Thursday, July 18th, 2013
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OVERNIGHT MARKETS AND NEWS
September E-mini S&Ps (ESU13 +0.12%) this morning are up +0.09% and European stocks are up +0.11%. Asian stocks closed mixed: Japan +1.32%, Hong Kong -0.12%, China -1.64%, Taiwan -0.78%, Australia +0.24%, Singapore +0.31%, South Korea -0.78%, India +0.90%. European and U.S. stocks rose on better-than-expected Q2 stock earnings results along with optimism the Fed will maintain stimulus, while Chinese stocks fell after the IMF said "downside risks" to China's economic growth are increasing and China Jun new home prices rose, which dimmed the prospects for its government to ease property curbs. Commodity prices are mixed. Aug crude oil (CLQ13 -0.11%) is down -0.24%. Aug gasoline (RBQ13 -0.65%) is down -0.51%, Aug gold (GCQ13 +0.23%) is up +0.22%, and Sep copper (HGU13 -0.22%) is down -0.14%. Agricultural and livestock prices are mixed. The dollar index (DXY00 +0.11%) is up +0.11%. EUR/USD (^EURUSD) is down -0.18% and USD/JPY (^USDJPY) is up +0.53%. September T-note prices (ZNU13 +0.12%) are up +6.5 ticks.
UK Jun retail sales ex auto fuel rose +0.2% m/m, right on expectations, while sales jumped +2.1% y/y, better than expectations of +1.6% y/y. Jun retail sales with auto fuel rose +0.2% m/m, slightly weaker than expectations of +0.3% m/m, and rose +2.2% y/y, better than expectations of +1.7% y/y.
The Eurozone May current account shrank to an unadjusted surplus of 9.5 billion euros from an unadjusted 16.6 billion euros surplus in April.
Spain sold 3.06 billion euros of government debt at auction, more than its maximum target of 3 billion euros.
Greece's Parliament approved austerity measures needed to release funds for the country's next installment of bailout loans. 153 Greek lawmakers voted for and 140 voted against the measures which put thousands of state workers on notice for possible dismissal. Passage of the austerity measures were needed for Eurozone officials and the IMF to sign off on the next disbursements from a 240 billion euro bailout.
Japan Jun nationwide department store sales climbed +7.2% y/y, their best pace of growth in 1-1/4 years.
China June new home prices rose in 69 of 70 cities the government tracked y/y.
U.S. STOCK PREVIEW
Fed Chairman Ben Bernanke today will deliver his second day of semi-annual monetary policy testimony, this time to the Senate Banking Committee. Today's weekly initial unemployment claims report is expected to show a -15,000 decline to 345,000, reversing nearly all of last week's jump of +16,000 to 360,000. Meanwhile, continuing claims are expected to show a decline of -18,000 to 2.959 million, reversing most of last week's +24,000 increase to 2.977 million. Today's July Philadelphia Fed manufacturing index is expected to show a -4.5 point decline to 8.0, giving back some ground after the +17.7 point surge to 12.5 seen in June. The Treasury today will sell $13 billion in 10-year TIPS. There are 32 of the S&P 500 companies that report earnings today with notable reports including BlackRock (consensus $3.81), UnitedHealth Group (1.25), Johnson Controls (0.75), Baxter (1.13), Morgan Stanley (0.43), Verizon (0.72), Capital One (1.73), AMD (-0.12), Google (10.80), and Microsoft (4.24). There are no equity conferences this week.
OVERNIGHT U.S. STOCK MOVERS
Fith Third Bancorp (FITB +0.69%) reported Q2 EPS of 66 cents, better than consensus of 42 cents.
BlackRock (BLK +1.47%) reported Q2 EPS of $4.15, much better than consensus of $3.81.
UnitedHealth Group (UNH -1.02%) reported Q2 EPS of $1.40, well ahead of consensus of $1.25.
Philip Morris International (PM -0.27%) reported Q2 EPS of $1.30, weaker than consensus of $1.41.
Crown Holdings (CCK +0.50%) reported Q2 EPS ex-items of 96 cents, better than consensus of 93 cents.
