Morning Call 10/5

Barchart Morning Call

Barchart.com - 35 minutes ago

OVERNIGHT MARKETS AND NEWS

Dec E-mini S&Ps (ESZ17 +0.03%) this morning are little changed, up +0.01%, ahead of speeches later this morning from Fed Governor Powell and Fed Presidents Harker and Williams. The speech from Fed Governor Powell may be given added scrutiny with reports that he is on President Trump's shortlist of candidates to replace Fed Chair Yellen. European stocks are unchanged as the markets weigh the situation in Spain where the state of Catalonia is trying to secede from Spain and form its own independent republic. Spain's IBEX Stock Index is up 1.15% and is giving a boost to European stocks after Spanish Economy Minister Guindos said that banks in Catalonia have indicated they are open to moving their headquarters elsewhere if the situation in the state worsens. Guindos also said that Catalonia's actions are illegal and independence is out of the question and that Spain has nothing to discuss with the secessionists until rule of law is restored. GBP/USD tumbled -0.49% to a 3-week low on reports that UK Prime Minister May could face a leadership rebellion within her own party with up to 30 Tory lawmakers prepared to sign a letter calling for her resignation. Asian stocks settled mixed: Japan +0.01%, Taiwan +0.47%, Australia -0.01%, Singapore +0.78%, India -0.25%. China, Hong Kong and South Korea are all closed for holidays.

The dollar index (DXY00 +0.16%) is up +0.11%. EUR/USD (^EURUSD) is down -0.13%. USD/JPY (^USDJPY) is down -0.22%.

Dec 10-year T-note prices (ZNZ17 +0.06%) are up +2.5 ticks.

UK Sep new car registrations fell -9.3% y/y to 426,170 and year-to-date are down -3.9% to 2,066.411.

The German Sep Markit construction PMI fell -1.5 to 53.4, the slowest pace of expansion in 8-months.

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) Sep Challenger job cuts (Aug +5.1% y/y), (2) weekly initial unemployment claims (expected -7,000 to 265,000, previous +12,000 to 272,000) and continuing claims (expected +16,000 to 1.950 million, previous -45,000 to 1.934 million), (3) Aug trade balance (expected -$42.7 billion, Jul -$43.7 billion), (4) Fed Governor Jerome Powell speaks on Treasury markets and Treasury market practices at an event in New York, (5) San Francisco Fed President John Williams (non-voter) delivers keynote speech at the St. Louis Fed’s Community Banking in the 21st Century Research and Policy Conference, (6) Aug factory orders (expected +1.0%, Jul -3.3% and +0.5% ex transportation), (7) Philadelphia Fed President Patrick Harker (voter) speaks at the “Investing in America’s Workforce” conference, (8) Kansas City Fed President Esther George (non-voter) speaks at the “Investing in America’s Workforce” conference, (9) USDA weekly Export Sales.

Notable Russell 1000 earnings reports today include: Costco (consensus $2.02), Constellation Brands (2.17), Global Payments (1.10), Yum China Holdings (0.56).

U.S. IPO's scheduled to price today: Switch (SWCH).

Equity conferences this week: Petaluma Area Chamber of Commerce Business Conference on Fri.

OVERNIGHT U.S. STOCK MOVERS

Microsoft (MSFT +0.58%) was upgraded to 'Buy' from 'Hold' at Canaccord Genuity with a price target of $86.

United Parcel Service (UPS -0.59%) and FedEx (FDX -0.75%) are both down over 2% in pre-market trading after Bloomberg News reported that Amazon.com is currently testing its own delivery service.

Norwegian Cruise Line Holdings Ltd (NCLH +2.28%) jumped 7% in after-hours trading after it was announced that it will replace Level 3 in the S&P 500 before the open of trading on Friday, Oct 13.

Mallinckrodt (MNK -0.61%) was downgraded to 'Hold' from 'Buy' at Canaccord Genuity.

ACADIA Pharmaceuticals (ACAD +0.72%) rallied over 5% in after-hours trading after the FDA granted 'Breakthrough Therapy Designation' to its Pimavanserin for the treatment of hallucinations and delusions associated with dementia-related psychosis.

Zumiez (ZUMZ -1.56%) climbed almost 5% in after-hours trading after it reported September comparable sales were up +9.3%, better than consensus of +2.9%, and then raised guidance on Q3 net sales to $241 million-$243 million from a prior estimate of $236 million-$241 million.

Monsanto (MON +0.05%) was downgraded to 'Neutral' from 'Outperform' at Macquarie.

