Morning Call 11/27

Barchart Morning Call

Barchart.com - Mon Nov 27, 6:40AM CST

OVERNIGHT MARKETS AND NEWS

Dec E-mini S&Ps (ESZ17 -0.04%) this morning are up +0.09% at a new record nearest-futures high on signs of sustainability in the U.S. economic recovery as consumers continue to spend after Adobe Systems reported that Black Friday online spending was a record $5.03 billion, up +16.9% y/y. Adobe also estimates that today's Cyber Monday shopping day will be the biggest online shopping day in history, with $6.6 billion in predicted sales, up +16.5% y/y. European stocks are up +0.24% as political risks in Germany eased on signs that the SPD party will join Chancellor Merkel's Christian Democratic party in a "Grand Coalition." Asian stocks settled mostly lower: Japan -0.24%, Hong Kong -0.60%, China -0.94%, Taiwan -0.95%, Australia +0.10%, Singapore -0.17%, South Korea -1.76%, India +0.13%. China's Shanghai Composite tumbled to a 3-month low as concern over the government's attempt to tighten liquidity led to long liquidation in Chinese large-cap stocks. 

The dollar index (DXY00 -0.08%) is down -0.12% at a 2-month low. EUR/USD (^EURUSD) is up +0.03% at a 2-month high on optimism Chancellor Merkel's Christian Democratic party can form a coalition with the German SPD party. USD/JPY (^USDJPY) is down -0.33%.

Dec 10-year T-note prices (ZNZ17 unch) are down -3 ticks.

Japan Oct PPI services prices rose +0.8% y/y, weaker than expectations of +0.9% y/y.

China Oct industrial profits rose +25.1% y/y and Jan-Oct industrial profits are up +23.3% y/y.

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) Oct new home sales (expected -6.3% to 625,000, Sep +18.9% to 667,000), (2) Nov Dallas Fed manufacturing activity (expected -3.6 to 24.0, Oct +6.3 to 27.6), (3) Treasury auctions $26 billion of 2-year T-notes and $34 billion of 5-year T-notes, (4) New York Fed President Dudley (voter) speaks in a moderated discussion at the University of California, Berkeley, on ‘The U.S. Economy: 10 Years after the Crisis,’ (5) USDA weekly grain export inspections, (6) USDA crop conditions and progress report.

Notable Russell 1000 earnings reports today include: Thor Industries (consensus $1.86).

U.S. IPO's scheduled to price today: none.

Equity conferences this week: MUFG Securities Equity Energy Tour on Mon, Credit Suisse Global TMT Conference on Mon-Wed, Credit Suisse Technology Media & Telecom Conference on Tue, UBS Global Real Estate CEO/CFO Conference on Tue, Piper Jaffray Health Care Conference on Tue-Wed, ACI European Base Oils & Lubricants Interactive Summit on Wed, Citi Basic Materials Conference on Wed-Thu, Bank of America Merrill Lynch Leveraged Finance Conference on Wed-Thu, Credit Suisse Industrials Conference on Wed-Thu, Evercore ISI Inaugural Biopharma Catalyst/Deep Dive Conference on Wed-Thu, ACI Cyber Security Oil, Gas, Power Conference on Thu, Deutsche Bank MedTools and Diagnostics One-on-One Day on Thu, HSBC High Yield Conference on Thu.

OVERNIGHT U.S. STOCK MOVERS

Ciena (CIEN +0.67%) was upgraded to 'Buy' from 'Neutral' at Bank of America/Merrill Lynch with a 12-month target price of $28.

Everest Re (RE -0.72%) was upgraded to 'Outperform' from 'Underperform' at Keefe, Bruyette & Woods.

Norfolk Southern (NSC +0.60%) was downgraded to 'Sell' from 'Hold' at Loop Capital Markets with a price target of $120.

Western Digital (WDC -0.14%) was downgraded to 'Equal-Weight' from 'Overweight' at Morgan Stanley.

