Tuesday, February 9, 2016

MORNING CALL 2/9

MORNING CALL
OVERNIGHT MARKETS AND NEWS
March E-mini S&Ps (ESH16 -0.86%) are down -0.40% and European stocks are down -0.59% at a 2-1/3 year low as global economic concerns intensified after German Dec industrial production unexpectedly fell by the most in 16 months and as Greece's ASE Stock Index fell to the lowest since 1990. Greek debt concerns resurfaced as the Greek government remains at odds with creditors as bailout talks drag on. Greek bank stocks plunged after representatives from the IMF, the European Commission, the ECB and the European Stability Mechanism left Athens after a week of talks that failed to find an agreement for additional Greek bailout funds. Estimate are that Greece may face a cash crunch by the middle of the year if it fails to find more funding with 3 billion euros of redemptions and interest payments due in July. Concerns over European banks abated slightly after Goldman Sachs said that European banks have "ample liquidity" and after Deutsche Bank AG rose over 1% when it said it has enough cash to pay its debts. Asian stocks settled lower: Japan -5.40%, Australia -2.86%, India -1.10% with Hong Kong, China, Taiwan, Singapore and South Korea all closed for holiday. Japan's Nikkei Stock Index fell to a 2-week low as exporters slid after the yen jumped to a 14-3/4 month high against the dollar. The plunge in Japanese stocks fueled safe-haven buying of government debt and pushed the yield on Japan's 10-year bond down to a record low of -0.035%.
The dollar index (DXY00 -0.07%) is down -0.12%. EUR/USD (^EURUSD) is up +0.26%. USD/JPY (^USDJPY) is down -0.72% at a 14-3/4 month low.
Mar T-note prices (ZNH16 unch) are down -6 ticks.
German Dec industrial production unexpectedly fell -1.2% m/m, weaker than expectations of +0.5% m/m and the biggest decline in 16 months.
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) Dec JOLTS job openings (expected +19,000 to 5.450 million, Nov +82,000 to 5.431 million), (2) Dec wholesale inventories (expected -0.2% m/m, Nov -0.3% m/m) and (3) the Treasury's auction of $24 billion of 3-year T-notes.
There are 18 of the S&P 500 companies that report earnings today with notable reports including: Disney (consensus $1.45), Coca-Cola Co (0.37), Viacom (1.18), Ingersol-Rand (0.93), CVS Health (1.53), Goodyear (0.75).
U.S. IPO's scheduled to price today: OTG EXP Inc (OTG).
Equity conferences during the remainder of this week include: Credit Suisse Financial Services Forum on Tue-Wed, Stifel Nicolaus Transportation and Logistics Conference on Tue-Wed, 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
CVS Health Corp. (CVS -3.71%) reported Q4 EPS of $1.53, right on consensus.
Ingersoll-Rand PLC (IR -3.66%) reported Q4 EPS of 94 cents, better than consensus of 93 cents.
Cheesecake Factory (CAKE -0.04%) was rated a new 'Buy' at Maxim Group with a price target of $57.
Salesforce.com (CRM -7.62%) was upgraded to 'Hold' from 'Underperform' at Jeffries.
Twenty-First Century Fox (FOXA -1.91%) declined nearly 6% in after-hours trading after it reported Q2 revenue of $7.38 billion, below consensus of $7.52 billion.
The Gap (GPS +0.93%) rose over 2% in after-hours trading after it said it sees Q4 adjusted EPS of 56 cents-57 cents, above consensus of 53 cents.
Waste Connections (WCN -1.91%) reported Q4 adjusted EPS of 49 cents, higher than consensus of 47 cents.
Partner Re (PRE -0.06%) reported Q4 operating EPS of $3.74, well above consensus of $2.48
Molina Healthcare MOH reported Q4 adjusted EPS of 67 cents, higher than consensus of 60 cents, although Q4 revenue of $3.77 billion was below consensus of $3.90 billion.
