Barchart Morning Call
Barchart.com - Wed Feb 22, 6:39AM CST
OVERNIGHT MARKETS AND NEWS
Mar E-mini S&Ps (ESH17 -0.17%) are down -0.15% and European stocks fell back from a 14-month high and are down -0.23%. Long liquidation ahead of today's minutes of the Jan 31-Feb 1 FOMC meeting weighed on U.S. stocks, while concern over the outcome of the French presidential election weighed on European stocks which had posted a 14-month high after the German Feb IFO business climate unexpectedly rose and matched a 5-1/2 year high. The increase in European political risks from France's presidential election undercut EUR/USD which fell to a 5-week low and boosted the safe-haven demand for government debt as German bunds rallied to a 1-1/2 month high. Another negative for equities is weakness in energy producing stocks with Apr WTI crude oil (CLJ17 -0.57%) down -0.44%. Asian stocks settled mostly higher: Japan -0.01%, Hong Kong +0.99%, China +0.24%, Taiwan +0.15%, Australia +0.24%, Singapore +0.91%, South Korea +0.27%, India +0.36%. China's Shanghai Composite rose to a 2-1/2 month high as Asian markets found support from Monday's rally in U.S. stocks to record highs.
The dollar index (DXY00 +0.24%) is up +0.29%. EUR/USD (^EURUSD) is down -0.36% at a 5-week low. USD/JPY (^USDJPY) is down -0.48%.
Mar 10-year T-note prices (ZNH17 +0.08%) are up +5.5 ticks.
China Jan new home prices rose in 45 of the 70 cities tracked by the government, down from 46 cities that rose in December and the fewest in a year.
The German Feb IFO business climate unexpectedly rose +1.1 to 111.0, stronger than expectations of -0.2 to 109.6 and matched a 5-1/2 year high.
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) weekly MBA mortgage applications (previous -3.7% with purchase sub-index -4.5% and refi sub-index -2.9%), (2) Jan existing home sales (expected +1.1% to 5.55 million, Dec -2.8% to 5.49 million), (3) Treasury auctions $13 billion 2-year floating-rate notes, (4) Fed Governor Jerome Powell speaks on the economic outlook and monetary policy at a Forecaster’s Club of New York luncheon, (5) Treasury auctions $34 billion of 5-year T-notes, and (6) minutes of the Jan 31-Feb1 FOMC meeting.
Notable S&P 500 earnings reports today include: HP (consensus $0.37), L Brands (1.90), Public Storage (2.65), Host Hotels (0.38), NiSource (0.33), Welltower (1.09), Garmin (0.57), Southern Co (0.30), TJX (1.00), Range Resources (0.09), Transocean (0.05), Realty Income (0.75).
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
Ralph Lauren (RL -0.26%) was downgraded to 'Underweight' from 'Neutral' at Atlantic Equities LP with a price target of $68.
Cavium (CAVM +0.19%) was rated a new 'Buy' at MKM Partners with a 12-month price target of $77.
XPO Logistics (XPO -1.71%) rallied over 3% in after-hours trading after it reported Q4 adjusted EPS of 24 cents, higher than consensus of 20 cents.
Texas Roadhouse (TXRH -0.93%) sank 9% in after-hours trading after it reported Q4 revenue of $484.7 million, weaker than consensus of $497.4 million.
Red Robin Gourmet Burgers (RRGB -0.63%) climbed over 3% in after-hours trading after it reported Q4 adjusted EPS of 35 cents, above consensus of 31 cents.
Cirrus Logic (CRUS -0.29%) was rated a new 'Buy' at MKM Partners with a 12-month target price of $65.
Tribune Media (TRCO +2.21%) moved up over 2% in after-hours trading after Starboard Value LP said it raised its stake in the company to 6.6% from 2.3%.
First Solar (FSLR +5.11%) climbed 5% in after-hours trading after it reported Q4 adjusted EPS of $1.24, higher than consensus of 98 cents, and then said it sees full-year net sales of $2.8 billion-$2.9 billion, above consensus of $2.53 billion.