Allergan (AGN -0.74%) was resumed with an 'Outperform' at Leerink Partners LLC with a 12-month target price of $237.

Buffalo Wild Wings (BWLD -0.07%) was downgraded to 'Neutral' from 'Buy' at UBS, citing valuation.

Square (SQ +0.10%) was downgraded to 'Sell' from 'Neutral' at BTIG LLC with a 12-month target price of $30.

Eminence Capital reported that it raised its passive stake in Wendy's (WEN -0.65%) to 5.2% from 3.68%.

Macy's (M +2.13%) slipped almost 1% in after-hours trading after a glitch in the company's credit-card processing Black Friday spurred long lines which prompted some customers to abandon purchases due to the long wait times.

Johnson Controls International Plc (JCI +0.33%) may move higher this morning after vice president of the company, William Jackson, filed a Form 4 with the SEC that he purchased 20,000 shares of JCI at an average price of $36 on Nov 21.

Broadfin Capital reported that it reduced its stake in Recro Pharma (REPH unch) to 15.31% from 16.21%.

Marathon Patent Group (MARA +172.94%) jumped 14% in after-hours trading on top of a 173% surge Friday after it reported a Q3 operating loss of -$3.9 million versus an operating loss of -$10.7 million for Q3 of 2016.

MARKET COMMENTS

Dec S&P 500 E-mini stock futures (ESZ17 -0.04%) this morning are up +2.25 points (+0.09%) at a new record nearest-futures high. Friday's closes: S&P 500 +0.21%, Dow Jones +0.14%, Nasdaq +0.36%. The S&P 500 on Friday climbed to a new record high and closed higher on a rally in consumer retail stocks due to optimism for strong holiday sales as Black Friday begins the all-important holiday shopping season. There was also strength in energy stocks after crude oil prices climbed +1.60% to a 2-1/3 year high.

Dec 10-year T-note prices (ZNZ17 unch) this morning are down -3 ticks. Friday's closes: TYZ7 -4.50, FVZ7 -2.75. Dec 10-year T-notes on Friday closed lower on the rally in the S&P 500 to a new record high and on the jump in crude oil prices to a 2-1/3 year high, which boosts inflation expectations.

The dollar index (DXY00 -0.08%) this morning is down -0.11 (-0.12%) at a 2-month low. EUR/USD (^EURUSD) is up +0.0004 (+0.03%) at a 2-month high and USD/JPY (^USDJPY) is down -0.37 (-0.33%). Friday's closes: Dollar Index -0.438 (-0.37%), EUR/USD +0.0080 (+0.68%), USD/JPY +0.30 (+0.27%). The dollar index on Friday fell to a 2-month low and closed lower on the unexpected decline in the U.S. Nov Markit manufacturing PMI, which is dovish for Fed monetary policy. There was also strength in EUR/USD, which rose to a 2-month high after the German Nov IFO business climate unexpectedly rose to the highest since the data series began in 1991.

Jan crude oil (CLF18 -1.05%) this morning is down -49 cents (-0.83%) and Jan gasoline (RBF18 -0.49%) is -0.0054 (-0.30%). Friday's closes: Jan WTI crude +0.93 (+1.60%), Jan gasoline +0.0187 (+1.06%). Jan crude oil and gasoline on Friday closed higher with Jan crude at a 2-1/3 year high and Jan gasoline at a 1-1/2 week high. Crude oil prices were boosted by the slump in the dollar index to a 2-month low and by a report that said Russia and OPEC have outlined a deal to extend their crude production cuts until the end of next year. Crude oil prices were also boosted by the rally in the S&P 500 to a new record high, which bolsters optimism in the economic outlook that may lead to increased energy demand.

