Barchart Morning Call
Barchart.com - Wed Sep 27, 6:36AM CDT
OVERNIGHT MARKETS AND NEWS
Dec E-mini S&Ps (ESZ17 +0.18%) this morning are up +0.14%, the dollar index rallied to a 1-month high and the 10-year T-note yield jumped to a 1-3/4 month high of 2.299% as details of President Trump’s tax plan emerge. The President will announce the details of his plan later today in Indiana, but people with knowledge of the plan said the rate on corporations will be set at 20%, down from the current 35%, and businesses would be allowed to immediately write off their capital spending for at least 5-years. The top tax rate for individuals will be cut to 35%, but the plan leaves it up to Congress to decide whether to create a higher bracket for those at the top of the income sale. European stocks are up +0.51% at a 2-3/4 month high, led by a rally in exporter companies, as EUR/USD tumbled to a 5-week low, which boosts the earnings prospects of exporters. Asian stocks settled mixed: Japan -0.31%, Hong Kong +0.47%, China +0.05%, Taiwan +0.68%, Australia -0.12%, Singapore +0.75%, South Korea -0.15%, India -1.39%. Chinese stocks eked out a small gain after China Aug industrial profits posted their largest gain in 4-years, while Japan's Nikkei Stock Index fell to a 1-week low, although losses were limited after USD/JPY climbed to a 2-1/4 month high and gave a boost to exporters.
The dollar index (DXY00 +0.51%) is up +0.42% at a 1-month high. EUR/USD (^EURUSD) is down -0.41% at a 5-week low. USD/JPY (^USDJPY) is up +0.61% at a 2-1/4 month high.
Dec 10-year T-note prices (ZNZ17 -0.38%) are down ticks -15.5 at a 2-1/2 month nearest-futures low as details of President Trump's tax plan are revealed.
Eurozone Aug M3 money supply rose +5.0% y/y, stronger than expectations of +4.6% y/y and the largest increase in 5 months.
UK Sep CBI retailing reported sales jumped to 42, stronger than expectations of 8 and the highest in 2 years.
China Aug industrial profits rose +24.0% y/y, the largest increase in 4 years.
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) weekly MBA mortgage applications (previous -9.7% with purchase sub-index -10.8%and refi sub-index -8.5%), (2) Aug durable goods orders (expected +1.0% and +0.3% ex-transportation, Jul -6.8% and +0.6 ex-transportation), (3) Aug pending home sales (expected -0.5%, Jul -0.8% m/m and -0.5% y/y), (4) the Treasury auctions $13 billion of 2-year floating rate and $34 billion 5-year T-notes, (5) St. Louis Fed President James Bullard (non-voter) speaks on the U.S. economy and monetary policy at Truman State University in Kirksville, MO, (6) Boston Fed President Eric Rosengren (non-voter) speaks to eh Money Marketeers of NYU, (7) EIA weekly Petroleum Status Report.
Notable Russell 1000 earnings reports today include: Thor Industries (1.96), Jabil (0.61).
U.S. IPO's scheduled to price today: Roku (ROKU), NuCana PLC (NCNA), Deciphera Pharmaceuticals (DCPH), Nightstar Therapeutics (NITE).
Equity conferences this week: 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
Amazon.com (AMZN -0.13%) was resumed wth an 'Outperform' at Wells Fargo Securities awith a price target of $1,400.
Darden Restaurants (DRI -6.53%) was upgraded to 'Outperform' from 'Neutral' at Baird with a 12-month target price of $94.
Six Flags Entertainment (SIX +0.43%) gained 3% in after-hours trading when it was announced that it will replace Parexel International in the S&P MidCap 400 prior to the open of trading on Monday, October 2.
KEMET (KEM unch) rose 4% in after-hours trading when it was announced that it will replace Astoria Financial in the S&P SmallCap 600 prior to the open of trading on Monday, October 2.
Nike (NKE +0.88%) fell 3% in after-hours trading after it reported Q1 revenue of $9.07 billion, below consensus of $9.09 billion, citing declining growth in North America.
