Barchart Morning Call
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OVERNIGHT MARKETS AND NEWS
Mar E-mini S&Ps (ESH17 +0.18%) are up +0.16% as mining companies rose with the price of Mar COMEX copper (HGH17 +0.76%) up +0.72%. European stocks are down -0.02% after a larger-than-expected increase in Eurozone Dec CPI dampened expectations that the ECB will expand stimulus measures. Eurozone Dec CPI rose a more than expected +1.1% y/y, the largest increase in 3-1/4 years, which boosted demand for gold as an inflation hedge with Feb COMEX gold (GCG17 +0.27%) up +0.32% at a 3-week high. Losses in European stocks were contained after the Eurozone Dec composite PMI was revised upward to a 2-year high. Asian stocks settled mostly higher: Japan +2.51%, Hong Kong -0.07%, China +0.73%, Taiwan +0.15%, Australia +0.06%, Singapore +0.77%, South Korea +0.06%, India -0.04%. China's Shanghai Composite moved up to a 2-week high, led by a rally in rail companies, after the Xinhua News Agency said the government will invest about 800 billion yuan ($115 billion) in railways this year. Japan's Nikkei Stock Index rose to its highest in a year on strength in exporter stocks after USD/JPY on Tuesday climbed to near its highest in 11-months.
The dollar index (DXY00 -0.18%) is down =-0.18%. EUR/USD (^EURUSD) is up +0.29%. USD/JPY (^USDJPY) is down -0.22%.
The Eurozone Dec Markit composite PMI was revised upward to 54.4 from the originally reported 53.9, the fastest pace of expansion since the data series began in 2014.
Eurozone Dec CPI rose +1.1% y/y, stronger than expectations of +1.0% y/y and the largest increase in 3-1/4 years. The Dec core CPI rose +0.9% y/y, stronger than expectations of +0.8% y/y and the biggest increase in 5 months.
The Japan Dec Nikkei manufacturing PMI was revised upward to 52.4 from the originally reported 51.9, a 1-year high.
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) weekly MBA mortgage applications (previous +2.5% with purchase sub-index +2.7% and refi sub-index +3.0%), (2) minutes of the Dec 13-14 FOMC meeting, (3) Dec total vehicle sales (expected 17.70 million, Nov 17.70 million)
Russell 1000 earnings reports today include: none.
U.S. IPO's scheduled to price today: none.
Equity conferences this week include: Citi Global Internet, Media and Telecommunications Conference on Tue-Thu, Wolfe Research Refiners Conference on Wed, Goldman Sachs CEOs Unplugged Conference on Thu, J.P. Morgan CES Tech Forum on Thu, JP Morgan Chase & Co., Inc. International Tech Forum on Thu.
OVERNIGHT U.S. STOCK MOVERS
Athenahealth (ATHN +3.21%) was upgraded to 'Overweight' from 'Sector Weight' at KeyBanc Capital Markets with a 12-month price target of $140.
Chevron (CVX +0.13%) was upgraded to 'Buy' from 'Neutral' at Bank of America/Merrill Lynch.
Intuitive Surgical (ISRG +1.20%) was downgraded to 'Hold' from 'Buy' at Evercore ISI with a 12-month target price of $690.
Hologic (HOLX +0.07%) was downgraded to 'Hold' from 'Buy' at Evercore ISI with a 12-month target price of $42.
Priceline Group (PCLN +0.79%) was initiated with a 'Buy' at Needham & Co. with a price target of $1,800.
Apple (AAPL +0.28%) was rated a new 'Buy' at Guggenheim Securities with a price target of $140.
Tesla Motors (TSLA +1.54%) dropped 2% in after-hours trading after it reported 76,230 vehicle deliveries for 2016, below the company's own forecast of 80,000 vehicles.
Netgear (NTGR +1.20%) was initiated at a 'Buy' at Guggenheim Securities with a price target of $70.
Idexx Laboratories (IDXX +0.28%) gained 1% in after-hours trading when it was announced that it will replace St. Jude Medical in the S&P 500 after the close of trading on Wednesday, Jan 4.
Chemours (CC -3.94%) rose over 1% in after-hours trading when it was announced that it will replace Idexx Laboratories in the S&P Midcap 400 after the close of trading on Wednesday, Jan 4.
Shake Shack ({=SHAK =}) climbed nearly 5% in after-hours trading when it was announced that it will replace Chemours in the S&P SmallCap 600 after the close of trading on Wednesday, Jan 4.
Humana (HUM -3.15%) was rated a new 'Overweight' at Piper Jaffray with a 12-month target price of $231.
Amgen (AMGN +3.09%) rose 1% in after-hours trading after a trial judge let stand a patent win on Amgen's PCSK9 patent. Regeneron Pharmaceuticals (REGN +3.44%) fell nearly 2% in after-hours trading on the news.
Agile Therapeutics (AGRX -12.28%) plummeted over 70% in after-hours trading after it said a Phase 3 study of its Twirla contraceptive patch scored a 4.8 using the Pearl Index, an index that shows the number of times the contraceptive fails over a calculated 100 years of use, worse than a competitors Pearl Index score of 3.19.
