Barchart Morning Call
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OVERNIGHT MARKETS AND NEWS
Dec E-mini S&Ps (ESZ16 +0.01%) are up +0.02% and European stocks are up +1.01% at a 7-1/4 month high on optimism the ECB will prolong QE. Expectations are for the ECB at its monthly meeting tomorrow to extend its monthly asset purchases of 80 billion euros by 6 to 9 months. Also, energy producing stocks are higher with Jan WTI crude oil (CLF17-0.55%) up +0.20% after the API reported late yesterday that U.S. oil inventories fell -2.21 million bbl last week. Market anxiety has also fallen since last month's surprise election of Donald Trump as U.S. President as the VIX volatility index dropped to a 3-1/2 month low today. Asian stocks settled mostly higher: Japan +0.74%, Hong Kong +0.55%, China +0.71%, Taiwan +0.14%, Australia +0.91%, Singapore +0.36%, South Korea +0.28%, India -0.59%. India's S&P Sensex Stock Index erased an early rally and closed down -0.59 % after the Reserve Bank of India unexpectedly kept the benchmark repurchase rate unch at 6.25% when expectations were for a -25 bp cut to 6.00%.
The dollar index (DXY00 -0.03%) is unch. EUR/USD (^EURUSD) is up +0.06%. USD/JPY (^USDJPY) is down -0.04%.
Mar 10-year T-note prices (ZNH17 +0.16%) are up +5.5 ticks.
German Oct industrial production rose +0.3% m/m and +1.2% y/y, weaker than expectations of +0.8% m/m and +1.6% y/y.
UK Oct industrial production unexpectedly fell -1.3% m/m, weaker than expectations of +0.2% m/m and the biggest decline in 4 years.
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) weekly MBA mortgage applications (previous -9.4% with purchase sub-index -0.2% and refi sub-index -16.2%), (2) Oct JOLTS job openings (expected +14,000 to 5.500 million, Sep +33,000 to 5.486 million), (3) Oct consumer credit (expected +$18.3 billion, Sep +$19.292 billion), (4) EIA Weekly Petroleum Status Report.
Russell 1000 earnings reports today include: Costco (consensus $1.19), John Wiley (0.66), Brown-Forman (0.50), Casey's General Stores (1.57), H&R Block (-0.68), lululemon athletica (0.43), Orbital ATK (1.39).
U.S. IPO's scheduled to price today: Collplant Holdings (CQPTD).
Equity conferences during the remainder of this week include: UBS Global Media and Communications Conference on Mon-Wed, Goldman Sachs U.S. Financial Services Conference on Tue-Wed, Wells Fargo Pipeline, MLP and Utility Symposium on Wed, Citi Global Health Care Conference on Wed-Thu, Barclays Global Technology, Media and Telecommunications Conference on Wed-Thu, Bernstein Consumer Summit on Wed-Thu, Capital One Southcoast Energy Conference on Wed-Thu, ACI European Biopolymer Summit on Thu.
OVERNIGHT U.S. STOCK MOVERS
Discover Financial Services (DFS +1.38%) was upgraded to 'Outperform' from 'Neutral' at Wedbush with a 12-month target price of $78.
Best Buy (BBY +0.23%) was rated a new 'Buy' at Loop Capital with a price target of $58.
ABIOMED (ABMD +2.72%) was rated a new 'Buy' at Guggenheim Securities with a 12-month target price of $150.
MasterCard (MA -1.50%) gained almost 1% in after-hours trading after it boosted its quarterly dividend to 22 cents a share from 19 cents, and then approved a $4 billion stock buyback program, effective upon completion of a previous program that has $1.3 billion remaining.
Western Digital (WDC +2.83%) rallied over 5% in after-hours trading after it renewed a royalty-bearing cross licensing agreement with Samsung through 2024, and then raised guidance on Q2 adjusted EPS to $2.10-$2.15 from an October 26 view of $1.85-$1.95.
Dave & Buster's Entertainment (PLAY -1.70%) jumped 12% in after-hours trading after it reported Q3 EPS of 25 cents, well above consensus of 14 cents, and then raised guidance on fiscal 2017 comparable store sales to up +3.1%-3.6% from a prior view of +2.25%-3.25%.
Bluebird Bio (BLUE +9.42%) fell over 2% in after-hours trading after it proposed a $200 million stock offering.
HealthEquity (HQY -2.76%) dropped over 4% in after-hours trading after it reported Q3 EPS of 10 cents, below consensus of 12 cents.
AeroVironment (AVAV +2.66%) tumbled nearly 10% in after-hours trading after it reported a Q2 loss per share of -18cents, a much bigger loss than expectations of -1 cent, and then said it sees a Q3 loss per share of -34 cents to -38 cents, more than consensus of -24 cents.
Ensco PLC (ESV +4.55%) declined over 6% in after-hours trading after it started a private placement of $650 million senior notes due 2014.
Sigma Designs (SIGM +1.31%) sank over 10% in after-hours trading after it said it expects Q4 revenue of $42 million-$45 million, weaker than consensus of $57.4 million.
