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OVERNIGHT MARKETS AND NEWS
September E-mini S&Ps (ESU14 -0.59%) this morning are down -0.56% and European stocks are down -0.86%, both at 1-1/2 week lows, as company earnings results disappointed. Samsung, the world's biggest smartphone maker, fell 3.7% in South Korea and led technology stocks lower after it reported Q2 net income that fell short of consensus, while Lufthansa dropped nearly 6% after Europe's second-largest airline said Q2 profit fell and predicted travel markets will remain weak in the second half of this year. Standard & Poor's said Argentina was in default after it missed an interest payment on $13 billion of debt. Asian stocks closed mixed: Japan -0.16%, Hong Kong +0.10%, China +1.22%, Taiwan -1.39%, Australia +0.18%, Singapore +0.61%, South Korea -0.55%, India -0.74%. China's Shanghai Stock Index climbed to its highest level in 7-1/2 months on speculation government stimulus and reform measures will boost economic growth. Commodity prices are mixed. Sep crude oil (CLU14 -0.72%) is down -0.74% at a 2-week low as it fell below $100 a barrel on dollar strength. Sep gasoline (RBU14 -0.56%) is down -0.69% at a 3-1/2 month low. Aug gold (GCQ14 -0.05%) is up +0.05%. Sep copper (HGU14 -0.06%) is up +0.11%. Agriculture and livestock prices are lower. The dollar index (DXY00 +0.08%) is up +0.06%. EUR/USD (^EURUSD) is down -0.07% after weaker-than-expected Eurozone Jul CPI boosted the prospects for additional ECB easing measures. USD/JPY (^USDJPY) is up +0.08%. Sep T-note prices (ZNU14 -0.01%) are unchanged.The Eurozone Jul CPI estimate unexpectedly weakened to +0.4% y/y, lower than expectations of unch at +0.5% y/y and the slowest pace of increase in 4-3/4 years. The Jul core CPI rose +0.8% y/y, right on expectations.
The Eurozone Jun unemployment rate unexpectedly fell -0.1 to 11.5%, better than expectations of no change at 11.6% y/y and the lowest in 1-3/4 years.
The German Jul unemployment change fell -12,000, over double expectations of -5,000 and the first decrease in 3 months. The Jul unemployment rate remained unchanged at 6.7%, right on expectations and the lowest since data for a reunified Germany began in 1991.
German Jun retail sales were mixed as sales rose +1.3% m/m, better than expectations of +1.0% m/m, but rose only +0.4% y/y, less than expectations of +1.3% y/y.
UK Jul GfK consumer confidence unexpectedly fell -3 points to -2, weaker than expectations of +1 to 2.
UK Jul nationwide house prices rose +0.1% m/m and +10.6% y/y, less than expectations of +0.5% m/m and +11.3% y/y.
Japan Jun labor cash earnings rose +0.4% y/y, less than expectations of +0.8% y/y.
U.S. STOCK PREVIEW
Today’s weekly initial unemployment claims report is expected to show a +16,000 gain to 300,000, reversing most of last week’s -19,000 decline to 284,000. Meanwhile, today’s continuing claims report is expected to show a -8,000 decline to 2.492 million, matching last week’s decline of -8,000 to 2.500 million. Today’s Q2 employment cost index is expected to strengthen to +0.5% q/q (+2.0% annualized) from +0.3% (+1.2% annualized) in Q1. Today’s July Chicago PMI report is expected to show a +0.4 point increase to 63.0, recovering some of the sharp -2.9 point loss to 62.6 seen in June.There are 51 of the S&P 500 companies that report earnings today with notable reports including: Mastercard (consensus $0.77), Exxon (1.86), Kellogg (1.02), Expedia (0.76), CME Group (0.79), Time Warner (1.90), ConocoPhillips (1.61), Marathon Petroleum (2.20), ADP (0.63), Excelon (0.50). 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
CME Group (CME +0.44%) reported Q2 EPS of 77 cents, below consensus of 79 cents.Avon Products (AVP +0.39%) reported Q2 EPS of 20 cents, weaker than consensus of 21 cents.
Con-way (CNW +0.19%) reported Q2 EPS of 91 cents, well above consensus of 75 cents.