Terex (TEX +0.41%) slid over 3% in after-hours trading after it lowered guidance on full-year adjusted EPS to 60 cents to 80 cents, weaker than consensus of $1.05.
Wright Medical Group NV (WMGI -0.37%) gained nearly 3% in after-hours trading after it reported Q4 net sales of $193 million, better than consensus of $183.5 million, and then said it sees full-year revenue of $755 million-$765 million, better than consensus of $755.5 million.
CSRA Inc. (CSRA +2.03%) raised guidance on full-year adjusted EPS to $2.00-$2.04 from a prior view of $1.98-$2.02.
Yum! Brands (YUM -1.07%) dropped over 1% in after-hours trading after a block trade of 12 million shares was said to be offered via Morgan Stanley
Papa John's (PZZA -0.44%) fell over 1% in after-hours trading after it reported Q4 revenue of $439.6 million, below consensus of $447.4 million.
Global Blood Therapeutics (GBT +5.95%) dropped 10% in after-hours trading after it announced a $75 million public offering of common stock.
Copart (CPRT +2.19%) reported Q2 adjusted EPS of 58 cents, better than consensus of 57 cents.
MARKET COMMENTS
Mar E-mini S&Ps (ESH17 -0.17%) this morning are down -3.50 points (-0.15%). Tuesday's closes: S&P 500 +0.60%, Dow Jones +0.58%, Nasdaq +0.49%. The S&P 500 on Tuesday rallied to a fresh all-time high and closed higher on carry-over support from a rally in European stocks to a 14-month high on signs of economic strength in Europe after the Eurozone Feb Markit composite PMI rose +1.6 to 56.0, the fastest pace of expansion since the data series began in 2014. There was also a rally in energy-producing stocks after the price of Apr WTI crude oil rose +0.84% to a 1-month high.
Mar 10-year T-notes (ZNH17 +0.08%) this morning are up +5.5 ticks. Tuesday's closes: TYH7 unch, FVH7 -0.50. Mar 10-year T-notes on Tuesday closed little changed. T-notes found supported on the unexpected decline in the U.S. Feb Markit manufacturing PMI (-0.7 versus expectations of +0.4) and on strong demand for the Treasury's $26 billion 2-year T-note auction that had a bid-to-cover ratio of 2.82, above the 12-auction average of 2.69. T-notes were undercut by reduced safe-haven demand with the rally in the S&P 500 to a new record high.
The dollar index (DXY00 +0.24%) this morning is up +0.29 (+0.29%). EUR/USD (^EURUSD) is down -0.0038 (-0.36%) at a 5-week low. USD/JPY (^USDJPY) is down -0.55 (-0.48%). Tuesday's closes: Dollar index +0.42 (+0.42%), EUR/USD -0.0078 (-0.73%), USD/JPY +0.58 (+0.51%). The dollar index on Tuesday closed higher on hawkish comments from Philadelphia Fed President Harker (voter) who said an interest rate increase at the Mar 14-15 FOMC meeting remains on the table. There was also weakness in EUR/USD as European political risks rose after polls showed anti-euro French presidential candidate Marine Le Pen gained ground on her rivals.
Apr WTI crude oil prices (CLJ17 -0.57%) this morning are down -24 cents (-0.44%) and Apr gasoline (RBJ17 -0.06%) is +0.0025 (+0.15%). Tuesday's closes: Apr crude +0.45 (+0.84%), Apr gasoline -0.0081 (-0.53%). Apr crude oil and gasoline on Tuesday settled mixed with Apr crude at a 1-month high. Crude oil prices were supported by comments from OPEC Secretary-General Mohammad Barkindo who said OPEC intends to achieve full compliance with its crude production cuts "in due course." Gasoline closed lower after the crack spread fell to a 1-year low, which may reduce refinery demand for crude to refine into gasoline.
