Monday, August 3, 2015

BARCHART MORNING CALL 8/3

OVERNIGHT MARKETS AND NEWS
September E-mini S&Ps (ESU15 unch) are down -0.04%, led by a decline in basic-resource companies and energy producers, as the price of copper (HGU15 -0.83%) dropped to a 6-year low on concerns over Chinese demand and crude oil (CLU15 -1.57%) tumbled to a 4-1/4 month low on concern the global supply glut will persist after Iranian Oil Minister Bijan Namdar Zanganeh said Iran can raise oil output by 500,000 bpd within a week of the end of sanctions. European stocks are up +0.68% on signs of improving company earnings after Heineken NV and Commerzbank AG both reported better-than-expected earnings results. Another positive for European stocks was the upward revision to the Eurozone Jul Markit manufacturing PMI. European stocks rose despite the -17.24% plunge in Greek stocks which reopened after a 5-week suspension. The Greek economy is in shambles as it trys to recover from its debt crisis after the Greek Jul Markit manufacturing PMI collapsed to a record low of 30.2 from 46.9 in Jun. Asian stocks closed mostly lower: Japan -0.18%, Hong Kong -0.91%, China -1.11%, Taiwan -1.63%, Australia -0.35%, Singapore -0.30%, South Korea -1.15%, India +0.26%. Chinese stocks were undercut by economic concerns after a gauge of Chinese manufacturing activity last month was revised lower to its steepest pace of contraction in 2 years.
The dollar index (DXY00 +0.17%) is up +0.14%. EUR/USD (^EURUSD) is down -0.22%. USD/JPY (^USDJPY) is up +0.27%.

Sep T-note prices (ZNU15 +0.06%) are up +1 tick.
The Eurozone Jul Markit manufacturing PMI was revised upward to 52.4 from the previously reported 52.2.
The China Jul Caixin manufacturing PMI was unexpectedly revised lower to 47.8 from the previously reported 48.2, weaker than expectations of +0.1 to 48.3 and the steepest pace of contraction in 2 years.
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) June personal spending (expected +0.2%, May +0.9%) and June personal income (expected +0.3%, May +0.5%), (2) June PCE deflator (expected +0.2% m/m and +0.2% y/y, May +0.3% m/m and +0.2% y/y) and June core PCE deflator (expected +0.1% m/m and +1.2% y/y, May +0.1% m/m and +1.2% y/y), (3) final-Jul Markit manufacturing PMI (expected unrevised at 53.8, prelim-Jul +0.2 to 53.8), (4) June construction spending (expected +0.6%, May +0.8% m/m), (5) July ISM manufacturing index (expected unch at 53.5, Jun +0.3 to 53.5), and (5) July total vehicle sales (expected 17.20 million).
There are 17 of the S&P 500 companies that report earnings today with notable reports including: AllState (consensus $0.96), NextEra Energy (1.50), Tyson Foods (0.92), Tenet Healthcare (0.45), General Growth Properties (0.33).
U.S. IPO's scheduled to price today include: none.
Equity conferences this week: Piper Jaffray Technology-Enabled Industrials Symposium on Tue-Wed, Needham Interconnect Conference on Wed.
OVERNIGHT U.S. STOCK MOVERS
Lowes (L -0.52%) reported Q2 EPS of 45 cents, well below consensus of 70 cents.
Diamond Offshore Drilling (DO -1.61%) reported Q2 EPS of 66 cents, higher than consensus of 47 cents.
Noble Energy (NBL -2.54%) reported Q2 EPS of 26 cents, well above conensus of 6 cents.
NiSource (NI +1.99%) reported Q2 EPS of 18 cents, weaker than consensus of 21 cents.
Torchmark (TMK -0.29%) was upgraded to 'Market Perform' from 'Underperform' at FBR Capital.
AMC Networks (AMCX +0.60%) was upgraded to 'Overweight' from 'Equal Weight' at Morgan Stanley.
Coach (COH -0.32%) was downgraded to 'Neutral' from 'Overweight' at JPMorgan Chase.