MARKET COMMENTS
Mar E-mini S&Ps (ESH17 +0.18%) this morning are up +3.50 points (+0.16%). Tuesday's closes: S&P 500 +0.85%, Dow Jones +0.60%, Nasdaq +0.98%. The S&P 500 on Tuesday closed higher on carry-over support from a 1% rally in China's Shanghai Composite on signs of strength in Chinese manufacturing after the China Dec Caixin manufacturing PMI unexpectedly rose +1.0 to a 4-year high of 51.9, stronger than expectations of unchanged at 50.9. Stocks were also boosted by the +1.5 point increase in the U.S. Dec ISM manufacturing PMI to a 2-year high of 54.7, stronger than expectations of +0.6 to 53.8.
Mar 10-year T-notes (ZNH17 -0.13%) this morning are down -3 ticks. Tuesday's closes: TYH7 -5.50, FVH7 -3.75. Mar T-notes on Tuesday closed lower on the stronger-than-expected rise in the Dec ISM manufacturing index to a 2-year high and on the surge in the Dec ISM prices-paid sub-index to a 5-1/2 year high, a sign of inflation pressures that bolsters the case for the Fed to further tighten monetary policy. T-notes were also undercut by carry-over weakness from a slide in German bund prices to a 2-week low after German Dec CPI rose more than expected.
The dollar index (DXY00 -0.18%) this morning is down -0.19 (-0.18%). EUR/USD (^EURUSD) is up +0.0030 (+0.29%). USD/JPY (^USDJPY) is down -0.26 (-0.22%). Tuesday's closes: Dollar index +0.410 (+0.40%), EUR/USD -0.0050 (-0.48%), USD/JPY +0.20 (+0.17%). The dollar index on Tuesday rallied to a 14-year high and closed higher on signs of U.S. economic strength after the Dec U.S. ISM manufacturing index expanded at its fastest pace in 2 years. The dollar was also boosted by an improved U.S. interest rate differential outlook with the +11.0 point jump in the Dec ISM prices paid sub-index to a 5-1/2 year high of 65.5, which may prompt the Fed to raise interest rates faster than expected.
Feb WTI crude oil prices (CLG17 +0.76%) this morning are up +19 cents (+0.36%) and Feb gasoline (RBG17 +0.84%) is +0.0073 (+0.45%). Tuesday's closes: Feb crude -1.25 (-2.33%), Feb gasoline -0.0402 (-2.01%). Feb crude oil and gasoline on Tuesday closed lower on the rally in the dollar index to a 14-year high and on forecasts for warmer-than-normal weather this month in the Central and Eastern U.S., which signals weaker demand for heating fuels. Crude oil posted an early high on signs that OPEC is cutting production after the Al-Anba newspaper reported that Kuwait has cut its crude production by 130,000 bpd to 2.75 million bpd and after Oman’s Oil Ministry Director of Marketing said Oman has cut its crude production by 45,000 bpd.
GLOBAL EVENT CALENDAR01/04/2017
| Wednesday, Jan 4 | ||
| US | 0700 ET | Weekly MBA mortgage applications, previous +2.5% with purchase sub-index +2.7% and refi sub-index +3.0%. |
| 1400 ET | Minutes of the Dec 13-14 FOMC meeting. | |
| n/a | Dec total vehicle sales expected 17.70 million, Nov 17.75 million. Dec domestic vehicle sales expected 13.70 million, Nov 13.85 million. | |
| Thursday, Jan 5 | ||
| US | 0730 ET | Dec Challenger job cuts, Nov -13.0% y/y. |
| 0815 ET | Dec ADP employment change expected +175,000, Nov +216,000. | |
| 0830 ET | Weekly initial unemployment claims expected -5,000 to 260,000, previous -10,000 to 265,000. Weekly continuing claims expected -51,000 to 2.051 million, previous +63,000 to 2.102 million. | |
| 0945 ET | Revised Dec Markit services PMI, prelim-Dec -1.2 to 53.4. | |
| 1000 ET | Dec ISM non-manufacturing index expected -0.5 to 56.7, Nov +2.4 to 57.2. | |
| 1100 ET | EIA Weekly Petroleum Status Report. | |
| 1100 ET | Treasury announces amount of 3-year T-notes (previous $24 billion), 10-year T-notes (previous $20 billion) and 30-year T-bonds (previous $12 billion) to be auctioned Jan 10-12. |
U.S. STOCK CALENDAR01/04/2017
| Company | Ticker | Time | Event Description | Period | Estimate |
|---|---|---|---|---|---|
| Ford Motor Co | F US | 9:15 | December 2016 Sales and Revenue Release | 2016 | |
| Ford Motor Co | F US | 10:00 | December 2016 Sales and Revenue Call | 2016 | |
| Kosmos Energy Ltd | KOS US | 10:00 | Business Update Call | ||
| Costco Wholesale Corp | COST US | 21:00 | December 2016 Sales and Revenue Release | 2016 |
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