Bristow Group (BRS +2.27%) slid nearly 3% in after-hours trading after it reported Q3 adjusted EPS of 67 cents, better than consensus of 63 cents, but Q3 revenue of $419.9 million was below consensus of $447.8 million.
Plains All American Pipeline LP (PAA -13.15%) fell over 1% in after-hours trading after it reported Q4 adjusted EPS of 38 cents, below consensus of 46 cents.
Qualys (QLYS -6.09%) dropped 7% in after-hours trading after it lowered guidance on fiscal 2016 adjusted EPS to 74 cents-79 cents, weaker than consensus of 81 cents.
MARKET COMMENTS
Mar E-mini S&Ps (ESH16 -0.86%) this morning are down -7.50 points (-0.40%). Monday's closes: S&P 500 -1.42%, Dow Jones -1.10%, Nasdaq -1.59%. The S&P 500 index on Monday sold off to a 2-1/2 week low and closed sharply lower on carryover weakness from the plunge in European stocks to a 2-1/3 year low, the slump in the Nasdaq Composite to a 17-month low, and a sell-off in energy producers after crude oil fell -2.5%.
Mar 10-year T-notes (ZNH16 unch) this morning are down -6 ticks. Monday's closes: TYH6 +30.00, FVH6 +16.50. Mar T-notes on Monday rallied to a new contract high and the 10-year T-note yield tumbled to a 1-year low of 1.73%. T-note prices were boosted by safe-haven demand from the plunge in stocks and by reduced inflation expectations as the 10-year breakeven inflation expectations rate fell to a 6-3/4 year low.
The dollar index (DXY00 -0.07%) this morning is down -0.113 (-0.12%). EUR/USD (^EURUSD) is up +0.0029 (+0.26%). USD/JPY (^USDJPY) is down-0.83 (-0.72%) at a 14-3/4 month low. Monday's closes: Dollar Index -0.461 (-0.48%), EUR/USD +0.0035 (+0.31), USD/JPY -1.02 (-0.87%). The dollar index on Monday closed lower on weakness in USD/JPY which plunged to a 14-3/4 month low as the slump in the S&P 500 to a 2-week low prompted safe-haven buying of the yen. The dollar was also undercut by speculation that the slide in global equity markets will keep the Fed from additional interest rate increases.
Mar crude oil (CLH16 +0.64%) this morning is up +56 cents (+1.89%) and Mar gasoline (RBH16 -1.27%) is down -0.0061 (-0.64%). Monday's closes: CLH6-0.77 (-2.49%), RBH6 -0.0338 (-3.40%). Mar crude oil and gasoline on Monday closed lower with Mar gasoline at a 7-year nearest-futures low. Crude oil prices were undercut by the slump in global equity markets and by signs that OPEC will continue to overproduce after Venezuela's oil minister met with other OPEC oil ministers over the weekend and was unable to drum up support for a coordinated cut in OPEC oil production. Crude prices recovered from their worst levels as the dollar weakened.
GLOBAL EVENT CALENDAR02/09/2016
US1000 ETDec JOLTS job openings expected +19,000 to 5.450 million, Nov +82,000 to 5.431 million.
1000 ETDec wholesale inventories expected -0.2% m/m, Nov -0.3% m/m. Dec wholesale trade sales expected -0.4% m/m, Nov -1.0% m/m.
1200 ETUSDA Feb WASDE crop production.
1300 ETTreasury auctions $24 billion 3-year T-notes.
GER0200 ETGerman Dec industrial production expected +0.5% m/m and -0.6% y/y, Nov -0.3% m/m and +0.1% y/y.
0200 ETGerman Dec trade balance expected +20.0 billion euros, Nov +20.5 billion euros. Dec exports expected +0.5% m/m, Nov +0.5% m/m. Dec imports expected -0.5% m/m, Nov +1.7% m/m.
JPN0100 ETJapan Jan machine tool orders, Dec -25.7% y/y.
1850 ETJapan Jan PPI expected -0.7% m/m and -2.8% y/y, Dec -0.3% m/m and -3.4% y/y.
CHIn/aChina Jan new yuan loans expected 1.9 trillion yuan, Dec +597.8 billion yuan.
