Barchart Morning Call
Barchart.com - Mon Oct 30, 6:53AM CDT
OVERNIGHT MARKETS AND NEWS
Dec E-mini S&Ps (ESZ17 -0.21%) this morning are down -0.23% on long liquidation ahead of several potential market moving events in the U.S. this week including Wednesday's FOMC decision, President Trump's nomination of a new Fed Chair, and Friday's monthly payroll data. European stocks are up +0.16% after Eurozone Oct economic confidence rose to a 16-1/2 year high and as Spain's IBEX Stock Index rallied +1.31% as political tensions in Spain eased after the Spanish government began the process of reasserting control over Catalonia. Asian stocks settled mixed: Japan +0.01%, Hong Kong -0.36%, China -0.77%, Taiwan +0.45%, Australia +0.27%, Singapore -0.31%, South Korea +0.35%, India +0.33%. Japan's Nikkei Stock Index climbed to a new 21-year high on carry-over support from Friday's gains in U.S. equities to new record highs. China's Shanghai Composite tumbled to a 1-month low as a slide in China's bond market deepened amid concerns about deleveraging. China's 10-year government bond yield jumped 8 bp to 3.93%, near a 3-year high, which will boost funding costs for Chinese companies as more than 1 trillion yuan ($150 billion) of funding provided by the PBOC matures this week, the most in 8 months.
The dollar index (DXY00 -0.28%) is down -0.28%. EUR/USD (^EURUSD) is up +0.26%. USD/JPY (^USDJPY) is down -0.05%.
The dollar index (DXY00 -0.28%) is down -0.28%. EUR/USD (^EURUSD) is up +0.26%. USD/JPY (^USDJPY) is down -0.05%.
Dec 10-year T-note prices (ZNZ17 +0.18%) are up +9 ticks.
German Sep retail sales rose +0.5% m/m, right on expectations.
Eurozone Oct economic confidence rose +0.9 to 114.0, stronger than expectations of +0.3 to 113.3 and a 16-1/2 year high.
Japan Sep retail sales rose +0.8% m/m, right on expectations.
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) Sep personal spending (expected +0.9%, Aug +0.1%) and Sep personal income (expected +0.4%, Aug +0.2%), (2) Sep PCE deflator (expected +0.4% m/m and +1.6% y/y, Aug +0.2% m/m and +1.4% y/y) and Sep core PCE deflator (expected +0.1% m/m and +1.3% y/y, Aug +0.1% m/m and +1.3% y/y), (3) Oct Dallas Fed manufacturing activity (expected -0.3 to 21.0, Sep +4.3 to 21.3), (4) USDA weekly grain export inspections, (5) USDA crop conditions and progress report.
Notable S&P 500 earnings reports today include: Dominion Energy (consensus $1.02), Noble Energy (-0.13), Mondelez (0.54), Loews (0.55), Vornado Realty Trust (0.55), Sempra Energy (1.05), Edison Intl (1.33), AvalonBay Communities (2.17), Affiliated Managers (3.35).
U.S. IPO's scheduled to price today: none.
Equity conferences this week: ACEP Scientific Assembly on Mon, Gabelli & Company Automotive Aftermarket Symposium on Mon-Tue, VancAnalysts Association of Boston Conference on Thu-Fri, American College of Rheumatology Meeting on Fri, North American Cystic Fibrosis Conference on Fri.
OVERNIGHT U.S. STOCK MOVERS
Macy's (M -7.73%) is down over 2% in pre-market trading after it was downgraded to 'Sell' from 'Neutral' at Citigroup with a price target of $16.
J.C. Penney (JCP -14.75%) was downgraded to 'Sell' from 'Neutral' at Citigroup with a price target of $1.50.
Advanced Micro Devices (AMD -1.33%) is down 3% in pre-market trading after it was downgraded to 'Underweight' from 'Equal-Weight' at Morgan Stanley with a price target of $8.
Praxair (PX -0.98%) was upgraded to 'Buy' from 'Neutral' at Citigroup with a price target of $168.
Intel (INTC +7.38%) was upgraded to 'Outperform' from 'Market Perform' at BMO Capital Markets with a price target of $58.
General Motors (GM -1.35%) was downgraded to 'Sell from 'Neutral' at Goldman Sachs.
