Barchart Morning Call
Barchart.com - Tue May 16, 6:42AM CDT
OVERNIGHT MARKETS AND NEWS
Jun E-mini S&Ps (ESM17 +0.07%) this morning are little changed, up +0.01%, as stock prices consolidate following Monday's rally to a new record high. European stocks are down -0.12% as exporter companies weakened after EUR/USD climbed to a 6-1/4 month high. Losses were contained on signs of European economic optimism after the German May ZEW survey expectations of economic growth rose to a 1-3/4 year high. Asian stocks settled mostly higher: Japan +0.25%, Hong Kong -0.14%, China +0.74%, Taiwan -0.05%, Australia +0.21%, Singapore -1.12%, South Korea +0.27%, India +0.86%. China's Shanghai Composite erased early declines and climbed to a 1-week high on signs that policy makers are trying to stabilize the market with state-sponsored buying of equities. Japan's Nikkei Stock Index rallied to a 17-1/2 month high as optimism over corporate earnings boosts stock prices. Japanese telecommunication stocks rose, led by gains in Nippon Telegraph & Telephone, after it announced plans to raise its dividend this year.
The dollar index (DXY00 -0.47%) is down -0.42% at a 6-month low. EUR/USD (^EURUSD) is up +0.75% at a 6-1/4 month high. USD/JPY (^USDJPY) is down -0.11%.
ECB Governing Council member Smets said risks to Eurozone economic growth "are certainly close to balance," although "in my opinion, it is still too early to declare that inflation is durably converging to its target."
Eurozone Apr new car registrations fell -6.6% y/y to 1.191 million, the largest decline in 4 years. Year-to-date registrations are up +4.7% y/y to 3,819,086.
The German May ZEW survey expectations of economic growth rose +1.1 to 20.6, weaker than expectations of +2.5 to 22.0, but still the highest in 1-3/4 years.
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) Apr housing starts (expected +3.7% to 1.260 million, Mar -6.8% to 1.215 million), (2) Apr industrial production (expected +0.4%, Mar +0.5%).
Notable Russell 2000 earnings reports today include: Home Depot (consensus $1.61), TJX (0.79), Staples (0.17), Dick's Sporting Goods (0.54), Alere (0.54), Urban Outfitters (0.15).
U.S. IPO's scheduled to price today: G1 Therapeutics (GTHX), Modern Media Acquisition (MMDMU).
Equity conferences: JP Morgan Denver Energy Bus Tour on Mon-Tue, Bank of America Merrill Lynch Global Mining Metals & Steel Conference on Tue, Deutsche Bank Clean Tech Utility & Power Conference on Tue, Needham Emerging Technology Conference on Tue-Wed, Goldman Sachs Basic Materials Conference on Tue-Wed, Bank of America Merrill Lynch Health Care Conference on Tue-Thu, Barclays Americas Select Franchise Conference on Tue-Fri, Stephens Energy Executive Summit on Wed, BMO Capital Markets Farm to Market Conference on Wed-Thu, J.P. Morgan Homebuilding & Building Products Conference on Wed-Thu, MoffettNathanson Media & Communications Summit on Wed-Thu, RBC Capital Markets Canadian Automotive, Transportation & Industrials Conference on Thu, Barclays Water Symposium - Panel on Thu.
OVERNIGHT U.S. STOCK MOVERS
Yum! Brands (YUM +0.46%) was upgraded to 'Buy' from 'Hold' at Argus with a price target of $80.
Dr Pepper Snapple Group (DPS +0.82%) was upgraded to 'Overweight' from 'Equalweight' at Morgan Stanley with a price target of $104.
Pfizer (PFE +0.33%) is down over 1% in pre-market trading after it was downgraded to 'Sell' from 'Neutral' at Citigroup.
Sysco (SYY +0.17%) was initiated with a 'Buy' at Loop Capital Markets with a 12-month price target of $61.
LGI Homes ({=LGIH was upgraded to 'Market Perform' from 'Underperform' at Wells Fargo Securities with a price target of $33.
Sage Therapeutics (SAGE -0.58%) was initiated with a 'Buy' at Needham & Co. with a 12-month target price of $82.
