Thursday, January 26, 2017

MORNING CALL 1/26

Barchart Morning Call

Barchart.com - Thu Jan 26, 6:38AM CST
OVERNIGHT MARKETS AND NEWS
Mar E-mini S&Ps (ESH17 +0.03%) are up +0.03% at a fresh all-time nearest-futures high and European stocks are up +0.22% at a 13-month high as global equity markets continue this week's rally on expectations of stronger economic growth and government spending by the Trump administration. Stronger-than-expected UK Q4 GDP was positive for European stocks along with increased M&A activity that has also given a boost to European drug and healthcare companies after Johnson & Johnson acquired Swiss drug maker Actelion Ltd, for $30 billion. The rally in global stock prices has reduced demand for gold as a safe-haven with Feb COMEX gold (GCG17 -0.69%) down -0.47% at a 1-1/2 week low, and has also led to selling of government bonds as the 10-year German bund yield climbed to a 1-year high of 0.499% and Mar 10-year T-notes tumbled to a 4-week low. Asian stocks settled higher: Japan +1.81%, Hong Kong +1.41%, China +0.31%, Singapore +0.39%, South Korea +0.87%, Taiwan, Australia and India all closed for holiday. China's Shanghai Composite and Japan's Nikkei Stock index both rose to 2-week highs on optimism the Trump administration’s' pro-growth policies will boost the global economy.
The dollar index (DXY00 +0.19%) is up +0.16%. EUR/USD (^EURUSD) is down -0.18%. USD/JPY (^USDJPY) is up +0.90%.
Mar 10-year T-note prices (ZNH17 -0.10%) are down -3.5 ticks at a 4-week low.
UK Q4 GDP rose +0.6% q/q and +2.2% y/y, stronger than expectations of +0.5% q/q and +2.1% y/y, but unchanged from Q3.
German Feb GfK consumer confidence rose +0.3 to 10.2, stronger than expectations of +0.1 to 10.0 and the highest in 5 months.
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) weekly initial unemployment claims (expected +13,000 to 247,000, previous -15,000 to 234,000) and continuing claims (expected -6,000 to 2.040 million, previous -47,000 to 2.046 million), (2) Dec wholesale inventories (expected +0.1% m/m, Nov +1.0% m/m. Dec retail inventories, Nov +1.0% m/m), (3) Dec Chicago Fed national activity index (expected +0.22 to -0.05, Nov -0.22 to -0.27), (4) Jan Markit services PMI (expected +0.5 to 54.4, Dec -0.7 to 53.9), (5) Dec new home sales (expected -0.8% to 587,000, Nov +5.2% to 592,000), (6) Dec leading indicators (expected +0.5%, Nov unch) (7) Jan Kansas City Fed manufacturing survey (expected -3 to 8, Dec +10 to 11), (8) Treasury auctions $28 billion of 7-year T-notes, (9) President Trump is scheduled to meet with House and Senate Republicans at their 3-day policy retreat in Philadelphia, (10) USDA weekly Export Sales.
Notable S&P 500 earnings reports today include: Alphabet (consensus $9.62), Microsoft (0.79), Caterpillar (0.66), Intel (0.75), Starbucks (0.52), PayPal (0.42), Wynn Resorts (0.83), PulteGroup (0.59), Baker Hughes (-0.12), Ford (0.30).
U.S. IPO's scheduled to price today: Visterra (VIST), Jounce Therapeutics (JNCE), Jagged Peak Energy (JAG), JELD-WEN Holding (JELD), REV Group (REVG).
Equity conferences: Hart Energy DUG Marcellus Utica Midstream Conference on Wed-Thu.
OVERNIGHT U.S. STOCK MOVERS
Ebay (EBAY +0.80%) rallied 8% in after-hours trading after it reported Q4 adjusted continuing operations EPS of 54 cents, higher than consensus of 53 cents.
Caterpillar (CAT +1.98%) is down 1.5% in pre-market-trading after it reported Q4 revenue of $9.57 billion, below consensus of $9.81 billion.
