Monday, May 19th, 2014View Older Reports
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OVERNIGHT MARKETS AND NEWS
June E-mini S&Ps (ESM14 -0.19%) this morning are down -0.36% and European stocks are down -0.75%. AstraZeneca is down 13% in pre-market trading and is leading health-care stocks lower after it rejected Pfizer's upward revised $117 billion bid for the company as too low. Deutsche Bank is down 2% after Germany's biggest bank sold about 60 million shares to the Qatari royal family as it announced plans to raise 8 billion euros in its second-largest capital increase. Asian stocks closed mixed: Japan -0.64%, Hong Kong -0.04%, China -1.43%, Taiwan +0.13%, Australia -1.28%, Singapore unch, South Korea +0.17%, India +1.00%. India's Sensex Stock Index rose to another record high on positive carry-over on speculation Narendra Modi's incoming government will take steps to revive India's economy. China's Shanghai stock index fell to a 1-3/4 month low on concern over China's economy after China Apr new-home prices rose in April in the fewest cities in 1-1/2 years. Commodity prices are mixed. Jun crude oil (CLM14 +0.73%) is up +0.58% at a 3-1/2 week high. Jun gasoline (RBM14 +0.49%) is up +0.66% at a 2-week high. Jun gold (GCM14 +0.68%) is up +0.66%. July copper (HGN14 +0.91%) is up +0.71% at a 2-1/4 month high. Agriculture prices are mixed. The dollar index (DXY00 -0.12%) is down -0.11%. EUR/USD (^EURUSD) is up +0.18%. USD/JPY (^USDJPY) is down -0.33% at a 3-1/2 month low as a slide in stocks boost the safe-haven demand for the yen. June T-note prices (ZNM14 -0.01%) are up +1 tick.China Apr new-home prices rose in 44 of the 70 cities tracked by the government, the fewest in 1-1/2 years and a sign that the slowdown in China's housing market is spreading.
Der Spiegel reported that ECB Chief Economist Peter Praet will recommend that the ECB cut the 2-week refinancing rate by 10 bp to 0.15% and cut the overnight deposit rate to a negative -0.10% when the central bank next meets on Jun 5.
UK May Rightmove house prices rose +3.6% m/m and +8.9% y/y with the +8.9% y/y increase the largest annual gain in 6-1/2 years.
EUR Mar construction output fell -0.6% m/m and rose +5.2% y/y, weaker than Feb's upward revised +0.4% m/m and +7.5% y/y.
Japan Mar machine orders surged +19.1% m/m, well above expectations of +5.8% m/m and the largest monthly increase in 17 years. On a year-over-year basis, machine orders rose +16.1% y/y over three time expectations of +4.3% y/y.
U.S. STOCK PREVIEW
The markets this week will focus on a heavy schedule of speaking engagements by Fed officials, the minutes of the April 29-30 FOMC meeting on Wednesday, and the Treasury’s sale of $13 billion of 10-year TIPS on Thursday. There are 4 of the Russell 2000 companies that report earnings today: Campbell Soup (consensus $0.59), Valspar (1.04), Urban Outfitters (0.27), Hertz Global Holdings (0.09).Equity conferences this week include: American Gas Association Financial Forum on Mon, EPG (Electrical Products Group) Spring Conference on Mon-Tue, J.P. Morgan Global Technology, Media and Telecom Conference on Mon-Tue, UBS Global Healthcare Conference on Mon-Wed, UBS Global Oil and Gas conference on Mon-Thu, CRU World Aluminum Conference on Tue, Bloomberg CFO Conference on Tue, Digital Summit Atlanta 2014 on Tue, J.P. Morgan Consumer & Retail Conference on Tue, Goldman Sachs Basic Materials Conference on Tue-Wed, Wolfe Research Global Transportation Conference on Tue-Wed, SunTrust Robinson Humphrey Financial Services Unconference on Tue-Wed, UBS Global Financial Services Conference on Tue-Thu, Bank of America Merrill Lynch Services One-On-One Conference on Wed, National Association of Publicly Traded Partnerships NAPTP MLP Investor Confere on Wed, BMO Capital Markets Farm to Market Conference on Wed-Thu, Medical Devices & Diagnostics Business Review on Thu, St. Petersburg International Economic Forum (SPIEF) 2014 on Thu, and Bloomberg Industries & CME Group Precious Metals Forum on Fri.
OVERNIGHT U.S. STOCK MOVERS
Deutsche Bank (DB +0.24%) was downgraded to 'Underperform' from 'Neutral' at BofA/Merrill.Campbell Soup (CPB +0.20%) reported Q3 EPS of 62 cents, better than consensus of 59 cents.
AT&T (T +0.60%) was upgraded to 'Outperform' from 'Market Perform' at Raymond James.
DirecTV ({=DTV rose 4% in pre-market trading after AT&T agreed to buy the company for $48.5 billion.
Brean Capital raised its price target on Hewlett-Packard (HPQ +0.34%) to $40 from $34 and keeps its 'Buy' rating on the stock.
Valspar (VAL +0.07%) reported Q2 EPS ex-items of $1.07, higher than consensus of $1.04.
Broadcom (BRCM +0.68%) and Micron (MU +0.66%) were both upgraded to 'Outperform' from 'Sector Perform' at RBC Capital.
ATK (ATK +1.03%) was downgraded to 'Neutral' from 'Buy' at Goldman Sachs.
Genworth (GNW -0.95%) was downgraded to 'Underweight' from 'Equal Weight' at Morgan Stanley.
