Morning Call 10/4

Barchart Morning Call

Barchart.com - 28 minutes ago

OVERNIGHT MARKETS AND NEWS

Dec E-mini S&Ps (ESZ17 -0.02%) this morning are down -0.09% and European stocks are down -0.56% as weakness in crude oil drags energy stocks lower. Nov WTI crude oil (CLX17 -0.32%) is down -0.32% at a 2-week low after API data late Tuesday showed U.S. gasoline supplies rose +4.91 million bbl, much more than expectations of +1.0 million bbl. European stocks also fell after data showed that Eurozone Aug retail sales unexpectedly fell -0.5% m/m, the biggest decline in 1-3/4 years. Another negative for European markets was the slump in Spain's IBEX Stock Index by -2.56% to a 6-1/2 month low amid the escalating crisis in Spain where the state of Catalonia is trying to secede and form its own independent republic. Asian stocks settled mixed: Japan +0.06%, Hong Kong +0.73%, Australia -0.87%, Singapore -0.29%, India +0.55%. China, Taiwan and South Korea were closed for holidays. Japan's Nikkei Stock Index climbed to a new 2-year high as the rally in the S&P 500 to a fresh record high Tuesday gave a boost to other global bourses.

The dollar index (DXY00 -0.07%) is down -0.27%. EUR/USD (^EURUSD) is up +0.22%. USD/JPY (^USDJPY) is down -0.39%.

Dec 10-year T-note prices (ZNZ17 +0.15%) are up +6.5 ticks.

The UK Sep Markit/CIPS services PMI unexpectedly rose +0.4 to 53.6, stronger than expectations of no change at 53.2.

Eurozone Aug retail sales unexpectedly fell -0.5% m/m, weaker than expectations of +0.3% m/m and the biggest decline in 1-3/4 years.

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) weekly MBA mortgage applications (previous -0.5% with purchase sub-index +2.8% and refi sub-index +3.5%), (2) Sep ADP employment (expected +143,000, Aug +237,000), (3) revised-Sep Markit U.S. services PMI (expected unchanged at 55.1, prelim-Sep -0.9 to 55.1), (4) Sep ISM non-manufacturing PMI (expected +0.2 to 55.5, Aug +1.4 to 55.3), (5) Fed Chair Janet Yellen delivers opening remarks at a community banking conference in St. Louis, (6) EIA weekly Petroleum Status Report.

Notable Russell 1000 earnings reports today include: Acuity Brands (consensus $2.44), RPM Intl (0.84), PepsiCo (1.43), Monsanto (-0.42), Lamb Weston (0.49).

U.S. IPO's scheduled to price today: Rhythm Pharmaceuticals (RYTM).

Equity conferences this week: Deutsche Bank U.S. Leveraged Finance Conference on Mon-Wed, Japan Pack Trade Show on Tue, Linley Processor Conference on Wed, Petaluma Area Chamber of Commerce Business Conference on Fri.

OVERNIGHT U.S. STOCK MOVERS

Kraft Heinz (KHC -0.04%) was downgraded to 'Neutral' from 'Buy' at Goldman Sachs.

Waste Management (WM +0.65%) was downgraded to 'Hold' from 'Buy' at Stifel.

Jack in the Box (JACK -1.24%) was upgraded to 'Outperform' from 'Market Perform' at Telsey Advisory Group with a 12-month target price of $118.

Lennar (LEN +4.79%) was upgraded to 'Buy' from 'Neutral' at MKM Partners with a target price of $64.

Winnebago Industries (WGO -0.54%) was downgraded to 'Hold' from 'Buy' at Stifel.

Tesla (TSLA +1.94%) gained nearly 1% in after-hours trading after Nomura initiated coverage on the stock as a 'Buy' saying there will be an "unprecedented run-up" in Tesla's revenue to $58 billion in 20121 from $8 billion in 2016.

Global Blood Therapeutics (GBT -4.19%) rose 3% in after-hours trading after holder Point72 Asset Management reported a 5.2% stake in the company.

CytomX Therapeutics (CTMX -1.30%) surged over 30% in after-hours trading after it entered into a strategic collaboration with Amgen to co-develop immuno-oncology therapies.

