Wednesday, October 1, 2014

BARCHART MORNING CALL 10/1

OVERNIGHT MARKETS AND NEWS
December E-mini S&Ps (ESZ14 -0.14%) this morning are down -0.10% and European stocks are down -0.09% after a gauge of Eurozone manufacturing activity last month was revised lower to its slowest pace of expansion in 15 months. Losses were contained after data showed Chinese manufacturing activity was stronger-than-expected last month. Greek stocks rallied sharply after the Financial Times reported that ECB President Draghi at Thursday's ECB policy meeting will unveil a plan to buy private-sector assets and will push for the central bank to buy bundles of Greek and Cypriot bank loans with "junk" ratings. Asian stocks closed mixed: Japan -0.56%, Hong Kong and China closed for holiday, Taiwan +0.26%, Australia +0.78%, Singapore -0.39%, South Korea -1.54%, India -0.23%. Commodity prices are mixed. Nov crude oil (CLX14 +0.67%) is up +0.36%. Nov gasoline (RBX14 +0.58%) is up +0.31%. Dec gold (GCZ14 -0.15%) is down -0.21%. Dec copper (HGZ14 +1.20%) is up +0.57%. Agriculture and livestock prices are lower with Dec corn down -0.47% at a fresh 5-year low. The dollar index (DXY00 +0.23%) is up +0.18%. EUR/USD (^EURUSD) is down -0.27%. USD/JPY (^USDJPY) is up +0.17% at a new 6-year high. Dec T-note prices (ZNZ14 +0.18%) are up +8.5 ticks at a 3-week high on carry-over support from a rally in German bunds to a 3-week high.
The German Sep Markit/BME manufacturing PMI was revised lower to 49.9 from the previously reported 50.3, the first time that manufacturing activity in Germany has contracted in 15 months.
The Eurozone Sep Markit manufacturing PMI was revised down to 50.3 from the previously reported 50.5, the slowest pace of expansion in 15 months.
The China Sep manufacturing PMI was unchanged at 51.1, better than expectations of -0.1 to 51.0.
The UK Sep Markit manufacturing PMI fell -0.6 to 51.6, weaker than expectations of +0.2 to 52.7 and the slowest pace of expansion in 17 months.
The Japan Q3 Tankan large manufacturing business conditions unexpectedly improved to 13 from 12 in Q2, better than expectations of decline to 10.
U.S. STOCK PREVIEW
Today’s Sep ISM manufacturing index is expected to show a -0.5 point decline to 58.5. Today’s Sep ADP employment report is expected to show an increase of +207,000, slightly better than August’s report of +204,000. Today’s Sep total vehicle sales report is expected to fall back to 16.80 million units from the 8-1/2 year high of 17.45 million posted in August.
There is one of the Russell 1000 companies that reports earnings today: Acuity Brands (consensus $1.22). Equity conferences this week include: Oracle OpenWorld 2014 on Mon-Wed, Unconventional Resources Conference Canada 2014 on Wed, and Paris Motor Show 2014-Press Days on Thu.
OVERNIGHT U.S. STOCK MOVERS
Dean Foods (DF +0.61%) was downgraded to 'Hold' from 'Buy' at BB&T.
Panera Bread (PNRA +2.51%) was upgraded to 'Buy' from 'Hold' at Wunderlich.
Tyson Foods (TSN +1.34%) was upgraded to 'Neutral' from 'Underperform' at Credit Suisse.
Janus Capital (JNS -1.09%) was upgraded to 'Buy' from 'Hold' at Jefferies.
eBay (EBAY +7.54%) was downgraded to 'Hold' from 'Buy' at Jefferies.
Allergan (AGN -0.84%) was upgraded to 'Buy' from 'Hold' at Stifel.
Freeport McMoRan (FCX +0.77%) was initiated with a 'Buy' at Brean Capital with a price target of $39.
Lockheed Martin (LMT +0.78%) was awarded a $246.61 million modification to a previously awarded government contract to develop, test, and certify two Drag Chute Systems for the Low Rate Initial Production Lot VII F-35 Lightning II Joint Strike Fighter aircraft.
Tekmira (TKMR +2.22%) surged 20%, Hemispherx BioPharma (HEB unch) climbed 15%, NewLink Genetics (NLNK -7.11%) jumped 14%, and BioCryst (BCRX -6.77%) rose over 10% in after-hours trading after the CDC confirmed that an individual traveling from Liberia has been diagnosed with the Ebola virus in the U.S.
NRG Energy (NRG +0.23%) was upgraded to 'Strong Buy' from 'Buy' at ISI Group.
Dynegy (DYN -1.54%) and Exelon (EXC -0.06%) were both upgraded to 'Buy' from 'Hold' at ISI Group.
