MORNING CALL 11/16

MORNING CALL

Monday, November 16th, 2015View Older Reports

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OVERNIGHT MARKETS AND NEWS

Dec E-mini S&Ps (ESZ15 +0.20%) this morning are up 4.50 points (+0.22%) and the EuroStoxx 50 index is up +0.34% as the world stock markets are showing resiliency despite last Friday's terrorist attack in Paris. The terrorist attack is a bearish factor for global stocks with expectations for expanded Western military action in the Middle East and a dent to French economic growth. However, the market fall-out has been contained since there were no additional attacks and no indications as yet of similar imminent threats in other Western nations. Indeed, energy and commodity producer stocks rallied today along with energy and commodity prices, overcoming weakness in travel and leisure companies.

Chinese mainland stocks initially fell today after the Chinese mainland exchanges after Friday's close announced a doubling of stock margins to reduce stock investor leverage. The Shanghai Composite index was down -1.7% early in today's session but was able to rally and end the day up +0.7% on speculation that the Chinese government was in the market buying stocks. The Hong Kong Hang Seng index, however, did not fare as well and closed the day down -1.72%.

Asian stocks today closed mostly lower: Japan -1.04%, Hong Kong -1.72%, China Shanghai Composite +0.73%, Taiwan -0.41%, Australia -0.94%, Singapore -0.34%, South Korea -1.58%, India +0.58%, Turkey -0.82%.

The dollar index (DXY00 +0.08%) this morning is slightly higher by +0.054 points (+0.05%) while USD/JPY (^USDJPY) is up +0.46 (+0.38%) on some safe-haven demand. EUR/USD (^EURUSD) is down -0.0034 (-0.32%) as the terrorist attack in Paris will put a dent in French economic growth and could increase the likelihood of additional ECB stimulus at its December meeting. Dec 10-year T-note futures (ZNZ15 +0.14%) this morning are up +5 ticks on some increased safe-haven demand.

The Chinese yuan rallied by +0.1% today after news that the IMF staff recommended that the yuan be included in the IMF's basket of reserve currencies, which will likely lead to increased demand for the yuan in coming years. The IMF executive board will meet on Nov 30 to make a final decision on whether to add the yuan to the currency basket.

Commodity prices this morning are up +0.49% due to strength in energy and metals prices. Dec crude oil (CLZ15 +2.28%) this morning is up +0.75 (+1.84%) and Dec gasoline (RBZ15 +1.14%) is up +0.0114 (+0.92%) on expectations for increased turmoil in the Middle East after Friday's terrorist attacks in Paris. Dec gold (GCZ15 +0.96%) is up +9.6 (+0.89%) and Dec silver (SIZ15 +1.27%) is up +0.166 (+1.17%) on increased safe-haven demand with Friday's terrorist attack in Paris, but Dec copper (HGZ15 -0.85%) is down -0.024 (-1.11%). Grains are steady to lower with Dec corn unchanged, Jan soybeans down -1.00 (-0.12%), and Dec wheat down -3.50 (-0.71%). Softs this morning are mixed: March sugar -0.06 (-0.40%), Dec coffee +0.65 (+0.58%), Dec cocoa +21 (+0.63%), and Dec cotton unchanged.

Credit-rating firm DBRS Ltd kept Portugal's credit rating at investment grade, thus maintaining the eligibility for Portugal to remain in the ECB's QE bond-buying program. Portuguese 10-year bond yields today fell by 7 bp to 2.69%.

Today is the second day of the 2-day G-20 summit in Turkey where the initial focus was on Friday's terrorist attack in Paris and efforts to stabilize Syria.

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) Nov Empire manufacturing survey of general business conditions (expected +5.01 to -6.35, Oct +3.31 to -11.36).

There are 4 of the Russell 1000 companies that report earnings today: Agilent Technologies (consensus $0.47), Dillard's (1.20), Urban Outfitters (0.42), Nuance Communications (0.35).

U.S. IPO's scheduled to price today: none.

