Barchart Morning Call
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OVERNIGHT MARKETS AND NEWS
Mar E-mini S&Ps (ESH17 -0.08%) are down -0.08% and European stocks are down -0.09% ahead of the results of today's ECB meeting. The ECB is expected to keep its monthly asset purchases at 80 billion euros ($85 billion) until March, and then at 60 billion euros from April to December. The markets will also scour comments from ECB President Draghi about when the central bank may begin to taper QE at his press conference following today's ECB meeting. Metals prices are weaker with Feb COMEX gold (GCG17 -0.76%) down -0.82% and Mar COMEX copper (HGH17 -0.52%) down -0.59% at a 1-week low after comments yesterday from Fed Chair Yellen bolstered interest rate hike expectations when she said the U.S. economy is close to the Fed's objectives of full employment and stable prices. Stock losses were muted as energy producing companies gained with Mar WTI crude oil prices (CLH17 +1.21%) up +0.69% after the API late yesterday reported that U.S. crude stockpiles fell by -5.04 million bbl last week. Asian stocks settled mixed: Japan +0.94%, Hong Kong -0.21%, China -0.38%, Taiwan -0.26%, Australia +0.24%, Singapore +0.27%, South Korea +0.23%, India +0.19%. Chinese stocks were led lower by losses in mining stocks with the slide in metals prices while Japanese stocks moved higher as strength in USD/JPY boosted exporter stocks.
The dollar index (DXY00 +0.15%) is up +0.18%. EUR/USD (^EURUSD) is up +0.32%. USD/JPY (^USDJPY) is down -0.06%.
Mar 10-year T-note prices (ZNH17 -0.34%) are down -13.5 ticks at a 1-week low on continuation of weakness seen late yesterday after comments from Fed Chair Yellen bolstered the prospects for more Fed rate hikes.
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) weekly initial unemployment claims (expected +5,000 to 252,000, previous +10,000 to 247,000) and continuing claims (expected -12,000 to 2.075 million, previous -29,000 to 2.087 million), (2) Dec housing starts (expected +8.9% to 1.187 million, Nov 18.7% to 1.090 million), (3) Jan Philadelphia Fed business outlook index (expected -4.9 to 15.1, Dec +11.0 to 19.7), (4) Treasury auctions $13 billion of 10-year TIPS, (5) Fed Chair Janet Yellen speaks to the Stanford Institute for Economic Policy Research, and (6) EIA Weekly Petroleum Status Report.
S&P 500 earnings reports today include: IBM (consensus $4.88), AMEX (0.99), Union Pacific (1.33), PPG Industries (1.18), BB&T (0.74), M&T Bank (2.04), JB Hunt (1.01), KeyCorp (0.29), Bank of NY Mellon (0.77), People's United Financial (0.24), Schlumberger (0.26), Skyworks Solutions (1.58).
U.S. IPO's scheduled to price today: Keane Group (FRAC).
Equity conferences: ACI Future of Polyolefins Summit on Thu.
OVERNIGHT U.S. STOCK MOVERS
Exxon Mobile (XOM -1.24%) was downgraded to 'Sell' from 'Neutral' at UBS with a price target of $77.
Netflx (NFLX +0.28%) jumped over 7% in pre-market trading after it reported 1.93 million net streaming adds, higher than consensus of 1.45 million, and said it added 5.12 million new customers in international markets, above consensus of 3.78 million.
Under Armour (UAA -2.62%) was rated a new 'Buy' at CLSA with a price target of $37.
CSX Corp. (CSX -3.18%) rallied 8% in after-hours trading after the WSJ reported that outgoing CEO Hunter Harrison and activist investor Paul Hilal are finalizing a partnership and are set to target CSX.
Kinder Morgan (KMI -0.49%) fell over 2% in after-hours trading after it reported Q4 revenue of $3.39 billion, below consensus of $3.53 billion.
Mondelex International (MDLZ +0.29%) rose nearly 3% in after-hours trading after Bega Cheese agreed to buy Mondelez's Australian grocery business for A$460 million.
Canadian Pacific Railway (CP -0.45%) lost 1% in after-hours trading after the company accelerated the retirement of CEO Hunter Harrison by about 6 months after he inquired about the possibility of working with other major freight railroads.
Rent-A-Center (RCII +1.39%) tumbled over 12% in after-hours trading after it said preliminary Q4 core comparable sales tumbled 14% and that it will have a Q4 loss per share of -20 cents to -30 cents, much weaker than consensus for EPS of 10 cents.
Zynerba Pharmaceuticals (ZYNE +15.18%) declined nearly 7% in after-hours trading after it announced a proposed public offering of common stock.
Oclaro (OCLR -0.61%) jumped nearly 8% in after-hours trading after it reported preliminary Q2 revenue of $153.5 million-$154 million, better than consensus of $150.5 million.
PTC Inc. (PTC +0.04%) rose over 1% in after-hours trading after it reported Q1 adjusted revenue of $287.2 million, above consensus of $285.6 million.
Heron Therapeutics (HRTX -0.39%) dropped over 3% in after-hours trading after it proposed a $150 million public offering of common stock.
La Quinta Holdings (LQ +1.40%) gained almost 2% in after-hours trading after it said it will pursue plans to separate into two stand-alone publicly traded companies which could involve a spinoff of its real estate assets.
Plexus (PLXS +0.58%) slid over 2% in after-hours trading after it said it sees Q2 revenue of $620 million-$650 million, below consensus of $658.7 million.
EP Energy (EPE -2.79%) dropped nearly 4% in after-hours trading after it was downgraded to 'Sell' from 'Neutral' at UBS.
