Barchart Morning Call
Barchart.com - 41 minutes ago
OVERNIGHT MARKETS AND NEWS
Dec E-mini S&Ps (ESZ17 -0.07%) this morning are down slightly by -0.06% as they consolidate Wednesday's rally to a new all-time high. Losses were limited as energy stocks rose with the price of Nov WTI crude oil (CLX17 +1.04%) up +1.02% to a 5-1/2 month high. European stocks are up +0.19% at a 3-month high on optimism in the European economic outlook after Eurozone Sep economic confidence rose a more-than-expected +1.1 to 113.0, a 10-1/4 year high. Global bond markets sold-off for a second day with 10-year German bunds at a 1-3/4 month low and U.S. 10-year T-notes at a 2-1/2 month low on optimism in the global economic outlook along with expectations for another Fed interest rate hike this year. Expectations for another Fed rate increase this year has also undercut gold prices with Dec COMEX gold (GCZ17-0.04%) down -0.05% to a new 1-month low. Asian stocks settled mixed: Japan +0.47%, Hong Kong -0.80%, Chia -0.17%, Taiwan -0.29%, Australia +0.11%, Singapore -0.28%, South Korea +0.01%, India +0.39%. Wednesday's slump in the yen helped boost Japanese exporter stocks and lead the Nikkei Stock Index higher after USD/JPY climbed to a 2-1/2 month high.
The dollar index (DXY00 -0.13%) is down -0.12%. EUR/USD (^EURUSD) is up +0.28%. USD/JPY (^USDJPY) is down -0.14%.
Dec 10-year T-note prices (ZNZ17 -0.11%) are down -6 ticks at a 2-1/2 month low on expectations for a Dec Fed rate hike after Boston Fed President Rosengren said the Fed should raise interest rates" in a regular and gradual" because a tight labor market risks overheating the economy.
ECB Governing Council member Liikanen said "a very substantial degree of monetary accommodation is still needed in the euro area for underlying inflationary pressures to gradually build up."
Boston Fed President Rosengren said "I believe policy makers should not overreact to low current inflation readings that are widely expected to be temporary" and that the Fed should raise interest rates" in a regular and gradual" because a tight labor market risks overheating the economy.
Eurozone Sep economic confidence rose +1.1 to 113.0, stronger than expectations of +0.1 to 112.0 and a 10-1/4 year high.
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) weekly initial unemployment claims (expected +11,000 to 270,000, previous -23,000 to 259,000) and continuing claims (expected +13,000 to 1.993 million, previous +44,000 to 1.980 million), (2) revised Q2 GDP (expected unrevised at 3.0% q/q annualized), (3) Aug wholesale inventories (expected +0.4%, Jul +0.6% m/m), (4) 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, (5) Fed Vice Chair Stanley Fischer speaks at the BOE Independence Conference in London on ‘Developments in Central Banking,’ (6) Sep Kansas City Fed manufacturing activity (expected -2 to 14, Aug +6 to 16), (7) Treasury auctions $28 billion of 7-year T-notes, (8) Atlanta Fed President Raphael Bostic (non-voter) speaks on a Webcast about careers leveraging economics, (9) USDA weekly Export Sales, (10) USDA Q3 Hogs & Pigs Inventory.
Notable Russell 1000 earnings reports today include: Accenture (consensus $1.46), Vail Resorts (-1.81), McCormick (1.03), Rite Aid (-0.01), Conagra Brands (0.40).
U.S. IPO's scheduled to price today: none.
Equity conferences this week: Wolfe Research Conference on Tue-Thu, LEERINK Partners Rare Disease & Immuno-Oncology Conference on Wed-Thu, B. Riley Consumer Conference on Thu.
OVERNIGHT U.S. STOCK MOVERS
Archer Daniels Midland (ADM -1.08%) was downgraded to 'Neutral' from 'Buy' at Citigroup.
Vail Resorts (MTN +1.36%) may open lower this morning after it reported a Q4 Ebitda loss of -$50.4 million, wider than consensus of -$46.6 million, and then said it sees full-year Ebitda of $652 million-$682 million, the midpoint weaker than consensus of $670.1 million.
McCormick (MKC -0.85%) may move higher this morning after it reported Q3 adjusted EPS of $1.12, better than expectations of $1.03, and then said it sees full-year adjusted EPS of $4.20-$4.24, above consensus of $4.07.
