Thursday, February 11, 2016

MORNING CALL 2/11

MORNING CALL
OVERNIGHT MARKETS AND NEWS
March E-mini S&Ps (ESH16 -1.69%) are down sharply by -2.11% at a 3-week low and European stocks are down -3.44% at a 2-1/2 year low after Wednesday's testimony to Congress by Fed Chair Yellen failed to boost confidence in the markets. Crude oil prices (CLH16 -2.95%) are down -4.04% at a 3-week low and copper (HGH16 -0.57%) is down -0.67% at a 2-week low, which has pushed energy producers, miners, and raw-material companies lower with Exxon Mobile sliding more than 5% in pre-market trading. The plunge in global equities has fueled a massive rush into the safe-haven of government bonds as the 10-year UK gilt yield fell to a record low of 1.296%, the 10-year German bund yield declined to a 9-1/2 month low of 0.158% and the 10-year T-note yield dropped to a 2-3/4 year low of 1.62%. The global market turmoil has also pushed global investors into the safe-haven of gold with Apr gold (GCJ16 +3.37%) up +3.93% at an 8-1/2 month high. Asian stocks settled mostly lower: Japan, China and Taiwan closed for holiday. Hong Kong -3.85%, Australia +0.95%, Singapore -1.70%, South Korea -2.83%, India -3.40%.
The dollar index (DXY00 -0.25%) is down -0.40% at a 3-1/2 month low. EUR/USD (^EURUSD) is up +0.41% at a 3-1/2 month high. USD/JPY (^USDJPY) is down -1.83% at a 15-month low.
Mar T-note prices (ZNH16 +0.75%) are up +1-3.5/32 points at a 2-3/4 year nearest-futures high.

U.S. STOCK PREVIEW
Key U.S. news today includes: (1) weekly initial unemployment claims (expected -5,000 to 280,000, previous +8,000 to 285,000) and continuing claims (expected -10,000 to 2.245 million, previous -18,000 to 2.255 million), (2) Fed Chair Janet Yellen's testimony before the Senate Banking Committee to deliver the Fed’s semi-annual monetary policy report to Congress, and (3) the Treasury's auction of $15 billion of 30-year T-bonds.
There are 20 of the S&P 500 companies that report earnings today with notable reports including: Coca-Cola Enterprises (Consensus $0.51), PepsiCo (1.06), Kellogg (0.75), BorgWarner (0.72), AIG (-0.91), CBS (0.92), TripAdvisor (0.33), Wynn Resorts (0.76).
U.S. IPO's scheduled to price today: none.
Equity conferences during the remainder of this week include: Goldman Sachs Technology and Internet Conference on Tue-Thu, Bank Of America Merrill Lynch Insurance Conference on Wed-Thu, BB&T Capital Markets Transportation Services Conference on Wed-Thu, Leerink Partners Global Health Care Conference on Wed-Thu, Morgan Stanley Chemicals Corporate Access Day on Thu.



OVERNIGHT U.S. STOCK MOVERS
Exxon Mobil (XOM -0.91%) slumped over 5% in pre-market trading as the price of oil tumbled to a 3-week low.
Twitter (TWTR +4.03%) declined over 8% in pre-market trading after it lowered guidance on Q1 revenue to $595 million-$610 million, below consensus of $627.6 million.
Cisco Systems (CSCO -0.62%) gained 6% in pre-market trading after it reported Q2 adjusted EPS of 57 cents, better than consensus of 54 cents, and then added $15 billion to the company's share buyback program.
Amazon.com (AMZN +1.74%) climbed over 2% in after-hours trading after its board authorized a $5 billion share buyback program
Tesla Motors (TSLA -3.09%) rose nearly 8% in pre-market trading after it reported an unexpected Q4 adjusted EPS loss of -87 cents, well below consensus of a 10 cent profit, but then said it expects its global automobile deliveries to climb as much as 78% this year.
O'Reilly Automotive (ORLY +0.17%) rose over 5% in after-hours trading after it reported Q4 adjusted EPS of $2.19, higher than consensus of $2.08, and then raised guidance on Q1 EPS to $2.41-$2.51, above consensus of $2.38.
Whole Foods Market (WFM -0.65%) jumped nearly 6% in after-hours trading after it reported Q1 EPS of 46 cents, higher than consensus of 40 cents, and then raised guidance on fiscal 2016 EPS to $1.53 or greater, up from a November 4 estimate of $1.50.
Prudential Financial (PRU +0.74%) reported Q4 operating EPS of $1.94, below consensus of $2.30, although Q4 total revenue of $13.2 billion was better than consensus of $11.6 billion.
Pilgrim's Pride (PPC +1.54%) plunged 15% in after-hours trading after it reported Q4 adjusted EPS of 26 cents, much weaker than consensus of 40 cents.
Expedia (EXPE +1.85%) jumped 12% in pre-market trading after it said it sees 2016 adjusted Ebitda growth of 35%-45%. The stock recovered from overnight losses of as much as 7% after it reported Q4 adjusted EPS of 77 cents, well below consensus of 96 cents.
Mylan (MYL -0.39%) tumbled over 8% in pre-market trading after it reported Q4 adjusted EPS of $1.22, weaker than consensus of $1.28.
Skechers (SKX +1.08%) slid over 6% in after-hours trading after it reported Q4 EPS of 19 cents, below consensus of 20 cents.
iRobot (IRBT -3.25%) dropped over 7% in after-hours trading after it lowered guidance on fiscal 2016 EPS to $1.20-$1.40, well below consensus of $1.96.
Zynga (ZNGA +4.93%) tumbled over 10% in after-hours trading after it lowered guidance on Q1 revenue to $160 million-$175 million, below consensus of $184.3 million.

