Tuesday, February 2, 2016

MORNING CALL 2/2

MORNING CALL
OVERNIGHT MARKETS AND NEWS
March E-mini S&Ps (ESH16 -0.63%) are down -0.75% and European stocks are down -1.40% on global growth concerns. Crude oil (CLH16 -3.10%) is down -3.45%, which is undercutting energy producers that are leading the overall market lower with Chevron and Schlumberger down over 1% in pre-market trading. Losses in European stocks were limited after the Eurozone Dec unemployment rate unexpectedly fell to a 4-1/3 year low of 10.4%. Asian stocks settled mostly lower: Japan -0.64%, Hong Kong -0.76%, China +2.26%, Taiwan -0.32%, Australia -1.00%, Singapore -0.89%, South Korea -1.10%, India -1.15%. China's Shanghai Composite closed higher after the PBOC injected 100 billion yuan ($15 billion) into the banking system using reverse repurchase agreements to provide liquidity ahead of the Chinese lunar new year holidays next week.
The dollar index (DXY00 -0.11%) is down -0.05%. EUR/USD (^EURUSD) is up +0.30%. USD/JPY (^USDJPY) is down -0.15%.
Mar T-note prices (ZNH16 +0.21%) are up +9.5 ticks.
The PBOC said it will allow banks to cut the minimum required mortgage down payment to 20% from 25% for first-home purchases to the lowest ever in an attempt to boost China's property market. Also, the minimum down payment for second-home purchases was cut to 30% from 40%.
The Eurozone Dec unemployment rate unexpectedly fell -0.1 to 10.4%, better than expectations of no change at 10.5% and the lowest in 4-1/3 years.
Eurozone Dec PPI fell -0.8% m/m and -3.0% y/y, a faster pace of decline than expectations of -0.6% m/m and -2.8% y/y.
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) Jan New York ISM (Dec +1.3 to 62.0), (2) Kansas City Fed President Esther George's speech about the U.S. economic outlook and monetary policy to the Central Exchange, and (3) Jan total vehicle sales (expected 17.30 million, Dec 17.22 million) and Jan domestic vehicle sales (expected 13.70 million, Dec 13.46 million).
There are 31 of the S&P 500 companies that report earnings today with notable reports including: Exxon (0.64), UPS (1.42), Pfizer (0.52), Baxter (0.32), ADM (0.64), Chipotle (1.81), Yahoo (0.12).
U.S. IPO's scheduled to price today: BeiGene (BGNE), Nordic Realty Trust (NORT), Editas Medicine (EDIT).
Equity conferences this week include: Cowen and Company Aerospace/Defense Conference & Transport Forum on Wed-Thu
OVERNIGHT U.S. STOCK MOVERS
Alphabet (GOOGL +1.24%) is up overr 3% in pre-market trading after it reported Q4 adjusted EPS of $8.67, well above consensus of $8.09, as Q4 paid clicks climbed +31% y/y, higher than consensus of +22.4% y/y.
Down Chemical (DOW +1.38%) reported Q4 EPS of 91 cents, higher than consensus of 69 cents.
UGI Corp. (UGI +0.32%) reported Q1 adjusted EPS of 64 cents, below consensus of 70 cents.
Aflac (AFL -2.50%) rose over 1% in after-hours trading after it reported Q4 operating EPS of $1.56, above consensus of $1.48.
Rent-A-Center (RCII -2.50%) slumped over 10% in after-hours trading after it reported Q3 revenue of $793.8 million, less than consensus of $874.8 million, and said it sees 2016 core U.S. revenue down -4% to -6%, weaker than consensus of +1%.
Flowserve (FLS -0.70%) lowered guidance on fiscal 2016 adjusted EPS to $2.40-$2.75, weaker than consensus of $2.95.
Mattel (MAT -3.01%) gained over 5% in after-hours trading after it reported Q4 adjusted EPS all items of 63 cents, above consensus of 61 cents.
Leggett & Platt (LEG +0.17%) slid almost 4% in after-hours trading after it said it sees 2016 sales of $2.9 billion-$4.1 billion, below consensus of $4.17 billion.
