Wednesday, July 8th, 2015View Older Reports
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OVERNIGHT MARKETS AND NEWS
September E-mini S&Ps (ESU15 -0.75%) are down -0.65% on concern that a sell-off in Chinese stocks will spread across the globe. European stocks are up +0.87% on optimism that the ECB will be able to contain fallout from the Greek debt crisis after ECB Governing Council member Visco said that the ECB is ready to use all means at its disposal in the Greek financial crisis. European leaders on Tuesday ordered Greece to accept a rescue package by Sunday or face expulsion from the Eurozone. Weakness in European automakers is limiting gains in the overall market after China Jun passenger-vehicle sales dropped for the first time in more than 2 years. Asian stocks closed sharply lower: Japan -3.14%, Hong Kong -5.84%, China -5.90%, Taiwan -2.96%, Australia -2.00%, Singapore -1.67%, South Korea -1.25%, India -1.72%. The rout on Chinese stocks continued today with the Shanghai Composite falling to a fresh 3-1/2 month low as government measures to arrest the slide have so far proven ineffective. The sell-off in Chinese shares has spread throughout Asia with Japan's Nikkei Stock Index falling to a 1-1/2 month low.Commodity prices are mixed. Aug crude oil (CLQ15 +0.52%) is up +0.71%, Aug gasoline (RBQ15 +1.78%) is up +1.79%. Metals prices are mixed. Aug gold (GCQ15 +0.32%) is up +0.08%. Sep copper (HGU15 -0.18%) is down -0.10% at a fresh 6-year low. Agricultural prices are weaker.
The dollar index (DXY00 -0.28%) is down -0.180 (-0.19%). EUR/USD (^EURUSD) is up +0.0006 (+0.05%). USD/JPY (^USDJPY) is down -0.89 (-0.73%) at a 1-1/2 month low.
Sep T-note prices (ZNU15 +0.06%) are up +1.5 ticks at a 5-week high as the slump in stocks boosts the safe-haven demand for Treasuries.
Investors trying to get out of Chinese stocks have found that 1,331 companies, or 72% of stocks on mainland exchanges have halted trading as trading curbs make it impossible to sell the stocks. Another 747 companies fell by their 10% limit on Wednesday as buyers were nowhere to be found. That suggests that today's 5.9% plunge in the Shanghai Composite Index was understated. Actions taken by the government thus far have been unable to stabilize the market as the Shanghai Composite has fallen 32% from its 7-1/3 year high on Jun 12.
China Jun passenger-vehicle sales fell -3.2% y/y to 1.43 million units, the first decline in more than 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 -4.1% and refi sub-index -5.2%), (2) the Treasury's auction of $21 billion of 10-year T-notes, (3) the minutes of the Jun 16-17 FOMC meeting, (4) a speech by San Francisco Fed President John Williams on the economic outlook to the International Conference of Commercial Bank Economists in Los Angeles, (5) May consumer credit (expected +$18.5 billion after April's +$20.541 billion), and (6) EIA Weekly Petroleum Status Report.One of the Russell 1000 companies reports earnings today: Alcoa (consensus $0.23).
U.S. IPO's scheduled to price today include: Clovis Oncology (CLVS).
Equity conferences this week: none.
OVERNIGHT U.S. STOCK MOVERS
Navistar (NAV -1.53%) was downgraded to 'Hold' from 'Buy' at BB&T.Harley-Davidson (HOG +0.37%) was downgraded to 'Sector Perform' from 'Outperform' at RBC Capital.
Reuters reported that JPMorgan Chase (JPM -0.79%) agreed to pay at least $125 million to settle probes that the bank sought to improperly collect and sell consumer credit card data.
W. R. Berkley (WRB +1.80%) was upgraded to 'Buy' from 'Neutral' at Goldman Sachs.
Advance Auto Parts (AAP +0.07%) will replace Family Dollar (FDO +0.05%) in the S&P 500 as of the close of trading today.
St. Jude Medical (STJ +1.38%) was upgraded to 'Outperform' from 'Market Perform' at Wells Fargo.
Dick's Sporting Goods (DKS +0.13%) was upgraded to 'Outperform' from 'In-Line' at Imperial Capital.
Rolls-Royce (RYCEY -5.32%) was downgraded to 'Neutral' from 'Outperform' at Exane BNP Paribas.
Pearson (PSO -0.16%) was downgraded to 'Sell' from 'Hold' at Berenberg.
Tourbillon reported a 14.9% passive stake in Green Plains Partners (GPP +1.39%) .
Vanda Pharmaceuticals (VNDA -1.91%) announced that the European Commission approved its Hetlioz drug for the treatment of Non-24-Hour Sleep-Wake Disorder in totally blind adults in the European Union.
Novartis' (NVS +0.56%) Entresto drug was approved by FDA for treatment of heart failure.
Gilder, Gagnon, Howe & Co. reported a 13.18% passive stake in Papa Murphy's (FRSH +3.15%) .
