Tuesday, October 7th, 2014View Older Reports
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OVERNIGHT MARKETS AND NEWS
December E-mini S&Ps (ESZ14 -0.38%) this morning are down -0.40% and European stocks are down -1.12% on German economic concerns after German Aug industrial production fell more than expected by the most in 5-1/2 years. European airlines and travel companies are also lower on concern over the spread of the Ebola virus after a Spanish nurse was confirmed to have become infected with the virus, the first person to contract Ebola in Europe. Asian stocks closed mixed: Japan -0.67%, Hong Kong +0.46%, China, closed for holiday, Taiwan -0.60%, Australia -0.16%, Singapore -0.28%, South Korea +0.30%, India -1.11%. Japanese stocks fell after the BOJ refrained from additional easing measures following its 2-day policy meeting and said that "some weakness particularly on the production side has been observed." Hong Kong's Hang Seng Index rose for a second day as tensions eased in the city as formal talks between protesters and Hong Kong officials began. Commodity prices are mixed. Nov crude oil (CLX14 -0.10%) is down -0.27%. Nov gasoline (RBX14 -0.56%) is down -0.65%. Dec gold (GCZ14 -0.07%) is down -0.13%. Dec copper (HGZ14 -0.35%) is down -0.31%. Agriculture and livestock prices are mixed. The dollar index (DXY00 +0.10%) is up +0.14%. EUR/USD (^EURUSD) is down -0.52%. USD/JPY (^USDJPY) is down -0.10%. Dec T-note prices (ZNZ14 +0.09%) are up +4 ticks.German Aug industrial production fell -4.0% m/m, a larger drop than expectations of -1.5% m/m and the biggest monthly decline in 5-1/2 years. On an annual basis. Aug industrial production fell -2.8% y/y, a faster pace of decline than expectations of -0.5% y/y.
Kansas City Fed President George said that "inflation looks to be relatively tame" though "my colleagues and I must remain vigilant on the front," and that divergent central bank policies could have the effect of keeping longer-term interest rates lower.
UK Aug industrial production was unch m/m and rose +2.5% y/y, slightly less than expectations of unch m/m and +2.6% y/y.
UK Aug manufacturing production rose +0.1% m/m and +3.9% y/y, better than expectations of +0.1% m/m and +3.4% y/y.
U.S. STOCK PREVIEW
The market is expecting today’s Aug U.S. consumer credit report to show another big increase of +$20.0 billion. The Treasury today will sell $27 billion of 3-year T-notes. There is one of the Russell 1000 companies that report earnings today: Yum Brands (consensus $0.83). Equity conferences this week include: Predictive Analytics World Conference - Boston on Mon-Tue, RBC International Oil & Gas Conference on Tue, CEATEC Japan 2014 on Tue, Economic Club of Canada: Reasserting Canada's Competitiveness in the Digital Ec on Tue, and 2014 IIF Annual Membership Meeting on Fri.
OVERNIGHT U.S. STOCK MOVERS
Deere (DE +0.83%) was downgraded to 'Underperform' from 'Neutral' at BofA/Merrill Lynch.U.S. Bancorp (USB -0.31%) was downgraded to 'Market Perform' from 'Strong Buy' at Raymond James.
Hibbett Sports (HIBB +0.60%) was downgraded to 'Neutral' from 'Buy' at BofA/Merrill Lynch.
Dick's Sporting Goods (DKS -1.64%) was upgraded to 'Buy' from 'Neutral' at Goldman Sachs.
MGM Resorts (MGM +0.23%) was upgraded to 'Buy' from 'Hold' at Deutsche Bank with a price target of $30.
Las Vegas Sands (LVS +0.69%) was downgraded to 'Hold' from 'Buy' at Deutsche Bank.
Dunkin' Brands (DNKN +1.06%) was downgraded to 'Hold' from 'Buy' at Jefferies.
Keurig Green Mountain (GMCR +0.17%) was initiated with a 'Buy' at Goldman Sachs with a prce targey of $166.
Amazon.com (AMZN -0.17%) slid 1% in pre-market trading after the European Union said it is investigating whether the company unfairly shifted profits to Luxembourg to lower its taxes.
Zillow (Z -2.48%) fell nearly 2% in pre-market trading after the biggest U.S. website for real estate agents and prospective home buyers said it had 82.81 million unique users in September, down from 86.29 million in August and 88.84 million in July.
Adobe (ADBE -1.07%) said it expects fiscal 2015 adjusted EPS of approximately $2.00, below consensus of $2.07.
Gabelli reported a 8.95% stake in Annie's (BNNY unch) .
