BARCHART MORNING CALL 7/14

BARCHART MORNING CALL

Tuesday, July 14th, 2015View Older Reports

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OVERNIGHT MARKETS AND NEWS

September E-mini S&Ps (ESU15 -0.02%) are down -0.05% and European stocks are down -0.32% as global stocks consolidate Monday's sharp rally. Q2 earnings season is now in focus as the market awaits earnings reports from JPMorgan Chase, Wells Fargo and Johnson & Johnson. Losses in European stocks were contained after German investor confidence fell less than expected this month. Asian stocks closed mixed: Japan +1.47%, Hong Kong -0.41%, China -1.16%, Taiwan +0.09%, Australia +1.90%, Singapore +0.16%, South Korea -0.48%, India -0.10%.
Commodity prices are mostly lower. Aug crude oil (CLQ15 -1.03%) is down sharply by -2.09% after Iran reached a deal with world powers over its nuclear program, which bolstered speculation that an increase in Iranian crude exports will flood an already oversupplied global oil market. Aug gasoline (RBQ15 -1.07%) is down -1.64%. Metals prices are weaker. Aug gold (GCQ15 -0.22%) is down -0.25%. Sep copper (HGU15 -1.20%) is down -1.08%. Agricultural prices are mixed with Nov soybeans up +0.73% at an 8-month high on crop concerns after the National Weather Service said that parts of the Midwest saw more than triple the normal amount of rainfall in the past week.
The dollar index (DXY00 -0.20%) is down -0.16%. EUR/USD (^EURUSD) is up +0.21%. USD/JPY (^USDJPY) is down -0.05%.

Sep T-note prices (ZNU15 -0.09%) are down -2.5 ticks.
After 18 days of negotiations, Iran and six world powers signed an agreement to limit Iran's nuclear program in return for ending economic sanctions that were imposed on Iran in 2012. Diplomats said that restrictions on Iran will remain in place until UN monitors report on the country's compliance with the deal in December. The U.S. Congress has 60 days to review and agree to the deal, a deal that Israel said it would use "every means" possible to convince Congress to reject.
The German Jul ZEW survey expectations of economic growth fell -1.8 to 29.7, a smaller decline than expectations of -2.5 to 29.0, but still the lowest in 8 months.

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) June retail sales (expected +0.2% and +0.5% ex autos after May's +1.2% and +1.0% ex autos), (2) June import price index (expected +0.1% m/m and -9.8% y/y after May's +1.3% m/m and -9.6% y/y), and (3) May business inventories (expected +0.3% after April's +0.4%).
There are 6 of the S&P 500 companies that report earnings today: JPMorgan Chase (consensus $1.45), Johnson & Johnson (1.67), Wells Fargo (1.03), Fastenal (0.47), CSX Corp (0.53), Yum Brands (0.63).
U.S. IPO's scheduled to price today include: none.
Equity conferences during the remainder of this week include: SEMICON West CEO Investor Summit on Tue-Wed, 2015 International Stewardship Symposium on Wed, Delivering Alpha Conference on Wed.

OVERNIGHT U.S. STOCK MOVERS

JPMorgan Chase (JPM +1.55%) reported Q2 EPS of $1.49, better than expectations of $1.45.
Fastenal (FAST +1.16%) reported Q2 EPS of 48 cents, higher than consensus of 47 cents.
Orbitz (OWW unch) was downgraded to 'Sell' from 'Neutral' at UBS.
Western Refining (WNR +1.57%) was upgraded to 'Neutral' from 'Sell' at Goldman Sachs.
Delek U.S. (DK -0.03%) was upgraded to 'Buy' from 'Neutral' at Goldman Sachs.
Phillips 66 (PSX +2.37%) was downgraded to 'Neutral' from 'Buy' at Goldman Sachs.
Coca-Cola (KO +0.67%) was upgraded to 'Buy' from 'Neutral' at UBS.
Cardinal Health (CAH +0.75%) was downgraded to 'Hold' from 'Buy' at Evercore ISI.
Amazon.com (AMZN +2.72%) was upgraded to 'Buy' from 'Neutral' at UBS.
Buffalo Wild Wings (BWLD +2.05%) was upgraded to 'Outperform' from 'Market Perform' at Raymond James.
GoPro (GPRO -0.76%) was upgraded to 'Overweight' from 'Equal Weight' at Barclays.
Micron Technology (MU +0.23%) jumped nearly 9% in pre-market trading after people familiar with the matter said that China's Tsinghua Unigroup Ltd, plans to offer $23 billion for the chipmaker.
Navient (NAVI -0.05%) slid over 10% in after-hours trading after it lowered guidance on fiscal 2015 core EPS to $1.85, well below consensus of $2.20.
Candlewood Investment Group reported a 17.9% passive stake in Pacific Ethanol (PEIX +1.39%) .

