Monday, June 2nd, 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 new all-time high and European stocks are up +0.25% at a 5-1/2 year high after manufacturing activity in China last month expanded at the fastest pace in 5 months. Asian stocks closed higher: Japan +2.07%, Hong Kong, China and Taiwan closed for holidays, Australia +0.47%, Singapore +0.19%, South Korea +0.56%, India +1.93%. Japan's Nikkei Stock Index climbed to a 4-week high after Japanese data showed Q1 capital spending rose by the most in nearly 2 years. Commodity prices are mixed. July crude oil (CLN14 +0.16%) is up +0.23%. July gasoline (RBN14 -0.04%) is up +0.12%. Aug gold(GCQ14 +0.06%) is up +0.06% as it rebounds from a 4-month low. July copper (HGN14 +1.41%) is up +1.47%. Agriculture prices are lower. The dollar index (DXY00 +0.17%) is up +0.18%. EUR/USD (^EURUSD) is down -0.19% after a gauge of Eurozone manufacturing activity was revised lower to the slowest pace in 6 months. USD/JPY (^USDJPY) is up +0.27%. Sep T-note prices (ZNU14 -0.25%) are down -9.5 ticks.Chicago Fed President Evans said in a speech in Istanbul that the Fed will end asset purchases this year and may wait until inflation is much closer to its 2% objective before they consider raising interest rates. He added that a "highly accommodative" monetary policy is appropriate "well into 2015 and could even be" in 2016.
China May manufacturing PMI rose +0.4 to 50.8, better than expectations of +0.3 to 50.7 and the fastest pace of expansion in 5 months.
The Eurozone May Markit manufacturing PMI was revised lower to 52.2 from the originally reported 52.5, the slowest pace of expansion in 6 months.
The German May Markit/BME manufacturing PMI was revised lower to 52.3 from the originally reported 52.9, the slowest pace of expansion in 7 months.
UK Apr net consumer credit rose +0.7 billion pounds, less than expectations of +0.8 billion pounds and Mar was revised lower to show an increase of +1.0 billion pounds from the originally reported +1.1 billion pounds.
UK Apr mortgage approvals rose 62,900, less than expectations of 64,500 and the fewest in 9 months.
Japan Q1 capital spending ex-software rose +8.3% y/y, better than expectations of +5.9% y/y and the most in 7 years. Q1 capital spending climbed +7.4% y/y, better than expectations of +5.8% y/y and the most sine Q2 of 2012.
U.S. STOCK PREVIEW
The market is expecting today’s May ISM manufacturing index to show a +0.6 point increase to 55.5, which would be the fourth consecutive monthly increase. There are none of the Russell 1000 companies that report earnings today.Equity conferences this week include: Apple Worldwide Developers Conference (WWDC) on Mon, Goldman Sachs Lodging, Gaming, Restaurant & Leisure Conference on Mon-Tue, American Society of Clinical Oncology (ASCO) Meeting on Mon-Tue, Eurelectric Conference 2014 on Mon-Tue, Jefferies Global Health Care Conference on Mon-Thu, National Association of Real Estate Investment Trusts REITWeek Investor Forum on Tue-Thu, Bank of America Merrill Lynch Global Telecom & Media Conference on Tue, Barclays Power & Utility Credit Conference on Tue, Wells Fargo Insurance Forum on Tue, Stifel Consumer Conference on Tue, Barclays Power & Utility Credit Conference on Tue, RBC Global Energy and Power Conference on Tue, Bank of America Merrill Lynch Global Technology Conference on Tue-Wed, Stephens Spring Conference on Tue-Wed, Bank of America Merrill Lynch Energy and Power Leveraged Finance Conference on Tue-Wed, Goldman Sachs Dotcommerce Conference on Wed, KBW Asset Management Conference on Wed, Sandler O'Neill Global Exchange & Brokerage Conference on Wed,
Deutsche Bank Global Industrials and Basic Materials Conference on Wed-Thu, Credit Suisse Engineering & Construction Conference on Thu, UBS Aerospace & Defense Conference on Thu.
OVERNIGHT U.S. STOCK MOVERS
Oppenheimer increased its price target on Netflix (NFLX +0.63%) to $500 from $435 and keeps an 'Outperform' rating on the stock.Conn's (CONN -0.26%) reported Q1 adjusted EPS of 80 cents, better than consensus of 73 cents.
Ventas (VTR +0.54%) will acquire American Realty Capital (HCT +1.63%) for $2.6 billion in stock and cash.
Alcoa (AA +0.22%) was upgraded to 'Neutral' from 'Underperform' at BofA/Merrill.
Microchip Technology (MCHP +0.61%) and Xilinx (XLNX +0.21%) were both downgraded to 'Neutral' from 'Buy' at Goldman Sachs.
The LA Times reports that JPMorgan Chase (JPM -0.27%) is being sued by the city of Los Angeles over predatory home loans.
STMicroelectronics (STM +0.20%) was downgraded to 'Sell' from 'Neutral' at Citigroup.
