MORNING CALL 6/1

MORNING CALL

Wednesday, June 1st, 2016View Older Reports

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OVERNIGHT MARKETS AND NEWS

Jun E-mini S&Ps (ESM16 -0.38%) are down -0.31% and European stocks are down -0.89% on signs of lackluster global manufacturing activity. The German May Markit/BME manufacturing PMI was revised lower, Japan's May Nikkei PMI contracted at the steepest pace in over 3 years, and China's May manufacturing PMI remained basically flat. A -1.22% slide in July WTI crude oil (CLN16 -1.20%) to a 1-week low undercut energy producers, and U.S. stocks were under pressure after the OECD revised its U.S. 2016 GDP forecast downward. Asian stocks settled mostly lower: Japan -1.62%, Hong Kong -0.26%, China -0.11%, Taiwan +0.72%, Australia -1.03%, Singapore -0.02%, South Korea -0.02%, India +0.17%.

The dollar index (DXY00 -0.38%) is down -0.34% after the OECD cut its U.S. 2016 GDP forecast and EUR/USD (^EURUSD) is up +0.26% after the OECD raised its Eurozone 2016 GDP forecast to 1.6% from a Feb estimate of 1.4%. USD/JPY (^USDJPY) is down -1.11%.

Sep T-note prices (ZNU16 +0.06%) are up +1 tick.

The OECD cut its U.S. 2016 GDP estimate to 1.8% from a Feb projection of 2.0% and raised its Eurozone 2016 GDP forecast to 1.6% from a Feb estimate of 1.4%. The OECD kept its global 2016 GDP estimate unchanged at 3.0%, but warned that the global economy is slipping into a self-fulfilling "low-growth trap" where ultra-loose monetary policy risks doing more harm than good.

The China May manufacturing PMI was unchanged at 50.1, stronger than expectations of -0.1 to 50.0.

The German May Markit/BME manufacturing PMI was revised downward to 52.1 from the originally reported 52.4.

The Japan May Nikkei manufacturing PMI was revised upward to 47.7 from the originally reported 47.6, still the steepest pace of contraction since the data series began in 2013.

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) weekly MBA mortgage applications (previous +2.3% with purchase sub-index +4.8% and refi sub-index +0.4%), (2) revised-May Markit U.S. manufacturing PMI (expected unrevised at 50.5, preliminary-May -0.3 to 50.5), (3) May ISM manufacturing index (expected -0.5to 50.3, Apr -1.0 to 50.8), (4) Apr construction spending (expected +0.6%, Mar +0.3%), (5) Fed Beige Book, (6) May total vehicle sales (expected 17.30 million, Apr 17.32 million).

There are 2 of the Russell 1000 companies that report earnings today: Michael Kors Holdings (consensus $0.97), Alere (0.58).

U.S. IPO's scheduled to price today: Nant Health LLC (NH).

Equity conferences during the remainder of this week include: Deutsche Bank Global Financial Services Investor Conference on Tue-Wed, BMO Capital Markets Energy & Power Conference on Wed, D. A. Davidson & Co Technology Forum on Wed, Stifel Dental & Veterinary Conference on Wed, Bank of America Merrill Lynch Global Technology Conference on Wed-Thu, Cowen and Company Technology, Media & Telecom Conference on Wed-Thu, RBC Capital Markets Consumer & Retail Conference on Wed-Thu, Bernstein Strategic Decisions Conference on Wed-Fri, Credit Suisse Engineering & Construction Conference on Thu, Keefe, Bruyette & Woods Asset Management Conference on Thu, American Society of Clinical Oncology (ASCO) Meeting on Fri.

OVERNIGHT U.S. STOCK MOVERS

Nike (NKE -1.73%) fell 2% in pre-market trading after it was downgraded to 'Neutral' from 'Buy' at Bank of America/Merrill Lynch.

Whole Foods Markets (WFM +1.00%) jumped over 2% in pre-market trading after it was upgraded to 'Outperform' from 'Neutral' at Credit Suisse.

Zoetis (ZTS +0.51%) was rated a new 'Buy' at Stifel with a 12-month price target of $58.

InterXion Holding NV (INXN +0.86%) rose nearly 1% in after-hours trading after it was upgraded to 'Outperform' from 'Market Perform' at Wells Fargo Securities.

