BC - Tue Aug 20, 6:46AM CDT
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OVERNIGHT MARKETS AND NEWS
September E-mini S&Ps (ESU13 +0.18%) this morning are down -0.02% at a 6-week low and European stocks are down -1.32%. Asian stocks closed lower: Japan -2.63%, Hong Kong -2.20%, China -0.81%, Taiwan -0.86%, Australia -0.67%, Singapore -1.40%, South Korea -1.51%, India -0.34%. Stocks and commodity prices are mostly lower on speculation the Fed will begin cutting its bond purchases next month. Expectations increased for the Fed to begin tapering QE3 after Richmond Fed President Lacker in a Richmond Times-Dispatch newspaper interview said that the benefits of more bond purchases by the Fed "are likely to be negligible." Oct crude oil (CLV13 -0.65%) is down -0.66% and Oct gasoline (RBV13 -0.38%) is down -0.49%. Dec gold (GCZ13 -0.06%) is down -0.10%, and Sep copper (HGU13 -0.26%) is down -0.26%. Agricultural and livestock prices are mostly lower. The dollar index (DXY00 -0.20%) is down -0.20% at a 1-week low. EUR/USD (^EURUSD) is up +0.33% at a 2-month high and USD/JPY (^USDJPY) is down -0.29%. September T-note prices (ZNU13 +0.40%) are up +19 ticks on short-covering from the recent rout that sent Treasury yields to a 2-year high on Monday.
German July PPI unexpectedly fell -0.1% m/m, weaker than expectations of a +0.2% m/m increase as producer prices have now fallen in 5 of the last 6 months. On an annual basis July PPI rose +0.5% y/y, a smaller increase than expectations of +0.7% y/y.
Eurozone Jun construction output rose +0.7% m/m, up from a revised +0.5% in May that was originally reported as a -0.3% m/m decline. Year-over-year, Jun construction output fell -3.0% y/y, the eighteenth straight month that construction output has declined an on annual basis.
Japan July nationwide department store sales fell -2.5% y/y from a +7.2% increase in Jun, the first decline in a year.
The Japan Jun all-industry activity index fell -0.6% m/m, its first decline in 6 months, although a smaller decline than expectations of -0.7% m/m.
In the minutes of its Aug 6 policy meeting, the Reserve Bank of Australia (NYSE:RBA) said the direction of the currency will be important in setting policy and signaled that further interest-rate cuts remain a possibility. The minutes stated that "A rate cut remains possible should the business sentiment and the non-mining economy show no meaningful signs of picking up in the next few months, or if the Australian dollar unexpectedly rallies."
U.S. STOCK PREVIEW
There are no U.S. econonmic reports today. There are 7 of the S&P 500 companies that report earnings today: Home Depot (consensus $1.21), Best Buy (0.12), Medtronic (0.88), JC Penney (-1.07), TJX (0.63), Intuit (-0.01), Analog Devices (0.54). Equity conferences during the remainder of this week include CRM Evolution Conference & Exhibition 2013 on Tue-Wed, Morgan Stanley Semiconductor & Semi-Cap Equipment Corporate Access Day on Wed, Citi One on One Midstream/Infrastructure Conference on Wed, and Raymond James Bank Conference on Thu.
OVERNIGHT U.S. STOCK MOVERS
Dick's Sporting (DKS +1.20%) reported Q2 EPS of 71 cents, weaker than consensus of 74 cents.
JC Penney (JCP -1.34%) reported a Q2 EPS loss of -$2.16, a bigger loss than consensus of -$1.01.
Best Buy (BBY +1.19%) jumped 11% in pre-market trading after it reported Q2 EPS of 32 cents, well ahead of consensus of 12 cents.
Home Depot (HD -0.23%) reported Q2 EPS of $1.24, better than consensus of $1.21.
Robert Kopple reported a 19.99% stake in Cardero Resource (CDY +13.33%) .
Perfect World (PWRD +2.49%) reported Q2 adjusted EPS of 33 cents, better than consensus of 30 cents.
Aegean Marine (ANW +1.11%) reported Q2 adjusted EPS of 13 cents, below consensus of 17 cents.
Facebook (FB +1.97%) was initiated with a "Buy" at Janney Capital with a price target of $50.
Urban Outfitters (URBN +0.45%) rose nearly 7% in after-hours trading after it reported Q2 EPS of 51 cents, stronger than consensus of 48 cents.
Bob Evans (BOBE -0.36%) reported Q1 EPS ex-charges of 58 cents, better than consensus of 57 cents, and raised its quarterly dividend to 31 cents from 27.5 cents.
