Tuesday, August 2nd, 2016View Older Reports
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OVERNIGHT MARKETS AND NEWS
Sep E-mini S&Ps (ESU16 -0.23%) are down -0.15% and European stocks are down -1.45% at a 2-week low as weakness in European bank stocks leads the overall market lower. Commerzbank AG, Germany's second-largest lender, is down 8% after it scrapped its profit target for this year and forecast a drop in earnings, while Italy's UniCredit dropped over 5% after Il Messaggero reported that the bank may consider a capital increase of as much as 8 billion euros ($8.96 billion). Another negative for European stocks is concern that rising prices may keep the ECB from boosting stimulus measures after Eurozone Jun PPI rose a more-than-expected +0.7% m/m, the largest monthly increase in 3-3/4 years. Asian stocks settled mostly lower: Japan -1.47%, Hong Kong closed for holiday, China +0.61%, Taiwan -0.13%, Australia -0.84%, Singapore -1.24%, South Korea -0.74%, India -0.08%. Japanese stocks closed lower after USD/JPY dropped to a 3-week low when the Japanese government announced 4.6 trillion yen ($45 billion) in extra spending for the current fiscal year, much less than the 28 trillion-yen amount Japanese Prime Minister Abe had signaled in a speech last week. Australia's 10-year bond yield fell to a record low 1.823% after the Reserve Bank of Australia (RBA) cut its benchmark rate by 25 bp to a record low 1.5% today.
The dollar index (DXY00 -0.29%) is down -0.30% at a week low. EUR/USD (^EURUSD) is up +0.26% at a 1-1/4 month high. USD/JPY (^USDJPY) is down-0.63% at a 3-week low.
The RBA cut its benchmark rate by 25 bp to a record low 1.5% and RBA Governor Stevens said that "recent data confirm that inflation remains quite low and given very subdued growth in labor costs and very low cost pressures elsewhere in the world, this is expected to remain the case for some time."
The Eurozone Jun PPI of +0.7% m/m and -3.1% y/y was stronger than expectations of +0.4% m/m and -3.4% y/y with the +0.7% m/m gain the largest monthly increase in 3-3/4 years.
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) Dallas Fed President Robert Kaplan speaks on economic conditions and implications for monetary policy at an Official Monetary and Financial Institutions Forum City Lecture in Beijing, China, (2) Jun personal spending (expected +0.3%, May +0.4%) and Jun personal income (expected +0.3%, May +0.2%), (3) Jun PCE deflator (expected +0.2% m/m and +0.9% y/y, May +0.2% m/m and +0.9% y/y) and Jun core PCE deflator (expected +0.1% m/m and +1.6% y/y, May +0.2% m/m and +1.6% y/y), (4) Jul New York ISM (May 45.4), (5) Jul total vehicle sales (expected 17.30 million, Jun 16.61 million).
There are 40 of the S&P 500 companies that report earnings today with notable reports including: Procter & Gamble (consensus $0.75), Emerson Electric (0.84), Royal Caribbean Cruises (1.02), Martin Marietta Materials (2.02), Seagate Technology (0.60), Aetna (2.12), Harris Corp (1.05), Pfizer (0.62), CVS Health (1.30), ADM (0.45), Cummins (2.16), Devon Energy (-0.20), Electronic Arts (-0.02), Verisk Analytics (0.76).
U.S. IPO's scheduled to price today: none.
Equity conferences this week include: Wells Fargo Services Conference on Wed-Thu.
OVERNIGHT U.S. STOCK MOVERS
Buffalo Wild Wings (BWLD +1.21%) was downgraded to 'Hold' from 'Buy' at Maxim Group.
Frontier Communications (FTR -2.31%) slid over 3% in pre-market trading after it reported Q2 adjusted Ebitda of $1.03 billion, less than consensus of $1.05 billion.
Charter Communications (CHTR +0.48%) was rated a new 'Buy' at Bank of America/Merrill Lynch with a price target of $300.
Williams Cos. (WMB -6.01%) rallied over 4% in after-hours trading after the company cut its dividend to 20 cents a share from 64 cents and said it will reinvest $1.7 billion into Williams Partners through 2017 with the cash saved from the lower dividends.
Texas Roadhouse (TXRH +1.02%) dropped over 5% in after-hours trading after it reported Q2 franchise comps of +2.6%, below consensus of +3.7%.
FormFactor (FORM +0.53%) was upgraded to 'Buy' from 'Hold' at Stifel with a 12-month target price of $13.
Tenet Healthcare (THC -5.55%) lost over 2% in after-hours trading after it reported Q2 adjusted EPS of 38 cents, weaker than consensus of 51 cents.
Chegg (CHGG +2.78%) climbed nearly 4% in after-hours trading after it reported Q2 adjusted EPS of 5 cents, better than consensus of 3 cents.
