Barchart Morning Call
Barchart.com - Tue Oct 3, 6:40AM CDT
OVERNIGHT MARKETS AND NEWS
Dec E-mini S&Ps (ESZ17 -0.06%) this morning are up +0.08% at a fresh record nearest-futures high. European stocks slipped from a 4-month high and are down -0.09% as the markets consolidate following sharp gains over the past two sessions. GBP/USD fell to a 2-week low and is down -0.12% after the UK Sep Markit/CIPS construction PMI unexpectedly contracted at its weakest pace in 14-months. Asian stocks settled mostly higher: Japan +1.05%, Hong Kong +2.25%, China and South Korea closed for holidays, Taiwan +0.04%, Australia -0.49%, Singapore -0.49%, India +0.68%. Japan's Nikkei Stock Index rallied to a new 2-year high after strong U.S. manufacturing data Monday along with expectations for a U.S. tax cut bolstered optimism in global economic growth. Japanese stocks extended their gains on expectations for an increase in consumer spending after the Japan Sep consumer confidence index rose more than expected and matched a 4-year high. India's Sensex Stock Index rallied +0.68%, led by a +3.6% surge in Tata Motors, after the company won a government contract for 10,000 electric cars.
The dollar index (DXY00 -0.33%) is down -0.02%. EUR/USD (^EURUSD) is up +0.22% as it rebounded from a 1-1/2 month low in overnight trade after Eurozone Aug PPI rose at a stronger-than-expected +0.3% m/m pace, the most in 7-months, which bolsters the outlook for the ECB to taper its bond purchases. USD/JPY (^USDJPY) is up +0.19%.
The UK Sep Markit/CIPS construction PMI unexpectedly fell -3.0 to 48.1, weaker than expectations of no change at 51.1 and the steepest pace of contraction in 14-months.
Eurozone Aug PPI rose +0.3% m/m and +2.5% y/y, stronger than expectations of +0.1% m/m and +2.3% y/y with the +0.3% m/m gain the largest monthly increase in 7-months.
The Japan Sep consumer confidence index rose +0.6 to 43.9, stronger than expectations of +0.2 to 43.5 and matched its 4-year high from Mar 2017.
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) Fed Governor Jerome Powell discusses regulatory reform at a U.S. Financial Regulation event in Washington, (2) Sep total vehicle sales (expected 17.00 million, Aug 16.03 million).
Notable Russell 1000 earnings reports today include: Lennar (consensus $1.01), Paychex (0.60).
U.S. IPO's scheduled to price today: none.
Equity conferences this week: Deutsche Bank U.S. Leveraged Finance Conference on Mon-Wed, European Utility Week Conference on Tue, Global Gaming Conference - Panel on Tue, Helitech International Conference on Tue, NetApp Insight Investor Summit on Tue, Japan Pack Trade Show on Tue, Linley Processor Conference on Wed, Petaluma Area Chamber of Commerce Business Conference on Fri.
OVERNIGHT U.S. STOCK MOVERS
Phillips 66 (PSX +0.84%) was upgraded to 'Buy' from 'Neutral' at Goldman Sachs with a price target of $109.
Cal-Maine Foods (CALM +1.34%) was upgraded to 'Overweight' from 'Equal Weight' at Stephens with a price target of $50.
MGM Resorts International (MGM -5.58%) was downgraded to 'Neutral' from 'Positive' at Susquehanna Financial.
Craft Brew Alliance (BREW +1.42%) was rated a new 'Positive' at Susquehanna Financial with a price target of $22.
Herbalife (HLF -0.28%) said it sees Q3 adjusted EPS of 80 cents-90 cents, better than consensus of 65 cents-85 cents.
Tesla (TSLA +0.13%) slid over 1% in after-hours trading after it reported production of its Model 3 at only 260 units, below expectations of 1,500 units.
CenturyLink (CTL +2.22%) gained almost 1% in after-hours trading after it the Department of Justice cleared CenturyLink's acquisition of Level 3.
Tile Shop Holdings (TTS +3.94%) plunged 20% in after-hours trading after it reported Q3 preliminary net sales of $84 million, below consensus of $87.1 million, and it said its July 18 expectations for full-year 2017 "are no longer applicable."
Insys Therapeutics (INSY +12.05%) rose over 2% in after-hour trading on technical buying after it closed above its 50-day moving average Monday for the first time since July.
Callon Petroleum (CPE +1.51%) lost nearly 3% in after-hours trading after it cut its Q3 crude production forecast to 22,450 bpd to 22,600 bpd from an earlier forecast of 23,000 bpd-25,000 bpd due to Hurricane Harvey.
Endocyte (ECYT +157.45%) jumped 17% in after-hours trading, on top of Monday's +157% surge, after it announced an exclusive world-wide license of Phase 3 ready PSMA-Targeted radioligand therapeutic therapy for development to treat prostate cancer.
MARKET COMMENTS
Dec S&P 500 E-mini stock futures (ESZ17 -0.06%) this morning are up +2.00 points (+0.08%) at a new record nearest-futures high. Monday's closes: S&P 500 +0.39%, Dow Jones +0.68%, Nasdaq +0.04%. The S&P 500 on Monday climbed to a new record high and closed higher on optimism about the global economic outlook after the China Sep manufacturing PMI unexpectedly rose +0.7 to 52.4, stronger than expectations of -0.1 to 51.6 and the fastest pace of expansion in 5-1/3 years. There was also optimism about the U.S. economic outlook after the U.S. Sep ISM manufacturing index unexpectedly rose +2.0 to 60.8, stronger than expectations of -0.7 to 58.1 and the fastest pace of expansion in 13-1/3 years.