Vipshop Holdings Ltd (VIPS -0.87%) rose over 2% in after-hours trading after it reported Q1 revenue of $2.32 billion, above consensus of $2.27 billion.
Kornit Digital Ltd (KRNT +0.68%) slid 3% in after-hours trading after it announced the launch of an underwritten secondary public offering of 4.25 million shares of its stock by the company's largest shareholder, Fortissimo Capital Fund II LP.
Editas Medicine (EDIT +3.73%) lost nearly 7% in after-hours trading after it reported a Q1 loss of -85 cents a share, wider than consensus of -70 cents.
Akebia Therapeutics (AKBA +1.65%) jumped 12% in after-hour trading after it entered into an exclusive license pact with Fresenius Medical to exclusively distribute vadadustat upon FDA approval.
Etsy Inc (ETSY +0.53%) may move higher today after TPG Group reported a 4.3% stake in Etsy and Dragoneer reported a 3.7% stake in the company.
Pernix Therapeutics Holdings (PTX -2.05%) plunged 30% in after-hours trading after it reported a Q1 net loss of -$29.5 million and said it is still analyzing strategic and refinancing alternatives.
MARKET COMMENTS
June E-mini S&Ps (ESM17 +0.07%) this morning are up +0.25 of a point (+0.01%). Monday's closes: S&P 500 +0.48%, Dow Jones +0.41%, Nasdaq +0.31%. The S&P 500 on Monday rallied to a new record high and closed higher on the unexpected +2 point increase in the U.S. May NAHB housing market index, stronger than expectations of unchanged at 68, and on strength in energy producing companies after crude oil rose 2.11% to a 2-week high. Stocks were undercut by the -6.2 point decline in the U.S. May Empire manufacturing index to -1.0, weaker than expectations of +2.3 to 7.5 and the steepest pace of contraction in 7 months.
June 10-year T-notes (ZNM17 -0.05%) this morning are down -1 tick. Monday's closes: TYM7 -0.50, FVM7 -0.50. Jun 10-year T-notes on Monday fell back from a 1-1/2 week high and closed slightly lower on the unexpected increase in the U.S. May NAHB housing market index (+2 to 70), and (2) the rally in the S&P 500 to a new record high, which reduces the safe-haven demand for T-notes.
The dollar index (DXY00 -0.47%) this morning is down -0.419 (-0.42%) to a 6-month low. EUR/USD (^EURUSD) is up +0.0082 (+0.75%) at a 6-1/4 month high and USD/JPY (^USDJPY) is down -0.12 (-0.11%). Monday's closes: Dollar index -0.341 (-0.34%), EUR/USD +0.0044 (+0.40%), USD/JPY +0.41 (+0.36%). The dollar index on Monday closed lower on the rally in crude oil that boosted the currencies of the crude oil exporting countries of Russia and Canada to 2-week highs against the dollar. The dollar index was also undercut by the unexpected contraction in the U.S. May Empire manufacturing survey of general business conditions (-6.2 to -1.0), which bolsters the case for the Fed to refrain from further raising interest rates.
June WTI crude oil prices (CLM17 +0.63%) this morning are up +18 cnts (+0.37%) and June gasoline (RBM17 +0.81%) is +0.0080 (+0.50%). Monday's closes: Jun crude +1.01 (+2.11%), Jun gasoline +0.0139 (+1.22%). Jun crude oil and gasoline on Monday rallied to 2-week highs and settled higher. Crude oil prices rallied on a weaker dollar and comments from Saudi Arabia's and Russia's energy ministers that they favor extending their crude oil production cuts until Mar 2018, three months longer than expectations for an extension to the end of 2017.
