Wednesday, April 1st, 2015View Older Reports
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OVERNIGHT MARKETS AND NEWS
June E-mini S&Ps (ESM15 -0.40%) this morning are down -0.08% ahead of today's Mar ADP employment change, while European stocks are up +1,25% at a 6-3/4 year high after Eurozone Mar manufacturing activity was revised higher to its fastest pace in 10 months. Global stocks also received support from an unexpected increase in the China Mar manufacturing PMI that climbed above the expand/contract 50.0 level. Asian stocks settled mixed: Japan -0,90%, Hong Kong +0.73%, China +1.79%, Taiwan -0.82%, Australia -0.52%, Singapore unch, South Korea -0.90%, India +1.08%. Japanese stocks fell after the Q1 Tankan large manufacturing business conditions came in weaker than expected, while Chinese stocks gained after the China Mar manufacturing activity unexpectedly expanded. Commodity prices are mixed. May crude oil (CLK15 -0.42%) is down -0.55% after the foreign ministers of Russia and Iran said consensus on major points of a nuclear accord were reached and a statement may be drafted today. May gasoline (RBK15 +0.46%) is up +0.40%. Jun gold (GCM15 +0.08%) is up +0.05%. May copper (HGK15 -0.49%) is up +0.35%. Agriculture prices are higher. The dollar index (DXY00 +0.06%) is down -0.07%. EUR/USD (^EURUSD) is up +0.24%. USD/JPY (^USDJPY) is down -0.02%. Jun T-note prices (ZNM15 +0.10%) are up +2 ticks.The China Mar manufacturing PMI unexpectedly expanded +0.2 to 50.1, stronger than expectations of -0.2 to 49.7. The Mar non-manufacturing PMI fell -0.2 to 53.7 and matched Jan as the slowest pace of expansion in 14 months.
The Eurozone Mar Markit manufacturing PMI was revised upward by +0.3 to 52.2 from the previously reported 51.9, the fastest pace of expansion in 10 months.
The German Mar Markit/BME manufacturing PMI was revised upward by +0.4 to 52.8 from the previously reported 52.4, the fastest pace of expansion in 11 months.
UK Mar Markit manufacturing PMI rose +0.4 to 54.4, right on expectations and the fastest pace of expansion in 8 months.
The ECB Governing Council will consider extending the Emergency Liquidity Assistance, the funds that are keeping Greece afloat, after net withdrawals on Greek banks in March were 3 billion euros, according to two people familiar with the matter. This brings total outflows from Greek banks since October to 28 billion euros. Dependence on the emergency cash has surged since Feb when the ECB stopped allowing Greek government bonds to be used as collateral for its regular funding operations and deposits in Greek banks fell to their lowest in more than 10 years.
The Japan Q1 Tankan large manufacturing business conditions remained unchanged at 12 from Q4, weaker than expectations of +2 to 14.
The Japan Mar Markit/JMMA manufacturing PMI was revised down -0.1 to 50.3 from the originally reported 50.4, the slowest pace of expansion in 10 months.
Japan Mar vehicle sales fell -13.1% y/y, a smaller decline than the -14.2% y/y drop in Feb, but still the eighth consecutive month that vehicle sales have declined.
U.S. STOCK PREVIEW
Key news today includes (1) today's weekly MBA mortgage applications report, (2) today's Mar ADP employment change (expected +225,000 after Feb's +212,000), (3) the final-Mar Markit U.S. manufacturing PMI (expected unrevised at 55.3 after the prelim-March report showed a +0.2 point increase to 55.3), (4) today's Feb construction spending report (expected -0.1% m/m), (5) today's March ISM manufacturing index (expected -0.4 to 52.5, adding to Feb's decline of -0.6 to 52.9), (6) today's March total vehicle sales report (expected much higher at 16.90 million versus Feb's 16.16 million), and (7) today's comments by San Francisco Fed President John Williams and Atlanta Fed President Dennis Lockhart.There are three of the Russell 1000 companies that report earnings today: Monsanto (consensus $2.93), Acuity Brands (1.05), and Micron Technology (0.73).