MARKET COMMENTS

September E-mini S&Ps (ESU15 -0.02%) this morning are down -1.00 point (-0.05%). Monday's closes: S&P 500 +1.11%, Dow Jones +1.22%, Nasdaq +1.68%. The S&P 500 on Monday rose to a 2-week high and closed higher on reduced Grexit concerns after (1) Greek PM Tsipras agreed to bailout reforms, and (2) Chinese stocks rallied by another +2.4%.
Sep 10-year T-notes (ZNU15 -0.09%) this morning are down -2.5 ticks. Monday's closes: TYU5 -4.50, FVU5 -3.75. Sep T-notes on Monday dropped to a 1-week low on reduced safe-haven demand with some progress on Greece and a +2.4% rally in Chinese stocks.
The dollar index (DXY00 -0.20%) this morning is down -0.152 (-0.16%). EUR/USD (^EURUSD) is up +0.0023 (+0.21%). USD/JPY (^USDJPY)is down -0.06 (-0.05%). Monday's closes: Dollar Index +0.833 (+0.87%), EUR/USD -0.0155 (-1.39%), USD/JPY +0.653 (+0.53%). The dollar index Monday settled higher on speculation that a deal to end the Greek debt crisis and a recovery in Chinese stocks may keep the Fed on course to raise interest rates this year.
Aug WTI crude oil (CLQ15 -1.03%) this morning is down -$1.09 a barrel (-2.09%) on news that Iran signed a nuclear agreement with western powers. Aug gasoline (RBQ15 -1.07%)is down -0.0319 (-1.64%). Monday's closes: CLQ5 -0.55 (-1.04%), RBQ5 -0.0750 (-3.72%). Aug crude oil and gasoline prices on Monday closed lower on strength in the dollar, record June Saudi Arabian crude production of 10.564 bpd, and reports that an Iranian nuclear deal is imminent, which would pave the way for the elimination of sanctions and up to 1 million bpd of new Iranian oil exports.

GLOBAL EVENT CALENDAR07/14/2015

US	0830 ET	Jun retail sales expected +0.2% and +0.5% ex autos, May +1.2% and +1.0% ex autos. Jun retail sales ex auto and gas expected +0.4%, May +0.7%.
	0830 ET	Jun import price index expected +0.1% m/m and -9.8% y/y, May +1.3% m/m and -9.6% y/y.
	1000 ET	May business inventories expected +0.3%, Apr +0.4%.
GER	0200 ET	Revised German Jun CPI (EU harmonized), previous -0.2% m/m and +0.1% y/y.
	0500 ET	German Jul ZEW survey expectations of economic growth expected -2.5 to 29.0, Jun 31.5. Jul ZEW survey current situation expected -2.9 to 60.0, Jun 62.9.
UK	0430 ET	UK Jun CPI expected +0.1% m/m and unch y/y, May +0.2% m/m and +0.1% y/y. Jun core CPI expected +0.9% y/y, May +0.9% y/y.
	0430 ET	UK Jun RPI expected +0.1% m/m and +1.0% y/y, May +0.2% m/m and +1.0% y/y. Jun RPI ex-mortgage interest payments expected +1.0% y/y, May +1.1% y/y.
	0430 ET	UK Jun PPI input prices expected -0.8% m/m and -11.8% y/y, May -0.9% m/m and -12.0% y/y. Jun PPI output prices expected +0.1% m/m and -1.5% y/y, May +0.1% m/m and -1.6% y/y. Jun PPI output core prices expected unch m/m and +0.1% y/y, May unch m/m and +0.1% y/y.
	0430 ET	UK May ONS house prices, Apr +5.5% y/y.
EUR	0500 ET	Eurozone May industrial production expected +0.2% m/m and +2.0% y/y, Apr +0.1% m/m and +0.8% y/y.
CHI	2200 ET	China Jun industrial production expected +6.0% y/y, May +6.1% y/y. Jun retail sales expected +10.2% y/y, May +10.1% y/y.
	2200 ET	China Q2 GDP expected +6.8% y/y, Q1 +7.0% y/y.

