Barchart Morning Call
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OVERNIGHT MARKETS AND NEWS
Jun E-mini S&Ps (ESM17 -0.04%) this morning are down -0.06% as they fell back from a record high in overnight trading and European stocks are down -0.52% as they retreated from a 1-1/2 year high. Stock prices initially rallied after pro-EU French presidential candidate Macron soundly defeated anti-EU candidate Le Pen with 66% of the total vote. However, a slide in Jul COMEX copper prices (HGN17 -1.62%) by -1.66% to a 4-1/4 month low undercut mining stocks and commodity producers and stock prices gave up their gains and turned lower. Copper prices sold-off on Chinese demand concerns as China Jan-Apr unwrought copper imports slumped -22.9% y/y to 1.88 MMT. Asian stocks settled mostly higher: Japan +2.31%, Hong Kong +0.41%, China -0.79%, Taiwan +0.38%, Australia +0.59%, Singapore +0.22%, South Korea +2.53%, India +0.23%. Japan's Nikkei Stock Index rallied to a 17-month high as it reopened following a 3-day holiday. China's Shanghai Composite tumbled to a 3-1/2 month low as the ongoing crackdown on financial leverage undercut inventor confidence. Also, weaker than expected Chinese trade data showed China Apr exports and imports rose less than expected.
The dollar index (DXY00 +0.21%) recovered from a 5-3/4 month low and is up +0.21%. EUR/USD (^EURUSD) fell back from a 5-3/4 month high and is down -0.45%. USD/JPY (^USDJPY) is down -0.13%.
Jun 10-year T-note prices (ZNM17 +0.10%) are up +5 ticks.
San Francisco Fed President Williams said Saturday that the economy "is operating above potential" and that the U.S. "is at full employment, or maybe even a little beyond." He added that his outlook for three of four rate increases this year hasn't shifted.
The Eurozone May Sentix investor confidence rose +3.5 to 27.4, stronger than expectations of +1.3 to 25.2 and a 9-3/4 year high.
The China Apr trade balance was in surplus by +$38.05 billion, wider than expectations of +$35.20 billion. Apr exports rose +8.0% y/y, weaker than expectations of +11.3% y/y. Apr imports rose +11.9% y/y, weaker than expectations of +18.0% y/y.
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) St. Louis Fed President James Bullard (non-voter) participates in a panel discussion on “Shifting Sands of Low Interest Rates” at the Atlanta Fed’s Financial Markets Conference, (2) Cleveland Fed President Loretta Mester (non-voter) speaks at the Chicago Council on Global Affairs, (3) Fed Senior Loan Officer Survey, (4) USDA weekly grain export inspections, (5) USDA crop conditions and planting progress.
Notable S&P 500 earnings reports today include: Marriott (consensus $0.92), Intl Flavors & Fragrances (1.51), Tesoro (0.31), Tyson Foods (1.02), Sysco (0.52), Newell Brands (0.29), AES (0.20), Mallinckrodt (1.63).
U.S. IPO's scheduled to price today: none.
Equity conferences: Stifel WasteExpo Investor Summit on Mon, Morgan Stanley E&P and Oil Services Conference on Mon-Tue, Goldman Sachs Global Staples Forum on Tue, Evercore ISI Global Autos Conference on Tue, Oppenheimer Emerging Growth Conference on Tue, Oppenheimer Industrial Growth Conference on Tue, Wells Fargo Industrials Conference on Tue-Wed, Jefferies Global Technology Conference on Wed, Citi European Internet and Digital Conference on Wed, Citi Global Energy and Utilities Conference on Wed, 11th Annual Barrington Research Spring Investment Conference on Thu, Citi Boston Energy Conference on Thu, Deutsche Bank AutoTech Conference on Thu.
OVERNIGHT U.S. STOCK MOVERS
Micron (MU +1.48%) is down 3% in pre-market trading after it was downgraded to 'Neutral' from 'Buy' at Goldman Sachs.
Tyson Foods (TSN +0.57%) reported Q2 adjusted EPS of $1.10, slightly below consensus of $1.02.
Varian Medical Systems (VAR +0.60%) is up over 2% in pre-market trading after it was upgraded to 'Buy' from 'Neutral' at Citigroup with a price target of $119.
Fluor (FLR -4.78%) was upgraded to 'Buy' from 'Hold' at Canaccord Genuity with a price target of $55.
Louisiana-Pacific (LPX -3.61%) was downgraded to 'Neutral' from 'Buy' at DA Davidson & Co.
United Rentals (URI +1.49%) was upgraded to 'Outperform' from 'In-Line' at Evercore ISI.
NXP Semiconductors NV (NXPI -0.19%) was downgraded to 'Neutral' from 'Buy' at Nomura/Instinet.
LyondellBasell Industries NV (LYB +3.37%) was downgraded to 'Underperform' from 'Buy' at Bank of America Merrill Lynch.
Temper Sealy International (TPX +2.31%) was upgraded to 'Hold' from 'Sell' at SunTrust Robinson Humphrey.
Berkshire Hathaway ({=BRK/B=}) fell slightly in after-hours trading after its Q1 operating EPS was a little below consensus due to disappointing insurance results.
Delta (DAL +0.12%) is reportedly considering a delay in a $3 billion Airbus order.
Williams Cos (WMB +2.44%) was raised to "Outperform" from "Market Perform" by Wells Fargo.
MARKET COMMENTS
June E-mini S&Ps (ESM17 -0.04%) this morning are down -1.50 points (-0.06%). Friday's closes: S&P 500 +0.41%, Dow Jones +0.26%, Nasdaq +0.42%. The S&P 500 on Friday closed higher on increased confidence that centrist Emmanuel Macron would win Sunday's French presidential election and on the strong Apr U.S. unemployment report that bolstered confidence in the U.S. economy. In addition, the higher close in oil prices helped oil stocks to stabilize.