Metals prices this morning are mixed with Dec gold (GCZ17 +0.51%) +6.2 (+0.48%), Dec silver (SIZ17 +0.52%) +0.078 (+0.46%) and Dec copper (HGZ17 -1.29%) -0.039 (-1.21%). Friday's closes: Dec gold -4.9 (-0.38%), Dec silver -0.120(-0.70%), Dec copper +0.0320 (+1.02%). Metals on Friday settled mixed with Dec copper at a 3-week high. Metals prices were boosted by the slide in the dollar index to a 2-month low. Copper was also boosted by strikes by copper miners in Chile and Peru and by tighter copper supplies as LME copper inventories fell -5,475 MT to a 2-1/4 month low of 213,600 MT. Metals prices were undercut by the rally in the S&P 500 to a new record high, which curbs safe-haven demand for precious metals.

GLOBAL EVENT CALENDAR11/27/2017

		Monday, Nov 27
US	1000 ET	Oct new home sales expected -6.3% to 625,000, Sep +18.9% to 667,000.
	1030 ET	Nov Dallas Fed manufacturing activity expected -3.6 to 24.0, Oct +6.3 to 27.6.
	1100 ET	USDA weekly grain export inspections.
	1130 ET	Treasury auctions $26 billion of 2-year T-notes.
	1300 ET	Treasury auctions $34 billion of 5-year T-notes.
	1600 ET	USDA crop conditions and progress report.
	1900 ET	New York Fed President Dudley (voter) speaks in a moderated discussion at the University of California, Berkeley, on The U.S. Economy: 10 Years after the Crisis.
		Tuesday, Nov 28
US	0830 ET	Oct wholesale inventories expected +0.4%, Sep +0.3%. Oct retail inventories, Sep -1.0%.
	0900 ET	Sep FHFA house price index expected +0.5% m/m, Aug +0.7% m/m. Q3 house price purchase index, Q2 +1.6% q/q.
	0900 ET	Sep S&P CoreLogic composite-20 home price index expected +0.3% m/m and +6.0% y/y, Aug +0.45% m/m and +5.92% y/y.
	1000 ET	Conference Board Nov U.S. consumer confidence expected -1.9 to 124.0, Oct +5.3 to 125.9.
	1000 ET	Senate Banking Committee holds hearing on Fed Chair nominee Jerome Powell.
	1000 ET	Nov Richmond Fed manufacturing index expected +2 to 14, Oct -7 to 12.
	1300 ET	Treasury auctions $28 billion of 7-year T-notes.

U.S. STOCK CALENDAR11/27/2017

Name	Ticker	Time	Description	Period	Estimate
Equifax Inc	EFX US		Investor Meeting
Thor Industries Inc	THO US	Aft-mkt	Q1 2018 Earnings Release	Q1 18	1.859

Morning Call 11/18

Barchart Morning Call

Barchart.com - Wed Oct 18, 6:42AM CDT

OVERNIGHT MARKETS AND NEWS

Dec E-mini S&Ps (ESZ17 +0.15%) this morning are up +0.16% at a new record nearest-futures high and European stocks are up +0.45% at a 5-month high. Optimism that the Trump administration will pass a tax reform plan continues to underpin U.S. equity prices, while speculation that the ECB will remain accommodative for longer in lifting European stocks. An introductory speech by ECB President Draghi today at a conference in Frankfort shed no light on ECB plans, while the markets speculate that President Trump will insert a hawk to be the next Fed Chair. A person familiar with the process said that President Trump will name his choice for the next Fed Chair before he leaves Nov 3 on an 11-day trip to Asia and Hawaii. Asian stocks settled mostly higher: Japan +0.13%, Hong Kong +0.05%, China +0.29%, Taiwan -0.03%, Australia +0.01%, Singapore closed for holiday, South Korea -0.03%, India -0.08%. Chinese stocks gained ahead of data tomorrow on China GDP, industrial production and retail sales. Japan's Nikkei Stock Index rose to a new 20-3/4 year high as polls suggest Prime Minister Abe's ruling party may show its best election result in more than three decades after this Sunday's elections in Japan. Abe's Liberal Democratic Party is projected to win as many as 303 seats, close to 2/3 of the 465 seats up for election. That would be the strongest showing since 304 seats were won in the 1986 election.

