Wednesday, February 3, 2016

MORNING CALL 2/3

MORNING CALL

OVERNIGHT MARKETS AND NEWS
March E-mini S&Ps (ESH16 +0.26%) are up +0.20% as stock index futures track crude oil prices (CLH16 +1.84%) which are up +1.67%. European stocks are down -0.93% at a 1-1/2 week low as losses in Italian banks lead the market lower. The cost of insuring corporate debt in Europe rose as the Markit iTraxx Europe Index of credit-default swaps on investment-grade companies rose above 100 bp, the highest in 2-1/3 years, as the continued decline in energy and commodity prices is putting pressure on miners and energy producers along with the banks that have loaned to those companies. Asian stocks settled lower: Japan -3.15%, Hong Kong -2.34%, China -0.38%, Taiwan -0.84%, Australia -2.33%, Singapore -1.10%, South Korea -0.92%, India -1.29%. Losses in Chinese stocks were limited as property stocks rose after the PBOC cut the minimum required down payment for first-time purchases to the lowest ever in an attempt to prop up the property market.
The dollar index (DXY00 -0.20%) is down -0.26%. EUR/USD (^EURUSD) is down -0.01%. USD/JPY (^USDJPY) is down -0.38%.
Mar T-note prices (ZNH16 -0.12%) are down -2 ticks.
According to people with direct knowledge of the matter, the PBOC plans to loosen rules on when foreign investors can bring money in and out of funds under the Qualified Foreign Institutional Investor scheme (QFII), which grants quotas for money brought into China for investment in domestic stocks and bonds. The lock-up period for the withdrawal of QFII funds from China would be relaxed and institutions will be given more latitude over when they can bring money into China. Under the planned changes, QFII funds would be allowed to withdraw money from China on a daily basis. Currently, funds are subject to lock-ups of either 1 week of 1 month, depending on the type of quota.
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) weekly MBA mortgage applications (previous +8.8% with purchase sub-index +4.6% and refi sub-index +11.2%), (2) Jan ADP employment change (expected +193,000, Dec +257,000), (3) final-Jan Markit services PMI (expected unrevised at 53.7, prelim-Jan -0.6 to 53.7), (4) Jan ISM non-manufacturing index (expected -0.7 to 55.1, Dec -0.8 to 55.8).
There are 31 of the S&P 500 companies that report earnings today with notable reports including: GM (1.20), Marathon Petroleum (0.69), Merck (0.91), ADP (0.72), Southern Company (0.43), Allstate (1.34), Yum Brands (0.66), MetLife (1.36).
U.S. IPO's scheduled to price today: PLx Pharma (PLXP).
Equity conferences this week include: Cowen and Company Aerospace/Defense Conference & Transport Forum on Wed-Thu
OVERNIGHT U.S. STOCK MOVERS
Intel (INTC -3.31%) was upgraded to 'Neutral' from 'Sell' at Goldman Sachs.
Merck & Co. (MRK -0.67%) reported Q4 EPS of 93 cents, higher than consensus of 91 cents.
Marathon Petroleum (MPC -3.59%) reported Q4 EPS ex-charge of 79 cents, better than consensus of 69 cents.
Chipotle Mexican Grill (CMG +0.64%) declined over 6% in pre-market trading after it said it received a subpoena from the U.S. Attorney's office for the Central District of California expanding the scope of a federal criminal probe into a norovirus outbreak in California.
Yahoo! (YHOO -1.72%) fell over 1% in after-hours trading after it reported Q4 adjusted EPS of 13 cents, better than consensus of 12 cents, but said it sees Q1 adjusted Ebitda of $100 million-$120 million, below consensus of $181 million.
Edwards Lifesciences (EW -2.45%) gained over 4% in after-hours trading after it reported Q4 adjusted EPS of 63 cents, better than consensus of 60 cents, and then raised guidance on fiscal 2016 adjusted EPS to $2.57-$2.67 from a December forecast of $2.30-$2.40, above consensus of $2.41.
IAC/Interactive (IAC -2.08%) slid over 1% in after-hours trading after it reported Q4 adjusted EPS of 75 cents, well below consensus of 92 cents.
Gilead Sciences (GILD -1.59%) rose 1% in after-hours trading after it reported Q4 adjusted EPS of $3.32, higher than consensus of $2.99.
Barnes & Noble (BKS -5.38%) slid nearly 2% in after-hours trading after the WSJ reported that Amazon said it plans 300 to 400 physical bookstores nationwide.
Match Group (MTCH -4.69%) dropped over 3% in after-hours trading after it reported Q4 revenue of $267.6 million, below consensus of $275.9 million.
Boot Barn Holdings (BOOT -13.73%) climbed over 5% in after-hours trading after it reported Q3 adjusted EPS of 45 cents, above consensus of 44 cents.