Piper Jaffray (PJC +1.61%) was upgraded to 'Outperform' from 'Market Perform' at Keefe, Bruyette & Woods with a price target of $78.
Office Depot (ODP -0.27%) was downgraded to 'Underweight' from 'Neutral' at JP Morgan Chase.
Leggett & Platt (LEG +2.53%) was downgraded to 'Neutral' from 'Overweight' at Piper Jaffray with a price target of $46.
Bristol-Meyers Squibb (BMY -1.66%) rose over 1% in after-hours trading after competitor Merck withdrew its European application for KEYTRUDA in combination with pemetrexed and carboplatin as a treatment for non-small cell lung cancer. Merck MRK fell nearly 3% in after-hours trading on the news.
La Jolla Pharmaceuticals (LJPC +7.42%) filed a $150 million mixed securities shelf.
Century Aluminum (CENX -0.26%) was downgraded to 'Neutral' from 'Overweight' at JP Morgan Chase with a price target of $14.50.
MARKET COMMENTS
Dec S&P 500 E-mini stock futures (ESZ17 -0.21%) this morning are down -6.00 points (-0.23%). Friday's closes: S&P 500 +0.81%, Dow Jones +0.14%, Nasdaq +2.91%. The S&P 500 on Friday rallied to a fresh record high and closed higher on the U.S. Q3 GDP report of +3.0% (q/q annualized), stronger than expectations of +2.6%, and on speculation that President Trump will name Jerome Powell as the next Fed Chair, which signals a continuation of Fed Chair Yellen's policies. There was also impressive strength in technology stocks, led by a 4% gain in Alphabet, a 6% gain in Microsoft and a 13% jump in Amazon.com after they all reported stellar quarterly earnings results.
Dec 10-year T-note prices (ZNZ17 +0.18%) this morning are up +9 ticks. Friday's closes: TYZ7 +7.00, FVZ7 +4.25. Dec 10-year T-notes on Friday closed higher on carry-over support from a rally in 10-year German bunds to a 1-week high on increased safe-haven demand after Catalan lawmakers voted for independence in defiance of Spain. T-notes also closed higher on media reports that President Trump is leaning toward Jerome Powell as next Fed Chair, which would signal a continuation of Fed Chair Yellen's monetary policy direction.
The dollar index (DXY00 -0.28%) this morning is down -0.27 (-0.28%). EUR/USD (^EURUSD) is up +0.0030 (+0.26%) and USD/JPY (^USDJPY) is down -0.06 (-0.05%). Friday's closes: Dollar Index +0.304 (+0.32%), EUR/USD -0.0043 (-0.37%), USD/JPY -0.31 (-0.27%). The dollar index on Friday rallied to a 3-1/4 month high and closed higher on the stronger-than-expected U.S. Q3 GDP report, which bolsters the case for additional Fed rate hikes, and on the recent increase in hopes for a Republican tax cut. EUR/USD continued to show weakness after the ECB on Thursday extended QE until September 2018 and left the option open for an extension pasat Sep 2018.
Dec crude oil (CLZ17 +0.02%) this morning is down -1 cent (-0.02%) and Dec gasoline (RBZ17 -0.09%) is -0.0008 (-0.05%). Friday's closes: Dec WTI crude +1.26 (+2.39%), Dec gasoline +0.0157 (+0.92%). Dec crude oil and gasoline on Friday closed higher with Dec crude at a 6-1/2 month high. Crude oil prices were boosted by optimism that OPEC will agree to extend its production cuts after Saudi Crown Prince Mohammed bin Salman said Thursday that he backed the extension of OPEC crude production cuts beyond Mar of 2018. Crude oil prices were also boosted by Friday's stronger-than-expected U.S. Q3 GDP, which signals strength in energy demand and consumption.
Metals prices this morning are higher Dec gold (GCZ17 +0.01%) +1.2 (+0.09%), Dec silver (SIZ17 +0.02%) +0.023 (+0.14%) and Dec copper (HGZ17 +0.32%) +0.007 (+0.21%). Friday's closes: Dec gold +2.2 (+0.17%), Dec silver -0.059 (-0.35%), Dec copper -0.0740 (-2.33%). Metals on Friday settled mixed with Dec copper at a 2-week low. Metals prices were undercut by the surge in the dollar index to a 3-1/4 month high, and by the rally in the S&P 500 to a new record high, which curbs the safe-haven demand for precious metals. Gold closed higher on media reports that President Trump is leading toward Jerome Powell as the next Fed Chair, which gave gold a boost on expectations that Powell will keep Fed Chair Yellen's gradual approach to raising interest rates.