Newlyn Genetics (NLNK +5.00%) slid over 6% in after-hours trading after it announced that it intends to offer up to $50 million shares of its common stock in an underwritten public offering.

Office Depot (ODP +1.32%) tumbled over 10% in after-hours trading after it acquired CompuCom for about $1 billion.

Intelsat SA (I +10.95%) gained 4% in after-hours trading after RBC Capital Markets said the company's joint proposal with Intel for sharing of C-band spectrum in 5G networks was a potential "gold mine."

Rigel Pharmaceuticals (RIGL -4.15%) dropped 7% in after-hours trading after it announced that it intends to offer up to $40 million shares of its common stock in an underwritten public offering.

MARKET COMMENTS

Dec S&P 500 E-mini stock futures (ESZ17 -0.02%) this morning are down -2.25 points (-0.09%). Tuesday's closes: S&P 500 +0.22%, Dow Jones +0.37%, Nasdaq +0.22%. The S&P 500 on Tuesday rose to a new record high and closed higher on strength in airline stocks, led by a 6% jump in Delta Air Lines, after it reported Sep total system traffic was up +0.3%. There was also strength in U.S. automakers after U.S. Sep total vehicle sales surged to 18.47 million units, the most in 12 years.

Dec 10-year T-note prices (ZNZ17 +0.15%) this morning up +6.5 ticks. Tuesday's closes: TYZ7 +2.50, FVZ7 +1.75. Dec 10-year T-notes on Tuesday closed higher on a report from Politico that U.S. Treasury Secretary Mnuchin favors Jerome Powell over Kevin Warsh for Fed chairman, which is supportive for T-notes as Powell as seen as more dovish that Warsh. There was also some short-covering after Dec T-note prices failed to take out Monday's 2-1/2 month low.

The dollar index (DXY00 -0.07%) this morning is .down -0.257 (-0.27%) EUR/USD (^EURUSD) is up +0.0026 (+0.22%) and USD/JPY (^USDJPY) is down -0.44 (-0.39%). Tuesday's closes: Dollar Index -0.288 (-0.31%), EUR/USD +0.0011 (+0.09%), USD/JPY +0.08 (+0.07%). The dollar index on Tuesday closed lower on strength in EUR/USD which recovered from a 1-1/2 month low and moved higher after Eurozone Aug PPI rose +0.3% m/m, the largest increase in 7 months, which bolstered the case for the ECB to taper QE. The dollar was also undercut by the decline in the 10-year T-note yield, which reduces the dollar's interest rate differentials.

Nov crude oil (CLX17 -0.32%) this morning is down -16 cents (-0.32%) at a 2-week low and Nov gasoline (RBX17 -0.45%) is down -0.0053 (-0.34%). Tuesday's closes: Nov WTI crude -0.04 (-0.08%), Nov gasoline +0.0102 (+0.66%). Nov crude oil and gasoline on Tuesday settled mixed. Crude oil prices were supported by a weaker dollar and by expectations for Wednesday's EIA data to show that U.S. crude supplies fell -500,000 bbl last week. Crude closed lower on increased OPEC crude output after OPEC Sep crude production rose +120,000 bpd to 32.38 million bpd.

Metals prices this morning are mixed with Dec gold (GCZ17 +0.30%) +8.0 (+0.63%), Dec silver (SIZ17 +1.02%) +0.19 (+1.14%) and Dec copper (HGZ17 -0.10%) -0.008 (-0.25%). Tuesday's closes: Dec gold -1.2 (-0.09%), Dec silver -0.004(-0.02%), Dec copper +0.008 (+0.27%). Metals on Tuesday settled mixed with Dec gold at a 1-3/4 month low. Metals prices were boosted by a weaker dollar and by the rally in the S&P 500 to a new record high, which bolsters confidence in the economic outlook and industrial metals demand. Gold and silver closed lower after a rally in the S&P 500 to new record high reduced safe-haven demand for precious metals.