Oclaro (OCLR +3.97%) jumped 9% in after-hours trading after it reported Q2 profit from continuing operations of 3 cents, above consensus of 1 cent.
MARKET COMMENTS
Mar E-mini S&Ps (ESH16 +0.26%) this morning are up +3.75 points (+0.20%). Tuesday's closes: S&P 500 -1.87%, Dow Jones -1.80%, Nasdaq -2.18%. The S&P 500 index on Tuesday closed sharply lower on continued concerns about weak global growth and on the -5.5% plunge in crude oil prices, which dragged down energy-producer stocks.
Mar 10-year T-notes (ZNH16 -0.12%) this morning are down -2 ticks. Tuesday's closes: TYH6 +29.50, FVH6 +16.25. Mar T-note prices on Tuesday rallied to a contract high and the 10-year T-note yield tumbled to a 9-1/2 month low of 1.85%. T-note prices rallied on carryover support from a rally in German bunds to a 9-month high and on increased safe-haven demand prompted by the sharp sell-off in stocks.
The dollar index (DXY00 -0.20%) this morning is down -0.257 (-0.26%). EUR/USD (^EURUSD) is down -0.0001 (-0.01%). USD/JPY (^USDJPY) is down-0.45 (-0.38%). Tuesday's closes: Dollar Index -0.137 (-0.14%), EUR/USD +0.0031 (+0.28%), USD/JPY -1.02 (-0.84%). The dollar index on Tuesday closed lower on increased safe-haven demand for the yen from the plunge in stocks, and on strength in EUR/USD after Eurozone Dec unemployment rate unexpectedly fell -0.1 to a 4-1/3 year low of 10.4%.
Mar crude oil (CLH16 +1.84%) this morning is up +50 cents (+1.67%) and Mar gasoline (RBH16 -2.61%) is down -0.0283 (-2.83%). Tuesday's closes: CLH6 -1.74 (-5.50%), RBH6 -0.1004 (-9.27%). Mar crude oil and gasoline prices on Tuesday closed sharply lower with Mar gasoline at a contract low. Crude oil prices were undercut by news that Jan Russian oil production rose +1.5% y/y to a post-Soviet record high of 10.878 million bpd and by expectations for Wednesday’s weekly EIA crude inventories to climb +3.75 million bbl.
GLOBAL EVENT CALENDAR02/03/2016
US0700 ETWeekly MBA mortgage applications, previous +8.8% with purchase sub-index +4.6% and refi sub-index +11.2%.
0815 ETJan ADP employment change expected +193,000, Dec +257,000.
0830 ETTreasury announces amount of 3-year T-notes (previous $24 billion), 10-year T-notes (previous $21 billion) and 30-year T-bonds (previous $13 billion) to be auctioned in the Feb quarterly refunding Feb 9-11.
0945 ETFinal-Jan Markit services PMI expected unrevised at 53.7, prelim-Jan -0.6 to 53.7. Revised Jan Markit composite PMI, prelim-Jan -0.3 to 53.7.
1000 ETJan ISM non-manufacturing index expected -0.7 to 55.1, Dec -0.8 to 55.8.
1030 ETEIA Weekly Petroleum Status Report.
JPN0000 ETJapan Jan consumer confidence index expected -0.2 to 42.5, Dec 42.7.
GER0355 ETRevised German Jan Markit services PMI, preliminary -0.6 to 55.4.
EUR0400 ETRevised Eurozone Jan Markit composite PMI, preliminary -0.8 to 53.5.
0500 ETEurozone Dec retail sales expected +0.3% m/m and +1.5% y/y, Nov -0.3% m/m and +1.4% y/y.
UK0430 ETUK Jan Markit/CIPS services PMI expected -0.1 to 55.4, Dec 55.5.