Assurant (AIZ -0.73%) was upgraded to 'Buy' from 'Underperform' at BofA/Merrill Lynch.
Monster Beverage (MNST +0.90%) should be bought on any weakness, says Stifel.
NVIDIA (NVDA -0.35%) was upgraded to 'Outperform' from 'Neutral' at Macquarie.
Yelp's (YELP +1.42%) recent guidance cut may signal weakness for similar companies such as Groupon (GRPN +0.21%) and others, according to a weekend Barron's story.
Kellogg (K +0.12%) on Sunday announced an agreement on a five-year master contract with labor unions at four of its ready-to-eat cereal factories in Battle Creek, one day before current contract expires on Monday.
Renewable Energy (REGI -1.45%) announced an agreement to acquire most of the assets of Imperium Renewables.
MARKET COMMENTS
Sep E-mini S&Ps (ESU15 unch) this morning are down -0.75 of a point (-0.04%). Friday's closes: S&P 500 -0.23%, Dow Jones -0.32%, Nasdaq -0.01%. The S&P 500 on Friday closed the day mildly lower on some pre-weekend long liquidation pressure and on the downward revision in the final-July U.S. consumer sentiment index to 93.1 from the preliminary-July level of 93.3, which was substantially weaker than market expectations of +0.7 to 94.0. Stocks received some underlying support from the rally in T-notes and the stronger-than-expected July Chicago PMI report of +5.3 to 54.7 vs expectations of +1.4 to 50.8.
Sep 10-year T-note prices (ZNU15 +0.06%) this morning are up +1 tick. Friday's closes: TYU5 +19, FVU5 +12. Sep 10-year T-notes on Friday rallied sharply on the much weaker-than-expected +0.2% increase in the Q2 ECI, which indicated weaker inflation pressure. T-notes also received a boost after the Treasury on Thursday concluded its $105 billion weekly T-note package.
The dollar index (DXY00 +0.17%) this morning is up +0.133 (+0.14%). EUR/USD (^EURUSD) is down -0.0024 (-0.22%). USD/JPY (^USDJPY) is up +0.33 (+0.27%). Friday's closes: Dollar Index -0.224 (-0.23%), EUR/USD -0.0006 (-0.05%), USD/JPY +0.11 (+0.09%). The dollar index on Friday closed mildly lower on the weak U.S. ECI report, which gives the Fed less reason to raise interest rates.
Sep crude oil (CLU15 -1.57%) this morning is down -71 cents (-1.57%) at a 4-1/4 month low and Sep gasoline (RBU15 -1.86%) is down -0.0336 (-1.90%). Friday's closes: CLU5 -1.40 (-2.89%), RBU5 +0.0030 (+0.17%). Sep crude oil and gasoline on Friday closed mixed. Crude oil prices continued to see downward pressure on expectations for a boost in Iranian oil late this year when sanctions are dropped since it does not appear that Republicans have enough Democratic support to gain a veto-proof way of stopping President Obama from dropping Iranian sanctions.
GLOBAL EVENT CALENDAR08/03/2015
US0830 ETJun personal spending expected +0.2%, May +0.9%. Jun personal income expected +0.3%, May +0.5%. Personal income and spending benchmark revisions.
0830 ETJun PCE deflator expected +0.2% m/m and +0.2% y/y, May +0.3% m/m and +0.2% y/y. Jun core PCE deflator expected +0.1% m/m and +1.2% y/y, May +0.1% m/m and +1.2% y/y.
0945 ETFinal-Jul Markit manufacturing PMI expected unrevised at 53.8, prelim-Jul +0.2 to 53.8.
1000 ETJun construction spending expected +0.6%, May +0.8% m/m.
1000 ETJul ISM manufacturing index expected unch at 53.5, Jun +0.3 to 53.5. Jul ISM new orders, Jun +0.2 to 56.0, Jul ISM employment, Jun +3.8 to 55.5. Jul ISM prices paid expected -0.2 to 49.3, Jun unch at 49.5.
