Wednesday, December 31st, 2014View Older Reports
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OVERNIGHT MARKETS AND NEWS
March E-mini S&Ps (ESH15 +0.13%) this morning are up +0.12% and European stocks are up +0.25% in thin holiday trade. Many European equity markets close early today and U.S. and all European markets will be closed tomorrow for New Year's day. Greek sovereign-debt risks remain elevated as the Greek 10-year bond yield climbed to a 1-1/4 year high of 9.745% on concern that elections on Jan 25 may give power to the anti-austerity Syriza party that seeks to renegotiate Greek’s debt. Asian stocks closed mixed: Japan and South Korea closed for holiday, Hong Kong +0.44%, China +2.20%, Taiwan +0.42%, Australia -0.10%, Singapore -0.03%, India +0.35%. China's Shanghai Stock Index rallied up to a 4-3/4 year high on speculation the government will boost stimulus measures along with increased M&A activity after China CNR Corp. and CSR Corp., China's biggest train makers, agreed to merge. Commodity prices are mostly lower. Feb crude oil (CLG15 -2.18%) is down -1.77%. Feb gasoline (RBG15 -3.17%) is down -2.35% at a 5-1/2 year low. Feb gold (GCG15 -0.18%) is down -0.27%. Mar copper (HGH15 -0.53%) is down -0.54%. Agriculture prices are weaker. The dollar index (DXY00 -0.06%) is down -0.11%. EUR/USD (^EURUSD) is down -0.03%. USD/JPY (^USDJPY) is down -0.12%. Mar T-note prices (ZNH15 +0.16%) are up +7.5 ticks at a 1-week high.Comments from ECB Chief Economist Praet signal the ECB may be closer to implementing QE when he said the Eurozone could see "negative inflation during a substantial part of 2015" amid a slide in crude prices. He added that "Inflation expectations are extremely fragile" and "the risk of second-round effects seems to be greater today than it was in the past" and that the Governing Council "cannot simply look through that."
The China Dec HSBC manufacturing PMI was unexpectedly revised higher to 49.6, better than expectations of unch at 49.5 but still the slowest pace of expansion in 7 months.
U.S. STOCK PREVIEW
Today’s initial unemployment claims report is expected to show an increase of +10,000 to 290,000, exactly reversing last week’s decline of -10,000 to 280,000. Meanwhile, today’s continuing claims report is expected to show a decline of -38,000 to 2.365 million, more than reversing last week’s increase of +25,000 to 2.403 million. Today’s Dec Chicago PMI report is expected to fall -0.8 points to 60.0, adding to November’s sharp decline of -5.4 to 60.8 from October’s 3-3/4 year high of 66.2. Today’s Nov pending home sales report is expected to show an increase of +0.5% m/m, reversing part of the -1.1% decline seen in October. None of the Russell 3000 companies report earnings today. There are no equity conferences this week.
OVERNIGHT U.S. STOCK MOVERS
Stifel keeps a 'Buy' rating on share of Monsanto (MON -0.28%) and said that seed prices ae likely to rise in 2015.GrubHub (GRUB -0.11%) climbed nearly 2% in after-hours trading after it was upgraded to 'Outperform' from 'Market Perform' at Barrington.
Stifel keeps a 'Buy' rating on Cempra (CEMP +2.59%) and raised its price target on the stock to $33 from $22.
According to the NY Post, American Apparel (APP -0.93%) is said to be delaying payments to its suppliers.
Globalstar (GSAT -5.76%) fell nearly 3% in after-hours trading after it filed to sell 12.37 million shares of common stock for holders.
Gabelli reported a 7.91% stake in Media General (MEG -1.84%) .
Perion Network (PERI unch) was downgraded to 'Neutral' from 'Buy' at Chardan.
Handy & Harman (HNH +3.80%) submitted a proposal to acquire JPS Industries (JPST +7.80%) for $10 per share.
