Monday, June 23rd, 2014View Older Reports
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OVERNIGHT MARKETS AND NEWS
September E-mini S&Ps (ESU14 +0.05%) this morning are unchanged and European stocks are down % after a composite gauge of European manufacturing and services activity slowed to its slowest pace in 6 months. Another negative for stocks was heightened geopolitical risk as the fighting in Iraq intensified after the al-Queda breakaway group ISIL seized all of Iraq's border crossings with Jordan and Syria. The advances made by ISIL have edged Iraq closer to sectarian strife and an all-out civil war. Losses in stocks were muted after a gauge of Chinese manufacturing activity expanded at the fastest pace in 7 months. Asian stocks closed mixed: Japan +0.13%, Hong Kong -1.68%), China -0.12%, Taiwan -0.49%, Australia +0.62%, Singapore -0.04%, South Korea +0.57%, India -0.30%. Commodity prices are mixed. Aug crude oil (CLQ14 +0.14%) is up +0.12%. Aug gasoline (RBQ14 +0.18%) is up +0.17%. Aug gold (GCQ14 -0.32%) is down -0.39%. July copper (HGN14 +0.74%) is up +0.78% at a 2-1/2 week high on signs of increased Chinese demand after manufacturing growth expanded in China. Agriculture prices are higher on crop concerns after heavy rains inundated the Midwest over the weekend. The dollar index (DXY00 -0.06%) is unchanged. EUR/USD (^EURUSD) is down -0.11% after ECB President Draghi signaled Eurozone interest rates may remain low for another 2-1/2 years. USD/JPY (^USDJPY) is up +0.06%. Sep T-note prices (ZNU14 +0.14%) are up +4 ticks.The Jun China HSBC flash manufacturing PMI rose +1.4 to 50.8, stronger than expectations of +0.3 to 49.7 and the fastest rate of expansion in 7 months.
The Japan Jun Markit/JMMA manufacturing PMI rose +1.2 to 51.1, better than expectations of +0.2 to 50.1 and the highest in 3 months.
The German Jun Markit/BME manufacturing PMI rose +0.1 to 52.4, less than expectations of +0.2 to 52.5. The Jun Markit services PMI fell -1.2 to 54.8, a bigger decline than expectations of -0.2 to 55.8.
The Eurozone Jun Markit composite PMI fell -0.7 to 52.8, a bigger decline than expectations of -0.1 to 53.4 and the slowest rate of expansion in 6 months.
In an interview with Dutch newspaper De Telegraaf, ECB President Draghi signaled that interest rates will probably remain low for at least another 2-1/2 years when he said "We have prolonged banks' access to unlimited liquidity up to the end of 2016. That is a signal." The recovery "is still weak and unevenly distributed across the Eurozone" and that broad-based asset purchases will be "the answer" if the inflation outlook weakens further.
U.S. STOCK PREVIEW
Today’s May existing home sales report is expected to show a +1.9% increase to 4.74 million, adding to the +1.3% increase to 4.65 million seen in April. There are two of the Russell 1000 companies that report earnings today: Micron Technology (consensus $0.72), Hertz (0.08). Equity conferences this week include: Smart Grid World Conference 2014 on Tue, Global Hunter Securities LLC Energy Conference on Tue-Wed, Oppenheimer Consumer Conference on Tue-Wed, Mobile Pharma Biztech 2014 on Wed-Thu.
OVERNIGHT U.S. STOCK MOVERS
Barclays (BCS -1.05%) was upgraded to 'Buy' from 'Hold' at Canaccord.Wisconsin Energy (WEC +0.02%) will acquire Integrys Energy (TEG +0.25%) for $9.1 billion.
NVIDIA (NVDA -1.10%) was downgraded to 'Underperform' from 'Sector Perform' at Pacific Crest.
Burlington Stores (BURL +1.12%) were upgraded to 'Buy' from 'Neutral' at Goldman Sachs.
Owens Corning (OC -6.03%) was downgraded to 'Neutral' from 'Buy' at Longbow.
Helmerich & Payne (HP +0.44%) was downgraded to 'Market Perform' from 'Outperform' at FBR Capital.
Express (EXPR -0.54%) was upgraded to 'Buy' from 'Neutral' at Janney Capital.
Teradata (TDC -0.93%) was downgraded to 'Market Perform' from 'Outperform' at JMP Securities.
Ashland (ASH +0.32%) was upgraded to 'Buy' from 'Hold' at KeyBanc.
DISH (DISH +2.47%) was upgraded to 'Buy' from 'Neutral' at Citigroup.
AMD (AMD -5.96%) was downgraded to 'Underperform' from 'Sector Perform' at Pacific Crest.
Nordstrom (JWN -0.39%) was downgraded to 'Neutral' from 'Buy' at Goldman Sachs.
SunPower (SPWR +1.10%) was downgraded to 'Hold' from 'Buy' at Brean Capital.
Cubist Pharmaceuticals (CBST +5.38%) announced the U.S. FDA approved its SIVEXTRO drug for the treatment of adult acute bacterial skin and skin structure infections.