Dec 10-year T-note prices (ZNZ17 -0.02%) this morning are down -4 ticks. Monday's closes: TYZ7 -2.00, FVZ7 -1.50. Dec 10-year T-notes on Monday fell to a fresh 2-1/2 month low and closed lower on the unexpected increase in the Sep ISM manufacturing index to a 13-1/3 year high and on reduced safe-haven demand with the rally in the S&P 500 to a new all-time high. T-notes recovered from their worst levels on dovish comments from Minneapolis Fed President Neel Kashkari who said the Fed should not raise rates again until core PCE inflation rises to 2%.
The dollar index (DXY00 -0.33%) this morning is down -0.022 (-0.02%). EUR/USD (^EURUSD) is up +0.0026 (+0.22%) and USD/JPY (^USDJPY) is up +0.21 (+0.19%). Monday's closes: Dollar Index +0.483 (+0.52%), EUR/USD -0.0081 (-0.69%), USD/JPY +0.26 (+0.23%). The dollar index on Monday closed higher on the unexpected increase in the U.S. Sep ISM manufacturing index to a 13-1/3 year high, which bolsters the case for additional Fed rate hikes. There was also weakness in EUR/USD due to civil unrest in Spain after Spanish police tried to stop a referendum in state of Catalonia to secede from Spain.
Nov crude oil (CLX17 +0.04%) this morning is down -5 cents (-0.10%) and Nov gasoline (RBX17 +0.06%) is -0.0010 (-0.06%). Monday's closes: Nov WTI crude -1.09 (-2.11%), Nov gasoline -0.0357 (-2.24%). Nov crude oil and gasoline on Monday closed sharply lower with Nov crude at a 1-week low and Nov gasoline at a 3-1/2 week low. Crude oil prices were undercut by a stronger dollar and by negative carry-over from Friday's Baker Hughes report that active U.S. oil rigs increased by 6 rigs in the week ended Sep 29 to 750 rigs, the first increase in 7 weeks.
Metals prices this morning are mostly lower with Dec gold (GCZ17 +0.12%) -2.1 (-0.16%) at a 1-3/4 month low, Dec silver (SIZ17 -0.20%) -0.029 (-0.17%) and Dec copper (HGZ17 +1.06%) unch. Monday's closes: Dec gold -3.9 (-0.30%), Dec silver -0.171 (-1.02%), Dec copper -0.026 (-0.87%). Metals on Monday closed lower with Dec gold at a 1-1/2 month low and Dec silver at a 1-3/4 month low. Metals prices were undercut by strength in U.S. manufacturing activity that boosted the dollar and increased the chances for a Fed rate hike after the Sep ISM climbed to a 13-1/3 year high.
GLOBAL EVENT CALENDAR10/03/2017
| Tuesday, Oct 3 | ||
| US | 0830 ET | Fed Governor Jerome Powell discusses regulatory reform at a U.S. Financial Regulation event in Washington. |
| n/a | Sep total vehicle sales expected 17.10 million, Aug 16.03 million. Sep domestic vehicle sales expected 13.00 million, Aug 12.48 million. | |
| Wednesday, Oct 4 | ||
| US | 0700 ET | Weekly MBA mortgage applications, previous -0.5% with purchase sub-index +2.8% and refi sub-index +3.5%. |
| 0815 ET | Sep ADP employment change expected +143,000, Aug +237,000. | |
| 0945 ET | Revised Sep Markit services PMI expected unchanged at 55.1, prelim-Sep -0.9 to 55.1. Revised Sep Markit composite PMI, prelim-Sep -0.7 to 54.6. | |
| 1000 ET | Sep ISM non-manufacturing PMI expected +0.2 to 55.5, Aug +1.4 to 55.3. | |
| 1030 ET | EIA weekly Petroleum Status Report. | |
| 1515 ET | Fed Chair Janet Yellen delivers opening remarks at a community banking conference in St. Louis. |
U.S. STOCK CALENDAR10/03/2017
| Name | Ticker | Time | Description | Period | Estimate |
|---|---|---|---|---|---|
| Paychex Inc | PAYX US | Bef-mkt | Q1 2018 Earnings Release | Q1 18 | 0.604 |
| Lennar Corp | LEN US | Bef-mkt | Q3 2017 Earnings Release | Q3 17 | 1.009 |
| Sherwin-Williams Co/The | SHW US | 08:00 | Financial Community Meeting | ||
| Paychex Inc | PAYX US | 09:30 | Q1 2018 Earnings Call | Q1 18 | |
| Intuit Inc | INTU US | 11:00 | Investor Day | ||
| Lennar Corp | LEN US | 11:00 | Q3 2017 Earnings Call | Q3 17 | |
| Telephone & Data Systems Inc | TDS US | Roadshow - Day 2 | |||
| United States Cellular Corp | USM US | Roadshow - Day 2 | |||
| DR Horton Inc | DHI US | Extraordinary Shareholders Meeting |