U.S. STOCK CALENDAR07/14/2015

Company	Ticker	Time	Event Description	Period	Estimate
Johnson & Johnson	JNJ US	Bef-mkt	Q2 2015 Earnings Release	Q2 2015	1.669
JPMorgan Chase & Co	JPM US	7:00	Q2 2015 Earnings Release	Q2 2015	1.447
Fastenal Co	FAST US	7:00	Q2 2015 Earnings Release	Q2 2015	0.465
Wells Fargo & Co	WFC US	8:00	Q2 2015 Earnings Release	Q2 2015	1.025
JPMorgan Chase & Co	JPM US	8:30	Q2 2015 Earnings Call	Q2 2015
Johnson & Johnson	JNJ US	8:30	Q2 2015 Earnings Call	Q2 2015
General Mills Inc	GIS US	9:00	Investor Meeting	Y 2015
Wells Fargo & Co	WFC US	10:00	Q2 2015 Earnings Call	Q2 2015
Fastenal Co	FAST US	10:00	Q2 2015 Earnings Call	Q2 2015
Lam Research Corp	LRCX US	12:00	Investor & Analyst Meeting	Y 2015
CSX Corp	CSX US	Aft-mkt	Q2 2015 Earnings Release	Q2 2015	0.527
Yum! Brands Inc	YUM US	Aft-mkt	Q2 2015 Earnings Release	Q2 2015	0.626

Barchart Morning Call 3/7

Barchart Morning Call

Barchart.com - Wed Mar 07, 7:00AM CST

Overnight Developments

• Global stocks this morning are mixed with the Euro Stoxx 50 up +0.10% and Mar S&Ps up +5.90 points. Treasuries weakened as the euro and commodities rose amid speculation private investors will accept terms of a Greek bond exchange needed for it to receive a second bailout package. Greece's six largest banks said they plan to accept the offer, according to the Greek Finance Ministry, while Societe Generale SA, France's second-biggest bank, Assicurazioni Generali SpA and UniCredit SpA joined other lenders saying they will participate in Greece's debt swap. The Greek government, which set a 75% participation rate as a threshold for proceeding with the transaction, said it will use collective action clauses to force holders of Greek-law bonds to accept the swap if it receives sufficient consent from investors. Another bullish factor for stocks and the euro is the decline in dollar finding costs for European banks after the 3-month cross-currency basis swap, the rate banks pay to convert euro interest payments into dollars, declined to 65.5 bp below the euro interbank offered rate, a 7-month low. Limiting gains in European stocks was the unexpected decline in Jan German factory orders which fell -2.7% m/m, weaker than expectations of a +0.6% m/m increase.
• Asian stocks today closed lower with Japan down -0.64%, China -0.69%, Australia -1.45%, South Korea -0.95%, India -0.16%. Most Asian stock markets finished lower as financial stocks weakened on concern Greece's debt-swap deal were threatened by reluctant bond holders. Chinese stocks also fell after Commerce Minister Chen Deming said exports rose about 7% over the first two months of this year, which suggests that Feb China exports, to be released on Mar 10, will be less than the +32% y/y gain expected. Australian stocks tumbled and the Australian dollar slid to a 6-week low against the dollar after Q4 Australia GDP expanded +0.4% q/q, weaker than expectations of +0.8% q/q.

