Friday, March 18th, 2016View Older Reports
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OVERNIGHT MARKETS AND NEWS
Jun E-mini S&Ps (ESM16 +0.26%) are up +0.28% and European stocks are up +0.54% on speculation that global central banks will remain accommodative. Strength in Chinese stocks also gave support to a rally in global equity markets on signs that actions taken by the Chinese government to boost economic confidence are starting to bear fruit after China Feb new home prices rose in the most cities in nearly 2 years. Energy producers are also higher as crude oil climbed over $40 a barrel to a 3-1/2 month high. Asian stocks settled mostly higher: Japan -1.25%, Hong Kong +0.82%, China +1,73%, Taiwan +0.87%, Australia +0.29%, Singapore +0.92%, South Korea +0.22%, India +1.12%. Japan's Nikkei Stock Index was the only Asian bourse to close lower as it fell to a 1-week low after exporters sold-off on earnings concerns when USD/JPY plunged to a 1-1/3 year low yesterday. The yield on Japan's 10-year government bond fell to a record low -0.135% as the BOJ ramps up it bond buying operations. China's Shanghai Composite rallied to a 1-3/4 month high as strength in property stocks propelled the overall market higher after new-home prices last month rose in 47 cities out of 70 tracked by the government, the most in nearly 2 years.
The dollar index (DXY00 +0.27%) is up +0.32%. EUR/USD (^EURUSD) is down -0.43% after ECB Executive Board member Praet said that there was still scope for the ECB to cut interest rates if the Eurozone economy falters. USD/JPY (^USDJPY) is up +0.04%.
Jun T-note prices (ZNM16 +0.11%) are up +6.5 ticks.
ECB Executive Board member Praet said "if new negative shocks should worsen the outlook or if financing conditions should not adjust in the direction and to the extent that is necessary to boost the economy and inflation, a rate reduction remains in our armory."
Feb China new home prices rose in 47 cities out of 70 tracked by the government, the most in 23 months.
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) New York Fed President William Dudley's delivery of the opening remarks at a conference on bank supervision in NY, (2) University of Michigan prelim-March U.S. consumer sentiment index (expected +0.5 to 92.2, Feb -0.3 to 91.7), (3) Boston Fed President Eric Rosengren's speech on a panel on bank supervision in NY, and (4) St. Louis Fed President James Bullard's presentation at the International Research Forum on Monetary Policy Euro Area Business Cycle Network in Frankfurt, Germany.
There are 2 of the Russell 1000 companies that report earnings today: Tiffany (consensus $1.40), Avangrid (2.16).
U.S. IPO's scheduled to price today: BioLight Life Sciences (BOLT).
Equity conferences today include: none.
OVERNIGHT U.S. STOCK MOVERS
Adobe Systems (ADBE +2.03%) rallied over 5% in pre-market trading after it reported Q1 adjusted EPS of 66 cents, better than consensus of 61 cents, and then raised guidance on fiscal 2016 adjusted EPS to $2.80 from a prior estimate of $2.70, above consensus of $2.76.
Tiffany & Co. (TIF -0.23%) reported Q4 adjusted EPS of $1.46, higher than consensus of $1.40.
JPMorgan Chase (JPM -0.29%) rose 1% in after-hours trading after its board authorized an additional $1.88 billion to be added to its $6.4 billion stock repurchase program authorized last year.
Continental Resources (CLR +4.40%) was rated a new 'Outperform" at RBC with a price target of $35.
Micron Technology (MU +1.40%) was downgraded to 'Neutral' from 'Positive' at Susquehanna.
Avista (AVA +1.33%) was downgraded to 'Sell' from 'Neutral' at UBS.
Titan Machinery (TITN +4.67%) reported a preliminary Q4 adjusted loss of -$1.31, a much bigger loss than consensus of -12 cents.
Adecoagro (AGRO +0.23%) reported Q4 net sales of $209.8 million, above consensus of $202.3 million.
Regency Centers (REG +2.12%) was downgraded to 'Hold' from 'Buy' at Argus Research.
Shoe Carnival (SCVL +5.55%) rose nearly 6% in after-hours trading after it reported Q4 EPS of 21 cents, well above consensus of 14 cents.
Columbia Pipeline Group (CPGX +2.22%) climbed over 5% in after-hours trading after TransCanada agreed to buy the company for $25.50 a share or $10.2 billion. TransCanada (TRP +3.76%) is down over 4% in after-hours trading after the announcement.
Turquoise Hill Resources (TRQ +3.51%) reported Q4 EPS of 10 cents, well above consensus of 1 cent.