June 10-year T-notes (ZNM17 +0.10%) this morning are up +5 ticks. Friday's closes: TYM7 +1.50, FVM7 +0.075. Jun 10-year T-notes on Friday closed slightly higher on some pre-weekend short-covering after June 10-year T-notes initially fell to a 3-1/2 week low. T-note prices were also boosted by the +2.5% y/y gain in April average hourly earnings, which was weaker than market expectations of +2.7% and was dovish for inflation.
The dollar index (DXY00 +0.21%) this morning is up +0.206 (+0.21%). EUR/USD (^EURUSD) is down -0.00050 (-0.45%) and USD/JPY (^USDJPY) is down -0.15 (-0.13%). Friday's closes: Dollar index -0.149 (-0.15%), EUR/USD +0.0013 (+0.12%), USD/JPY +0.25 (+0.22%). The dollar index last Friday fell to a 5-3/4 month low while EUR/USD rallied to a new 5-3/4 month high. The dollar index was undercut by continued strength in the euro on expectations that centrist Macron would beat far-right Le Pen in Sunday's election and pave the way for the ECB to start planning its QE exit for 2018. The dollar index found underlying support on last Friday's strong U.S. April unemployment report.
June WTI crude oil prices (CLM17 -0.26%) this morning are down -1 cent (-0.02%) and June gasoline (RBM17 +0.58%) is up +0.0084 (+0.56%). Friday's closes: Jun crude +0.29 (+0.56%), Jun gasoline +0.0234 (+1.58%). Jun crude oil and gasoline on Friday closed higher on some short-covering after Thursday's plunge. Crude oil prices were hurt by underlying concern about the steady rise in U.S. crude oil production and the fact that the OPEC production cut agreement is not bringing down the massive world glut of oil fast enough. Crude oil prices were also undercut by Friday's Baker Hughes report that U.S. active oil rigs rose by another 6 rigs to post a new 2-year high of 703 rigs.
GLOBAL EVENT CALENDAR05/08/2017
| Monday, May 8 | ||
| US | 0835 ET | St. Louis Fed President James Bullard (non-voter) participates in a panel discussion on Shifting Sands of Low Interest Rates at the Atlanta Feds Financial Markets Conference |
| 0845 ET | Cleveland Fed President Loretta Mester (non-voter) speaks at the Chicago Council on Global Affairs. | |
| 1100 ET | USDA weekly grain export inspections. | |
| 1400 ET | Fed Senior Loan Officer Survey. | |
| 1600 ET | USDA crop conditions and planting progress. | |
| Tuesday, May 9 | ||
| US | 0600 ET | Apr NFIB small business optimism index expected -0.7 to 104.0, Mar 104.7. |
| 0900 ET | Minneapolis Fed President Neel Kashkari (voter) speaks at Minnesota High Tech Conference. | |
| 1000 ET | Mar JOLTS job openings, Feb +118,000 to 5.743 million. | |
| 1000 ET | Mar wholesale trade sales, Feb +0.6%. Mar wholesale inventories expected unrevised at -0.1%. | |
| 1300 ET | Boston Fed President Eric Rosengren (non-voter) speaks at a NYU Conference on risk management. | |
| 1300 ET | Treasury auctions $24 billion of 3-year T-notes. | |
| 1615 ET | Dallas Fed President Robert Kaplan (voter) participates in a moderated Q&A at the Dallas Regional Chamber Lower Middle Market Investment Summit. |
U.S. STOCK CALENDAR05/08/2017
| Company | Ticker | Time | Event Description | Period | Estimate |
|---|---|---|---|---|---|
| Mallinckrodt PLC | MNK US | 06:00 | Q1 2017 Earnings Release | Q1 17 | 1.625 |
| AES Corp/VA | AES US | Bef-mkt | Q1 2017 Earnings Release | Q1 17 | 0.204 |
| Newell Brands Inc | NWL US | Bef-mkt | Q1 2017 Earnings Release | Q1 17 | 0.29 |
| Sysco Corp | SYY US | Bef-mkt | Q3 2017 Earnings Release | Q3 17 | 0.515 |
| Tyson Foods Inc | TSN US | 07:30 | Q2 2017 Earnings Release | Q2 17 | 1.024 |
| Newell Brands Inc | NWL US | 08:30 | Q1 2017 Earnings Call | Q1 17 | |
| Mallinckrodt PLC | MNK US | 08:30 | Q1 2017 Earnings Call | Q1 17 | |
| Tyson Foods Inc | TSN US | 09:00 | Q2 2017 Earnings Call | Q2 17 | |
| AES Corp/VA | AES US | 09:00 | Q1 2017 Earnings Call | Q1 17 | |
| Sysco Corp | SYY US | 10:00 | Q3 2017 Earnings Call | Q3 17 | |
| International Paper Co | IP US | Annual General Meeting | |||
| Digital Realty Trust Inc | DLR US | Annual General Meeting | |||
| LKQ Corp | LKQ US | Annual General Meeting | |||
| EOG Resources Inc | EOG US | Aft-mkt | Q1 2017 Earnings Release | Q1 17 | 0.147 |
| International Flavors & Fragrances Inc | IFF US | Aft-mkt | Q1 2017 Earnings Release | Q1 17 | 1.511 |
| Tesoro Corp | TSO US | Aft-mkt | Q1 2017 Earnings Release | Q1 17 | 0.306 |
| Verizon Communications Inc | VZ US | 16:30 | Analyst Meeting | ||
| Marriott International Inc/MD | MAR US | 17:00 | Q1 2017 Earnings Release | Q1 17 | 0.917 |
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