U.S. IPO's that are scheduled price today include: Axalta Coating Systems (AXTA), and Kornit Digital (KRNT). U.S. IPO's that start trading today include: GoDaddy (GDDY), CyrusOne (CONE), Coherus Biosciences (CHRS),
Equity conferences during the remainder of this week include: Bank of America Merrill Lynch New York Auto Summit on Wed, DUG Bakken and Niobrara Unconventional Oil Conference on Wed, Mitsubishi UFJ Financial Utilities Conference on Wed, New York Interational Auto Show-Press Days on Wed, and Goldman Sachs Biosimilars Conference on Thu.
OVERNIGHT U.S. STOCK MOVERS
American Airlines (AAL -1.60%) , Delta Air Lines (DAL -1.32%) and United Continental (UAL -1.38%) were all downgraded to 'Hold' from 'Buy' at Deutsche Bank.Hewlett-Packard (HPQ -1.30%) was upgraded to 'Buy' from 'Hold' at Jefferies.
Pier 1 Imports (PIR +0.65%) was downgraded to 'Underweight' from 'Equal Weight' at Morgan Stanley.
Esperion (ESPR +0.61%) was initiated with a 'Buy' at UBS with a price target of $140.
Willbros Group (WG -3.22%) reported a Q4 EPS loss of -72 cents with items, weaker than consensus of a profit of 6 cents, and then lowered guidance on fiscal 2015 revenue to $1.40 billion to $1.60 billion, below consensus of $1.83 billion.
Burlington Stores (BURL +0.13%) filed to sell 12.49 million shares of common stock for holders.
Dyax (DYAX -1.76%) surged over 40% in after-hours trading after it announced positive results from its Phase 1b clinical trial of DX-2930 being developed for the prevention of hereditary angioedema.
Allstate (ALL +0.31%) was initiated with an 'Outperform' at Credit Suisse with a price target of $84.
Aon plc (AON -2.02%) was initiated with an 'Underperform' at Credit Suisse with a price target of $95.
UTi Worldwide (UTIW -1.91%) reported a Q4 EPS loss of -$1.02, much weaker than consensus of -8 cents.
SYNNEX (SNX -1.10%) reported Q1 EPS of $1.46, below consensus of $1.52, and then lowered guidance on Q2 EPS to $1.50-$1.56, weaker than consensus of $1.59.
MARKET COMMENTS
Jun E-mini S&Ps (ESM15 -0.40%) this morning are down -1.75 points (-0.08%). Tuesday's closes: S&P 500 -0.88%, Dow Jones -1.11%, Nasdaq -1.12%. The U.S. stock market on Tuesday closed lower on the weaker-than-expected Mar Chicago PMI report of +0.5 to 46.3 (vs expectations of +6.2 to 52.0). In addition, commodity producers dragged down the overall U.S. stock indexes due to strength in the dollar index. Stocks received some support on Tuesady from the stronger-than-expected U.S. March U.S. consumer confidence report from the Conference Board of +2.5 to 101.3.Jun 10-year T-notes (ZNM15 +0.10%) this morning are up +2 ticks. Tuesday's closes: TYM5 +10.00, FVM5 +6.50. T-note prices on Tuesday rallied due to the rally in German Bunds to a 1-week high on Eurozone deflation concerns with the Eurozone March core CPI dropping to match the record low of +0.6% y/y. T-notes also received a boost from the weaker-than-expected Chicago PMI report but were undercut by the stronger-than-expected U.S. consumer confidence index.
The dollar index (DXY00 +0.06%) this morning is down -0.069 (-0.07%). EUR/USD (^EURUSD) is up +0.0026 (+0.24%). USD/JPY (^USDJPY) is down -0.03 (-0.02%). Tuesday's closes: Dollar index +0.382 (+0.39%), EUR/USD -0.01019 (-0.94%), USD/JPY +0.059 (+0.05%). The dollar index on Tuesday rallied to a new 1-week high on dollar-support tied to the stronger-than-expected U.S. Mar consumer confidence index report of +2.5 to 101.3. In addition, EUR saw weakness on European deflation concerns as the Eurozone Mar core CPI fell to match a record low of +0.6% y/y.