Micron Technology (MU -1.98%) rose over 2% in after-hours trading after it reported Q4 adjusted EPS of $2.02, stronger than consensus of $1.84, and then said it sees Q1 adjusted EPS of $2.09 to $2.33, above consensus of $1.84.
Cintas (CTAS -0.56%) climbed almost 3% in after-hours trading after it reported Q1 revenue of $1.61 billion, higher than consensus of $1.57 billion, and then said it sees full-year revenue of $6.33 billion-$6.40 billion, the midpoint above consensus of $6.33 billion.
Ascendis Pharma A/S (ASND +2.68%) dropped 4% in after-hours trading after it announced that it had commenced an underwritten public offering of $125 million of American Depository Shares, each of which represents one ordinary share of Ascendis.
Westlake Chemical Partners LP (WLKP +0.63%) slid 8% in after-hours trading after 4.5 common units were offered after the close of trading via UBS, Citi, Barclays and Bank of America/Merrill Lynch that were a 6.64% to 8.71% discount to Tuesday's closing price of $24.10.
Editas Medicine (EDIT -3.93%) rose 3% in after-hours trading after its EDIT-101 drug to treat Congenital Amaurosis type 10 received orphan medicinal product designation from the European Medicines Agency.
Intra-Cellular Therapies (ITCI -2.88%) dropped 7% in after-hours trading after it announced that it had commenced an underwritten public offering of $150 million in shares of its common stock.
Twitter (TWTR -2.30%) gained almost 2% in after-hours trading after it said it will test a new 280-character limit on tweets.
MARKET COMMENTS
Dec S&P 500 E-mini stock futures (ESZ17 +0.18%) this morning are up +3.50 points (+0.14%). Tuesday's closes: S&P 500 +0.01%, Dow Jones -0.05%, Nasdaq +0.24%. The S&P 500 on Tuesday closed little changed. Stocks were undercut by the weaker-than-expected U.S. Aug new home sales report of -3.4% to an 8-month low of 560,000 and by hawkish comments from Fed Chair Yellen that signal she favors a Dec rate hike when she warned that the Fed should be "wary of moving too gradually" on raising interest rates and that "it would be imprudent to keep monetary policy on hold until inflation is back to 2.0%." Stocks were supported by President Trump's statement that he will unveil a "big announcement" on tax reform Wednesday.
Dec 10-year T-note prices (ZNZ17 -0.38%) this morning are down -15.5 ticks at a 2-1/2 month nearest-futures low. Tuesday's closes: TYZ7 -2.00, FVZ7 -1.50. Dec 10-year T-notes on Tuesday closed lower on comments from Fed Chair Yellen who warned that the Fed must avoid "moving too gradually" on raising interest rates. In addition, Atlanta Fed President Bostic said he is "pretty comfortable" with Dec Fed rate hike.
The dollar index (DXY00 +0.51%) this morning is up +0.392 (+0.42%) at a 1-month high. EUR/USD (^EURUSD) is down -0.0048 (-0.41%) at a 5-week low and USD/JPY (^USDJPY) is up +0.68 (+0.61%) at a 2-1/4 month high. Tuesday's closes: Dollar Index +0.318 (+0.34), EUR/USD -0.0055 (-0.46%), USD/JPY +0.51 (+0.46%). The dollar index on Tuesday climbed to a 3-week high and closed higher on hawkish comments from Fed Chair Yellen who warned that the Fed should be "wary of moving too gradually" on raising interest rates. There was also weakness in EUR/USD which tumbled to a 1-month low on concern German Chancellor Merkel may have a tough time forming a coalition government after Sunday's weaker-than-expected showing for her CDU party in the German elections.
Nov crude oil (CLX17 +0.13%) this morning is up +2 cents (+0.04%) and Nov gasoline (RBX17 -0.93%) is -0.0190 (-1.15%). Tuesday's closes: Nov WTI crude -0.34 (-0.65%), Nov gasoline -0.0183 (-1.10%). Nov crude oil and gasoline on Tuesday closed lower on the rally in the dollar index to a 3-week high and on expectations for Wednesday's EIA crude inventories to climb +2.5 million bbl, their fourth straight increase.