MARKET COMMENTS
Jun E-mini S&Ps (ESM16 +0.26%) this morning are up +5.75 ponts (+0.28%). Thursday's closes: S&P 500 +0.66%, Dow Jones +0.90%, Nasdaq-0.09%. The S&P 500 on Thursday rallied to a 2-1/2 month high and closed higher on the unexpected +260,000 increase in Jan JOLTS job openings to a 6-month high of 5.541 million, the +15.2 point jump in the Mar Philadelphia Fed business outlook survey to a 13-month high of 12.4 (stronger than expectations of +1.3 to -1.5), and the rally in commodity prices, which pushed raw material and energy producer stocks higher.
Jun 10-year T-notes (ZNM16 +0.11%) this morning are up +6.5 ticks. Thursday's closes: TYM6 +8.50, FVM6 +4.50. Jun T-notes on Thursday rose to a 1-week high and closed higher on positive carryover from Wednesday's dovish FOMC meeting where the FOMC cut its GDP and inflation forecasts and now predicts only two rate hikes this year rather the four. T-notes were undercut by the stronger-than-expected Mar Philadelphia Fed business outlook survey that jumped to a 13-month high and by increased inflation expectations after the 10-year T-note breakeven inflation rate rose to a 3-1/4 month high.
The dollar index (DXY00 +0.27%) this morning is up +0.300 (+0.32%). EUR/USD (^EURUSD) is DOWN -0.0049 (-0.43%). USD/JPY (^USDJPY) is UP +0.04 (+0.04%). Thursday's closes: Dollar Index -1.130 (-1.18%), EUR/USD +0.0094 (+0.84%), USD/JPY -1.17 (-1.04%). The dollar index on Thursday tumbled to a 4-3/4 month low and closed lower on negative carryover from Wednesday's dovish FOMC meeting where the Fed cut its expectations for rate hikes, acknowledged global risks, and cut its GDP and inflation forecasts. In addition, there was massive short-covering in EUR/USD which rose to a 5-week high and in the yen as USD/JPY plunged to a 1-1/3 year low.
Apr WTI crude (CLJ16 +1.52%) this morning is up +58 cents (+1.44%) at a 3-1/2 month high and Apr gasoline (RBJ16 +0.75%) is up +0.0093 (+0.65%). Thursday's closes: CLJ6 +1.88 (+4.89%), RBJ6 +0.0177 (+1.25%). Apr crude and gasoline on Thursday closed higher with Apr crude at a 3-1/4 month high. Crude oil prices were boosted by the sell-off in the dollar index to a 4-3/4 month low and by expectations from U.S. crude production to continue to fall after Wednesday’s EIA data showed a -0.1% decline in U.S. crude production in the week ended Mar 11 to a 16-month low of 9.068 million bpd.
GLOBAL EVENT CALENDAR03/18/2016
U.S. STOCK CALENDAR03/18/2016
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- Dec E-mini S&Ps this morning are slightly lower by -0.04% as the markets react to last night's U.S. election returns. European stocks are up +0.38% and Asian stocks closed generally higher with Hong Kong up +0.71%, Taiwan up +0.70%, and Australia up +0.71%, although Japan closed -0.03% and China closed -0.21%. Commodity prices are slightly higher by +0.09% with Dec crude oil down -0.83%, Dec gasoline -0.90%, Dec gold up +0.55%, Dec copper virtually unchanged, and agricultural prices generally trading higher. The dollar index is slightly lower by -0.05% and EUR/USD is slightly lower by -0.09%. Dec 10-year T-notes are up 19.5 ticks.
- The election results were in line with pre-election probabilities and the status quo prevailed. President Obama won reelection, Republicans kept control of the House, and Democrats kept control of the Senate. Attention now turns to how Washington will handle the year-end fiscal cliff and the need for a debt ceiling hike by early 2013.
- The Greek parliament today will hold its first vote on approving the 13.5 billion euro austerity package that is necessary for Greece to obtain its next 31 billion euro tranche of bailout money. If the Greek parliament cannot approve the austerity package, speculation will quickly arise again about whether Greece may end up leaving the Eurozone. Greek workers today held the second day of their 2-day strike to protest austerity measures.
- The European Commission today cut its GDP forecast for the Eurozone for 2013 to +0.1% from its May forecast of +1.0%, acknowledging that the economy will show virtually no growth in 2013 after a forecasted -0.4% decline in 2012.
- The Sep Eurozone retail sales report of -0.2% m/m and -0.8% y/y was slightly weaker than market expectations of -0.2% m/m.
- The German Sep industrial
production report of -1.8% m/m and -1.2% y/y was much weaker than market
expectations of -0.7% m/m and +0.1% y/y.