Alibaba Group Holding Ltd. (BABA +1.27%) fell over 2% in pre-market trading after Softbank Group, the largest investor in Alibaba, said it will sell at least $7.9 billion of its Alibaba stake.

Under Armour (UA -0.50%) lost more than 3% in after-hours trading after it cut its full-year net revenue estimate to $4.925 billion from a prior view of $5 billion.

Quanex Building Products (NX +2.47%) reported Q2 adjusted EPS of 10 cents, better than consensus of 9 cents, and boosted its full-year Ebitda estimate to $117 million-$121 million from a December 14 estimate of $112 million-$120 million.

Ascena Retail (ASNA +1.12%) dropped nearly 6% in after-hours trading after it lowered guidance on full-year EPS to 67 cents-70 cents from a prior view of 75 cents-80 cents.

Zoe's Kitchen (ZOES +2.47%) climbed over 3% in after-hours trading after it reported Q1 adjusted EPS of 6 cents, better than consensus of 4 cents, and then raised its full-year revenue estimate to $277 million-$281 million from a prior estimate of $275 million-$289 million.

NCI Building Systems (NCS +2.48%) reported Q2 sales of $372.2 million, higher than consensus of $363.5 million.

Boyd Gaming (BYD +0.48%) rose more than 4% in after-hours trading after MGM Resorts International acquired Boyd's 50% stake in Atlantic City's Borgata hotel and casino for $900 million.

TiVo (TIVO -0.70%) slipped 3% in after-hours trading after it reported Q1 EPS of 4 cents, weaker than consensus of 8 cents.

MARKET COMMENTS

June E-mini S&Ps (ESM16 -0.38%) this morning are down -6.50 points (-0.31%). Tuesday's closes: S&P 500 -0.10%, Dow Jones -0.48%, Nasdaq +0.25%. The S&P 500 on Tuesday fell back from a 1-1/4 month high and closed lower on the unexpected -2.1 point decline in U.S. May consumer confidence (Conference Board) to 92.6 (weaker than expectations of +1.9 to 96.1 and a 6-month low) and the unexpected -1.1 point decline in the May Chicago PMI (weaker than expectations of +0.1 to 50.5). Stocks were boosted by the +1.0% m/m increase in U.S. Apr personal spending, stronger than expectations of +0.7% m/m and the largest increase in 6-1/2 years.

September 10-year T-note prices (ZNU16 +0.06%) this morning are up +1 tick. Tuesday's closes: TYU6 -0.50, FVU6 -0.25. Sep T-notes on Tuesday fell to a 1-month low but recovered and closed little changed. T-notes were undercut by negative carry-over from Friday's comments by Fed Chair Yellen who said a Fed rate hike in coming months may be "appropriate." T-notes were also undercut by the sharp +1.0% increase in U.S. Apr personal spending. T-notes found support on the decline in the U.S. May consumer confidence index to a 6-month low and by the weak May Chicago PMI.

The dollar index (DXY00 -0.38%) this morning is down -0.327 (-0.34%). EUR/USD (^EURUSD) is up +0.0029 (+0.26%). USD/JPY (^USDJPY) is down-1.23 (-1.11%). Tuesday's closes: Dollar Index +0.370 (+0.97%), EUR/USD -0.0006 (-0.05%), USD/JPY -0.39 (-0.35%). The dollar index on Tuesday closed higher on carryover support from Friday's hawkish comments Friday by Fed Chair Yellen who said a Fed rate hike in coming months may be "appropriate." The dollar was also boosted by the stronger-than-expected U.S. Apr personal spending of +1.0%, which rose at the fastest pace in 6-1/2 years and bolstered the case for a Fed rate hike.

July WTI crude oil (CLN16 -1.20%) this morning is down -60 cents (-1.22%) at a 1-week low. July gasoline (RBN16 -0.60%) is down -0.0117 (-0.73%) at a 2-week low. Tuesday's closes: CLN6 -0.23 (-0.47%), RBN6 -0.0244 (-1.49%). July crude oil and gasoline on Tuesday closed lower on the stronger dollar and on expectations that OPEC members will be unable to agree on production cuts when the cartel meets on Thursday in Vienna.

