Barchart Morning Call
Barchart.com - Fri Oct 27, 6:40AM CDT
OVERNIGHT MARKETS AND NEWS
Dec E-mini S&Ps (ESZ17 +0.21%) this morning are up +0.25% and European stocks are up +0.63% at a 2-year high. U.S. stock index futures rose after the U.S. House passed a resolution that brings tax cuts a step closer. Also, technology stocks gained with Alphabet up 3% in pre-market trading and Amazon.com up 8% in pre-market trading after both companies reported stellar quarterly earnings results. European stocks gained on the slow approach by the ECB to reducing monetary stimulus along with the slump in EUR/USD to a 3-month low that gave European exporter stocks a boost. Asian stocks settled mostly higher: Japan +1.24%, Hong Kong +0.84%, China +0.27%, Taiwan -0.24%, Australia -0.22%, Singapore +0.90%, South Korea +0.69%, India +0.03%. China's Shanghai Composite climbed to a 1-1/4 year high on optimism in the Chinese economic outlook after China Sep industrial profits surged +27.7% y/y, the largest increase in 5-3/4 years. Japan's Nikkei Stock Index rallied to a 21-1/4 year high on strength in financial and telecommunication companies. Also. Japanese exporters surged as the yen fell to a 3-1/2 month low against the dollar, which boosted exporters' earnings prospects.
The dollar index (DXY00 +0.37%) is up +0.28% to a 3-1/4 month high after the U.S. House passed a budget resolution on tax reforms ad on speculation that President Trump will nominate a hawk as the next Fed Chair. EUR/USD (^EURUSD) is down -0.31% at a 3-month low after the ECB extended its QE program to at least Sep of 2018. USD/JPY (^USDJPY) is up +0.12% at a 3-1/2 month high as a rally in global equity markets reduces the safe-haven demand for the yen.
The dollar index (DXY00 +0.37%) is up +0.28% to a 3-1/4 month high after the U.S. House passed a budget resolution on tax reforms ad on speculation that President Trump will nominate a hawk as the next Fed Chair. EUR/USD (^EURUSD) is down -0.31% at a 3-month low after the ECB extended its QE program to at least Sep of 2018. USD/JPY (^USDJPY) is up +0.12% at a 3-1/2 month high as a rally in global equity markets reduces the safe-haven demand for the yen.
Dec 10-year T-note prices (ZNZ17 +0.01%) are up +1 tick.
As expected, the Bank of Russia cut its benchmark rate by -25 bp to 8.25% from 8.50%.
China Sep industrial profits jumped +27.7% y/y, the most in 5-3/4 years.
German Sep import prices rose +0.9% m/m and +3.0% y/y, stronger than expectations of +0.5% m/m and +2.6% y/y with the +0.9% m/m gain the largest monthly increase in 8 months.
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) Q3 GDP (expected +2.6% q/q annualized, Q2 +3.1%), (2) final-Oct University of Michigan U.S. consumer sentiment (expected -0.4 to 100.7, previous +6.0 to 101.1).
Notable S&P 500 earnings reports today include: Exxon Mobil (consensus $0.87), Phillips 66 (1.57), Colgate-Palmolive (0.73), Merck (1.04), Cabot Oil & Gas (0.08), AbbVie (1.39), Goodyear (0.67), Weyerhaeuser (0.32).
U.S. IPO's scheduled to price today: none.
Equity conferences this week: Society of Women Engineers National Conference on Fri.
OVERNIGHT U.S. STOCK MOVERS
Alphabet (GOOGL unch) climbed nearly 3% in pre-market trading after it reported Q3 EPS of $9.57, well above consensus of $8.34.
Amazon.com (AMZN -0.05%) jumped 8% in pre-market trading after it reported Q3 EPS of 52 cents, well above consensus of 4 cents.
First Solar (FSLR +1.12%) was upgraded to 'Buy' from 'Hold' at Needham & Co with a 12-month target price of $60.
Gilead Sciences (GILD -2.52%) slipped 3% in after-hours trading after it management said during a conference call that competition from AbbVie's hepatitis C drug Mavyret is undercutting Gilead and will have a bigger impact in Q4 and into next year.
Microsoft (MSFT +0.17%) rose almost 4% in after-hours trading after it reported Q1 EPS of 84 cents, better than consensus of 72 cents.
Intel (INTC +1.40%) gained over 1% in after-hours trading after it reported Q3 adjusted EPS of $1.01, higher than consensus of 80 cents.
Expedia (EXPE -0.37%) slumped 15% in after-hours trading after it reported Q3 adjusted EPS of $2.51, weaker than consensus of $2.62.
Stryker (SYK -0.91%) rose almost 3% in after-hours trading after it reported Q3 adjusted EPS of $1.52, above consensus of $1.49, and he said is sees full-year adjusted EPS of $6.45 to $6.50, better than consensus of $6.43.