Equity conferences this week include: Gabelli & Company Television & Broadcasting Symposium on Mon, UBS Global Technology Conference on Mon-Tue, J.P. Morgans Global Technology, Media and Telecom Conference on Tue, Mitsubishi UFJ Securities: Industry Conference - Oil & Gas Conference - New York on Tue, Bank of America Merrill Lynch Banking and Financial Services Conference on Tue-Wed, Morgan Stanley Global Consumer & Retail Conference on Tue-Wed, Stifel Health Care Conference on Tue-Wed, Bank of America Merrill Lynch Frontier Markets Conference on Wed, Barclays Global Automotive Conference on Wed, Vertical Research Partners Global Materials Conference on Wed, Canaccord Genuity Medical Technology and Diagnostics Forum on Thu, Jefferies Global Health Care Conference on Thu, Scotiabank Canadian Energy Infrastructure Conference on Thu, UBS Industrials and Transportation Conference on Thu-Fri.

Dec E-mini S&Ps this morning are up 4.50 points (+0.22%) as the world stock markets are showing resiliency despite last Friday's terrorist attack in Paris with the EuroStoxx 50 index this morning up +0.34%. Friday's closes: S&P 500 -1.12%, Dow Jones -1.16%, Nasdaq -1.54%. The S&P 500 on Friday extended the sharp 1-week sell-off to post a new 3-week low and close sharply lower as the downside correction continues from the sharp October rally. U.S. stocks on Friday saw downward pressure from the weak Oct U.S. retail sales report of +0.1% and +0.2% ex-autos, which kept U.S. consumer spending in a weak light, and from continued weakness in energy and mining companies with crude oil and copper closing lower once again.

OVERNIGHT U.S. STOCK MOVERS

• Marriott International (MAR -2.39%) announced a tender offer to buy Starwood Hotels & Resorts (HOT) for $12.2 billion, which would create the world's largest hotel company.
• Intercontinental Exchange (ICE -0.62%) is buying BC's Trayport for $650 million in stock.
• Ross Stores (ROST -6.86%) was added to its Conviction List by Goldman Sachs.
• Exxon (XOM -1.65%) reported a "temporary issue" at its California Torrance refinery
• SunEdison (SUNE +8.59%) fell -0.2% in after-hours on Friday after news that Third Point exited its 3.9% stake. Third Point also exited its stake in Phillips 66 (PSX -0.18%).
• Apple's (AAPL -2.92%) CEO Cook said he sees "huge" 2015 Apple Watch sales.
• Emerson Electric (EMR +0.93%) may rally 25% in the next few years due to planned divestitures to boost profitability, according to a weekend article in Barron's.
• Genessee & Wyoming (GWR +0.38%) could rise more than 20% if the company makes acquisitions, according to Barrron's.

MARKET COMMENTS

Dec 10-year T-note futures this morning are up +5 ticks on some increased safe-haven demand. Friday's closes: TYZ5 +10.50, FVZ5 +7.5. Dec 10-year T-notes on Friday closed higher on the weak U.S. Oct retail sales report and on increased safe-haven demand with the fairly sharp sell-off seen in most global stock markets on Friday.

The dollar index this morning is slightly higher by +0.054 points (+0.05%) while USD/JPY is up +0.46 (+0.38%) on some safe-haven demand. EUR/USD is down -0.0034 (-0.32%) as the terrorist attack in Paris will put a dent in French economic growth and could increase the likelihood of additional ECB stimulus at its December meeting. Friday's closes: Dollar Index +0.349 (+0.35%), EUR/USD -0.0041 (-0.38%), USD/JPY unchanged. The dollar index on Friday closed lower on fairly strong market expectations that the Fed will go ahead with a rate hike at its next meeting on Dec 15-16 after fairly hawkish comments by various Fed officials during the week.

GLOBAL EVENT CALENDAR11/16/2015

US	0830 ET	Nov Empire manufacturing survey of general business conditions expected +5.01 to -6.35, Oct +3.31 to -11.36.
	1100 ET	USDA weekly grain export inspections.
	1600 ET	USDA weekly crop progress.
EUR	0500 ET	Revised Eurozone Oct CPI, prelim -0.1% y/y. Revised Oct core CPI, prelim +1.0% y/y.