Trex Co. (TREX +0.82%) gained nearly 3% in after-hours trading after it reported Q2 EPS of 79 cents, higher than consensus of 71 cents.
Atwood Oceanics (ATW -3.65%) rose 3% in after-hours trading after it reported Q3 revenue of $227.8 million, above consensus of $225.2 million.
T2 Biosystems (TTOO +24.38%) slumped 9% in after-hours trading after it reported an Q2 EPS loss of -58 cents, wider than consensus of -56 cents
Amkor Technology (AMKR +2.54%) jumped 11% in after-hours trading after it reported an unexpected Q2 EPS profit of 2 cents, better than consensus for an -8 cent loss, and said it sees Q3 sales of $1.01 billion-$1.09 billion, higher than consensus of $936 million.
Cognex (CGNX +0.33%) surged 15% in after-hours trading after it reported Q2 EPS continuing operations of 50 cents, higher than consensus of 44 cents, and then said it sees Q3 revenue of $142 million-$147 million, above consensus of $127.6 million.
MARKET COMMENTS
Sep E-mini S&Ps (ESU16 -0.23%) this morning are down -3.25 points (-0.15%). Monday's closes: S&P 500 -0.13%, Dow Jones -0.15%, Nasdaq +0.55%. The S&P 500 on Monday retreated from a new all-time high and closed lower on the -0.6 point decline in the U.S. Jul ISM manufacturing index to 52.6 (weaker than expectations of -0.2 to 53.0) and on the sell-off in energy producers caused by the -3.7% drop in crude oil prices to a new 3-1/2 month low.
Sep 10-year T-notes (ZNU16 -0.34%) this morning are down -14 ticks. Monday's closes: TYU6 -8.00, FVU6 -2.50. Sep T-notes on Monday closed lower on hawkish comments from New York Fed President Dudley who said investors "appear to be too complacent" on interest rates" and "it is premature” to rule out Fed rate hikes this year.
The dollar index (DXY00 -0.29%) is down -0.285 (-0.30%) at a 4-week low. EUR/USD (^EURUSD) is up +0.0029 (+0.26%) at a 1-1/4 month high. USD/JPY (^USDJPY) is down -0.64 (-0.63%) at a 3-week low. Monday's closes: Dollar index +0.183 (+0.195%), EUR/USD -0.0011 (-0.10%), USD/JPY +0.33 (+0.32%). The dollar index on Monday closed higher on hawkish comments from New York Fed President Dudley who said "it is premature to rule out further monetary policy tightening this year." USD/JPY saw strength ahead of expectations that Japanese Prime Minister Abe on Tuesday will unveil the details of his 28 trillion-yen ($273 billion) fiscal stimulus package.
Sep WTI crude oil (CLU16 +1.45%) this morning is up +50 cents (+1.25%) and Sep gasoline (RBU16 +1.69%) is up +0.0227 (+1.74%). Monday's closes: CLU6 -1.54 (-3.70%), RBU6 -0.0158 (-1.20%). Sep crude oil and gasoline on Monday closed lower with Sep crude at a 3-1/2 month low on the stronger dollar and on global energy demand concerns after the U.S. Jul ISM manufacturing PMI and the China Jul manufacturing PMI were both weaker-than-expected. There was also negative carryover from last Friday's Baker Hughes report that U.S. active oil rigs increased for a fifth straight week.
GLOBAL EVENT CALENDAR08/02/2016
| Tuesday, Aug 2 | ||
| US | 0615 ET | Dallas Fed President Robert Kaplan speaks on economic conditions and implications for monetary policy at an Official Monetary and Financial Institutions Forum City Lecture in Beijing, China. |
| 0830 ET | Jun personal spending expected +0.3%, May +0.4%. Jun personal income expected +0.3%, May +0.2%. | |
| 0830 ET | Jun PCE deflator expected +0.2% m/m and +0.9% y/y, May +0.2% m/m and +0.9% y/y. Jun core PCE deflator expected +0.1% m/m and +1.6% y/y, May +0.2% m/m and +1.6% y/y. | |
