Thursday, September 17th, 2015
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OVERNIGHT MARKETS AND NEWS
December E-mini S&Ps (ESZ15 -0.18%) are down -0.15% and European stocks are up +0.35% ahead of today's widely anticipated Fed interest rate decision. The markets are pricing in a 32% chance of a Fed rate hike today according to fed fund futures, up slightly from 30% at the beginning of the week. Weakness in technology stocks is dragging the overall market lower with Oracle down -1.2% in pre-market trading after reporting Q1 revenue of $8.45 billion, below consensus of $8.53 billion. Peabody Energy, the largest U.S. coal miner, plunged 15% in pre-market trading after it authorized a reverse stock split. Emerging markets closed higher and Asian stocks closed mixed: Japan +1.43%, Hong Kong -0.51%, China -2.10%, Taiwan +1.35%, Australia +0.94%, Singapore +0.94%, South Korea +0.21%, India closed for holiday. Japan's Nikkei Stock Index climbed to a 1-week high on speculation the BOJ may need to expand stimulus to revive economic growth after Japanese trade data showed Aug imports fell more than expected.
Dec T-note prices (ZNZ15 +0.12%) are up +5 ticks.
The ECB lowered Greece's Emergency Liquidity Assistance (NYSE:ELA) to 88.9 billion euros from 89.1 billion euros and said the reduction of ceiling requested by the Bank of Greece "reflects an improvement of the liquidity situation of Greek banks, amid a reduction of uncertainty and the stabilization of private sector deposit flows."
The Japan Aug trade balance was in deficit by -569.7 billion yen, wider than expectations of -540.0 billion yen and the largest deficit in 7 months. Aug exports rose +3.1% y/y, weaker than expectations of +4.3% y/y. Aug imports fell -3.1% y/y, more than expectations of -2.5% y/y.
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) weekly initial unemployment claims (expected unch at 275,000, previous -6,000 to 275,000) and continuing claims (expected -2,000 to 2.258 million, previous +1,000 to 2.260 million), (2) Q2 current account deficit (expected -$113.5 billion, Q1 -$113.3 billion), (3) Aug housing starts (expected -3.8% to 1.160 million, Jul +0.2% to 1.206 million), (4) Sep Philadelphia Fed business outlook survey (expected -2.4 to 5.9, Aug +2.6 to 8.3), (5) the FOMC's policy announcement after its 2-day meeting and a press conference by Fed Chair Yellen.
There are 2 of the Russell 1000 companies reports earnings today: Adobe Systems (consensus $0.50), Rite Aid (0.04).
Equity conferences during the remainder of this week include: Bank of America Merrill Lynch Power & Gas Leaders Conference on Wed-Thu, Citi 2015 Industrials Conference on Wed-Thu, Deutsche Bank Technology Conference on Wed-Thu, Morgan Stanley Industrials Conference on Wed-Thu, Barclays Capital Global Financial Services Conference on Wed-Fri, Credit Suisse Basic Materials Conference on Wed-Fri, Goldman Sachs Communacopia Conference on Wed-Fri, Morgan Stanley Global Healthcare Conference on Wed-Fri, Bank of America Merrill Lynch Global Health Care Conference on Thu, Imperial Capital Global Opportunities Conference on Thu, and AACR CRI-CIMT-EATI Immunotherapy Conference on Thu-Fri.
OVERNIGHT U.S. STOCK MOVERS
Oracle (ORCL +0.74%) slid over 1% in pre-market trading after it reported Q1 EPS of 53 cents, better than consensus of 52 cents, although Q1 revenue of $8.45 billion was below consensus of $8.53 billion.
Raytheon (RTN +0.04%) was upgraded to 'Top Pick' from 'Outperform' at RBC Capital.
Hasbro (HAS +1.48%) was downgraded to 'Neutral' from 'Buy' at Goldman Sachs.
NVIDIA (NVDA +0.70%) was upgraded to 'Buy' from 'Hold' at Jefferies with a $30 price target.
Stanley Black & Decker (SWK +0.44%) was initiated with a 'Buy' at UBS with a price target of $120.
Hanesbrands (HBI +1.17%) was upgraded to 'Buy' from 'Neutral' at Goldman Sachs.
Cablevision (CVC unch) jumped over 16% in pre-market trading after after Altice announced that it will acquire Cablevision for $34.90 per share in cash.
Clarcor (CLC +0.58%) reported Q3 non-GAAP EPS of 66 cents, weaker than consensus of 84 cents, and then lowered guidance on fiscal 2015 EPS view to $2.70-$2.80 from $3.00-$3.15, below consensus of $3.05.
Northrop Grumman Corporation (NOC +0.37%) announced that its board has authorized an additional $4 billion for the repurchase of the company's common stock.
Aetna (AET +0.01%) backs its fiscal 2015 EPS view of at least $7.40, below consensus of $7.51.
Envision Healthcare (EVHC -0.09%) was initiated with a 'Buy' at Canaccord with a price target of $51.
Allscripts (MDRX +0.59%) was initiated with a 'Buy' at Canaccord with a price target of $18.
