Barchart Morning Call
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OVERNIGHT MARKETS AND NEWS
Dec E-mini S&Ps (ESZ17 -0.06%) this morning are little changed, down -0.03%, as the markets await comments from Fed Chair Yellen at the NABE conference later today. European stocks are up slightly by +0.05% on signs of increased M&A activity with Carrefour up over 3% after French publication Valeurs Actuelles reported that Amazon was looking to purchase the company. European exporter stocks were also getting a boost and lifting the overall market from a slide in EUR/USD (^EURUSD) to a 1-month low. Asian stocks settled mostly lower: Japan -0.33%, Hong Kong +0.05%, China +0.06%, Taiwan -0.76%, Australia -0.22%, Singapore -0.12%, South Korea -0.67%, India -0.08%. The deepening spat between the U.S. and North Korea weighed on Asian markets after North Korea on Monday said it can shoot down U.S. warplanes in international airspace as part of its right to self-defense under the United Nations charter. Technology stocks in Asia also moved lower after lackluster reviews of Apple's new iPhone weighed on Asian suppliers to Apple.
The dollar index (DXY00 +0.36%) is up +0.38% at a 3-week high. EUR/USD (^EURUSD) is down -0.49% to a 1-month low on speculation the ECB may delay tapering QE when ECB President Draghi said Monday that the ECB "can't afford hasty moves" on monetary policy. USD/JPY (^USDJPY) is up +0.04%.
Dec 10-year T-note prices (ZNZ17 +0.01%) are unchanged.
Minneapolis Fed President Kashkari said "Wage growth has been very limited and inflation has been very limited, and we're not exactly sure why. My best assessment is that there's more slack, which tells me the Fed should be under no pressure to raise rates. We have time to let inflation climb back to target."
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) July S&P CoreLogic composite-20 home price index (expected +0.2% m/m and +5.7% y/y, Jun +0.11% m/m and +5.65% y/y), (2) Cleveland Fed President Loretta J. Mester (non-voter) moderates the “Global Outlook” panel at the NABE conference, (3) Aug new home sales (expected +2.5% to 585,000, Jul -9.4% to 571,000), (4) Conference Board Sep U.S. consumer confidence (expected -2.9 to 120.0, Aug +2.9 to 122.9), (5) Sep Richmond Fed manufacturing index (expected -1 to 13, Aug unch at 14), (6) Fed Governor Lael Brainard speak sat a Fed conference on ‘Disparities in the Labor Market: What are we missing?,’ (7) Fed Chair Janet Yellen delivers the keynote speech on Inflation, Uncertainty, and Monetary policy at the NABE conference in Cleveland, Ohio, (8) Treasury auctions $26 billion 2-year T-notes.
Notable Russell 1000 earnings reports today include: Nike (consensus $0.48), Carnival (2.20), Darden Restaurants (0.99), IHS Markit (0.53), FactSet (1.89), Cintas (1.31), Micron Technology (1.84),
U.S. IPO's scheduled to price today: RYB Education (RYB), Grupo Financiero Galicia (GGAL).
Equity conferences this week: Cantor Fitzgerald Global Healthcare Conference on Mon-Tue, Denver Gold Forum on Mon-Tue, Ladenburg Thalmann Health Care Conference on Tue, American Society for Radiation Oncology Meeting on Tue, Johnson Rice & Co. Energy Conference on Tue, Wolfe Research Conference on Tue-Thu, Deutsche Bank Energy Conference on Wed, Barrington Research Fall Investment Conference on Wed, Bernstein Pan European Strategic Decisions Conference on Wed, LEERINK Partners Rare Disease & Immuno-Oncology Conference on Wed-Thu, B. Riley Consumer Conference on Thu.
OVERNIGHT U.S. STOCK MOVERS
Aflac (AFL +0.38%) was downgraded to 'Sell' from 'Neutral' at Citigroup with a price target of $79.
L Brands (LB +3.15%) was upgraded to 'Overweight' from 'Neutral' at Atlantic Equities LLP with a 12-month target price of $56.
Cheniere Energy (LNG +1.47%) was initiated with an 'Outperform' at BMO Capital Markets with a 12-month target price of $60.
Cardtronics (CATM -10.83%) was downgraded to 'Market Perform' from 'Outperform' at William Blair & Co.
SYNNEX (SNX +0.34%) jumped nearly 9% in after-hours trading after it reported Q3 revenue of $4.28 billion, above consensus of $4.00 billion, and said it sees Q4 revenue of $4.75 billion-$4.95 billion, better than consensus of $4.47 billion.
Red Hat (RHT -0.51%) climbed 4% in after-hours trading after it reported Q2 revenue of $723 million, better than consensus of $699.3 million, and then raised its full-year revenue estimate to $2.88 billion-$2.90 billion from a prior estimate of $2.79 billion-$2.83 billion.