U.S. STOCK CALENDAR11/16/2015

Company	Ticker	Time	Event Description	Period	Estimate
Dillard's Inc	DDS US	Bef-mkt	Q3 2016 Earnings Release	Q3 2016	1.198
Hasbro Inc	HAS US	10:00	Investor Day	Y 2015
Agilent Technologies Inc	A US	16:00	Q4 2015 Earnings Release	Q4 2015	0.473
Urban Outfitters Inc	URBN US	16:30	Q3 2016 Earnings Release	Q3 2016	0.419
Agilent Technologies Inc	A US	16:30	Q4 2015 Earnings Call	Q4 2015
Urban Outfitters Inc	URBN US	17:00	Q3 2016 Earnings Call	Q3 2016
Nuance Communications Inc	NUAN US	17:00	Q4 2015 Earnings Call	Q4 2015
Nuance Communications Inc	NUAN US	Aft-mkt	Q4 2015 Earnings Release	Q4 2015	0.354
American Express Co	AXP US		Credit-card Charge-offs and Delinquencies
JPMorgan Chase & Co	JPM US		Credit-card Charge-offs and Delinquencies
Bank of America Corp	BAC US		Credit-card Charge-offs and Delinquencies
Citigroup Inc	C US		Credit-card Charge-offs and Delinquencies
Morgan Stanley	MS US		Credit-card Charge-offs and Delinquencies
Capital One Financial Corp	COF US		Credit-card Charge-offs and Delinquencies
Reynolds American Inc	RAI US		Investor Day - New York	Y 2015
Discover Financial Services	DFS US		Credit-card Charge-offs and Delinquencies
Synchrony Financial	SYF US		Credit-card Charge-offs and Delinquencies