Anadarko Petroleum (APC -2.15%) climbed over 4% in after-hours trading after it reported a Q4 adjusted EPS loss of -57 cents, a smaller loss than consensus of -$1.10.
Plantronics (PLT -0.16%) was downgraded to 'Underperform' from 'Outperform' at Raymond James.
Hain Celestial (HAIN +1.73%) reported Q2 adjusted EPS of 57 cents, higher than consensus of 54 cents.
PVH Corp. (PVH -0.29%) rose over 6% in after-hours trading after it raised guidance on 2016 adjusted EPS to above $7.00 from a December estimate of $6.90-$7.00, above consensus of $6.96.
Rayonier Advanced Materials (RYAM +2.43%) fell over 7% in after-hours trading after it reported Q4 revenue of $242 million, below consensus of $245.8 million.
MARKET COMMENTS
Mar E-mini S&Ps (ESH16 -0.63%) this morning are down -14.50 points (-0.75%). Monday's closes: S&P 500 -0.04%, Dow Jones -0.10%, Nasdaq +0.17%. The S&P 500 on Monday closed slightly lower on negative carryover from the -1.78% drop in China's Shanghai Composite on growth concerns after China's Jan manufacturing PMI fell -0.3 to 49.4, weaker than expectations of -0.1 to 49.6 and the steepest pace of contraction in 3-1/3 years. Stocks were also undercut by the +0.2 point increase in the U.S. Jan ISM manufacturing index, which was weaker than expectations of +0.4 to 48.4. On the supportive side, Fed Vice Fed Chair Fischer said that market turmoil could affect the Fed's next policy move, which reduces the outlook for the Fed to raise interest rates at the next FOMC meeting in March.
Mar 10-year T-notes (ZNH16 +0.21%) this morning are up +9.5 ticks. Monday's closes: TYH6 -13.00, FVH6 -8.50. Mar T-notes on Monday retreated from a contract high and closed lower on profit-taking after the rally of more than 4 points in Mar T-notes in the past month. T-notes were also undercut by signs of strength within the weaker-than-expected Jan ISM report after the Jan new orders sub-index rose +2.7 a 5-month high of 51.5.
The dollar index (DXY00 -0.11%) this morning is down -0.048 (-0.05%). EUR/USD (^EURUSD) is up +0.0033 (+0.30%). USD/JPY (^USDJPY) is down-0.18 (-0.15%). Monday's closes: Dollar Index -0.597 (-0.60%), EUR/USD +0.0057 (+0.53%), USD/JPY -0.15 (-0.12%). The dollar index on Monday closed lower on global economic concerns that may delay additional Fed interest rate increases after China's Jan manufacturing PMI contracted for an eleventh month and the U.S. Jan ISM manufacturing index contracted for a fourth month. The dollar index was also undercut by strength in EUR/USD after German Jan Markit/BME manufacturing PMI was revised upward to 52.3 from 52.1.
Mar crude oil (CLH16 -3.10%) this morning is down -$1.09 a barrel (-3.45%) and Mar gasoline (RBH16 -4.59%) is down -0.0481 (-4.44%). Monday's closes: CLH6 -2.30 (-6.84%), RBH6 -0.0508 (-4.49%). Mar crude oil and gasoline on Monday closed sharply lower on global economic concerns after China's Jan manufacturing PMI contracted at the steepest pace in 3-1/3 years and the U.S. Jan ISM manufacturing contracted for a fourth month. Crude oil prices were also hurt by news of record OPEC crude output as Jan OPEC crude production rose +38,000 bpd to a record 33.113 million bpd.
GLOBAL EVENT CALENDAR02/02/2016
US0945 ETJan New York ISM, Dec +1.3 to 62.0.
1300 ETKansas City Fed President Esther George speaks about the U.S. economic outlook and monetary policy to the Central Exchange.
n/aJan total vehicle sales expected 17.30 million, Dec 17.22 million. Jan domestic vehicle sales expected 13.70 million, Dec 13.46 million.