MARKET COMMENTS
Mar E-mini S&Ps (ESH16 -1.69%) this morning are down sharply by -39.00 points (-2.11%) at a 3-week low. Wednesday's closes: S&P 500 -0.02%, Dow Jones -0.62%, Nasdaq +0.47%. The S&P 500 on Wednesday closed little changed. Stocks were boosted by carryover support from a rally in European stocks as concerns over European bank creditworthiness eased after Deutsche Bank AG jumped over 10% when it said it may buy back some of its debt. Stocks also received support from Fed Chair Yellen's comment that the Fed expects the economy to warrant only gradual interest rate increases and that job and wage gains should support incomes and spending. Stocks were undercut by renewed weakness in energy and raw-material producer stocks when the price of crude fell to a 3-week low and the price of copper slid to a 2-week low.
Mar 10-year T-notes (ZNH16 +0.75%) this morning are up +1-3.5/32 points at a 2-3/4 year nearest-futures high. Wednesday's closes: TYH6 +6.00, FVH6 +2.00. Mar T-notes on Wednesday rallied to a new contract high and closed higher on Fed Chair Yellen's comment that the Fed expects the economy to warrant only gradual rate rises. T-notes were also boosted by strong foreign demand for the Treasury's $23 billion 10-year T-note auction where indirect bidders, a proxy for foreign buying, bought 62.3% of the total auction, higher than the 12-auction average of 60.5%.
The dollar index (DXY00 -0.25%) this morning is down -0.386 (-0.40%) at a 3-1/2 month low. EUR/USD (^EURUSD) is up +0.0046 (+0.41%) at a 3-1/2 month high. USD/JPY (^USDJPY) is down -2.07 (-1.83%) at a 15-month low. Wednesday's closes: Dollar Index -0.183 (-0.19%), EUR/USD -0.001(-0.01%), USD/JPY -1.76 (-1.53%). The dollar index on Wednesday closed lower as Fed Chair Yellen said that the Fed expects the economy to warrant only gradual interest rate increases. USD/JPY plunged to a 1-1/4 year low as the yen continued to see safe-haven demand.
Mar crude (CLH16 -2.95%) this morning is down -$1.11 a barrel (-4.04%) at a 3-weeklow and Mar gasoline (RBH16 +0.51%) is up +0.0029 (+0.31%). Wednesday's closes: CLH6 -0.49 (-1.75%), RBH6 +0.0436 (+4.85%). Mar crude oil and gasoline on Wednesday settled mixed with Mar crude at a 3-week nearest-futures low. Crude oil prices were undercut by the +1.26 million bbl increase in EIA gasoline inventories to a record high 255.6 million bbl (more than expectations of +1.0 million bbl) and by the +523,000 bbl increase in crude supplies at Cushing, OK, delivery point of WTI futures, to a record high 64.7 million bbl. Crude oil prices were boosted by a weaker dollar and by the unexpected -754,000 bbl decline in weekly EIA crude oil inventories, less than expectations for a +3.2 million bbl increase.
GLOBAL EVENT CALENDAR02/11/2016
US0830 ETWeekly initial unemployment claims expected -5,000 to 280,000, previous +8,000 to 285,000. Weekly continuing claims expected -10,000 to 2.245 million, previous -18,000 to 2.255 million.
0830 ETUSDA weekly Export Sales.
1000 ETFed Chair Janet Yellen appears before the Senate Banking Committee to deliver the Feds semi-annual monetary policy report to Congress.
1100 ETTreasury announces amount of 30-TIPS to be auctioned Feb 18.
1300 ETTreasury auctions $15 billion 30-year T-bonds.
JPNn/aJapanese markets closed for National Foundation Day.
U.S. STOCK CALENDAR02/11/2016

