BARCHART MORNING CALL 7/7

BARCHART MORNING CALL

Tuesday, July 7th, 2015View Older Reports

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OVERNIGHT MARKETS AND NEWS

September E-mini S&Ps (ESU15 -0.10%) are up +0.25%, although European stocks are down -0.57% at a fresh 4-3/4 month low as European leaders prepare to meet to discuss Greece's economic crisis. The ECB maintained the level of Emergency Liquidity Assistance to Greek banks at 88.6 billion euros on Monday, while tightening terms related to collateral as it raised the haircut on Greek debt to 45%. Greek banks and its stock market will remain shut through Wednesday. Asian stocks closed mixed: Japan +1.31%, Hong Kong -1.03%, China -1.29%, Taiwan -0.06%, Australia +1.94%, Singapore +0.24%, South Korea -0.10%, India -0.13%. The sell-off in Chinese stocks continued for the fourth time in five days as the Shanghai Composite fell to a 3-1/2 month low. Deleveraging of stocks purchased on margin has fueled declines as traders cut 93.6 billion yuan worth of stock bought on margin on the Shanghai Stock exchange since Monday, the most since at least 2010. Also, foreign investors are exiting Chinese stocks at a record pace as net selling through the Hong Kong-Shanghai exchange link reached 10.3 billion yuan today, extending sales to 23.7 billion yuan in the past 2 days, the most since the link started in November.
Commodity prices are mixed. Aug crude oil (CLQ15 -0.70%) is up +0.78%, Aug gasoline (RBQ15 -0.24%) is up +0.95%. Metals prices are weaker. Aug gold (GCQ15 -0.17%) is down -0.72%. Sep copper (HGU15 -1.98%) is down -2.44% at a new 5-month low. Agricultural prices are lower.
The dollar index (DXY00 +0.57%) is up +0.54% at a 1-month high. EUR/USD (^EURUSD) is down -0.77% at a 1-week low. USD/JPY (^USDJPY) is down -0.06%.

Sep T-note prices (ZNU15 +0.39%) are up +10.5 ticks on carry-over support from a rally in German bunds to a 1-month high.
In a document published on its website today, the ECB added "moral hazard" to its Emergency Liquidity Assistance (ELA) rules in an attempt to clarify the conditions to which banks may access emergency aid. The ECB warned that "moral hazard" could be a reason to object to ELA it allows banks to access saying that "the objective of ELA is to support solvent credit institutions facing temporary liquidity problems. It is not a monetary-policy instrument." The reference to moral hazard indicates the ECB is worried that bending the liquidity rules for Greece may lead future Eurozone members to act less responsibly.

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) May U.S. trade deficit (expected -$42.75 billion after April's -$40.90 billion), (2) May JOLTS job openings (expected -76,000 to 5.300 million after April's +267,000 to 5.376 million), and (3) the Treasury's auction of $24 billion of 3-year T-notes.
One of the Russell 1000 companies reports earnings today: MSC Industrial Direct (consensus $0.96).
U.S. IPO's scheduled to price today include: none.
Equity conferences this week: none.

OVERNIGHT U.S. STOCK MOVERS

Lloyds Banking (LYG -2.03%) was upgraded to 'Buy' from 'Hold' at Canaccord.
Broadcom (BRCM -1.34%) was downgraded to 'Perform' from 'Outperform' at Oppenheimer.
Marvell (MRVL -1.19%) was upgraded to 'Perform' from 'Underperform' at Oppenheimer.
Dillard's (DDS -0.39%) was downgraded to 'Underperform' from 'Neutral' at BofA/Merrill Lynch.
Disney (DIS +0.63%) was upgraded to 'Overweight' from 'Neutral' at Atlantic Equities.
BTIG initiated Teva (TEVA +0.16%) with a 'Buy' rating and a $77 price target.
Baxter (BAX -0.68%) was downgraded to 'Market Perform' from 'Outperform' at BMO Capital.
W. R. Berkley (WRB +1.19%) was upgraded to 'Hold' from 'Sell' at Deutsche Bank.
Electronic Arts (EA +0.31%) and Kansas City Southern (KSU -0.82%) were both upgraded to 'Buy' from 'Neutral' at UBS.
Tesla (TSLA -0.11%) was downgraded to 'Hold' from 'Buy' at Deutsche Bank.
Advance Auto Parts (AAP +0.81%) will replace Family Dollar (FDO +0.05%) in the S&P 500 as of the close of trading on Wednesday July 8.
A. Schulman (SHLM -2.25%) reported Q3 adjusted EPS of 72 cents, below consensus of 77 cents, and then lowered guidance on 2015 EPS to$2.37-$2.42, weaker than consensus of $2.47.
Luxor Capital Group reported a 5.03% passive stake in Northstar Realty (NRF -1.14%) .
Advanced Micro Devices (AMD -2.37%) lowered guidance on Q2 revenue view to down 8% versus Q1, weaker than an earlier estimate of down 3%, plus or minus 3%.