MARKET COMMENTS
Dec E-mini S&Ps (ESZ14 -0.14%) this morning are down -2.00 points (-0.10%). The S&P 500 index on Tuesday closed lower: S&P 500 -0.28%, Dow Jones -0.17%, Nasdaq +0.06%. Bearish factors included (1) the -7.6 point drop in Sep U.S. Sep consumer confidence (Conference Board) to 86.0, much weaker than expectations of -0.2 to 92.2 and the lowest in 4 months, (2) the -0.50% m/m drop in the Jul S&P/CaseShiller composite-20 home price index, weaker than expectations of -0.10%, and (3) the -3.8 point drop in the Sep Chicago PMI to 60.5, weaker than expectations of -2.3 to 62.0.
Dec 10-year T-notes (ZNZ14 +0.18%) this morning are up +8.5 ticks at a 3-week high. Dec 10-year T-note futures prices on Tuesday closed lower. Bearish factors included (1) hawkish comments from Dallas Fed President Fisher who said that as the economy continues to accelerate the Fed may need to raise rates in Q1-2015, and (2) speculation that Wednesday’s Sep ADP employment change will show strength in the U.S. labor market. Closes: TYZ4 -4.00, FVZ4 -1.50.
The dollar index (DXY00 +0.23%) this morning is up +0.157 (+0.18%). EUR/USD (^EURUSD) is down -0.0034 (-0.27%) and USD/JPY (^USDJPY) is up +0.19 (+0.17%) at a new 6-year high. The dollar index on Tuesday rallied to a 4-1/4 year high and closed higher. Bullish factors included (1) the slide in EUR/USD to a 2-year low on expectations for additional ECB stimulus after the Eurozone Sep CPI eased to a 4-3/4 year low of +0.3% y/y, and (2) the rally in USD/JPY to a 6-year high as the yen plunged on the divergent Fed/BOJ monetary policies. Closes: Dollar index +0.345 (+0.40%), EUR/USD -0.00549 (-0.43%), USD/JPY +0.149 (+0.14%).
Nov WTI crude oil (CLX14 +0.67%) this morning is up +33 cents (+0.36%) and Nov gasoline (RBX14 +0.58%) is up +0.0076 (+0.31%). Nov crude and Nov gasoline prices on Tuesday closed sharply lower: CLX4 -3.41 (-3.61%), RBXX4 -0.0769 (-3.06%). Nov crude retreated from a 3-1/2 week high on bearish factors that included (1) the rally in the dollar index to a new 4-1/4 year high, and (2) expectations that Wednesday’s weekly EIA inventory report will show that crude inventories rose by +1.5 mln bbl.
GLOBAL EVENT CALENDAR10/01/2014
US0700 ETWeekly MBA mortgage applications, previous -4.1% with purchase sub-index -0.3% and refi sub-index -7.0%.
0815 ETSep ADP employment change expected +207,000, Aug +204,000.
0945 ETRevised Sep Markit manufacturing PMI expected unch at 57.9, prelim-Sep unch at 57.9.
1000 ETSep ISM manufacturing PMI expected -0.5 to 58.5, Aug +1.9 to 59.0. Sep ISM employment, Aug -0.1 to 58.1. Sep ISM new orders, Aug +3.3 to 66.7. Sep ISM prices paid expected -1.0 to 57.0, Aug -1.5 to 58.0.
1000 ETAug construction spending expected +0.5% m/m, Jul +1.8% m/m.
1030 ETEIA Weekly Petroleum Status Report.
n/aSep total vehicle sales expected 16.80 million, Aug 17.45 million. Sep domestic vehicle sales expected 13.55 million, Aug 13.87 million.
JPN0100 ETJapan Sep vehicle sales, Aug -5.0% y/y.
GER0355 ETRevised German Sep Markit/BME manufacturing PMI, previous 50.3.
EUR0400 ETRevised Eurozone Sep Markit manufacturing PMI, previous 50.5.
UK0430 ETUK Sep Markit manufacturing PMI expected +0.2 to 52.7, Aug 52.5.
U.S. STOCK CALENDAR10/01/2014
Company NameTickerTimeEvent DescriptionPeriodEstimate
Acuity Brands IncAYI USBef-mktQ4 2014 Earnings ReleaseQ4 20141.219
Patterson Cos IncPDCO US7:30Analyst and Investor DayY 2014
BOK Financial CorpBOKF US8:00Investor MeetingY 2014
American Capital Agency CorpAGNC US9:15Investor DayY 2014
Ford Motor CoF US9:30September 2014 Sales and Revenue Release2014
Ford Motor CoF US10:00September 2014 Sales and Revenue Call2014
Acuity Brands IncAYI US10:00Q4 2014 Earnings CallQ4 2014
General Motors CoGM US10:30Business Update Call - Call 1
Autodesk IncADSK US11:30Investor DayY 2014
General Motors CoGM US13:25Business Update Call - Call 2
Posted by Jim Van Meerten at
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