Lam Research (LRCX -1.32%) reported Q4 adjusted EPS of $1.25, better than consensus of $1.23.
Western Digital (WDC +0.38%) reported Q4 EPS of $1.85, stronger than consensus of $1.74.
Unum Group (UNM -0.46%) reported Q2 EPS of 94 cents, higher than consensus of 87 cents.
Endurance Specialty (ENH -0.19%) terminated its offer to acquire Aspen Insurance (AHL -0.63%) .
Hologic (HOLX +1.68%) reported Q3 EPS of 37 cents, better than consensus of 34 cents, and then raisd guidance on fiscal 2014 EPS view ex-items to $1.44-$1.45 from $1.37-$1.40, higher than consensus of $1.40.
Allstate (ALL -0.28%) gained nearly 3% in after-hours tradng after it reported Q2 operating EPS of $1.01, well above consensus of 70 cents.
MetLife (MET +0.65%) reported Q2 EPS of $1.39, less than consensus of $1.41.
Kraft Foods (KRFT -0.90%) dropped over 2% in after-hours trading after it reported Q2 EPS of 80 cents, weaker than consensus of 83 cents.
Fortune Brands (FBHS +0.11%) reported Q2 EPS of 55 cents, higher than consensus of 54 cents, although Q2 revenue of $1.14 billion was slightly less than consensus of $1.17 billion.
Whiting Petroleum (WLL -0.13%) rose over 1% in after-hours trading after it reported adjusted Q2 EPS of $1.40, stronger than consensus of $1.28.
AMC Entertainment (AMC -0.31%) reported Q2 EPS of 32 cents, higher than consensus of 29 cents.
Whole Foods Market (WFM +3.80%) fell over 4% in afer-hours trading after it reported Q3 EPS of 41 cents, better than consensus of 39 cents, but then lowered guidance on fiscal 2014 EPS view to $1.52-$1.54 from $1.52-$1.56, at the low end of consensus of $1.53.
Akamai (AKAM +2.93%) reported Q2 EPS of 58 cents, higher than consensus of 55 cents.
MARKET COMMENTS
Sep E-mini S&Ps (ESU14 -0.59%) this morning are down -11,00 points (-0.56%). The S&P 500 index on Wednesday recovered from a 1-1/2 week low and closed higher: S&P 500 +0.01%, Dow Jones -0.19%, Nasdaq +0.43%. Bullish factors included (1) the +4.0% gain in U.S. Q2 GDP, stronger than expectations of +3.0% as Q2 personal consumption rose +2.5%, better than expectations of +1.9%, and (2) positive Q2 company earnings results as 77% of reporting S&P 500 companies have beaten estimates. A negative factor was the +218,000 increase in Jul ADP employment, less than expectations of +230,000.Sep 10-year T-notes (ZNU14 -0.01%) this morning are unch. Sep 10-year T-note futures prices on Wednesday tumbled to a 3-week low and closed lower. Bearish factors included (1) the stronger-than-expected U.S. Q2 GDP of +4.0%, which bolstered the outlook for the Fed to raise interest rates sooner rather than later, and (2) the +2.0% increase in the Q2 core PCE deflator, more than expectations of +1.9% and the fastest pace in 2-1/4 years. Closes: TYU4 -23.00, FVU4 -11.00.
The dollar index (DXY00 +0.08%) this morning is up +0.048 (+0.06%). EUR/USD (^EURUSD) is down -0.0010 (-0.07%) and USD/JPY (^USDJPY) is up +0.08 (+0.08%). The dollar index on Wednesday soared to a 10-1/2 month high after the stronger-than-expected U.S. Q2 GDP report bolstered the outlook for the Fed to tighten monetary policy. EUR/USD fell to an 8-1/2 month low and USD/JPY rose to a 2-3/4 month high as the yen weakened on speculation the BOJ may expand its stimulus measures after Japan Jun industrial production fell -3.3% m/m, the most in 3-1/4 years. Closes: Dollar index +0.218 (+0.27%), EUR/USD -0.0012 (-0.09%), USD/JPY +0.672 (+0.66%).