MARKET COMMENTS
Mar E-mini S&Ps (ESH17 -0.08%) this morning are down -1.75 points (-0.08%). Wednesday's closes: S&P 500 +0.18%, Dow Jones -0.11%, Nasdaq +0.22%. The S&P 500 on Wednesday closed higher on comments from Dallas Fed President Kaplan (voter) who said he's "pretty optimistic" about the 2017 economic outlook. Stocks were also boosted by the +0.8% increase in U.S. Dec industrial production, stronger than expectations of +0.6% and the biggest increase in 2 years. Stocks were undercut by the -2 point decline in the U.S. Jan NAHB housing market index to 67 (weaker than expectations for a decline to 69) and by the +0.2% increase in U.S. Dec manufacturing production (weaker than expectations of +0.4%).
Mar 10-year T-notes (ZNH17 -0.34%) this morning are down -13.5 ticks at a 1-week low. Wednesday's closes: TYH7 -16.50, FVH7 -9.50. Mar 10-year T-notes on Wednesday closed lower on increased inflation expectations that bolster the case for tighter Fed policy after the 10-year T-note breakeven inflation rate rose to a 2-1/3 year high. T-notes were also undercut by comments from Dallas Fed President Kaplan who said that stronger growth and structural reforms "would allow the Fed to more quickly normalize interest rates."
The dollar index (DXY00 +0.15%) this morning is up +0.18 (+0.18%). EUR/USD (^EURUSD) is up +0.0034 (+0.32%). USD/JPY (^USDJPY) is down -0.07 (-0.06%). Wednesday's closes: Dollar index +0.98 (+0.98%), EUR/USD -0.0083 (-0.77%), USD/JPY +2.02 (+1.8%). The dollar index on Wednesday closed higher on comments from Dallas Fed President Kaplan who said he's "pretty optimistic" about the 2017 economic outlook and on comments from Fed Chair Yellen who said the U.S. economy is "close" to the Fed's objectives of full employment and stable prices.
Mar WTI crude oil prices (CLH17 +1.21%) this morning are up +36 cents (+0.69%) and Mar gasoline (RBH17 +0.61%) is +0.0034 (+0.22%). Wednesday's closes: Mar crude -1.37 (-2.57%), Mar gasoline -0.0454 (-2.79%). Mar crude oil and gasoline on Wednesday closed lower with Mar gasoline at a 1-week low. Crude oil prices were undercut by the stronger dollar and by comments from IEA Director Fatih Birol who said that the recent rally in oil prices will trigger a "significant" increase in U.S. shale-oil output.
GLOBAL EVENT CALENDAR01/19/2017
| Thursday, Jan 19 | ||
| US | 0830 ET | Weekly initial unemployment claims expected +5,000 to 252,000, previous +10,000 to 247,000. Weekly continuing claims expected -12,000 to 2.075 million, previous -29,000 to 2.087 million. |
| 0830 ET | Dec housing starts expected +8.9% to 1.187 million, Nov 18.7% to 1.090 million. Dec building permits expected +1.1% to 1.225 million, Nov -3.8% to 1.212 million. | |
| 0830 ET | Jan Philadelphia Fed business outlook survey expected -4.9 to 15.1, Dec +11.0 to 19.7. | |
| 1100 ET | EIA Weekly Petroleum Status Report. | |
| 1100 ET | Treasury announces amount of 2-year T-notes (previous $26 billion), 2-year floating-rate notes (previous $13 billion), 5-year T-notes (previous $34 billion) and 7-year T-notes (previous $28 billion) to be auctioned Jan 24-26. | |
| 1300 ET | Treasury auctions $13 billion of 10-year TIPS. | |
| 2000 ET | Fed Chair Janet Yellen speaks to the Stanford Institute for Economic Policy Research. | |
| Friday, Jan 20 | ||
| US | 0830 ET | USDA weekly Export Sales. |
| 0900 ET | Philadelphia Fed President Patrick Harker (voter) speaks on the economic outlook at an event in New Jersey. | |
| n/a | President-elect Trumps swearing in ceremony begins. | |
| 1300 ET | San Francisco Fed President John Williams (non-voter) delivers closing remarks at the Bay Area Council meeting. | |
| 1545 ET | San Francisco Fed President John Williams (non-voter) speaks at the Solano Economic Development Corporations Annual Luncheon meeting. |
U.S. STOCK CALENDAR01/19/2017
| Company | Ticker | Time | Event Description | Period | Estimate |
|---|---|---|---|---|---|
| PPG Industries Inc | PPG US | Bef-mkt | Q4 2016 Earnings Release | Q4 2016 | 1.182 |
| BB&T Corp | BBT US | Bef-mkt | Q4 2016 Earnings Release | Q4 2016 | 0.739 |
| M&T Bank Corp | MTB US | Bef-mkt | Q4 2016 Earnings Release | Q4 2016 | 2.036 |
| JB Hunt Transport Services Inc | JBHT US | Bef-mkt | Q4 2016 Earnings Release | Q4 2016 | 1.01 |
| KeyCorp | KEY US | Bef-mkt | Q4 2016 Earnings Release | Q4 2016 | 0.29 |
| Bank of New York Mellon Corp/The | BK US | 6:30 | Q4 2016 Earnings Release | Q4 2016 | 0.772 |
| Union Pacific Corp | UNP US | 7:00 | Q4 2016 Earnings Release | Q4 2016 | 1.329 |
| Skyworks Solutions Inc | SWKS US | Aft-mkt | Q1 2017 Earnings Release | Q1 2017 | 1.582 |
| DR Horton Inc | DHI US | Annual General Meeting |
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