Tuesday, July 29, 2014

BARCHART MORNING CALL 7/29

OVERNIGHT MARKETS AND NEWS
September E-mini S&Ps (ESU14 +0.15%) this morning are up +0.01% and European stocks are up +0.46% as optimism over Q2 corporate earnings results offsets concern about the geopolitical crisis' in Ukraine and the Middle East. Gains in European stocks were muted as the EU and the U.S. prepare new sanctions against Russia. Concern that new sanctions against Russia may slow European economic growth has fueled a rally in European government bond markets with the yield on the 10-year German bund falling to 1.119%, the lowest since Bloomberg began tracking the data in 1989. Asian stocks closed mostly higher: Japan +0.57%, Hong Kong +0.87%, China +0.32%, Taiwan -0.30%, Australia +0.20%, Singapore +0.18%, South Korea +0.93%, India closed for holiday. Japan's Nikkei Stock Index climbed to a 6-month high as exporter stocks rallied after the yen fell to a 3-week low against the dollar, which improves the earnings prospects for exporters. China's Shanghai Stock Index rose to a 7-month high as property developers rallied after the Shanghai Securities News reported that banks in Shanghai, Beijing and Guangzhou may shorten their mortgage-approval process to 1 month from 3 months, which may boost China's home sales in the second half of this year. Commodity prices are mixed. Sep crude oil (CLU14 -0.26%) is down -0.23%. Sep gasoline (RBU14 +0.45%) is up +0.44%. Aug gold (GCQ14 +0.36%) is up +0.32%. Sep copper (HGU14 -0.29%) is down -0.28%. Agriculture and livestock prices are mostly lower. The dollar index (DXY00 +0.04%) is up +0.03%. EUR/USD (^EURUSD) is down -0.03%. USD/JPY (^USDJPY) is up +0.12% at a 3-week high. Sep T-note prices (ZNU14 +0.07%) are up +4 ticks on catty-over support from a rally in European bond markets.
The Japan Jun jobless rate unexpectedly rose +0.2 to 3.7%, higher than expectations of unch at 3.5% and the highest in 5 months. The Jun job-to-applicant ratio unexpectedly rose +0.01 to 1.10, higher than expectations of unch at 1.09 and the highest in 22 years.
Japan Jun retail sales rose +0.4% m/m and fell -0.6% y/y, weaker than expectations of +0.8% m/m and -0.5% y/y.
Japan Jun overall household spending fell -3.0% y/y, less than expectations of -4.0% y/y.
UK Jun mortgage approvals rose 67,200, more than expectations of 63,000.
UK Jun net consumer credit rose +0.4 billion pounds, less than expectations of +0.8 billion pounds and the smallest increase in 17 months.
U.S. STOCK PREVIEW
The 2-day FOMC meeting begins today and will conclude tomorrow with a policy announcement. Today’s May S&P/CaseShiller Composite-20 home price index is expected to show an increase of +0.3% m/m, strengthening a bit from the +0.2% increase seen in April. April’s report of +0.2% m/m marked the smallest advance for the series since it started rising in February 2012. Today’s July U.S. consumer confidence from the Conference Board is expected to show a small increase of +0.2 to 85.4, edging higher after the sharp +3.0 point increase to 85.2 seen in June. The Treasury today will sell $35 billion of 5-year T-notes.
There are 46 of the S&P 500 companies that report earnings today with notable reports including: UPS (consensus $1.25), Newmont Mining (0.19), Aflac (1.59), Pfizer (0.57), Martin Marietta Materials (1.29), Corning (0.38), Wynn Resorts (2.03), International Paper (0.83), Merck (0.81). 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
Merck & Co. (MRK -0.31%) reported Q2 EPS of 85 cents, better than consensus of 81 cents.
Aetna (AET +1.71%) reported Q2 EPS of $1.69, higher than consensus of $1.60.
Eastman Chemical (EMN -0.05%) reported Q2 EPS of $1.92, above consensus of $1.84.
Range Resources (RRC -0.57%) reported Q2 EPS of 36 cents, weaker than consensus of 40 cents.
Masco (MAS -3.01%) climbed 6% in after-hours trading after it reported Q2 adjusted EPS of 32 cents, stronger than consensus of 28 cents.
Luxor Capital Group reported a 5.4% passive stake in Orbitz (OWW unch) .
Herbalife (HLF +2.15%) fell over 10% in after-hours trading after it reported Q2 EPS of $1.55, below consensus of $1.57.