SeaWorld Entertainment (SEAS +4.60%) rose almost 4% in after-hours trading after Merlin Entertainment is said to have approached SeaWorld on a deal for part of the company.

Matador Resources (MTDR -1.26%) may open lower today after it announced that it had commenced an underwritten public offering of 8.0 million shares of its common stock.

8Point3 Energy Partners LP (CAFD +1.21%) lost almost 2% in after-hours trading after it said it sees Q4 revenue of $12 million-$15 million, the midpoint below consensus of $14.6 million.

ImmunoGen (IMGN +2.35%) dropped 8% in after-hours trading after it announced that it intends to offer 12 million shares of common stock in an underwritten public offering.

MobileIron (MOBL -2.60%) jumped over 9% in after-hours trading after holder Altai Capital reported a 7.63% stake in the company as of Oct 2.

Fairmont Santrol Holdings (FMSA -3.85%) rose 2% in after-hours trading after it was re-initiated an 'Overweight' rating at Keybanc Capital Markets with a price target of $6.50.

MARKET COMMENTS

Dec S&P 500 E-mini stock futures (ESZ17 +0.03%) this morning are up +0.25 points (+0.01%). Wednesday's closes: S&P 500 +0.12%, Dow Jones +0.09%, Nasdaq +0.06%. The S&P 500 on Wednesday posted a new record high and closed higher on the rise in the U.S. Sep ISM non-manufacturing index by +4.5 points to 59.8, stronger than expectations of +0.2 to 55.5 and the fastest pace of expansion in 12 years. Stocks were also supported by increased speculation that President Trump may select Jerome Powell over Kevin Warsh for Fed chairman, which may lead to easier monetary policy as Powell is seen as more dovish than Warsh.

Dec 10-year T-note prices (ZNZ17 +0.06%) this morning are up +2.5 ticks. Wednesday's closes: TYZ7 unch, FVZ7 unch. Dec 10-year T-notes on Wednesday closed little changed. T-note prices were undercut by the stronger-than-expected U.S. Sep ISM non-manufacturing index to a 12-year high and by reduced safe-haven demand with the rally in the S&P 500 to a new record high. T-note prices were supported by speculation that President Trump may be leaning toward Jerome Powell to replace Janet Yellen as Fed Chair, which is seen a supportive for T-notes since Powell is one of the more dovish choices for Fed Chair compared to other candidates.

The dollar index (DXY00 +0.16%) this morning is up +0.103 (+0.11%). EUR/USD (^EURUSD) is down -0.0015 (-0.13%) and USD/JPY (^USDJPY) is down -0.25 (-0.22%). Wednesday's closes: Dollar Index +0.039 (+0.04%), EUR/USD +0.0015 (+0.13%), USD/JPY -0.09 (-0.08%). The dollar index on Wednesday closed little changed. The dollar was supported by the jump in the U.S. Sep ISM non-manufacturing index to a 12-year high and by the increase in 10-year T-note yields, which boosts the dollar's interest rate differentials. The dollar was undercut by increased speculation that President Trump may select Jerome Powell over Kevin Warsh for Fed chairman, which would be negative for the dollar since Powell is seen as more dovish than Warsh.

Nov crude oil (CLX17 +0.34%) this morning is up +9 cents (+0.18%) and Nov gasoline (RBX17 +1.59%) is +0.0215 (+1.36%). Wednesday's closes: Nov WTI crude -0.44 (-0.87%), Nov gasoline +0.0150 (+0.96%). Nov crude oil and gasoline on Wednesday settled mixed. Crude oil prices found support on the -6.02 million bbl decline in EIA crude inventories (a much bigger decline than expectations of -500,000 bbl) and strong foreign demand for U.S. crude after U.S. crude exports rose +33% in the week of Sep 29 to a record 1.98 million bpd. Crude oil prices were undercut by the +0.1% increase in U.S. crude production in the week of Sep 29 to 9.561 million bpd, a new 2-year high, and by the +1.53 million bbl increase in crude supplies at Cushing, OK, delivery point of WTI crude futures.

Metals prices this morning are hogher with Dec gold (GCZ17 +0.29%) +4.3 (+0.34%), Dec silver (SIZ17 +0.28%) +0.071 (+0.43%) and Dec copper (HGZ17 +0.74%) +0.022 (+0.73%). Wednesday's closes: Dec gold +2.2 (+0.17%), Dec silver -0.026(-0.16%), Dec copper -0.0045 (-0.15%). Metals on Wednesday settled mixed. Metals prices found support on increased safe-haven demand for precious metals on political tensions in Spain where the state of Catalonia wants to secede from Spain and form its own independent republic. Metals prices were also boosted by the increase in the U.S. Sep ISM non-manufacturing index to a 12-year high, a sign of economic strength that is positive for industrial metals demand. Metals prices were undercut by the rally in the S&P 500 to a new record high, which reduced the safe-haven demand for precious metals.

