MORNING CALL 3/18

MORNING CALL

Friday, March 18th, 2016View Older Reports Everything you need to know about the markets in one free daily newsletter. E-mail:   You will also receive a free subscription to the Barchart family of newsletters. OVERNIGHT MARKETS AND NEWS Jun E-mini S&Ps (ESM16 +0.26%) are up +0.28% and European stocks are up +0.54% on speculation that global central banks will remain accommodative. Strength in Chinese stocks also gave support to a rally in global equity markets on signs that actions taken by the Chinese government to boost economic confidence are starting to bear fruit after China Feb new home prices rose in the most cities in nearly 2 years. Energy producers are also higher as crude oil climbed over $40 a barrel to a 3-1/2 month high. Asian stocks settled mostly higher: Japan -1.25%, Hong Kong +0.82%, China +1,73%, Taiwan +0.87%, Australia +0.29%, Singapore +0.92%, South Korea +0.22%, India +1.12%. Japan's Nikkei Stock Index was the only Asian bourse to close lower as it fell to a 1-week low after exporters sold-off on earnings concerns when USD/JPY plunged to a 1-1/3 year low yesterday. The yield on Japan's 10-year government bond fell to a record low -0.135% as the BOJ ramps up it bond buying operations. China's Shanghai Composite rallied to a 1-3/4 month high as strength in property stocks propelled the overall market higher after new-home prices last month rose in 47 cities out of 70 tracked by the government, the most in nearly 2 years. The dollar index (DXY00 +0.27%) is up +0.32%. EUR/USD (^EURUSD) is down -0.43% after ECB Executive Board member Praet said that there was still scope for the ECB to cut interest rates if the Eurozone economy falters. USD/JPY (^USDJPY) is up +0.04%. Jun T-note prices (ZNM16 +0.11%) are up +6.5 ticks. ECB Executive Board member Praet said "if new negative shocks should worsen the outlook or if financing conditions should not adjust in the direction and to the extent that is necessary to boost the economy and inflation, a rate reduction remains in our armory." Feb China new home prices rose in 47 cities out of 70 tracked by the government, the most in 23 months. U.S. STOCK PREVIEW Key U.S. news today includes: (1) New York Fed President William Dudley's delivery of the opening remarks at a conference on bank supervision in NY, (2) University of Michigan prelim-March U.S. consumer sentiment index (expected +0.5 to 92.2, Feb -0.3 to 91.7), (3) Boston Fed President Eric Rosengren's speech on a panel on bank supervision in NY, and (4) St. Louis Fed President James Bullard's presentation at the International Research Forum on Monetary Policy Euro Area Business Cycle Network in Frankfurt, Germany. There are 2 of the Russell 1000 companies that report earnings today: Tiffany (consensus $1.40), Avangrid (2.16). U.S. IPO's scheduled to price today: BioLight Life Sciences (BOLT). Equity conferences today include: none. OVERNIGHT U.S. STOCK MOVERS Adobe Systems (ADBE +2.03%) rallied over 5% in pre-market trading after it reported Q1 adjusted EPS of 66 cents, better than consensus of 61 cents, and then raised guidance on fiscal 2016 adjusted EPS to $2.80 from a prior estimate of $2.70, above consensus of $2.76. Tiffany & Co. (TIF -0.23%) reported Q4 adjusted EPS of $1.46, higher than consensus of $1.40. JPMorgan Chase (JPM -0.29%) rose 1% in after-hours trading after its board authorized an additional $1.88 billion to be added to its $6.4 billion stock repurchase program authorized last year. Continental Resources (CLR +4.40%) was rated a new 'Outperform" at RBC with a price target of $35. Micron Technology (MU +1.40%) was downgraded to 'Neutral' from 'Positive' at Susquehanna. Avista (AVA +1.33%) was downgraded to 'Sell' from 'Neutral' at UBS. Titan Machinery (TITN +4.67%) reported a preliminary Q4 adjusted loss of -$1.31, a much bigger loss than consensus of -12 cents. Adecoagro (AGRO +0.23%) reported Q4 net sales of $209.8 million, above consensus of $202.3 million. Regency Centers (REG +2.12%) was downgraded to 'Hold' from 'Buy' at Argus