Wednesday, May 13th, 2015View Older Reports
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OVERNIGHT MARKETS AND NEWS
June E-mini S&Ps (ESM15 +0.25%) this morning are up +0.27% and European stocks are up +0.85% after global bond markets rallied and after Eurozone Q1 GDP expanded as expected. The British pound fell back from a 4-3/4 month high against the dollar after the BOE cut its 2015 UK GDP forecast and after BOE Governor Carney signaled the BOE may keep interest rates at record lows for longer than expected. Asian stocks closed mixed: Japan +0.71%, Hong Kong -0.58%, China -0.58%, Taiwan +0.45%, Australia +0.71%, Singapore +0.31%, South Korea +0.70%, India +1.39%. China's Shanghai Composite Index closed lower after China Apr fixed-asset investment growth grew at the slowest pace in over 14 years and after China Apr industrial production rose less than expected.
Commodity prices are mostly higher. Jun crude oil (CLM15 +0.91%) is up +0.67% and Jun gasoline (RBM15 +0.33%) is up +0.17% ahead of today's EIA data where crude inventories are expected to fall -250,000 bbl. Metals prices are mixed. Jun gold (GCM15 +0.39%) is up +0.07%. Jul copper (HGN15 -0.12%) is down -0.12%. Agriculture prices are mixed.
The dollar index (DXY00 -0.11%) is down -0.04%. EUR/USD (^EURUSD) is up +0.08%. USD/JPY (^USDJPY) is down -0.12%.
Jun T-note prices (ZNM15 +0.20%) are up +8.5 ticks on a rebound in global government bond markets.
The BOE cut its 2015 UK GDP forecast to 2.5% from a 2.9% forecast in Feb and raised its 2015 inflation forecast to +0.6% from a Feb estimate of +0.5%. BOE Governor Carney said that "persistent headwinds continue to weigh on the U.K. economy" and that this may require "not only a more gradual rate of increase in bank rates than in previous cycles, but also require the level of bank rates to remain below average historical levels for some time to come."
Eurozone Q1 GDP rose +0.4% q/q and +1.0% y/y, right on expectations.
China Apr fixed asset investment (excluding rural households) rose +12.0% y/y, weaker than expectations of +13.5% y/y and the slowest pace of investment growth since Dec 2000.
China Apr industrial production rose +5.9% y/y, less than expectations of +6.0% y/y.
U.S. STOCK PREVIEW
Key U.S. reports today include: (1) weekly MBA mortgage applications (last week -4.6% with purchase sub-index +0.8% and refi sub-index -8.3%), (2) Apr retail sales (expected +0.2%, +0.5% ex autos, +0.6% ex-autos and gas after Mar's +0.9%, +0.4%, and +0.5%, respectively), (3) Apr import price index (expected +0.3% m/m and -9.7% y/y after March's -0.3% m/m and -10.5% y/y), (4) March business inventories (expected +0.2% after Feb's +0.3%), and (5) the Treasury's auction of $24 billion of 10-year T-notes.
There are 10 of the Russell 100 companies that report earnings today with notable reports including: Macy's (consensus $0.62), Cisco Systems (0.53), Ralph Lauren (1.32), JC Penney (-0.76).
U.S. IPO's scheduled to price today include: Fortress Transportation (FTAI), Galapagos ((GLPYY), Fenix Parts (FENX).
Equity conferences during the remainder of this week include: Citi Global Energy and Utilities Conference on Tue-Wed, Jefferies Global Technology, Media and Telecom Conference on Tue-Wed, Oppenheimer Industrials Conference on Tue-Wed, Bank of America Merrill Lynch Health Care Conference on Tue-Thu, Jefferies Global Technology, Media and Telecom Conference on Tue-Thu, Morgan Stanley E&P and Oil Services Conference on Tue-Thu, Bank of America Merrill Lynch Small-Mid Cap Conference on Wed, UBS Financial Services Conference on Wed, Credit Suisse Disruptive Technology Conference on Wed, JP Morgan Business Services Conference on Wed, Janney Montgomery Scott - Company Marketing : Biotechnology - Southeast on Wed, MoffettNathanson Media & Communications Summit on Wed-Thu, Bank of America Merrill Lynch Transportation Conference on Thu, Barclays Biotech CEO/CFO Conference on Thu, Royal Bank of Canada Aerospace & Defense Investor Day on Thu.
OVERNIGHT U.S. STOCK MOVERS
Microsoft (MSFT -0.04%) was upgraded to 'Buy' from 'Hold' at Deutsche Bank.
Danaher (DHR +2.92%) said it will separate into two independent, publicly traded companies.
Precision Castparts (PCP -0.62%) reported Q4 EPS of $2.94, below consensus of $2.95, and then lowered guidance on fiscal 2016 EPS to $12.50-$13.40, below consensus of $13.39.
