Wednesday, April 9th, 2014View Older Reports
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OVERNIGHT MARKETS AND NEWS
June E-mini S&Ps (ESM14 +0.14%) this morning are up +0.09% and European stocks are up +0.32%. Alcoa started quarterly earnings season off on a positive note as it trades up by more than 3% in pre-market trading after it reported better-than-expected quarterly profits. The situation in Ukraine remains tense after pro-Russian activists released scores of hostages in Ukraine's eastern city of Luhansk today after U.S. Secretary of State Kerry accused Russia of using "special forces and agents" to fuel unrest. Asian stocks outside of Japan closed higher: Japan -2.10%, Hong Kong +1.09%, China +0.06%, Taiwan +0.48%, Australia +0.98%, Singapore +0.18%, South Korea +0.28%, India +1.61%. China's Shanghai Stock Index posted a 1-1/2 month high on signs the government will boost stimulus measures to promote economic growth after the People's Daily reported that the Chinese government raised its fixed-asset investment target for railway spending this year to 720 billion yuan ($116.2 billion) from 700 billion yuan. Commodity prices are mixed. May crude oil (CLK14 +0.16%) is down -0.03%. May gasoline (RBK14 +0.30%) is up +0.23%. Jun gold (GCM14 -0.45%) is up +0.02%. May copper (HGK14 -0.69%) is down -0.48%. Agriculture and livestock prices are mixed, although May soybeans are up +0.74% at a 7-month nearest-futures high ahead of the USDA's Apr WASDE crop production report later today. The dollar index (DXY00 +0.07%) is up +0.06%. EUR/USD (^EURUSD) is up +0.05%. USD/JPY (^USDJPY) is up +0.23%. June T-note prices (ZNM14 -0.11%) are down -5 ticks.The German Feb trade balance increased to a 16.3 billion euro surplus from a 15.0 billion euro surplus in Jan, less than expectations of a 17.5 billion euro surplus. Feb exports fell -1.3% m/m, more than expectations of -0.5% m/m and the biggest decline in 9 months. Feb imports rose +0.4% m/m, better than expectations of +0.1% m/m.
The South Korean won climbed to 1,040.46 per dollar today, the highest in 5-1/2 years, on speculation that South Korean authorities will allow it to appreciate after South Korean Finance Minister Hyun Oh Seok told reporters that the government is more concerned with currency market volatility than the level of the won.
U.S. STOCK PREVIEW
The minutes will be released today from the March 18-19 FOMC meeting. That was the meeting at which the FOMC dropped its 6.5% unemployment rate threshold and said will now look at a “wide range of information” when deciding on policy. The Treasury today will sell $21 billion in 10-year T-notes. There are 4 of the Russell 1000 companies that report earnings today: Constellation Brands (consensus $0.76), MSC Industrial Direct (0.85), Bed Bath & Beyond (1.60), and Progressive Corp (0.39). Equity and industry conferences during the remainder of this week include: BNEF Summit on Mon-Wed, and New Economic Summit (NES) 2014 on Tue-Wed.
OVERNIGHT U.S. STOCK MOVERS
Constellation Brands (STZ +0.84%) raised guidance on fiscal 2015 adjusted EPS to $3.95-$4.15, above consensus of $3.95.Arch Coal (ACI +3.19%) and Walter Energy (WLT +4.77%) were both downgraded to 'Sell' from 'Neutral' at UBS.
General Motors (GM +1.23%) was downgraded to 'Underweight' from 'Equal Weight' at Morgan Stanley.
The WSJ reports that Apple (AAPL -0.01%) seeks $2.2 billion in damages from Samsung (SSNLF +6.56%) in patent infringement charges that covers more than 37 million smartphones and tablets sold by Samsung in the U.S. from 2011-2013.
CBOE Holdings (CBOE -1.08%) was upgraded to 'Buy' from 'Neutral' at BofA/Merrill.
NASDAQ (NDAQ -2.74%) was downgraded to 'Neutral' from 'Buy' at BofA/Merrill.
Tech Data (TECD +0.62%) reported Q4 adjusted EPS of $2.10, better than consensus of $1.93, although Q$ revenue of $7.97 billion was below consensus of $7.98 billion.
Toyota Motor (TM -2.06%) announced five recalls involving 27 Toyota models and over 6 million vehicles worldwide.
Aeropostale (ARO +1.19%) was downgraded to 'Underweight' from 'Neutral' at Piper Jaffray.
Intuitive Surgical (ISRG -1.45%) slumped over 10% in after-hours trading after it said it sees Q1 revenue of $465 million, well below consensus of $537.9 million.
SAIC (SAIC +1.50%) reported Q4 EPS of 66 cents, higher than consensus of 65 cents.
JP Morgan Chase reported a 10.7% passive stake in Malibu Boats (MBUU +0.41%) .
Philip Morris (PM +1.12%) was upgraded to 'Neutral' from 'Reduce' at Nomura.
Alcoa (AA +0.48%) rose over 3% in pre-market trading after it reported Q1 adjusted EPS of 9 cents, well ahead of consensus of 5 cents, although Q1 revenue of $5.50 billion was below consensus of $5.55 billion.
