Barchart Morning Call
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OVERNIGHT MARKETS AND NEWS
Mar E-mini S&Ps (ESH17 +0.24%) are up +0.23% at a new all-time nearest-futures high and European stocks are up +0.38%. Signs of strength in the European economy are giving stocks a lift after the Eurozone Feb Markit composite PMI expanded at the fastest pace since the data series began in 2014. A +1.67% rally in Mar WTI crude oil (CLH17 +1.59%) to a 2-week high is also giving energy producing stocks a boost. Asian stocks settled mostly higher: Japan +0.68%, Hong Kong -0.76%, China +0.41%, Taiwan +0.11%, Australia -0.07%, Singapore -0.08%, South Korea +0.88%, India +0.35%. China's Shanghai Composite climbed to a 2-1/2 month high on optimism in the global economic outlook and Japanese stocks found support on strength in manufacturing activity after the Japan Feb Nikkei manufacturing PMI expanded at the fastest pace in 2-3/4 years.
The dollar index (DXY00 +0.56%) is up +0.52% after Philadelphia Fed President Harker said that he would "not take the March FOMC meeting off the table for a rate hike." EUR/USD (^EURUSD) is down -0.72%. USD/JPY (^USDJPY) is up +0.46%.
Philadelphia Fed President Harker (voter) said the Fed needs to keep moving along a path of gradual rate hikes to minimize the risk of falling behind the curve on inflation and that he would "not take the March FOMC meeting off the table for a rate hike at this point."
The Eurozone Feb Markit composite PMI rose +1.6 to 56.0, stronger than expectations of -0.1 to 54.3 and the fastest pace of expansion since the data series began in 2014.
Eurozone Feb Markit manufacturing PMI unexpectedly rose +0.3 to 55.5, stronger than expectations of -0.2 to 55.0 and the fastest pace of expansion since the data series began in 2014.
The Japan Feb Nikkei manufacturing PMI rose +0.8 to 53.5, the fastest pace of expansion in 2-3/4 years.
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) Minneapolis Fed President Neel Kashkari (voter) participates in a discussion about the economy and the role of the Federal Reserve at a meeting of the Financial Planning Association of Minnesota in Golden Valley, MN, (2) Feb Markit manufacturing PMI (expected +0.3 to 55.3, Jan +0.7 to 55.0) and Feb Markit services PMI (expected +0.2 to 55.8, Jan +1.7 to 55.6), (3) Philadelphia Fed President Patrick Harker (voter) speaks on the economic outlook at the Wharton School of the University of Pennsylvania, (4) Treasury auctions $26 billion of 2-year T-notes, (5) San Francisco Fed President John Williams (non-voter) gives an economic presentation to students at Boise State University, and (6) USDA weekly grain export inspections.
Notable S&P 500 earnings reports today include: Wal-Mart (consensus $1.29), Home Depot (1.33), Medtronic (1.11), Macy's (1.96), Newmont Mining (0.32), First Solar (0.98), Verisk Analytics (0.78).
U.S. IPO's scheduled to price today: none.
Equity conferences: CAGNY Investor Conference on Tue-Fri, Barclays Industrial Select Conference on Wed-Thu, RBC Capital Markets Health Care Conference on Wed-Thu, Cantor Fitzgerald Internet & Technology Services Conference on Thu.
OVERNIGHT U.S. STOCK MOVERS
Wal-Mart (WMT +0.73%) rose 2% in pre-market trading after it reported Q4 adjusted EPS of $1.30, above consensus of $1.29, as it said Q4 comparable sales were up +1.8%, higher than consensus of up +1.3%.
Colgate-Palmolive (CL +4.32%) was upgraded to 'Outperform' from 'Neutral at Exane BNP Paribas with a price target of $90.
Dick's Sporting Goods (DKS +2.66%) was downgraded to 'Market Perform' form 'Outperform' at Oppenheimer.
Henry Schein (HSIC +0.51%) reported Q4 adjusted EPS of $1.88, better than consensus of $1.84.
Avangrid (AGR +0.32%) reported Q4 operating revenue of $1.49 billion, below consensus of $1.55 billion.
Verizon Communications (VZ +1.51%) was upgraded to 'Buy' from 'Neutral' at MoffetNathanson with a price target of $54.
Freeport-McMoRan (FCX -1.06%) was downgraded to 'Sell' from 'Hold' at Deutsche Bank.
Eaton Vance (EV +0.35%) was upgraded to 'Neutral' from 'Underperform' at Bank of America/Merrill Lynch.
Credit Acceptance Corp. (CACC -5.14%) authorized an additional 1 million shares to its stock repurchase program.
Sucampo Pharmaceuticals (SCMP +0.43%) jumped nearly 6% in after-hours trading after it was announced that it will replace Blue Nile in the S&P SmallCap 600 at the open of trade Thursday, February 23.