Overnight U.S. Stock News

• March S&Ps this morning are trading up +5.90 points. The U.S. stock market Tuesday tumbled and settled lower for a third day on global growth concerns along with concern that Greece may not be able to finalize a voluntary debt-swap deal by Thursday's deadline: Dow Jones -1.57%, S&P 500 -1.54%, Nasdaq Composite -1.36%. The S&P 500 posted a 3-week low, the Dow slumped to a 1-month low while the Nasdaq slipped to a 1-week low. Bearish factors Tuesday included (1) global growth concerns after Q4 Euro-Zone GDP remained unrevised at -0.3% q/q and +0.7% y/y, (2) concern that Greece will struggle to complete a debt-swap by Thursday's deadline as only 20% of the private creditors have agreed to the voluntary debt swap, below the 75% participation rate the Greek government has set as a threshold for proceeding with the transaction, and (3) weakness in mining companies and raw material and energy producers as strength in the dollar along with demand concerns fueled a decline in the prices of most commodities.
• Bullish factors included (1) positive comments from EU Commissioner for Economic and Monetary Affairs, Ollie Rehn, who said the Euro-Zone economy will likely be "turning the tide in the coming months," and (2) reduced liquidity concerns in Europe after the Euribor-OIS spread, a measure of European banks' reluctance to lend to one another that's measured as the difference between the borrowing benchmark and overnight indexed swaps, narrowed to a 7-month low of 59 bp.
• Netflix (NFLX) rose 1.8% in European trading after CEO Hastings said the company is considering partnerships with cable operators to offer its service as part of their premium lineup.

Today's Market Focus

• June 10-year T-notes this morning are down -4 ticks. T-note prices Tuesday traded in positive territory the entire day and settled higher as a slump in global equities spurred safe-haven demand for Treasuries along with concern that Greece may not be able to persuade creditors to agree to a debt-swap plan: TYM2 +17.5, FVM2 +8.0, EDU2 -0.5. Bullish factors Tuesday included (1) increased safe-haven demand for Treasuries after the S&P 500 slumped to a 3-week low, (2) a flight-to-quality into Treasuries on concern Greece will struggle to complete a debt-swap by Thursday's deadline, and (3) the Fed's purchase of $4.027 billion of Treasuries as part of its Operation Twist program to replace $400 billion of short-term debt in its portfolio with longer-term Treasuries in an effort to keep borrowing costs low. Bearish factors included (1) reduced safe-haven demand for Treasuries as liquidity concerns diminished in Europe after the Euribor-OIS spread, a measure of European banks' reluctance to lend to one another that's measured as the difference between the borrowing benchmark and overnight indexed swaps, narrowed to a 7-month low of 59 bp, and (2) reduced safe-haven demand for Treasuries after the EU Commissioner for Economic and Monetary Affairs, Ollie Rehn, said the Euro-Zone economy will likely be "turning the tide in the coming months" as the ECB's actions have prevented a credit crunch, and "significant steps" by Italy and Spain have improved confidence and reduced tensions on government bond markets.
• The dollar index this morning is weaker with the dollar/yen -0.14 yen and the euro/dollar +0.22 cents. The dollar index Tuesday rallied to a 2-1/2 week high on increased safe-haven demand as the stock market slumped along with weakness in EUR/USD on concern Greece will struggle to complete a debt-swap by Thursday's deadline in order to receive a 130 billion-euro bailout: Dollar Index +0.540, USD/JPY -0.663, EUR/USD -0.01042. Bullish factors included (1) the fall in EUR/USD to a 2-1/2 week low on concern Greece will struggle to complete a debt-swap by Thursday's deadline as only 20% of the private creditors have agreed to the voluntary debt swap, below the 75% participation rate the Greek government has set as a threshold for proceeding with the transaction, (2) increased safe-haven demand for the dollar after the S&P 500 fell to a 3-week low, and (3) the increase in the ECB's balance sheet to a record 3.02 trillion euros, which increases inflation risks. Bearish factors included (1) euro positive comments from EU Commissioner for Economic and Monetary Affairs, Ollie Rehn, who said the Euro-Zone economy will likely be "turning the tide in the coming months" as the ECB's actions have prevented a credit crunch, and "significant steps" by Italy and Spain have improved confidence and reduced tensions on government bond markets, and (2) reduced dollar funding costs for European banks after the 3-month cross-currency basis swap, the rate banks pay to convert euro interest payments into dollars, fell to 67 bp below the euro interbank offered rate, a 7-month low.
• Apr crude oil prices this morning are up +62 cents a barrel and Apr gasoline is +2.81 cents per gallon. Crude oil and gasoline prices Tuesday settled lower as the dollar rallied and after the EU offered to restart negotiations with Iran over its nuclear program: CLJ12 -$2.02, RBJ -2.81. Apr crude posted a 2-week low. Bearish factors included (1) the rally in the dollar index to a 2-1/2 week high, which discourages investment demand in commodities, (2) reduced geopolitical concerns after EU foreign policy chief Ashton said she urged Iran's nuclear envoy to meet her to seek an accord on its nuclear program, and (3) the slide in the S&P 500 to a 3-week low, which erodes confidence in the economic outlook and energy demand. Bullish factors included (1) optimistic comments from the EU Commissioner for Economic and Monetary Affairs, Ollie Rehn, who said the Euro-Zone economy will likely be "turning the tide in the coming months," which would be positive for energy demand and consumption and (2) the outlook for Wednesday's weekly DOE inventory report to show that gasoline supplies fell for a third week as refiners shut plants for maintenance. Expectations for Wednesday's weekly DOE inventory report are for crude oil supplies to increase +1.5 million bbl, gasoline stockpiles to fall -1.75 million bbl, distillate inventories to decline -1.65 million bbl and the refinery utilization rate to remain unchanged at 83.6% of capacity.