Deutsche Bank raised its price target for Oracle (ORCL -0.57%) shares to $48 from $45 and keeps its 'Buy' rating on the stock.
Abbott (ABT -0.46%) was upgraded to 'Outperform' from 'Neutral' at Credit Suisse.
Fossil (FOSL +1.02%) was upgraded to 'Hold' from 'Sell' at Brean Capital.
Abrams Capital reported a 6.26% passive stake in Barnes & Noble (BKS +1.85%) .
MARKET COMMENTS
June E-mini S&Ps (ESM14 -0.19%) this morning are down -6.75 points (-0.36%). The S&P 500 index on Friday closed higher as strength in U.S. housing starts and building permits offset an unexpected drop in consumer confidence: S&P 500 +0.37%, Dow Jones +0.27%, Nasdaq +0.62%. Bullish factors included (1) the +13.2% increase in U.S. Apr housing starts to a 5-month high of 1.072 million, better than expectations of +3.6% to 980,000, and (2) the +8.0% increase in Apr building permits to 1.08 million, better than expectations of +1.3% to 1.01 million and the most in 5-3/4 years. Gains in stocks were limited after an unexpected -2.3 point decline in the May University of Michigan consumer confidence to 81.8, weaker than expectations of +0.4 to 84.5.Jun 10-year T-notes (ZNM14 -0.01%) this morning are up +1 tick. Jun 10-year T-note futures prices on Friday closed lower as strength in stocks and stronger-than-expected U.S. Apr housing starts spurred long liquidation in Treasuries: TYM4 -4.50, FVM4 -1.50. T-notes recovered from their worst levels after the U.S. May University of Michigan consumer confidence unexpectedly declined.
The dollar index (DXY00 -0.12%) this morning is down -0.090 (-0.11%). EUR/USD (^EURUSD) is up +0.0024 (+0.18%). USD/JPY (^USDJPY) is down -0.34 (-0.33%) at a 3-1/2 month low. The dollar index on Friday closed higher after U.S. Apr housing starts rose by the most in 5 months, although the dollar fell back from its best levels after the U.S. May University of Michigan consumer confidence unexpectedly fell: Dollar index +0.040 (+0.05%), EUR/USD -0.0016 (-0.12%), USD/JPY -0.085 (-0.08%). EUR/USD remained under pressure on speculation that the ECB will boost stimulus measures next month.
Jun WTI crude oil (CLM14 +0.73%) this morning is up +59 cents (+0.58%) at a 3-1/2 week high. Jun gasoline (RBM14 +0.49%) is up +0.0197 (+0.66%) at a fresh 2-week high. Jun crude and gasoline prices on Friday closed higher with Jun gasoline at a 2-week high: CLM4 +0.52 (+0.51%) RBM4 +0.0093 (+0.31%). Bullish factors included (1) signs of improvement in the U.S. economy after Apr housing starts rose more than expected by the most in 5 months, and (2) speculation that escalation of the Ukraine crisis may disrupt energy supplies from Russia after NATO Secretary General Rasmussen said that Russian President Putin's assurances that Russia has no plans to intervene further in Ukraine "can't be believed."
GLOBAL EVENT CALENDAR05/19/2014
| US | 1100 ET | USDA weekly grain export inspections. |
| 1210 ET | Dallas Fed President Richard Fisher and San Francisco Fed President John Williams discuss their views on how monetary policy is shaped at an event in Dallas. | |
| 1600 ET | USDA weekly crop progress. | |
| EUR | 0300 ET | ECB Council members Jens Weidmann and Yves Mersch speak at an event in Frankfurt. |
| 0500 ET | Eurozone Mar construction output, Feb +0.1% m/m and +6.7% y/y. |
U.S. STOCK CALENDAR05/19/2014
| Company Name | Ticker | Time | Event Description | Period | Estimate |
|---|---|---|---|---|---|
| Campbell Soup Co | CPB US | Bef-mkt | Q3 2014 Earnings Release | Q3 2014 | 0.591 |
| Valspar Corp/The | VAL US | Bef-mkt | Q2 2014 Earnings Release | Q2 2014 | 1.042 |
| Campbell Soup Co | CPB US | 8:30 | Q3 2014 Earnings Call | Q3 2014 | |
| Sirius XM Holdings Inc | SIRI US | 9:00 | Annual General Meeting | Y 2014 | |
| Consolidated Edison Inc | ED US | 10:00 | Annual General Meeting | ||
| Valspar Corp/The | VAL US | 11:00 | Q2 2014 Earnings Call | Q2 2014 | |
| Kinder Morgan Inc/DE | KMI US | 11:00 | Annual General Meeting | Y 2014 | |
| zulily Inc | ZU US | 13:00 | Annual General Meeting | ||
| Cisco Systems Inc | CSCO US | 15:30 | Investor Day - Day 1 | Y 2014 | |
| Urban Outfitters Inc | URBN US | 16:00 | Q1 2015 Earnings Release | Q1 2015 | 0.265 |
| Urban Outfitters Inc | URBN US | 17:00 | Q1 2015 Earnings Call | Q1 2015 | |
| 3D Systems Corp | DDD US | Annual General Meeting | |||
| Goldman Sachs Group Inc/The | GS US | Goldman Sachs Metals & Mining Conference Call Series:Outlook for Gold Market | |||
| Hertz Global Holdings Inc | HTZ US | 23:59 | Q1 2014 Earnings Release | Q1 2014 | 0.09 |
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