Piper Jaffray kept its 'Overweight' rating on Acuity Brands (AYI +1.11%) and raised its price target on the stock to $207 from $194.
Vale (VALE -3.79%) was downgraded to 'Neutral' from 'Outperform' at Macquarie.
Humana (HUM +4.06%) was downgraded to 'Underperform' from 'Neutral' at Sterne Agee CRT.
American Eagle (AEO -1.40%) was upgraded to 'Outperform' from 'Market Perform' at Cowen.
Jefferies upgraded Magellan Health (MGLN +0.15%) to 'Buy' from 'Hold' with a $78 price target.
Kimberly-Clark (KMB -0.15%) was upgraded to 'Overweight' from 'Equal Weight' at Barclays.
AOL (AOL +18.62%) was upgraded to 'Neutral' from 'Sell' at Goldman Sachs.
Vertex (VRTX -2.61%) jumped over 7% in after-hours trading when it confirmed that an FDA panel voted 12-to-1 to recommend approval of its drug Orkambi for use in people with cystic fibrosis.
American Express (AXP -0.78%) rose nearly 2% in after-hours trading after it authorized a 150 million share repurchase and raised its dividend.
McKesson (MCK +0.44%) reported Q4 adjusted adjusted EPS of $2.94, higher than consensus of $2.75, although Q4 revenue of $44.93 billion was below consensus of $45.04 billion.
MARKET COMMENTS
June E-mini S&Ps (ESM15 +0.25%) this morning are up +5.75 points (+0.27%). Tuesday's closes: S&P 500 -0.29%, Dow Jones -0.20%, Nasdaq -0.41%. The S&P 500 on Tuesday closed lower on the sharp -150,000 drop in March JOLTS job openings and on New York Fed President Dudley's comment that the Fed's first rate increase since 2006 will usher in a "regime shift" that will stir financial markets when it occurs. Supportive factors included M&A activity after Verizon said it would buy AOL for $4.4 billion, and strength in energy producers after crude oil rallied.
Jun 10-year T-notes (ZNM15 +0.20%) this morning are up +8.5 ticks. Tuesday's closes: TYM5 +5.00, FVM5 +4.00. June T-notes on Tuesday recovered from a 4-1/4 month low and closed higher on the sharp -150,000 drop in March JOLTS job openings and on strong foreign demand for the Treasury's $24 billion auction of 3-year T-notes after indirect bidders, a proxy for foreign buyers, bought 52.7% of the auction, well above the 12-auction average of 39.3% and the most in 5 years. T-notes posted a 4-1/4 month low early on bearish carry-over from a surge in European and Japanese government bond yields.
The dollar index (DXY00 -0.11%) this morning is down -0.042 (-0.04%). EUR/USD (^EURUSD) is up +0.0009 (+0.08%). USD/JPY (^USDJPY) is down -0.14 (-0.12%). Tuesday's closes: Dollar Index -0.477 (-0.50%), EUR/USD +0.00584 (+0.52%), USD/JPY -0.215 (-0.18%). The dollar index on Tuesday closed lower on EUR strength as the rise in European government bond yields boosted the euro's interest rate differentials. EUR also saw some strength after Greece made its 750 million euro payment due Tuesday to the IMF and after Dutch Finance Minister Dijsselbloem, leader of the Eurozone finance ministers, said "we are making faster progress" in Greece's debt negotiations.
Jun WTI crude oil (CLM15 +0.91%) this morning is up +41 cents (+0.67%) and Jun gasoline (RBM15 +0.33%) is up +0.0035 (+0.17%). Tuesday's closes: CLM5 +1.50 (+2.53%), RBM5 +0.0561 (+2.82%). Jun crude oil and gasoline on Tuesday settled higher on a weaker dollar and expectations that Wednesday's EIA report will show that crude inventories fell -500,000 bbl. Oil prices also received a boost after the EIA's monthly drilling report said that U.S. oil production from shale production is set to decline in June to a 5-month low of 5.56 million bpd.
