BARCHART MORNING CALL 9/1

BARCHART MORNING CALL

Tuesday, September 1st, 2015View Older Reports

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OVERNIGHT MARKETS AND NEWS

September E-mini S&Ps (ESU15 -1.96%) are down sharply by -2.13% and European stocks are down -2.02% on concern the slowdown in China is deepening. Global stock and commodity markets all fell after a gauge of Chinese manufacturing activity last month contracted at the fastest pace in 3 years. European stocks also fell after the Eurozone Aug Markit manufacturing PMI was revised lower, but stock prices recovered from their worst levels after the Eurozone Jul unemployment rate unexpectedly fell to the lowest in 3-1/2 years. Asian stocks closed lower: Japan -3.84%, Hong Kong -2.24%, China -1.23%, Taiwan -1.92%, Australia -2.12%, Singapore -1.32%, South Korea -1.40%, India -2.23%. Emerging market stocks and currencies all declined after the slowdown in Chinese manufacturing activity intensified, although large-capitalization stocks in China's Shanghai Composite rebounded from their lows in late trading on signs of government intervention. Over each of the past four session, government-backed-funds have been seen buying stocks in the last hour of trading as China tries to stabilize the market before a WWII victory parade on Thursday. China's financial markets will be closed on Thursday and Friday to commemorate the event.
The dollar index (DXY00 -0.27%) is down -0.32%. EUR/USD (^EURUSD) is up +0.48%. USD/JPY (^USDJPY) is down -0.93% as the slide in global stocks boosts the safe-haven demand for the yen.
Dec T-note prices (ZNZ15 +0.25%) are up +10.5 ticks on a flight to safety.
The China Aug manufacturing PMI fell -0.3 to 49.7 as expected, but still was the steepest pace of contraction in 3 years.
The Eurozone Aug Markit manufacturing PMI was revised lower to 52.3 from the originally reported 52.4.
The Eurozone Jul unemployment rate unexpectedly fell -0.2 to 10.9%, better than expectations of unch at 11.1% and the lowest in 3-1/2 years.

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) July construction spending (expected +0.6% m/m, Jun +0.1% m/m), (2) Aug ISM manufacturing index (expected -0.2 to 52.5, Jul -0.8 to 52.7), (3) final-Aug Markit manufacturing PMI (expected unrevised at 52.9, prelim-Aug -0.9 to 52.9), (4) Aug total vehicle sales (expected 17.30 million, Jul 17.46 million).
There are 3 of the Russell 1000 companies that report earnings today: Donaldson (consensus $0.42), Dollar Tree (0.62), H&R Block (-0.40).
U.S. IPO's scheduled to price today include: none.
Equity conferences this week include: European Society of Cardiology Meeting on Mon-Wed, Longbow Research Industrial Manufacturing & Technology Investor Conference on Tue, Simmons Gleneagles Energy Conference on Tue-Wed, KeyBanc Capital Markets Basic Materials and Packaging Conference on Wed, Global Hunter Securities Industrials Conference on Thu.

OVERNIGHT U.S. STOCK MOVERS

Freeport McMoRan (FCX +1.33%) was downgraded to 'Neutral' from 'Buy' at Citi.
Donaldson (DCI -0.82%) reported Q4 adjusted EPS of 45 cents, better than consensus of 42 cents.
Constellation Brands (STZ +0.05%) was upgraded to 'Outperform' from 'Underperform' at CLSA.
McCormick (MKC -0.80%) was initiated with a 'Buy' at BB&T with a price target of $99.
BB&T upgraded Cal-Maine Foods (CALM +5.71%) to 'Buy' with a $62 price target.
American Airlines (AAL +0.93%) was upgraded to 'Buy' from 'Hold' at Deutsche Bank.
Endo (ENDP -2.16%) was downgraded to 'Equal Weight' from 'Overweight' at Morgan Stanley.
Scientific Games (SGMS -5.16%) was upgraded to 'Hold' from 'Sell' at Deutsche Bank.
VMware (VMW +2.06%) was upgraded to 'Outperform' from 'Neutral' at Baird.
Barron's says in its 'Barron's Take' column Berkshire Hathaway's stake in Phillips 66 (PSX +2.38%) drove shares higher and the stock could continue to rise.
Glenhill Advisors reported a 5.3% stake in Allscripts (MDRX -0.22%) .
Adage Capital reported a 5.56% stake in Olin Corp (OLN +0.86%) .
Samuel Zell reported a 5.6% stake in Anixter (AXE +2.50%) .
SunEdison (SUNE +0.97%) rose over 4% in after-hours trading after Point72 reported a 5.1% passive stake in the company.
Trevena (TRVN -0.66%) surged over 30% in after-hours trading after the Phase 2b study of its TRV130 drug achieved its primary endpoint.

