Wednesday, August 12th, 2015View Older Reports
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OVERNIGHT MARKETS AND NEWS
September E-mini S&Ps (ESU15 -0.71%) are down -0.83% at a 4-week ow and European stocks are down -1.96% at a 1-month low on concern a slowdown in China could harm global growth. The Chinese yuan plunged to a 4-year low of 6.4489 per dollar on negative carry-over from Tuesday's action by the PBOC to devalue the currency. Emerging markets stocks and currencies also fell on concern those countries will also have to devalue their currencies to keep pace with China. Asian stocks closed lower: Japan -1.58%, Hong Kong -2.38%, China -1.06%, Taiwan -1.32%, Australia -1.67%, Singapore -2.90%, South Korea -0.28%, India -1.27%. Weaker-than-expected China Jul industrial production dragged Sep copper prices (HGU15 -0.32%) down -0.04% to a fresh 6-year low, which the increased global market volatility boosted demand for gold as a safe haven with Dec gold (ESU15 -0.71%) up +0.90% at a 3-week high.The dollar index (DXY00 -0.90%) is down -0.86% at a 1-week low on concern the devaluation of the Chinese yuan will slow inflation globally and delay a Fed interest rate increase. EUR/USD (^EURUSD) is up +0.90% at a 4-week high. USD/JPY (^USDJPY) is down -0.64%.
Sep T-note prices (ZNU15 +0.18%) are up +10.5 ticks at a 3-1/4 month high as the plunge in stocks boosts safe-haven demand for government debt. Also, inflation expectations continue to fall with the sell-off in commodities as the 10-year T-note breakeven inflation rate declined to a 4-3/4 month low.
Eurozone Jun industrial production fell -0.4% m/m and rose +1.2% y/y, weaker than expectations of -0.1% m/m and +1.7% y/y.
China Jul industrial production rose +6.0% y/y, weaker than expectations of +6.6% y/y.
Japan Jul PPI fell -0.2% m/m and -3.0% y/y, more than expectations of -0.1% m/m and -2.9% y/y with the -3.0% y/y decline the fastest annual decrease in 5-1/2 years.
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) weekly MBA mortgage applications (last week +4.7% with purchase sub-index +3.3% and refi sub-index +5.9%), (2) June JOLTS job openings (expected -73,000 to 5.290 million, May +29,000 to 5.363 million), (3) July monthly budget statement (expected -$126.8.0 billion, Jun +$51.8 billion), and (4) the Treasury's auction of $24 billion of 10-year T-notes.There are 3 of the S&P 500 companies that report earnings today: Macy's (consensus $0.76), Cisco Systems (0.56), News Corp (0.05).
U.S. IPO's scheduled to price today include: Houlihan Lokey (HLI), Shake Shack (SHAK), Inotek Pharmaceuticals (ITEK), CareTrust REIT (CTRE).
Equity conferences during the remainder of this week include: J.P. Morgan Auto Conference on Tue-Wed, Oppenheimer Technology, Internet & Communications Conference on Tue-Wed, Jefferies Industrials Conference on Tue-Thu, Cowen and Co. Communications Infrastructure Summit on Wed, Canaccord Genuity Growth Conference on Wed-Thu, Nomura Media & Telecom Conference on Thu.
OVERNIGHT U.S. STOCK MOVERS
Alibaba (BABA -3.89%) slid over 5% in pre-market trading after it reported Q1 EPS of 59 cents, better than consensus of 58 cents, but Q1 revenue of $3.27 billion was below consensus of $3.39 billion.Aramark (ARMK -0.62%) reported Q3 adjusted EPS of 29 cents, above consensus of 28 cents.
Cash America (CSH -3.26%) was upgraded to 'Buy' from 'Neutral' at Sterne Agee CRT.
L Brands (LB -1.08%) was downgraded to 'Market Perform' from 'Outperform' at BMO Capital.
Johnson Controls (JCI -3.59%) was upgraded to 'Buy' from 'Neutral' at Goldman Sachs.
Tenneco (TEN -2.79%) was upgraded to 'Neutral' from 'Sell' at Goldman Sachs.
Applied Industrial (AIT -0.10%) reported Q4 EPS of 70 cents, below consensus of 73 cents.
The WSJ reports that Credit Suisse (CS -2.09%) and Barclays (BCS -1.42%) are in settlement talks with the SEC and the New York Attorney General over allegations of wrongdoing at their "dark pools."
CDK Global (CDK -3.23%) rose over 9% in after-hours trading after Bloomberg reported that the company is said to be working with bankers to explore a sale.
CSC (CSC -1.77%) reported Q1 adjusted EPS of $1.11, higher than consensus of $1.01, and then was upgraded to 'Buy' from 'Neutral' at SunTrust.
Gabelli reported a 6.47% stake in Southwest Gas (SWX +1.27%) .
Viavi (VIAV -5.80%) reported Q4 EPS of 13 cents, better than consensus of 8 cents.
Fossil (FOSL -3.74%) reported Q2 EPS of $1.12, above consensus of 82 cents, and then raised guidance on fiscal 2015 EPS to $6.20-$7.00, well above consensus of $5.57.