GLOBAL EVENT CALENDAR05/13/2015
| US | 0700 ET | Weekly MBA mortgage applications, previous -4.6% with purchase sub-index +0.8% and refi sub-index -8.3%. |
| 0830 ET | Apr retail sales expected +0.2%, +0.5% ex autos, +0.6% ex-autos and gas; Mar +0.9%, +0.4% ex autos, +0.5% ex-autos and gas. | |
| 0830 ET | Apr import price index expected +0.3% m/m and -9.7% y/y, Mar -0.3% m/m and -10.5% y/y. | |
| 1000 ET | Mar business inventories expected +0.2%, Feb +0.3%. | |
| 1030 ET | EIA Weekly Petroleum Status Report. | |
| 1300 ET | Treasury auctions $24 billion 10-year T-notes. | |
| JPN | 0030 ET | Japan Apr bankruptcies, Mar +5.52% y/y. |
| 0100 ET | Japan Apr eco-watchers survey current expected +0.1 to 52.3, Mar 52.2. Apr eco-watchers survey outlook expected -0.1 49 53.3, Mar 53.4. | |
| CHI | 0130 ET | China Apr industrial production expected +6.0% y/y, Mar +5.6% y/y. |
| 0130 ET | China Apr retail sales expected +10.4% y/y, Mar +10.2% y/y. | |
| GER | 0200 ET | German Q1 GDP expected +0.5% q/q and +1.3% y/y (NSA), Q4 +0.7% q/q and +1.6% y/y . |
| 0200 ET | Revised German Apr CPI (EU harmonized), previous -0.1% m/m and +0.3% y/y. | |
| UK | 0430 ET | UK Apr jobless claims change expected -20,000, Mar -20.700. Apr claimant count rate expected -0.1 to 2.2%, Mar 2.3%. |
| 0430 ET | UK Mar avg weekly earnings expected +1.7% 3-mo avg y/y, Feb +1.7% 3-mo avg y/y. Mar weekly earnings ex-bonus expected +2.1% 3-mo avg y/y, Feb +1.8% 3-mo avg y/y. | |
| 0430 ET | UK Mar ILO unemployment rate expected -0.1 to 5.5% 3-months through Mar, previous 5.6% 3-month through Feb. | |
| 0530 ET | BOE Quarterly Inflation Report. | |
| 1901 ET | UK Apr RICS house price balance expected 22%, Mar 21%. | |
| EUR | 0500 ET | Eurozone Mar industrial production expected unch m/m and +1.9% y/y, Feb +1.1% m/m and +1.6% y/y. |
| 0500 ET | Eurozone Q1 GDP expected +0.4% q/q and +1.0% y/y, Q4 +0.3% q/q and +0.9% y/y. |
U.S. STOCK CALENDAR05/13/2015
| Company | Ticker | Time | Event Description | Period | Estimate |
|---|---|---|---|---|---|
| Macy's Inc | M US | Bef-mkt | Q1 2016 Earnings Release | Q1 2016 | 0.623 |
| Precision Castparts Corp | PCP US | Bef-mkt | Q4 2015 Earnings Release | Q4 2015 | 2.947 |
| Delta Air Lines Inc | DAL US | 7:00 | Delta Air Lines Releases Shareholder Returns Plan | ||
| WW Grainger Inc | GWW US | 8:00 | April 2015 Sales and Revenue Call | 2015 | |
| WW Grainger Inc | GWW US | 8:00 | April 2015 Sales and Revenue Release | 2015 | |
| Ingersoll-Rand PLC | IR US | 8:00 | Analyst and Investor Conference | Y 2015 | |
| Ralph Lauren Corp | RL US | 8:00 | Q4 2015 Earnings Release | Q4 2015 | 1.317 |
| Anthem Inc | ANTM US | 8:00 | Annual General Meeting | Y 2015 | |
| EI du Pont de Nemours & Co | DD US | 8:30 | Annual General Meeting - Proxy Fight for Board Representation | Y 2015 | |
| Williams Cos Inc/The | WMB US | 8:45 | Analyst Day | Y 2015 | |
| Macy's Inc | M US | 9:00 | Q1 2016 Earnings Call | Q1 2016 | |
| Ralph Lauren Corp | RL US | 9:00 | Q4 2015 Earnings Call | Q4 2015 | |
| Akamai Technologies Inc | AKAM US | 9:30 | Annual General Meeting | ||
| Frontier Communications Corp | FTR US | 10:00 | Annual General Meeting | ||
| Precision Castparts Corp | PCP US | 10:00 | Q4 2015 Earnings Call | Q4 2015 | |
| American International Group Inc | AIG US | 11:00 | Annual General Meeting | Y 2015 | |
| Southwest Airlines Co | LUV US | 11:00 | Annual General Meeting | Y 2015 | |
| Hospira Inc | HSP US | 11:00 | Extraordinary Shareholders Meeting - M&A Vote | Y 2015 | |
| Cisco Systems Inc | CSCO US | 16:05 | Q3 2015 Earnings Release | Q3 2015 | 0.527 |
| Cisco Systems Inc | CSCO US | 16:30 | Q3 2015 Earnings Call | Q3 2015 | |
| Charles Schwab Corp/The | SCHW US | 17:00 | Annual General Meeting | ||
| Murphy Oil Corp | MUR US | Annual General Meeting | |||
| Laboratory Corp of America Holdings | LH US | Annual General Meeting | |||
| National Oilwell Varco Inc | NOV US | Annual General Meeting | |||
| Yum! Brands Inc | YUM US | Investor Conference-China-Day 1 | Y 2015 | ||
| Sempra Energy | SRE US | Annual General Meeting | |||
| Chipotle Mexican Grill Inc | CMG US | Annual General Meeting |