Barchart Morning Call
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OVERNIGHT MARKETS AND NEWS
Dec E-mini S&Ps (ESZ17 -0.06%) this morning are down -0.02% with mining stocks leading losses in the overall market as metals prices decline with Dec COMEX gold (GCZ17 -1.51%) down -1.48% to a 3-1/2 week low and Dec COMEX copper (HGZ17 -1.18%) down -0.94% to a 1-month low. Metals prices retreated after the Fed signaled Wednesday afternoon, after metals markets had closed, that it will start trimming its balance sheet next month and projected another interest rate increase for this year. European stocks are up +0.55% at a 2-1/2 month high due to a rally in bank stocks and insurance companies on rising bond yields as the 10-year German bund climbed to a 1-1/2 month high of 0.484%. Asian stocks settled mostly lower: Japan +0.18%, Hong Kong -0.06%, China -0.24%, Taiwan +0.56%, Australia -0.94%, Singapore -0.13%, South Korea -0.07%, India -0.09%. Chinese stocks fell back after S&P Global Ratings cut China's sovereign credit rating by one step to A+ from AA-, citing the risks from soaring debt. Japan's Nikkei Stock Index rallied to a new 2-year high after the BOJ kept its benchmark interest rate at a record low and maintained its QE program. The divergence in monetary policies between the Fed and BOJ also weakened the yen, which boosted Japanese exporter stocks as USD/JPY climbed to a 2-month high.
The dollar index (DXY00 +0.03%) is down -0.06%. EUR/USD (^EURUSD) is up +0.08%. USD/JPY (^USDJPY) is up +0.29% to a 2-month high.
Dec 10-year T-note prices (ZNZ17 +0.01%) are up +1 tick.
As expected, the BOJ kept its benchmark interest rate at -0.1% and said it will maintain its purchases of government bonds to keep the 10-year bond yield at about zero percent.
S&P Global Ratings cut China's sovereign credit rating by one step to A+ from AA-, the first cut since 1999, saying "China's prolonged period of strong credit growth has increased its economic and financial risks."
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) weekly initial unemployment claims (expected +16,000 to 300,000, previous -14,000 to 284,000) and continuing claims (expected +31,000 to 1.975 million, previous -7,000 to 1.944 million), (2) Sep Philadelphia Fed business outlook index (expected -1.7 to 17.2, Aug -0.6 to 18.9), (3) Jul FHFA house price index (expected +0.4% m/m, Jun +0.1% m/m), (4) Aug leading indicators (expected +0.3%, Jul +0.3%), (5) Treasury auctions $11 billion of 10-year TIPS, (6) USDA weekly Export Sales.
Notable Russell 1000 earnings reports today include: none.
U.S. IPO's scheduled to price today: none.
Equity conferences this week: Electronic Design Process Symposium on Thu.
OVERNIGHT U.S. STOCK MOVERS
PRA Group (PRAA +0.17%) was downgraded to 'Underperform' from 'Market Perform' at Raymond James.
Netflix (NFLX -0.09%) was initiated with a 'Buy' at Buckingham Research Group with a 12-month target price of $214.
Anadarko Petroleum (APC +2.40%) jumped over 4% in after-hours trading after its board authorized a $2.5 billion share repurchase program through the end of 2018.
Nvidia (NVDA -0.81%) slid 2% in after-hours trading after CNBC reported that AMD is working with Tesla on a chip for autonomous driving. Nvidia currently supplies Tesla with graphics processing units.
Advanced Micro Devices (AMD +4.73%) climbed 4% in after-hours trading after it said it was working with Tesla on an AI self-drive chip.
Herman Miller (MLHR unch) lost nearly 2% in after-hours trading after the CEO said the company faces "some challenges resulting from the recent storms in Texas and the South East."
Global Blood Therapeutics (GBT +0.35%) rose 3% in after-hours trading after Needham initiated coverage on the stock with a 'Buy' and a price target of $59.
Juno Therapeutics (JUNO +3.22%) fell over 4% in after-hours trading after it announced a $225 million secondary offering of its common stock.
Amphastar Pharmaceuticals (AMPH -0.13%) gained almost 3% in after-hours trading after the company received approval from the FDA for its sodium bicarbonate injection prefilled syringe system.
GSE Systems (GVP +1.82%) rose 2% in after-hours trading after it purchased Absolute Consulting for $8.75 million in cash.
Blue Apron Holdings (APRN -5.26%) gained 3% in after-hours trading on take-over speculation after Albertsons agreed to purchase Plated, another meal-kit service.
VEON Ltd (VEON -0.71%) dropped 4% in after-hours trading after it announced that Telenor East Holding II is offering for sale 90 million shares of VEON.