MARKET COMMENTS
Sep E-mini S&Ps (ESU15 -0.71%) this morning are down -17.25 points (-0.83%) at a 4-week low. Tuesday's closes: S&P 500 -0.96%, Dow Jones -1.21%, Nasdaq -1.29%. The S&P 500 on Tuesday closed lower on weakness in Chinese exporters after the PBOC unexpectedly devalued the yuan. Stocks also saw weakness in commodity producers as crude oil fell to a 4-3/4 month low, and on concern about U.S. consumer demand after June wholesale inventories rose by +0.9% m/m, the biggest increase in 14 months.Sep 10-year T-note prices (ZNU15 +0.18%) this morning are up +10.5 ticks at a new 3-1/4 month high. Tuesday's closes: TYU5 +27.0, FVU5 +15.00. Sep T-notes Tuesday rallied sharply to a 3-1/4 month nearest-futures high on talk that the Chinese economy may be even weaker than the market thinks after the Chinese central bank devalued the yuan by 1.9%. T-notes also received a boost on the decline in the 10-year T-note breakeven inflation rate to a 4-3/4 month low, and increased safe-haven demand for T-notes after stocks fell.
The dollar index (DXY00 -0.90%) this morning is down -0.835 (-0.86%) at a 1-week low. EUR/USD (^EURUSD) is up +0.0099 (+0.90%) at a 4-week high. USD/JPY (^USDJPY) is down -0.80 (-0.64%). Tuesday's closes: Dollar Index +0.131 (+0.13%), EUR/USD +0.00227 (+0.21%), USD/JPY +0.495 (+0.40%). The dollar index on Tuesday fell to a 1-week low but rebounded and closed slightly higher. The dollar found strength on the Chinese central bank's -1.9% devaluation of the yuan, which dragged other Asian currencies lower and boosted the dollar. Meanwhile, the dollar was undercut by euro strength after Greece reached an accord with creditors on the terms for a third bailout.
Sep crude oil (CLU15 +0.81%) this morning is up +70 cents (+1.62%) and Sep gasoline (RBU15 +1.34%) is up +0.0299 (+1.77%). Tuesday's closes: CLU5 -1.58 (-3.51%), RBU5 +0.0035 (+0.21%). Sep crude oil and gasoline settled mixed on Tuesday with Sep crude at a 4-3/4 month low. Crude oil closed lower on Chinese demand concerns after China devalued the yuan, which fueled concern that Chinese demand for foreign crude may fall as the weaker yuan boosts import costs. Crude oil prices also fell on OPEC data showing that Iran's July oil production rose +32,300 bpd to 2.86 million bpd, a 3-year high. Gasoline closed higher on production concerns after British Petroleum said its Whiting, Indiana refinery will be at reduced output for a month due to unplanned maintenance and Phillips 66 said its Bayway, New Jersey refinery will shut gasoline production for up to two weeks.
GLOBAL EVENT CALENDAR08/12/2015
| US | 0700 ET | Weekly MBA mortgage applications, previous +4.7% with purchase sub-index +3.3% and refi sub-index +5.9%. |
| 1000 ET | Jun JOLTS job openings expected -13,000 to 5.350 million, May +29,000 to 5.363 million. | |
| 1030 ET | EIA Weekly Petroleum Status Report. | |
| 1200 ET | USDA Aug WASDE crop production. | |
| 1300 ET | Treasury auctions $24 billion 10-year T-notes. | |
| 1400 ET | Jul monthly budget statement expected -$137.0 billion, Jun +$51.8 billion. | |
| JPN | 0030 ET | Revised Japan Jun industrial production, previous+0.8% m/m and +2.0% y/y. Jun capacity utilization, May 3.0% m/m. |
| 0030 ET | Japan Jun tertiary industry index expected +0.1% m/m, May -0.7% m/m. | |
| 1950 ET | Japan Jun machine orders expected -4.8% m/m and +17.6% y/y, May +0.6% m/m and +19.3% y/y. | |
| CHI | 0130 ET | China Jul industrial production expected +6.6% y/y, Jun +6.8% y/y. |
| 0130 ET | China Jul retail sales expected +10.6% y/y, Jun +10.6% y/y. | |
| UK | 0430 ET | UK Jul jobless claims change expected +1,000, Jun +7,000. Jul claimant count rate expected unch at 2.3%. |
| 0430 ET | UK Jun avg weekly earnings expected +2.8% 3-mo avg, May +3.2% 3-mo avg. Jun weekly earnings ex-bonus expected +2.8% 3-mo avg, May +2.8% 3-mo avg. | |
| 0430 ET | UK Jun ILO unemployment rate expected 5.6% for the 3-months though Jun, previous 5.6% for the 3-months through May. | |
| 1901 ET | UK Jul RICS house price balance expected 42%, Jun 40%. | |
| EUR | 0500 ET | Eurozone Jun industrial production expected -0.1% m/m and +1.7% y/y, May -0.4% m/m and +1.6% y/y. |
U.S. STOCK CALENDAR08/12/2015
| Company | Ticker | Time | Event Description | Period | Estimate |
|---|---|---|---|---|---|
| Macy's Inc | M US | Bef-mkt | Q2 2016 Earnings Release | Q2 2016 | 0.76 |
| Macy's Inc | M US | 9:00 | Q2 2016 Earnings Call | Q2 2016 | |
| AT&T Inc | T US | 10:00 | Analyst Conference | Y 2015 | |
| JM Smucker Co/The | SJM US | 11:00 | Annual General Meeting | Y 2015 | |
| Cisco Systems Inc | CSCO US | 16:30 | Q4 2015 Earnings Call | Q4 2015 | |
| Cisco Systems Inc | CSCO US | Aft-mkt | Q4 2015 Earnings Release | Q4 2015 | 0.563 |
| News Corp | NWSA US | Aft-mkt | Q4 2015 Earnings Release | Q4 2015 | 0.05 |
| News Corp | NWSA US | 18:00 | Q4 2015 Earnings Call | Q4 2015 | |
| Equifax Inc | EFX US | Investor Meeting - Paris | Y 2015 | ||
| Xilinx Inc | XLNX US | Annual General Meeting | |||
| United Parcel Service Inc | UPS US | Roadshow - Chicago - Day1 | Y 2015 |