Sep WTI crude oil (CLU14 -0.72%) this morning is down -74 cents (-0.74%) at a 2-week low and Sep gasoline (RBU14 -0.56%) is down -0.0194 (-0.69%) at a 3-1/2 month low. Sep crude and gasoline prices on Wednesday closed lower with Sep crude at a 2-week low and Sep gasoline at a 2-1/2 month low: CLU4 -1.29 (-1.28%), RBU4 -0.0419 (-1.47%). Bearish factors included (1) the rally in the dollar index to a 10-1/2 month high, and (2) the +789,000 bbl increase in EIA distillate inventories to a 10-month high of 126.7 million bbl. Crude prices failed to rally on the -3.697 million bbl drop in weekly EIA inventories, three times more than expectations of a -1.25 million bbl draw.
GLOBAL EVENT CALENDAR07/31/2014
| US | 0730 ET | Jul Challenger job cuts, Jun -20.2% y/y. |
| 0830 ET | Weekly initial unemployment claims expected +16,000 to 300,000, previous -19,000 to 284,000. Weekly continuing claims expected -8,000 to 2.492 million, previous -8,000 to 2.500 million. | |
| 0830 ET | USDA weekly Export Sales. | |
| 0830 ET | Q2 employment cost index expected +0.5%, Q1 +0.3%. | |
| 0900 ET | Jul Milwaukee ISM expected +0.4 to 61.0, Jun -2.92 to 60.57. | |
| 0945 ET | Jul Chicago PMI expected +0.4 to 63.0, Jun -2.9 to 62.6. | |
| JPN | 0100 ET | Japan Jun annualized housing starts expected -11.5% y/y to 857,000, May -15.0% y/y to 872,000. |
| 0100 ET | Japan Jun construction orders, May +13.7% y/y. | |
| GER | 0200 ET | German Jun retail sales expected +1.0% m/m and +1.3% y/y, May -0 |
| 0355 ET | German Jul unemployment change expected -5,000, Jun +9,000. Jul unemployment rate expected unch at 6.7%, Jun 6.7%. | |
| EUR | 0500 ET | Eurozone Jul CPI estimate expected +0.5% y/y, Jun +0.5% y/y. Jul core CPI expected +0.8% y/y, Jun +0.8% y/y. |
| 0500 ET | Eurozone Jun unemployment rate expected unchanged at 11.6%, May 11.6%. | |
| UK | 0200 ET | UK Jul Nationwide House Price index expected +0.5% m/m and +11.3% y/y, June +1.0% m/m and +11.8% y/y. |
| CHI | 2100 ET | China Jul manufacturing PMI (National Bureau of Statistics) expected +0.4 to 51.4, Jun +0.2 to 51.0. |
| 2145 ET | Final-July HSBC China manufacturing PMI expected unch at 52.0, prelim-Jul +1.3 to 52.0. |
U.S. STOCK CALENDAR07/31/2014
| Company Name | Ticker | Time | Event Description | Period | Estimate |
|---|---|---|---|---|---|
| Pentair PLC | PNR US | Bef-mkt | Q2 2014 Earnings Release | Q2 2014 | 1.034 |
| Xcel Energy Inc | XEL US | Bef-mkt | Q2 2014 Earnings Release | Q2 2014 | 0.405 |
| DIRECTV | DTV US | Bef-mkt | Q2 2014 Earnings Release | Q2 2014 | 1.533 |
| Occidental Petroleum Corp | OXY US | Bef-mkt | Q2 2014 Earnings Release | Q2 2014 | 1.764 |
| Marathon Petroleum Corp | MPC US | Bef-mkt | Q2 2014 Earnings Release | Q2 2014 | 2.195 |
| PG&E Corp | PCG US | Bef-mkt | Q2 2014 Earnings Release | Q2 2014 | 0.75 |