Today's U.S. Earnings Reports Earnings reports (confirmed releases, sorted by mkt cap): BF/B-Brown-Forman (BEST earnings consensus $1.01), PLL-Pall Corp. (0.74), HRB-H&R Block (0.07), AEO-American Eagle Outfitters (0.35), EXPR-Express (0.68), TFM-Fresh Market (0.37), MW-Men's Warehouse (-0.13), RLJ-RLJ Lodging Trust (0.18), SMTC-Semtech (0.31), CIEN-Ciena (-0.03), PLCE-Children's Place Retail Stores (0.90), PWRD-Perfect World Co. Ltd. (0.58), HTHT-China Lodging Group Ltd. (0.10), DK-Delek US Holdings (-0.17).
Global Financial Calendar

Wednesday 3/7/12
United States
0700 ET	Weekly MBA mortgage applications, previous -0.3% with purchase mortgage sub-index+8.2% and refinancing sub-index -2.2%.
0815 ET	Feb ADP employment change expected +215,000, Jan +170,000.
0830 ET	Revised Q4 non-farm productivity expected +0.8%, previous +0.7%. Revised Q4 unit labor costs expected no change at +1.2%.
1500 ET	Jan consumer credit expected +$10.8 billion, Dec +$19.308 billion.
Japan
0000 ET	Jan Japan coincident index CI expected 93.4, Dec 93.6. Jan leading index CI expected 95.0, Dec 94.0.
1850 ET	Revised Q4 Japan GDP expected -0.2% q/q and -0.6% y/y, previous -0.6% q/q and -2.3% y/y.
2330 ET	Feb Japan bankruptcies, Jan-5.4% y/y.
Germany
0600 ET	Jan German factory orders expected +0.6% m/m and -1.7% y/y, Dec +1.7% m/m and unchanged y/y.
Canada
0830 ET	Jan Canada building permits expected -3.0% m/m, Dec +11.1% m/m.

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