The dollar index (DXY00 +0.21%) is up +0.20% at a 1-week high on hawkish comments from San Francisco Fed President Williams and Philadelphia Fed President Harker who both look for Fed rate hike at the Dec FOMC meeting. EUR/USD (^EURUSD) is down -0.13% at a 1-week low. USD/JPY (^USDJPY) is up +0.52% at a 1-week high.

Dec 10-year T-note prices (ZNZ17 -0.22%) are down -10 ticks.

San Francisco Fed President Williams said the U.S. economy is stronger than in looks and that inflation softness in overstated. He said the Fed should aim to raise interest rates at the Dec FOMC meeting and three more times next year.

Philadelphia Fed President Harker said he sees one more rate increase in 2017 and notes that high prices for equities and other assets could be an argument for continued, steady pace for rate increases and "that's why I would like to prudently move up to the neutral real rate as quickly as possible."

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) weekly MBA mortgage applications (previous -2.1% with purchase sub-index -0.1% and refi sub-index -4.2%), (2) New York Fed President William Dudley (voter) and Dallas Fed President Robert Kaplan (voter) take part in a moderated discussion on economic development, (3) Sep housing starts (expected -0.4% to 1.175 million, Aug -0.8% to 1.18 million), (4) Fed Beige Book, (5) EIA weekly Petroleum Status Report.

Notable S&P 500 earnings reports today include: American Express (consensus $1.48), United Rentals (3.03), M&T Bank (2.04), United Continental (2.19), SL Green Realty (1.56), Northern Trust (1.12), Crown Castle (1.00), US Bancorp (0.88), Abbott Labs (0.65), EBay (0.48), Kinder Morgan (0.15).

U.S. IPO's scheduled to price today: MongoDB (MDB), RumbleOn (RMBL)

Equity conferences this week: International Association for the Study of Lung Cancer World Conference - Abstra on Mon-Wed, BIO Investor Forum on Tue, METALCON Conference on Thu, SAP Retail Executive Forum on Thu, American Association for the Study of Liver Diseases Liver Meeting on Fri.

OVERNIGHT U.S. STOCK MOVERS

Expedia (EXPE +0.44%) was upgraded to 'Buy' from 'Neutral' at Redburn.

Grainger (GWW +12.65%) was upgraded to 'Outperform' from 'Market Perform' at Oppenheimer with an 18-month target price of $245.

Chipotle Mexican Grill (CMG +2.78%) fell nearly 3% in pre-market trading after it was downgraded to 'Underperform' from 'Neutral' at Bank of America/Merrill Lynch.

WP Carey (WPC -0.43%) was initiated as an 'Outperform' at Baird with a 12-month target price of $77.

Allergan (AGN -0.32%) was downgraded to 'Hold' from 'Buy' at Edward Jones,

International Business Machines (IBM -0.20%) jumped nearly 5% in after-hours trading after it reported Q3 operating EPS of $3.30, better than consensus of $3.28, and said it sees a $2.8 billion to $2.9 billion increase in Q4 sales from Q3.

Cree (CREE +0.20%) lost nearly 3% in after-hours trading after it forecast Q2 revenue of $340 million-$360 million, below consensus of $369 million.

Select Comfort (SCSS -0.56%) fell over 4% in after-hours trading after it reported Q3 EPS of 62 cents, weaker than consensus of 68 cents, and then said it sees full-year EPS of $1.30-$1.45, the midpoint below consensus of $1.39.

Hi-Crush Partners LP (HCLP +2.87%) jumped nearly 12% in after-hours trading when it announced that it will resume a quarterly cash distribution of 15 cents per share and its board said it authorized a stock buyback program of up to $100 million.

Inovio Pharmaceuticals (INO +0.48%) rose nearly 3% in after-hours trading after it was initiated as an 'Outperform' at RBC Capital Markets with a 12-month target price of $11.

Akari Therapeutics LLC (AKTX -1.23%) plunged 15% in after-hours trading after it was said to offer $17 million in company shares at $5.00-$5.25 each, a 17.97%-21.88% discount to Tuesday's close.