MARKET COMMENTS
Dec E-mini S&Ps (ESZ14 -0.38%) this morning are down -7.75 points (-0.40%). The S&P 500 index on Monday erased an early rally and closed lower: S&P 500 -0.16%, Dow Jones -0.10%, Nasdaq -0.27%. Bearish factors included (1) European economic concerns after German Aug factory orders plunged -5.7% m/m, weaker than expectations of -2.5% m/m and the largest monthly decline in 5-1/2 years, and (2) a slide in small-cap stocks which dragged the overall market lower. Losses were contained on expectations that S&P 500 Q3 stock earnings results that begin this week will show a decent increase.Dec 10-year T-notes (ZNZ14 +0.09%) this morning are up +4 ticks. Dec 10-year T-note futures prices on Monday closed higher. Supportive factors for T-notes included (1) carry-over support from a rally in European government bonds after German Aug factory orders plunged by the most in 5-1/2 years, and (2) increased safe-haven demand for T-notes after stocks turned lower. T-note prices were undercut by supply pressures as the Treasury auctions $61 billion of T-notes and T-bonds this week starting with Tuesday’s $27 billion auction of 3-year T-notes. Closes: TYZ4 +8.50, FVZ4 +8.25.
The dollar index (DXY00 +0.10%) this morning is up +0.118 (+0.14%). EUR/USD (^EURUSD) is down -0.0066 (-0.52%) and USD/JPY (^USDJPY) is down -0.11 (-0.10%). The dollar index on Monday closed lower. Negative factors included (1) reduced expectations for a near-term Fed rate hike after Goldman Sachs said that U.S. labor-market slack and weak wage growth will keep the Fed from raising interest rates until Q3-2015, and (2) strength in the yen as USD/JPY fell back on expectations that the BOJ on Tuesday will refrain from additional stimulus measures. Negatives for EUR/USD included (1) the -5.7% m/m decline in German Aug factory orders, the most in 5-1/2 years, and (2) the larger-than-expected decline in Eurozone Oct Sentix investor confidence to the lowest in 17 months. Closes: Dollar index -0.766 (-0.88%), EUR/USD +0.01394 (+1.11%), USD/JPY -1.004 (-0.91%).
Nov WTI crude oil (CLX14 -0.10%) this morning is down -24 cents (-0.27%) and Nov gasoline (RBX14 -0.56%) is down -0.0156 (-0.65%). Nov crude and Nov gasoline prices on Monday closed higher: CLX4 +0.60 (+0.67%), RBXX4 +0.0360 (+1.51%). Supportive factors included (1) a weak dollar, and (2) gasoline supply concerns after the 298,800 bpd Irving Oil refinery in St. John, New Brunswick that provides gasoline supplies to the U.S. Northeast said it will need another 50-55 days of unscheduled maintenance for repairs. Bearish factors included (1) demand concerns after German Aug factory orders plunged by the most in 5-1/2 years, and (2) concern that Saudi Arabia’s cut in its official selling price to a 6-year low may start a price war within OPEC.
GLOBAL EVENT CALENDAR10/07/2014
| US | 1000 ET | Aug JOLTS job openings expected 4.700 million, Jul 4.673 million. |
| 1300 ET | Treasury auctions $27 billion 3-year T-notes. | |
| 1430 ET | Minneapolis Fed President Narayana Kocherlakota delivers a speech titled Clarifying the Objectives of Monetary Policy at an event in Rapid City, South Dakota. | |
| 1500 ET | New York Fed President William Dudley speaks on the regional and national economy at an event in New York. | |
| 1500 ET | Aug consumer credit expected +$20.0 billion, Jul +$26.006 billion. | |
| JPN | 0100 ET | Japan Aug leading index CI expected -1.4 to 104.0, Jul 105.4. Aug coincident index expected -1.3 to 108.6, Jul 109.9. |
| n/a | BOJ announces interest rate decision. | |
| GER | 0200 ET | German Aug industrial production expected -1.5% m/m and -0.5% y/y, Jul +1.9% m/m and +2.5% y/y. |
| UK | 0430 ET | UK Aug industrial production expected unch m/m and +2.6% y/y, Jul +0.5% m/m and +1.7% y/y. |
| 0430 ET | UK Aug manufacturing production expected +0.1% m/m and +3.4% y/y, Jul +0.3% m/m and +2.2% y/y. | |
| 1901 ET | UK Sep BRC shop price index, Aug -1.6% y/y. |
U.S. STOCK CALENDAR10/07/2014
| Company Name | Ticker | Time | Event Description | Period | Estimate |
|---|---|---|---|---|---|
| Accenture PLC | ACN US | 8:30 | Investor Analyst Conference | Y 2014 | |
| Forest City Enterprises Inc | FCE/A US | 13:30 | Investor Day | Y 2014 | |
| Splunk Inc | SPLK US | 14:15 | Investor and Analyst Meeting | Y 2014 | |
| Yum! Brands Inc | YUM US | Aft-mkt | Q3 2014 Earnings Release | Q3 2014 | 0.83 |
| Pinnacle West Capital Corp | PNW US | Investor Meeting - Day 2 | Y 2014 |
