Monday, November 23rd, 2015View Older Reports
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OVERNIGHT MARKETS AND NEWS
December E-mini S&Ps (ESZ15 -0.01%) are down -0.14% and European stocks are down -0.36% after weekend comments from San Francisco Fed President Williams that there's a "strong case" for a Fed rate hike next month sparked a sell-off in commodity prices. Crude oil (CLF16 +0.62%) is down-1.74%, which undercut energy and raw material producers, while the price of copper (HGZ15 -1.44%) dropped -1.95% to a fresh 6-1/2 year low, which also pressured mining stocks with Freeport McMoRan and BHP Billiton both down nearly 2%. U.S. stock futures rebounded from their worst levels on increased M&A activity after Pfizer and Allergan announced that they will merge in a deal valued at over $150 billion. Losses in European stocks were contained after the Eurozone Nov Markit composite PMI expanded at its fastest pace in 4-1/2 years. Asian stocks settled mixed: Japan closed for holiday, Hong Kong -0.39%, China -0.56%, Taiwan +0.24%, Australia +0.39%, Singapore -0.49%, South Korea +0.46%, India -0.19%.
The dollar index (DXY00 +0.14%) is up +0.30% at a 7-1/4 month high after comments from San Francisco Fed President Williams bolstered the case for a Fed rate hike next month. EUR/USD (^EURUSD) is down -0.20% at a 7-1/4 month low. USD/JPY (^USDJPY) is up +0.30%.
San Francisco Fed President Williams said there's a "strong case" for a Federal Reserve interest rate increase in December assuming U.S. economic data continues to be encouraging.
The Eurozone Nov Markit composite PMI rose +0.5 to 54.4, stronger than expectations of +0.1 to 54.0 and the fastest pace of expansion in 4-1/2 years.
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) Oct Chicago Fed national activity index (expected +0.45 to 0.08, Sep +0.02 to -0.37), (2) preliminary Nov Markit manufacturing PMI (expected -0.1 to 54.0, Oct +1.0 to 54.1), (3) Oct existing home sales (expected -2.7% to 5.40 million, Sep +4.7% to 5.55 million), and (4) the Treasury's auction of $26 billion 2-year T-notes.
There are 7 of the Russell 1000 companies that report earnings today: Tyson Foods (consensus $0.88), Jacobs Engineering (0.77), GameStop (0.59), Mallinckrodt (1.76), Copart (0.43), Brocade Communications (0.24), Palo Alto Networks (0.32).
U.S. IPO's scheduled to price today: Adnina Acquisition Corp II (ANDAU).
Equity conferences this week include: J.P. Morgan Asia Rising Dragons One-on-One Forum on Mon-Tue, INTERGAS VII Oil, Gas & Petrochemicals Conference & Exhibition on Wed.
OVERNIGHT U.S. STOCK MOVERS
Freeport McMoRan (FCX -1.90%) and Royal Gold (RGLD -2.99%) are both down nearly 2% in pre-market trading as metals prices plunged in early trade on Monday, with Dec copper falling to a fresh 6-1/2 year low.
Tyson Foods (TSN -1.82%) reported Q4 EPS of 83 cents, below consensus of 88 cents.
Chipolte Mexican Grill (CMG -12.32%) was downgraded to 'Neutral' from 'Buy' at Sterne Agee CRT.
Novartis (NVS -0.25%) was cut to 'Hold' from 'Buy' at Vontobel.
Kellog (K -0.33%) was upgraded to 'Outperform' from 'Neutral' at Credit Suisse with a price target of $76.
Allergan Plc (AGN +3.45%) is up over 5% in pre-market trading on speculation that Pfizer may acknowledge, as soon as today, a deal that it will acquire the company in an agreement worth more than $150 billion.
Panerea Bread (PNRA +0.20%) was upgraded to 'Buy' from 'Hold' at Maxim Group with a 12-month price target of $210.
Hewlett Packard (HPQ +1.96%) was upgraded to 'Buy' from 'Hold' at Maxim Group with a 2-month price target of $17.
Peabody Energy (BTU -4.65%) will sell New Mexico and Colorado coal assets for $358 million to Bowie Resource Partners LLC, which will also assume $105 million in liabilities.
Novacure (NVCR -1.65%) jumped over 10% in after-hours trading after Phase 3 data showed brain cancer patients who were treated with its Tumor Treating Fields therapy lived longer than patients who received chemotherapy alone.
TerraForm Power (TERP +9.65%) rose over 1% in after-hours trading after BlueMountain Capital raised its stake in the company to 10.1% from 7.3%.
MARKET COMMENTS
Dec E-mini S&Ps (ESZ15 -0.01%) this morning are down -3.00 points (-0.14%). Friday's closes: S&P 500 +0.38%, Dow Jones +0.51%, Nasdaq +0.67%. The S&P 500 on Friday posted a 2-week high and closed higher on ECB President Draghi's indication that the ECB may expand stimulus when it meets next month when he said the ECB will do what's necessary to raise inflation "as quickly as possible." In addition, there were upbeat comments from St. Louis Fed President Bullard who said that U.S. financial conditions have improved and the probability for a hard landing in China's economy has not risen.