MARKET COMMENTS
Sep E-mini S&Ps (ESU14 +0.05%) this morning are unch. The S&P 500 index on Friday rose to yet another record high and closed higher. Bullish factors for stocks included (1) technical buying after the S&P 500 posted record highs for three straight sessions, (2) a rally in health-care stocks and drug makers on increased M&A activity after Shire turned down AbbVie’s offer to buy the company for 27.3 billion pounds ($47 billion), and (3) a rally in gold producers after gold prices climbed to a 2-1/4 month high. Closes: S&P 500 +0.17%, Dow Jones +0.15%, Nasdaq +0.05%.Sep 10-year T-notes (ZNU14 +0.14%) this morning are up +4 ticks. Sep 10-year T-note futures prices on Friday closed lower. Bearish factors included (1) reduced safe-haven demand for Treasuries as the S&P 500 posted a new all-time high, and (2) inflation concerns after the Treasury 5-year break-even rate, which measures the difference between yields on benchmark 5-year T-notes and similar maturity TIPS, rose to 209 bp, the highest in 13 months. Closes: TYU4 -2.50, FVU4 -1.75.
The dollar index (DXY00 -0.06%) this morning is unch. EUR/USD (^EURUSD) is down -0.0015 (-0.11%). USD/JPY (^USDJPY) is down -0.22 (-0.22%). The dollar index on Friday closed higher. Weakness in EUR/USD helped push the dollar higher after (1) Eurozone Jun consumer confidence unexpectedly fell -0.3 to -7.4, weaker than expectations of -6.5, and (2) the German May PPI that unexpectedly fell -0.2% m/m, weaker than expectations of unch m/m and the fourth decline in the last 5 months, which may push the ECB into its own quantitative easing program. Closes: Dollar Index +0.055 (+0.07%), EUR/USD -0.0009 (-0.07%), USD/JPY +0.122 (+0.12%).
Aug WTI crude oil (CLQ14 +0.14%) this morning is up +13 cents (+0.12%). Aug gasoline (RBQ14 +0.18%) is up +0.0052 (+0.17%). Aug crude and gasoline prices on Friday closed higher. Bullish factors included (1) a rally in the S&P 500 to a new record high, which boosts confidence in the economic outlook and energy demand, and (2) heightened geopolitical risks with NATO’s condemnation of Russia’s increased troop presence along Ukraine’s border and with the escalation of violence in Iraq that may lead to a disruption in supplies of OPEC’s second-largest producer. Closes: CLQ4 +0.78 (+0.74%) RBQ4 +0.0034 (+0.11%).
GLOBAL EVENT CALENDAR06/23/2014
| US | 0830 ET | May Chicago Fed activity index expected +0.52 to 0.20, Apr -0.32. |
| 0945 ET | Preliminary Jun Markit manufacturing PMI expected -0.4 to 56.0, May +1.0 to 56.4. | |
| 1000 ET | May existing home sales expected +1.9% to 4.74 million, Apr +1.3% to 4.65 million. | |
| 1100 ET | USDA weekly grain export inspections. | |
| 1500 ET | USDA May Cold Storage. | |
| 1600 ET | USDA weekly crop progress. | |
| EUR | 0300 ET | ECB Vice President Vitor Constancio speaks at the ESCBs Macro-prudential Research Network conference. |
| 0400 ET | Eurozone Jun Markit composite PMI expected -0.1 to 53.4, May 53.5. | |
| 0800 ET | ECB Governing Council member Yves Mersch speaks at the European Financial Congress on Is Growth of Competitiveness of the European Economy Possible Without Ensuring Financial Safety? | |
| GER | 0330 ET | German Jun Markit/BME manufacturing PMI expected +0.2 to 52.5, May 52.3. Jun Markit services PMI expected -0.2 to 55.8, May 56.0. |
| UK | n/a | UK Jun nationwide house prices expected +0.5% m/m and +11.2% y/y, May +0.7% m/m and +11.1% y/y. |
U.S. STOCK CALENDAR06/23/2014
| Company Name | Ticker | Time | Event Description | Period | Estimate |
|---|---|---|---|---|---|
| Applied Materials Inc | AMAT US | 13:00 | Extraordinary Shareholders Meeting | Y 2014 | |
| CarMax Inc | KMX US | 13:00 | Annual General Meeting | Y 2014 | |
| Micron Technology Inc | MU US | 16:30 | Q3 2014 Earnings Call | Q3 2014 | |
| Micron Technology Inc | MU US | Aft-mkt | Q3 2014 Earnings Release | Q3 2014 | 0.723 |
| Kennametal Inc | KMT US | Financial Community Meeting - Day 1 | Y 2014 | ||
| Questar Corp | STR US | Roadshow - Day 1 | Y 2014 | ||
| Weyerhaeuser Co | WY US | Annual General Meeting | Y 2014 | ||
| Hertz Global Holdings Inc | HTZ US | Q1 2014 Earnings Release | Q1 2014 | 0.078 |
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