Tuesday, June 3rd, 2014View Older Reports
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OVERNIGHT MARKETS AND NEWS
June E-mini S&Ps (ESM14 -0.26%) this morning are down -0.13% as the market consolidates gains from Monday's rally to a record high, and European stocks are down -0.16% after a slower-than-expected increase in Eurozone CPI points to sluggish economic growth in the Eurozone. Asian stocks closed mixed: Japan +0.66%, Hong Kong +0.91%, China -0.30%, Taiwan +0.52%, Australia -0.70%, Singapore -0.17%, South Korea +0.31%, India +0.70%. Japan's Nikkei Stock Index climbed to a 4-week high on speculation that Japan's Government Pension Investment Fund (GPIF), the country's biggest, will diversify more of its assets into Japanese stocks and foreign investments from government bonds. Commodity prices are mixed. July crude oil (CLN14 -0.12%) is down -0.06%. July gasoline (RBN14 -0.25%) is down -0.24%. Aug gold (GCQ14 +0.25%) is up +0.14%. July copper (HGN14 -1.25%) is down -1.21%. Agriculture and livestock prices are mixed. The dollar index (DXY00 -0.12%) is down -0.04%. EUR/USD (^EURUSD) is up +0.09%. USD/JPY (^USDJPY) is up +0.06%. Sep T-note prices (ZNU14 -0.19%) are down -9 ticks at a 2-week low.The Eurozone May CPI estimate rose +0.5% y/y, less than expectations of +0.6% y/y and the slowest pace of increase in 4-1/2 years. The May CPI core rose +0.7% y/y, also less than expectations of +0.8% y/y and matched the slowest pace of increase since Eurozone data began in 1991.
The Eurozone Apr unemployment rate unexpectedly fell -0.1 to 11.7%, better than expectations of no change at 11.8% and the lowest in 17 months.
UK May nationwide house prices rose +0.7% m/m and +11.1% y/y, more than expectations of +0/6% m/m and +10.9% y/y, with the +11.1% y/y increase the biggest annual gain in nearly 7 years.
The UK May Markit/CIPS construction PMI unexpectedly fell -0.8 to a 7-month low of 60.0, weaker than expectations of +0.2 to 61.0.
Japan Apr labor cash earnings rose +0.9% y/y, over double expectations of +0.4% y/y and the most in 2 years.
The China May non-manufacturing PMI rose +0.7 to 55.5, the fastest pace of expansion in 6 months.
U.S. STOCK PREVIEW
Today’s April factory orders report is expected to show an increase of +0.5%, adding to the +0.9% increase seen in March. Today’s May total vehicle sales report is expected to edge higher to 16.10 million from 15.98 million in April. There are 2 of the Russell 1000 companies that report earnings today: Dollar General (consensus $0.73), Ascena Retail Group (0.19).Equity conferences this week include: 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
Dollar General (DG +0.97%) reported Q1 EPS of 72 cwnts, below consensus of 73 cents.Clovis (CLVS -6.76%) was downgraded to 'Neutral' from 'Buy' at Citigroup.
Broadcom (BRCM +9.32%) was downgraded to 'Hold' from 'Buy' at Stifel.
Lam Research (LRCX +0.44%) was initiated with a 'Buy' at Jefferies with a price target of $75.
Merion Investment reported a 9.0% passive stake in Zale (ZLC unch) .
Lockheed Martin (LMT +0.28%) was awarded a $914.7 million government contract for engineering, manufacturing and development, production and deployment for the Space Fence program.
Steadfast Capital reported a 5.2% passive stake in Tesoro (TSO -0.21%) .
Applied Materials (AMAT +1.63%) was initiated with a 'Buy' at Jefferies with a price target of $28.
Kroger (KR -0.48%) was initiated with an 'Outperform' at Oppenheimer with a price target of $55.
Quiksilver (ZQK -2.53%) plunged over 30% in after-hours trading after it reported a Q2 adjusted EPS loss of -15 cents, a much wider loss than consensus of -2 cents.