MARKET COMMENTS

September E-mini S&Ps (ESU15 -0.10%) this morning are up +5.25 points (+0.25%). Monday's closes: S&P 500 -0.39%, Dow Jones -0.26%, Nasdaq -0.33%. The S&P 500 on Monday closed lower on (1) a slide in European stocks to a 4-3/4 month low as financial stocks plunged on Grexit concerns after Greece voters decisively voted No in Sunday's referendum, (2) the +0.3 point increase in the U.S. Jun ISM non-manufacturing index to 56.0, weaker than expectations of +0.7 to 56.4, and (3) weakness in oil producers on the plunge in oil prices. Stocks recovered from their worst levels after Greek Finance Minster Varoufakis resigned, which raised hopes that Prime Minister Tsipras may be ready to accede to a bailout deal.
Sep 10-year T-notes (ZNU15 +0.39%) this morning are up +10.5 ticks. Monday's closes: TYU5 +28.50, FVU5 +15.25. Sep T-notes on Monday gapped up to a 2-week high and closed higher on (1) Grexit concerns after Sunday's referendum vote, and (2) ideas that the Fed might be forced to delay a rate hike by the Greek crisis. T-notes fell back from their best levels after stocks recovered on speculation the ECB will contain any negative fallout from the Greek crisis.
The dollar index (DXY00 +0.57%) this morning is up +0.523 (+0.54%) at a fresh 1-month high. EUR/USD (^EURUSD) is down -0.0085 (-0.77%) at a 1-week low. USD/JPY (^USDJPY) is down -0.07 (-0.06%). Monday's closes: Dollar Index +0.185 (+0.19%), EUR/USD -0.0028 (-0.25%), USD/JPY -0.486 (-0.39%). The dollar index on Monday climbed to a 1-month high and settled higher on the decline in EUR/USD to a 1-week low on Grexit concerns. However, the rally in the dollar index was curbed by safe-haven demand for the yen and by news that Greek Finance Minster Varoufakis resigned, which means that Prime Minister Tsipras may be ready for a bailout deal.
Aug WTI crude oil (CLQ15 -0.70%) this morning is up +41 cents (+0.78%). Aug gasoline (RBQ15 -0.24%) is up +0.0183 (+0.95%). Monday's closes: CLQ5 -2.99 (-5.39%), RBQ5 -0.0651 (-3.25%). Aug crude oil and gasoline gapped lower Monday and finished sharply lower with Aug crude at a 2-1/2 month low and Aug gasoline at a 1-month low. Negative factors included dollar strength, Grexit concerns, and the possibility of an Iran nuclear deal this week, which would pave the way for at least a doubling of Iranian oil exports.

GLOBAL EVENT CALENDAR07/07/2015

US	0830 ET	May trade balance expected -$42.75 billion, Apr -$40.90 billion.
	1000 ET	May JOLTS job openings expected -76,000 to 5.300 million, Apr +267,000 to 5.376 million.
	1300 ET	Treasury auctions $24 billion of 3-year T-notes.
GER	0200 ET	German May industrial production expected +0.1% m/m and +2.6% y/y, Apr +0.9% m/m and +1.4% y/y.
UK	0430 ET	UK May industrial production expected -0.2% m/m and +1.6% y/y, Apr +0.4% m/m and +1.2% y/y.
	0430 ET	UK May manufacturing production expected +0.1% m/m and +1.8% y/y, Apr -0.4% m/m and +0.2% y/y.
	1901 ET	UK Jun BRC shop price index, May -1.9% y/y.

U.S. STOCK CALENDAR07/07/2015

Company	Ticker	Time	Event Description	Period	Estimate
MSC Industrial Direct Co Inc	MSM US	7:00	Q3 2015 Earnings Release	Q3 2015	0.962
MSC Industrial Direct Co Inc	MSM US	8:30	Q3 2015 Earnings Call	Q3 2015
Columbus McKinnon Corp/NY	CMCO US	9:00	Investor and Analyst Day	Y 2015
A Schulman Inc	SHLM US	10:00	Q3 2015 Earnings Call	Q3 2015
Stifel Financial Corp	SF US	12:00	Annual General Meeting
Navidea Biopharmaceuticals Inc	NAVB US	13:00	Business Update Call
Container Store Group Inc/The	TCS US	16:30	Q1 2016 Earnings Call	Q1 2016
Container Store Group Inc/The	TCS US	Aft-mkt	Q1 2016 Earnings Release	Q1 2016	-0.124
Allegiant Travel Co	ALGT US		June 2015 Sales and Revenue Release - Traffic Results	2015