MARKET COMMENTS
Dec S&P 500 E-mini stock futures (ESZ17 -0.06%) this morning are down -0.50 points (-0.02%). Wednesday's closes: S&P 500 +0.06%, Dow Jones +0.19%, Nasdaq -0.29%. The S&P 500 on Wednesday rose to a new record high and settled higher on the FOMC's confidence in the economy as displayed by its willingness to issue a hawkish interest rate forecast and also raise its 2017 GDP estimate to +2.4% from 2.2%. There was also strength in energy stocks as crude oil prices rose +1.58% to a 3-3/4 month high. Stocks were undercut by the weaker-than-expected U.S. Aug existing home sales report of -1.7% to a 1-year low of 5.35 million (vs expectations of +0.2% to 5.45 million) and the jump in the 10-year T-note yield to a 1-1/2 month high after the FOMC maintained its projection for one more 25 bp rate hike this year and three more next year.
Dec 10-year T-note prices (ZNZ17 +0.01%) this morning are up +1 tick. Wednesday's closes: TYZ7 -11.50, FVZ7 -8.00. Dec 10-year T-notes on Wednesday fell to a 1-1/2 month low and closed lower on the FOMC's projections for one more 25 bp rate hike this year and three more next year and the FOMC's hike in its U.S. 2017 GDP estimate to 2.4% from 2.2%.
The dollar index (DXY00 +0.03%) this morning is down -0.058 (-0.06%). EUR/USD (^EURUSD) is up +0.0010 (+0.08%) and USD/JPY (^USDJPY) is up +0.32 (+0.29%) at a 2-month high. Wednesday's closes: Dollar Index +0.715 (+0.78), EUR/USD -0.0102 (-0.85%), USD/JPY +0.63 (+0.56%). The dollar index on Wednesday rallied to a 2-week high and closed higher on the FOMC's hike in its 2017 U.S. GDP estimate to 2.4% from 2.2% and the FOMC's projections for one more 25 bp rate hike this year and three more rate hikes next year.
Nov crude oil (CLX17 -1.01%) this morning is down -29 cents (-0.57%) and Nov gasoline (RBX17 -0.72%) is -0.0079(-0.49%). Wednesday's closes: Nov WTI crude +0.79 (+1.58%), Nov gasoline +0.0099 (+0.62%). Nov crude oil and gasoline on Wednesday closed higher on the -2.13 million bbl decline in EIA gasoline inventories to a 1-3/4 year low and the -5.693 bbl fall in EIA distillate stockpiles to a 2-year low, more than expectations of -1.95 million bbl.
Metals prices this morning are weaker with Dec gold (GCZ17 -1.51%) -19.5 (-1.48%) at a 3-1/2 week low, Dec silver (SIZ17-1.90%) -0.349 (-2.01%) at a 3-1/2 week low and Dec copper (HGZ17 -1.18%) -0.028 (-0.94% at a 1-month low. Wednesday's closes: Dec gold +5.8 (+0.44%), Dec silver +0.055 (+0.32%), Dec copper -0.0005 (-0.02%). Metals on Wednesday settled mixed. Metals were supported by early weakness in the dollar and by short-covering ahead of the outcome of Wednesday's 2-day FOMC meeting, which happened after the close of metals trading. Copper closed lower after U.S. Aug existing home sales unexpectedly fell -1.7% to a 1-year low of 5.35 million, a sign of weaker copper demand.
GLOBAL EVENT CALENDAR09/21/2017
| Thursday, Sep 21 | ||
| US | 0830 ET | Weekly initial unemployment claims expected +16,000 to 300,000, previous -14,000 to 284,000. Weekly continuing claims expected +31,000 to 1.975 million, previous -7,000 to 1.944 million. |
| 0830 ET | Sep Philadelphia Fed business outlook index expected -1.7 to 17.2, Aug -0.6 to 18.9. | |
| 0830 ET | USDA weekly Export Sales. | |
| 0900 ET | Jul FHFA house price index expected +0.4% m/m, Jun +0.1% m/m. | |
| 1000 ET | Aug leading indicators expected +0.3%, Jul +0.3%. | |
| 1100 ET | Treasury announces amount of 2-year T-notes (previous $26 billion), 2-year floating-rate notes (previous $13 billion), 5-year T-notes (previous $34 billion) and 7-year T-notes (previous $28 billion) to be auctioned Sep 26-28. | |
| 1300 ET | Treasury auctions $11 billion 10-year TIPS. | |
| Friday, Sep 22 | ||
| US | 0600 ET | San Francisco Fed President John Williams (non-voter) speaks to media prior to taking part in a closed academic conference at the Swiss National Bank in Zurich. |
| 0930 ET | Kansas City Fed President Esther George delivers opening keynote speech at a conference on global oil supply and demand hosted jointly by the Kansas City and Dallas Fed titled Global Oil Supply & Demand; Prospects for Greater Balance. | |
| 0945 ET | Preliminary-Sep Markit U.S. manufacturing PMI expected +0.2 to 53.0, Aug -0.5 to 52.8. Sep Markit U.S. services PMI expected -0.2 to 55.8, Aug +1.3 to 56.0. | |
| 1330 ET | Dallas Fed President Robert Kaplan speaks in a moderated Q&A at a conference on global oil supply and demand hosted jointly by the Kansas City and Dallas Fed. | |
| 1500 ET | USDA Aug Cold Storage. | |
| 1500 ET | USDA Aug Cattle on Feed. |
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