GLOBAL EVENT CALENDAR10/04/2017

		Wednesday, Oct 4
US	0700 ET	Weekly MBA mortgage applications, previous -0.5% with purchase sub-index +2.8% and refi sub-index +3.5%.
	0815 ET	Sep ADP employment change expected +143,000, Aug +237,000.
	0945 ET	Revised Sep Markit services PMI expected unchanged at 55.1, prelim-Sep -0.9 to 55.1. Revised Sep Markit composite PMI, prelim-Sep -0.7 to 54.6.
	1000 ET	Sep ISM non-manufacturing PMI expected +0.2 to 55.5, Aug +1.4 to 55.3.
	1030 ET	EIA weekly Petroleum Status Report.
	1515 ET	Fed Chair Janet Yellen delivers opening remarks at a community banking conference in St. Louis.
		Thursday, Oct 5
US	0730 ET	Sep Challenger job cuts, Aug +5.1% y/y.
	0830 ET	Weekly initial unemployment claims expected -7,000 to 265,000, previous +12,000 to 272,000. Weekly continuing claims expected +16,000 to 1.950 million, previous -45,000 to 1.934 million.
	0830 ET	Aug trade balance expected -$42.7 billion, Jul -$43.7 billion.
	0830 ET	USDA weekly Export Sales.
	0910 ET	Fed Governor Jerome Powell speaks on Treasury markets and Treasury market practices at an event in New York.
	0915 ET	San Francisco Fed President John Williams (non-voter) delivers keynote speech at the St. Louis Feds Community Banking in the 21st Century Research and Policy Conference.
	1000 ET	Aug factory orders expected +1.0%, Jul -3.3% and +0.5% ex transportation.
	1000 ET	Philadelphia Fed President Patrick Harker (voter) speaks at the Investing in Americas Workforce conference.
	1100 ET	Treasury announces amount of 3-year T-notes (previous $24 billion), 10-year T-notes (previous $20 billion) and 30-year T-bonds (previous $12 billion) to be auctioned Oct 11-12.
	1630 ET	Kansas City Fed President Esther George (non-voter) speaks at the Investing in Americas Workforce conference.

U.S. STOCK CALENDAR10/04/2017

Name	Ticker	Time	Description	Period	Estimate
RPM International Inc	RPM US	Bef-mkt	Q1 2018 Earnings Release	Q1 18	0.842
Acuity Brands Inc	AYI US	Bef-mkt	Q4 2017 Earnings Release	Q4 17	2.435
PepsiCo Inc	PEP US	06:00	Q3 2017 Earnings Release	Q3 17	1.431
Monsanto Co	MON US	Bef-mkt	Q4 2017 Earnings Release	Q4 17	(0.419)
PepsiCo Inc	PEP US	07:45	Q3 2017 Earnings Call	Q3 17
Boston Properties Inc	BXP US	08:00	Investor Meeting
Lamb Weston Holdings Inc	LW US	08:30	Q1 2018 Earnings Release	Q1 18	0.494
Monsanto Co	MON US	09:30	Q4 2017 Earnings Call	Q4 17
Acuity Brands Inc	AYI US	10:00	Q4 2017 Earnings Call	Q4 17
RPM International Inc	RPM US	10:00	Q1 2018 Earnings Call	Q1 18
Lamb Weston Holdings Inc	LW US	10:00	Q1 2018 Earnings Call	Q1 18
salesforce.com Inc	CRM US	11:30	Investor Meeting
Mallinckrodt PLC	MNK US	12:00	Investor Meeting
Telephone & Data Systems Inc	TDS US		Roadshow - Day 3
United States Cellular Corp	USM US		Roadshow - Day 3
BWX Technologies Inc	BWXT US	13:00	Investor and Analyst Day