Dec 10-year T-notes (ZNZ15 -0.21%) this morning are down -7 ticks. Friday's closes: TYZ5 -3.50, FVZ5 -1.75. Dec T-notes on Friday rallied to a 2-week high but erased their gains and closed lower. T-note prices were undercut by the rally in the S&P 500 to a 2-week high, which reduced the safe-haven demand for T-notes. T-notes were also undercut by the rise in the 10-year T-note breakeven inflation expectations rate to a 2-1/2 month high.
The dollar index (DXY00 +0.14%) this morning is up +0.302 (+0.30%) at a 7-1/4 month high. EUR/USD (^EURUSD) is down -0.0021 (-0.20%) at a 7-1/4 month low. USD/JPY (^USDJPY) is up +0.37 (+0.30%). Friday's closes: Dollar Index +0.576 (+0.58%), EUR/USD -0.0088 (-0.82%), USD/JPY -0.06(-0.05%). The dollar index on Friday closed higher on St. Louis Fed President Bullard's comment that the probabilities of an end to zero interest rates in the U.S. "have increased." In addition, there was weakness in EUR/USD sparked by ECB President Draghi's suggestion that the ECB will expand QE at the Dec 3 ECB meeting when he said that policy makers will do what they must to raise inflation "as quickly as possible."
Jan crude oil (CLF16 +0.62%) this morning is down -73 cents (-1.74%) and Jan gasoline (RBF16 +1.59%) is down -0.0025 (-0.20%). Friday's closes: CLF6 +0.18 (+0.43%), RBF6 -0.0008 (-0.06%). Jan crude oil and gasoline on Friday settled mixed. Metals were boosted by the rally in the S&P 500 to a 2-week high, which bolsters confidence in the economic outlook and energy demand, and by expectations for U.S. oil production to fall after Baker Hughes reported that active U.S. oil rigs fell by 10 rigs in the week ended Nov 20 to a 5-1/3 year low of 564 rigs. Crude prices were undercut by the stronger dollar and the ongoing crude oil supply glut with U.S. crude supplies over 100 million bbl above the seasonal 5-year average.
GLOBAL EVENT CALENDAR11/23/2015
| US | 0830 ET | Oct Chicago Fed national activity index expected +0.45 to 0.08, Sep +0.02 to -0.37. |
| 0945 ET | Preliminary Nov Markit manufacturing PMI expected -0.1 to 54.0, Oct +1.0 to 54.1. | |
| 1000 ET | Oct existing home sales expected -2.7% to 5.40 million, Sep +4.7% to 5.55 million. | |
| 1100 ET | USDA weekly grain export inspections. | |
| 1300 ET | Treasury auctions $26 billion 2-year T-notes. | |
| 1500 ET | USDA Oct Cold Storage. | |
| 1600 ET | USDA weekly crop progress. | |
| GER | 0330 ET | German Nov Markit/BME manufacturing PMI expected -0.1 to 52.0, Oct 52.1. Nov Markit services PMI expected -0.1 to 54.4, Oct 54.5. |
| EUR | 0400 ET | Eurozone Nov Markit manufacturing PMI expected unch at 52.3. Nov Markit composite PMI expected +0.1 to 54.0, Oct 53.9. |
| JPN | 2035 ET | Japan Nov Nikkei manufacturing PMI, Oct 52.4. |
U.S. STOCK CALENDAR11/23/2015
| Company | Ticker | Time | Event Description | Period | Estimate |
|---|---|---|---|---|---|
| Jacobs Engineering Group Inc | JEC US | Bef-mkt | Q4 2015 Earnings Release | Q4 2015 | 0.772 |
| GameStop Corp | GME US | Bef-mkt | Q3 2016 Earnings Release | Q3 2016 | 0.593 |
| Mallinckrodt PLC | MNK US | Bef-mkt | Q4 2015 Earnings Release | Q4 2015 | 1.763 |
| Tyson Foods Inc | TSN US | 7:30 | Q4 2015 Earnings Release | Q4 2015 | 0.881 |
| Mallinckrodt PLC | MNK US | 8:30 | Q4 2015 Earnings Call | Q4 2015 | |
| Tyson Foods Inc | TSN US | 9:00 | Q4 2015 Earnings Call | Q4 2015 | |
| Jacobs Engineering Group Inc | JEC US | 11:00 | Q4 2015 Earnings Call | Q4 2015 | |
| GameStop Corp | GME US | 11:00 | Q3 2016 Earnings Call | Q3 2016 | |
| Palo Alto Networks Inc | PANW US | 16:30 | Q1 2016 Earnings Call | Q1 2016 | |
| Copart Inc | CPRT US | Aft-mkt | Q1 2016 Earnings Release | Q1 2016 | 0.426 |
| Brocade Communications Systems Inc | BRCD US | Aft-mkt | Q4 2015 Earnings Release | Q4 2015 | 0.244 |
| Palo Alto Networks Inc | PANW US | Aft-mkt | Q1 2016 Earnings Release | Q1 2016 | 0.318 |
| Brocade Communications Systems Inc | BRCD US | 17:30 | Q4 2015 Earnings Call | Q4 2015 |
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