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Thursday, July 2nd, 2015

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September E-mini S&Ps (ESU15 +0.14%) are up +0.18% and European stocks are unchanged before the release of U.S. Jun payroll data. Greek Finance Minister Varoufakis said he would resign if his country votes in a referendum on Jul 5 to accept European Union bailout proposals. This signals that if Greece votes in favor of the referendum, it could lead to the collapse of the current Tsipras government and the possibility of new elections. Recent polls suggest the vote is too close to call. Asian stocks closed mixed: Japan +0.95%, Hong Kong +0.12%, China -3.48%, Taiwan +0.04%, Australia +1.53%, Singapore -0.10%, South Korea +0.17%, India -0.27%. Chinese stocks remain weak after the Shanghai Composite tumbled to a 3-month low as margin traders continue to liquidate losing stock positions. The Shanghai Composite has now fallen 24% from its 7-1/3 year high on June 12.

Commodity prices are mixed. Aug crude oil (CLQ15 +0.39%) is up +0.46%, Aug gasoline (RBQ15 +1.74%) is up +1.44%. Metals prices are mixed. Aug gold (GCQ15 -0.83%) is down -0.66% at a 3-month low on speculation today's U.S. Jun non-farm payroll data will support the prospects for a Fed interest rate increase. Sep copper (HGU15 -0.06%) is up +0.11%. Agricultural prices are mostly lower.

The dollar index (DXY00 -0.05%) is down -0.04%. EUR/USD (^EURUSD) is up +0.21%. USD/JPY (^USDJPY) is up +0.28%.

Sep T-note prices (ZNU15 -0.16%) are down -4 ticks.

The ECB on Wednesday left the Emergency Liquidity Assistance that it grants to Greek banks unchanged at 88.6 billion euros, where it has remained since it was last increased on Jun 23. This signals the ECB will wait until the outcome of the Jul 5 referendum in Greece before it decides whether to increase funding to Greek banks or raise of lower the discounts imposed on collateral the Greek banks must use to obtain funds.


Key U.S. news today includes: (1) June non-farm payrolls (expected +230,000 after May's +280,000) and the June unemployment rate (expected -0.1 to 5.4% after May's +0.1 to 5.5%), (2) weekly initial unemployment claims (expected -1,000 to 270,000 after last week's +3,000 to 271,000) and continuing claims (expected -11,000 to 2.236 million after last week's +22,000 to 2.247 million), (3) June New York ISM (May was -4.1 to 54.0), (4) May factory orders (expected -0.5% after April's -0.4%), and (5) May factory orders (expected -0.5% after April's -0.4%), and (5) USDA weekly Export Sales.

None of the Russell 1000 companies report earnings today.

U.S. IPO's scheduled to price today include: none.

Equity conferences during the remainder of this week: none.


CME Group (CME +0.70%) reported that June contracts traded per day were up 15% y/y to 14.6 million.

HealthSouth (HLS +0.87%) was upgraded to 'Outperform' from 'Market Perform' at JMP Securities.

ConAgra (CAG +2.01%) was upgraded to 'Overweight' from 'Equal Weight' at Morgan Stanley.

Ryerson (RYI +5.49%) was downgraded to 'Hold' from 'Buy' at Deutsche Bank.

Kosmos (KOS -5.93%) was upgraded to 'Outperform' from 'Market Perform' at BMO Capital.

Babcock & Wilcox (BW +2.05%) was initiated with a 'Buy' at UBS with a price target of $25.

WestRock (WRK) was initiated with a 'Buy' at Goldman Sachs with a price target of $73.

Regal Entertainment (RGC -0.53%) was upgraded to 'Neutral' from 'Sell' at B. Riley.

AstraZeneca (AZN +1.46%) was upgraded to 'Buy' from 'Hold' at Berenberg.

T-Mobile (TMUS -0.36%) was initiated with a 'Buy' at Buckingham with a price target of $50.

AT&T (T +0.14%) was initiated with a 'Buy' at Buckingham with a price target of $41.

Family Dollar (FDO +0.47%) reported Q3 adjusted EPS of 74 cents, below consensus of 82 cents.

Moody's Investors Service downgraded Greece's government bond rating to Caa3 from Caa2 and placed the rating on review for further downgrade.