MARKET COMMENTS
June E-mini S&Ps (ESM14 -0.26%) this morning are down -2.50 points (-0.13%). The S&P 500 index on Monday rose to a new record high and closed higher. Bullish factors include (1) reduced Chinese economic concerns after the 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, and (2) the +0.5 point increase in the May ISM manufacturing index to a 5-month high of 55.4. Closes: S&P 500 +0.07%, Dow Jones +0.16%, Nasdaq -0.10%.Sep 10-year T-notes (ZNU14 -0.19%) this morning are down -9 ticks at a 2-week low. Sep 10-year T-note futures prices on Monday 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 increase in the May ISM manufacturing index to its fastest pace in 5 months. Closes: TYU4 -20.00, FVU4 -11.75.
The dollar index (DXY00 -0.12%) this morning is down -0.032 (-0.04%). EUR/USD (^EURUSD) is +0.0012 (+0.09%). USD/JPY (^USDJPY) is up +0.06 (+0.06%). The dollar index on Monday rose to a 3-1/2 month high and closed higher. Supportive factors included (1) weakness in EUR/USD after German May CPI rose a less than expected +0.6% y/y, the slowest pace of increase in 4-1/2 years, which may prompt the ECB to expand stimulus measures when it meets Thursday, and (2) weakness in the yen after USD/JPY rallied up to a 1-month high after Nomura Holdings forecast that Japan’s pension funds may diversify their assets and purchase as much as $200 billion in foreign assets, which may weaken the yen by about 10% against the dollar. Closes: Dollar Index +0.275 (+0.34%), EUR/USD -0.0034 (-0.25%), USD/JPY +0.652 (+0.64%).
July WTI crude oil (CLN14 -0.12%) this morning is down -6 cents (-0.06%). July gasoline (RBN14 -0.25%) is down -0.0071 (-0.24%). July crude and gasoline prices on Monday slipped to 1-1/2 week lows and closed lower. Bearish factors included (1) the surge in the dollar index to a 3-1/2 month high, and (2) increased OPEC output after Bloomberg data showed OPEC May oil production rose +75,000 bpd to 29.988 million bpd. Closes: CLN4 -0.32 (-0.31%) RBN4 -0.0162 (-0.55%).
GLOBAL EVENT CALENDAR06/03/2014
| US | 1000 ET | Apr factory orders expected +0.5%, Mar +0.9%. |
| 1350 ET | Kansas City Fed President Esther George speaks about the U.S. economy and monetary policy to business and community leaders at an event in Breckenridge, CO. | |
| n/a | ||
| UK | 0200 ET | UK May nationwide house prices, expected +0.6% m/m and +10.9% y/y, Apr +1.2% m/m and +10.9% y/y. |
| 0430 ET | UK May Markit/CIPS construction PMI, Apr 60.8. | |
| 1901 ET | UK May BRC shop price index expected -1.3% y/y, Apr -1.4% y/y. | |
| EUR | 0500 ET | Eurozone May CPI estimate expected +0.6% y/y, Apr +0.7% y/y. May core CPI expected +0.8% y/y, Apr +1.0% y/y. |
| 0500 ET | Eurozone Apr unemployment rate expected unch at 11.8%. |
U.S. STOCK CALENDAR06/03/2014
| Company Name | Ticker | Time | Event Description | Period | Estimate |
|---|---|---|---|---|---|
| Dollar General Corp | DG US | Bef-mkt | Q1 2015 Earnings Release | Q1 2015 | 0.732 |
| SEI Investments Co | SEIC US | 8:30 | Investor Meeting | Y 2014 | |
| Cubist Pharmaceuticals Inc | CBST US | 8:30 | Annual General Meeting | Y 2014 | |
| MasterCard Inc | MA US | 8:30 | Annual General Meeting | Y 2014 | |
| Ford Motor Co | F US | 9:30 | May 2014 Sales and Revenue Release | 2014 | |
| Ford Motor Co | F US | 10:00 | May 2014 Sales and Revenue Call | 2014 | |
| Dollar General Corp | DG US | 10:00 | Q1 2015 Earnings Call | Q1 2015 | |
| Nabors Industries Ltd | NBR US | Annual General Meeting | |||
| Cognizant Technology Solutions Corp | CTSH US | Annual General Meeting | |||
| IPG Photonics Corp | IPGP US | Annual General Meeting | Y 2014 | ||
| Fresh Market Inc/The | TFM US | Annual General Meeting |
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