MARKET COMMENTS
June E-mini S&Ps (ESM14 +0.14%) this morning are up +1.75 points (+0.09%). The S&P 500 on Tuesday closed higher. Bullish factors included (1) the IMF report stating that the U.S. economy is in good shape and is providing a “major impulse” to global economic growth, and (2) a rebound in biotechnology and computer and internet-related stocks that had slumped over the past 2 sessions on concern about their high multiples. Closes: S&P 500 +0.38%, Dow Jones +0.06%, Nasdaq +0.87%.Jun 10-year T-notes (ZNM14 -0.11%) this morning are down -5 ticks. Jun 10-year T-note futures prices on Tuesday climbed to a 2-week high and closed higher. Bullish factors included (1) increased flight-to-safety demand for T-notes on concerns about Ukraine after Russia called on Ukraine to halt all military preparations “immediately” in the eastern part of Ukraine or risk civil war, and (2) strong demand for the Treasury’s $30 billion 3-year T-note auction that had a bid-to-cover ratio of 3.36, above the 12-auction average of 3.28. Closes: TYM4 +6.00, FVM4 +1.25.
The dollar index (DXY00 +0.07%) this morning is up +0.044 (+0.06%). EUR/USD (^EURUSD) is up +0.0007 (+0.05%). USD/JPY
(^USDJPY) is up +0.23 (+0.23%). The dollar index on Tuesday fell to a 2-week low and closed lower. Bearish factors included (1) strength in the yen as USD/JPY fell to a 2-1/2 week low after the BOJ refrained from additional stimulus measures following their 2-day policy meeting, and (2) reduced European sovereign debt concerns that boosted EUR/USD after ECB data showed that ECB lending to Portuguese banks in March fell for a sixth month to 45.05 billion euros, the least amount Portuguese lenders have borrowed from the ECB since July 2011. Closes: Dollar index -0.480 (-0.60%), EUR/USD +0.00555 (+0.40%), USD/JPY -1.284 (+1.25%).
May WTI crude oil (CLK14 +0.16%) this morning is down -3 cents (-0.03%) and May gasoline (RBK14 +0.30%) is up +0.0069 (+0.23%). May crude and gasoline prices on Tuesday rallied to 1-month highs and closed sharply higher. Bullish factors included (1) the slide in the dollar index to a 2-week low, (2) expectations that Wednesday’s EIA data will show crude supplies at Cushing, OK, delivery point for WTI futures, fell for a tenth straight week, and (3) strength in gasoline on expectations for Wednesday’s weekly EIA gasoline inventories to decline -940,000 bbl, the seventh consecutive decline. Closes: CLK4 +2.12 (+2.11%). RBK4 +0.0565 (+1.93%).
GLOBAL EVENT CALENDAR04/09/2014
| US | 0700 ET | Weekly MBA mortgage applications, previous -1.2% with purchase sub-index +0.9% and refi sub-index -2.9%. |
| 1000 ET | Feb wholesale inventories expected +0.5% m/m, Jan +0.6% m/m. Feb wholesale trade sales expected +1.0% m/m, Jan -1.9% m/m. | |
| 1030 ET | EIA Weekly Petroleum Status Report. | |
| 1200 ET | Apr WASDE crop production report. | |
| 1300 ET | Treasury auctions $21 billion 10-year T-notes. | |
| 1400 ET | Minutes of the Mar 18-19 FOMC meeting. | |
| 1530 ET | Chicago Fed President Charles Evans and Fed Governor Daniel Tarullo speak at a conference in Washington D.C. titled Stabilizing Financial Systems for Growth and Full Employment. | |
| GER | 0200 ET | German Feb trade balance expected +17.5 billion euros, Jan +15.0 billion euros. Feb exports expected -0.5% m/m, Jan +2.2% m/m. Feb imports expected +0.1% m/m, Jan +4.1% m/m. |
| UK | 1901 ET | UK Mar RICS house price balance expected 43%, Feb 45%. |
| JPN | 1950 ET | Japan Feb machine orders expected -2.6% m/m and +17.5% y/y, Jan+13.4% m/m and +23.6% y/y. |
| CHI | n/a | China Mar trade balance expected +$1.80 billion, Feb -$22.99 billion. Mar exports expected +4.8% y/y, Feb 18.1% y/y. Mar imports expected +3.9% y/y, Feb +10.1% y/y. |
U.S. STOCK CALENDAR04/09/2014
| Company Name | Ticker | Time | Event Description | Period | Estimate |
|---|---|---|---|---|---|
| Constellation Brands Inc | STZ US | 4/9/2014 | Q4 2014 Earnings Release | Q4 2014 | 0.761 |
| MSC Industrial Direct Co Inc | MSM US | 4/9/2014 | Q2 2014 Earnings Release | Q2 2014 | 0.846 |
| MSC Industrial Direct Co Inc | MSM US | 4/9/2014 | Q2 2014 Earnings Call | Q2 2014 | |
| Tech Data Corp | TECD US | 4/9/2014 | Q4 2014 Earnings Call | Q4 2014 | |
| Valley National Bancorp | VLY US | 4/9/2014 | Annual General Meeting | Y 2014 | |
| Bed Bath & Beyond Inc | BBBY US | 4/9/2014 | Q4 2014 Earnings Release | Q4 2014 | 1.601 |
| Lennar Corp | LEN US | 4/9/2014 | Annual General Meeting | ||
| Progressive Corp/The | PGR US | 4/9/2014 | Q1 2014 Earnings Release | Q1 2014 | 0.385 |
| Progressive Corp/The | PGR US | 4/9/2014 | March 2014 Sales and Revenue Release | 2014 | |
| Questar Corp | STR US | 4/9/2014 | Roadshow - Day 2 | Y 2014 | |
| Schlumberger Ltd | SLB US | 4/9/2014 | Annual General Meeting | ||
| IHS Inc | IHS US | 4/9/2014 | Annual General Meeting | ||
| Avago Technologies Ltd | AVGO US | 4/9/2014 | Annual General Meeting |
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