MobileIron (MOBL -2.56%) slumped 10% in after-hours trading after it announced that CEO Barry Mainz will step down effective immediately amid a "mutual decision," and after the company reported preliminary Q3 revenue of $42 million-$43 million, below a July 27 forecast of $44 million-$46 million.

MARKET COMMENTS

Dec S&P 500 E-mini stock futures (ESZ17 +0.15%) this morning are up +4.00 points (+0.16%) at a fresh record nearest-futures high. Tuesday's closes: S&P 500 +0.07%, Dow Jones +0.18%, Nasdaq +0.13%. The S&P 500 on Tuesday eked out a new record high and closed slightly higher on the unexpected +4 point increase in the U.S. Oct NAHB housing market index to 68, stronger than expectations of unchanged at 64 and a 5-month high. There was also strength in health-care stocks after Republican Senator Alexander and Democratic Senator Murray said they have the "basic outlines" of a bipartisan deal to resume federal subsidies to health insurers for 2 years. Stocks were undercut by news that U.S. Sep import prices rose +0.7% m/m, stronger than expectations of +0.6% m/m and the fastest pace of increase in 15 months, which bolsters the case for a Fed rate hike in Dec.

Dec 10-year T-note prices (ZNZ17 -0.22%) this morning are down -10 ticks. Tuesday's closes: TYZ7 +0.50, FVZ7 unch. Dec 10-year T-notes on Tuesday closed little changed. T-note prices were supported by the the weaker-than-expected U.S. Sep manufacturing production report and by the decline in the 10-year T-note breakeven inflation expectations rate to a 3-week low. T-note prices were undercut by the stronger-than expected U.S. Sep import price report of +0.7% m/m, the most in 15 months, and by the unexpected 4-point increase in the U.S. Oct NAHB housing market index to a 5-month high.

The dollar index (DXY00 +0.21%) this morning is up +0.183 (+0.20%) at a 1-week high. EUR/USD (^EURUSD) is down -0.0015 (-0.13%) at a 1-week low and USD/JPY (^USDJPY) is up +0.58 (+0.52%) at a 1-week high. Tuesday's closes: Dollar Index +0.174 (+0.19%), EUR/USD -0.0030 (-0.25%), USD/JPY +0.01 (+0.01%). The dollar index on Tuesday closed higher on speculation that President Trump may be leaning toward John Taylor as the next Fed chair, who is thought to be hawkish. There was also weakness in EUR/USD which fell to a 1-week low after the German Oct ZEW came in lower than expected and after Spain cut its 2018 GDP estimates.

Nov crude oil (CLX17 +0.31%) this morning is up +20 cents (+0.39%) and Nov gasoline (RBX17 +0.50%) is +0.0083 (+0.51%). Tuesday's closes: Nov WTI crude +0.01 (+0.02%), Nov gasoline +0.0132 (+0.82%). Nov crude oil and gasoline on Tuesday closed higher on expectations for Wednesday's EIA crude inventories to fall -3.0 million bbl and the increase in the crack spread to a 1-week high, which gives incentive for refineries to purchase more crude to refine into gasoline. Crude oil prices were undercut by a stronger dollar and by reduced tensions between Iraq and Kurdistan after Sky News reported that the Kurdish Peshmerga agreed to return to Iraq's 2003 border demarcations, which reduces the likelihood of disruptions of crude supplies from Iraq.

Metals prices this morning are lower with Dec gold (GCZ17 -0.35%) -5.5 (-0.43%) at a 1-week low, Dec silver (SIZ17-0.36%) -0.081 (-0.48%) at a 1-week low and Dec copper (HGZ17 -0.25%) -0.007 (-0.20%). Tuesday's closes: Dec gold -16.8(-1.29%), Dec silver -0.328 (-1.89%), Dec copper -0.0435 (-1.34%). Metals on Tuesday closed lower with Dec gold and Dec silver at 1-week lows. Metals prices were undercut by a stronger dollar and by speculation that President Trump is leaning toward John Taylor as the next Fed chair, who is thought to be a monetary policy hawk.