GLOBAL EVENT CALENDAR02/22/2017
| 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. | |
| Thursday, Feb 23 | ||
| US | 0830 ET | Weekly initial unemployment claims expected +1,000 to 240,000, previous +5,000 to 239,000. Weekly continuing claims expected -11,000 to 2.065 million, previous -3,000 to 2.076 million. |
| 0830 ET | Jan Chicago Fed national activity index expected -0.17 to -0.03, Dec +0.47 to 0.14. | |
| 0900 ET | Dec FHFA house price index expected +0.5%, Nov +0.5% m/m. Q4 house price purchase index expected +0.4% q/q, Q3 +1.5% q/q. | |
| 1100 ET | Feb Kansas City Fed manufacturing activity expected unch at 9, Jan unch at 9. | |
| 1100 ET | EIA Weekly Petroleum Status Report. | |
| 1300 ET | Treasury auctions $28 billion of 7-year T-notes. | |
| 1500 ET | USDA Jan Cold Storage. |
U.S. STOCK CALENDAR02/22/2017
| Company | Ticker | Time | Event Description | Period | Estimate |
|---|---|---|---|---|---|
| Host Hotels & Resorts Inc | HST US | Bf-mkt | Q4 2016 Earnings Release | Q4 2016 | 0.375 |
| NiSource Inc | NI US | Bf-mkt | Q4 2016 Earnings Release | Q4 2016 | 0.334 |
| Welltower Inc | HCN US | Bf-mkt | Q4 2016 Earnings Release | Q4 2016 | 1.092 |
| Garmin Ltd | GRMN US | Bf-mkt | Q4 2016 Earnings Release | Q4 2016 | 0.574 |
| Southern Co/The | SO US | 7:30 | Q4 2016 Earnings Release | Q4 2016 | 0.314 |
| Verisk Analytics Inc | VRSK US | 8:30 | Q4 2016 Earnings Call | Q4 2016 | |
| NiSource Inc | NI US | 9:00 | Q4 2016 Earnings Call | Q4 2016 | |
| Eversource Energy | ES US | 9:00 | Q4 2016 Earnings Call | Q4 2016 | |
| American Water Works Co Inc | AWK US | 9:00 | Q4 2016 Earnings Call | Q4 2016 | |
| TJX Cos Inc/The | TJX US | 9:30 | Q4 2017 Earnings Release | Q4 2017 | 1.002 |
| Concho Resources Inc | CXO US | 9:30 | Q4 2016 Earnings Call | Q4 2016 | |
| Host Hotels & Resorts Inc | HST US | 10:00 | Q4 2016 Earnings Call | Q4 2016 | |
| Newmont Mining Corp | NEM US | 10:00 | Q4 2016 Earnings Call | Q4 2016 | |
| Welltower Inc | HCN US | 10:00 | Q4 2016 Earnings Call | Q4 2016 | |
| FirstEnergy Corp | FE US | 10:00 | Q4 2016 Earnings Call | Q4 2016 | |
| Garmin Ltd | GRMN US | 10:30 | Q4 2016 Earnings Call | Q4 2016 | |
| TJX Cos Inc/The | TJX US | 11:00 | Q4 2017 Earnings Call | Q4 2017 | |
| Newfield Exploration Co | NFX US | 11:00 | Q4 2016 Earnings Call | Q4 2016 | |
| Southern Co/The | SO US | 13:00 | Q4 2016 Earnings Call | Q4 2016 | |
| Extra Space Storage Inc | EXR US | 13:00 | Q4 2016 Earnings Call | Q4 2016 | |
| HP Inc | HPQ US | 17:00 | Q1 2017 Earnings Call | Q1 2017 | |
| HP Inc | HPQ US | Aft-mkt | Q1 2017 Earnings Release | Q1 2017 | 0.369 |
| L Brands Inc | LB US | Aft-mkt | Q4 2017 Earnings Release | Q4 2017 | 1.897 |
| Public Storage | PSA US | Aft-mkt | Q4 2016 Earnings Release | Q4 2016 | 2.646 |
| Range Resources Corp | RRC US | Aft-mkt | Q4 2016 Earnings Release | Q4 2016 | 0.094 |
| Transocean Ltd | RIG US | Aft-mkt | Q4 2016 Earnings Release | Q4 2016 | 0.05 |
| Realty Income Corp | O US | Aft-mkt | Q4 2016 Earnings Release | Q4 2016 | 0.75 |
| Deere & Co | DE US | Annual General Meeting |
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