Barchart Morning Call
Barchart.com - Tue Oct 10, 6:41AM CDT
OVERNIGHT MARKETS AND NEWS
Dec E-mini S&Ps (ESZ17 +0.12%) this morning are up +0.15% on optimism about U.S. company quarterly earnings ahead of the start of quarterly earnings results from S&P 500 companies later this week. European stocks are down -0.19%, led by losses in Spanish stocks, with Spain's IBEX Stock Index down -1.05% before a meeting of Catalan's regional parliament later today. According to people familiar with the matter, Spanish police are ready to arrest Catalan President Puigdemont immediately if he declares independence in today's parliament meeting. Losses in European stocks were limited on signs of strength in Germany's economy, Europe's largest, after German Aug exports and imports rose more than expected. Asian stocks settled mostly higher: Japan +0.64%, Hong Kong+0.58%, China +0.26%, Taiwan closed for holiday, Australia -0.02%, Singapore -0.08%, South Korea +1.97%, India +0.24%. Japanese markets reopened after Monday's holiday and the Nikkei Stock Index jumped to a new 2-year high after Friday's stronger-than-expected U.S. Sep wage data bolstered confidence that the global economic recovery can continue.
The dollar index (DXY00 -0.25%) is down -0.28% at a 1-week low on concern that President Trump's feud with Senator Corker may undercut support for his tax reform plan. EUR/USD (^EURUSD) is up +0.36% at a 1-week high on hawkish comments from ECB Executive Board member Lautenschlaeger who said the ECB should exit QE "as soon as possible." USD/JPY (^USDJPY) is down -020% at a 1-week low.
Dec 10-year T-note prices (ZNZ17 +0.02%) are up +2 ticks.
ECB Executive Board member Lautenschlaeger said the ECB should exit QE "as soon as possible because financial stability risks increase and the benefits decrease."
The German Aug trade balance widened to a surplus of +20.0 billion euros, larger than expectations of +19.5 billion euros. Aug exports rose +3.1% m/m, stronger than expectations of +1.1% m/m and the biggest increase in a year. Aug imports rose +1.2% m/m, stronger than expectations of +0.5% m/m.
Japan Sep eco watchers survey outlook expectations fell -0.1 to 51.0, stronger than expectations of -0.6 to 50.5. The Sep eco watchers survey current conditions rose +1.6 to 51.3, stronger than expectations of +0.5 to 50.1 and the highest in 9-months.
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) Minneapolis Fed President Neel Kashkari (voter) speaks at a regional economic conference hosted by his bank, (2) Dallas Fed President Robert Kaplan (voter) speaks in a moderated Q&A at a Stanford Institute for Economic Policy Research Associates Meeting, (3) USDA weekly grain export inspections, (4) USDA crop conditions and progress report.
Notable Russell 1000 earnings reports today include: none.
U.S. IPO's scheduled to price today: none.
Equity conferences this week: Cerner Health Conference on Mon-Wed, HR Technology Conference on Tue-Fri, National HUBZone Conference on Thu.
OVERNIGHT U.S. STOCK MOVERS
McKesson (MCK -2.08%) was upgraded to 'Outperform' from 'Market Perform' at Cowen with a price target of $189.
Transocean (RIG +1.94%) was initiated a new 'Buy' at Deutsche Bank with a price target of $13.
Union Pacific (UNP -0.06%) was downgraded to 'Hold' from 'Buy' at Aegis Capital.
Apache (APA +1.51%) cut its Q3 crude production estimate to 206,000 bpd to 208,000 bpd from a prior estimate of 208,000 to 214,000 bpd and cut its Q4 crude production estimate to 218,000 bpd to 224,000 bpd from a prior view of 225,000 bpd to 237,000 bpd due to the impact of Hurricane Harvey.
Caterpillar (CAT -0.04%) gained +0.2% in after-hours trading after Goldman Sachs reiterated its 'Buy' rating on the stock and raised its 12-month target price to $158 from $143.
American Homes (AMH +0.42%) was initiated a new 'Buy' at BTIG with a price target of $26.
SRC Energy ({=SRCI was initiated a new 'Buy' at Jeffries with a price target of $12.
Clovis Oncology (CLVS -1.05%) gained almost 1% in after-hours trading after it said it submitted a Supplemental New Drug Application with the FDA for its rucaparib drug for maintenance treatment for patients with platinum-sensitive recurrent ovarian cancer.
American International Group (AIG -0.77%) fell nearly 1% in after-hours trading after it said its sees Q3 pre-tax catastrophe losses net of reinsurance of $2.9 billion-$3.1 billion.
PDC Energy (PDCE +1.05%) was initiated a new 'Buy' at Jeffries with a price target of $60.