U.S. STOCK CALENDAR02/03/2016

CompanyTickerTimeEvent DescriptionPeriodEstimate
Automatic Data Processing IncADP USBef-mktQ2 2016 Earnings ReleaseQ2 20160.715
Becton Dickinson and CoBDX USBef-mktQ1 2016 Earnings ReleaseQ1 20161.845
Eaton Corp PLCETN USBef-mktQ4 2015 Earnings ReleaseQ4 20151.098
International Paper CoIP USBef-mktQ4 2015 Earnings ReleaseQ4 20150.823
Jacobs Engineering Group IncJEC USBef-mktQ1 2016 Earnings ReleaseQ1 20160.684
Merck & Co IncMRK USBef-mktQ4 2015 Earnings ReleaseQ4 20150.912
Exelon CorpEXC USBef-mktQ4 2015 Earnings ReleaseQ4 20150.384
Comcast CorpCMCSA USBef-mktQ4 2015 Earnings ReleaseQ4 20150.818
Alexion Pharmaceuticals IncALXN USBef-mktQ4 2015 Earnings ReleaseQ4 20151.099
National Oilwell Varco IncNOV USBef-mktQ4 2015 Earnings ReleaseQ4 20150.438
Spectra Energy CorpSE USBef-mktQ4 2015 Earnings ReleaseQ4 20150.308
General Motors CoGM USBef-mktQ4 2015 Earnings ReleaseQ4 20151.204
Marathon Petroleum CorpMPC USBef-mktQ4 2015 Earnings ReleaseQ4 20150.691
Avery Dennison CorpAVY US6:45Q4 2015 Earnings ReleaseQ4 20150.781
CBRE Group IncCBG US6:59Q4 2015 Earnings ReleaseQ4 20150.783
Southern Co/TheSO US7:30Q4 2015 Earnings ReleaseQ4 20150.429
Becton Dickinson and CoBDX US8:00Q1 2016 Earnings CallQ1 2016
Merck & Co IncMRK US8:00Q4 2015 Earnings CallQ4 2015
Mondelez International IncMDLZ US8:00Q4 2015 Earnings ReleaseQ4 20150.482
CBRE Group IncCBG US8:00Q4 2015 Earnings CallQ4 2015
Automatic Data Processing IncADP US8:30Q2 2016 Earnings CallQ2 2016
Franklin Resources IncBEN US8:30Q1 2016 Earnings ReleaseQ1 20160.752
Franklin Resources IncBEN US8:30Q1 2016 Earnings Call - pre-recordedC1 2016
Comcast CorpCMCSA US8:30Q4 2015 Earnings CallQ4 2015
CH Robinson Worldwide IncCHRW US8:30Q4 2015 Earnings CallQ4 2015
Unum GroupUNM US9:00Q4 2015 Earnings CallQ4 2015
National Oilwell Varco IncNOV US9:00Q4 2015 Earnings CallQ4 2015
Spectra Energy CorpSE US9:00Q4 2015 Earnings CallQ4 2015
Avery Dennison CorpAVY US10:00Q4 2015 Earnings CallQ4 2015
Eaton Corp PLCETN US10:00Q4 2015 Earnings CallQ4 2015
International Paper CoIP US10:00Q4 2015 Earnings CallQ4 2015
Kimco Realty CorpKIM US10:00Q4 2015 Earnings CallQ4 2015
Alexion Pharmaceuticals IncALXN US10:00Q4 2015 Earnings CallQ4 2015
Mondelez International IncMDLZ US10:00Q4 2015 Earnings CallQ4 2015
General Motors CoGM US10:00Q4 2015 Earnings CallQ4 2015
Marathon Petroleum CorpMPC US10:00Q4 2015 Earnings CallQ4 2015
Franklin Resources IncBEN US11:00Q1 2016 Earnings CallQ1 2016
Jacobs Engineering Group IncJEC US11:00Q1 2016 Earnings CallQ1 2016
Exelon CorpEXC US11:00Q4 2015 Earnings CallQ4 2015
Equity ResidentialEQR US11:00Q4 2015 Earnings CallQ4 2015
Visa IncV US11:30Annual General MeetingY 2016
Accenture PLCACN US12:00Annual General Meeting
Southern Co/TheSO US13:00Q4 2015 Earnings CallQ4 2015
Microchip Technology IncMCHP US17:00Q3 2016 Earnings CallQ3 2016
XL Group PLCXL USAft-mktQ4 2015 Earnings ReleaseQ4 20150.578
Lincoln National CorpLNC USAft-mktQ4 2015 Earnings ReleaseQ4 20151.563
Plum Creek Timber Co IncPCL USAft-mktQ4 2015 Earnings ReleaseQ4 20150.154
Torchmark CorpTMK USAft-mktQ4 2015 Earnings ReleaseQ4 20151.064
Cincinnati Financial CorpCINF USAft-mktQ4 2015 Earnings ReleaseQ4 20150.917
Microchip Technology IncMCHP USAft-mktQ3 2016 Earnings ReleaseQ3 20160.618
Allstate Corp/TheALL USAft-mktQ4 2015 Earnings ReleaseQ4 20151.336
Macerich Co/TheMAC USAft-mktQ4 2015 Earnings ReleaseQ4 20151.073
AvalonBay Communities IncAVB USAft-mktQ4 2015 Earnings ReleaseQ4 20151.982
Boston Properties IncBXP USAft-mktQ4 2015 Earnings ReleaseQ4 20151.266
Yum! Brands IncYUM USAft-mktQ4 2015 Earnings ReleaseQ4 20150.661
MetLife IncMET USAft-mktQ4 2015 Earnings ReleaseQ4 20151.363
Costco Wholesale CorpCOST US21:00January 2016 Sales and Revenue Release2016
Motorola Solutions IncMSI USQ4 2015 Earnings ReleaseQ4 20151.456
AutoNation IncAN USJanuary 2016 Sales and Revenue Release2016
Posted by Jim Van Meerten at
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