U.S. STOCK CALENDAR02/09/2016
CompanyTickerTimeEvent DescriptionPeriodEstimate
Coca-Cola Co/TheKO USBef-mktQ4 2015 Earnings ReleaseQ4 20150.373
Goodyear Tire & Rubber Co/TheGT USBef-mktQ4 2015 Earnings ReleaseQ4 20150.746
HCP IncHCP USBef-mktQ4 2015 Earnings ReleaseQ4 20150.779
CVS Health CorpCVS USBef-mktQ4 2015 Earnings ReleaseQ4 20151.532
Omnicom Group IncOMC USBef-mktQ4 2015 Earnings ReleaseQ4 20151.325
Regeneron Pharmaceuticals IncREGN USBef-mktQ4 2015 Earnings ReleaseQ4 20153.374
Martin Marietta Materials IncMLM USBef-mktQ4 2015 Earnings ReleaseQ4 20151.338
Fidelity National Information Services IncFIS USBef-mktQ4 2015 Earnings ReleaseQ4 20150.928
Wyndham Worldwide CorpWYN USBef-mktQ4 2015 Earnings ReleaseQ4 20150.966
Ingersoll-Rand PLCIR US6:30Q4 2015 Earnings ReleaseQ4 20150.926
Masco CorpMAS US7:00Q4 2015 Earnings ReleaseQ4 20150.258
Masco CorpMAS US8:00Q4 2015 Earnings CallQ4 2015
Owens-Illinois IncOI US8:00Q4 2015 Earnings CallQ4 2015
Viacom IncVIAB US8:00Q1 2016 Earnings ReleaseQ1 20161.179
CVS Health CorpCVS US8:30Q4 2015 Earnings CallQ4 2015
Omnicom Group IncOMC US8:30Q4 2015 Earnings CallQ4 2015
Regeneron Pharmaceuticals IncREGN US8:30Q4 2015 Earnings CallQ4 2015
Fidelity National Information Services IncFIS US8:30Q4 2015 Earnings CallQ4 2015
Viacom IncVIAB US8:30Q1 2016 Earnings CallQ1 2016
Wyndham Worldwide CorpWYN US8:30Q4 2015 Earnings CallQ4 2015
Coca-Cola Co/TheKO US9:00Q4 2015 Earnings CallQ4 2015
Goodyear Tire & Rubber Co/TheGT US9:00Q4 2015 Earnings CallQ4 2015
Ingersoll-Rand PLCIR US10:00Q4 2015 Earnings CallQ4 2015
Texas Instruments IncTXN US11:00Strategy Update Call
Charles Schwab Corp/TheSCHW US11:30Business Update Call
Ford Motor CoF US12:00C.D. Howe Institute Presents CEO of Ford Canada, Dianne Craig
HCP IncHCP US12:00Q4 2015 Earnings CallQ4 2015
Martin Marietta Materials IncMLM US14:00Q4 2015 Earnings CallQ4 2015
Western Union Co/TheWU US16:01Q4 2015 Earnings ReleaseQ4 20150.416
Walt Disney Co/TheDIS US16:15Q1 2016 Earnings ReleaseQ1 20161.446
Western Union Co/TheWU US16:30Q4 2015 Earnings CallQ4 2015
Akamai Technologies IncAKAM US16:30Q4 2015 Earnings CallQ4 2015
Walt Disney Co/TheDIS US17:00Q1 2016 Earnings CallQ1 2016
Federal Realty Investment TrustFRT USAft-mktQ4 2015 Earnings ReleaseQ4 20151.377
Akamai Technologies IncAKAM USAft-mktQ4 2015 Earnings ReleaseQ4 20150.624
Willis Towers Watson PLCWLTW USAft-mktQ4 2015 Earnings ReleaseQ4 20151.446
Assurant IncAIZ USAft-mktQ4 2015 Earnings ReleaseQ4 20151.539
Posted by Jim Van Meerten at
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