GLOBAL EVENT CALENDAR05/16/2017
| Tuesday, May 16 | ||
| US | 0830 ET | Apr housing starts expected +3.7% to 1.260 million, Mar -6.8% to 1.215 million. Apr building permits expected +0.2% to 1.270 million, Mar +4.2% to 1.267 million. |
| 0915 ET | Apr industrial production expected +0.4%, Mar +0.5%. Apr manufacturing production expected +0.4%, Mar -0.4%. Apr capacity utilization expected +0.2 to 76.3%, Mar +0.4 to 76.1%. | |
| Wednesday, May 17 | ||
| US | 0700 ET | Weekly MBA mortgage applications, previous +2.4% with purchase sub-index +1.7% and refi sub-index +3.3%. |
| 1030 ET | EIA Weekly Petroleum Status Report. |
U.S. STOCK CALENDAR05/16/2017
| Company | Ticker | Time | Event Description | Period | Estimate |
|---|---|---|---|---|---|
| Staples Inc | SPLS US | Bef-mkt | Q1 2018 Earnings Release | Q1 18 | 0.173 |
| Dick's Sporting Goods Inc | DKS US | Bef-mkt | Q1 2018 Earnings Release | Q1 18 | 0.542 |
| Murphy USA Inc | MUSA US | 08:00 | Investor Day | ||
| Staples Inc | SPLS US | 08:00 | Q1 2018 Earnings Call | Q1 18 | |
| Diamond Offshore Drilling Inc | DO US | 08:30 | Annual General Meeting | ||
| Hanover Insurance Group Inc/The | THG US | 09:00 | Annual General Meeting | ||
| Stanley Black & Decker Inc | SWK US | 09:00 | Investor Day | ||
| FirstEnergy Corp | FE US | 09:00 | Annual General Meeting | ||
| Home Depot Inc/The | HD US | 09:00 | Q1 2018 Earnings Call | Q1 18 | |
| Home Depot Inc/The | HD US | 09:00 | Q1 2018 Earnings Release | Q1 18 | 1.614 |
| TJX Cos Inc/The | TJX US | 09:30 | Q1 2018 Earnings Release | Q1 18 | 0.79 |
| Avis Budget Group Inc | CAR US | 09:30 | Annual General Meeting | ||
| BankUnited Inc | BKU US | 10:00 | Annual General Meeting | ||
| Dick's Sporting Goods Inc | DKS US | 10:00 | Q1 2018 Earnings Call | Q1 18 | |
| JPMorgan Chase & Co | JPM US | 10:00 | Annual General Meeting | ||
| Principal Financial Group Inc | PFG US | 10:00 | Annual General Meeting | ||
| Arthur J Gallagher & Co | AJG US | 10:00 | Annual General Meeting | ||
| Halliburton Co | HAL US | 10:00 | Annual General Meeting | ||
| Quest Diagnostics Inc | DGX US | 10:30 | Annual General Meeting | ||
| Square Inc | SQ US | 11:00 | Investor Day | ||
| Vectren Corp | VVC US | 11:00 | Annual General Meeting | ||
| TJX Cos Inc/The | TJX US | 11:00 | Q1 2018 Earnings Call | Q1 18 | |
| Stanley Black & Decker Inc | SWK US | Investor Day | |||
| Realty Income Corp | O US | Annual General Meeting | |||
| WR Berkley Corp | WRB US | Annual General Meeting | |||
| Alere Inc | ALR US | Q1 2017 Earnings Release | Q1 17 | 0.54 | |
| Newfield Exploration Co | NFX US | Annual General Meeting | |||
| ConocoPhillips | COP US | Annual General Meeting | |||
| QEP Resources Inc | QEP US | Annual General Meeting | |||
| Packaging Corp of America | PKG US | Annual General Meeting | |||
| Arconic Inc | ARNC US | Annual General Meeting - Proxy Fight for Board Representation | |||
| Masco Corp | MAS US | 13:00 | Investor Day | ||
| Nordstrom Inc | JWN US | 14:00 | Annual General Meeting | ||
| Essex Property Trust Inc | ESS US | 16:00 | Annual General Meeting | ||
| Urban Outfitters Inc | URBN US | Aft-mkt | Q1 2018 Earnings Release | Q1 18 | 0.151 |
| Charles Schwab Corp/The | SCHW US | 17:00 | Annual General Meeting | ||
| Urban Outfitters Inc | URBN US | 17:00 | Q1 2018 Earnings Call | Q1 18 |