Noble Corp. (NE +1.16%) reported Q2 EPS ex-charges of 63 cents, better than consensus of 57 cents.
Carl Icahn reported a 15.54% stake in Navistar (NAV +4.44%) .
Xilinx (XLNX +0.58%) reported Q1 EPS of 56 cents, higher than consensus of 47 cents.
Universal Forest (UFPI -0.23%) reported Q2 EPS of 79 cents, better than consensus of 67 cents.
eBay (EBAY +1.00%) fell 6% in after-hours trading after it reported Q2 EPS of 63 cents, weaker than consensus of 64 cents, and lowered guidance on fiscal 2013 EPS to $2.70-$2.75, weaker than consensus of $2.75.
IBM (IBM +0.36%) climbed nearly 4% in after-hours trading after it reported Q2 EPS of $3.91, higher than consensus of $3.77, and boosted its fiscal 2013 EPS view to 'at least' $16.90, higher than a previous estimate of $16.70.
American Express (AXP -1.88%) reported Q2 EPS of $1.27, better than consensus of $1.22.
SanDisk (SNDK -0.10%) climbed over 6% in after-hours trading after it reported Q2 EPS of $1.21, well ahead of consensus of 93 cents and said it sees fiscal 2013 revenue of $5.75 billion-$6.05 billion, higher than consensus of $5.82 billion.
Plexus (PLXS -0.39%) rose 5% in after-hours trading after it reported Q3 EPS of 68 cents, better than consensus of 58 cents.
Covanta (CVA -0.64%) reported Q2 adjusted EPS of 10 cents, stronger than consensus of 6 cents.
Intel (INTC -0.41%) fell over 3% in pre-market trading after it reported Q2 EPS of 39 cents, weaker than consensus of 40 cents and said it sees fiscal 2013 revenue approximately flat year-over-year, weaker than consensus of $53.51 billion.
MARKET COMMENTS
Sep E-mini S&Ps (ESU13 +0.12%) this morning are up +1.50 points (+0.09%). The U.S. stock market on Wednesday closed higher. Bullish factors included (1) strength in financial stocks after Bank of America and Bank of New York Mellon both reported better-than-expected earnings results, and (2) comments from Fed Chairman Bernanke that suggest the Fed is in no hurry to cut stimulus. A bearish factor for stocks was the U.S. Jun housing starts that unexpectedly fell -9.9% to a 10-month low of 836,000, weaker than expectations of a +5.0% increase to 960,000. Closes: S&P 500 +0.28%, Dow Jones +0.12%, Nasdaq 100 +0.25%.
Sep 10-year T-notes (ZNU13 +0.12%) this morning are up +6.5 ticks. Sep 10-year T-note prices on Wednesday climbed to a 3-1/2 week high and closed higher after Fed Chairman Bernanke said that accommodative monetary policy "could be maintained for longer" if inflation remained too low or the outlook for employment became less favorable. Another bullish factor for T-notes was the unexpected declines in Jun housing starts and building permits: TYU3 +13.50, FVU3 +8.50.
The dollar index (DXY00 +0.11%) this morning is up +0.094 (+0.11%). EUR/USD (^EURUSD) is down -0.0024 (-0.18%). USD/JPY (^USDJPY) is up +0.53 (+0.53%). The dollar index on Wednesday rebounded from a 3-week low and closed higher after comments from Fed Chairman Bernanke weren't as dovish as the market expected when he said he expected the economy to pick up later this year. Dollar gains were limited after U.S. Jun housing starts unexpectedly fell to their lowest level in 10-months. Closes: Dollar index +0.210 (+0.25%), EUR/USD -0.00368(-0.28%), USD/JPY +0.486 (+0.49%).