Leidos Holdings (LDOS +0.40%) rose over 3% in after-hours trading after it received a contract from the Social Security Administration to provide IT support for the Social Security Administration's Strategic Plan.
Ichor Holdings Ltd (ICHR +1.89%) climbed 6% in after-hours trading after the company said it entered into a "substantial" agreement to produce liquid delivery systems for a key customer.
Chesapeake Energy (CHK -0.24%) lost 1% in after-hours trading after it was downgraded to 'Underperform' from 'Hold' at Jeffries with a price target of $2.
MARKET COMMENTS
Dec S&P 500 E-mini stock futures (ESZ17 +0.12%) this morning are up +3.75 points (+0.15%). Monday's closes: S&P 500 -0.18%, Dow Jones -0.06%, Nasdaq -0.10%. The S&P 500 on Monday closed lower on negative carry-over from last Friday's U.S. Sep average hourly earnings report of +2.9% that bolstered the case for additional Fed tightening. There was also some long liquidation pressure ahead of quarterly earnings results from major U.S. banks later this week. Energy stocks received a boost from the +0.59% rally in crude oil prices.
Dec 10-year T-note prices (ZNZ17 +0.02%) this morning are up +2 ticks. Monday's closes: TYZ7 +2.00, FVZ7 +1.25. Dec 10-year T-notes on Monday closed higher on carry-over support from a rally in German bund prices and on weakness in stocks.
The dollar index (DXY00 -0.25%) this morning is down -0.258 (-0.28%) at a 1-week low. EUR/USD (^EURUSD) is up +0.0042 (+0.36%) at a 1-week high and USD/JPY (^USDJPY) is down -0.23 (-0.20%) at a 1-week low. Monday's closes: Dollar Index -0.125 (-0.13%), EUR/USD +0.0010 (+0.09%), USD/JPY +0.03 (+0.03%). The dollar index on Monday closed lower on strength in EUR/USD as political tensions eased in Spain after a senior member of the Catalan administration called for dialogue with the Spanish government. There was also strength in the yuan versus the dollar after China Sep foreign reserves rose for the eighth month in a row.
Nov crude oil (CLX17 +1.33%) this morning is up +68 cents (+1.37%) and Nov gasoline (RBX17 +1.05%) is +0.0188 (+1.21%). Monday's closes: Nov WTI crude +0.29 (+0.59%), Nov gasoline +0.0006 (+0.04%). Nov crude oil and gasoline on Monday closed higher on a weaker dollar and on comments from OPEC Secretary General Mohammed Barkindo who said the rebalancing of the oil market is underway and that OPEC may need to take further steps to sustain the recovery into 2018.
Metals prices this morning are higher with Dec gold (GCZ17 +0.65%) +8.0 (+0.62%) at a 1-week high, Dec silver (SIZ17+1.35%) +0.189 (+1.11%) at a 2-week high and Dec copper (HGZ17 +0.31%) +0.008 (+0.26%) at a 4-week high. Monday's closes: Dec gold +10.1 (+0.79%), Dec silver +0.181 (+1.08%), Dec copper -0.0020 (+0.07%). Metals on Monday closed higher with Dec gold at a 1-week high and Dec silver at a 1-1/2 week high. Metals prices were boosted by a weak dollar and by the German Aug industrial production report of +2.6% m/m, the biggest increase in 6 years, which is positive for copper consumption and demand. Copper prices were also boosted by the -2,450 MT decline in LME copper inventories to a 3-week low of 291,000 MT.
GLOBAL EVENT CALENDAR10/10/2017
| Tuesday, Oct 10 | ||
| US | 1000 ET | Minneapolis Fed President Neel Kashkari (voter) speaks at a regional economic conference hosted by his bank. |
| 1100 ET | USDA weekly grain export inspections. | |
| 1600 ET | USDA crop conditions and progress report. | |
| 2000 ET | Dallas Fed President Robert Kaplan (voter) speaks in a moderated Q&A at a Stanford Institute for Economic Policy Research Associates Meeting. | |
| Wednesday, Oct 11 | ||
| US | 0700 ET | Weekly MBA mortgage applications, previous -0.4% with purchase sub-index +1.0% and refi sub-index -1.8%. |
| 0715 ET | Chicago Fed President Charles Evans (voter) takes part in a moderated discussion on the economy and monetary policy. | |
| 1000 ET | Aug JOLTS job openings expected -10,000 to 6.16 million, Jul +54,000 to 6.17 million. | |
| 1130 ET | Treasury auctions $24 billion of 3-year T-notes | |
| 1300 ET | Treasury auctions $20 billion of 10-year T-notes. | |
| 1400 ET | Minutes of the Sep 19-20 FOMC meeting. | |
| 1440 ET | San Francisco Fed President John Williams gives a Community Leaders Speech at an event in San Francisco. |
