Wednesday, August 19th, 2015View Older Reports
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OVERNIGHT MARKETS AND NEWS
September E-mini S&Ps (ESU15 -0.23%) are down -0.26% and European stocks are down -0.67% at a 1-1/4 month low as exporters fell on concern a slowdown in China and other developing economies threatens exporters' earnings. A drop in basic-resource companies is undercutting European stocks as well, with Glencore Plc down over 6% on concern that slower growth in China will undercut its demand for commodities. Asian stocks closed mixed: Japan -1.61%, Hong Kong -1.31%, China +1.23%, Taiwan -1.90%, Australia +1.45%, Singapore -0.28%, South Korea -0.40%, India +0.36%. China's Shanghai Composite reversed losses from as much as 5% and recovered from a 2-week low and closed higher after several Chinese companies disclosed that government-backed funds had purchased their shares. Chinese Stocks had sold-off sharply Tuesday and early Wednesday on concern over reduced government support for equities after China Securities Finance Corp., the state agency appointed to support stock prices, said it will reduce its purchases of stocks as volatility declines. Japan's Nikkei Stock Index tumbled to a 3-week low on concern an economic slowdown in China will depress demand for Japanese exports.The dollar index (DXY00 -0.10%) is down -0.12%. EUR/USD (^EURUSD) is up +0.15% after Germany's Parliament overwhelmingly approved a third bailout package for Greece. USD/JPY (^USDJPY) is down -0.04%.
Sep T-note prices (ZNU15 +0.05%) are up +2.5 ticks.
The Japan Jul trade balance unexpectedly widened to a -268.1 billion yen deficit, more than expectations of -53.0 billion yen and the biggest trade deficit in 5 months. Jul exports rose +7.6% y/y, more than expectations of +5.2% y/y, and Jul imports fell -3.2% y/y, less than expectations of -8.2% y/y.
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) Weekly MBA mortgage applications, (2) Jul CPI (expected +0.2% m/m and +0.2% y/y), (3) Jul CPI ex food & energy (expected +0.2% m/m and +1.8% y/y), and (4) Minutes of the Jul 28-29 FOMC meeting.There are 6 of the S&P 500 companies that reports earnings today: Target (consensus $1.11), Hormel Foods (0.55), Lowe's (1.24), Staples (0.12), L Brands (0.68), NetApp (0.23).
U.S. IPO's scheduled to price today include: Sabre ($26.85), Summit Materials (25.75), PG&E (51.90), Medical Properties Trust (12.25), Sunrun (14.00), Planet Fitness (16.00), Aimmune Therapeutics (16.00), Dermira (21.50), Imprivata (15.00), Corium International (13.00).
Equity conferences during the remainder of this week include: ITG - Industry Conference: Midwest Industrials Conference - Milwaukee on Wed.
OVERNIGHT U.S. STOCK MOVERS
Lowe's (LOW +0.75%) reported Q2 EPS of $1.20, less than consensus of $1.24.Staples (SPLS -0.56%) reported Q2 EPS of 12 cents, right on consensus.
Hormel Foods (HRL -1.37%) reported Q3 adjusted EPS of 56 cents, higher than consensus of 55 cents.
Intuit (INTU +0.15%) was upgraded to 'Buy' from 'Hold' at Deutsche Bank.
Google (GOOG -0.72%) was upgraded to 'Overweight' from 'Neutral' at Atlantic Equities.
International Game (IGT -0.87%) was initiated with a 'Sell' at Goldman Sachs.
Aflac (AFL +0.08%) was downgraded to 'Underperform' from 'Neutral' at BofA/Merrill Lynch.
C.H. Robinson (CHRW +0.09%) was initiated with a 'Buy' at Evercore ISI with a price target of $81.
Knight Transportation (KNX +0.29%) was initiated with a 'Buy' at Evercore ISI with a price target of $32.
Con-way (CNW -0.40%) was initiated with a 'Buy' at Evercore ISI with a price target of $44.
Seagate (STX -0.76%) said it will acquire Dot Hill Systems (HILL -4.78%) for $9.75 per share, or $694 million.
The WSJ reported that JPMorgan Chase (JPM +0.21%) is in advanced discussions with the SEC to settle investment bias charges for $150 million that it inappropriately guided clients to its own investment products.
DeVry (DV -2.03%) slid over 6% in after-hours trading after it reported Q4 EPS of 57 cents, below consensus of 61 cents.
La-Z-Boy (LZB -0.11%) rose over 1% in after-hours trading after it reported Q1 EPS of 27 cents, higher than consensus of 21 cents.
Analog Devices (ADI -2.69%) jumped over 7% in after-hours trading after it reported Q3 EPS of 77 cents, better than consensus of 74 cents.