HealthSouth (HLS +1.21%) reported Q2 EPS of 81 cents with items, well above consensus of 47 cents, and then raised guidance on fiscal 2014 EPS view to $2.25-$2.31 from $1.86-$1.91, well above consensus of $1.91.
Amkor Technology (AMKR +0.10%) jumped over 10% in after-hours trading after it reported Q2 EPS of 21 cents, higher than consensus of 15 cents.
Lloyd Miller reported a 5.4% passive stake in Learning Tree (LTRE +1.28%) .
CNO Financial (CNO +0.17%) reported Q2 EPS of 29 cents, weaker than consensus of 31 cents.
W. R. Berkley (WRB -0.25%) reported Q2 operating EPS of 82 cents, stronger than consensus of 77 cents.
Plum Creek Timber (PCL +0.32%) reported Q2 EPS of 31 cents, higher than consensus of 30 cents, but then lowered guidance on fiscal 2014 EPS view to $1.05-$1.25 from $1.30-$1.50, well below consensus of $1.39.
Norwegian Cruise Line (NCLH +1.11%) reported Q2 adjusted EPS of 58 cents, better than consensus of 57 cents.
MARKET COMMENTS
Sep E-mini S&Ps (ESU14 +0.15%) this morning are up +0.25 of a point (+0.01%). The S&P 500 index on Monday erased early losses and closed higher 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 and after Zillow agreed to purchase Trulia for $3.5 billion: S&P 500 +0.08%, Dow Jones +0.03%, Nasdaq +0.13%. Negative factors that kept gains in check included (1) the -1.1% m/m decline in June pending home sales, weaker than expectations of a +0.5% m/m increase and the biggest monthly decline in 6 months, and (2) geopolitical concerns with the escalation of violence in the Middle East and Ukraine and with impending new Russian sanctions.
Sep 10-year T-notes (ZNU14 +0.07%) this morning are up +4 ticks. Sep 10-year T-note futures prices on Monday closed lower. Negative factors included (1) supply pressures as the Treasury auctions $108 billion of T-notes this week, and (2) expectations for the Fed to further reduce its monthly bond purchases by $10 billion when it convenes at this week’s 2-day FOMC meeting. Losses were limited as stocks fell after Jun pending home sales unexpectedly fell by the most in 6 months. Closes: TYU4 -6.0, FVU4 -4.00.
The dollar index (DXY00 +0.04%) this morning is up +0.026 (+0.03%). EUR/USD (^EURUSD) is down -0.0004 (-0.03%) and USD/JPY (^USDJPY) is up +0.12 (+0.12%) a a 3-week high. The dollar index on Monday closed little changed on signs of economic weakness after U.S. Jun pending home sales unexpectedly declined. EUR/USD was undercut by comments from ECB Vice President Constancio who said that inflation rates in the Eurozone “remained too low” in the second quarter. Closes: Dollar index unch, EUR/USD -0.0034 (-0.25%), USD/JPY +0.02 (+0.02%).
Sep WTI crude oil (CLU14 -0.26%) this morning is down -23 cents (-0.23%) and Sep gasoline (RBU14 +0.45%) is up +0.0125 (+0.44%). Sep crude and gasoline prices Monday closed lower with Sep crude at a 2-week low: CLU4 -0.42 (-0.41%), RBU4 -0.0129 (-0.45%). Bearish factors for crude oil and gasoline included (1) signs of economic weakness after U.S. Jun pending home sales unexpectedly declined by the most in 6 months, and (2) reduced geopolitical concerns as the flow of crude oil from the Middle East remains unaffected by the surge of violence in Libya and Iraq.
GLOBAL EVENT CALENDAR07/29/2014
US0900 ETMay S&P/CaseShiller Composite-20 home price index expected +0.3% m/m and +10.0% y/y, Apr +0.19% m/m and +10.82% y/y.
1000 ETJul U.S. consumer confidence (Conference Board) expected +0.2 to 85.4, Jun +3.0 to 85.2.
1100 ETFOMC begins 2-day policy meeting.
1300 ETTreasury auctions $35 billion of 5-year T-notes.
UK0430 ETUK Jun net consumer credit expected +0.8 billion pounds, May +0.7 billion pounds.