MARKET COMMENTS

Sep E-mini S&Ps (ESU15 -1.96%) this morning are down sharply by -42.00 points (-2.13%). Monday's closes: S&P 500 -0.84%, Dow Jones -0.69%, Nasdaq -1.26%. The S&P 500 on Monday closed lower on the -0.82% slide in the China Shanghai Composite and on the -0.3 point decline in the Aug Chicago PMI to 54.4, weaker than expectations of -0.2 to 54.5. Energy producer stocks strengthened as oil prices rallied sharply for the third session to post a new 1-month high.
Dec 10-year T-notes (ZNZ15 +0.25%) this morning are up +10.5 ticks. Monday's closes: TYZ5 -4.50, FVZ5 -4.00. Dec 10-year T-note prices on Monday posted a 1-week low and closed lower on the slide in German bund prices to a 6-week low (after the Eurozone Aug core CPI rose +1.0% y/y, stronger than expectations of +0.9% y/y) and on hawkish weekend comments from Fed Vice Chair Fischer suggesting that he favors raising interest rates sooner rather than later when he said that that there's "good reason" to believe that inflation is poised to move higher. T-notes found underlying support on the weaker-than-expected Aug Chicago PMI and Aug Dallas Fed manufacturing activity report and on safe-haven demand with the sell-off in stocks.
The dollar index (DXY00 -0.27%) this morning is down -0.307 (-0.32%). EUR/USD (^EURUSD) is up +0.0054 (+0.48%). USD/JPY (^USDJPY) is down -1.13 (-0.93%). Monday's closes: Dollar Index -0.282 (-0.29%), EUR/USD +0.00283 (+0.25%), USD/JPY -0.496 (-0.41%). The dollar index on Monday closed lower on (1) the larger-than-expected declines in the Aug Chicago PMI index and the Aug Dallas Fed manufacturing activity index, and (2) strength in EUR/USD after the Eurozone Aug CPI was stronger than expected and dampened speculation of additional ECB stimulus. The dollar found underyling support on the comments from Fed Vice Chair Fischer who left open the door for a Fed rate hike in Sep when he said that there's "good reason" to believe that inflation is poised to move higher.
Oct crude oil (CLV15 -1.91%) this morning is down -$1.10 a barrel (-2.24%) and Oct gasoline (RBV15 -2.94%) is down -0.0457 (-3.05%). Monday's closes: CLV5 +3.98 (+8.80%), RBV5 +0.0699 (+5.00%). Oct crude oil and gasoline on Monday closed sharply higher with Oct crude at a 1-month high and Oct gasoline at a 2-week high. Bullish factors included (1) the weaker dollar, (2) the IEA's downward revision in its U.S. crude production estimate for the first half of 2015 to 9.4 million bpd from a previous estimate of 9.53 million bpd, and (3) OPEC's comment in its monthly magazine that it is ready to talk to other crude producers outside of OPEC in order to achieve "fair prices."

GLOBAL EVENT CALENDAR09/01/2015

US	0945 ET	Final-Aug Markit manufacturing PMI expected unrevised at 52.9, prelim-Aug -0.9 to 52.9.
	1000 ET	Jul construction spending expected +0.6% m/m, Jun +0.1% m/m.
	1000 ET	Aug ISM manufacturing index expected -0.2 to 52.5, Jul -0.8 to 52.7. Aug ISM new orders, Jul +0.5 to 56.5. Aug ISM employment, Jul -2.8 to 52.7. Aug ISM prices paid expected -5.0 to 39.0, Jul -5.5 to 44.0.
	n/a	Aug total vehicle sales expected 17.30 million, Jul 17.46 million. Aug domestic vehicle sales expected 13.70 million, Jul 13.92 million.
JPN	0100 ET	Japan Aug vehicle sales, Jul -1.3% y/y.
GER	0355 ET	German Aug unemployment change expected -4,000, Jul +9,000. Aug unemployment rate expected unch at 6.4%.
	0355 ET	Revised German Aug Markit/BME manufacturing PMI, previous +1.4 to 53.2.
EUR	0400 ET	Revised Eurozone Aug Market manufacturing PMI, previous unch at 52.4.
	0500 ET	Eurozone Jul unemployment rate expected unch at 11.1%.
UK	0430 ET	UK Jul net consumer credit expected +1.2 billion pounds, Jun +1.2 billion pounds.
	0430 ET	UK Jul mortgage approvals expected 68,100, Jun 66,600.
	0430 ET	UK Jul M4 money supply, Jun -0.5% m/m and -0.3% y/y.
	0430 ET	UK Aug Markit manufacturing PMI expected +0.1 to 52.0, Jul 51.9.

U.S. STOCK CALENDAR09/01/2015

Company	Ticker	Time	Event Description	Period	Estimate
Donaldson Co Inc	DCI US	Bef-mkt	Q4 2015 Earnings Release	Q4 2015	0.418
Dollar Tree Inc	DLTR US	Bef-mkt	Q2 2016 Earnings Release	Q2 2016	0.62
Keysight Technologies Inc	KEYS US	8:30	Analyst and Investor Day	Y 2015
Dollar Tree Inc	DLTR US	9:00	Q2 2016 Earnings Call	Q2 2016
Ford Motor Co	F US	9:15	August 2015 Sales and Revenue Release	2015
Donaldson Co Inc	DCI US	10:00	Q4 2015 Earnings Call	Q4 2015
Ford Motor Co	F US	10:00	August 2015 Sales and Revenue Call	2015
H&R Block Inc	HRB US	16:30	Q1 2016 Earnings Call	Q1 2016
H&R Block Inc	HRB US	Aft-mkt	Q1 2016 Earnings Release	Q1 2016	-0.397