September E-mini S&Ps (ESU15 +0.14%) this morning are up +3.75 points (+0.18%). Wednesday's closes: S&P 500 +0.69%, Dow Jones +0.79%, Nasdaq +0.74%. The S&P 500 on Wednesday closed higher on (1) hopes for an eventual Greek bailout after Greek Prime Minister Tsipras said he's willing to accept most of the Eurozone's reform demands, and (2) signs of U.S. economic strength after the Jun ADP employment rose by +237,000, stronger than expectations of +218,000, and the Jun ISM manufacturing index rose +0.7 to 53.5, stronger than expectations of +0.4 to 53.2 and the fastest pace of expansion 5 months.

Sep 10-year T-notes (ZNU15 -0.16%) this morning are down -4 ticks. Wednesday's closes: TYU5 -22.50, FVU5 -12.50. Sep T-notes Wednesday closed lower on (1) reduced safe-haven demand for T-notes after stocks rallied on signs that Greece may be ready to accept creditor demands for a bailout, and (2) stronger-than-expected Jun ADP employment and Jun ISM manufacturing reports.

The dollar index (DXY00 -0.05%) this morning is down -0.035 (-0.04%). EUR/USD (^EURUSD) is up +0.0023 (+0.21%). USD/JPY (^USDJPY) is up +0.34 (+0.28%). Wednesday's closes: Dollar Index +0.825 (+0.86%), EUR/USD -0.00864 (-0.78%), USD/JPY +0.677 (+0.55%). The dollar index on Wednesday closed higher on the stronger-than-expected U.S. ADP and ISM reports and fears of a "no" in Sunday's Greek referendum that would likely lead to Grexit.

Aug WTI crude oil (CLQ15 +0.39%) this morning is up +26 cents (+0.46%). Aug gasoline (RBQ15 +1.74%) is up +0.0289 (+1.44%). Wednesday's closes: CLQ5 -2.50 (-4.20%), RBQ5 -0.0364 (-1.78%). Aug crude oil and gasoline closed sharply lower on Wednesday with Aug crude at a 5-week low on the unexpected +2.39 million bbl increase in weekly EIA crude inventories, more than expectations of a -2.5 million bbl decline and the first increase in 9 weeks. Gasoline prices found some underlying support after EIA gasoline supplies fell -1.76 million bbl to a 7-month low of 216.7 million bbl, a bigger decline than expectations of -250,000 bbl.


US 0830 ET Jun non-farm payrolls expected +230,000, May +280,000. Jun private payrolls expected +225,000, May +262,000. Jun manufacturing payrolls expected +6,000, May +7,000. Jun unemployment rate expected -0.1 to 5.4%, May +0.1 to 5.5%.
  0830 ET Jun avg hourly earnings expected +0.2% m/m and +2.3% y/y, May +0.3% m/m and +2.3% y/y. Jun avg weekly hours all employees expected unch at 34.5 hours.
  0830 ET Weekly initial unemployment claims expected -1,000 to 270,000, previous +3,000 to 271,000. Weekly continuing claims expected -11,000 to 2.236 million, previous +22,000 to 2.247 million.
  0830 ET USDA weekly Export Sales.
  0945 ET Jun New York ISM, May -4.1 to 54.0.
  1000 ET May factory orders expected -0.5%, Apr -0.4%. May factory orders ex-transportation, Apr unch.
  1100 ET Treasury announces amount of 3-year T-notes (previous $24 billion), 10-year T-notes (previous $21 billion), and 30-year T-bonds (previous $13 billion) to be auctioned Jul 7-9.
UK 0200 ET UK Jun nationwide house prices expected +0.5% m/m and +4.5% y/y, May +0.3% m/m and +4.6% y/y.
  0430 ET UK Jun Markit/CIPS construction PMI expected +0.6 to 56.5, May 55.9.
EUR 0500 ET Eurozone May PPI expected +0.1% m/m and -2.0% y/y, Apr -0.1% m/m and -2.2% y/y.
JPN 2135 ET Japan Jun Markit composite PMI, May 51.6.
CHI 2145 ET China Jun Markit composite PMI, May 51.2.


Company Ticker Time Event Description Period Estimate
Bed Bath & Beyond Inc BBBY US 9:00 Annual General Meeting Y 2015  
Freescale Semiconductor Ltd FSL US 9:00 Extraordinary Shareholders Meeting - M&A Vote Y 2015  
Equifax Inc EFX US   Investor Meeting - New York Y 2015  
AutoNation Inc AN US   June 2015 Sales and Revenue Release 2015  
Delta Air Lines Inc DAL US   June 2015 Sales and Revenue Release - Traffic Results 2015  
Kraft Foods Group Inc KRFT US   Extraordinary Shareholders Meeting Y 2015