Herman Miller (MLHR +1.24%) climbed 4% in after-hours trading after it reported Q1 EPS of 56 cents, well above consensus of 46 cents.
Dec E-mini S&Ps (ESZ15 -0.18%) this morning are down -3.00 points (-0.15%). Wednesday's closes: S&P 500 +0.87%, Dow Jones +0.84%, Nasdaq +0.54%. The S&P 500 Wednesday rose to a 3-week high and closed higher on (1) the +1.8% y/y increase in U.S. Aug CPI, less than expectations of +1.9% y/y, which reduces the pressure on the Fed to raise interest rates, and (2) the unexpected +1 point increase in the Sep NAHB housing market index to a 9-3/4 year high of 62. Energy producers rallied after crude oil climbed to a 1-1/2 week high.
Dec 10-year T-notes (ZNZ15 +0.12%) this morning are up +5 ticks. Wednesday's closes: TYZ5 -6.00, FVZ5 -1.50. Dec T-notes Wednesday fell to a 4-week low and closed lower on the unexpected increase in the Sep NAHB housing market index to a 9-3/4 year high, which bolsters the case for a Fed interest rate increase, and on reduced safe-haven demand as the S&P 500 rallied to a 3-week high.
The dollar index (DXY00 -0.24%) this morning is down -0.204 (-0.21%). EUR/USD (^EURUSD) is up +0.0029 (+0.26%). USD/JPY (^USDJPY) is up +0.40 (+0.33%). Wednesday's closes: Dollar Index -0.191 (-0.20%), EUR/USD +0.0021 (+0.19%), USD/JPY +0.15 (+0.12%). The dollar index on Wednesday closed lower on reduced pressure for the Fed to raise interest rates after the U.S. Aug CPI rose +1.8% y/y, less than expectations of +1.9% y/y. EUR/USD was undercut by ECB Vice President Constancio's comment that the ECB has the scope to expand QE if needed.
Oct crude oil (CLV15 -0.98%) this morning is down -68 cents (-1.44%) and Oct gasoline (RBV15 -0.48%) is down -0.0118 (-0.85%). Wednesday's closes: CLV5 +2.54 (+5.70%), RBV5 +0.0491 (+3.68%). Oct crude oil and gasoline on Wednesday closed sharply higher with Oct crude at a 1-1/2 week high on (1) the unexpected -2.1 million bbl decline in weekly EIA crude inventories, (2) the -1.9 million bbl draw in crude supplies at Cushing to a 5-3/4 month low, and (3) the -0.2% decline in U.S crude production in the week ended Sep 11 to a 9-month low of 9.117 million bpd.
GLOBAL EVENT CALENDAR09/17/2015
|US||0830 ET||Weekly initial unemployment claims expected unch at 275,000, previous -6,000 to 275,000. Weekly continuing claims expected -2,000 to 2.258 million, previous +1,000 to 2.260 million.|
|0830 ET||Q2 current account balance expected -$113.5 billion, Q1 -$113.3 billion.|
|0830 ET||Aug housing starts expected -3.8% to 1.160 million, Jul +0.2% to 1.206 million. Aug building permits expected +2.5% to 1.158 million, Jul-15.5% to 1.130 million.|
|0830 ET||USDA weekly Export Sales.|
|1000 ET||Sep Philadelphia Fed business outlook survey expected -2.4 to 5.9, Aug +2.6 to 8.3.|
|1100 ET||Treasury announces amount of 2-year T-notes (previous $26 billion), 2-year floating rate notes (previous $13 billion), 5-year T-notes (previous $35 billion) and 7-year T-notes (previous $29 billion) to be auctioned Sep 22-24.|
|1400 ET||FOMC announces interest rate decision.|
|UK||0430 ET||UK Aug retail sales ex auto fuel expected +0.1% m/m and +3.8% y/y, Jul +0.4% m/m and +4.3% y/y.|
|0430 ET||UK Aug retail sales including auto fuel expected +0.2% m/m and +3.8% y/y, Jul +0.1% m/m and +4.2% y/y.|
|EUR||0500 ET||Eurozone Jul construction output, Jun -1.9% m/m and -2.3% y/y.|
|CHI||2130 ET||China Aug property prices.|
U.S. STOCK CALENDAR09/17/2015
|Rite Aid Corp||RAD US||7:00||Q2 2016 Earnings Release||Q2 2016||0.036|
|Air Products & Chemicals Inc||APD US||8:00||Business Update Call|
|Rite Aid Corp||RAD US||8:30||Q2 2016 Earnings Call||Q2 2016|
|Intuit Inc||INTU US||11:00||Investor Day||Y 2015|
|Synopsys Inc||SNPS US||11:45||Business Update Call|
|NIKE Inc||NKE US||13:00||Annual General Meeting|
|Adobe Systems Inc||ADBE US||17:00||Q3 2015 Earnings Call||Q3 2015|
|Adobe Systems Inc||ADBE US||Aft-mkt||Q3 2015 Earnings Release||Q3 2015||0.497|
|Progressive Corp/The||PGR US||August 2015 Sales and Revenue Release||2015|
|Darden Restaurants Inc||DRI US||Annual General Meeting|