McKesson (MCK +1.88%) sank 8% in after-hours trading after it reported Q3 revenue of $50.1 billion, below consensus of $50.5 billion, citing "weaker branded pharmaceutical pricing than anticipated."
Teradyne (TER +2.53%) climbed 5% in after-hours trading after it reported Q4 adjusted EPS of 32 cents, well above consensus of 22 cents, and said it sees Q1 adjusted EPS of 33 cents-40 cents, higher than consensus of 30 cents.
Mattel (MAT +1.19%) tumbled 10% in after-hours trading after it reported Q4 adjusted EPS of 52 cents, well below consensus of 71 cents.
Citrix Systems (CTXS +1.45%) dropped 4% in after-hours trading after it said it sees Q1 adjusted EPS of 93 cents-95 cents, below consensus of $1.19.
United Rentals (URI +0.57%) jumped 8% in after-hours trading after it reported Q4 adjusted EPS of $2.67, higher than consensus of $2.30, and then said it will acquire NES Rentals Holdings II for $965 million.
Varian Medical Systems (VAR +2.35%) fell 2% in after-hours trading after it reported Q1 adjusted EPS of 75 cents, weaker than consensus of $1.05, and said it sees Q2 adjusted EPS of 84 cents-90 cents, below consensus of $1.18.
ServiceNow (NOW +2.85%) rallied 5% in after-hours trading after it reported Q4 adjusted EPS of 24 cents, higher than consensus of 23 cents, and then said it sees fiscal 2017 revenue of $1.82 billion-$1.85 billion, above consensus of $1.79 billion.
Las Vegas Sands (LVS +1.23%) fell nearly 5% in after-hours trading after it reported Q4 net revenue of $3.08 billion, below consensus of $3.12 billion.
Vertex Pharmaceuticals (VRTX +3.59%) rose over 1% in after-hours trading after it reported Q4 adjusted EPS of 35 cents, better than consensus of 30 cents.
Western Digital (WDC +5.28%) gained almost 2% in after-hours trading after it said it sees Q3 adjusted EPS of $2.00-$2.10, well above consensus of $1.68.
F5 Networks (FFIV +1.11%) slid over 4% in after-hours trading after it reported Q1 net revenue of $516 million, less than consensus of $516.8 million.
Quality Systems (QSII +2.99%) rallied over 7% in after-hours trading after it reported Q3 revenue of $127.9 million. above consensus of $125.7 million.
Weight Watchers International (WTW +1.09%) jumped 6% and Kraft Heinz (KHC +0.17%) gained almost 1% in after-hours trading after both companies announced a joint venture with Oprah Winfrey called Mealtime Stories that create a new line of food and donate 10% of profits to eradicate hunger.
MARKET COMMENTS
Mar E-mini S&Ps (ESH17 +0.03%) this morning are up +0.75 (+0.03%) of a point at a fresh all-time nearest-futures high. Wednesday's closes: S&P 500 +0.80%, Dow Jones +0.78%, Nasdaq +0.99%. The S&P 500 on Wednesday rallied to a fresh record high and settled higher on the +0.5% increase in the U.S. Nov FHFA house price index, slightly stronger than expectations of +0.4% m/m, and on underlying support from the Trump/Republican tax and infrastructure agenda.
Mar 10-year T-notes (ZNH17 -0.10%) this morning are down -3.5 ticks at a 4-week low. Wednesday's closes: TYH7 -13.00, FVH7 -6.75. Mar 10-year T-notes on Wednesday sold off to a 3-week low and closed lower on carry-over weakness from a plunge in German bund prices to a 1-year low and on the surge in the S&P 500 to a fresh all-time high, which reduced demand for T-notes as a safe-haven. There was also weak demand for the Treasury's $34 billion auction of 5-year T-notes that had a bid-to-cover ratio of 2.38, weaker than the 12-auction average of 2.45 and the lowest in 6 months.