0430 ETUK Jun mortgage approvals expected 63,000, May 61,700.
0430 ETUK Jun M4 money supply expected -0.6% y/y, May -0.1% m/m and -0.9% y/y.
JPN1950 ETJapan Jun industrial production expected -1.2% m/m and +5.2% y/y, May +0.7% m/m and +1.0% y/y.
GER0200 ETGerman Jun import price index expected +0.3% m/m and -1.2% y/y, May unch m/m and -2.1% y/y.
U.S. STOCK CALENDAR07/29/2014
Company NameTickerTimeEvent DescriptionPeriodEstimate
Martin Marietta Materials IncMLM USBef-mktQ2 2014 Earnings ReleaseQ2 20141.292
Pfizer IncPFE USBef-mktQ2 2014 Earnings ReleaseQ2 20140.567
Nielsen NVNLSN USBef-mktQ2 2014 Earnings ReleaseQ2 20140.612
Waste Management IncWM USBef-mktQ2 2014 Earnings ReleaseQ2 20140.593
Corning IncGLW USBef-mktQ2 2014 Earnings ReleaseQ2 20140.376
Eaton Corp PLCETN USBef-mktQ2 2014 Earnings ReleaseQ2 20141.118
Ecolab IncECL USBef-mktQ2 2014 Earnings ReleaseQ2 20141.022
Entergy CorpETR USBef-mktQ2 2014 Earnings ReleaseQ2 20141.103
Wynn Resorts LtdWYNN USBef-mktQ2 2014 Earnings ReleaseQ2 20142.026
National Oilwell Varco IncNOV USBef-mktQ2 2014 Earnings ReleaseQ2 20141.437
PACCAR IncPCAR USBef-mktQ2 2014 Earnings ReleaseQ2 20140.891
Fidelity National Information Services IncFIS USBef-mktQ2 2014 Earnings ReleaseQ2 20140.739
Affiliated Managers Group IncAMG USBef-mktQ2 2014 Earnings ReleaseQ2 20142.599
International Paper CoIP USBef-mktQ2 2014 Earnings ReleaseQ2 20140.832
Reynolds American IncRAI USBef-mktQ2 2014 Earnings ReleaseQ2 20140.867
Marsh & McLennan Cos IncMMC USBef-mktQ2 2014 Earnings ReleaseQ2 20140.744
Merck & Co IncMRK USBef-mktQ2 2014 Earnings ReleaseQ2 20140.81
Aetna IncAET US6:00Q2 2014 Earnings ReleaseQ2 20141.604
Harris CorpHRS US6:30Q4 2014 Earnings ReleaseQ4 20141.284
CONSOL Energy IncCNX US6:45Q2 2014 Earnings ReleaseQ2 20140.245
Xylem Inc/NYXYL US7:00Q2 2014 Earnings ReleaseQ2 20140.444
McGraw Hill Financial IncMHFI US7:15Q2 2014 Earnings ReleaseQ2 20140.98
NextEra Energy IncNEE US7:30Q2 2014 Earnings ReleaseQ2 20141.44
United Parcel Service IncUPS US7:45Q2 2014 Earnings ReleaseQ2 20141.248
Illinois Tool Works IncITW US8:00Q2 2014 Earnings ReleaseQ2 20141.201
Masco CorpMAS US8:00Q2 2014 Earnings CallQ2 2014
Eastman Chemical CoEMN US8:00Q2 2014 Earnings CallQ2 2014
Merck & Co IncMRK US8:00Q2 2014 Earnings CallQ2 2014
Nielsen NVNLSN US8:30Q2 2014 Earnings CallQ2 2014
Corning IncGLW US8:30Q2 2014 Earnings CallQ2 2014
Wynn Resorts LtdWYNN US8:30Q2 2014 Earnings CallQ2 2014
Harris CorpHRS US8:30Q4 2014 Earnings CallQ4 2014
United Parcel Service IncUPS US8:30Q2 2014 Earnings CallQ2 2014
Fidelity National Information Services IncFIS US8:30Q2 2014 Earnings CallQ2 2014
Aetna IncAET US8:30Q2 2014 Earnings CallQ2 2014
Marsh & McLennan Cos IncMMC US8:30Q2 2014 Earnings CallQ2 2014
McGraw Hill Financial IncMHFI US8:30Q2 2014 Earnings CallQ2 2014
Xylem Inc/NYXYL US9:00Q2 2014 Earnings CallQ2 2014
NextEra Energy IncNEE US9:00Q2 2014 Earnings CallQ2 2014