Market Comments- Dec E-mini S&Ps this morning are slightly lower by -0.50 points (-0.04%) after last night's election returns were in line with the pre-election probabilities. E-mini S&Ps are seeing some support today from the +0.38% rally in European stocks. The S&P 500 index on Tuesday closed moderately higher: S&P 500 +0.79%, Dow Jones +1.02%, Nasdaq +0.30%. Bullish factors included some relief that the election uncertainty was nearly over and the +0.73% rally in European stocks.
- Dec 10-year T-notes this morning are up 19.5 ticks as the market calculates that the Obama reelection victory will give the FOMC more scope to continue its accommodative monetary policy, although that also boosts the long-term inflation risks. Dec 10-year T-note prices on Tuesday closed moderately lower: TYZ2 -14, FVZ2 -8.25. Bearish factors included reduced safe-haven demand with the rally in stocks and supply overhang with this week's refunding operation. The results from Tuesday's 3-year T-note auction were a bit disappointing with the bid cover ratio of 3.41 being below the 12-auction average of 3.58 and at the lowest level in 9 months. In addition, indirect (foreign) bidders bought only 25.1% of the auction, which was well below the 12-auction average of 33.9% and the lowest level since 2007.
- The dollar index this morning is slightly lower by -0.04 (-0.05%) and EUR/USD is down lower by -0.0011 (-0.09%). USD/JPY is down -0.26 (-0.32%). The dollar index on Tuesday closed mildly lower: Dollar index -0.14 (-0.17%), EUR/USD +0.0018 (+0.14%), USD/JPY +0.06 (+0.07%). Bearish factors included (1) reduced safe-haven demand with the rally in the stocks, and (2) the odds for an Obama victory, which would mean support for the Fed's dollar-bearish QE3 program.
- Dec WTI crude oil prices this morning are down -0.74 (-0.83%) and Dec gasoline is down -0.0242 (-0.90%) as the markets give back some of yesterday's sharp gains. Dec crude oil and gasoline prices on Tuesday closed sharply higher: CLZ2 +3.06 (+3.57%), RBZ2 +0.0787 (+3.00%). Bullish factors included general commodity strength and the continued disruptions of gasoline supplies in the northeastern U.S. The market consensus for today's DOE report is for a +1.5 million barrel rise in crude oil inventories, a -1.5 million barrel drop in gasoline inventories, a -1.25 million barrel drop in distillate inventories, and a -1.5 point drop in the refinery utilization rate to 86.2% of capacity. However, today's report for the week ended Nov 2 will see severe disruptions from Hurricane Sandy, which made landfall on October 29.
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Today's U.S. Earnings Reports Earnings reports (ranked by market cap): QCOM-Qualcomm (Consensus:$0.82), MDLZ-Mondelez (0.36%), TWX-Time Warner (0.82), PRU-Prudential Financial (1.67), KRFT-Kraft Foods (0.67), DVN-Devon Energy (0.69), CTL-Centurylink (0.58), CBS-CBS (0.60), CTSH-Cognizant (0.92), WLP-Wellpoint (1.83), WFM-Whole Foods (0.60), M-Macy's (0.30), BDX-Becton Dickinson (1.40), CLR-Contl Res (0.87), ETE-Energy Transfer (0.40), ATVI-Activision (0.08), PRGO-Perrigo (1.24), BAP-Credicorp (2.43), CXO-Concho Resources (1.04), CNP-Centerpoint Energy (0.34), MPEL-Melco Crown (0.17).
Global Financial Calendar
Barchart.com provides Financial Quotes, Charts and Technical Analysis for Stock and Commodity Traders.Wednesday 11/7/12 United States 0700 ET Weekly MBA mortgage applications, previous -4.8% with purchase sub-index +0.5% and refi sub-index -6.0%. 1030 ET DOE Weekly Petroleum Status Report. 1300 ET Treasury auctions $24 billion in 10-year T-notes. 1500 ET Sep consumer credit expected +$10.6 bln, Aug +$18.123 bln. Euro-Zone 0500 ET Eurozone Sep retail sales expected -0.1% m/m and -0.8% y/y, Sep +0.1% m/m and -1.3% y/y. Germany 0600 ET German Sep industrial production expected -0.6% m/m and +0.1% y/y, Aug -0.5% m/m and -1.4% y/y. Japan 1850 ET Japan Sep machine orders expected -2.1% m/m and -4.9% y/y, Aug -3.3% m/m and -6.1% y/y. 1850 ET Japan Sep current account expected 761 bln yen, Aug 454.7 bln yen. Sep adjusted current account expected 206 bln yen, Aug 722.3 bln yen. Sep trade balance BOP basis expected -417 bln yen, Aug -644.5 bln yen. 1850 ET Japan Oct bank lending ex-trusts expected +1.1% y/y, Sep +1.2% y/y. 2100 ET Tokyo Oct average office vacancies, Sep 8.9%. 2330 ET Japan Oct bankruptcies, Sep -7.0% y/y.