Thursday, March 5th, 2015View Older Reports
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OVERNIGHT MARKETS AND NEWS
March E-mini S&Ps (ESH15 +0.16%) this morning are up +0.12% and European stocks are up +0.79% at a 6-3/4 year high ahead of today's ECB meeting where ECB President Draghi will announce details of the ECB's bond-buying program. Increased M&A activity is also supportive for stocks after Abbvie agreed to buy Pharmacyclics for $21 billion. As expected, the BOE kept its benchmark interest rate unchanged at 0.50% and left its asset purchase target at 375 billion pounds. Asian stocks closed mixed: Japan +0.26%, Hong Kong -1.11%, China -0.98%, Taiwan -0.28%, Australia +0.04%, Singapore -0.59%, South Korea -0.06%, India +0.23%. Chinese stocks fell after Premier Li Keqiang lowered China's 2015 GDP target to 7.0%, the lowest in more than 15 years, from 7.5% in 2014, and said "the difficulties we are to encounter in the year ahead may be even more formidable than those of last year." Commodity prices are mixed. Apr crude oil (CLJ15 +0.80%) is up +1.01% at a 1-1/2 week high after Libya's National Oil Corp. declared force majeure on oil supplies from 11 Libyan oil fields due to attacks on oil infrastructure from Islamic militants. Apr gasoline (RBJ15 -0.22%) is down -0.24%. Apr gold (GCJ15 +0.02%) is down -0.11%. May copper (HGK15 +0.15%) is up +0.17%. Agriculture prices are weaker. The dollar index (DXY00 +0.22%) is up +0.25% at an 11-1/3 year high. EUR/USD (^EURUSD) is down -0.23% at an 11-1/2 year low. USD/JPY (^USDJPY) is up +0.39%. Jun T-note prices (ZNM15 -0.05%) are down -2 ticks.German Jan factory orders fell -3.9% m/m, weaker than expectations of -1.0% m/m and the biggest monthly decline in 5 months. On an annual basis, Jan factory orders unexpectedly fell -0.1% y/y, weaker than expectations of +2.6% y/y.
UK Feb Halifax house prices fell -0.3% m/m and rose +8.3% y/y, weaker than expectations of -0.2% m/m and +8.5% y/y.
U.S. STOCK PREVIEW
Today’s Feb ADP employment report is expected to show a respectable increase of +220,000, stronger than the +213,000 increase seen in January. Today’s Feb ISM non-manufacturing index is expected to show a small -0.2 decline to 56.5, thus reversing January’s small +0.2 point increase to 56.7. The Fed today will release its Beige Book report ahead of the March 17-18 FOMC meeting. There are 3 of the S&P 500 companies that report earnings today: H&R Block (consensus $-0.17), Brown-Forman (0.86), PetSmart (1.37).Equity conferences during the remainder of this week include: Cowen & Co. Health Care Conference on Mon-Wed, Citigroup Global Property CEO Conference on Mon-Wed, Raymond James & Associates Institutional Investors Conference on Mon-Wed, Morgan Stanley Technology Media & Telecom Conference on Mon-Thu, Bank of America Merrill Lynch Consumer & Retail Conference on Tue-Wed, J.P. Morgan Aviation, Transportation and Industrials Conference on Tue-Thu, Mitsubishi UFJ Securities 3rd Annual Seattle Consumer Conference on Wed, Morgan Stanley European MedTech & Services Conference on Wed, Simmons Energy Conference on Wed, UBS Natural Gas, Electric Power and MLP Conference on Wed, UBS Utilities and Natural Gas Conference on Wed, UBS Global Consumer Conference on Wed-Thu, Bank of America Merrill Lynch Refining Conference on Thu, Barclays Investment Grade Energy & Pipeline Conference on Thu, Pacific Crest Emerging Technology Summit on Thu, Morgan Stanley MLP/Diversified Natural Gas, Utilities Clean Tech Conference on Thu.
OVERNIGHT U.S. STOCK MOVERS
Costo Wholesale (COST -0.14%) reported Q2 EPS of $1.25, more than consensus of $1.18.Abercrombie & Fitch (ANF -15.51%) was downgraded to 'Neutral' from 'Buy' at Nomura.
Exxon Mobil (XOM -0.50%) was downgraded to 'Hold' from 'Buy' at Evercore ISI.