May WTI crude oil (CLK15 -0.42%) this morning is down -26 cents (-0.55%) and May gasoline (RBK15 +0.46%) is up +0.0071 (+0.40%). Tuesday's closes: CLK5 -1.08 (-2.22), RBK5 -0.0227 (-1.26%). Crude oil and gasoline prices on Tuesday closed lower due to strength in the dollar index combined with expectations for another big 4.5 million bbl increase in U.S. crude oil inventories in Wednesday's EIA report. Crude oil prices also saw some weakness on the possibility of an Iranian nuclear deal, which could eventually lead to reduced sanctions on Iran and increased Iranian oil exports.
GLOBAL EVENT CALENDAR04/01/2015
| US | 0700 ET | Weekly MBA mortgage applications, previous +9.5% with purchase sub-index +4.9% and refi sub-index +12.3%. |
| 0815 ET | Mar ADP employment change expected +225,000, Feb +212,000. | |
| 0900 ET | San Francisco Fed President John Williams moderates a panel at the Atlanta Feds financial markets conference on Financial Stability: How Essential Should Financial Stability be to Central Banks? | |
| 0945 ET | Final-Mar Markit manufacturing PMI expected unrevised at 55.3, prelim-March +0.2 to 55.3. | |
| 1000 ET | Feb construction spending expected -0.1% m/m, Jan -1.1% m/m. | |
| 1000 ET | Mar ISM manufacturing index expected -0.4 to 52.5, Feb -0.6 to 52.9. Mar ISM new orders, Feb -0.4 to 52.5. Mar ISM employment, Feb -2.7 to 51.4. Mar ISM prices paid expected +3.0 to 38.0, Feb unch at 35.0. | |
| 1030 ET | Atlanta Fed President Dennis Lockhart chairs a panel at the Atlanta Feds financial markets conference on Monetary Policy: Will the Traditional Banking Channel Remain Central to Monetary Policy? | |
| 1030 ET | EIA Weekly Petroleum Status Report. | |
| n/a | Mar total vehicle sales expected 16.90 million, Feb 16.16 million. Mar domestic vehicle sales expected 13.50 million, Feb 12.87 million. | |
| JPN | 0100 ET | Japan Mar vehicle sales, Feb -14.2% y/y. |
| GER | 0355 ET | Revised German Mar Markit/BME manufacturing PMI, previous +1.3 to 52.4. |
| EUR | 0400 ET | Revised Eurozone Mar Markit manufacturing PMI, previous +0.9 to 51.9. |
| UK | 0430 ET | UK Mar manufacturing PMI expected +0.3 to 54.4, Feb 54.1. |
U.S. STOCK CALENDAR04/01/2015
| Company | Ticker | Time | Event Description | Period | Estimate |
|---|---|---|---|---|---|
| Monsanto Co | MON US | Bef-mkt | Q2 2015 Earnings Release | Q2 2015 | 2.931 |
| Acuity Brands Inc | AYI US | Bef-mkt | Q2 2015 Earnings Release | Q2 2015 | 1.054 |
| Ford Motor Co | F US | 9:15 | March 2015 Sales and Revenue Release | 2015 | |
| Monsanto Co | MON US | 9:30 | Q2 2015 Earnings Call | Q2 2015 | |
| Ford Motor Co | F US | 10:00 | March 2015 Sales and Revenue Call | 2015 | |
| Wal-Mart Stores Inc | WMT US | 10:00 | Business Update Call | ||
| Acuity Brands Inc | AYI US | 10:00 | Q2 2015 Earnings Call | Q2 2015 | |
| Micron Technology Inc | MU US | 16:30 | Q2 2015 Earnings Call | Q2 2015 | |
| Micron Technology Inc | MU US | Aft-mkt | Q2 2015 Earnings Release | Q2 2015 | 0.733 |
| Alliant Energy Corp | LNT US | Investors Meeting - Day 2 | Y 2015 |
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