Monday, July 28, 2014

BARCHART MORNING CALL 7/28

OVERNIGHT MARKETS AND NEWS
September E-mini S&Ps (ESU14 -0.14%) this morning are down -0.08% and European stocks are up +0.14%. Goldman Sachs cut its rating on global stocks to neutral for the next 3 months, saying stocks are at risk of a brief selloff as rising inflation boosts government bond yields. Stocks received a boost on increased M&A activity after Dollar Tree agreed to buy rival Family Dollar Stores in a cash-and-stock deal valued at about $8.5 billion. Russia's Micex fell nearly 2% to a 2-month low and the ruble slid as the U.S. and Europe consider more sanctions against Russia after the U.S. said it had satellite photos showing Russia firing across the border at Ukraine forces. Asian stocks closed mostly higher: Japan +0.46%, Hong Kong +0.88%, China +2.81%, Taiwan -0.20%, Australia -0.11%, Singapore closed for holiday, South Korea +0.78%, India -0.52%. Japan's Nikkei Stock Index rallied to a 6-month high on speculation Q2 Japanese company earnings results will be positive. China's Shanghai Stock Index jumped to a 7-month high on signs of increased company profits after China Jun industrial profits rose by the most in 9 months. Commodity prices are mixed. Sep crude oil (CLU14 -0.44%) is down -0.60%. Sep gasoline (RBU14 -0.44%) is down -0.43%. Aug gold (GCQ14 +0.11%) is up +0.07%. Sep copper (HGU14 +0.02%) is up +0.23%. Agriculture prices are mixed. The dollar index (DXY00 -0.02%) is down -0.03%. EUR/USD (^EURUSD) is up +0.07%. USD/JPY (^USDJPY) is up +0.01%. Sep T-note prices (ZNU14 -0.06%) are down -4 ticks.
ECB Vice President Constancio said that the Eurozone and the global economy "still face challenges" and that inflation rates in the Eurozone "remained too low" in the second quarter.
China Jun industrial profits rose +17.9% y/y, the largest increase in 9 months.
U.S. STOCK PREVIEW
Today’s June pending home sales report is expected to show an increase of +0.5% m/m, adding to the sharp gain of +6.1% seen in May.  The Treasury today will sell $29 billion of 2-year T-notes.  There are 10 of the S&P 500 companies that report earnings today with notable reports including:  Tyson Foods (consensus $0.78), Cummins (2.39), Roper Industries (1.50), Plum Creek Timber (0.30), and Eastman Chemical (1.84).  Equity conferences this week include the following:  Institute of Validation technology on Tue-Thu, and Marcus Evans 13th Annual Outage Management for Power Plants Conference on Tue-Thu.
OVERNIGHT U.S. STOCK MOVERS
Tyson Foods (TSN -0.58%) reported Q3 EPS of 75 cents, weaker than consensus of 78 cents.
PG&E (PCG -0.57%) was downgraded to 'Sell' from 'Neutral' at Goldman Sachs.
Pfizer (PFE -0.49%) was downgraded to 'Market Perform' from 'Outperform' at BMO Capital.
Time Warner Cable (TWC -1.09%) was upgraded to 'Buy' from 'Hold' at Wunderlich.
Semtech (SMTC -4.26%) was upgraded to 'Strong Buy' from 'Outperform' at Raymond James.
Reynolds American (RAI -0.75%) was upgraded to 'Top Pick' from 'Outperform' at RBC Capital.
Cal-Maine Foods (CALM +0.66%) reported Q4 EPS $1.30, better than consensus of $1.15.
Citigroup raised its price target for Chipotle (CMG +2.03%) to $793 from $648 and keeps its 'Buy' ratng on the stock.
Dollar Tree (DLTR -1.33%) agreed to buy Family Dollar (FDO -0.79%) for $74.50 per share in cash and stock.
Cisco (CSCO +0.54%) was downgraded to 'Sector Perform' from 'Outperform' at Pacific Crest.
CIT Group (CIT +0.59%) was upgraded to 'Overweight' from 'Equal Weight' at Morgan Stanley who also raised their price target on the stock to $57 from $46.
Cummins (CMI -0.43%) reported Q2 EPS of $2.43, higher than consensus of $2.39.
Roper Industries (ROP -0.14%) reported Q2 EPS of $1.56, better than consensus of $1.50.
The U.S Commerce Department proposed expanded duties on some Chinese solar-energy imports, according to Bloomberg, potentially affecting Chinese solar companies such as Trina (TSL +0.71%), Yingli (YGE +0.57%) and JinkoSolar (JKS +2.17%), among others.
Amazon.com (AMZN -9.65%) is likely to remain range-bound as costs escalate, according to Barron's.
MARKET COMMENTS
Sep E-mini S&Ps (ESU14 -0.14%) this morning are down -1.50 points (-0.08%). The S&P 500 index on Friday closed moderately lower: S&P 500 -0.48%, Dow Jones -0.72%, Nasdaq -0.50%. The durable goods orders report was generally favorable, but stocks lost ground on (1) pre-weekend long liquidation pressure, (2) nervousness as the U.S. and Europe consider further sanctions against Russia, and (3) the surprise 50 bp rate hike to 8.00% by the Russian central bank along with the -1.45% sell-off in the Russian Micex stock index on Friday.
Sep 10-year T-notes (ZNU14 -0.06%) this morning are down -4 ticks. Sep 10-year T-note futures prices on Friday closed moderately higher on weak global stocks and on increased safe-haven demand with impending new sanctions on Russia and the Russian rate hike. Closes: TYU4 +8.5, FVU4 +3.75.
The dollar index (DXY00 -0.02%) this morning is down -0.023 (-0.03%). EUR/USD (^EURUSD) is up +0.0010 (+0.07%). USD/JPY (^USDJPY) is up +0.01 (+0.01%). The dollar index on Friday extended the 3-week rally to a new 5-1/2 month high with bullish factors including generally strong U.S. economic data and continued safe-haven demand. EUR/USD fell to a new 8-month low on the ECB’s recent monetary policy easing and on concerns about new sanctions on Russia. Closes: Dollar index +0.16 (+0.19%), EUR/USD -0.0034 (-0.25%), USD/JPY +0.02 (+0.02%).
Sep WTI crude oil (CLU14 -0.44%) this morning is down -61 cents (-0.60%). and Sep gasoline (RBU14 -0.44%) is down -0.0122 (-0.43%). Aug crude and gasoline prices on Friday closed steady to higher: CLU4 +0.02 (+0.02%), RBU4 +0.0272 (+0.97%). Crude oil and gasoline prices received a boost on Friday from Ukraine-Russian turmoil, but continued to see some downward pressure from rising U.S. gasoline inventories and concerns about a near-term rise in Libyan exports.