CompanyTickerTimeEvent DescriptionPeriodEstimate
Coca-Cola Enterprises IncCCE USBef-mktQ4 2015 Earnings ReleaseQ4 20150.506
Advance Auto Parts IncAAP USBef-mktQ4 2015 Earnings ReleaseQ4 20151.203
Reynolds American IncRAI USBef-mktQ4 2015 Earnings ReleaseQ4 20150.504
TripAdvisor IncTRIP USBef-mktQ4 2015 Earnings ReleaseQ4 20150.328
Allegion PLCALLE USBef-mktQ4 2015 Earnings ReleaseQ4 20150.735
Nielsen Holdings PLCNLSN USBef-mktQ4 2015 Earnings ReleaseQ4 20150.798
PepsiCo IncPEP US6:30Q4 2015 Earnings ReleaseQ4 20151.06
Molson Coors Brewing CoTAP US6:45Q4 2015 Earnings ReleaseQ4 20150.512
Mosaic Co/TheMOS US7:00Q4 2015 Earnings ReleaseQ4 20150.442
FLIR Systems IncFLIR US7:30Q4 2015 Earnings ReleaseQ4 20150.492
WW Grainger IncGWW US8:00January 2016 Sales and Revenue Call2016
Kellogg CoK US8:00Q4 2015 Earnings ReleaseQ4 20150.746
PepsiCo IncPEP US8:00Q4 2015 Earnings CallQ4 2015
BorgWarner IncBWA US8:00Q4 2015 Earnings ReleaseQ4 20150.718
TripAdvisor IncTRIP US8:00Q4 2015 Earnings CallQ4 2015
Nielsen Holdings PLCNLSN US8:00Q4 2015 Earnings CallQ4 2015
Equifax IncEFX US8:30Q4 2015 Earnings CallQ4 2015
Advance Auto Parts IncAAP US8:30Q4 2015 Earnings CallQ4 2015
Allegion PLCALLE US8:30Q4 2015 Earnings CallQ4 2015
Emerson Electric CoEMR US9:00Investor MeetingY 2016
FMC CorpFMC US9:00Q4 2015 Earnings CallQ4 2015
Reynolds American IncRAI US9:00Q4 2015 Earnings CallQ4 2015
Mosaic Co/TheMOS US9:00Q4 2015 Earnings CallQ4 2015
Kellogg CoK US9:30Q4 2015 Earnings CallQ4 2015
BorgWarner IncBWA US9:30Q4 2015 Earnings CallQ4 2015
Coca-Cola Enterprises IncCCE US10:00Q4 2015 Earnings CallQ4 2015
International Flavors & Fragrances IncIFF US10:00Q4 2015 Earnings CallQ4 2015
Pioneer Natural Resources CoPXD US10:00Q4 2015 Earnings CallQ4 2015
Molson Coors Brewing CoTAP US11:00Q4 2015 Earnings CallQ4 2015
O'Reilly Automotive IncORLY US11:00Q4 2015 Earnings CallQ4 2015
FLIR Systems IncFLIR US11:00Q4 2015 Earnings CallQ4 2015
Prudential Financial IncPRU US11:00Q4 2015 Earnings CallQ4 2015
Molson Coors Brewing CoTAP US13:00Q4 2015 Earnings Call - Follow-Up SessionC4 2015
QUALCOMM IncQCOM US13:00Analyst DayY 2016
Realty Income CorpO US14:30Q4 2015 Earnings CallQ4 2015
VeriSign IncVRSN US16:05Q4 2015 Earnings ReleaseQ4 20150.781
Activision Blizzard IncATVI US16:30Q4 2015 Earnings CallQ4 2015
CBS CorpCBS US16:30Q4 2015 Earnings CallQ4 2015
VeriSign IncVRSN US16:30Q4 2015 Earnings CallQ4 2015
Wynn Resorts LtdWYNN US16:30Q4 2015 Earnings CallQ4 2015
DaVita HealthCare Partners IncDVA US17:00Q4 2015 Earnings CallQ4 2015
Republic Services IncRSG US17:00Q4 2015 Earnings CallQ4 2015
American International Group IncAIG USAft-mktQ4 2015 Earnings ReleaseQ4 2015-0.906
Activision Blizzard IncATVI USAft-mktQ4 2015 Earnings ReleaseQ4 20150.857
CBS CorpCBS USAft-mktQ4 2015 Earnings ReleaseQ4 20150.921
DaVita HealthCare Partners IncDVA USAft-mktQ4 2015 Earnings ReleaseQ4 20150.966
Republic Services IncRSG USAft-mktQ4 2015 Earnings ReleaseQ4 20150.493
Dun & Bradstreet Corp/TheDNB USAft-mktQ4 2015 Earnings ReleaseQ4 20152.831
Wynn Resorts LtdWYNN USAft-mktQ4 2015 Earnings ReleaseQ4 20150.758
Varian Medical Systems IncVAR US19:30Annual General MeetingY 2016
WW Grainger IncGWW USJanuary 2016 Sales and Revenue Release2016
Varian Medical Systems IncVAR USAnnual General Meeting
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