Research. Shoe Carnival (SCVL +5.55%) rose nearly 6% in after-hours trading after it reported Q4 EPS of 21 cents, well above consensus of 14 cents. Columbia Pipeline Group (CPGX +2.22%) climbed over 5% in after-hours trading after TransCanada agreed to buy the company for $25.50 a share or $10.2 billion. TransCanada (TRP +3.76%) is down over 4% in after-hours trading after the announcement. Turquoise Hill Resources (TRQ +3.51%) reported Q4 EPS of 10 cents, well above consensus of 1 cent. MARKET COMMENTS Jun E-mini S&Ps (ESM16 +0.26%) this morning are up +5.75 ponts (+0.28%). Thursday's closes: S&P 500 +0.66%, Dow Jones +0.90%, Nasdaq-0.09%. The S&P 500 on Thursday rallied to a 2-1/2 month high and closed higher on the unexpected +260,000 increase in Jan JOLTS job openings to a 6-month high of 5.541 million, the +15.2 point jump in the Mar Philadelphia Fed business outlook survey to a 13-month high of 12.4 (stronger than expectations of +1.3 to -1.5), and the rally in commodity prices, which pushed raw material and energy producer stocks higher. Jun 10-year T-notes (ZNM16 +0.11%) this morning are up +6.5 ticks. Thursday's closes: TYM6 +8.50, FVM6 +4.50. Jun T-notes on Thursday rose to a 1-week high and closed higher on positive carryover from Wednesday's dovish FOMC meeting where the FOMC cut its GDP and inflation forecasts and now predicts only two rate hikes this year rather the four. T-notes were undercut by the stronger-than-expected Mar Philadelphia Fed business outlook survey that jumped to a 13-month high and by increased inflation expectations after the 10-year T-note breakeven inflation rate rose to a 3-1/4 month high. The dollar index (DXY00 +0.27%) this morning is up +0.300 (+0.32%). EUR/USD (^EURUSD) is DOWN -0.0049 (-0.43%). USD/JPY (^USDJPY) is UP +0.04 (+0.04%). Thursday's closes: Dollar Index -1.130 (-1.18%), EUR/USD +0.0094 (+0.84%), USD/JPY -1.17 (-1.04%). The dollar index on Thursday tumbled to a 4-3/4 month low and closed lower on negative carryover from Wednesday's dovish FOMC meeting where the Fed cut its expectations for rate hikes, acknowledged global risks, and cut its GDP and inflation forecasts. In addition, there was massive short-covering in EUR/USD which rose to a 5-week high and in the yen as USD/JPY plunged to a 1-1/3 year low. Apr WTI crude (CLJ16 +1.52%) this morning is up +58 cents (+1.44%) at a 3-1/2 month high and Apr gasoline (RBJ16 +0.75%) is up +0.0093 (+0.65%). Thursday's closes: CLJ6 +1.88 (+4.89%), RBJ6 +0.0177 (+1.25%). Apr crude and gasoline on Thursday closed higher with Apr crude at a 3-1/4 month high. Crude oil prices were boosted by the sell-off in the dollar index to a 4-3/4 month low and by expectations from U.S. crude production to continue to fall after Wednesday’s EIA data showed a -0.1% decline in U.S. crude production in the week ended Mar 11 to a 16-month low of 9.068 million bpd. GLOBAL EVENT CALENDAR03/18/2016 US 0900 ET New York Fed President William Dudley delivers opening remarks at a conference on bank supervision in NY. 1000 ET University of Michigan prelim-March U.S. consumer sentiment index expected +0.5 to 92.2, Feb -0.3 to 91.7. 1100 ET Boston Fed President Eric Rosengren speaks on a panel on bank supervision in NY. 1400 ET St. Louis Fed President James Bullard delivers a presentation at the International Research Forum on Monetary Policy Euro Area Business Cycle Network in Frankfurt, Germany. 1500 ET USDA Feb Cattle on Feed. JPN 0130 ET Japan Feb nationwide department store sales, Jan -1.9% y/y. GER 0300 ET German Feb PPI expected -0.1% m/m and -2.6% y/y, Jan -0.7% m/m and -2.4% y/y. EUR 0600 ET Eurozone Q4 labor costs, Q3 +1.1% y/y. U.S. STOCK CALENDAR03/18/2016 Company Ticker Time Event Description Period Estimate Tiffany & Co TIF US Bef-mkt Q4 2016 Earnings Release Q4 2016 1.4 Tiffany & Co TIF US 8:30 Q4 2016 Earnings Call Q4 2016 Motorola Solutions Inc MSI US Annual General Meeting Y 2016 Avangrid Inc AGR US Y 2015 Earnings Release Y 2015 2.158 Lions Gate Entertainment Corp LGF US U.S. Box Office Release of Movie Divergent""