Sabra Health Care REIT (SBRA +0.54%) fell almost 6% in after-hours trading after it said it plans to offer 16 million shares of its common stock in an underwritten public offering.
TherapeuticsMD (TXMD -1.78%) slid over 3% in after-hours trading after it announced the launch of an underwritten public offering of 12.4 million shares of its common stock.
QEP Resources (QEP +6.09%) dropped almost 8% in after-hours trading after it cut its 2017 oil production estimate to 19.5 million bbl to 20.0 million bbl from a previous view of 21 million-22 million bbl, and cut its 2017 gas production estimate to 165 to 170 Bcf from a prior view of 182.5 to 192.5 Bcf.
ProQR Therapeutics (PRQR +4.03%) jumped nearly 8% in after-hours trading after it reported meaningful improvement across all doses in its Phase 1b trial of its QR-010 in treatment of subjects with Cystic Fibrosis.
Actua Corp (ACTA -0.81%) surged over 25% in after-hours trading after it said it will sell three of its businesses for $549 million.
Genocea Biosciences (GNCA +0.76%) plunged over 45% in after-hours trading after it said it will cease spending on GEN-003 activities related to the treatment for genital herpes. GNCA also said it will cut its workforce by 40% and shift its focus to immuno-oncology and the development of neoantigen cancer vaccines.
Kadmon Holdings (KDMN +7.67%) sank 16% in after-hours trading after it announced a proposed public offering of common stock and warrants, although no size was given.
MARKET COMMENTS
Dec S&P 500 E-mini stock futures (ESZ17 -0.06%) this morning are down -0.75 points (-0.03%). Monday's closes: S&P 500 -0.22%, Dow Jones -0.24%, Nasdaq -1.10%. The S&P 500 on Monday fell to a 2-week low and closed lower on increased geopolitical risks that spurred long liquidation in stocks after North Korean foreign minister Ri Yong Ho said his country has the right to shoot down U.S. bombers even if they are not in North Korean airspace since recent comments from U.S. President Trump were a declaration of war. Stocks were also undercut by the Sep Chicago Fed national activity index report of -0.34 to a 1-year low of -0.31, weaker than expectations of -0.24 to -0.25. Energy stocks rallied on the sharp +3.08% rally in crude oil prices.
Dec 10-year T-note prices (ZNZ17 +0.01%) this morning are unch. Monday's closes: TYZ7 +10.50, FVZ7 +5.50. Dec 10-year T-notes on Monday closed higher on increased safe-haven demand with the increased North Korean geopolitical risks and the sell-off in stocks.
The dollar index (DXY00 +0.36%) this morning is up +0.356 (+0.38%) to a 3-week high. EUR/USD (^EURUSD) is down -0.0058 (-0.49%) to a 1-month low and USD/JPY (^USDJPY) is up +0.05 (+0.04%). Monday's closes: Dollar Index +0.377 (+0.52), EUR/USD -0.0103 (-0.86%), USD/JPY -0.26 (-0.23%). The dollar index on Monday closed higher on weakness in EUR/USD which fell to a 1-week low after ECB President Draghi said the ECB "can't afford hasty moves" on monetary policy, which suggests the ECB will take its time in tapering QE. The dollar was also supported by comments from New York Fed President Dudley who said inflation should pick up with "the fading of effects from a number of temporary, idiosyncratic factors" and allow the Fed to maintain its pace of monetary tightening.
Nov crude oil (CLX17 -0.06%) this morning is down -17 cents (-0.33%) and Nov gasoline (RBX17 -0.08%) is -0.0052(-0.31%). Monday's closes: Nov WTI crude +1.5 (+3.08%), Nov gasoline +0.0413 (+2.54%). Nov crude oil and gasoline on Monday closed sharply higher with Nov crude at a 5-1/4 month high. Crude oil prices were boosted by Middle East crude oil supply concerns after Turkey threatened to shut down Kurdish oil shipments through its territory in response for the Kurds holding an independence vote from Iraq. In addition, OPEC Secretary-General Barkindo said that OPEC had implemented "more than 100 percent" of its agreed-to crude production cuts last month.
Metals prices this morning are mixed with Dec gold (GCZ17 -0.37%) -5.4 (-0.41%), Dec silver (SIZ17 -0.45%) -0.067 (-0.39%) and Dec copper (HGZ17 +0.32%) +0.012 (+0.39%). Monday's closes: Dec gold +14.0 (+1.08%), Dec silver +0.163 (+0.96%), Dec copper -0.0070 (-0.24%). Metals on Monday settled mixed. Metals prices were boosted by increased safe-haven demand for precious metals after North Korean Foreign Minister Ri Yong Ho said recent comments from U.S. President Trump amount to a declaration of war and that North Korea could therefore shoot down American planes. Precious metals prices were also boosted by comments from ECB President Draghi who said the ECB "can't afford hasty moves" on monetary policy, which bolstered speculation the ECB may delay moves to taper QE and tighten monetary policy. A rally in the dollar index was a negative factor for precious metals.