GLOBAL EVENT CALENDAR06/01/2016

US	0700 ET	Weekly MBA mortgage applications, previous +2.3% with purchase sub-index +4.8% and refi sub-index +0.4%.
	0945 ET	Revised-May Markit U.S. manufacturing PMI expected unchanged at 50.5, preliminary-May -0.3 to 50.5.
	1000 ET	May ISM manufacturing index expected -0.5 to 50.3, Apr -1.0 to 50.8. May ISM new orders, Apr -2.5 to 55.8. May ISM employment, Apr +0.9 to 49.2. May ISM prices paid expected -1.0 to 58.0, Apr +7.5 to 59.0.
	1000 ET	Apr construction spending expected +0.6%, Mar +0.3%.
	1400 ET	Fed Beige Book.
	n/a	May total vehicle sales expected 17.30 million, Apr 17.32 million. May domestic vehicle sales expected 13.58 million, Apr 13.48 million.
JPN	0100 ET	Japan May vehicle sales, Apr +7,2% y/y.
GER	0355 ET	Revised German May Markit/BME manufacturing PMI, preliminary +0.6 to 52.4.
EUR	0400 ET	Revised Eurozone May Market manufacturing PMI, preliminary -0.2 to 51.5.
UK	0200 ET	UK My nationwide house prices expected +0.3% m/m and +4.8% y/y, Apr +0.2% m/m and +4.9% y/y.
	0430 ET	UK Apr net consumer credit expected +1.6 billion pounds, Mar +1.9 billion pounds.
	0430 ET	UK Apr mortgage approvals expected 67,900, Mar 71,400.
	0430 ET	UK Apr M4 money supply, Mar -0.4% m/m and +1.6% y/y.
	0430 ET	UK May Markit manufacturing PMI expected +0.4 to 49.6, Apr 49.2.

U.S. STOCK CALENDAR06/01/2016

Company	Ticker	Time	Event Description	Period	Estimate
Michael Kors Holdings Ltd	KORS US	Bef-mkt	Q4 2016 Earnings Release	Q4 2016	0.965
Michael Kors Holdings Ltd	KORS US	8:00	Q4 2016 Earnings Call	Q4 2016
Alkermes PLC	ALKS US	8:30	ALKS 5461 FORWARD-3 & FORWARD-4 Data Study Results Call
Ford Motor Co	F US	9:15	May 2016 Sales and Revenue Release	2016
Ford Motor Co	F US	10:00	May 2016 Sales and Revenue Call	2016
IPG Photonics Corp	IPGP US	10:00	Annual General Meeting
Gaming and Leisure Properties Inc	GLPI US	10:00	Annual General Meeting
Workday Inc	WDAY US	12:00	Annual General Meeting	Y 2016
Pandora Media Inc	P US	12:00	Annual General Meeting
Costco Wholesale Corp	COST US	21:00	May 2016 Sales and Revenue Release	2016
Equifax Inc	EFX US		Investor Meeting - San Francisco	Y 2016
MGM Resorts International	MGM US		Annual General Meeting
Taubman Centers Inc	TCO US		Annual General Meeting
American Tower Corp	AMT US		Annual General Meeting
Alere Inc	ALR US		Q4 2015 Earnings Release	Q4 2015	0.583
Equinix Inc	EQIX US		Annual General Meeting
Ulta Salon Cosmetics & Fragrance Inc	ULTA US		Annual General Meeting
Michaels Cos Inc/The	MIK US		Annual General Meeting
Rice Energy Inc	RICE US		Annual General Meeting

