt | Q4 2013 Earnings Release | Q4 2013 | 0.201 |
| Fluor Corp | FLR US | 17:30 | Q4 2013 Earnings Call | Q4 2013 | |
| Fluor Corp | FLR US | Aft-mkt | Q4 2013 Earnings Release | Q4 2013 | 0.983 |
| Analog Devices Inc | ADI US | Aft-mkt | Q1 2014 Earnings Release | Q1 2014 | 0.487 |
| CF Industries Holdings Inc | CF US | Aft-mkt | Q4 2013 Earnings Release | Q4 2013 | 4.41 |
| American Electric Power Co Inc | AEP US | Roadshow - Japan - Day 2 | Y 2014 |
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