| BorgWarner Inc | BWA US | Bef-mkt | Q2 2014 Earnings Release | Q2 2014 | 0.871 |
| PPL Corp | PPL US | Bef-mkt | Q2 2014 Earnings Release | Q2 2014 | 0.454 |
| Automatic Data Processing Inc | ADP US | Bef-mkt | Q4 2014 Earnings Release | Q4 2014 | 0.629 |
| Exelon Corp | EXC US | Bef-mkt | Q2 2014 Earnings Release | Q2 2014 | 0.497 |
| Avon Products Inc | AVP US | Bef-mkt | Q2 2014 Earnings Release | Q2 2014 | 0.213 |
| Pinnacle West Capital Corp | PNW US | Bef-mkt | Q2 2014 Earnings Release | Q2 2014 | 1.148 |
| L-3 Communications Holdings Inc | LLL US | Bef-mkt | Q2 2014 Earnings Release | Q2 2014 | 2.016 |
| SCANA Corp | SCG US | Bef-mkt | Q2 2014 Earnings Release | Q2 2014 | 0.616 |
| McKesson Corp | MCK US | Bef-mkt | Q1 2015 Earnings Release | Q1 2015 | 2.327 |
| Colgate-Palmolive Co | CL US | Bef-mkt | Q2 2014 Earnings Release | Q2 2014 | 0.734 |
| TECO Energy Inc | TE US | Bef-mkt | Q2 2014 Earnings Release | Q2 2014 | 0.268 |
| MasterCard Inc | MA US | Bef-mkt | Q2 2014 Earnings Release | Q2 2014 | 0.768 |
| Ensco PLC | ESV US | Bef-mkt | Q2 2014 Earnings Release | Q2 2014 | 1.314 |
| CME Group Inc/IL | CME US | Bef-mkt | Q2 2014 Earnings Release | Q2 2014 | 0.793 |
| Delphi Automotive PLC | DLPH US | Bef-mkt | Q2 2014 Earnings Release | Q2 2014 | 1.326 |
| Ball Corp | BLL US | 6:00 | Q2 2014 Earnings Release | Q2 2014 | 1.022 |
| Becton Dickinson and Co | BDX US | 6:00 | Q3 2014 Earnings Release | Q3 2014 | 1.671 |
| Cigna Corp | CI US | 6:00 | Q2 2014 Earnings Release | Q2 2014 | 1.842 |
| Iron Mountain Inc | IRM US | 6:00 | Q2 2014 Earnings Release | Q2 2014 | 0.423 |
| Time Warner Cable Inc | TWC US | 6:00 | Q2 2014 Earnings Release | Q2 2014 | 1.901 |
| Helmerich & Payne Inc | HP US | 6:00 | Q3 2014 Earnings Release | Q3 2014 | 1.63 |
| Host Hotels & Resorts Inc | HST US | 6:00 | Q2 2014 Earnings Release | Q2 2014 | 0.434 |
| Quanta Services Inc | PWR US | 6:07 | Q2 2014 Earnings Release | Q2 2014 | 0.403 |
| Newell Rubbermaid Inc | NWL US | 6:30 | Q2 2014 Earnings Release | Q2 2014 | 0.544 |
| NiSource Inc | NI US | 6:30 | Q2 2014 Earnings Release | Q2 2014 | 0.244 |
| Discovery Communications Inc | DISCA US | 7:00 | Q2 2014 Earnings Release | Q2 2014 | 0.966 |
| ConocoPhillips | COP US | 7:00 | Q2 2014 Earnings Release | Q2 2014 | 1.606 |
| Mosaic Co/The | MOS US | 7:00 | Q2 2014 Earnings Release | Q2 2014 | 0.739 |
| DENTSPLY International Inc | XRAY US | 7:00 | Q2 2014 Earnings Release | Q2 2014 | 0.682 |
| Legg Mason Inc | LM US | 7:00 | Q1 2015 Earnings Release | Q1 2015 | 0.553 |
| Invesco Ltd | IVZ US | 7:30 | Q2 2014 Earnings Release | Q2 2014 | 0.586 |
| Newell Rubbermaid Inc | NWL US | 8:00 | Q2 2014 Earnings Call | Q2 2014 | |
| Apache Corp | APA US | 8:00 | Q2 2014 Earnings Release | Q2 2014 | 1.64 |