DryShips (DRYS +2.76%) plunged 20% in after-hours trading after it entered into a pact with Kalani Investments where DryShips may sell up to $200 million of stock to Kalani over a period of 2-years.
MARKET COMMENTS
Mar E-mini S&Ps (ESH17 +0.24%) this morning are up +5.50 points (+0.23%) at a new all-time nearest-futures high. Friday's closes: S&P 500 +0.17%, Dow Jones +0.02%, Nasdaq +0.45%. The S&P 500 on Friday closed higher on the +0.6% increase in U.S. Jan leading indicators (stronger than expectations of +0.5% and the biggest increase in 1-1/2 years) and on a late-day rally in industrial and defense stocks after President Trump reiterated his promise to rebuild the U.S. military. Stock prices were undercut by weakness from a slide in European stocks on French presidential election fears.
Mar 10-year T-notes (ZNH17 -0.20%) this morning are down -7 ticks. Friday's closes: TYH7 +15.50, FVH7 +9.50. Mar 10-year T-notes on Friday closed higher on carry-over support from a rally in German bunds to a 1-week high on increased safe-haven demand from European political risks as concerns arose about a discussion of a left-wing alliance in France's presidential election campaign may boost the chances of anti-euro Marine Le Pen winning France's presidential election. T-notes were also boosted by reduced inflation expectations after the 10-year T-note breakeven inflation rate fell to a 1-week low.
The dollar index (DXY00 +0.56%) this morning is up +0.52 (+0.52%). EUR/USD (^EURUSD) is down -0.0078 (-0.72%). USD/JPY (^USDJPY) is up +0.52 (+0.46%). Friday's closes: Dollar index +0.46 (+0.45%), EUR/USD -0.0058 (-0.54%), USD/JPY -0.40 (-0.35%). The dollar index on Friday closed higher on the stronger-than-expected U.S. Jan leading indicators report and on weakness in EUR/USD after Credit Suisse Bank said there's "little benefit" in being long EUR/USD over the next two to three months due to political risks in Europe.
Mar WTI crude oil prices (CLH17 +1.59%) this morning are up +89 cents (+1.67%) at a 2-week high and Mar gasoline (RBH17 +0.06%) is +0.0003 (+0.02%). Friday's closes: Mar crude +0.04 (+0.07%), Mar gasoline -0.0081 (-0.53%). Mar crude oil and gasoline on Friday settled mixed with Mar gasoline at a 1-week low. Crude oil prices were undercut by a stronger dollar and by concern about increased U.S. crude production after Baker Hughes reported that U.S. active oil rigs rose by 6 rigs in the week ended Feb 17 to 597 rigs, a 16-month high. Crude oil prices were also undercut by the plunge in the crack spread to an 11-3/4 month low, which may curb refinery demand for crude to refine into gasoline. Crude closed higher after Russian Energy Minister Novak said Russia may cut its crude output by more than 100,000 bpd this month, more than initially agreed to under the deal with OPEC.
GLOBAL EVENT CALENDAR02/21/2017
| Tuesday, Feb 21 | ||
| US | 0850 ET | Minneapolis Fed President Neel Kashkari (voter) participates in a discussion about the economy and the role of the Federal Reserve at a meeting of the Financial Planning Association of Minnesota in Golden Valley, MN. |
| 0945 ET | Feb Markit manufacturing PMI expected +0.3 to 55.3, Jan +0.7 to 55.0. Feb Markit services PMI expected +0.2 to 55.8, Jan +1.7 to 55.6. | |
| 1100 ET | USDA weekly grain export inspections. | |
| 1200 ET | Philadelphia Fed President Patrick Harker (voter) speaks on the economic outlook at the Wharton School of the University of Pennsylvania. | |
| 1300 ET | Treasury auctions $26 billion of 2-year T-notes. | |
| 1530 ET | San Francisco Fed President John Williams (non-voter) gives an economic presentation to students at Boise State University. | |
| Wednesday, Feb 22 | ||
| US | 0700 ET | Weekly MBA mortgage applications, previous -3.7% with purchase sub-index -4.5% and refi sub-index -2.9%. |