MARKET COMMENTS
September E-mini S&Ps (ESU15 -0.75%) this morning are down -13.50 points (-0.65%). Tuesday's closes: S&P 500 +0.61%, Dow Jones +0.53%, Nasdaq +0.243%. The S&P 500 on Tuesday recovered from a 3-1/2 month low and closed higher on supportive factors including hopes that a Greek bailout agreement will be reached by Sunday and the unexpected +29,000 increase in U.S. May JOLTS job openings to 5.363 million, stronger than expectations of 5.300 million and the most since the data series began in 2000. Bearish factors included a plunge in European stocks to a 5-1/2 month low on Grexit concerns and weakness in commodity producers after crude oil dropped to a 3-month low and copper sank to a 5-month low.Sep 10-year T-notes (ZNU15 +0.06%) this morning are up +1.5 ticks at a new 5-week high. Tuesday's closes: TYU5 +11.50, FVU5 +4.75. Sep T-notes on Tuesday rallied to a 5-week high on (1) safe-haven concerns sparked by Grexit and the Chinese stock market melt-down, and (2) reduced inflation concerns as a plunge in commodity prices pushed the 10-year T-note breakeven inflation rate down to a 3-week low.
The dollar index (DXY00 -0.28%) this morning is down -0.180 (-0.19%). EUR/USD (^EURUSD) is up +0.0006 (+0.05%). USD/JPY (^USDJPY) is down -0.89 (-0.73%) at a 1-1/2 month low. Tuesday's closes: Dollar Index -0.118 (-0.12%), EUR/USD -0.00446 (-0.40%), USD/JPY -0.036 (-0.03%). The dollar index on Tuesday fell back from a 5-week high and closed lower on reduced safe-haven demand after a recovery in U.S. stocks. The dollar posted a 5-week high early in the session on signs of strength in the U.S. labor market that may push the Fed to raise interest rates after U.S. May JOLTS job openings rose to their highest since the data began in 2000.
Aug WTI crude oil (CLQ15 +0.52%) this morning is up +37 cents (+0.71%). Aug gasoline (RBQ15 +1.78%) is up +0.0348 (+1.79%). Tuesday's closes: CLQ5 -0.68 (-1.28%), RBQ5 +0.0257 (+1.32%). Aug crude oil and gasoline Tuesday settled mixed. Crude oil fell to a 3-month low on (1) the EIA's hike in its 2015 U.S. crude production estimate to 9.47 million bpd from a 9.43 million bpd estimate last month, and (2) speculation that a nuclear deal with Iran may be imminent, which would pave the way for at least a doubling of Iranian oil exports.
GLOBAL EVENT CALENDAR07/08/2015
| US | 0700 ET | Weekly MBA mortgage applications, previous -4.7% with purchase sub-index -4.1% and refi sub-index -5.2%. |
| 1030 ET | EIA Weekly Petroleum Status Report. | |
| 1300 ET | Treasury auctions $21 billion of 10-year T-notes. | |
| 1400 ET | Minutes of the Jun 16-17 FOMC meeting. | |
| 1400 ET | San Francisco Fed President John Williams speaks on the economic outlook to the International Conference of Commercial Bank Economists in Los Angeles. | |
| 1500 ET | May consumer credit expected +$18.5 billion, Apr +$20.541 billion. | |
| JPN | 0030 ET | Japan Jun bankruptcies, May -13.18% y/y. |
| 0100 ET | Japan Jun eco-watchers survey current expected -0.3 to 53.0, May 53.3. Jun eco-watchers survey outlook expected -0.5 to 54.0. May 54.5 | |
| 1950 ET | Japan May machine orders expected -4.9% m/m and +16.7% y/y, Apr +3.8% m/m and +3.0% y/y. | |
| EUR | 0500 ET | ECB Executive Board member Benoit Coeure speaks on The International Role of the Euro at an event in Frankfurt. |
| UK | 1901 ET | UK Jun RICS house price balance, May 34%. |
| CHI | 2130 ET | China Jun CPI expected +1.3% y/y, May +1.2% y/y. China Jun PPI expected -4.6% y/y, May -4.6% y/y. |
U.S. STOCK CALENDAR07/08/2015
| Company | Ticker | Time | Event Description | Period | Estimate |
|---|---|---|---|---|---|
| Alcoa Inc | AA US | 17:00 | Q2 2015 Earnings Call | Q2 2015 | |
| United Continental Holdings Inc | UAL US | 17:00 | June 2015 Sales and Revenue Release - Operational Performance | 2015 | |
| Alcoa Inc | AA US | Aft-mkt | Q2 2015 Earnings Release | Q2 2015 | 0.226 |
| Costco Wholesale Corp | COST US | Aft-mkt | June 2015 Sales and Revenue Release | 2015 | |
| Advance Auto Parts Inc | AAP US | Aft-mkt | Advanced Auto Parts Inc. Replaces Family Dollar Stores in S&P 500 | ||
| Advance Auto Parts Inc | AAP US | Aft-mkt | Jack in the Box Replaces Advanced Auto Parts in S&P MidCap 400 | ||
| Healthcare Trust of America Inc | HTA US | Annual General Meeting |