| Allegion PLC | ALLE US | 8:00 | Q2 2014 Earnings Call | Q2 2014 | |
| Becton Dickinson and Co | BDX US | 8:00 | Q3 2014 Earnings Call | Q3 2014 | |
| Exxon Mobil Corp | XOM US | 8:00 | Q2 2014 Earnings Release | Q2 2014 | 1.862 |
| Kellogg Co | K US | 8:00 | Q2 2014 Earnings Release | Q2 2014 | 1.017 |
| Legg Mason Inc | LM US | 8:00 | Q1 2015 Earnings Call | Q1 2015 | |
| MetLife Inc | MET US | 8:00 | Q2 2014 Earnings Call | Q2 2014 | |
| Discovery Communications Inc | DISCA US | 8:30 | Q2 2014 Earnings Call | Q2 2014 | |
| PPL Corp | PPL US | 8:30 | Q2 2014 Earnings Call | Q2 2014 | |
| Automatic Data Processing Inc | ADP US | 8:30 | Q4 2014 Earnings Call | Q4 2014 | |
| McKesson Corp | MCK US | 8:30 | Q1 2015 Earnings Call | Q1 2015 | |
| Cigna Corp | CI US | 8:30 | Q2 2014 Earnings Call | Q2 2014 | |
| Iron Mountain Inc | IRM US | 8:30 | Q2 2014 Earnings Call | Q2 2014 | |
| Tesoro Corp | TSO US | 8:30 | Q2 2014 Earnings Call | Q2 2014 | |
| Time Warner Cable Inc | TWC US | 8:30 | Q2 2014 Earnings Call | Q2 2014 | |
| DENTSPLY International Inc | XRAY US | 8:30 | Q2 2014 Earnings Call | Q2 2014 | |
| CME Group Inc/IL | CME US | 8:30 | Q2 2014 Earnings Call | Q2 2014 | |
| Pentair PLC | PNR US | 9:00 | Q2 2014 Earnings Call | Q2 2014 | |
| NiSource Inc | NI US | 9:00 | Q2 2014 Earnings Call | Q2 2014 | |
| Avon Products Inc | AVP US | 9:00 | Q2 2014 Earnings Call | Q2 2014 | |
| TECO Energy Inc | TE US | 9:00 | Q2 2014 Earnings Call | Q2 2014 | |
| Invesco Ltd | IVZ US | 9:00 | Q2 2014 Earnings Call | Q2 2014 | |
| Noble Corp plc | NE US | 9:00 | Q2 2014 Earnings Call | Q2 2014 | |
| Unum Group | UNM US | 9:00 | Q2 2014 Earnings Call | Q2 2014 | |
| MasterCard Inc | MA US | 9:00 | Q2 2014 Earnings Call | Q2 2014 | |
| Mosaic Co/The | MOS US | 9:00 | Q2 2014 Earnings Call | Q2 2014 | |
| Delphi Automotive PLC | DLPH US | 9:00 | Q2 2014 Earnings Call | Q2 2014 | |
| Allstate Corp/The | ALL US | 9:00 | Q2 2014 Earnings Call | Q2 2014 | |
| BorgWarner Inc | BWA US | 9:30 | Q2 2014 Earnings Call | Q2 2014 | |
| Quanta Services Inc | PWR US | 9:30 | Q2 2014 Earnings Call | Q2 2014 | |
| Williams Cos Inc/The | WMB US | 9:30 | Q2 2014 Earnings Call | Q2 2014 | |
| Kellogg Co | K US | 9:30 | Q2 2014 Earnings Call | Q2 2014 | |
| Xcel Energy Inc | XEL US | 10:00 | Q2 2014 Earnings Call | Q2 2014 | |
| Occidental Petroleum Corp | OXY US | 10:00 | Q2 2014 Earnings Call | Q2 2014 | |
| Marathon Petroleum Corp | MPC US | 10:00 | Q2 2014 Earnings Call | Q2 2014 | |
| Exelon Corp | EXC US | 10:00 | Q2 2014 Earnings Call | Q2 2014 | |
| Progressive Corp/The | PGR US | 10:00 | Investor Relations Conference Call | ||
| Lincoln National Corp | LNC US | 10:00 | Q2 2014 Earnings Call | Q2 2014 | |
| Host Hotels & Resorts Inc | HST US | 10:00 | Q2 2014 Earnings Call | Q2 2014 | |