Barchart Morning Call 12/21

Barchart Morning Call

Wed, 21 Dec 2011 07:00:00 -0600

Overnight Developments

• Global stocks this morning are mostly higher with the Euro Stoxx 50 up +0.22% and Mar S&Ps up +2.80 points. Treasuries and the dollar fell on reduced safe-haven demand after stocks and commodities rallied when the ECB lent Euro-Zone banks a record amount for 3 years in an effort to avert a liquidity squeeze during the ongoing debt crisis. The ECB awarded 489 billion euros in 1,134 day loans, the most ever in a single operation and more than estimates of 293 billion euros to a total of 523 Euro-Zone lenders. That helped push the cost of credit default swaps to insure European government debt down 6 bp to a 2-week low of 355.5 bp. Limiting gains in stocks is weakness in technology shares led by a 7.5% drop in Oracle when it reported late yesterday that its fiscal Q2 profit than ended Nov 30 was 54 cents a share on revenue excluding certain items of $8.81 billion, weaker than analysts' estimates of profit of 57 cents a share on sales of $9.23 billion. The British pound rallied to a 3-week high against the dollar after the Nov U.K. budget deficit narrowed more than expected as net borrowing excluding support for banks was 18.1 billion pounds, smaller than expectations of 19.1 billion pounds.
• Asian stocks today closed mostly higher with Japan up +1.48%, China -1.60%, Australia +2.13%, South Korea +3.28%, India +3.36%. Asian stocks finished mostly higher as better-than-expected U.S. data on housing starts and the unexpected increase in German business optimism reduces the chances of the global economy falling into recession and boosts the earnings prospects of Asian exporters. Gains in Japanese stocks were limited after Nov Japan exports fell -4.5% y/y, weaker than expectations of -4.3% y/y and after the BOJ downgraded its assessment of the economy following its policy meeting when it said the Japanese economy will "remain more or less flat for the time being." Chinese stocks closed lower as a cash crunch weighed on equities after the 7-day repurchase rate, a gauge of funding available in the financial system, rose 36 bp to a 2-1/2 week high of 3.60% as banks hoard cash to meet year-end reserve-ratio requirements.

Overnight U.S. Stock News

• March S&Ps this morning are trading up +2.80 points. The US stock market yesterday rallied right from the opening and settled sharply higher as European debt concerns eased and recession fears abated after strong Nov U.S. housing starts bolstered speculation the U.S. economy may weather the European debt crisis: Dow Jones +2.87%, S&P 500 +2.98%, Nasdaq Composite +3.19%. Bullish factors included (1) carry-over strength from a rally in European equity markets as the region's debt concerns eased after strong demand was seen at an auction of Spanish government debt and after Dec German Ifo business sentiment unexpectedly improved, (2) a rally in homebuilders after Nov U.S. housing starts rose to a 19-month high (+9.3% to 685,000) and Nov U.S. building permits unexpected surged to a 20-month high (+5.7% to 681,000 versus expectations of -1.4% to 635,000), (3) data from the U.S. Labor Department that showed payrolls increased in 29 states in Nov and the jobless rate declined in 43 states, a sign the labor market is recovering across much of the U.S., and (4) comments from Minneapolis Fed President Kocherlakota who said recent government data have made him "more upbeat" on the outlook for the U.S. economy.
• Bearish factors included (1) comments from European Commission President Barroso who said the sovereign-debt crisis is "worsening" conditions in the European labor market and (2) concern the European debt crisis may worsen after Fitch Ratings said the risk of downgrading the EFSF bail-out fund had increased and that the fund's AAA rating depends on France remaining AAA.
• Research in Motion (RIMM) surged 13% in pre-market trrading after the WSJ reported that Microsaft and Nokia Oyj have "flirted" with the idea of making a joint bid for the company.
• Oracle (ORCL) fell 7.5% in pre-market trading after the company reported late yesterday that its fiscal Q2 profit than ended Nov 30 was 54 cents a share on revenue excluding certain items of $8.81 billion, weaker than analysts' estimates of profit of 57 cents a share on sales of $9.23 billion.

