Thursday, May 22nd, 2014View Older Reports
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OVERNIGHT MARKETS AND NEWS
June E-mini S&Ps (ESM14 +0.03%) this morning are up +0.05% at a 1-week high and European stocks are down -0.18%. U.S. stocks found support on stronger-than-expected Chinese manufacturing data, while European stocks slipped after German manufacturing activity rose at its slowest pace in 6 months. Asian stocks closed mostly higher: Japan +2.11%, Hong Kong +0.51%, China -0.22%, Taiwan +1.21%, Australia +1.02%, Singapore +0.12%, South Korea +0.35%, India +0.31%. China's Shanghai Stock Index shed early gains and closed lower despite the larger-than-expected increase in the China May HSBC manufacturing PMI to a 5-month high, while India's Sensex Stock Index posted another record high as it continues its recent bull run. Commodity prices are mixed. July crude oil (CLN14 -0.09%) is down -0.11%. July gasoline (RBN14 unch) is unch. Jun gold (GCM14 +0.79%) is up +0.68%. July copper (HGN14 +0.72%) is up +0.94%. Agriculture and livestock prices are mostly higher. The dollar index (DXY00 +0.08%) is up +0.04%. EUR/USD (^EURUSD) is down -0.09%. USD/JPY (^USDJPY) is up +0.19%. June T-note prices (ZNM14 -0.10%) are down -2.5 ticks.The China May HSBC manufacturing PMI rose +1.6 to 49.7, better than expectations of +0.2 to 48.3 and the highest level in 5 months.
The German May Markit/BME manufacturing PMI fell -1.2 to 52.9, a larger decline than expectations of -0.1 to 54.0 and the slowest pace of expansion in 6 months.
The Eurozone May Markit composite PMI fell -0.1 to 53.9, right on expectations.
UK May CBI trends total orders rose +1 to 0, less than expectations of +4 to 3. May CBI trends selling prices unexpectedly fell -5 to 4, weaker than expectations of +1 to 10.
UK Apr public sector net borrowing rose +9.6 billion pounds, more than expectations of +3.4 billion pounds and the most in 5 months.
UK Q1 GDP was left unrevised at +0.8% q/q and +3.1% y/y, right on expectations, although Q1 private consumption was revised upward to +0.8% q/q from the originally reported +0.6% q/q and Q1 government spending was revised downward to +0.1% q/q from the originally reported +0.2% q/q.
The Japan May Markit/JMMA manufacturing PMI rose +0.5 to 49.9.
U.S. STOCK PREVIEW
Today’s weekly initial unemployment claims report is expected to show an increase of +13,000 to 310,000, reversing part of last week’s -24,000 decline to 297,000. Meanwhile, today’s continuing claims report is expected to show an increase of +8,000 to 2.675 million, reversing most of last week’s decline of -9,000 to 2.667 million. Today’s April existing home sales report is expected to show an increase of +2.2% to 4.69 million, more than reversing the small -0.2% decline to 4.59 million seen in March. Today’s April leading indicators report is expected to show an increase of +0.4%, adding to the sharp increase of +0.8% seen in March. The Treasury today will sell $13 billion of 10-year TIPS.There are 7 of the S&P 500 companies that report earnings today: HP (consensus $0.88), Dollar Tree (0.66), Patterson (0.66), Best Buy (0.19), Ross Stores (1.15), Gap (0.57), GameStop (0.57). Equity conferences this week include: UBS Global Oil and Gas conference on Mon-Thu, UBS Global Financial Services Conference on Tue-Thu, 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
Best Buy (BBY +2.80%) reported Q1 EPS of 33 cents, well ahead of consensus of 19 cents.Signet Jewelers (SIG +2.13%) reported Q1 adjusted EPS of $1.29, better than consensus of $1.27.
Marathon Petroleum's Speedway (MPC -1.06%) will acquire Hess Retail (HES +1.44%) for $2.87 billion.
Dollar Tree (DLTR -2.19%) reported Q1 EPS of 67 cents, higher than consensus of 66 cents.
Keurig Green Mountain (GMCR -0.01%) was downgraded to 'Neutral' from 'Buy' at Roth Capital.
Sears (SHLD -3.66%) reported a Q1 EPS loss of -$3.79, over double consensus for a -$1.87 loss.
Patterson Companies (PDCO +0.91%) reported Q4 EPS of 61 cents, below consensus of 66 cents.
Raging Capital reported a 11.1% passive stake in GSI Technology (GSIT +1.09%) .
L Brands (LB +0.65%) reported Q1 EPS of 53 cents, higher than consensus of 52 cents.
Aegean Marine (ANW +2.53%) reported Q1 EPS of 11 cents, below consensus of 17 cents.
Williams-Sonoma (WSM +0.52%) climbed over 4% in after-hours trading after it reported Q1 EPS of 48 cents, higher than consensus of 44 cents.