GLOBAL EVENT CALENDAR10/05/2017

		Thursday, Oct 5
US	0730 ET	Sep Challenger job cuts, Aug +5.1% y/y.
	0830 ET	Weekly initial unemployment claims expected -7,000 to 265,000, previous +12,000 to 272,000. Weekly continuing claims expected +16,000 to 1.950 million, previous -45,000 to 1.934 million.
	0830 ET	Aug trade balance expected -$42.7 billion, Jul -$43.7 billion.
	0830 ET	USDA weekly Export Sales.
	0910 ET	Fed Governor Jerome Powell speaks on Treasury markets and Treasury market practices at an event in New York.
	0915 ET	San Francisco Fed President John Williams (non-voter) delivers keynote speech at the St. Louis Feds Community Banking in the 21st Century Research and Policy Conference.
	1000 ET	Aug factory orders expected +1.0%, Jul -3.3% and +0.5% ex transportation.
	1000 ET	Philadelphia Fed President Patrick Harker (voter) speaks at the Investing in Americas Workforce conference.
	1100 ET	Treasury announces amount of 3-year T-notes (previous $24 billion), 10-year T-notes (previous $20 billion) and 30-year T-bonds (previous $12 billion) to be auctioned Oct 11-12.
	1630 ET	Kansas City Fed President Esther George (non-voter) speaks at the Investing in Americas Workforce conference.
		Friday, Oct 6
US	0830 ET	Sep non-farm payrolls expected +80,000, Aug +156,000. Sep private payrolls expected +74,000, Aug +165,000. Sep manufacturing payrolls expected +8,000, Aug +36,000. Sep unemployment rate expected unch at 4.4%, Aug +0.1 to 4.4%.
	0830 ET	Sep avg hourly earnings expected +0.3% m/m and +2.5% y/y, Aug +0.1% m/m and +2.5% y/y. Sep avg weekly hours all-employees expected unch at 34.4 hours, Aug -0.1 to 34.4 hours.
	0915 ET	Atlanta Fed President Raphael Bostic (non-voter) speaks at the Investing in Americas Workforce conference.
	1000 ET	Aug wholesale trade sales expected unch m/m, Jul -0.1% m/m. Revised Aug wholesale inventories expected unchanged at +1.0%, prelim-Aug +1.0% m/m.
	1215 ET	New York Fed President William Dudley (voter)will deliver a speech on The Monetary Policy Outlook and the Importance of Higher Education for Economic Mobility at an event in New York.
	1245 ET	Dallas Fed President Robert Kaplan (voter) speaks in a moderated Q&A at an Investing in Americas Workforce conference in Dallas.
	1500 ET	Aug consumer credit expected +$15.54 billion, Jul +$18.499 billion.

U.S. STOCK CALENDAR10/05/2017

Name	Ticker	Time	Description	Period	Estimate
Constellation Brands Inc	STZ US	Bef-mkt	Q2 2018 Earnings Release	Q2 18	2.166
Leucadia National Corp	LUK US	08:30	Investor Meeting
Clorox Co/The	CLX US	09:00	Analyst Day
Constellation Brands Inc	STZ US	10:30	Q2 2018 Earnings Call	Q2 18
Telephone & Data Systems Inc	TDS US		Roadshow - Day 4
United States Cellular Corp	USM US		Roadshow - Day 4
RPM International Inc	RPM US		Annual General Meeting
Global Payments Inc	GPN US		Q3 2017 Earnings Release	Q3 17	1.098
Leucadia National Corp	LUK US		Investor Day
Symantec Corp	SYMC US	12:00	Annual General Meeting
Oracle Corp	ORCL US	14:00	Analyst Meeting
Costco Wholesale Corp	COST US	16:15	Q4 2017 Earnings Release	Q4 17	2.017
Yum China Holdings Inc	YUMC US	16:30	Q3 2017 Earnings Release	Q3 17	0.564
Costco Wholesale Corp	COST US	17:00	Q4 2017 Earnings Call	Q4 17
Yum China Holdings Inc	YUMC US	20:00	Q3 2017 Earnings Call	Q3 17