Volvo (VOLVY -0.82%) was downgraded to 'Sell' from 'Neutral' at Goldman Sachs.
Marathon Oil (MRO unch) will sell its Norway business for $2.7 billion to Det norske oljeselskap ASA.
MSDC Management reported a 10.6% passive stake in Liquid Holdings (LIQD -8.64%) .
Armistice Capital reported a 5.16% passive stake in Digital Cinema (DCIN +1.41%) .
MARKET COMMENTS
June E-mini S&Ps (ESM14 +0.03%) this morning are up +1.00 point (+0.05%0 at a new all-time high. The S&P 500 index on Friday posted a new record high and closed higher. Bullish factors include (1) the unexpected +2.5 point increase in the May Chicago PMI to 65.5, better than expectations of -2.0 to 61.0 and the fastest pace of expansion in 7 months, and (2) comments from Philadelphia Fed President Plosser who said he expects the economy to grow at a +3.0% pace for the rest of 2014 and that “there’s a possibility” that unemployment “may be below 6% by the end of the year if things keep going the way they have.” Stock prices were undercut by the -0.1% drop in Apr personal spending, weaker than expectations of +0.2% and the first decline in a year. Closes: S&P 500 +0.18%, Dow Jones +0.11%, Nasdaq +0.03%.Sep 10-year T-notes (ZNU14 -0.25%) this morning are down -9.5 ticks. Sep 10-year T-note futures prices Friday closed lower. Bearish factors included (1) reduced safe-haven demand for Treasuries after the S&P 500 rallied to another record high, and (2) the unexpected rise in the May Chicago PMI to a 7-month high. Bullish factors included the weaker-than-expected U.S. Apr personal spending and consumer confidence reports. Closes: TYU4 -3.50, FVU4 -1.75.
The dollar index (DXY00 +0.17%) this morning is up +0.141 (+0.18%). EUR/USD (^EURUSD) is down -0.0026 (-0.19%). USD/JPY (^USDJPY) is up +0.27 (+0.27%). The dollar index on Friday closed lower on reduced safe-haven demand after the S&P 5000 posted yet another record high. Dollar losses were limited after the May Chicago PMI unexpected expanded at the fastest pace in 7 months, a sign of economic strength. Closes: Dollar Index -0.125 (-0.16%), EUR/USD +0.00291 (+0.21%), USD/JPY -0.056 (-0.06%).
July WTI crude oil (CLN14 +0.16%) this morning is up +24 cents (+0.23%). July gasoline (RBN14 -0.04%) is up +0.0037 (+0.12%). July crude and gasoline prices on Friday closed lower with July crude at a 1-week low. Bearish factors included (1) concern about the sustainability of the economic recovery and energy demand after U.S. Apr personal spending unexpectedly fell for the first time in a year, and (2) reduced geopolitical risks after a Pentagon spokesman said that Russia has withdrawn a majority of its military forces from the Ukrainian border. Closes: CLN4 -0.87 (-0.84%) RBN4 -0.0239 (-0.80%).
GLOBAL EVENT CALENDAR06/02/2014
| US | 0300 ET | Chicago Fed President Charles Evans speaks on the economy and monetary policy at the Istanbul School of |
| Central Bankings Macro Workshop 2014. | ||
| 0945 ET | Revised U.S. May Markit manufacturing PMI, previous 56.2. | |
| 1000 ET | May ISM manufacturing index expected +0.6 to 55.5, Apr +1.2 to 54.9. May ISM prices paid expected +0.4 to 56.9, Apr 56.5. May ISM new orders, Apr unch at 55.1. May ISM employment, Apr +3.6 to 54.7. | |
| 1000 ET | Apr construction spending expected +0.5%, Mar +0.2% m/m. | |
| 1100 ET | USDA weekly grain export inspections. | |
| 1600 ET | USDA weekly crop progress. | |
| JPN | 0100 ET | Japan May vehicle sales, Apr -11.4% y/y. |
| 2130 ET | Japan Apr labor cash earnings, Mar +0.7% y/y. | |
| GER | 0355 ET | Revised German May Markit/BME manufacturing PMI, previous 52.9. |
| 0800 ET | German May CPI (EU harmonized) expected +0.1% m/m and +1.0% y/y, Apr -0.3% m/m and +1.1% y/y. | |
| EUR | 0400 ET | Revised Eurozone May Markit manufacturing PMI, previous 52.5. |
| UK | 0430 ET | UK Apr net consumer credit expected +0.8 billion pounds, Mar +1.1 billion pounds. |
| 0430 ET | UK Apr mortgage approvals expected 64,500, Mar 67,100. | |
| 0430 ET | UK Apr M4 money supply, Mar -2.3% m/m and -0.3% y/y. | |
| 0430 ET | UK May Markit manufacturing PMI expected -0.3 to 57.0, Apr 57.3. | |
| CHI | 2100 ET | China May non-manufacturing PMI, Apr +0.3 to 54.8. |
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