| 1000 ET | Jan existing home sales expected +0.9% to 5.54 million, Dec -2.8% to 5.49 million. | |
| 1130 ET | Treasury auctions $13 billion 2-year floating-rate notes. | |
| 1300 ET | Fed Governor Jerome Powell speaks on the economic outlook and monetary policy at a Forecasters Club of New York luncheon. | |
| 1300 ET | Treasury auctions $34 billion of 5-year T-notes. | |
| 1400 ET | Minutes of the Jan 31-Feb1 FOMC meeting. |
U.S. STOCK CALENDAR02/21/2017
| Company | Ticker | Time | Event Description | Period | Estimate |
|---|---|---|---|---|---|
| Ecolab Inc | ECL US | Bf-mkt | Q4 2016 Earnings Release | Q4 2016 | 1.273 |
| Expeditors Intl of Washington | EXPD US | Bf-mkt | Q4 2016 Earnings Release | Q4 2016 | 0.597 |
| Henry Schein Inc | HSIC US | Bf-mkt | Q4 2016 Earnings Release | Q4 2016 | 1.842 |
| Quanta Services Inc | PWR US | Bf-mkt | Q4 2016 Earnings Release | Q4 2016 | 0.565 |
| Advance Auto Parts Inc | AAP US | Bf-mkt | Q4 2016 Earnings Release | Q4 2016 | 1.084 |
| Scripps Networks Interactive Inc | SNI US | Bf-mkt | Q4 2016 Earnings Release | Q4 2016 | 1.071 |
| Medtronic PLC | MDT US | 6:45 | Q3 2017 Earnings Release | Q3 2017 | 1.109 |
| Wal-Mart Stores Inc | WMT US | 7:00 | Q4 2017 Earnings Release | Q4 2017 | 1.291 |
| Wal-Mart Stores Inc | WMT US | 7:00 | Q4 2017 Earnings Call - Pre-Recorded | Q4 2017 | |
| Macy's Inc | M US | 8:00 | Q4 2017 Earnings Release | Q4 2017 | 1.95 |
| Medtronic PLC | MDT US | 8:00 | Q3 2017 Earnings Call | Q3 2017 | |
| Advance Auto Parts Inc | AAP US | 8:00 | Q4 2016 Earnings Call | Q4 2016 | |
| Genuine Parts Co | GPC US | 8:30 | Q4 2016 Earnings Release | Q4 2016 | 1.013 |
| United Parcel Service Inc | UPS US | 8:30 | Investor Conference | Y 2017 | |
| Home Depot Inc/The | HD US | 9:00 | Q4 2017 Earnings Release | Q4 2017 | 1.333 |
| Home Depot Inc/The | HD US | 9:00 | Q4 2017 Earnings Call | Q4 2017 | |
| Quanta Services Inc | PWR US | 9:00 | Q4 2016 Earnings Call | Q4 2016 | |
| Cerner Corp | CERN US | 9:30 | Investment Community Meeting | Y 2017 | |
| Macy's Inc | M US | 10:00 | Q4 2017 Earnings Call | Q4 2017 | |
| Mattel Inc | MAT US | 10:00 | Analyst Meeting - Q&A | Y 2017 | |
| Wal-Mart Stores Inc | WMT US | 10:00 | Q4 2017 Earnings Call - Follow-Up | C4 2017 | |
| Henry Schein Inc | HSIC US | 10:00 | Q4 2016 Earnings Call | Q4 2016 | |
| Scripps Networks Interactive Inc | SNI US | 10:00 | Q4 2016 Earnings Call | Q4 2016 | |
| Genuine Parts Co | GPC US | 11:00 | Q4 2016 Earnings Call | Q4 2016 | |
| Tractor Supply Co | TSCO US | 12:00 | Investment Community Meeting | Y 2017 | |
| Ecolab Inc | ECL US | 13:00 | Q4 2016 Earnings Call | Q4 2016 | |
| Eversource Energy | ES US | 16:15 | Q4 2016 Earnings Release | Q4 2016 | 0.743 |
| Edison International | EIX US | 16:30 | Q4 2016 Earnings Release | Q4 2016 | 0.957 |
| Edison International | EIX US | 16:30 | Q4 2016 Earnings Call | Q4 2016 | |
| First Solar Inc | FSLR US | 16:30 | Q4 2016 Earnings Call | Q4 2016 | |
| Newmont Mining Corp | NEM US | Aft-mkt | Q4 2016 Earnings Release | Q4 2016 | 0.316 |
| Newfield Exploration Co | NFX US | Aft-mkt | Q4 2016 Earnings Release | Q4 2016 | 0.368 |
| FirstEnergy Corp | FE US | Aft-mkt | Q4 2016 Earnings Release | Q4 2016 | 0.394 |
| Extra Space Storage Inc | EXR US | Aft-mkt | Q4 2016 Earnings Release | Q4 2016 | 0.976 |
| First Solar Inc | FSLR US | Aft-mkt | Q4 2016 Earnings Release | Q4 2016 | 0.982 |
| Concho Resources Inc | CXO US | Aft-mkt | Q4 2016 Earnings Release | Q4 2016 | -0.075 |
| American Water Works Co Inc | AWK US | Aft-mkt | Q4 2016 Earnings Release | Q4 2016 | 0.57 |
| Verisk Analytics Inc | VRSK US | Aft-mkt | Q4 2016 Earnings Release | Q4 2016 | 0.778 |
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