Barchart's Morning Call 8/13

Barchart Morning Call

BC - Thu Aug 16, 7:00AM CDT

Overnight Developments

• Sep E-mini S&Ps this morning are up +0.14% and the Euro Stoxx 50 is down -0.08%. U.S. stocks are higher led by a 5.6% rally in Cisco Systems after the company late yesterday reported Q4 EPS of 47 cents, higher than estimates of 46 cents, and increased its quarterly dividend by 75% to 14 cents a share. Commodity prices are lower with Sep crude down -0.06% and Sep copper down -0.07%, while the grain markets are mixed with Dec corn up +0.22% and Nov soybeans down -0.14%. The dollar index this morning is up +0.10% at a 1-1/2 week high with EUR/USD down -0.07% and USD/JPY up +0.33% at a 1-month high. Sep T-notes are down -3 ticks at a 3-month low on reduced expectations for additional Fed stimulus.
• Asian stocks today closed mixed: Japan +1.88%, Hong Kong -0.45%, China -0.51%, Taiwan +0.30%, Australia +1.14%, Singapore +0.03%, South Korea -0.01%, and India -0.40%.
• Spain's 10-year bond yield fell 6 bp to a 1-month low of 6.55% after a person familiar with the matter said Spain is about to get an emergency disbursement from a 100 billion-euro bailout package.
• U.K. July retail sales with auto fuel unexpectedly rose +0.3% m/m and +2.8% y/y, better than expectations of -0.1% m/m and +1.4% y/y.
• Euro-Zone July CPI fell -0.5% m/m and rose +2.4% y/y, right on expectations.
• Dallas Fed President Fisher said late Wednesday that he doesn't see a "high likelihood" of a recession next year and that he doesn't believe "any amount of monetary stimulus is going to deal with this uncertainty and inability of companies to budget, to plan" due to the lack of clarity in fiscal policy.
• China July foreign direct investment fell -8.7% y/y to $7.58 billion, its lowest level in 2 years, which fuels concern that a slowdown in confidence in China's growth prospects may restrain any economic rebound.
• The South Korean July unemployment rate unexpectedly dipped -0.1 to 3.1%, better than expectations of a +0.1 increase to 3.3% and its lowest level in 7 months.
  Market Comments
  • Sep E-mini S&Ps this morning are up +2.00 points (+0.14%) and the Euro Stoxx 50 is down -0.08%. The stock market on Wednesday fluctuated between gains and losses and finally settled mixed as strength in U.S. July industrial production and the Aug NAHB housing market index offset weakness in the Aug Empire manufacturing index and an increase in Q2 China non-performing loans: S&P 500 +0.11%, Dow Jones -0.06%, Nasdaq 100 +0.28%. Tame inflation was another positive for stocks as the smaller-than-expected +1.4% y/y increase in July CPI was its smallest annual gain in 20 months.
  • Sep 10-year T-notes this morning are down -3 ticks at a fresh 3-month low on reduced expectations of additional Fed stimulus. T-note prices on Wednesday fell for the third straight session as stronger-than-expected U.S. economic data on industrial production and housing signaled improvement in the economy that dampened speculation the Fed will need to provide additional monetary stimulus: TYU2 -18.0, FVU2 -7.2. The 10-year T-note yield jumped to a 3-month high of 1.811%.
  • The dollar index this morning is up +0.10%. EUR/USD is down -0.07% and USD/JPY is up +0.33% at a 1-month high. The dollar index on Wednesday closed higher as strong U.S. economic data on industrial production and housing dampened speculation the Fed will need to increase dollar negative stimulus measures to support the economy: Dollar index +0.162 (+0.20%), EUR/USD -0.08%, USD/JPY +0.54%. USD/JPY posted a 4-week high as an increase in the U.S. 10-year T-note yield to a 3-month high boosted the dollar's interest rate differentials versus the yen.
  • Sep WTI crude oil prices this morning are down 6 cents a barrel (-0.06%) and Sep gasoline is -0.0073 of a cent per gallon (-0.24%). Crude oil and gasoline prices on Wednesday closed higher after DOE weekly crude oil supplies fell a more than expected -3.70 million barrels a day to a 4-month low of 366.2 million barrels, while U.S. petroleum consumption for the week ended Aug 10 jumped 5.7% to a 9-month high of 20.03 million barrels a day: CLU2 +0.90 (+0.96%), RBU2 +0.0826 (+2.75%).
  • For the complete subscription version of this daily report (plus a 13-page big-picture weekly report), along with the earliest possible delivery in the morning, please visit http://www.barchart.com/register/crbfms_usmc.php
    Today's U.S. Earnings Reports Earnings reports (ranked by market cap): WMT-Wal-Mart (Consensus $1.17), GPS-The Gap (0.48), ROST-Ross Stores (0.81), DLTR-Dollar Tree (0.47), PRGO-Perrigo (1.27), AVGO-Avago Technologies Ltd. (0.66), MRVL-Marvell Technology Group Ltd. (0.27), SHLD-Sears Holdings (-0.86), BRCD-Brocade Communication Systems (0.12), GME-GameStop (0.15), BKE-The Buckle (0.49), ARO-Aeropostale (0.01), PLCE-Children's Place Retail Stores (-0.66), SFUN-SouFun Holdings Ltd. (0.41), DRYS-DryShips (0.05).
    Global Financial Calendar
    

    Thursday 8/16/12
    United States
    0830 ET	Weekly initial unemployment claims expected +4,000 to 365,000, previous -6,000 to 361,000. Weekly continuing claims expected -27,000 to 3.305 million, previous +53,000 to 3.332 million .
    0830 ET	July housing starts expected -0.4% to 757,000, June +6.9% to 760,000. July building permits expected +1.3% to 770,000, June -3.1% to 760,000.
    0830 ET	USDA weekly exports.
    1000 ET	Aug Philadelphia Fed manufacturing index expected +7.9 to -5.0, July +3.7 to -12.9.
    1030 ET	DOE natural gas storage.
    1100 ET	Treasury announces amount of 5-year TIPS (previous $16 billion) to be auctioned Aug 23.
    1630 ET	Weekly money supply report and Fed balance sheet.
    Japan
    0000 ET	Tokyo July condo sales, June +16.4% y/y.
    United Kingdom
    0430 ET	UK July retail sales with auto fuel expected -0.1% m/m and +1,4% y/y, June +0.1% m/m and +1.6% y/y. July retail sales ex-auto fuel expected -0.2% m/m and +2/0% y/y, June +0.3% m/m and +2.2% y/y.
    Euro-Zone
    0500 ET	Eurozone July CPI expected -0.5% m/m and +2.4% y/y, June -0.1% m/m. July core CPI expected +1.7% y/y, June +1.6% y/y.
    CHI
    2130 ET	China July industrial profits, June -2.2% y/y.

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