Barchart Morning Call
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OVERNIGHT MARKETS AND NEWS
Dec E-mini S&Ps (ESZ16 +0.26%) are up +0.22% and European stocks are up +0.32% at a 1-week high as strength in energy producing stocks leads the overall market higher. Jan WTI crude oil (CLF17 +7.96%) has surged +7.12% to a 1-week high after OPEC ministers expressed optimism about a deal to cut oil production and prop up oil prices. Iraqi Oil Minister Jabbar al-Luaibi said OPEC ministers were unanimous in favor of a cut and Iran Oil Minister Bijan Namdar Zanganeh said producers will reach agreement without his country freezing production and that Russia was ready to abandon its previous position and participate in curbing oil production. European stocks also received a boost after German Oct retail sales rose more than expected at the fastest pace in 2-3/4 years. Asian stocks settled mixed: Japan +0.01%, Hong Kong +0.23%, China -1.00%, Taiwan +0.53%, Australia -0.31%, Singapore +0.86%, South Korea +0.53%, India +0.98%. The Chinese yuan rose to a 1-1/2 week high against the dollar after people familiar with the matter said the PBOC is adding curbs to stop capital outflows and that it won't approve requests to bring the yuan overseas for the purpose of converting into foreign currencies unless applicants provide a valid business reason. The equivalent of $275 billion exited China via yuan payments this year through Oct, versus a $101.5 billion outflow in the same period of 2015.
The dollar index (DXY00 +0.28%) is up +0.12%. EUR/USD (^EURUSD) is down -0.02%. USD/JPY (^USDJPY) is up +0.76%.
German Oct retail sales rose +2.4% m/m, stronger than expectations of +1.0% m/m and the largest monthly increase in 2-3/4 years.
The Eurozone Nov CPI estimate rose +0.6% y/y, right on expectations. The Nov core CPI rose +0.8% y/y, also right on expectations.
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) weekly MBA mortgage applications (previous +5.5% with purchase sub-index +18.8% and refi sub-index -3.1%), (2) Dallas Fed President Robert Kaplan (non-voter) speaks to the Economic Club of New York, (3) Nov ADP employment change (expected +169,000, Oct +147,000), (4) Oct personal spending (expected +0.5%, Sep +0.5%) and Oct personal income (expected +0.4%, Sep +0.3%), (5) Oct PCE deflator (expected +0.3% m/m and +1.5% y/y, Sep +0.2% m/m and +1.2% y/y) and Oct core PCE (expected +0.1% m/m and +1.7% y/y, Sep +0.1% m/m and +1.7% y/y), (6) Nov Chicago PMI (expected +1.9 to 52.5, Oct -3.6 to 50.6), (7) Oct pending home sales (expected unch m/m, Sep +1.5% m/m and +2.0% y/y), (8) Fed Governor Jerome Powell speaks at the Brookings Institute in Washington, D.C., (9) Fed Beige Book, (10) OPEC meeting in Vienna, (11) EIA Weekly Petroleum Status Report.
Russell 1000 earnings reports today include: PVH Corp (consensus $2.40), Synopsys (0.77).
U.S. IPO's scheduled to price today: Supportingsmallbusiness Inc, Innovative Industrial Properties (IIPR).
Equity conferences during the remainder of this week include: Credit Suisse Technology, Media, and Telecom Conference on Mon-Wed, Citi Basic Materials Conference on Tue-Wed, Jefferies Energy Conference on Tue-Wed, Piper Jaffray Health Care Conference on Tue-Wed, Bank of America Merrill Lynch Leveraged Finance Conference on Tue-Wed, NASDAQ Investor Conference on Tue-Wed, J.P. Morgan FinTech & Specialty Finance Forum on Wed, Credit Suisse Industrials Conference on Tue-Thu.
OVERNIGHT U.S. STOCK MOVERS
Celanese (CE +0.73%) was upgraded to 'Buy' from 'Neutral' at Goldman Sachs with a price target of $92.
AmSurg (AMSG +3.85%) will replace Legg Mason in the S&P 500 effective after the close of trading on Thursday, Dec 1.