Barchart Morning Call 3/2

Barchart Morning Call

Barchart.com - Tue Mar 06, 7:00AM CST

Overnight Developments

• Global stocks this morning are weaker with the Euro Stoxx 50 down -1.04% and Mar S&Ps down -11.60 points, both at 1-week lows. Stocks declined, Treasuries rose and the dollar index rallied to a 2-1/2 week high, which fueled a slide in commodities as gold fell to a 5-week low, on signs the global economy was slowing along with concern over how many of Greece's private creditors agree to write down their sovereign-debt holdings by this Thursday's deadline. If at least 75% of the private creditors agree to the voluntary debt swap, Greece will reduce its borrowings by 106 billion euros and lower its debt to 120.5% of GDP by 2020, but so far, only 20% of the investors in Greek debt have declared their participation in the restructuring. As expected, the revised Q4 Euro-Zone GDP remained unchanged at -0.3% q/q and +0.7% y/y, while the cost of insuring European sovereign bonds rose after the Markitt iTraxx SovX Western Europe Index of credit-default swaps on 15 governments rose 5 bp to 352 bp, a 1-1/2 month high. 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.
• Asian stocks today closed lower with Japan down -0.63%, China -1.56%, Australia -1.37%, South Korea -0.72%, India -1.09%. Asian stock markets fell to a 1-week lows on concern a slowdown in China's economy will lead to reduced demand for the region's goods and services. Japanese stocks fell as the yen strengthened which indercut exporters and as shipping companies and machinery makers declined on concern a shift in China's growth strategy away from investment and exports in favor of domestic consumption will reduce demand for Japanese goods. The Australian dollar fell to a 5-week low against the dollar after the RBA kept its benchmark rate at 4.25% as expected and kept its easing bias when it said in a statement that while current settings are "appropriate for the moment," there is scope for easier policy if demand weakens "materially."

Overnight U.S. Stock News

• March S&Ps this morning are trading down -11.60 points at a 1-week low. The U.S. stock market Monday settled lower for a second day on global growth concerns after China reduced its economic growth target and after the Feb Euro-Zone PMI composite index was unexpectedly revised lower: Dow Jones -0.11%, S&P 500 -0.39%, Nasdaq Composite -0.86%. Bearish factors Monday included (1) carry-over weakness from a fall in Asian and European stocks on global economic concerns after China cut its growth projections to 7.5% from 8.0%, the lowest in 8 years, and after the Feb Euro-Zone PMI composite was unexpectedly revised down to 49.3 from 49.7, which signals greater-than-expected contraction in the European economy, (2) weakness in commodity producers, mining and industrial companies on concern a slowdown economic growth will reduce demand for their goods, and (3) comments from Dallas Fed President Fisher who said he opposes additional Fed asset purchases and that Wall Street should get ready to become less dependent on monetary easing as financial markets "have become hooked on the monetary morphine we provided" after the 2008 financial crisis.
• Bullish factors included (1) the unexpected increase in the Feb ISM non-manufacturing index to its best level in a year (+0.5 to 57.3, stronger than expectations of -0.7 to 56.1), (2) the smaller-than expected decline in Jan factory orders and the upward revision to Dec (Jan -1.0%, better than expectations of -1.3%, while Dec factory orders were revised up to +1.4% from the originally reported +1.1%), and (3) reduced European sovereign-debt concerns after Greek Finance Minister Venizelos said he expects private creditors to accept its debt-swap terms because it constitutes "the best offer."
• Amgen (AMGN) fell 1.1% in European trading after Sanford C. Bernstein downgraded the world's largest biotechnology company to "market perform" from "outperform."

