Monday, August 8th, 2016View Older Reports
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OVERNIGHT MARKETS AND NEWS
Sep E-mini S&Ps (ESU16 +0.17%) are up +0.18% at a fresh all-time nearest-futures high and European stocks are up +0.66% on positive carryover from last Friday's stronger-than-expected U.S. Jul non-farm payrolls. European stocks rose and commodity prices also gained after German Jun industrial production rose more than expected at the fastest pace in 5 months. Asian stocks settled higher: Japan +2.44%, Hong Kong +1.57%, China +0.93%, Taiwan 0.64%, Australia +0.74%, Singapore +1.51%, South Korea +0.69%, India +0.37%. Chinese stocks gained after weaker than expected China Jul exports and imports bolstered speculation the government may boost stimulus measures, and Japanese stocks were led higher by a rally in exporters as USD/JPY rose.
The dollar index (DXY00 +0.17%) is up +0.14%. EUR/USD (^EURUSD) is down -0.02%. USD/JPY (^USDJPY) is up +0.49%.
Sep T-note prices (ZNU16 -0.06%) are down -1 tick, but recovered nearly all of their losses from a 1-week low after Fed Governor Powell said he sees a "very gradual" path for interest rate increases.
Eurozone Aug Sentix investor confidence rose +2.5 to 4.2, stronger than expectations of +1.3 to 3.0.
German Jun industrial production rose +0.8% m/m, was stronger than expectations of +0.7% m/m and the largest increase in 5 months.
The China Jul trade balance unexpectedly widened to a surplus of +$52.31 billion, bigger than expectations of +$47.30 billion and the most in 6 months. Jul exports fell -4.4% y/y, weaker than expectations of -3.5% y/y and Jul imports fell -12.5% y/y, weaker than expectations of -7.0% y/y and the biggest decline in 5 months.
Fed Governor Powell said he sees an increasing risk that the U.S. is trapped in a prolonged period of subdued growth that requires a "very gradual" path for interest rate increases.
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) USDA weekly grain export inspections, and (2) USDA Weekly Crop Progress.
There are 7 of the S&P 500 companies that report earnings today: Tyson Foods (consensus $1.06), Allergan (3.31), Intl Flavors and Fragrances (1.40), DaVita HealthCare Partners (0.98), Endo Intl (0.74), Microchip Technology (0.75), News Corp (0.13).
U.S. IPO's scheduled to price today: none.
Equity conferences this week: Cowen and Company Communications Infrastructure Summit on Mon-Tue, Pacific Crest Global Technology Leadership Forum on Mon-Tue, UBS Financial Services Conference on Tue, J.P. Morgan Auto Conference on Tue-Wed, Oppenheimer Technology, Internet & Communications Conference on Tue-Wed, Jefferies Industrials Conference on Tue-Thu, Canaccord Genuity Growth Conference on Wed-Thu, Jefferies Financial Services Conference on Wed-Thu, Goldman Sachs Power, Utilities, MLP, and Pipeline Conference on Thu.
OVERNIGHT U.S. STOCK MOVERS
U.S. Concrete (USCR -4.15%) was rated a new 'Buy' at Suntrust Robinson with a price target of $75.
EOG Resources (EOG +7.03%) was upgraded to 'Buy' from 'Hold' at Wunderlich Securities.
Wyerhaeuser (WY +0.70%) was downgraded to 'Neutral' from 'Buy' at DA Davidson.
Level 3 Communications (LVLT +0.59%) was rated a new 'Buy' at BTIG with a price target of $63.
JP Morgan Chase (JPM +2.70%) is down -0.5% in pre-market trading after it was downgraded to 'Neutral' from 'Buy' at Citigroup.
Mattress Firm Holding (MFRM +1.47%) surged 100% in pre-market trading after Steinhoff International Holdings NV bought the company for $2.4 billion.
Delta Air Lines (DAL +3.09%) fell nearly 2% in pre-market trading after a computer-system failure grounded all of the carrier's flights across the U.S.
U.S. Steel (X +1.92%) gained over 1% in after-hours trading after the U.S. International Trade Commission (ITC) said that U.S. Steel can proceed with its case that charges Chinese manufacturers of carbon and alloy steel of misappropriating U.S. Steel trade secrets that a U.S. judge had put on hold July 6.
Berkshire Hathaway ({=BRK/B=}) lost almost 1% in after-hours trading after it reported Q2 operating EPS of $2,803, below consensus of $2,911.
Rackspace Holdings (RAX +10.24%) rose nearly 3% in after-hours trading, adding to last Friday's +10% surge, on reports that Apollo Global Management LLC is reportedly offering $3.5 billion for the company.
Lantheus Holdings (LNTH +54.24%) dropped almost 3% in after-hours trading after the company registered 17.8 million shares for sale for top share holder Avista Capital Partners.
MARKET COMMENTS
Sep E-mini S&Ps (ESU16 +0.17%) this morning are up +4.00 points (+0.18%) at a new all-time high. Friday's closes: S&P 500 +0.86%, Dow Jones +1.04%, Nasdaq +1.00%. The S&P 500 on Friday climbed to a new record high and closed higher on the +255,000 increase in U.S. July payrolls (stronger than expectations of +180,000) and the +0.3% m/m increase in U.S. July average hourly earnings (stronger than expectations of +0.2% m/m) that help sustain the economic recovery.