Mid-America Apartment Communities (MAA +1.68%) will replace Owens-Illinois in the S&P 500 as of the close of trading Thursday, Dec 1.
Shutterfly (SFLY +0.22%) was rated a new 'Buy' at Alegis Capital with an 18-month target price of $62.
Advaxis (ADXS -3.82%) was rated a new 'Buy' at Cantor Fitzgerald with a 12-month target price of $19.
Splunk (SPLK -0.07%) rallied over 4% in after-hours trading after it reported Q3 adjusted EPS of 12 cents, above consensus of 8 cents, and then raised guidance on fiscal 2017 revenue view to $930 million-$932 million from a prior view of $910 million-$914 million.
Autodesk (ADSK +0.11%) dropped 3% in after-hours trading after it forecast a Q4 adjusted share loss of -32 cents to -39cents, a larger loss than consensus of -31 cents.
Hyatt Hotels (H -0.08%) slid over 1% in after-hours trading after a 6-million share block of shares was offered.
Guidewire Software (GWRE -1.40%) rose over 2% in after-hours trading after it reported an unexpected Q1 adjusted EPS profit of 2 cents, better than consensus of a -5 cent loss, and then raised guidance on fiscal 2017 revenue to $473 million-$483 million from a September 7 view of $471.5 million-$483.5 million.
Ooma (OOMA +4.40%) climbed over 4% in after-hours trading after it reported a Q3 adjusted loss of -2 cents a share, a smaller loss than consensus of -5 cents, and then raised guidance on 2017 adjusted EP loss to -16 cents to -19 cents from an August 30 view of -20 cents to -25 cents.
Evolent Health (EVH -7.14%) fell 7% in after-hours trading after it said it will offer $110 million in convertible senior notes due on 2021, convertible into Class A shares.
Costamare (CMRE -6.60%) sank 9% in after-hours trading after it announced a public offering of 11 million shares of common stock.
Arrowhead Pharmaceuticals (ARWR -1.57%) plunged 60% in after-hours trading after it said it will discontinue development of clinical stage drug candidates ARC-520, ARC-521 and ARC-AAT and will reduce its workforce by 30%.
MARKET COMMENTS
Dec E-mini S&Ps (ESZ16 +0.26%) this morning are up +4.75 points (+0.22%). Tuesday's closes: S&P 500 +0.13%, Dow Jones 0.12%, Nasdaq +0.33%. The S&P 500 on Tuesday closed higher on the upward revision to U.S Q3 GDP to 3.2% from +2.9%, stronger than expectations of +3.0% and the fastest pace of expansion in 2 years. Stocks were also boosted by the +6.3 point increase in U.S. Nov consumer confidence (Conference Board) to a 9-1/3 year high of 107.1, stronger than expectations of +2.9 to 101.5. Energy producer stocks were undercut by the -3.93% slide in crude oil prices to a 2-week low.
Dec 10-year T-notes (ZNZ16 -0.39%) this morning are down -12 ticks. Tuesday's closes: TYZ6 +4.00, FVZ6 +3.00. Dec 10-year T-note futures on Tuesday rebounded from early losses and closed higher on short-covering after the recent plunge and the sharp sell-off in crude oil to a 2-week low, which undercut inflation expectations as the 10-year T-note breakeven inflation rate fell to a 1-1/2 week low.
The dollar index (DXY00 +0.28%) this morning is up +0.120 (+0.12%). EUR/USD (^EURUSD) is down -0.0002 (-0.02%). USD/JPY (^USDJPY) is up +0.85 (+0.76%). Tuesday's closes: Dollar index -0.400 (-0.39%), EUR/USD +0.0036 (+0.34%), USD/JPY +0.44 (+0.39%). The dollar index on Tuesday closed lower on strength in EUR/USD after Eurozone Nov economic confidence rose +0.1 to an 11-month high of 106.5. The dollar was also undercut by the decline in 10-year T-note yields, which reduced the dollar's interest rate differentials and spurred liquidation of long dollar positions.