Aug WTI crude oil (CLQ13 -0.11%) this morning is down -26 cents (-0.24%) and Aug gasoline (RBQ13 -0.65%) is down -0.0160 (-0.51%). Crude oil and gasoline prices on Wednesday closed mixed. Bullish factors included (1) the -6.9 million bbl plunge in weekly EIA crude inventories to a 6-month low of 367 million bbl, more than expectations of a-2.0 million bbl draw, and (2) comments from Fed Chairman Bernanke that suggest the Fed is in no hurry to cut stimulus. Bearish factors included (1) the stronger dollar, (2) the unexpected +3.055 million bbl increase in weekly EIA gasoline inventories when expectations were for a -1.5 million bbl draw, (3) slack gasoline consumption after U.S, gasoline consumption fell-570,000 barrels a day, 0r -6.1% to 8.73 million barrels a day for the week ended July 12, the biggest weekly decline in 7-1/2 years, (4) the +3.870 million bbl jump in weekly EIA distillate inventories to a 5-month high of 127.68 million bbl, more than expectations of +1.5 million bbl. and (5) the +1.2% increase in weekly U.S. crude production for the week ended July 12 to 7.490 million barrels per day, the highest in 22-1/2 years. Closes: CLQ3 +0.48 (+0.45%), RBQ3 -0.0242 (-0.77%).
GLOBAL EVENT CALENDAR07/18/2013
| US | 0830 ET | Weekly initial unemployment claims expected -15,000 to 345,000, previous +16,000 to 360,000. Weekly continuing claims expected-18,000 to 2.959 million, previous +24,000 to 2.977 million. |
| 0830 ET | USDA weekly Export Sales. | |
| 1000 ET | Fed Chairman Ben Bernanke delivers his semi-annual monetary policy report to the Senate Banking Committee. | |
| 1000 ET | Jul Philadelphia Fed manufacturing index expected -4.5 to 8.0, Jun +17.7 to 12.5. | |
| 1000 ET | Jun leading indicators expected +0.3%, May +0.1%. | |
| 1100 ET | Treasury announces amounts of 2-year T-notes (previous $35 billion), 5-year T-notes (previous $35 billion) and 7-year T-notes (previous $29 billion) to be auctioned Jul 23-25. | |
| 1300 ET | Treasury auctions $13 billion 10-year TIPS. | |
| JPN`0130 ET | Japan Jun nationwide department store sales, May +2.6% y/y. | |
| EUR | 0400 ET | Eurozone May current account, Apr +15.3 billion euros (nsa). |
| UK | 0430 ET | UK Jun retail sales ex auto fuel expected +0.2% m/m and +1.6% y/y, May +2.1% m/m and +2.1% y/y. Jun retail sales with auto fuel expected +0.3% m/m and +1.7% y/y, May +2.1% m/m and +1.9% y/y. |
U.S. STOCK CALENDAR07/18/2013
| Company Name | Symbol | Time | Event Description | Period | EPS Est (US$) |
|---|---|---|---|---|---|
| Nucor Corp | NUE US | Bef-mkt | Q2 2013 Earnings Release | Q2 2013 | 0.3 |
| PPG Industries Inc | PPG US | Bef-mkt | Q2 2013 Earnings Release | Q2 2013 | 2.345 |
| Huntington Bancshares Inc/OH | HBAN US | Bef-mkt | Q2 2013 Earnings Release | Q2 2013 | 0.161 |
| Safeway Inc | SWY US | Bef-mkt | Q2 2013 Earnings Release | Q2 2013 | 0.505 |
| BlackRock Inc | BLK US | Bef-mkt | Q2 2013 Earnings Release | Q2 2013 | 3.812 |
| Sherwin-Williams Co/The | SHW US | Bef-mkt | Q2 2013 Earnings Release | Q2 2013 | 2.572 |
| Snap-on Inc | SNA US | Bef-mkt | Q2 2013 Earnings Release | Q2 2013 | 1.456 |