GER0355 ETGerman Jan unemployment change expected -8,000, Dec -14,000. Jan unemployment rate expected unch at 6.3%.
UK0430 ETUK Jan Markit/CIPS construction PMI expected -0.3 to 57.5, Dec 57.8.
1901 ETUK Jan BRC shop price index, Dec -2.0% y/y.
EUR0500 ETEurozone Dec PPI expected -0.6% m/m and -2.8% y/y, Nov -0.2% m/m and -3.2% y/y.
0500 ETEurozone Dec unemployment rate expected unch at 10.5%.
U.S. STOCK CALENDAR02/02/2016
CompanyTickerTimeEvent DescriptionPeriodEstimate
Archer-Daniels-Midland CoADM USBef-mktQ4 2015 Earnings ReleaseQ4 20150.643
Baxter International IncBAX USBef-mktQ4 2015 Earnings ReleaseQ4 20150.316
Church & Dwight Co IncCHD USBef-mktQ4 2015 Earnings ReleaseQ4 20150.814
Dow Chemical Co/TheDOW USBef-mktQ4 2015 Earnings ReleaseQ4 20150.693
Emerson Electric CoEMR USBef-mktQ1 2016 Earnings ReleaseQ1 20160.503
Pfizer IncPFE USBef-mktQ4 2015 Earnings ReleaseQ4 20150.523
Pitney Bowes IncPBI USBef-mktQ4 2015 Earnings ReleaseQ4 20150.538
Ryder System IncR USBef-mktQ4 2015 Earnings ReleaseQ4 20151.752
Pentair PLCPNR USBef-mktQ4 2015 Earnings ReleaseQ4 20151.039
Royal Caribbean Cruises LtdRCL USBef-mktQ4 2015 Earnings ReleaseQ4 20150.918
Affiliated Managers Group IncAMG USBef-mktQ4 2015 Earnings ReleaseQ4 20153.604
LyondellBasell Industries NVLYB USBef-mktQ4 2015 Earnings ReleaseQ4 20152.117
Michael Kors Holdings LtdKORS USBef-mktQ3 2016 Earnings ReleaseQ3 20161.461
ADT Corp/TheADT USBef-mktQ1 2016 Earnings ReleaseQ1 20160.46
Mallinckrodt PLCMNK US6:00Q1 2016 Earnings ReleaseQ1 20161.779
Harris CorpHRS US6:30Q2 2016 Earnings ReleaseQ2 20161.334
United Parcel Service IncUPS US7:45Q4 2015 Earnings ReleaseQ4 20151.418
Exxon Mobil CorpXOM US8:00Q4 2015 Earnings ReleaseQ4 20150.638
Unum GroupUNM US16:00Q4 2015 Earnings ReleaseQ4 20150.918
Gilead Sciences IncGILD US16:05Q4 2015 Earnings ReleaseQ4 20152.978
Robert Half International IncRHI US16:15Q4 2015 Earnings ReleaseQ4 20150.7
Edwards Lifesciences CorpEW US16:15Q4 2015 Earnings ReleaseQ4 20150.598
Chipotle Mexican Grill IncCMG US16:30Q4 2015 Earnings ReleaseQ4 20151.808
Kimco Realty CorpKIM USAft-mktQ4 2015 Earnings ReleaseQ4 20150.348
Fiserv IncFISV USAft-mktQ4 2015 Earnings ReleaseQ4 20150.998
Equity ResidentialEQR USAft-mktQ4 2015 Earnings ReleaseQ4 20150.919
Yahoo! IncYHOO USAft-mktQ4 2015 Earnings ReleaseQ4 20150.122
CH Robinson Worldwide IncCHRW USAft-mktQ4 2015 Earnings ReleaseQ4 20150.869
Illumina IncILMN USAft-mktQ4 2015 Earnings ReleaseQ4 20150.825
TEGNA IncTGNA USQ4 2015 Earnings ReleaseQ4 20150.457
Wynn Resorts LtdWYNN USQ4 2015 Earnings ReleaseQ4 20150.758
Posted by Jim Van Meerten at
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