The dollar index (DXY00 +0.19%) this morning is up +0.16 (+0.16%). EUR/USD (^EURUSD) is down -0.0019 (-0.18%). USD/JPY (^USDJPY) is up +1.02 (+0.90%). Wednesday's closes: Dollar index -0.32 (-0.32%), EUR/USD +0.0017 (+0.16%), USD/JPY -0.51 (-0.45%). The dollar index on Wednesday fell to a 1-1/2 month low and closed lower on strength in EUR/USD after ECB Executive Board member Lautenschlaeger said she was "optimistic" that the ECB can soon talk about exiting its bond-buying program. In addition, GBP/USD jumped to a 6-week high on short-covering as the Brexit negotiating positions at least become a little clearer.
Mar WTI crude oil prices (CLH17 +0.27%) this morning are up +21 cents (+0.40%) and Mar gasoline (RBH17 -0.43%) is -0.0066 (-0.43%). Wednesday's closes: Mar crude -0.24 (-0.45%), Mar gasoline -0.0494 (-3.08%). Mar crude oil and gasoline on Wednesday closed lower with Mar gasoline at a 1-1/2 month low. Crude oil prices were undercut by the big +6.8 million bbl increase in EIA gasoline stockpiles to a 10-1/2 month high (vs expectations of +1.0 million bbl) and by the +0.2% increase in U.S. crude production in the week ended Jan 20 to 8.961 million bpd, the highest level in 9-1/4 months. Supportive factors included the fall in the dollar index to a 1-1/2 month low and the rally in the S&P 500 to a record high, which bolsters optimism in the economic outlook and energy demand.

GLOBAL EVENT CALENDAR01/26/2017
Thursday, Jan 26
US0830 ETWeekly initial unemployment claims expected +13,000 to 247,000, previous -15,000 to 234,000. Weekly continuing claims expected -6,000 to 2.040 million, previous -47,000 to 2.046 million.
0830 ETDec wholesale inventories expected +0.1% m/m, Nov +1.0% m/m. Dec retail inventories, Nov +1.0% m/m.
0830 ETDec Chicago Fed national activity index expected +0.22 to -0.05, Nov -0.22 to -0.27.
0830 ETUSDA weekly Export Sales.
0945 ETJan Markit services PMI expected +0.5 to 54.4, Dec -0.7 to 53.9.
1000 ETDec new home sales expected -0.8% to 587,000, Nov +5.2% to 592,000.
1000 ETDec leading indicators expected +0.5%, Nov unch. LEI benchmark revisions.
1100 ETJan Kansas City Fed manufacturing survey expected -3 to 8, Dec +10 to 11.
1300 ETTreasury auctions $28 billion of 7-year T-notes.
n/aPresident Trump is scheduled to meet with House and Senate Republicans at their 3-day policy retreat in Philadelphia.
Friday, Jan 27
US0830 ETQ4 GDP expected +2.2% (q/q annualized), Q3 +3.5% (q/q annualized). Q4 personal consumption expected +2.5%, Q3 +3.0%. Q4 GDP price index expected +2.1%, Q3 +1.4%. Q4 core PCE deflator expected +1.4% q/q, Q3 +1.7% q/q.
0830 ETDec durable goods orders expected +2.6% and +0.5% ex-transportation, Nov -4.5% and +0.6% ex-transportation. Dec capital goods orders nondefense ex-aircraft expected +0.2%, Nov +0.9%.