1100 ETUSDA weekly grain export inspections.
1600 ETUSDA weekly crop progress.
n/aJul total vehicle sales expected 17.20 million, Jun 17.11 million. Jul domestic vehicle sales expected 13.50 million, Jun 13.34 million.
JPN0100 ETJapan Jul vehicle sales, Jun +5.4% y/y.
2130 ETJapan Jun labor cash earnings, May +0.7% y/y. Jun real cash earnings, May unch y/y.
GER0355 ETRevised German Jul Markit/BME manufacturing PMI, previous -0.4 to 51.5.
EUR0400 ETRevised Eurozone Jul Markit manufacturing PMI, previous -0.3 to 52.2.
UK0430 ETUK Jul Markit manufacturing PMI, Jun 51.4.
U.S. STOCK CALENDAR08/03/2015
CompanyTickerTimeEvent DescriptionPeriodEstimate
Reynolds American IncRAI US4:00Investor Meeting - LondonY 2015
Frontier Communications CorpFTR USBef-mktQ2 2015 Earnings ReleaseQ2 20150.029
Clorox Co/TheCLX USBef-mktQ4 2015 Earnings ReleaseQ4 20151.372
NextEra Energy IncNEE USBef-mktQ2 2015 Earnings ReleaseQ2 20151.497
Loews CorpL USBef-mktQ2 2015 Earnings ReleaseQ2 20150.7
NiSource IncNI USBef-mktQ2 2015 Earnings ReleaseQ2 20150.211
Noble Energy IncNBL USBef-mktQ2 2015 Earnings ReleaseQ2 20150.055
PPL CorpPPL USBef-mktQ2 2015 Earnings ReleaseQ2 20150.466
Tyson Foods IncTSN USBef-mktQ3 2015 Earnings ReleaseQ3 20150.921
Diamond Offshore Drilling IncDO USBef-mktQ2 2015 Earnings ReleaseQ2 20150.468
Columbia Pipeline Group IncCPGX USBef-mktQ2 2015 Earnings ReleaseQ2 20150.203
Frontier Communications CorpFTR US8:30Q2 2015 Earnings CallQ2 2015
PPL CorpPPL US8:30Q2 2015 Earnings CallQ2 2015
Diamond Offshore Drilling IncDO US8:30Q2 2015 Earnings CallQ2 2015
NextEra Energy IncNEE US9:00Q2 2015 Earnings CallQ2 2015
NiSource IncNI US9:00Q2 2015 Earnings CallQ2 2015
Tyson Foods IncTSN US9:00Q3 2015 Earnings CallQ3 2015
Ford Motor CoF US9:15July 2015 Sales and Revenue Release2015
Ford Motor CoF US10:00July 2015 Sales and Revenue Call2015
Noble Energy IncNBL US10:00Q2 2015 Earnings CallQ2 2015
Columbia Pipeline Group IncCPGX US10:00Q2 2015 Earnings CallQ2 2015
Loews CorpL US11:00Q2 2015 Earnings CallQ2 2015
Clorox Co/TheCLX US13:30Q4 2015 Earnings CallQ4 2015
American International Group IncAIG USAft-mktQ2 2015 Earnings ReleaseQ2 20151.228
XL Group PLCXL USAft-mktQ2 2015 Earnings ReleaseQ2 20150.795
Tenet Healthcare CorpTHC USAft-mktQ2 2015 Earnings ReleaseQ2 20150.453
Vornado Realty TrustVNO USAft-mktQ2 2015 Earnings ReleaseQ2 20151.243
Microchip Technology IncMCHP USAft-mktQ1 2016 Earnings ReleaseQ1 20160.71
General Growth Properties IncGGP USAft-mktQ2 2015 Earnings ReleaseQ2 20150.33
Allstate Corp/TheALL USAft-mktQ2 2015 Earnings ReleaseQ2 20150.962
Microchip Technology IncMCHP US18:00Q1 2016 Earnings CallQ1 2016 
Posted by Jim Van Meerten at
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