Thor Industries (THO +2.35%) climbed nearly 3% in after-hours trading after it reported Q4 EPS from continuing operations of $2.26, well above consensus of $1.96.
Jabil (JBL +3.56%) lost almost 1% in after-hours trading after it forecast Q1 core EPS 65 cents-91 cents, the midpoint below consensus of 83 cents.
Progress Software (PRGS +1.15%) gained 2% in after-hours trading after it said it sees full-year adjusted EPS of $182-$1.85, higher than consensus of $1.80.
Chubb Ltd (CB +0.21%) said its insured losses for Hurricane Harvey are estimated at $650 million pretax, or $520 million after tax, and that losses from Hurricane Irma are estimated at $800 million-$950 million pretax, or $640 million-$750 million after tax.
Abbott Laboratories (ABT -1.32%) rose 2% in after-hours trading after its Freestyle Libre Flash Glucose Monitoring System received FDA approval.
DexCom (DXCM -0.66%) lost 13% in after-hours trading after competitor, Abbott Laboratories, won FDA approval for its Freestyle Libre Flash Glucose Monitoring System.
Comtech Telecommunications (CMTL +4.77%) dropped over 12% in after-hours trading after it reported Q4 net sales of $147.8 million, below consensus of $150.8 million, and said it sees full-year revenue of $550 million-$575 million, the midpoint below consensus of $564.8 million.
Evertec (EVTC -3.86%) was upgraded to 'Buy' from 'Hold' at Stifel with a 12-month target price of $18.
Pandora (P -1.34%) lost 1% in after-hours trading after it priced 7 million shares of its common stock in a secondary public offering.
Pier 1 Imports (PIR +3.21%) dropped nearly 8% in after-hours trading after it said it cut its full-year net sales estimate to 0% to up +2% from a prior view of +2% to +3%, and lowered its full-year adjusted EPS estimate to 38 cents-48 cents from a previous view of 46 cents-52 cents, the midpoint below consensus of 47 cents.
MARKET COMMENTS
Dec S&P 500 E-mini stock futures (ESZ17 -0.07%) this morning are down -1.50 points (-0.06%). Wednesday's closes: S&P 500 +0.41%, Dow Jones +0.25%, Nasdaq +0.96%. The S&P 500 on Wednesday rose to a new record high and closed higher on the U.S. Aug durable goods orders report of +1.7% (stronger than expectations of +1.0%) and optimism about the Republican's tax cut plan that includes a cut in the corporate tax rate to 20% from 35% and the immediate expensing of capital spending. Stocks were undercut by the weaker-than-expected U.S. Aug pending home sales report of -2.6% m/m, weaker than expectations of -0.5% m/m and the biggest decline in 7 months.
Dec 10-year T-note prices (ZNZ17 -0.11%) this morning are down -6 ticks to a fresh 2-1/2 month low. Wednesday's closes: TYZ7 -18.00, FVZ7 -8.25. Dec 10-year T-notes on Wednesday fell to a 2-1/2 month nearest-futures low and closed lower on concern about a larger deficit from the Republican tax cut plan and on increased inflation expectations after the 10-year T-note breakeven inflation rate rose to a 4-1/4 month high.
The dollar index (DXY00 -0.13%) this morning is down -0.116 (-0.12%). EUR/USD (^EURUSD) is up +0.0033 (+0.28%) and USD/JPY (^USDJPY)is down -0.16 (-0.14%). Wednesday's closes: Dollar Index +0.395 (+0.42), EUR/USD -0.0048 (-0.41%), USD/JPY +0.60 (+0.53%). The dollar index on Wednesday climbed to a 1-month high and closed higher on expectations that the U.S. economy may get a boost from the Republicans' tax reform plan and on the jump in the 10-year T-note yield to a 1-3/4 month high, which improves the dollar's interest rate differentials. EUR/USD fell to a 5-week low and USD/JPY climbed to a 2-1/4 month high.