Today's Market Focus

• June 10-year T-notes this morning are up +10 ticks. T-note prices Monday traded on either side of unchanged until mid-morning when they turned down and settled lower after growth in U.S. non-manufacturing industries unexpectedly grew in Feb, while safe-haven demand for Treasuries fell after Greece said it expects private creditors to accept its debt-swap terms: TYM2 -7.0, FVM2 -5.7, EDU2 -3.0. Bearish factors Monday included (1) the unexpected increase in the Feb ISM non-manufacturing index to its best level in a year (+0.5 to 57.3, stronger than expectations of -0.7 to 56.1), (2) comments from Greek Finance Minister Venizelos that dampened the safe-haven demand for Treasuries when he said he expects private creditors to accept its debt-swap terms because it constitutes "the best offer," and (3) hawkish comments from Dallas Fed President Fisher who said he opposes additional Fed asset purchases and that Wall Street should get ready to become less dependent on monetary easing as financial markets "have become hooked on the monetary morphine we provided" after the 2008 financial crisis. Bullish factors included (1) global growth concerns after China cut its growth projections to 7.5% from 8.0%, the lowest in 8 years and after the Feb Euro-Zone PMI composite was unexpectedly revised lower, and (2) increased safe-haven demand for Treasuries as the stock market faltered.
• The dollar index this morning is higher and at a 2-1/2 week high with the dollar/yen -0.48 yen and the euro/dollar -0.80 cents. The dollar index Monday posted a 2-week high on increased safe-haven demand after China cut its growth projections but then erased its advance and settled lower after the euro gained when Greece said it expects private creditors to accept its debt-swap terms: Dollar Index -0.103, USD/JPY -0.139, EUR/USD +0.00196. Bearish factors included (1) strength in the euro after Greek Finance Minister Venizelos said it expects private creditors to accept its debt-swap terms because it constitutes "the best offer," (2) the unexpected increase in Jan Euro-Zone retail sales, which is euro supportive, and (3) reduced safe-haven demand for the dollar after the Feb ISM non-manufacturing index unexpectedly expanded to its best level in a year. Bullish factors included (1) global growth concerns which boosted the safe-haven demand for the dollar after China cut its growth projections to 7.5% from 8.0%, the lowest in 8 years, (2) the unexpected downward revision to the Feb Euro-Zone PMI composite index to 49.3 from 49.7, which signals greater contraction in the European economy and is euro negative, and (3) data from the IMF that showed Q3 2011 global foreign-exchange holdings of euros fell to a 3-year low of 25.7%, while the U.S. dollar's share climbed to 61.7%, a 1-year high.
• Apr crude oil prices this morning are down -61 cents a barrel and Apr gasoline is -0.13 of a cent per gallon. Crude oil and gasoline prices Monday settled mixed as a weaker dollar and Iran concerns offset China's cut to its economic growth target: CLJ12 +$0.02, RBJ -1.41. Bullish factors included (1) the reversal in the dollar after the dollar index fell from a 2-week high and closed lower, which boosts investment demand in commodities, (2) increased geopolitical concerns after comments from President Obama who said he takes "no options off the table" including a "military effort" to stop Iran from having a nuclear weapon, and (3) supply concerns in the U.S. Midwest after a vehicle collision and fire prompted Enbridge to close a 320,000 barrel a day pipeline from Superior, Wisconsin to Mokena, Illinois that supplies refineries run by BP Plc and Citgo Petroleum in the Chicago area. Bearish factors included (1) the action by China to cut its economic growth goal to 7.5% from an 8.0% goal that had been in place since 2005, which signals reduced crude consumption by the world's second-largest crude oil consumer, (2) the increase in Iraq's crude production to more than 3 million barrels a day according to Iraq's oil minister, the highest since 1979, which signals increased global supplies, and (3) possible long-liquidation pressures after CFTC data showed hedge funds increased net-long positions in NYMEX crude by +5% to 272,032 contracts in the week ended Feb 28, the highest in 9-1/2 months.

Today's U.S. Earnings Reports Earnings reports (confirmed releases, sorted by mkt cap): DKS-Dick's Sorting Goods (BEST earnings consensus $0.88), KRO-Kronos Worldwide (0.50), P-Pandora Media (-0.02), UNFI-United Natural Foods (0.44), MAKO-MAKO Surgical (-0.14), MTN-Vail Resorts (1.38), AAT-American Assets Trust (-0.03), BPI-Bridgepoint Education (0.38), AKRX-Akorn (0.08), BLT-Bluont International (0.33), SHFL-Shuffle Master (0.11), ESC-Emeritus (-0.36), RIGL-Rigel Pharmaceuticals (-0.24), ALOG-Analogic (0.69).
Global Financial Calendar

Tuesday 3/6/12
United States
0745 ET	ICSC (Int?l Council of Shopping Centers) weekly retailer sales.
0855 ET	Redbook weekly retailer sales.
1130 ET	Weekly 4-week and monthly 1-year T-bill auctions.
United Kingdom
0300 ET	Feb U.K. Halifax house prices expected +0.3% m/m and -1.6% y/y, Jan +0.6% m/m and -1.8% y/y.
Euro-Zone
0500 ET	Revised Q4 Euro-Zone GDP, previous -0.3% q/q and +0.7% y/y
Canada
1000 ET	Feb Ivey purchasing Manager s Index expected -2.1 to 62.0, Jan +0.6 to 64.1.

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