McDonald's (MCD +0.51%) was downgraded to 'Neutral' from 'Overweight' at Piper Jaffray.
Joy Global (JOY -1.95%) reported Q1 EPS of 25 cents, less than consensus of 36 cents, and then lowered guidance on fiscal 2015 adjusted EPS view to $2.50-$3.00 from $3.10-$3.50, well below consensus of $3.20.
Sprouts Farmers Markets (SFM -1.22%) filed to sell 15.85 million shares of common stock for holders.
Darling (DAR -0.23%) rose over 4% in after-hours trading after it reported Q4 EPS of 42 cents, double consensus of 21 cents.
Pharmacyclics (PCYC +6.33%) jumped over 7% in pre-market trading after AbbVie agreed to buy the company fpr $21 billion.
Alon USA Partners (ALDW -0.06%) reported Q4 EPS of 67 cents, better than consensus of 60 cents.
Bristol-Myers Squibb (BMY +6.06%) announced that the FDA has approved its Opdivo injection, for intravenous use, for the treatment of patients with metastatic squamous non-small cell lung cancer.
Coca-Cola Bottling (COKE -2.00%) reported Q4 EPS of 32 cents, higher than one estimate of 13 cents.
H&R Block (HRB -0.86%) reported a Q3 adjusted EPS loss of -13 cents, a smaller loss than consensus of -17 cents.
Roundy's (RNDY -0.25%) reported Q4 adjusted EPS of 7 cents, more than twice consensus of 3 cents.
MARKET COMMENTS
Mar E-mini S&Ps (ESH15 +0.16%) this morning are up +2.50 points (+0.12%). The S&P 500 index on Wednesday tumbled to a 1-1/2 week low and closed lower: S&P 500 -0.44%, Dow Jones -0.58%, Nasdaq -0.30%. Bearish factors included (1) the +212,000 increase in Feb ADP employment, less than expectations of +220,000, (2) weakness in industrial companies led by a -5% plunge in Alcoa, and (3) a slide in transportation stocks after railroad companies sold off for a second day. Stocks recovered from their worst levels after the Feb ISM non-manufacturing index unexpectedly rose +0.2 to 56.9, stronger than expectations of -0.2 to 56.5.Jun 10-year T-notes (ZNM15 -0.05%) this morning are down -2 ticks. Jun 10-year T-note futures prices on Wednesday recovered from a 1-week low and closed higher. Closes: TYM5 +3.00, FVM5 +3.50. Bullish factors included (1) the smaller-than-expected increase in Feb ADP employment, and (2) the fall in the S&P 500 to a 1-1/2 week low, which boosted the safe-haven demand for T-notes.
The dollar index (DXY00 +0.22%) this morning is up +0.238 (+0.25%) at a fresh 11-1/3 year high. EUR/USD (^EURUSD) is down -0.0025 (-0.23%) at an 11-1/2 year low. USD/JPY (^USDJPY) is up +0.47 (+0.39%). The dollar index on Wednesday soared to an 11-1/3 year high and closed higher: Dollar index +0.582 (+0.61%), EUR/USD -0.00975 (-0.87%), USD/JPY -0.063 (-0.05%). Bullish factors included (1) the stronger-than-expected Feb ISM non-manufacturing index, which should keep the Fed on track to raise interest rates later this year, and (2) weakness in EUR/USD/ which fell to a 11-1/3 year low after the Eurozone Feb Markit composite PMI was revised lower.
Apr WTI crude oil (CLJ15 +0.80%) this morning is up +52 cents (+1.01%) at a 1-1/2 week high and Apr gasoline (RBJ15 -0.22%) is down -0.0046 (-0.24%). Apr crude and Apr gasoline prices on Wednesday settled mixed: CLJ5 +1.01 (+2.00%), RBJ5 -0.0274 (-1.41%). Bearish factors included (1) a rally in the dollar index to an 11-1/3 year high, (2) the +10.3 million bbl increase in weekly EIA crude inventories to 444.4 million bbl, far higher than expectations of +4.0 million bbl, and (3) the +0.4% increase in U.S. crude production in the week ended Feb 27 to 9.324 million bpd, the most in over three decades. Crude oil recovered its losses and moved higher after the Fed Beige Book said the U.S. economy continued to expand from Jan through mid Feb.
