Tuesday, August 26th, 2014
Everything you need to know about the markets in one free daily newsletter.E-mail: Submit
You will also receive a free subscription to the Barchart family of newsletters.
OVERNIGHT MARKETS AND NEWS
September E-mini S&Ps (ESU14 +0.15%) this morning are up +0.10% on the prospects for a strong U.S. Jul durable goods orders report later this morning, while European stocks are up +0.18% on optimism a resolution to the conflict in Ukraine can be found. Russia President Putin and Ukraine President Poroshenko are set to meet today in Minsk, Belarus, as tensions continue to flare in the region. Ukraine said that an armored column that included 10 tanks entered its country Monday from Russia under the guise of humanitarian aid into rebel-held Ukrainian territory. European government bond yields continue to fall to record lows amid speculation of additional ECB monetary easing. The yield on Italy's 10-year bond fell to 2.40% and the yield on Spain's 10-year bond fell to 2.18%, both at the lowest since Bloomberg started collecting the data in 1993. Asian stocks closed mixed as valuation concerns weighed on prices with Asian stock markets at their highest valuations this year: Japan -0.59%, Hong Kong -0.37%, China -0.80%, Taiwan +0.04%, Australia +0.05%, Singapore -0.22%, South Korea +0.26%, India +0.02%. China's Shanghai Stock Index fell to a 2-week low amid concern that 10 new initial public offerings this week may divert funds from existing equities. Commodity prices are mixed. Oct crude oil CLV14 +0.29%) is up +0.28%. Oct gasoline (RBV14 +0.15%) is up +0.15%. Dec gold (GCZ14 +0.69%) is up +0.74%. Sep copper (HGU14 -0.59%) is down -0.57%. Agriculture and livestock prices are mostly lower with Nov soybeans down -0.41% at a fresh contract low. The dollar index (DXY00 -0.02%) is down -0.07%. EUR/USD (^EURUSD) is up +0.05% as it rebounds from an 11-1/2 month low. USD/JPY (^USDJPY) is down -0.15%. Sep T-note prices (ZNU14 +0.10%) are up +6 ticks.
The Markit iTraxx Europe index of credit-default swaps on 125 investment-grade companies, which is cost of insuring against losses on European corporate debt, fell -2.5 bp to 57 bp, a 7-week low.
Japan Jul PPI services prices rose +3.7% y/y, unchanged from Jun and right on expectations and the fastest pace of increase in 24 years.
U.S. STOCK PREVIEW
Today's July durable goods orders report is expected to show a sharp gain of +8.0% for the headline figure but an increase of only +0.5% ex-transportation. Today's Aug Richmond Fed manufacturing index is expected to show a small -1 point decline to 6, giving back some of the +3 point increase to 7 seen in July. The market is expecting today's June FHFA index to be up +0.3% m/m and for the June Case-Shiller index to be unchanged from May. Today's Aug consumer confidence index from the Conference Board is expected to show a decline of -1.9 points to 89.0, reversing part of July's +4.5 point increase to 90.9. The Treasury today will sell $29 billion of 2-year T-notes, kicking off this week's sale of $106 billion of T-notes.
There are 6 of the Russell 1000 companis that reports earnings today: Tech Data (consensus $0.77), Golar LNG (-0.06), Best Buy (0.31), DSW (0.32), Analog Devices (0.63), Solera Holdings (0.80). Equity conferences this week include: ONS 2014 Conference on Mon-Thu, Latin Markets 3rd Annual Peru Capital Projects & Infrastructure Summit on Wed, Simmons European Energy Conference on Wed, Jefferies Semiconductors, Hardware & Communications Infrastructure Summit on Wed, and MIT Sloan Latin America-China Conference on Fri.
OVERNIGHT U.S. STOCK MOVERS
Best Buy (BBY +2.53%) reported Q2 EPS of 44 cents, well ahead of consensus of 31 cents.
Tech Data (TECD +0.67%) reported Q2 non-GAAP EPS of $1.12, much higher than consensus of 77 cents.
Salesforce.com (CRM -0.95%) files to sell 7.2 million shares of common stock for holders.
Sanderson Farms (SAFM +1.96%) reported Q3 EPS of $3.30, well below consensus of $3.82.
ArcelorMittal (MT +0.36%) was upgraded to 'Buy' from 'Sell' at UBS.
Comtech Telecommunications (CMTL +4.84%) rose 3% in after-hours trading after it confirmed that it is exploring strategic alternatives to enhance shareholder value, including a possible merger or sale of the company.
Castleton Commodities reported a 9.9% passive stake in Torchlight Energy Resources (TRCH -2.34%) .
D. E. Shaw & Co reported a 5.0% passive stake in Liberty Media (LMCA -0.37%) .
Owl Creek reported a 5.8% passive stake in Seventy Seven Energy (SSE +1.22%) .
OZ Management reported an 8.04% passive stake in Biglari (BH -0.58%) .
Amazon.com (AMZN +0.73%) announced that it reached an agreement to acquire Twitch Interactive for $970 million.
ModusLink Global Solutions reported a 9.9% stake in Medifast (MED -0.14%) .