MARKET COMMENTS
Sep E-mini S&Ps (ESU15 -0.23%) this morning are down -5.50 points. Tuesday's closes: S&P 500 -0.26%, Dow Jones -0.19%, Nasdaq -0.53%. The S&P 500 closed lower Tuesday on negative carry-over from the 6% plunge in China's Shanghai Composite Stock Index. Weakness in mining and basic-resource companies were a drag on the overall market as most commodity prices fell on Chinese demand concerns with copper at a new 6-year low. Another negative was the larger-than-expected decline in U.S. Jul building permits, a proxy for future building (-16.3% to 1.119 million vs. expectations of -8.0% to 1.225 million). Losses were limited after U.S. Jul housing starts rose +0.2% to a 7-3/4 year high of 1.206 million.Sep 10-year T-notes (ZNU15 +0.05%) this morning are up +2.5 ticks. Tuesday's closes: TYU5 -10.00, FVU5 -3.00. Reduced global deflation concerns undercut government bond prices as Sep T-notes fell along with British gilts and German bunds after UK Jul core CPI rose a more than expected +1.2% y/y, the fastest pace of increase in 5 months. Also, strength in the U.S. housing market undercut T-note prices after U.S. Jul housing starts rose to a 7-3/4 year high.
The dollar index (DXY00 -0.10%) this morning is down -0.114 (-0.12%). EUR/USD (^EURUSD) is up +0.0016 (+0.15%). USD/JPY (^USDJPY) is down -0.05 (-0.04%). Tuesday's closes: Dollar Index +0.234 (+0.24%), EUR/USD -0.00552 (-0.50%), USD/JPY +0.022 (+0.02%). The dollar index closed higher Tuesday as the increase in U.S. Jul housing starts to a 7-3/4 year high may prompt the Fed to raise interest rates as soon as next month. The dollar also found support on weakness in the commodity currencies of Australia, Canada and New Zealand after copper slumped to a 6-year low on Chinese economic concerns.
Sep crude oil (CLU15 -0.59%) this morning is down -22 cents (-0.52%) and Sep gasoline (RBU15 -1.20%) is down -0.0216 (-1.31%) at a fresh 1-week low. Tuesday's closes: CLU5 +0.56 (+1.34%), RBU5 -0.0178 (-1.08%). Sep gasoline Tuesday fell to a 1-week low and Sep crude traded lower early in the session as the dollar strengthened and after Algeria's Energy Minister sad OPEC can do little to halt the decline in crude prices and needs oil producers outside of OPEC to help in reducing global supplies. Crude oil recovered its losses, however, and closed higher on expectations for Wednesday's weekly EIA crude inventories to fall -750,000 bbl, the fourth straight decline.
GLOBAL EVENT CALENDAR08/19/2015
| US | 0700 ET | Weekly MBA mortgage applications, previous +0.1% with purchase sub-index -3.5% and refi sub-index +3.1%. |
| 0830 ET | Jul CPI expected +0.2% m/m and +0.2% y/y, Jun +0.3% m/m and +0.1% y/y. Jul CPI ex food & energy expected +0.2% m/m and +1.8% y/y, Jun +0.2% m/m and +1.8% y/y. | |
| 1030 ET | EIA Weekly Petroleum Status Report. | |
| 1400 ET | Minutes of the Jul 28-29 FOMC meeting. | |
| JPN | 0030 ET | Japan Jun all-industry activity index expected +0.4% m/m, May -0.5% m/m. |
| 0100 ET | Revised Japan Jun leading index CI, previous 107.2. Revised Jun coincident index, previous 112.0. | |
| 0130 ET | Japan Jul nationwide department store sales, Jun +0.4% y/y | |
| 0200 ET | Revised Japan Jul machine tool orders, previous +1.6% y/y. | |
| EUR | 0500 ET | Eurozone Jun construction output, May +0.3% m/m and +0.3% y/y. |
U.S. STOCK CALENDAR08/19/2015
| Company | Ticker | Time | Event Description | Period | Estimate |
|---|---|---|---|---|---|
| Target Corp | TGT US | Bef-mkt | Q2 2016 Earnings Release | Q2 2016 | 1.112 |
| Hormel Foods Corp | HRL US | Bef-mkt | Q3 2015 Earnings Release | Q3 2015 | 0.547 |
| Lowe's Cos Inc | LOW US | Bef-mkt | Q2 2016 Earnings Release | Q2 2016 | 1.239 |
| Staples Inc | SPLS US | 8:00 | Q2 2016 Earnings Call | Q2 2016 | 0.117 |
| Caterpillar Inc | CAT US | 15:00 | Caterpillar Inc. Teleconference with Analysts & Investors: Across the Table | ||
| L Brands Inc | LB US | Aft-mkt | Q2 2016 Earnings Release | Q2 2016 | 0.679 |
| NetApp Inc | NTAP US | Aft-mkt | Q1 2016 Earnings Release | Q1 2016 | 0.233 |
| Progressive Corp/The | PGR US | July 2015 Sales and Revenue Release | 2015 |
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