Sep E-mini S&Ps (ESU13 +0.18%) this morning are little changed, down -0.25 of a point (-0.02%). The S&P 500 index on Monday fluctuated on both sides of unchanged and closed lower as strength in technology stocks was offset by concern that the Fed may be closer to cutting stimulus. Technology stocks rallied after Piper Jaffray raised its rating on bellwether Intel to neutral from underweight. Another positive for stocks was carry-over support from a gain in Japanese stocks after Japan's July exports climbed +12.2% y/y, their fastest pace in 2-1/2 years. Closes: S&P 500 -0.59%, Dow Jones -0.47%, Nasdaq 100 -0.14%.
Sep 10-year T-notes (ZNU13 +0.40%) this morning are up +19 ticks. Sep 10-year T-note prices on Monday fell to a 6-week low and the 10-year T-note yield rose to a 2-year high of 2.89% on concern that Wednesday's FOMC minutes from the July 30-31 policy meeting will show Fed members favored a tapering of their bond buying. Another negative for T-note prices was carry-over bearishness from a slide in bund prices after the German bund 10-year yield rose to a 1-1/3 year high after the Bundesbank warned in its monthly report that the ECB could still raise interest rates if inflation pressures emerge. Closes: TYU3 -16.5, FVU3 -6.75.
The dollar index this morning is down -0.166 (-0.20%) at a 1-week low. EUR/USD (^EURUSD) is up +0.0044 (+0.33%) ata 2-month high and USD/JPY (^USDJPY) is down -0.28 (-0.29%). The dollar index on Monday closed little changed. EUR/USD received a boost after the Bundesbank warned in its monthly report that the ECB could still raise interest rates if inflation pressures emerge. Losses were limited in the dollar after the 10-year T-note yield rose to a 2-year high, which improves the dollar's interest rate differentials and may prompt increased foreign demand of dollar assets. Closes: Dollar index -0.031 (-0.04%), EUR/USD -0.0005 (-0.04%), USD/JPY +0.042 (+0.04%).
Oct WTI crude oil (CLV13 -0.65%) this morning is down -71 cents (-0.66%) and Oct gasoline (RBV13 -0.38%) is down -0.0139 (-0.49%). Oct crude oil and gasoline prices on Monday closed lower on concern the Fed will soon cut stimulus along with reduced threats of damage or loss of production at oil platforms and refineries in or near the Gulf of Mexico after the NWS said there was no tropical cyclone activity in the Atlantic basin. Losses remain limited on concern the ongoing civil unrest in Egypt may spread throughout the Middle East and lead to a disruption of the region's oil supplies. Closes: CLV3 -0.43 (-0.40%), RBV3 -0.0301 (-1.06%).
GLOBAL EVENT CALENDAR08/20/2013
|US||0830 ET||July Chicago Fed national activity index expected -0.10, Jun -0.13.|
|1630 ET||API weekly U.S. oil statistics.|
|JPN||0030 ET||Japan Jun all industry activity index expected -0.7%, May +1.1% m/m.|
|0130 ET||Japan July nationwide department store sales, Jun +7.2% y/y.|
|GER||0200 ET||German July PPI expected +0.2% m/m and +0.7% y/y, Jun unch m/m and +0.6% y/y.|
|EUR||0500 ET||Eurozone Jun construction output, May -0.3% m/m and -5.1% y/y.|
U.S. STOCK CALENDAR08/20/2013
|Company Name||Company Ticker||Time||Event Description||Period||Estimate|
|Home Depot Inc/The||HD US||6:00||Q2 2014 Earnings Release||Q2 2014||1.211|
|Best Buy Co Inc||BBY US||7:00||Q2 2014 Earnings Release||Q2 2014||0.12|
|Medtronic Inc||MDT US||7:15||Q1 2014 Earnings Release||Q1 2014||0.881|
|JC Penney Co Inc||JCP US||7:30||Q2 2014 Earnings Release||Q2 2014||-1.074|
|Best Buy Co Inc||BBY US||8:00||Q2 2014 Earnings Call||Q2 2014|
|Medtronic Inc||MDT US||8:00||Q1 2014 Earnings Call||Q1 2014|
|JC Penney Co Inc||JCP US||8:30||Q2 2014 Earnings Call||Q2 2014|
|Home Depot Inc/The||HD US||9:00||Q2 2014 Earnings Call||Q2 2014|
|TJX Cos Inc||TJX US||9:30||Q2 2014 Earnings Release||Q2 2014||0.632|
|TJX Cos Inc||TJX US||11:00||Q2 2014 Earnings Call||Q2 2014|
|Intuit Inc||INTU US||16:00||Q4 2013 Earnings Release||Q4 2013||-0.005|
|Intuit Inc||INTU US||16:30||Q4 2013 Earnings Call||Q4 2013|
|Analog Devices Inc||ADI US||17:00||Q3 2013 Earnings Call||Q3 2013|
|Analog Devices Inc||ADI US||Aft-mkt||Q3 2013 Earnings Release||Q3 2013||0.543|