| PG&E Corp | PCG US | 11:00 | Q2 2014 Earnings Call | Q2 2014 | |
| Ball Corp | BLL US | 11:00 | Q2 2014 Earnings Call | Q2 2014 | |
| L-3 Communications Holdings Inc | LLL US | 11:00 | Q2 2014 Earnings Call | Q2 2014 | |
| Hartford Financial Services Group Inc/The | HIG US | 11:00 | Q2 2014 Earnings Call | Q2 2014 | |
| Colgate-Palmolive Co | CL US | 11:00 | Q2 2014 Earnings Call | Q2 2014 | |
| Exxon Mobil Corp | XOM US | 11:00 | Q2 2014 Earnings Call | Q2 2014 | |
| FMC Corp | FMC US | 11:00 | Q2 2014 Earnings Call | Q2 2014 | |
| Ensco PLC | ESV US | 11:00 | Q2 2014 Earnings Call | Q2 2014 | |
| Helmerich & Payne Inc | HP US | 11:00 | Q3 2014 Earnings Call | Q3 2014 | |
| ConocoPhillips | COP US | 12:00 | Q2 2014 Earnings Call | Q2 2014 | |
| Pinnacle West Capital Corp | PNW US | 12:00 | Q2 2014 Earnings Call | Q2 2014 | |
| Michael Kors Holdings Ltd | KORS US | 12:00 | Annual General Meeting | Y 2014 | |
| Murphy Oil Corp | MUR US | 13:00 | Q2 2014 Earnings Call | Q2 2014 | |
| DIRECTV | DTV US | 14:00 | Q2 2014 Earnings Call | Q2 2014 | |
| Apache Corp | APA US | 14:00 | Q2 2014 Earnings Call | Q2 2014 | |
| SCANA Corp | SCG US | 15:00 | Q2 2014 Earnings Call | Q2 2014 | |
| Western Union Co/The | WU US | 16:00 | Q2 2014 Earnings Release | Q2 2014 | 0.357 |
| Western Union Co/The | WU US | 16:30 | Q2 2014 Earnings Call | Q2 2014 | |
| Expedia Inc | EXPE US | 16:30 | Q2 2014 Earnings Call | Q2 2014 | |
| DaVita HealthCare Partners Inc | DVA US | 17:00 | Q2 2014 Earnings Call | Q2 2014 | |
| Microchip Technology Inc | MCHP US | 17:00 | Q1 2015 Earnings Call | Q1 2015 | |
| Edison International | EIX US | 17:00 | Q2 2014 Earnings Call | Q2 2014 | |
| PerkinElmer Inc | PKI US | 17:00 | Q2 2014 Earnings Call | Q2 2014 | |
| Electronic Arts Inc | EA US | 17:00 | Annual General Meeting | ||
| Northeast Utilities | NU US | Aft-mkt | Q2 2014 Earnings Release | Q2 2014 | 0.506 |
| Fluor Corp | FLR US | Aft-mkt | Q2 2014 Earnings Release | Q2 2014 | 0.992 |
| DaVita HealthCare Partners Inc | DVA US | Aft-mkt | Q2 2014 Earnings Release | Q2 2014 | 0.888 |
| Microchip Technology Inc | MCHP US | Aft-mkt | Q1 2015 Earnings Release | Q1 2015 | 0.665 |
| Mohawk Industries Inc | MHK US | Aft-mkt | Q2 2014 Earnings Release | Q2 2014 | 2.197 |
| Edison International | EIX US | Aft-mkt | Q2 2014 Earnings Release | Q2 2014 | 0.818 |
| Public Storage | PSA US | Aft-mkt | Q2 2014 Earnings Release | Q2 2014 | 1.961 |
| PerkinElmer Inc | PKI US | Aft-mkt | Q2 2014 Earnings Release | Q2 2014 | 0.579 |
| Apartment Investment & Management Co | AIV US | Aft-mkt | Q2 2014 Earnings Release | Q2 2014 | 0.505 |
| Expedia Inc | EXPE US | Aft-mkt | Q2 2014 Earnings Release | Q2 2014 | 0.758 |
| Fluor Corp | FLR US | 17:30 | Q2 2014 Earnings Call | Q2 2014 |
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