GLOBAL EVENT CALENDAR03/05/2015
| US | 0830 ET | Weekly initial unemployment claims expected -18,000 to 295,000, previous +31,000 to 313,000. Weekly continuing claims expected -6,000 to 2.395 million, previous 21,000 to 2.401 million. |
| 0830 ET | Revised Q4 non-farm productivity expected -2.3%, previous -1.8%. Revised Q4 unit labor costs expected +3.3%, previous +2.7%. | |
| 0830 ET | USDA weekly Export Sales. | |
| 1000 ET | Jan factory orders expected +0.2%, Dec -3.4%. | |
| 1000 ET | San Francisco Fed President John Williams speaks on the economic outlook at the CFA Society Hawaii Economic Forecast Dinner. | |
| 1100 ET | Treasury announces amount of 3-year T-notes (previous $24 billion), 10-year T-notes (previous $24 billion) and 30-year T-bonds (previous $16 billion) to be auctioned Mar 10-12. | |
| 1630 ET | Fed releases results of its latest bank stress tests. | |
| GER | 0200 ET | German Jan factory orders expected -1.0% m/m and +2.6% y/y, Dec +4.2% m/m and +3.4% y/y. |
| UK | 0400 ET | UK Feb new car registrations, Jan +6.7% y/y. |
| 0700 ET | BOE announces interest rate decision and asset purchase target, expected no change to the 0.50% benchmark rate or to the 375 billion pound asset purchase target. | |
| EUR | 0745 ET | ECB announces interest rate decision. |
| 0830 ET | ECB President Mario Draghi holds press conference following ECB meeting. |
U.S. STOCK CALENDAR03/05/2015
| Company | Ticker | Time | Event Description | Period | Estimate |
|---|---|---|---|---|---|
| Joy Global Inc | JOY US | Bef-mkt | Q1 2015 Earnings Release | Q1 2015 | 0.361 |
| Kroger Co/The | KR US | Bef-mkt | Q4 2015 Earnings Release | Q4 2015 | 0.903 |
| Costco Wholesale Corp | COST US | Bef-mkt | Q2 2015 Earnings Release | Q2 2015 | 1.179 |
| L Brands Inc | LB US | 7:30 | February 2015 Sales and Revenue Call | 2015 | |
| Verisk Analytics Inc | VRSK US | 8:30 | Investor Day | Y 2015 | |
| MDU Resources Group Inc | MDU US | 9:00 | Investor & Analyst Meeting | Y 2015 | |
| TransDigm Group Inc | TDG US | 9:00 | Annual General Meeting | Y 2015 | |
| Kroger Co/The | KR US | 10:00 | Q4 2015 Earnings Call | Q4 2015 | |
| Greif Inc | GEF US | 10:00 | Q1 2015 Earnings Call | Q1 2015 | |
| Joy Global Inc | JOY US | 11:00 | Q1 2015 Earnings Call | Q1 2015 | |
| Costco Wholesale Corp | COST US | 11:00 | Q2 2015 Earnings Call | Q2 2015 | |
| WESCO International Inc | WCC US | 13:00 | Investor Day | Y 2015 | |
| Cooper Cos Inc/The | COO US | 16:00 | Q1 2015 Earnings Release | Q1 2015 | 1.535 |
| Fossil Group Inc | FOSL US | 16:00 | Investor Day | Y 2015 | |
| Cooper Cos Inc/The | COO US | 17:00 | Q1 2015 Earnings Call | Q1 2015 | |
| Pandora Media Inc | P US | 17:00 | Analyst & Investor Day | Y 2015 | |
| Paramount Group Inc | PGRE US | Aft-mkt | Q4 2014 Earnings Release | Q4 2014 | 0.18 |
| Equifax Inc | EFX US | Investor Meeting | Y 2015 | ||
| Gap Inc/The | GPS US | February 2015 Sales and Revenue Release | 2015 | ||
| L Brands Inc | LB US | February 2015 Sales and Revenue Release | 2015 | ||
| Rite Aid Corp | RAD US | February 2015 Sales and Revenue Release | 2015 | ||
| AmerisourceBergen Corp | ABC US | Annual General Meeting | |||
| Xcel Energy Inc | XEL US | Investor Meeting - New York | Y 2015 | ||
| Hospira Inc | HSP US | Trial begins-U.S. Ct of Appeals: Medicines Co. vs. Hospira Patent-Infringement | |||
| Riverbed Technology Inc | RVBD US | Special Meeting - M&A Vote |
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