Today's Market Focus

• March 10-year T-notes this morning are up +1 tick. T-note prices yesterday retreated on reduced safe-haven demand as equity markets rallied sharply after German business confidence unexpectedly improved and as Nov U.S. housing starts surged to a 19-month high: TYH2 -22.5, FVH2 -8.0, EDM2 +0.5. Bearish factors included (1) carry-over weakness from a slide in German bund prices after European debt concerns eased when the Dec German Ifo business climate unexpectedly improved and after strong demand was seen at a Spanish auction of government debt, (2) the larger-than-expected increase in Nov U.S. housing starts which rose to a 19-month high (+9.3% to 685,000 versus expectations of +1.1% to 635,000), (3) the unexpected surge in Nov U.S. building permits to their best level in 20 months (+5.7% to 681,000 versus expectations of -1.4% to 635,000), (4) comments from Minneapolis Fed President Kocherlakota who said recent government data have made him "more upbeat" on the outlook for the U.S. economy, and (5) supply pressures ahead of the Treasury's $29 billion auction of 7-year T-notes on Wed. Bullish factors included (1) strong demand for the Treasury's $35 billion auction of 5-year T-notes that had a bid-to-cover ratio of 2.86, slightly above the 12-auction average of 2.84 and strong foreign demand after indirect bidders took 50.6% of the auction, above the 12-auction average of 41.8%, and (2) the statement from Fitch Ratings that said the risk of downgrading the EFSF bail-out fund had increased and that the fund's AAA rating depends on France remaining AAA.
• The dollar index this morning is lower with the dollar/yen -0.07 yen and the euro/dollar +0.05 cents. The dollar index yesterday settled lower as the euro rallied when German business sentiment unexpectedly improved and strong demand was seen at a sale of Spanish government debt: Dollar Index -0.405, USDJPY -0.156, EURUSD +0.00835. Bearish factors included (1) the unexpected increase in the Dec German Ifo business climate, which is euro supportive, (2) the action by Spain to sell 5.64 billion euros of 3-month and 6-month Treasury bills, more than the maximum target of 4.5 billion euros and a sign of strong demand, and (3) strength in the British pound which rose to a 1-week high against the dollar after Nov U.K. nationwide consumer confidence unexpectedly rose and Dec U.K. CBI reported that sales unexpectedly surged to a 7-month high. Bullish factors for the dollar included (1) ongoing European debt crisis concerns which boosts the safe-haven demand for the dollar after European Commission President Barroso said the sovereign-debt crisis is "worsening" conditions in the European labor market and (2) dollar supportive comments from Minneapolis Fed President Kocherlakota who said recent government data have made him "more upbeat" on the outlook for the U.S. economy.
• Feb crude oil prices this morning are up +34 cents a barrel and Feb gasoline is +0.01 of a cent per gallon. Crude oil and gasoline prices yesterday closed higher for a second day as the dollar weakened, European debt concerns eased and after Nov U.S. housing starts surged: CLG12 +$3.19, RBG12 +8.68. Bullish factors included (1) the weaker dollar, which encourages investment demand in commodities, (2) the surge in Nov U.S. housing starts to their best level in 19 months, which lifts confidence in the economy and energy demand, and (3) reduced European debt concerns after the Dec German Ifo business climate unexpectedly gained. Bearish factors included (1) comments from European Commission President Barroso who said the sovereign-debt crisis is "worsening" conditions in the European labor market, which may slow economic growth and fuel demand and (2) concern that U.S. legislators will fail to extend the expiring U.S. payroll tax cut, which may reduce economic growth and fuel demand. Expectations for Wednesday's weekly inventory report from the DOE are for crude oil stockpiles to fall -2.12 million bbl, gasoline supplies to increase +1.5 million bbl, distillate inventories to fall -750,000 bbl and the refinery capacity rate to rise +0.4 to 85.5%.

Today's U.S. Earnings Reports Earnings reports (confirmed releases, sorted by mkt cap): WAG-Walgreen (BEST earnings consensus $0.67), BBBY-Bed Bath & Beyond (0.88), KMX-CarMax (0.38), MU-Micron Technology (-0.10), TIBX-TIBCO Software (0.35), SHAW-Shaw Group (0.44), ATU-Actuant (0.43), FINL-Finish Line (0.11), SCS-Steelcase (0.19), INXN-InterXion Holding NV (0.11), LNN-Lindsay (0.43), KBH-KB Home (0.04), PKE-Park Electrochemical (0.33).
Global Financial Calendar

Wednesday 12/21/11
United States
0700 ET	Weekly MBA mortgage applications, previous +4.1% with purchase mortgage sub-index -8.2% and refinancing sub-index +9.3%.
1000 ET	Nov existing home sales expected +2.0% to 5.07 million.
1300 ET	Treasury auctions $29 billion 7-year T-notes.
Germany
0200 ET	Nov German import price index expected +5.3% y/y, Oct -0.3% m/m and +6.8% y/y.
United Kingdom
0430 ET	Minutes of the Dec 8 BOE policy meeting.
0430 ET	Nov U.K. public sector net borrowing expected +16.6 billion pounds, Oct +3.4 billion pounds.
Canada
0830 ET	Oct Canada retail sales expected +0.4% and +0.2% less autos, Sep +1.0% m/m and +0.5% less autos.
Euro-Zone
1000 ET	Dec Euro-Zone consumer confidence expected -0.6 to -21.0, Nov -0.5 to -20.4.
1800 ET	European Systemic Risk Board (ESRB) meets in Frankfurt.
Japan
n/a	BOJ announces interest rate decision (expected no change to the 0.00% to 0.10% benchmark rate).

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