Metals prices this morning are mixed with Dec gold (GCZ17 -0.68%) -9.1 (-0.70%) at a 1-month low, Dec silver (SIZ17+0.01%) -0.008 (-0.05%) at a 1-month low and Dec copper (HGZ17 +0.82%) +0.029 (+0.99%). Tuesday's closes: Dec gold -9.8 (-0.75%), Dec silver -0.264 (-1.54%), Dec copper -0.0185 (-0.63%). Metals on Tuesday closed lower on the rally in the dollar index to a 3-week high, hawkish comments from Fed Chair Yellen that signal a Fed rate hike in Dec, and the unexpected decline in U.S. Aug new home sales to an 8-month low that was negative for copper demand.
GLOBAL EVENT CALENDAR09/27/2017
| 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 +1.0% 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. | |
| Thursday, Sep 28 | ||
| US | 0830 ET | Weekly initial unemployment claims expected +11,000 to 270,000, previous -23,000 to 259,000. Weekly continuing claims expected +13,000 to 1.993 million, previous +44,000 to 1.980 million. |
| 0830 ET | Revised Q2 GDP expected +unrevised at 3.0% (q/q annualized). Q2 personal consumption expected unrevised at +3.3%. Q2 GDP price index expected unrevised at +1.0%. Q2 core PCE deflator expected unrevised at +0.9% q/q. | |
| 0830 ET | Aug wholesale inventories expected +0.4%, Jul +0.6% m/m. | |
| 0830 ET | USDA weekly Export Sales. | |
| 0945 ET | Kansas City Fed President Esther George (non-voter) speaks on the U.S. economy and monetary policy at a forum hosted by the Kansas City Fed. | |
| 1000 ET | Fed Vice Chair Stanley Fischer speaks at the BOE Independence Conference in London on Developments in Central Banking. | |
| 1100 ET | Sep Kansas City Fed manufacturing activity expected -2 to 14, Aug +6 to 16. | |
| 1300 ET | Treasury auctions $28 billion of 7-year T-notes. | |
| 1330 ET | Atlanta Fed President Raphael Bostic (non-voter) speaks on a Webcast about careers leveraging economics. | |
| 1500 ET | USDA Q3 Hogs & Pigs Inventory. |
U.S. STOCK CALENDAR09/27/2017
| Name | Ticker | Time | Description | Period | Estimate |
|---|---|---|---|---|---|
| Palo Alto Networks Inc | PANW US | 08:30 | Investor Day | ||
| Flowserve Corp | FLS US | 08:30 | Financial Community Meeting | ||
| Spirit AeroSystems Holdings Inc | SPR US | 09:00 | Investor Conference | ||
| Praxair Inc | PX US | 10:00 | Extraordinary Shareholders Meeting - M&A Vote | ||
| Delphi Automotive PLC | DLPH US | 10:00 | Investor Meeting | ||
| Schlumberger Ltd | SLB US | Goldman Sachs Bus Tour | |||
| Schlumberger Ltd | SLB US | Credit Suisse Investor Dinner | |||
| Black Knight Financial Services Inc | BKFS US | Extraordinary Shareholders Meeting - M&A Vote | |||
| Flowers Foods Inc | FLO US | 12:15 | Investor Briefing | ||
| Applied Materials Inc | AMAT US | 13:00 | Analyst Day | ||
| Thor Industries Inc | THO US | Aft-mkt | Q4 2017 Earnings Release | Q4 17 | 1.956 |
| Thor Industries Inc | THO US | 16:20 | Q4 2017 Earnings Call | Q4 17 | |
| Jabil Inc | JBL US | 16:30 | Q4 2017 Earnings Call | Q4 17 | |
| Jabil Inc | JBL US | 16:30 | Q4 2017 Earnings Release | Q4 17 | 0.613 |
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