Spartan Stores (SPTN +0.74%) reported Q1 EPS of 40 cents, better than consensus of 38 cents.
According to Reuters, Reynolds American (RAI +4.38%) is in advanced negotiations to acquire Lorillard (LO +10.40%) .
Synopsys (SNPS +0.76%) reported Q2 EPS of 65 cents, higher than consensus of 59 cents.
NetApp (NTAP +1.59%) reported Q4 EPS of 84 cents, stronger than consensus of 79 cents.
MARKET COMMENTS
June E-mini S&Ps (ESM14 +0.03%) this morning are up +1.00 point (+0.05%) at a 1-week high. The S&P 500 index on Wednesday closed higher. Bullish factors for stock included (1) upbeat Q1 company earnings results as Bloomberg data shows 75% of the S&P 500 companies that have reported earnings results beat estimates and that 53% of the companies exceeded sales projections, and (2) the Apr 29-30 FOMC minutes that stated Fed members saw little risk of inflation from continued stimulus. Closes: S&P 500 +0.81%, Dow Jones +0.97%, Nasdaq +0.98%.Jun 10-year T-notes (ZNM14 -0.10%) this morning are down -2.5 ticks. Jun 10-year T-note futures prices on Wednesday closed lower as a rally in stocks reduced the safe-haven demand for Treasuries: TYM4 -6.00, FVM4 -2.75. T-notes recovered from their worst levels after the minutes of the Apr 29-30 FOMC meeting stated that policy makers said continued stimulus to push unemployment lower doesn't risk sparking an undesirable jump in the inflation rate.
The dollar index (DXY00 +0.08%) this morning is up +0.032 (+0.04%). EUR/USD (^EURUSD) is down -0.0012 (-0.09%). USD/JPY (^USDJPY) is up +0.19 (+0.19%). The dollar index on Wednesday closed higher: Dollar index +0.054 (+0.07%), EUR/USD -0.00148 (-0.11%), USD/JPY +0.036 (+0.04%). Bullish factors for the dollar included (1) the Apr 29-30 FOMC meeting minutes that stated policy makers saw little risk of inflation from continued stimulus to push the unemployment rate lower, and (2) weakness in EUR/USD which fell to a 3-1/4 month low on divergent monetary policies between the Fed, which is tapering stimulus, and the ECB which is expected to add to stimulus. This boosts the interest rate differentials in favor of the dollar over the euro.
July WTI crude oil (CLN14 -0.09%) this morning is down -11 cents (-0.11%). July gasoline (RBN14 unch) is unch. July crude and gasoline prices on Wednesday closed higher with July crude at a 1-month high: CLN4 +1.74 (+1.70%) RBN4 +0.0291 (+0.99%). Bullish factors included (1) the -7.226 million bbl plunge in weekly EIA crude inventories, a larger decline than expectations of unch, and (2) the -225,000 bbl drop in crude supplies at Cushing, OK, the delivery point for WTI futures, to a fresh 5-1/3 year low.
GLOBAL EVENT CALENDAR05/22/2014
| US | 0830 ET | Weekly initial unemployment claims expected +13,000 to 310,000, previous -24,000 to 297,000. Weekly continuing claims expected +8,000 to 2.675 million, previous -9,000 to 2.667 million. |
| 0830 ET | Chicago Fed Apr national activity index expected -0.20 to 0.00, Mar 0.20. | |
| 0830 ET | USDA weekly Export Sales. | |
| 0945 ET | Preliminary U.S. Markit May manufacturing PMI expected +0.1 to 55.5, Apr 55.4. | |
| 1000 ET | Apr existing home sales expected +2.2% to 4.69 million, Mar -0.2% to 4.59 million. | |
| 1000 ET | Apr leading indicators expected +0.4%, Mar +0.8% | |
| 1100 ET | May Kansas City Fed manufacturing index expected unch at 7, Apr 7. | |
| 1100 ET | Treasury announces amount of 2-year T-notes (previous $32 billion), 2-year floating-rate notes (previous $15 billion), 5-year T-notes (previous $35 billion), and 7-year T-notes (previous $29 billion) to be auctioned May 27-29. | |
| 1300 ET | Treasury auctions $13 billion of 10-year TIPS. | |
| 1500 ET | USDA Apr Cold Storage. | |