| 0945 ET | Jul New York ISM, May 45.4. | |
| n/a | Jul total vehicle sales expected 17.30 million, Jun 16.61 million. Jul domestic vehicle sales expected 13.06 million, Jun 12.76 million. | |
| Wednesday, Aug 3 | ||
| US | 0700 ET | Weekly MBA mortgage applications. |
| 0815 ET | Jul ADP employment change expected +170,000, Jun +172,000. | |
| 0830 ET | Treasury announces amount of 3-year T-notes (previous $24 billion), 10-year T-notes (previous $20 billion) and 30-year T-bonds (previous $12 billion) to be auctioned Aug 9-11 in the Aug quarterly refunding. | |
| 0945 ET | Revised Jul Markit services PMI expected +0.1 to 51.0; prelim-Jul -0.5 to 50.9. Revised Jul Markit composite PMI, prelim-Jul +0.3 to 51.5. | |
| 1000 ET | Jul ISM non-manufacturing PMI expected -0.6 to 55.9, Jun +0.6 to 56.5. | |
| 1030 ET | EIA Weekly Petroleum Status Report. | |
| GER | 0355 ET | Revised German Jul Markit services PMI, prelim-Jul +0.9 to 54.6. |
| EUR | 0400 ET | Revised Eurozone Jul Markit composite PMI, prelim-Jul -0.2 to 52.9. |
| 0500 ET | Eurozone Jun retail sales expected unch m/m and +1.8% y/y, May +0.4% m/m and +1.6% y/y. |
U.S. STOCK CALENDAR08/02/2016
| Company | Ticker | Time | Event Description | Period | Estimate |
|---|---|---|---|---|---|
| Emerson Electric Co | EMR US | Bef-mkt | Q3 2016 Earnings Release | Q3 2016 | 0.843 |
| NiSource Inc | NI US | Bef-mkt | Q2 2016 Earnings Release | Q2 2016 | 0.072 |
| Pinnacle West Capital Corp | PNW US | Bef-mkt | Q2 2016 Earnings Release | Q2 2016 | 1.135 |
| Expeditors International of Washington Inc | EXPD US | Bef-mkt | Q2 2016 Earnings Release | Q2 2016 | 0.589 |
| Welltower Inc | HCN US | Bef-mkt | Q2 2016 Earnings Release | Q2 2016 | 1.14 |
| Royal Caribbean Cruises Ltd | RCL US | Bef-mkt | Q2 2016 Earnings Release | Q2 2016 | 1.021 |
| Martin Marietta Materials Inc | MLM US | Bef-mkt | Q2 2016 Earnings Release | Q2 2016 | 2.017 |
| Seagate Technology PLC | STX US | Bef-mkt | Q4 2016 Earnings Release | Q4 2016 | 0.604 |
| Teradata Corp | TDC US | Bef-mkt | Q2 2016 Earnings Release | Q2 2016 | 0.596 |
| Mallinckrodt PLC | MNK US | Bef-mkt | Q3 2016 Earnings Release | Q3 2016 | 2.011 |
| Aetna Inc | AET US | 6:00 | Q2 2016 Earnings Release | Q2 2016 | 2.118 |
| Eaton Corp PLC | ETN US | 6:30 | Q2 2016 Earnings Release | Q2 2016 | 1.069 |
| Entergy Corp | ETR US | 6:30 | Q2 2016 Earnings Release | Q2 2016 | 1.049 |
| Harris Corp | HRS US | 6:30 | Q4 2016 Earnings Release | Q4 2016 | 1.438 |
| Pfizer Inc | PFE US | 6:45 | Q2 2016 Earnings Release | Q2 2016 | 0.624 |
| Molson Coors Brewing Co | TAP US | 6:45 | Q2 2016 Earnings Release | Q2 2016 | 1.094 |
| AmerisourceBergen Corp | ABC US | 6:45 | Q3 2016 Earnings Release | Q3 2016 | 1.268 |
| CVS Health Corp | CVS US | 6:50 | Q2 2016 Earnings Release | Q2 2016 | 1.303 |
| Xylem Inc/NY | XYL US | 6:55 | Q2 2016 Earnings Release | Q2 2016 | 0.474 |
| Archer-Daniels-Midland Co | ADM US | 7:00 | Q2 2016 Earnings Release | Q2 2016 | 0.448 |
| Pitney Bowes Inc | PBI US | 7:00 | Q2 2016 Earnings Release | Q2 2016 | 0.39 |
| Procter & Gamble Co/The | PG US | 7:00 | Q4 2016 Earnings Release | Q4 2016 | 0.745 |
| Cardinal Health Inc | CAH US | 7:00 | Q4 2016 Earnings Release | Q4 2016 | 1.13 |
| Mosaic Co/The | MOS US | 7:00 | Q2 2016 Earnings Release | Q2 2016 | 0.117 |
| Discovery Communications Inc | DISCA US | 7:00 | Q2 2016 Earnings Release | Q2 2016 | 0.567 |
| Cummins Inc | CMI US | 7:30 | Q2 2016 Earnings Release | Q2 2016 | 2.164 |
