Barchart Morning Call
Barchart.com - 1 hour ago
OVERNIGHT MARKETS AND NEWS
Mar E-mini S&Ps (ESH17 +0.03%) are up +0.06% ahead of data on U.S. Dec consumer prices and industrial production, while European stocks are down -0.16% ahead of Thursday's ECB meeting and any indications from the central bank on when it may begin to taper stimulus. The upside in stocks is limited as Feb WTI crude prices (CLG17 -1.64%) are down -1.26%, which is undercutting energy producing stocks. Crude prices retreated after IEA Executive Director Fatih Birol said he sees U.S. shale-oil output rising "in significant terms" due to the recent rally in oil prices and that there will be "lots more' supply in late 2017/early 2018. Asian stocks settled mixed: Japan +0.43%, Hong Kong +1.13%, China +0.14%, Taiwan -0.13%, Australia -0.36%, Singapore -0.42%, South Korea -0.11%, India +0.08%. Japan's Nikkei Stock Index recovered from a 1-1/4 month low and closed higher after USD/JPY rebounded from a 1-1/2 month low and moved higher, which fueled a rally in exporter stocks.
The dollar index (DXY00 +0.37%) is up +0.34%. EUR/USD (^EURUSD) is down -0.23%. USD/JPY (^USDJPY) is up +0.66%.
Mar 10-year T-note prices (ZNH17 -0.20%) are down -8 ticks after comments from San Francisco Fed President Williams who said that "further gradual increases in the target fed funds rate will likely be appropriate."
San Francisco Fed President Williams said late Tuesday that "further gradual increases in the target fed funds rate will likely be appropriate" to keep the U.S. economy on a sustainable course and avoid excess inflation or damaging asset bubbles.
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) weekly MBA mortgage applications (previous +5.8% with purchase sub-index +6.1% and refi sub-index +4.4%), (2) Dec CPI (expected +0.3% m/m and +2.1% y/y, Nov +0.2% m/m and +1.7% y/y) and Dec CPI ex food & energy (expected +0.2% m/m and +2.1% y/y, Nov +0.2% m/m and +2.1% y/y), (3) Dallas Fed President Robert Kaplan (voter) will speak at a panel discussion at the Dallas Fed followed by media and audience Q&A, (4) Dec industrial production (expected +0.6%, Nov -0.4%), (5) Jan NAHB housing market index (expected -1 to 69, Dec +7 to 70), (6) Minneapolis Fed President Neel Kashkari (voter) discusses the economy at the Minneapolis Urban League, (7) Fed Chair Janet Yellen speaks at the Commonwealth Club in San Francisco.
S&P 500 earnings reports today include: Goldman Sachs (consensus $4.84), Citigroup (1.12), Schwab (0.46), US Bancorp (0.81), Fastenal (0.38), Northern Trust (1.13), Netflix (0.13), Kinder Morgan (0.18).
U.S. IPO's scheduled to price today: none.
Equity conferences today: TD Securities Mining Conference on Wed, ACI Future of Polyolefins Summit on Thu.
OVERNIGHT U.S. STOCK MOVERS
Goldman Sachs (GS -3.50%) fell 2% in pre-market trading after it reported Q4 EPS of $5.08, higher than consensus of $4.84, but said Q4 equities and trading revenue was $1.59 billion, below consensus of $1.61 billion.
Wells Fargo (WFC -2.77%) was downgraded to 'Hold' from 'Buy' at Argus.
McKesson (MCK +0.85%) was upgraded to 'Market Outperform' from 'Market Perform' at Avondale Partners LLC with a 12-month target price of $193.
Hancock Holding (HBHC -3.46%) reported Q4 EPS of 64 cents, stronger than consensus of 61 cents.
Linear Technology (LLTC -0.05%) reported Q2 revenue of $375.8 million, higher than consensus of $373.8 million.
HP Enterprise (HPE -1.09%) bought Simplivity for $650 million in cash.
Toys R Us (TOY) reported that same-store comparable sales for the 9-week period ended December 31, fell =3.4%.
San Francisco Fed President Williams (non-voter) said more gradual interest rate increases will likely be needed, given a "strong" U.S. economy that's reached full employment with inflation approaching 2%.
United Continental Holdings (UAL -0.78%) lost over 1% in after-hours trading after it forecast Q1 Prasm growth of down -1% to up +1%, weaker than consensus of up +0.5% to +1.5%.