Sep 10-year T-notes (ZNU16 -0.06%) this morning are down -1 tick. Friday's closes: TYU6 -26.00, FVU6 -17.25. Sep T-notes on Friday fell to a 1-week low and closed sharply lower on the larger-than-expected increase in U.S. July non-farm payrolls, which may prompt the Fed to raise interest rates sooner rather than later. T-notes were also undercut by reduced safe-haven demand with the rally in the S&P 500 to a record high.
The dollar index (DXY00 +0.17%) this morning is up +0.138 (+0.14%). EUR/USD (^EURUSD) is down -0.0002 (-0.02%). USD/JPY (^USDJPY) is up +0.50 (+0.49%). Friday's closes: Dollar index +0.436 (+0.46%), EUR/USD -0.0044 (-0.40%), USD/JPY +0.60 (+0.59%). The dollar index on Friday closed higher on the stronger-than-expected U.S. July payroll report, which bolstered the case for the Fed to raise interest rates. In addition, EUR/USD fell to a 1-week low after German Jun factory orders unexpectedly fell -0.4% m/m, weaker than expectations of +0.5% m/m.
Sep WTI crude oil (CLU16 +1.46%) this morning is up +62 cents (+1.48%) at a 1-week high and Sep gasoline (RBU16 +0.68%) is up +0.0083 (+0.60%) at a 2-week high. Friday's closes: CLU6 -0.13 (-0.31%), RBU6 +0.0083 (+0.53%). Sep crude and gasoline on Friday settled mixed. Crude oil prices were undercut by the rally in the dollar and by the Baker Hughes report that showed that active U.S. oil rigs rose by +7 rigs in the week ended Aug 5 to a 4-1/2 month high of 381, the sixth straight week of increases. Crude oil prices found support on the rally in the S&P 500 to a new record high and on strong refinery demand after the crack spread rose to a 1-1/4 month high.
GLOBAL EVENT CALENDAR08/08/2016
| Monday, Aug 8 | ||
| US | 1100 ET | USDA weekly grain export inspections. |
| 1600 ET | USDA Weekly Crop Progress. | |
| Tuesday, Aug 9 | ||
| US | 0830 ET | Q2 non-farm productivity expected +0.5%, Q1 -0.6%. Q2 unit labor costs expected +1.8%, Q1 +4.5%. |
| 1000 ET | Jun wholesale inventories expected unch, May unch. Jun wholesale trade sales expected +0.5%, May +0.5%. | |
| 1300 ET | Treasury auctions $24 billion of 3-year T-notes. | |
| JPN | 0200 ET | Japan Jul machine tool orders, Jun -19.9% y/y. |
| 1950 ET | Japan Jun machine orders expected +3.3% m/m and -4.4% y/y, May -1.4% m/m and -11.7% y/y. | |
| 1950 ET | Japan Jul PPI expected -0.1% m/m and -4.0% y/y, Jun -0.1% m/m and -4.2% y/y. | |
| GER | 0200 ET | German Jun trade balance expected +22.5 billion euros, May +21.0 billion euros. Jun exports expected +1.3% m/m, May -1.9% m/m. Jun imports expected +0.8% m/m, May +0.1% y/y. |
| UK | 0430 ET | UK Jun industrial production expected unch m/m and +1.6% y/y, May -0.5% m/m and +1.4% y/y. |
| 0430 ET | UK Jun manufacturing production expected -0.2% m/m and +1.3% y/y, May -0.5% m/m and +1.7% y/y. | |
| CHI | n/a | China Jul new yuan loans expected 900.0 billion yuan, Jun 1.38 trillion yuan. |
U.S. STOCK CALENDAR08/08/2016
| Company | Ticker | Time | Event Description | Period | Estimate |
|---|---|---|---|---|---|
| Tyson Foods Inc | TSN | 7:30 | Q3 2016 Earnings Release | Q3 2016 | 1.059 |
| Allergan plc | AGN | 7:30 | Q2 2016 Earnings Release | Q2 2016 | 3.307 |
| Allergan plc | AGN | 8:30 | Q2 2016 Earnings Call | Q2 2016 | |
| Tyson Foods Inc | TSN | 9:00 | Q3 2016 Earnings Call | Q3 2016 | |
| International Flavors & Fragrances Inc | IFF | 16:00 | Q2 2016 Earnings Release | Q2 2016 | 1.404 |
| Gap Inc/The | GPS | 16:15 | July 2016 Sales and Revenue Release | 2016 | |
| Endo International PLC | ENDP | 16:30 | Q2 2016 Earnings Call | Q2 2016 | |
| News Corp | NWSA | 16:30 | Q4 2016 Earnings Call | Q4 2016 | |
| Microchip Technology Inc | MCHP | 17:00 | Q1 2017 Earnings Call | Q1 2017 | |
| DaVita HealthCare Partners Inc | DVA | 17:00 | Q2 2016 Earnings Call | Q2 2016 | |
| DaVita HealthCare Partners Inc | DVA | Aft-mkt | Q2 2016 Earnings Release | Q2 2016 | 0.976 |
| Endo International PLC | ENDP | Aft-mkt | Q2 2016 Earnings Release | Q2 2016 | 0.74 |
| Southwest Airlines Co | LUV | July 2016 Sales and Revenue Release - Traffic Results | 2016 | ||
| Microchip Technology Inc | MCHP | Q1 2017 Earnings Release | Q1 2017 | 0.749 | |
| United Continental Holdings Inc | UAL | July 2016 Sales and Revenue Release - Traffic Results | 2016 | ||
| News Corp | NWSA | Q4 2016 Earnings Release | Q4 2016 | 0.127 |