Align Technology (ALGN +0.61%) rallied 13% in after-hours trading after it reported Q3 net revenue of $385.3 million, higher than consensus of $359.8 million, and then said it sees Q4 net revenue of $391 million to $398 million, better than consensus of $368.2 million.
Electronics for Imaging (EFII -1.33%) sank 15% in after-hours trading after it reported Q3 adjusted EPS of 48 cents, below consensus of 58 cents.
Trimble (TRMB +0.02%) climbed 4% in after-hours trading after it reported Q3 revenue of $670 million, above consensus of $660.1 million, and said it sees Q4 revenue of $655 million-$685 million, better than consensus of $653.5 million.
Fortinet (FTNT +1.01%) dropped 9% in after-hours trading after it said it sees Q4 revenue of $404 million-$412 million, below consensus of $416.9 million, and said it sees full-year revenue of $1.48 billion-$1.49 billion, the mid-point below consensus of $1.49 billion.
Mattel (MAT -0.52%) tumbled 19% in after-hours trading after it reported Q3 adjusted EPS of 9 cents, well below consensus of 57 cents.
MARKET COMMENTS
Dec S&P 500 E-mini stock futures (ESZ17 +0.21%) this morning are up +6.50 points (+0.25%). Thursday's closes: S&P 500 +0.13%, Dow Jones +0.31%, Nasdaq -0.28%. The S&P 500 on Thursday closed higher on carry-over support from a rally in European stocks after the ECB extended its QE program by 9 months and left open the option for a continuation beyond that. Stocks were also boosted by strong quarterly earnings results from Ford, UPS and Twitter.
Dec 10-year T-note prices (ZNZ17 +0.01%) this morning are up +1 tick. Thursday's closes: TYZ7 -2.50, FVZ7 -2.00. Dec 10-year T-notes on Thursday closed lower on increased inflation expectations after the 10-year T-note breakeven inflation rate rose to a 1-1/2 week high, and by strength in stocks, which curbed the safe-haven demand for T-notes. T-notes found some support on the weaker-than-expected U.S. Sep pending home sales.
The dollar index (DXY00 +0.37%) this morning is up +0.28% to a 3-1/4 month high. EUR/USD (^EURUSD) is down -0.0036(-0.31%) to a 3-month low and USD/JPY (^USDJPY) is up +0.14 (+0.12%) to a 3-1/2 month high. Thursday's closes: Dollar Index +0.901 (+0.96%), EUR/USD -0.0162 (-1.37%), USD/JPY +0.24 (+0.21%). The dollar index on Thursday rallied to a 3-month high and settled higher on weakness in EUR/USD which fell to a 3-month low after the ECB extended its QE program until Sep 2018 and ECB President Draghi said the Eurozone still needs "ample" stimulus.
Dec crude oil (CLZ17 -0.13%) this morning is down -8 cents (-0.15%) and Dec gasoline (RBZ17 -0.17%) is -0.0058 (-0.34%). Thursday's closes: Dec WTI crude +0.46 (+0.88%), Dec gasoline +0.0156 (+0.93%). Dec crude oil and gasoline on Thursday closed higher on comments from Saudi Crown Prince Mohammed bin Salman who said that he backed the extension of OPEC crude production cuts beyond Mar of 2018. Crude oil prices were also supported by the increase in the crack spread to a 1-1/4 month high, which may spur refineries to boost their crude purchases to refine the crude into gasoline. Crude oil prices were undercut by the rally in the dollar index to a 3-month high.
Metals prices this morning are weaker with Dec gold (GCZ17 -0.17%) -1.5 (-0.12%) at a 3-week low, Dec silver (SIZ17-0.78%) -0.106 (-0.63%) at a 3-week low and Dec copper -0.055 (-1.72%) at a 1-1/2 week low. Thursday's closes: Dec gold -9.4 (-0.73%), Dec silver -0.114 (-0.67%), Dec copper (HGZ17 -2.14%) -0.0055 (-0.17%). Metals on Thursday closed lower on the rally in the dollar index to a 3-month high and by strength in stocks that reduced the safe-haven demand for precious metals.