Sep E-mini S&Ps (ESU14 +0.15%) this morning are up +2.00 points (+0.10%). The S&P 500 index and the Dow on Monday rallied to fresh all-time highs and closed higher: S&P 500 +0.48%, Dow Jones +0.44%, Nasdaq +0.36%. Bullish factors included (1) increased M&A activity after Roche Holding purchased InterMune for $8.3 billion and Burger King Worldwide said it was in talks to buy Tim Hortons, and (2) the +0.28 increase in the Jul Chicago Fed national activity index to a 4-month high 0.39, better than expectations of +0.08 to 0.20 Stocks fell back from their best levels after an unexpected -2.4% decline in Jul new home sales to a 4-month low of 412,000, weaker than expectations of a +5.8% increase to 430,000.
Sep 10-year T-notes (ZNU14 +0.10%) this morning are up +6 ticks. Sep 10-year T-note futures prices Monday settled little changed. T-note prices Monday were undercut by reduced safe-haven demand after the S&P 500 rallied to a new record high. Bullish factors included (1) the unexpected decline in U.S. Jul new home sales, and (2) carry-over support from a rally in German bunds after the yield on the 10-year German bund fell to a record low of 0.925%. Closes: TYU4 +2.0, FVU4 -1.50.
The dollar index (DXY00 -0.02%) this morning is down -0.059 (-0.07%). EUR/USD (^EURUSD) is up +0.0007 (+0.05%) and USD/JPY (^USDJPY) is down -0.16 (-0.15%). The dollar index on Monday posted an 11-1/2 month high and closed higher. EUR/USD tumbled to an 11-1/2 month low after the German Aug IFO business confidence fell more than expected to a 13-month low. USD/JPY rallied to a 7-month high and closed higher as the yen tumbled to a 7-month low against the dollar when BOJ Governor Kuroda said at the Fed's symposium in Jackson Hole, Wyoming that BOJ monetary policy was "having its intended effect" and that global central banks must fight deflation by any and all means. Closes: Dollar index +0.213 (+0.26%), EUR/USD -0.00497 (-0.38%), USD/JPY +0.145 (+0.14%).
Oct WTI crude oil (CLV14 +0.29%) this morning is up +26 cents (+0.28%) and Oct gasoline (RBV14 +0.15%) is up +0.0038 (+0.15%). Oct crude and gasoline prices on Monday settled mixed: CLV4 -0.30 (-0.32%), RBV4 +0.0065 (+0.25%). Crude prices fell on bearish factors that included (1) the rally in the dollar index to an 11-1/2 month high, and (2) expectations that Wednesday's weekly EIA inventory data will show crude supplies at Cushing, Oklahoma, delivery point of WTI futures, increased for a fourth week. Gasoline prices rose on increased optimism in the U.S. economic outlook after the S&P 500 posted a new record high.
GLOBAL EVENT CALENDAR08/26/2014
|US||0830 ET||Jul durable goods orders expected +8.0% and +0.5% ex-transportation, Jun +1.7% and +1.9% ex transportation. July capital goods orders non-defense ex-aircraft expected +0.2%, June +3.3%.|
|0900 ET||Jun FHFA house price index expected +0.3% m/m, May +0.4% m/m. Q2 house price index, Q1 +1.30% q/q.|
|0900 ET||Jun S&P/CaseShiller composite-20 home price index expected unch m/m and +8.3% y/y, May -0.31% m/m and +9.34% y/y. Q2 S&P/CaseShiller home price index, Q1 +10.35% y/y.|
|1000 ET||Aug consumer confidence (Conference Board) expected -1.9 to 89.0, Jul +4.5 to 90.9.|
|1000 ET||Aug Richmond Fed manufacturing index expected -1 to 6, Jul +3 to 7.|
|1300 ET||Treasury auctions $29 billion 2-year T-notes.|
U.S. STOCK CALENDAR08/26/2014
|Company Name||Ticker||Time||Event Description||Period||Estimate|
|Tech Data Corp||TECD US||Bef-mkt||Q2 2015 Earnings Release||Q2 2015||0.774|
|Golar LNG Ltd||GLNG US||Bef-mkt||Q2 2014 Earnings Release||Q2 2014||-0.063|
|Best Buy Co Inc||BBY US||7:00||Q2 2015 Earnings Release||Q2 2015||0.31|
|DSW Inc||DSW US||7:00||Q2 2015 Earnings Release||Q2 2015||0.315|
|Best Buy Co Inc||BBY US||8:00||Q2 2015 Earnings Call||Q2 2015|
|DSW Inc||DSW US||8:30||Q2 2015 Earnings Call||Q2 2015|
|Tech Data Corp||TECD US||9:00||Q2 2015 Earnings Call||Q2 2015|
|Golar LNG Ltd||GLNG US||10:30||Q2 2014 Earnings Call||Q2 2014|
|Analog Devices Inc||ADI US||17:00||Q3 2014 Earnings Call||Q3 2014|
|Solera Holdings Inc||SLH US||17:00||Q4 2014 Earnings Call||Q4 2014|
|Analog Devices Inc||ADI US||Aft-mkt||Q3 2014 Earnings Release||Q3 2014||0.627|
|Solera Holdings Inc||SLH US||Aft-mkt||Q4 2014 Earnings Release||Q4 2014||0.802|
|Equifax Inc||EFX US||Investor Meeting - London||Y 2014|