CSX Corp. (CSX -1.83%) dropped 3% in after-hours trading after it reported Q4 EPS of 49 cents, below consensus of 50 cents.
Neurocrine Biosciences (NBIX -4.92%) fell nearly 5% in after-hours trading after it said a Phase II clinical study of its Ingrezza to treat adults with Tourette syndrome did not meet its pre-specified primary endpoint.
Jazz Pharmaceuticals (JAZZ -1.47%) slid 4% in after-hours trading after the U.S. FDA said it approved the first generic version of Jazz's Xyrem drug to treat patients with narcolepsy.
Teladoc (TDOC -5.18%) dropped 5% in after-hours trading after certain stock holders are reportedly offering to sell 7.25 million shares of stock.
Interactive Brokers Group (IBKR -1.96%) fell over 2% in after-hours trading after it reported an unexpected Q4 comprehensive loss of -5 cents a share, much weaker than consensus for Q4 adjusted EPS to climb 35 cents.
Shiloh Industries (SHLO -3.23%) jumped 11% in after-hours trading after it reported Q4 adjusted EPS of 50 cents, well above consensus of 18 cents.
Almost Family (AFAM +1.48%) sank 9% in after-hours trading after it announced a proposed underwritten public offering of 2.5 million shares of common stock.
Gigamon (GIMO -2.87%) plunged over 20% in after-hours trading after it reported preliminary Q4 revenue of $84.5 million-$85 million, below consensus of $92.2 million.
MARKET COMMENTS
Mar E-mini S&Ps (ESH17 +0.03%) this morning are up +1.25 points (+0.06%). Tuesday's closes: S&P 500 -0.30%, Dow Jones -0.30%, Nasdaq -0.29%. The S&P 500 on Tuesday closed lower on Mr. Trump's opposition to the border-adjustment tax system proposed by House Republicans, which suggests that the corporate tax rate will not be lowered by as much as earlier hoped. There was also carry-over weakness from a slide in European stocks to a 2-weeke low on concerns about Brexit after UK Prime Minister May pledged to take Britain out of the European Union. Stocks recovered from their worst levels on upbeat comments from New York Fed President Dudley (voter) who said "I am optimistic that the economic expansion will continue over the next few years."
Mar 10-year T-notes (ZNH17 -0.20%) this morning are down -8 ticks. Tuesday's closes: TYH7 +14.50, FVH7 +10.00. Mar 10-year T-notes on Tuesday closed higher as the 10-year T-note yield fell to a 1-1/2 month low. T-note prices were boosted by comments from New York Fed President Dudley that dampened inflation concerns when he said "the recent strengthening of the dollar will put downward pressure on import prices and limit the ability of domestic producers to raise their prices."
The dollar index (DXY00 +0.37%) this morning is up 0.34 (+0.34%). EUR/USD (^EURUSD) is down -0.0025 (-0.23%). USD/JPY (^USDJPY) is up +0.74 (+0.66%). Tuesday's closes: Dollar index -0.87 (-0.86%), EUR/USD +0.0112 (+1.06%), USD/JPY -1.58 (-1.3%). The dollar index on Tuesday slid to a 1-1/4 month low and closed lower on comments from President-elect Trump who told the WSJ that the U.S. dollar is "too strong" in part because China holds down its currency. There was also strength in EUR/USD which posted a 1-1/4 month high after the German Jan ZEW survey expectations of economic growth rose to a 7-month high.
Feb WTI crude oil prices (CLG17 -1.64%) this morning are down -66 cents (-1.26%) and Feb gasoline (RBG17 -1.18%) is -0.0122 (-0.76%). Tuesday's closes: Feb crude +0.16 (+0.31%), Feb gasoline -0.0095 (-0.59%). Feb crude oil and gasoline on Tuesday settled mixed with Feb crude oil at a 1-week high. Crude oil prices were boosted by the sell-off in the dollar index to a 1-1/4 month low and by expectations that Thursday's weekly EIA data will show U.S. crude inventories fell -1.3 million bbl. Gasoline closed lower on expectations that Thursday's weekly EIA data will show gasoline supplies rose +2.0 million bbl.