National Oilwell Varco IncNOV US9:00Q2 2014 Earnings CallQ2 2014
International Paper CoIP US9:00Q2 2014 Earnings CallQ2 2014
Reynolds American IncRAI US9:00Q2 2014 Earnings CallQ2 2014
Range Resources CorpRRC US9:00Q2 2014 Earnings CallQ2 2014
Pfizer IncPFE US10:00Q2 2014 Earnings CallQ2 2014
Waste Management IncWM US10:00Q2 2014 Earnings CallQ2 2014
CONSOL Energy IncCNX US10:00Q2 2014 Earnings CallQ2 2014
General Growth Properties IncGGP US10:00Q2 2014 Earnings CallQ2 2014
Eaton Corp PLCETN US10:00Q2 2014 Earnings CallQ2 2014
Illinois Tool Works IncITW US10:00Q2 2014 Earnings CallQ2 2014
Entergy CorpETR US11:00Q2 2014 Earnings CallQ2 2014
Affiliated Managers Group IncAMG US11:00Q2 2014 Earnings CallQ2 2014
Jacobs Engineering Group IncJEC US11:00Q3 2014 Earnings CallQ3 2014
PACCAR IncPCAR US12:00Q2 2014 Earnings CallQ2 2014
Ecolab IncECL US13:00Q2 2014 Earnings CallQ2 2014
Martin Marietta Materials IncMLM US14:00Q2 2014 Earnings CallQ2 2014
Edwards Lifesciences CorpEW US16:00Q2 2014 Earnings ReleaseQ2 20140.769
CBRE Group IncCBG US16:00Q2 2014 Earnings ReleaseQ2 20140.356
CH Robinson Worldwide IncCHRW US16:15Q2 2014 Earnings ReleaseQ2 20140.765
American Express CoAXP US17:00Q2 2014 Earnings CallQ2 2014
Marriott International Inc/DEMAR US17:00Q2 2014 Earnings ReleaseQ2 20140.67
Edwards Lifesciences CorpEW US17:00Q2 2014 Earnings CallQ2 2014
Vertex Pharmaceuticals IncVRTX US17:00Q2 2014 Earnings CallQ2 2014
CBRE Group IncCBG US17:00Q2 2014 Earnings CallQ2 2014
Amgen IncAMGN US17:00Q2 2014 Earnings CallQ2 2014
Fiserv IncFISV US17:00Q2 2014 Earnings CallQ2 2014
Equity ResidentialEQR USAft-mktQ2 2014 Earnings ReleaseQ2 20140.768
Aflac IncAFL USAft-mktQ2 2014 Earnings ReleaseQ2 20141.592
Newmont Mining CorpNEM USAft-mktQ2 2014 Earnings ReleaseQ2 20140.191
American Express CoAXP USAft-mktQ2 2014 Earnings ReleaseQ2 20141.381
Anadarko Petroleum CorpAPC USAft-mktQ2 2014 Earnings ReleaseQ2 20141.296
Owens-Illinois IncOI USAft-mktQ2 2014 Earnings ReleaseQ2 20140.824
AGL Resources IncGAS USAft-mktQ2 2014 Earnings ReleaseQ2 20140.428
Newfield Exploration CoNFX USAft-mktQ2 2014 Earnings ReleaseQ2 20140.528
Vertex Pharmaceuticals IncVRTX USAft-mktQ2 2014 Earnings ReleaseQ2 2014-0.762
Boston Properties IncBXP USAft-mktQ2 2014 Earnings ReleaseQ2 20141.331
Genworth Financial IncGNW USAft-mktQ2 2014 Earnings ReleaseQ2 20140.349
Express Scripts Holding CoESRX USAft-mktQ2 2014 Earnings ReleaseQ2 20141.216
Amgen IncAMGN USAft-mktQ2 2014 Earnings ReleaseQ2 20142.064
Fiserv IncFISV USAft-mktQ2 2014 Earnings ReleaseQ2 20140.808
Ameriprise Financial IncAMP USAft-mktQ2 2014 Earnings ReleaseQ2 20142.01
Kimco Realty CorpKIM USAft-mktQ2 2014 Earnings ReleaseQ2 20140.344
Cincinnati Financial CorpCINF USAft-mktQ2 2014 Earnings ReleaseQ2 20140.455
Legg Mason IncLM USAnnual General MeetingY 2014
Posted by Jim Van Meerten at
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