GLOBAL EVENT CALENDAR10/18/2017

		Wednesday, Oct 18
US	0700 ET	Weekly MBA mortgage applications, previous -2.1% with purchase sub-index -0.1% and refi sub-index -4.2%.
	0800 ET	New York Fed President William Dudley (voter) and Dallas Fed President Robert Kaplan (voter) take part in a moderated discussion on economic development.
	0830 ET	Sep housing starts expected -0.4% to 1.175 million, Aug -0.8% to 1.18 million. Sep building permits expected -2.1%to 1.245 million, Aug +3.4% to 1.272 million.
	1030 ET	EIA weekly Petroleum Status Report.
	1400 ET	Fed Beige Book.
		Thursday, Oct 19
US	0830 ET	Weekly initial unemployment claims expected -3,000 to 240,000, previous -15,000 to 243,000. Weekly continuing claims expected +1,000 to 1.890 million, previous -32,000 to 1.889 million.
	0830 ET	Oct Philadelphia Fed business outlook survey expected -1.8 to 22.0, Sep +4.9 to 23.8.
	0830 ET	USDA weekly Export Sales.
	1000 ET	Sep leading indicators expected +0.1%, Aug +0.4%.
	1100 ET	Treasury announces amount of 2-year T-notes (previous $26 billion), 2-year floating-rate notes (previous $13 billion), 5-year T-notes (previous $34 billion) and 7-year T-notes (previous $28 billion) to be auctioned Oct 24-26
	1300 ET	Treasury auctions $5 billion of 30-year TIPS.

U.S. STOCK CALENDAR10/18/2017

Name	Ticker	Time	Description	Period	Estimate
M&T Bank Corp	MTB US	Bef-mkt	Q3 2017 Earnings Release	Q3 17	2.404
US Bancorp	USB US	Bef-mkt	Q3 2017 Earnings Release	Q3 17	0.881
Northern Trust Corp	NTRS US	07:30	Q3 2017 Earnings Release	Q3 17	1.123
Abbott Laboratories	ABT US	07:30	Q3 2017 Earnings Release	Q3 17	0.653
Navient Corp	NAVI US	08:00	Q3 2017 Earnings Call	Q3 17
US Bancorp	USB US	09:00	Q3 2017 Earnings Call	Q3 17
Abbott Laboratories	ABT US	09:00	Q3 2017 Earnings Call	Q3 17
M&T Bank Corp	MTB US	11:00	Q3 2017 Earnings Call	Q3 17
Northern Trust Corp	NTRS US	12:00	Q3 2017 Earnings Call	Q3 17
Seagate Technology PLC	STX US		Annual General Meeting
SL Green Realty Corp	SLG US	Aft-mkt	Q3 2017 Earnings Release	Q3 17	1.56
United Continental Holdings Inc	UAL US	Aft-mkt	Q3 2017 Earnings Release	Q3 17	2.189
Hewlett Packard Enterprise Co	HPE US	16:00	Analyst Meeting
Kinder Morgan Inc/DE	KMI US	Aft-mkt	Q3 2017 Earnings Release	Q3 17	0.146
American Express Co	AXP US	16:05	Q3 2017 Earnings Release	Q3 17	1.48
eBay Inc	EBAY US	16:15	Q3 2017 Earnings Release	Q3 17	0.48
United Rentals Inc	URI US	16:15	Q3 2017 Earnings Release	Q3 17	3.025
Kinder Morgan Inc/DE	KMI US	16:30	Q3 2017 Earnings Call	Q3 17
American Express Co	AXP US	17:00	Q3 2017 Earnings Call	Q3 17
eBay Inc	EBAY US	17:00	Q3 2017 Earnings Call	Q3 17
Adobe Systems Inc	ADBE US	17:00	Analyst Meeting
Crown Castle International Corp	CCI US	17:00	Q3 2017 Earnings Release	Q3 17	0.995