TerraForm Power (TERP +1.83%) slid nearly 2% in after-hours trading after it said it sees completing the rest of its 2016 filings and regaining full compliance by March.
MARKET COMMENTS
Dec E-mini S&Ps (ESZ16 +0.01%) this morning are up +0.50 of a point (+0.02%). Tuesday's closes: S&P 500 +0.34%, Dow Jones +0.18%, Nasdaq +0.22%. The S&P 500 on Tuesday closed higher on carry-over support from a rally in European stocks to a 3-week high on expectations that the ECB this Thursday will extend QE past March of next year. Stocks were also boosted by the +2.7% increase in U.S. Oct factory orders, stronger than expectations of +2.6% and the biggest increase in 16 months. Stocks were undercut by the U.S. Oct trade deficit of -$42.6 billion, which was wider than expectations of -$42.0 billion and was negative for Q4 GDP. There was also weakness in energy producer stocks as crude oil prices fell -1.70%.
Mar 10-year T-notes (ZNH17 +0.16%) this morning are up +5.5 ticks. Tuesday's closes: TYH7 unch, FVH7 +1.00. Mar 10-year T-notes on Tuesday closed little changed. T-notes were boosted by the the wider-than-expected U.S. Oct trade deficit, which was negative for Q4 GDP. T-notes were also boosted by the slide in crude oil prices, which undercut inflation expectations. T-note prices were undercut by the +2.7% increase in U.S. Oct factory orders, their biggest increase in 16 months.
The dollar index (DXY00 -0.03%) this morning is unch. EUR/USD (^EURUSD) is +0.0006 (+0.06%). USD/JPY (^USDJPY) is -0.05 (-0.04%). Tuesday's closes: Dollar index +0.400 (+0.40%), EUR/USD -0.0046 (-0.43%), USD/JPY +0.17 (+0.15%). The dollar index on Tuesday closed higher on the stronger than expected U.S. Oct factory orders report and by weakness in EUR/USD on expectations that the ECB on Thursday will announce an extension of QE beyond March of 2017.
Jan WTI crude oil prices (CLF17 -0.55%) this morning are up +10 cent s(+0.20%) and Jan gasoline (RBF17 -0.18%) is +0.0064 (+0.42%). Tuesday's closes: Jan crude -0.88 (-1.70%), Jan gasoline -0.0158 (-1.01%). Jan crude oil and gasoline on Tuesday closed lower on a stronger dollar and on news that OPEC Nov crude production rose by +200,000 bpd to a record 34.160 million bpd.
GLOBAL EVENT CALENDAR12/07/2016
| Wednesday, Dec 7 | ||
| US | 0700 ET | Weekly MBA mortgage applications, previous -9.4% with purchase sub-index -0.2% and refi sub-index -16.2%. |
| 1000 ET | Oct JOLTS job openings expected +14,000 to 5.500 million, Sep +33,000 to 5.486 million. | |
| 1030 ET | EIA Weekly Petroleum Status Report. | |
| 1500 ET | Oct consumer credit expected +$18.3 billion, Sep +$19.292 billion. | |
| Thursday, Dec 8 | ||
| US | 0830 ET | Weekly initial unemployment claims expected -13,000 to 255,000, previous +17,000 to 268,000. Weekly continuing claims expected -33,000 to 2.048 million, previous +38,000 to 2.081 million. |
| 0830 ET | USDA weekly Export Sales. | |
| 1100 ET | Treasury announces amount of 3-year T-notes (previous $24 billion), 10-year T-notes (previous $23 billion) and 30-year T-bonds (previous $15 billion) to be auctioned Dec 12-13. |
U.S. STOCK CALENDAR12/07/2016
| Company | Ticker | Time | Event Description | Period | Estimate |
|---|---|---|---|---|---|
| Brown-Forman Corp | BF/B US | 8:00 | Q2 2017 Earnings Release | Q2 2017 | 0.498 |
| Starbucks Corp | SBUX US | 8:00 | Investor Day | Y 2016 | |
| Principal Financial Group Inc | PFG US | 8:00 | Roadshow | Y 2016 | |
| Xerox Corp | XRX US | 9:00 | Investor Conference | Y 2016 | |
| Brown-Forman Corp | BF/B US | 10:00 | Q2 2017 Earnings Call | Q2 2017 | |
| Lowe's Cos Inc | LOW US | 10:00 | Analyst & Investor Conference | Y 2016 | |
| H&R Block Inc | HRB US | 16:30 | Q2 2017 Earnings Call | Q2 2017 | |
| Costco Wholesale Corp | COST US | 17:00 | Q1 2017 Earnings Call | Q1 2017 | |
| H&R Block Inc | HRB US | Aft-mkt | Q2 2017 Earnings Release | Q2 2017 | -0.675 |
| Costco Wholesale Corp | COST US | Aft-mkt | Q1 2017 Earnings Release | Q1 2017 | 1.187 |
| Baker Hughes Inc | BHI US | November 2016 Sales and Revenue Release - Rig Counts | 2016 | ||
| Equifax Inc | EFX US | Investor Meeting | Y 2016 |
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