| Pitney Bowes Inc | PBI US | 8:00 | Q2 2016 Earnings Call | Q2 2016 | |
| Cardinal Health Inc | CAH US | 8:00 | Q4 2016 Earnings Call | Q4 2016 | |
| Dun & Bradstreet Corp/The | DNB US | 8:00 | Q2 2016 Earnings Call | Q2 2016 | |
| Ecolab Inc | ECL US | 8:30 | Q2 2016 Earnings Release | Q2 2016 | 1.078 |
| Harris Corp | HRS US | 8:30 | Q4 2016 Earnings Call | Q4 2016 | |
| CVS Health Corp | CVS US | 8:30 | Q2 2016 Earnings Call | Q2 2016 | |
| Procter & Gamble Co/The | PG US | 8:30 | Q4 2016 Earnings Call | Q4 2016 | |
| Aetna Inc | AET US | 8:30 | Q2 2016 Earnings Call | Q2 2016 | |
| Teradata Corp | TDC US | 8:30 | Q2 2016 Earnings Call | Q2 2016 | |
| Discovery Communications Inc | DISCA US | 8:30 | Q2 2016 Earnings Call | Q2 2016 | |
| Mallinckrodt PLC | MNK US | 8:30 | Q3 2016 Earnings Call | Q3 2016 | |
| Archer-Daniels-Midland Co | ADM US | 9:00 | Q2 2016 Earnings Call | Q2 2016 | |
| NiSource Inc | NI US | 9:00 | Q2 2016 Earnings Call | Q2 2016 | |
| General Growth Properties Inc | GGP US | 9:00 | Q2 2016 Earnings Call | Q2 2016 | |
| Seagate Technology PLC | STX US | 9:00 | Q4 2016 Earnings Call | Q4 2016 | |
| Mosaic Co/The | MOS US | 9:00 | Q2 2016 Earnings Call | Q2 2016 | |
| Xylem Inc/NY | XYL US | 9:00 | Q2 2016 Earnings Call | Q2 2016 | |
| Ford Motor Co | F US | 9:15 | July 2016 Sales and Revenue Release | ||
| Williams Cos Inc/The | WMB US | 9:30 | Q2 2016 Earnings Call | Q2 2016 | |
| Cummins Inc | CMI US | 10:00 | Q2 2016 Earnings Call | Q2 2016 | |
| Eaton Corp PLC | ETN US | 10:00 | Q2 2016 Earnings Call | Q2 2016 | |
| Equifax Inc | EFX US | 10:00 | Business Update Call | ||
| Ford Motor Co | F US | 10:00 | July 2016 Sales and Revenue Call | ||
| Pfizer Inc | PFE US | 10:00 | Q2 2016 Earnings Call | Q2 2016 | |
| Vornado Realty Trust | VNO US | 10:00 | Q2 2016 Earnings Call | Q2 2016 | |
| Alliant Energy Corp | LNT US | 10:00 | Q2 2016 Earnings Call | Q2 2016 | |
| Welltower Inc | HCN US | 10:00 | Q2 2016 Earnings Call | Q2 2016 | |
| Royal Caribbean Cruises Ltd | RCL US | 10:00 | Q2 2016 Earnings Call | Q2 2016 | |
| Entergy Corp | ETR US | 11:00 | Q2 2016 Earnings Call | Q2 2016 | |
| Molson Coors Brewing Co | TAP US | 11:00 | Q2 2016 Earnings Call | Q2 2016 | |
| AmerisourceBergen Corp | ABC US | 11:00 | Q3 2016 Earnings Call | Q3 2016 | |
| American International Group Inc | AIG US | Aft-mkt | Q2 2016 Earnings Release | Q2 2016 | 0.922 |
| FMC Corp | FMC US | Aft-mkt | Q2 2016 Earnings Release | Q2 2016 | 0.68 |
| ONEOK Inc | OKE US | Aft-mkt | Q2 2016 Earnings Release | Q2 2016 | 0.437 |
| Cerner Corp | CERN US | Aft-mkt | Q2 2016 Earnings Release | Q2 2016 | 0.571 |
| Electronic Arts Inc | EA US | Aft-mkt | Q1 2017 Earnings Release | Q1 2017 | -0.023 |
| Fiserv Inc | FISV US | Aft-mkt | Q2 2016 Earnings Release | Q2 2016 | 1.074 |
| Newfield Exploration Co | NFX US | Aft-mkt | Q2 2016 Earnings Release | Q2 2016 | 0.157 |
| Hanesbrands Inc | HBI US | Aft-mkt | Q2 2016 Earnings Release | Q2 2016 | 0.524 |
| Concho Resources Inc | CXO US | Aft-mkt | Q2 2016 Earnings Release | Q2 2016 | 0.053 |
| Verisk Analytics Inc | VRSK US | Aft-mkt | Q2 2016 Earnings Release | Q2 2016 | 0.762 |
| Fortive Corp | FTV US | Aft-mkt | Q2 2016 Earnings Release | Q2 2016 | 0.613 |
| Alaska Air Group Inc | ALK US | July 2016 Sales and Revenue Release - Traffic Results | 2016 | ||
| Delta Air Lines Inc | DAL US | July 2016 Sales and Revenue Release - Traffic Results | 2016 | ||
| General Motors Co | GM US | July 2016 Sales and Revenue Release | 2016 |