| GER | 0330 ET | German May Markit/BME manufacturing PMI expected -0.1 to 54.0, Apr 54.1. May Market services PMI expected -0.2 to 54.5, Apr 54.7. |
| EUR | 0400 ET | Eurozone May Markit composite PMI expected -0.1 to 53.9, Apr 54.0. |
| UK | 0430 ET | UK Apr public sector net borrowing expected +3.4 billion pounds, Mar +4.9 billion pounds. |
| 0430 ET | Revised UK Q1 GDP, previous +0.8% q/q and +3.1% y/y. Q1 private consumption expected +0.6% q/q, Q4 +0.4% q/q. Q1 government spending expected +0.2% q/q, Q4 unch q/q. | |
| 0430 ET | UK Q1 total business investment expected +2.2% q/q, Q4 +2.4% q/q and +8.7% y/y. | |
| 0600 ET | UK May CBI trends total orders expected 3, Apr -1. May CBI trends selling prices expected 10, Apr 9. |
U.S. STOCK CALENDAR05/22/2014
| Company Name | Ticker | Time | Event Description | Period | Estimate |
|---|---|---|---|---|---|
| Dollar Tree Inc | DLTR US | Bef-mkt | Q1 2015 Earnings Release | Q1 2015 | 0.664 |
| Patterson Cos Inc | PDCO US | Bef-mkt | Q4 2014 Earnings Release | Q4 2014 | 0.657 |
| Best Buy Co Inc | BBY US | 7:00 | Q1 2015 Earnings Release | Q1 2015 | 0.194 |
| Aflac Inc | AFL US | 8:00 | Analyst Briefing | Y 2014 | |
| Best Buy Co Inc | BBY US | 8:00 | Q1 2015 Earnings Call | Q1 2015 | |
| Franklin Resources Inc | BEN US | 8:30 | Investor Day | Y 2014 | |
| KeyCorp | KEY US | 8:30 | Annual General Meeting | Y 2014 | |
| L Brands Inc | LB US | 8:30 | Annual General Meeting | Y 2014 | |
| Dollar Tree Inc | DLTR US | 9:00 | Q1 2015 Earnings Call | C1 2015 | |
| Dollar Tree Inc | DLTR US | 9:00 | Q1 2015 Earnings Call | Q1 2015 | |
| Home Depot Inc/The | HD US | 9:00 | Annual General Meeting | Y 2014 | |
| Lincoln National Corp | LNC US | 9:00 | Annual General Meeting | Y 2014 | |
| McDonald's Corp | MCD US | 9:00 | Annual General Meeting | Y 2014 | |
| L Brands Inc | LB US | 9:15 | Q1 2015 Earnings Call | C1 2015 | |
| L Brands Inc | LB US | 9:15 | Q1 2015 Earnings Call | Q1 2015 | |
| Tiffany & Co | TIF US | 9:30 | Annual General Meeting | ||
| Interpublic Group of Cos Inc/The | IPG US | 9:30 | Annual General Meeting | Y 2014 | |
| Sealed Air Corp | SEE US | 10:00 | Annual General Meeting | Y 2014 | |
| Patterson Cos Inc | PDCO US | 10:00 | Q4 2014 Earnings Call | Q4 2014 | |
| Hasbro Inc | HAS US | 11:00 | Annual General Meeting | Y 2014 | |
| Vornado Realty Trust | VNO US | 11:30 | Annual General Meeting | Y 2014 | |
| Intel Corp | INTC US | 11:30 | Annual General Meeting | Y 2014 | |
| NextEra Energy Inc | NEE US | 14:00 | Annual General Meeting | Y 2014 | |
| Facebook Inc | FB US | 14:00 | Annual General Meeting | Y 2014 | |
| Williams Cos Inc/The | WMB US | 15:00 | Annual General Meeting | ||
| Ross Stores Inc | ROST US | 16:00 | Q1 2015 Earnings Release | Q1 2015 | 1.153 |
| Gap Inc/The | GPS US | 16:00 | Q1 2015 Earnings Release | Q1 2015 | 0.569 |
| Ross Stores Inc | ROST US | 16:15 | Q1 2015 Earnings Call | Q1 2015 | |
| GameStop Corp | GME US | 17:00 | Q1 2015 Earnings Call | Q1 2015 | |
| Gap Inc/The | GPS US | 17:00 | Q1 2015 Earnings Call | Q1 2015 | |
| Hewlett-Packard Co | HPQ US | 17:00 | Q2 2014 Earnings Call | Q2 2014 | |
| GameStop Corp | GME US | Aft-mkt | Q1 2015 Earnings Release | Q1 2015 | 0.571 |
| Hewlett-Packard Co | HPQ US | Aft-mkt | Q2 2014 Earnings Release | Q2 2014 | 0.879 |
| Cablevision Systems Corp | CVC US | Annual General Meeting | |||
| Quanta Services Inc | PWR US | Annual General Meeting | |||
| Robert Half International Inc | RHI US | Annual General Meeting | |||
| Citrix Systems Inc | CTXS US | Annual General Meeting | |||
| Flowserve Corp | FLS US | Annual General Meeting | |||
| CBS Corp | CBS US | Annual General Meeting | |||
| United Parcel Service Inc | UPS US | Roadshow - Toronto | Y 2014 |
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