GLOBAL EVENT CALENDAR10/27/2017
| Friday, Oct 27 | ||
| US | 0830 ET | Q3 GDP expected +2.6% (q/q annualized), Q2 +3.1%. Q3 personal consumption expected +2.1%, Q2 +3.3%. Q3 GDP price index expected +1.7%, Q2 +1.0%. Q3 core PCE expected +1.3% q/q, Q2 +0.9% q/q. |
| 1000 ET | Final-Oct University of Michigan U.S. consumer sentiment expected -0.4 to 100.7, previous +6.0 to 101.1. | |
| Monday, Oct 30 | ||
| US | 0830 ET | Sep personal spending expected +0.8%, Aug +0.1%. Sep personal income expected +0.4%, Aug +0.2%. Sep PCE deflator expected +0.4% m/m, Aug +0.2% m/m and +1.4% y/y. Sep core PCE deflator expected +0.1% m/m, Aug +0.1% m/m and +1.3% y/y. |
| 1030 ET | Oct Dallas Fed manufacturing activity expected -0.3 to 21.0, Sep +4.3 to 21.3. | |
| 1100 ET | USDA weekly grain export inspections. | |
| 1600 ET | USDA crop conditions and progress report. |
U.S. STOCK CALENDAR10/27/2017
| Name | Ticker | Time | Description | Period | Estimate |
|---|---|---|---|---|---|
| Weyerhaeuser Co | WY US | 03:05 | Q3 2017 Earnings Release | Q3 17 | 0.319 |
| Goodyear Tire & Rubber Co/The | GT US | Bef-mkt | Q3 2017 Earnings Release | Q3 17 | 0.674 |
| AbbVie Inc | ABBV US | Bef-mkt | Q3 2017 Earnings Release | Q3 17 | 1.385 |
| Ventas Inc | VTR US | Bef-mkt | Q3 2017 Earnings Release | Q3 17 | 1.043 |
| Cabot Oil & Gas Corp | COG US | 06:30 | Q3 2017 Earnings Release | Q3 17 | 0.083 |
| Aon PLC | AON US | 06:30 | Q3 2017 Earnings Release | Q3 17 | 1.278 |
| Rockwell Collins Inc | COL US | 06:30 | Q4 2017 Earnings Release | Q4 17 | 1.79 |
| Merck & Co Inc | MRK US | 06:45 | Q3 2017 Earnings Release | Q3 17 | 1.039 |
| LyondellBasell Industries NV | LYB US | 06:45 | Q3 2017 Earnings Release | Q3 17 | 2.492 |
| Colgate-Palmolive Co | CL US | 06:55 | Q3 2017 Earnings Release | Q3 17 | 0.733 |
| Phillips 66 | PSX US | 07:00 | Q3 2017 Earnings Release | Q3 17 | 1.569 |
| Exxon Mobil Corp | XOM US | 08:00 | Q3 2017 Earnings Release | Q3 17 | 0.87 |
| Merck & Co Inc | MRK US | 08:00 | Q3 2017 Earnings Call | Q3 17 | |
| Eastman Chemical Co | EMN US | 08:00 | Q3 2017 Earnings Call | Q3 17 | |
| Aon PLC | AON US | 08:30 | Q3 2017 Earnings Call | Q3 17 | |
| Chubb Ltd | CB US | 08:30 | Q3 2017 Earnings Call | Q3 17 | |
| Simon Property Group Inc | SPG US | 08:30 | Q3 2017 Earnings Release | Q3 17 | 2.873 |
| Chevron Corp | CVX US | 08:30 | Q3 2017 Earnings Release | Q3 17 | 0.988 |
| Leggett & Platt Inc | LEG US | 08:30 | Q3 2017 Earnings Call | Q3 17 | |
| AbbVie Inc | ABBV US | 09:00 | Q3 2017 Earnings Call | Q3 17 | |
| Goodyear Tire & Rubber Co/The | GT US | 09:00 | Q3 2017 Earnings Call | Q3 17 | |
| Exxon Mobil Corp | XOM US | 09:30 | Q3 2017 Earnings Call | Q3 17 | |
| Cabot Oil & Gas Corp | COG US | 09:30 | Q3 2017 Earnings Call | Q3 17 | |
| FirstEnergy Corp | FE US | 10:00 | Q3 2017 Earnings Call | Q3 17 | |
| Principal Financial Group Inc | PFG US | 10:00 | Q3 2017 Earnings Call | Q3 17 | |
| Ventas Inc | VTR US | 10:00 | Q3 2017 Earnings Call | Q3 17 | |
| Simon Property Group Inc | SPG US | 10:00 | Q3 2017 Earnings Call | Q3 17 | |
| Weyerhaeuser Co | WY US | 10:00 | Q3 2017 Earnings Call | Q3 17 | |
| LyondellBasell Industries NV | LYB US | 11:00 | Q3 2017 Earnings Call | Q3 17 | |
| Colgate-Palmolive Co | CL US | 11:00 | Q3 2017 Earnings Call | Q3 17 | |
| National Oilwell Varco Inc | NOV US | 11:00 | Q3 2017 Earnings Call | Q3 17 | |
| Chevron Corp | CVX US | 11:00 | Q3 2017 Earnings Call | Q3 17 | |
| Cincinnati Financial Corp | CINF US | 11:00 | Q3 2017 Earnings Call | Q3 17 | |
| Mohawk Industries Inc | MHK US | 11:00 | Q3 2017 Earnings Call | Q3 17 | |
| Phillips 66 | PSX US | 12:00 | Q3 2017 Earnings Call | Q3 17 | |
| LyondellBasell Industries NV | LYB US | Q3 2017 Earnings Call | Q3 17 | ||
| Apartment Investment & Management Co | AIV US | 13:00 | Q3 2017 Earnings Call | Q3 17 | |
| Harris Corp | HRS US | 13:00 | Annual General Meeting |
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