| BB&T Corp | BBT US | Bef-mkt | Q2 2013 Earnings Release | Q2 2013 | 0.738 |
| Quest Diagnostics Inc | DGX US | Bef-mkt | Q2 2013 Earnings Release | Q2 2013 | 1.091 |
| AutoNation Inc | AN US | Bef-mkt | Q2 2013 Earnings Release | Q2 2013 | 0.728 |
| UnitedHealth Group Inc | UNH US | Bef-mkt | Q2 2013 Earnings Release | Q2 2013 | 1.25 |
| Genuine Parts Co | GPC US | Bef-mkt | Q2 2013 Earnings Release | Q2 2013 | 1.211 |
| KeyCorp | KEY US | Bef-mkt | Q2 2013 Earnings Release | Q2 2013 | 0.198 |
| Johnson Controls Inc | JCI US | Bef-mkt | Q3 2013 Earnings Release | Q3 2013 | 0.748 |
| Danaher Corp | DHR US | 6:00 | Q2 2013 Earnings Release | Q2 2013 | 0.865 |
| Fifth Third Bancorp | FITB US | 6:30 | Q2 2013 Earnings Release | Q2 2013 | 0.421 |
| Omnicom Group Inc | OMC US | 7:00 | Q2 2013 Earnings Release | Q2 2013 | 1.084 |
| Baxter International Inc | BAX US | 7:00 | Q2 2013 Earnings Release | Q2 2013 | 1.131 |
| Philip Morris International Inc | PM US | 7:00 | Q2 2013 Earnings Release | Q2 2013 | 1.406 |
| Dover Corp | DOV US | 7:00 | Q2 2013 Earnings Release | Q2 2013 | 1.286 |
| Morgan Stanley | MS US | 7:15 | Q2 2013 Earnings Release | Q2 2013 | 0.432 |
| Verizon Communications Inc | VZ US | 7:30 | Q2 2013 Earnings Release | Q2 2013 | 0.724 |
| BB&T Corp | BBT US | 8:00 | Q2 2013 Earnings Call | Q2 2013 | |
| Danaher Corp | DHR US | 8:00 | Q2 2013 Earnings Call | Q2 2013 | |
| Union Pacific Corp | UNP US | 8:00 | Q2 2013 Earnings Release | Q2 2013 | 2.354 |
| Amphenol Corp | APH US | 8:00 | Q2 2013 Earnings Release | Q2 2013 | 0.939 |
| SLM Corp | SLM US | 8:00 | Q2 2013 Earnings Call | Q2 2013 | |
| Omnicom Group Inc | OMC US | 8:30 | Q2 2013 Earnings Call | Q2 2013 | |
| Baxter International Inc | BAX US | 8:30 | Q2 2013 Earnings Call | Q2 2013 | |
| Verizon Communications Inc | VZ US | 8:30 | Q2 2013 Earnings Call | Q2 2013 | |
| Quest Diagnostics Inc | DGX US | 8:30 | Q2 2013 Earnings Call | Q2 2013 | |
| Union Pacific Corp | UNP US | 8:45 | Q2 2013 Earnings Call | Q2 2013 | |
| UnitedHealth Group Inc | UNH US | 8:45 | Q2 2013 Earnings Call | Q2 2013 | |
| Philip Morris International Inc | PM US | 9:00 | Q2 2013 Earnings Call | Q2 2013 | |
| BlackRock Inc | BLK US | 9:00 | Q2 2013 Earnings Call | Q2 2013 | |
| Noble Corp | NE US | 9:00 | Q2 2013 Earnings Call | Q2 2013 | |
| KeyCorp | KEY US | 9:00 | Q2 2013 Earnings Call | Q2 2013 | |
| Fifth Third Bancorp | FITB US | 9:00 | Q2 2013 Earnings Call | Q2 2013 | |
| Dell Inc | DELL US | 9:15 | Special Meeting - M&A Vote | ||
| Morgan Stanley | MS US | 10:00 | Q2 2013 Earnings Call | Q2 2013 | |
| Huntington Bancshares Inc/OH | HBAN US | 10:00 | Q2 2013 Earnings Call | Q2 2013 | |
| Snap-on Inc | SNA US | 10:00 | Q2 2013 Earnings Call | Q2 2013 | |
| Dover Corp | DOV US | 10:00 | Q2 2013 Earnings Call | Q2 2013 | |
| Google Inc | GOOG US | Aft-mkt | Q2 2013 Earnings Release | Q2 2013 | 10.796 |
| Intuitive Surgical Inc | ISRG US | Aft-mkt | Q2 2013 Earnings Release | Q2 2013 | 4.241 |
| Microsoft Corp | MSFT US | Aft-mkt | Q4 2013 Earnings Release | Q4 2013 | 0.747 |
| Dell Inc | DELL US | Extraordinary Shareholder Meeting |