1000 ETFinal-Jan University of Michigan U.S. consumer sentiment expected unch at 98.1, prelim-Jan -0.1 to 98.1.
1500 ETUSDA Dec Cattle on Feed.
U.S. STOCK CALENDAR01/26/2017
CompanyTickerTimeEvent DescriptionPeriodEstimate
Helmerich & Payne IncHP USBef-mktQ1 2017 Earnings ReleaseQ1 2017-0.357
Northrop Grumman CorpNOC USBef-mktQ4 2016 Earnings ReleaseQ4 20162.489
PulteGroup IncPHM USBef-mktQ4 2016 Earnings ReleaseQ4 20160.588
Praxair IncPX USBef-mktQ4 2016 Earnings ReleaseQ4 20161.407
Stanley Black & Decker IncSWK USBef-mktQ4 2016 Earnings ReleaseQ4 20161.678
Royal Caribbean Cruises LtdRCL USBef-mktQ4 2016 Earnings ReleaseQ4 20161.212
L3 Technologies IncLLL USBef-mktQ4 2016 Earnings ReleaseQ4 20162.112
Alliance Data Systems CorpADS USBef-mktQ4 2016 Earnings ReleaseQ4 20164.648
Fiat Chrysler Automobiles NVFCAU USBef-mktQ4 2016 Earnings ReleaseQ4 20160.438
Whirlpool CorpWHR US6:00Q4 2016 Earnings ReleaseQ4 20164.439
American Electric Power Co IncAEP US6:30Q4 2016 Earnings ReleaseQ4 20160.548
Baker Hughes IncBHI US6:30Q4 2016 Earnings ReleaseQ4 2016-0.118
Caterpillar IncCAT US6:30Q4 2016 Earnings ReleaseQ4 20160.66
Southwest Airlines CoLUV US6:30Q4 2016 Earnings ReleaseQ4 20160.693
Dow Chemical Co/TheDOW US6:45Q4 2016 Earnings ReleaseQ4 20160.877
Quest Diagnostics IncDGX US6:45Q4 2016 Earnings ReleaseQ4 20161.273
Invesco LtdIVZ US6:55Q4 2016 Earnings ReleaseQ4 20160.579
Bristol-Myers Squibb CoBMY US7:00Q4 2016 Earnings ReleaseQ4 20160.666
Dover CorpDOV US7:00Q4 2016 Earnings ReleaseQ4 20160.918
Ford Motor CoF US7:00Q4 2016 Earnings ReleaseQ4 20160.304
Raytheon CoRTN US7:00Q4 2016 Earnings ReleaseQ4 20161.853
Sherwin-Williams Co/TheSHW US7:00Q4 2016 Earnings ReleaseQ4 20162.2
Comcast CorpCMCSA US7:00Q4 2016 Earnings ReleaseQ4 20160.868
Biogen IncBIIB US7:00Q4 2016 Earnings ReleaseQ4 20164.962
Celgene CorpCELG US7:30Q4 2016 Earnings ReleaseQ4 20161.607
T Rowe Price Group IncTROW US7:30Q4 2016 Earnings ReleaseQ4 20161.411
Mead Johnson Nutrition CoMJN US7:30Q4 2016 Earnings ReleaseQ4 20160.818
Intel CorpINTC US16:00Q4 2016 Earnings ReleaseQ4 20160.748
Starbucks CorpSBUX US16:04Q1 2017 Earnings ReleaseQ1 20170.52
PayPal Holdings IncPYPL US16:05Q4 2016 Earnings ReleaseQ4 20160.419
Microsoft CorpMSFT US16:09Q2 2017 Earnings ReleaseQ2 20170.786
Robert Half International IncRHI US16:15Q4 2016 Earnings ReleaseQ4 20160.641
KLA-Tencor CorpKLAC US16:15Q2 2017 Earnings ReleaseQ2 20171.404
Juniper Networks IncJNPR US16:15Q4 2016 Earnings ReleaseQ4 20160.631
Eastman Chemical CoEMN US16:30Q4 2016 Earnings ReleaseQ4 20161.492
CR Bard IncBCR USAft-mktQ4 2016 Earnings ReleaseQ4 20162.739
Arthur J Gallagher & CoAJG USAft-mktQ4 2016 Earnings ReleaseQ4 20160.659
E*TRADE Financial CorpETFC USAft-mktQ4 2016 Earnings ReleaseQ4 20160.425
Wynn Resorts LtdWYNN USAft-mktQ4 2016 Earnings ReleaseQ4 20160.832
Alphabet IncGOOGL USAft-mktQ4 2016 Earnings ReleaseQ4 20169.623
Harman International Industries IncHAR USQ2 2017 Earnings ReleaseQ2 20171.85
Posted by Jim Van Meerten at
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