Jan crude oil prices (CLF17 +7.96%) this morning are up sharply by +$3.22 a barrel (+7.12%) and Jan gasoline (RBF17+5.98%) is +0.0744 (+5.40%), both at 1-week highs. Tuesday's closes: Jan crude -1.85 (-3.93%), Jan gasoline -0.0381(-2.69%). Jan crude oil and gasoline in Tuesday sold off sharply with Jan crude at a 2-week low. Crude oil prices fell on doubts that OPEC will be able to agree on any production cuts when it meets Wednesday in Vienna as Iran and Iraq continue to resist calls to cut output and Saudi Arabia says it is ready to reject a deal unless Iran and Iraq compromise.
GLOBAL EVENT CALENDAR11/30/2016
| Wednesday, Nov 30 | ||
| US | 0700 ET | Weekly MBA mortgage applications, previous +5.5% with purchase sub-index +18.8% and refi sub-index -3.1%. |
| 0800 ET | Dallas Fed President Robert Kaplan (non-voter) speaks to the Economic Club of New York. | |
| 0815 ET | Nov ADP employment change expected +169,000, Oct +147,000. | |
| 0830 ET | Oct personal spending expected +0.5%, Sep +0.5%. Oct personal income expected +0.4%, Sep +0.3%. | |
| 0830 ET | Oct PCE deflator expected +0.3% m/m and +1.5% y/y, Sep +0.2% m/m and +1.2% y/y. Oct core PCE expected +0.1% m/m and +1.7% y/y, Sep +0.1% m/m and +1.7% y/y. | |
| 0945 ET | Nov Chicago PMI expected +1.9 to 52.5, Oct -3.6 to 50.6. | |
| 1000 ET | Oct pending home sales expected unch m/m, Sep +1.5% m/m and +2.0% y/y. | |
| 1030 ET | EIA Weekly Petroleum Status Report. | |
| 1145 ET | Fed Governor Jerome Powell speaks at the Brookings Institute in Washington, D.C. | |
| 1400 ET | Fed Beige Book. | |
| n/a | OPEC meeting in Vienna. | |
| Thursday, Dec 1 | ||
| US | 0730 ET | Nov Challenger job cuts, Oct -39.1% y/y. |
| 0830 ET | Weekly initial unemployment claims expected +2,000 to 253,000, previous +18,000 to 251,000. Weekly continuing claims expected -10,000 to 2.033 million, previous +60,000 to 2.043 million. | |
| 0830 ET | USDA weekly Export Sales. | |
| 0900 ET | Dallas Fed President Robert Kaplan (non-voter) speaks in a moderated Q&A at St. Marys University Forum on Entrepreneurship. | |
| 0945 ET | Final-Nov Markit manufacturing PMI expected unch at 53.9, prelim-Nov +0.5 to 53.9. | |
| 1000 ET | Oct construction spending expected +0.6%, Sep -0.4%. | |
| 1000 ET | Nov ISM manufacturing index expected +0.4 to 52.3, Oct +0.4 to 51.9. Nov ISM new orders, Oct -3.0 to 52.1. Nov ISM employment, Oct +3.2 to 52.9. Nov ISM prices paid expected -0.5 to 54.0, Oct +1.5 to 54.5. | |
| n/a | Nov total vehicle sales expected 17.70 million, Oct 17.91 million. Nov domestic vehicle sales expected 14.00 million, Oct 14.05 million. |
U.S. STOCK CALENDAR11/30/2016
| Company | Ticker | Time | Event Description | Period | Estimate |
|---|---|---|---|---|---|
| Pilgrim's Pride Corp | PPC US | 9:00 | Acquisition of GNP Company by Pilgrim's Pride Corp Call | ||
| Equifax Inc | EFX US | 10:00 | Business Update Call | ||
| Microsoft Corp | MSFT US | 11:00 | Annual General Meeting | Y 2016 | |
| Synopsys Inc | SNPS US | 17:00 | Q4 2016 Earnings Call | Q4 2016 | |
| PVH Corp | PVH US | Aft-mkt | Q3 2017 Earnings Release | Q3 2017 | 2.401 |
| Synopsys Inc | SNPS US | Aft-mkt | Q4 2016 Earnings Release | Q4 2016 | 0.768 |
| Costco Wholesale Corp | COST US | 21:00 | November 2016 Sales and Revenue Release | 2016 |