GLOBAL EVENT CALENDAR10/30/2017
| Monday, Oct 30 | ||
| US | 0830 ET | Sep personal spending expected +0.9%, Aug +0.1%. Sep personal income expected +0.4%, Aug +0.2%. |
| 0830 ET | Sep PCE deflator expected +0.4% m/m and +1.6% y/y, Aug +0.2% m/m and +1.4% y/y. Sep core PCE deflator expected +0.1% m/m and +1.3% y/y, 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. | |
| Tuesday, Oct 31 | ||
| US | 0830 ET | Q3 employment index expected +0.7%, Q2 +0.5%. |
| 0900 ET | Aug S&P CoreLogic composite-20 home prices expected +0.40% m/m and +5.9% y/y, Jul +0.35% m/m and +5.81% y/y. | |
| 0945 ET | Oct Chicago PMI expected -5.2 to 60.0, Sep +6.3 to 65.2. | |
| 1000 ET | Oct consumer confidence (Conference Board) expected +1.2 to 121.0, Sep -0.6 to 119.8. | |
| 1030 ET | FOMC begins 2-day policy meeting. |
U.S. STOCK CALENDAR10/30/2017
| Name | Ticker | Time | Description | Period | Estimate |
|---|---|---|---|---|---|
| Loews Corp | L US | 06:00 | Q3 2017 Earnings Release | Q3 17 | 0.547 |
| Affiliated Managers Group Inc | AMG US | Bef-mkt | Q3 2017 Earnings Release | Q3 17 | 3.354 |
| Roper Technologies Inc | ROP US | 06:55 | Q3 2017 Earnings Release | Q3 17 | 2.295 |
| Sempra Energy | SRE US | 07:00 | Q3 2017 Earnings Release | Q3 17 | 1.053 |
| Dominion Energy Inc | D US | 07:30 | Q3 2017 Earnings Release | Q3 17 | 1.018 |
| CSX Corp | CSX US | 08:00 | Analyst and Investor Conference | ||
| Roper Technologies Inc | ROP US | 08:30 | Q3 2017 Earnings Call | Q3 17 | |
| Affiliated Managers Group Inc | AMG US | 08:30 | Q3 2017 Earnings Call | Q3 17 | |
| Dominion Energy Inc | D US | 10:00 | Q3 2017 Earnings Call | Q3 17 | |
| Loews Corp | L US | 11:00 | Q3 2017 Earnings Call | Q3 17 | |
| Sempra Energy | SRE US | 12:00 | Q3 2017 Earnings Call | Q3 17 | |
| Mondelez International Inc | MDLZ US | 16:00 | Q3 2017 Earnings Release | Q3 17 | 0.544 |
| Vornado Realty Trust | VNO US | Aft-mkt | Q3 2017 Earnings Release | Q3 17 | 0.548 |
| Noble Energy Inc | NBL US | Aft-mkt | Q3 2017 Earnings Release | Q3 17 | (0.127) |
| SBA Communications Corp | SBAC US | Aft-mkt | Q3 2017 Earnings Release | Q3 17 | 1.55 |
| Edison International | EIX US | 16:01 | Q3 2017 Earnings Release | Q3 17 | 1.329 |
| Alexandria Real Estate Equities Inc | ARE US | 16:10 | Q3 2017 Earnings Release | Q3 17 | 1.502 |
| Macerich Co/The | MAC US | 16:15 | Q3 2017 Earnings Release | Q3 17 | 0.976 |
| Everest Re Group Ltd | RE US | 16:15 | Q3 2017 Earnings Release | Q3 17 | (16.094) |
| AvalonBay Communities Inc | AVB US | 16:16 | Q3 2017 Earnings Release | Q3 17 | 2.167 |
| UDR Inc | UDR US | 16:16 | Q3 2017 Earnings Release | Q3 17 | 0.47 |
| Edison International | EIX US | 16:30 | Q3 2017 Earnings Call | Q3 17 | |
| Mondelez International Inc | MDLZ US | 17:00 | Q3 2017 Earnings Call | Q3 17 |
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