GLOBAL EVENT CALENDAR01/18/2017
| Wednesday, Jan 18 | ||
| US | 0700 ET | Weekly MBA mortgage applications, previous +5.8% with purchase sub-index +6.1% and refi sub-index +4.4%. |
| 0830 ET | Dec CPI expected +0.3% m/m and +2.1% y/y, Nov +0.2% m/m and +1.7% y/y. Dec CPI ex food & energy expected +0.2% m/m and +2.1% y/y, Nov +0.2% m/m and +2.1% y/y. | |
| 0900 ET | Dallas Fed President Robert Kaplan (voter) will speak at a panel discussion at the Dallas Fed followed by media and audience Q&A. | |
| 0915 ET | Dec industrial production expected +0.6%, Nov -0.4%. Dec manufacturing production expected +0.5%, Nov -0.1%. Dec capacity utilization expected +0.4 to 75.4%, Nov -0.4 to 75.0%. | |
| 1000 ET | Jan NAHB housing market index expected -1 to 69, Dec +7 to 70. | |
| 1100 ET | Minneapolis Fed President Neel Kashkari (voter) discusses the economy at the Minneapolis Urban League. | |
| 1500 ET | Fed Chair Janet Yellen speaks at the Commonwealth Club in San Francisco. | |
| Thursday, Jan 19 | ||
| US | 0830 ET | Weekly initial unemployment claims expected +5,000 to 252,000, previous +10,000 to 247,000. Weekly continuing claims expected -12,000 to 2.075 million, previous -29,000 to 2.087 million. |
| 0830 ET | Dec housing starts expected +8.9% to 1.187 million, Nov 18.7% to 1.090 million. Dec building permits expected +1.1% to 1.225 million, Nov -3.8% to 1.212 million. | |
| 0830 ET | Jan Philadelphia Fed business outlook survey expected -5.5 to 16.0, Dec +13.9 to 21.5. | |
| 1100 ET | EIA Weekly Petroleum Status Report. | |
| 1100 ET | Treasury announces amount of 2-year T-notes (previous $26 billion), 2-year floating-rate notes (previous $13 billion), 5-year T-notes (previous $34 billion) and 7-year T-notes (previous $28 billion) to be auctioned Jan 24-26. | |
| 1300 ET | Treasury auctions $13 billion of 10-year TIPS. | |
| 2000 ET | Fed Chair Janet Yellen speaks to the Stanford Institute for Economic Policy Research. |
U.S. STOCK CALENDAR01/18/2017
| Company | Ticker | Time | Event Description | Period | Estimate |
|---|---|---|---|---|---|
| Charles Schwab Corp/The | SCHW US | Bef-mkt | Q4 2016 Earnings Release | Q4 2016 | 0.358 |
| US Bancorp | USB US | Bef-mkt | Q4 2016 Earnings Release | Q4 2016 | 0.809 |
| Fastenal Co | FAST US | 7:00 | Q4 2016 Earnings Release | Q4 2016 | 0.379 |
| Northern Trust Corp | NTRS US | 7:30 | Q4 2016 Earnings Release | Q4 2016 | 1.125 |
| Goldman Sachs Group Inc/The | GS US | 7:30 | Q4 2016 Earnings Release | Q4 2016 | 4.838 |
| Citigroup Inc | C US | 8:00 | Q4 2016 Earnings Release | Q4 2016 | 1.119 |
| CSX Corp | CSX US | 8:30 | Q4 2016 Earnings Call | Q4 2016 | |
| US Bancorp | USB US | 9:00 | Q4 2016 Earnings Call | Q4 2016 | |
| Goldman Sachs Group Inc/The | GS US | 9:30 | Q4 2016 Earnings Call | Q4 2016 | |
| Fastenal Co | FAST US | 10:00 | Q4 2016 Earnings Call | Q4 2016 | |
| United Continental Holdings Inc | UAL US | 10:30 | Q4 2016 Earnings Call | Q4 2016 | |
| Micron Technology Inc | MU US | 11:00 | Annual General Meeting | Y 2017 | |
| Citigroup Inc | C US | 11:00 | Q4 2016 Earnings Call | Q4 2016 | |
| Northern Trust Corp | NTRS US | 12:00 | Q4 2016 Earnings Call | Q4 2016 | |
| Netflix Inc | NFLX US | 16:05 | Q4 2016 Earnings Release | Q4 2016 | 0.132 |
| Kinder Morgan Inc/DE | KMI US | 16:30 | Q4 2016 Earnings Call | Q4 2016 | |
| Netflix Inc | NFLX US | 17:00 | Q4 2016 Earnings Call | Q4 2016 | |
| Kinder Morgan Inc/DE | KMI US | Aft-mkt | Q4 2016 Earnings Release | Q4 2016 | 0.18 |