MARKET COMMENTS
Mar E-mini S&Ps (ESH15 +0.13%) this morning are up +2.50 points (+0.12%). The S&P 500 index on Tuesday fell to a 1-week low and closed lower: S&P 500 -0.49%, Dow Jones -0.31%, Nasdaq -0.70%. Negative factors included (1) the +1.6 point increase in U.S. Dec consumer confidence (Conference Board) to 91.0, less than expectations of +5.2 to 93.9, (2) high valuation levels that prompted year-end profit taking and long liquidation in stocks with the S&P 500's forward P/E at a 4-1/2 year high of 17.4.Mar 10-year T-notes (ZNH15 +0.16%) this morning are up +7.5 ticks at a 1-week high. Mar 10-year T-note futures prices on Tuesday closed higher: TYH5 +6.0, FVH5 +4.00. Bullish factors included (1) carry-over support from a drop in the German 10-year bund yield to a record low 0.535% on Greek debt concerns, and (2) a slide in stocks that boosted the safe-haven demand for Treasuries.
The dollar index (DXY00 -0.06%) this morning is down -0.097 (-0.11%). EUR/USD (^EURUSD) is down -0.0004 (-0.03%). USD/JPY (^USDJPY) is down -0.14 (-0.12%). The dollar index on Tuesday posted a new 8-1/2 year high but fell back and closed lower. Closes: Dollar index -0.199 (-0.22%), EUR/USD +0.0004 (+0.03%), USD/JPY -1.197 (-0.99%). The main bearish factor was weakness in USD/JPY which fell to a 1-week low after a slide in stocks boosted the safe haven demand for the yen. Gains in EUR/USD were limited on European sovereign debt risks after the Greek 10-year bond yield rose to a 1-1/4 year high of 9.628% on concern that elections on Jan 25 that may give power to the anti-austerity Syriza party that seeks to renegotiate Greek’s debt.
Feb WTI crude oil (CLG15 -2.18%) this morning is down -96 cents (-1.77%) and Feb gasoline (RBG15 -3.17%) is down -0.0345 (-2.35%) at a fresh 5-1/2 year low. Feb crude and Feb gasoline prices on Tuesday posted 5-1/2 year lows but recovered and closed higher. Closes: CLG5 +0.51 (+0.95%), RBG5 +0.0005 (+0.03%). Bullish factors included (1) a weaker dollar, and (2) a decline in Libyan oil production as data from Energy Aspects Ltd. stated Libya's oil output has fallen to below 300,000 bpd, a 7-month low, after militants attacked oil facilities. Gains were limited on concern that Wednesday's EIA data will show U.S. supplies remain ample with inventories near a 6-month high.
GLOBAL EVENT CALENDAR12/31/2014
| US | 0700 ET | Weekly MBA mortgage applications, previous +0.9% with purchase sub-index +1.3% and refi sub-index +1.1%. |
| 0830 ET | Weekly initial unemployment claims expected +10,000 to 290,000, previous -10,000 to 280,000. Weekly continuing claims expected -38,000 to 2.365 million, previous +25,000 to 2.403 million. | |
| 0900 ET | Dec Milwaukee ISM expected -5.25 to 65.00, Nov +4.64 to 70.25. | |
| 0945 ET | Dec Chicago PMI expected -0.8 to 60.0, Nov -5.4 to 60.8. | |
| 1000 ET | Nov pending home sales expected +0.5% m/m and +3.6% y/y, Oct -1.1% m/m and +2.2% y/y. | |
| 1030 ET | EIA Weekly Petroleum Status Report. | |
| CHI | 2000 ET | China Dec manufacturing PMI expected -0.3 to 50.0, Nov -0.5 to 50.3. |
U.S. STOCK CALENDAR12/31/2014
| Company | Ticker | Time | Event Description | Period | Estimate |
|---|---|---|---|---|---|
| Unifi Inc | UFI US | Aft-mkt | Unifi Inc. Replaces SWS Group Inc. in S&P SmallCap 600 | ||
| Central Pacific Financial Corp | CPF US | Aft-mkt | Central Pacific Financial Replaces TriQuint Semiconductor in S&P SmallCap 600 | ||
| SWS Group Inc | SWS US | Aft-mkt | Unifi Inc. Replaces SWS Group Inc. in S&P SmallCap 600 | ||
| TriQuint Semiconductor Inc | TQNT US | Aft-mkt | Central Pacific Financial Replaces TriQuint Semiconductor in S&P SmallCap 600 | ||
| Remy International Inc | REMY US | Special Meeting - M&A Vote |