Nov crude oil (CLX17 +1.04%) this morning is up +53 cents (+1.02%) at a 5-1/2 month high and Nov gasoline (RBX17-0.57%) is -0.0079 (-0.49%). Wednesday's closes: Nov WTI crude +0.26 (+0.50%), Nov gasoline -0.0271 (-1.64%). Nov crude oil and gasoline on Wednesday settled mixed. Crude oil prices were undercut by the rally in the dollar index to a 1-month high and by increased U.S. crude output after U.S. crude production in the week ended Sep 22 rose to 9.547 million bpd, a 2-year high. In addition, EIA gasoline inventories rose by +1.11 mln bbls, more than expectations of a -750,000 bbl draw. A bullish factor was the unexpected decline in EIA crude inventories which fell -1.85 million bbl versus expectations for an increase of +3.0 million bbl.
Metals prices this morning are mixed with Dec gold (GCZ17 -0.04%) -0.7 (-0.05%) to a new 1-month low, Dec silver (SIZ17+0.05%) +0.013 (+0.08%) and Dec copper (HGZ17 +0.24%) +0.011 (+0.36%). Wednesday's closes: Dec gold -13.9 (-1.07%), Dec silver -0.056 (-0.33%), Dec copper +0.0105 (+0.36%). Metals on Wednesday settled mixed with Dec gold at a 1-month low and Dec silver at a 1-1/4 month low. Metals prices were undercut by strength in the dollar as the dollar index rose to a 1-month high, and the rally in stocks, which curbed the safe-haven demand for precious metals. Copper closed higher on speculation that Republican tax cut plan might boost economic growth and lead to increased industrial metals demand.
GLOBAL EVENT CALENDAR09/28/2017
| 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. | |
| Friday, Sep 29 | ||
| US | 0830 ET | Aug personal spending expected +0.1%, Jul +0.3%. Aug personal income expected +0.2%, Jul +0.4%. |
| 0830 ET | Aug PCE deflator expected +0.3% m/m and +1.5% y/y, Jul +0.1% m/m and +1.4% y/y. Aug core PCE deflator expected +0.2% and +1.4% y/y, Jul +0.1% m/m and +1.4% y/y. | |
| 0945 ET | Sep Chicago PMI expected -0.2 to 58.7, Aug unch at 58.9. | |
| 1000 ET | Final-Sep University of Michigan U.S. consumer sentiment index expected unch at 95.3, prelim-Sep -1.5 to 95.3. | |
| 1100 ET | Philadelphia Fed President Patrick Harker (voter) speaks at an event titled: The Impact on Consumers, Banking, and Regulatory Policy. Text: No Q&A. | |
| 1200 ET | USDA Q3 Quarterly Grain Stocks. |
U.S. STOCK CALENDAR09/28/2017
| Name | Ticker | Time | Description | Period | Estimate |
|---|---|---|---|---|---|
| Vail Resorts Inc | MTN US | Bef-mkt | Q4 2017 Earnings Release | Q4 17 | (1.812) |
| McCormick & Co Inc/MD | MKC US | Bef-mkt | Q3 2017 Earnings Release | Q3 17 | 1.03 |
| Accenture PLC | ACN US | 06:59 | Q4 2017 Earnings Release | Q4 17 | 1.463 |
| Rite Aid Corp | RAD US | 07:00 | Q2 2018 Earnings Release | Q2 18 | (0.013) |
| Conagra Brands Inc | CAG US | 07:30 | Q1 2018 Earnings Release | Q1 18 | 0.401 |
| John Wiley & Sons Inc | JW/A US | 08:00 | Annual General Meeting | ||
| Aflac Inc | AFL US | 08:00 | Financial Analysts Briefing | ||
| McCormick & Co Inc/MD | MKC US | 08:00 | Q3 2017 Earnings Call | Q3 17 | |
| Accenture PLC | ACN US | 08:00 | Q4 2017 Earnings Call | Q4 17 | |
| Rite Aid Corp | RAD US | 08:30 | Q2 2018 Earnings Call | Q2 18 | |
| American Airlines Group Inc | AAL US | 09:00 | Investor Day | ||
| Conagra Brands Inc | CAG US | 09:30 | Q1 2018 Earnings Call | Q1 18 | |
| Vail Resorts Inc | MTN US | 11:30 | Q4 2017 Earnings Call | Q4 17 | |
| Ameren Corp | AEE US | Investor Meeting | |||
| Lamb Weston Holdings Inc | LW US | Annual General Meeting | |||
| Aflac Inc | AFL US | Analyst Briefing | |||
| Guidewire Software Inc | GWRE US | 12:30 | Analyst and Investor Meeting | https://www.barchart.com/story/news/barchart-morning-call |