GLOBAL EVENT CALENDAR09/26/2017
| Tuesday, Sep 26 | ||
| US | 0900 ET | Jul S&P CoreLogic composite-20 home price index expected +0.2% m/m and +5.7% y/y, Jun +0.11% m/m and +5.65% y/y. |
| 0930 ET | Cleveland Fed President Loretta J. Mester (non-voter) moderates the Global Outlook panel at the NABE conference. | |
| 1000 ET | Aug new home sales expected +2.5% to 585,000, Jul -9.4% to 571,000. | |
| 1000 ET | Sep consumer confidence (Conference Board) expected -2.9 to 120.0, Aug +2.9 to 122.9. | |
| 1000 ET | Sep Richmond Fed manufacturing index expected -1 to 13, Aug unch at 14. | |
| 1030 ET | Fed Governor Lael Brainard (voter) speak sat a Fed conference on Disparities in the Labor Market: What are we missing? | |
| 1130 ET | Atlanta Fed President Raphael Bostic (non-voter) discusses the U.S. economic outlook and monetary policy to the Atlanta Press Club. | |
| 1245 ET | Fed Chair Janet Yellen delivers the keynote speech on Inflation, Uncertainty, and Monetary Policy at the NABE conference in Cleveland, Ohio. | |
| 1300 ET | Treasury auctions $26 billion 2-year T-notes. | |
| Wednesday, Sep 27 | ||
| US | 0700 ET | Weekly MBA mortgage applications, previous -9.7% with purchase sub-index -10.8% and refi sub-index -8.5%. |
| 0830 ET | Aug durable goods orders expected +0.9% and +0.3% ex-transportation, Jul -6.8% and +0.6 ex-transportation. Aug capital goods new orders ex aircraft & parts expected +0.3%, Jul +1.0%. | |
| 1000 ET | Aug pending home sales expected -0.5%, Jul -0.8% m/m and -0.5% y/y. | |
| 1030 ET | EIA weekly Petroleum Status Report. | |
| 1130 ET | Treasury auctions $13 billion 2-year floating rate notes. | |
| 1300 ET | Treasury auctions $34 billion 5-year T-notes. | |
| 1330 ET | St. Louis Fed President James Bullard (non-voter) speaks on the U.S. economy and monetary policy at Truman State University in Kirksville, MO. | |
| 1900 ET | Boston Fed President Eric Rosengren (non-voter) speaks to eh Money Marketeers of NYU. |
U.S. STOCK CALENDAR09/26/2017
| Name | Ticker | Time | Description | Period | Estimate |
|---|---|---|---|---|---|
| Carnival Corp | CCL US | Bef-mkt | Q3 2017 Earnings Release | Q3 17 | 2.202 |
| Darden Restaurants Inc | DRI US | Bef-mkt | Q1 2018 Earnings Release | Q1 18 | 0.993 |
| IHS Markit Ltd | INFO US | 06:00 | Q3 2017 Earnings Release | Q3 17 | 0.528 |
| FactSet Research Systems Inc | FDS US | 07:00 | Q4 2017 Earnings Release | Q4 17 | 1.893 |
| IHS Markit Ltd | INFO US | 08:00 | Q3 2017 Earnings Call | Q3 17 | |
| Darden Restaurants Inc | DRI US | 08:30 | Q1 2018 Earnings Call | Q1 18 | |
| General Mills Inc | GIS US | 09:30 | Annual General Meeting | ||
| Carnival Corp | CCL US | 10:00 | Q3 2017 Earnings Call | Q3 17 | |
| FactSet Research Systems Inc | FDS US | 11:00 | Q4 2017 Earnings Call | Q4 17 | |
| Cintas Corp | CTAS US | Aft-mkt | Q1 2018 Earnings Release | Q1 18 | 1.312 |
| Micron Technology Inc | MU US | Aft-mkt | Q4 2017 Earnings Release | Q4 17 | 1.84 |
| NIKE Inc | NKE US | 16:15 | Q1 2018 Earnings Release | Q1 18 | 0.48 |
| Micron Technology Inc | MU US | 16:30 | Q4 2017 Earnings Call | Q4 17 | |
| NIKE Inc | NKE US | 17:00 | Q1 2018 Earnings Call | Q1 18 | |
| Cintas Corp | CTAS US | 17:00 | Q1 2018 Earnings Call | Q1 18 |
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