GLOBAL EVENT CALENDAR07/28/2014
US0945 ETJul Markit services PMI expected -0.2 to 59.8, Jun +2.9 to 61.0.
1000 ETJun pending home sales expected +0.5% m/m and -5.2% y/y, May +6.1% m/m and -6.9% y/y.
1030 ETJul Dallas Fed manufacturing activity expected +0.6 to 12.0, Jun +3.4 to 11.4.
1100 ETUSDA weekly grain export inspections.
1300 ETTreasury auctions $29 billion of 2-year T-notes.
1600 ETUSDA weekly crop progress.
JPN1930 ETJapan Jun jobless rate expected unch at 3.5%, May 3.5%. Jun job-to-applicant ratio expected unch at 1.09, May 1.09.
1930 ETJapan Jun overall household spending expected -3.9% y/y, May -8.0% y/y.
1950 ETJapan Jun retail sales expected +0.8% y/y and -0.5% y/y, May +4.6% m/m and -0.4% y/y.
U.S. STOCK CALENDAR07/28/2014
Company NameTickerTimeEvent DescriptionPeriodEstimate
Roper Industries IncROP USBef-mktQ2 2014 Earnings ReleaseQ2 20141.503
Tyson Foods IncTSN USBef-mktQ3 2014 Earnings ReleaseQ3 20140.784
Cummins IncCMI US7:30Q2 2014 Earnings ReleaseQ2 20142.385
Tyson Foods IncTSN US8:00Q3 2014 Earnings CallQ3 2014
Roper Industries IncROP US8:30Q2 2014 Earnings CallQ2 2014
Cummins IncCMI US10:00Q2 2014 Earnings CallQ2 2014
Plum Creek Timber Co IncPCL US17:00Q2 2014 Earnings CallQ2 2014
XL Group PLCXL US17:00Q2 2014 Earnings CallQ2 2014
Eastman Chemical CoEMN US17:00Q2 2014 Earnings ReleaseQ2 20141.837
Plum Creek Timber Co IncPCL USAft-mktQ2 2014 Earnings ReleaseQ2 20140.299
General Growth Properties IncGGP USAft-mktQ2 2014 Earnings ReleaseQ2 20140.305
XL Group PLCXL USAft-mktQ2 2014 Earnings ReleaseQ2 20140.837
Masco CorpMAS USAft-mktQ2 2014 Earnings ReleaseQ2 20140.281
Range Resources CorpRRC USAft-mktQ2 2014 Earnings ReleaseQ2 20140.398
Jacobs Engineering Group IncJEC US21:30Q3 2014 Earnings ReleaseQ3 20140.864
Posted by Jim Van Meerten at
Labels: , , , , , , , , , , , , , , , , , , ,

No comments:

Post a Comment

Subscribe to: Post Comments (Atom)