Tuesday, September 22nd, 2015
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OVERNIGHT MARKETS AND NEWS
December E-mini S&Ps (ESZ15 -1.41%) are down -1.44% at a 1-week low and European stocks are down -2.51% at a 4-week low. A -2.53% drop in copper prices (HGZ15 -2.57%) to a 2-week low has undercut miners and commodity producers with Rio Tinto Group and BHP Billiton Ltd. down over 4%, while Glencore Plc, the world's second-largest copper producer, tumbled 9%. European auto makers have been hammered with Volkswagen AG down 20% as U.S. officials familiar with the inquiry said the Justice Department is investigating claims that Volkswagen cheated on federal air-pollution tests. Peugeot SA slid 6.5% after France's finance minister called for a European investigation of the auto industry. Health-care stocks are also lower, with Roche Holding AG and Novartis AG down almost 3%, after U.S. presidential candidate Clinton said she will propose price caps and research-and-development spending guidelines for the pharmaceutical industry. Asian stocks closed mixed: Japan closed for holiday, Hong Kong +0.18%, China +0.92%, Taiwan +0.71%, Australia +0.74%, Singapore -0.48%, South Korea +0.83%, India -2.07%. China's Shanghai Composite posted a 1-week high as brokerage stocks rallied on prospects of an exchange link between London and Shanghai after British officials said they will study the feasibility of setting up a London-Shanghai stock trading link.
Dec T-note prices (ZNZ15 +0.28%) are up +11 ticks on carryover support from a rally in German bunds as the 10-year bund yield fell to a 4-week low of 0.619% as speculation mounts the ECB will expand stimulus after ECB Executive Board member Praet said that policy makers would "forcefully react" to defend their inflation objective.
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) July FHFA house price index (expected +0.4% m/m, Jun +0.2% m/m), (2) Sep Richmond Fed manufacturing index (expected +2 to 2, Aug -13 to 0), and (3) the Treasury's auction of $26 billion of 2-year T-notes.
There are 8 companies in the Russell 1000 index that report earnings today: AutoZone (consensus $12.68), General Mills (0.69), Darden Restaurants (0.58), FactSet (1.47), CarMax (0.76), ConAgra (0.40), Carnival (1.63), Copart (0.39).
U.S. IPO's scheduled to price today include: none.
Equity conferences during the remainder of this week include: Raymond James North American Equities Conference on Tue, Scotia Capital Fertilizer & Chemicals Conference on Tue, and Mitsubishi UFJ Securities: Utilities Conference - New York on Thu.
OVERNIGHT U.S. STOCK MOVERS
NetApp (NTAP -0.45%) was downgraded to 'Sell' from 'Neutral' at Goldman Sachs.
ConAgra Foods (CAG +0.43%) reported Q1 EPS of 45 cents, higher than consensus of 40 cents.
F5 Networks (FFIV +0.55%) was downgraded to 'Neutral' from 'Buy' at Guggenheim.
CarMax (KMAX) reported Q2 EPS of 82 cents, better than consensus of 76 cents.
General Mills (GIS +0.39%) reported Q1 EPS of 79 cents, above consensus of 69 cents,
Darden Restaurants (DRI +1.17%) reported Q1 EPS of 68 cents, better than consensus of 58 cents.
AutoZone (AZO +0.47%) reported Q4 EPS of $12.75, higher than consensus of $12.68.
HSBC (HSBC +0.87%) was upgraded to 'Conviction Buy' from 'Buy' at Goldman SAchs.
The Apple (AAPL +1.55%) iPhone 6s and iPhone 6s Plus are now sold out worldwide ahead of Friday's launch, reports 9 to 5 Mac.
Chubb (CB +1.57%) was initiated with a 'Buy' at Sterne Agee CRT.
Red Hat (RHT +2.34%) reported Q2 EPS of 47 cents, higher than consensus of 44 cents, and then raised guidance on fiscal 2016 EPS to $1.85-$1.87f rom $1.81-$1.84, above consensus of $1.83.
Thor Industries (THO +0.96%) reported Q4 EPS of $1.31, better than consensus of $1.30.
Jack in the Box (JACK -0.75%) announced a new $200 million stock repurchase program.
Luminus Management reported a 6.6% passive stake in TransAlta (TAC -2.56%) .
Dec E-mini S&Ps (ESZ15 -1.41%) this morning are down sharply by -28.25 points (-1.44%). Monday's closes: S&P 500 +0.46%, Dow Jones +0.77%, Nasdaq +0.28%. The S&P 500 index on Monday closed higher on positive carryover from a +1.89% rally in China's Shanghai Composite and on speculation that uneven economic data may further delay a Fed interest rate increase after U.S. Aug existing home sales fell -4.8% to 5.31 million, weaker than expectations of -1.6% to 5.50 million. Energy-producer stocks rose as crude oil prices rallied.
Dec 10-year T-notes (ZNZ15 +0.28%) this morning are up +11 ticks. Monday's closes: TYZ5 -19.00, FVZ5 -9.75. Dec T-notes Monday closed lower on supply pressures as the Treasury auctions $103 billion of T-notes this week, comments from San Francisco Fed President Williams who said he expects a Fed rate increase sometime this year, and reduced safe-haven demand for T-notes as stocks rallied.
The dollar index (DXY00 +0.16%) this morning is up +0.133 (+0.14%) at a 1-week high. EUR/USD (^EURUSD) is down -0.0030 (-0.27%) at a 1-1/2 week low. USD/JPY (^USDJPY) is down -0.66 (-0.55%). Monday's closes: Dollar Index +1.031 (+1.09%), EUR/USD -0.0108 (-0.96%), USD/JPY +0.58 (+0.48%). The dollar index on Monday climbed to a 1-week high on San Francisco Fed President Williams' comment that Thursday's FOMC decision was a "close call" and that he expects a Fed rate increase sometime this year. EUR/USD fell to a 1-week low on deflation concerns after German Aug PPI fell -0.5% m/m, the largest drop in 7 months.
Nov crude oil (CLX15 -2.45%) this morning is down -$1.16 a barrel (-2.47%) and Nov gasoline (RBX15 -0.74%) is down -0.0071 (-0.51%). Monday's closes: CLX5 +1.70 (+3.78%), RBX5 +0.0443 (+3.31%). Nov crude oil and gasoline prices on Monday closed higher on last Friday's Baker Hughes report showing that active U.S. oil rigs fell for a third straight week and on the rally in stocks that boosted confidence in the economic and energy demand outlook.
GLOBAL EVENT CALENDAR09/22/2015
|US||0900 ET||Jul FHFA house price index expected +0.4% m/m, Jun +0.2% m/m.|
|1000 ET||Sep Richmond Fed manufacturing survey expected +2 to 2, Aug -13 to 0.|
|1300 ET||Treasury auctions $26 billion of 2-year T-notes.|
|1500 ET||USDA Aug Cold Storage.|
|1830 ET||Atlanta Fed President Dennis Lockhart speaks on the economy to the Alabama World Affairs Council.|
|UK||0430 ET||UK Aug public sector net borrowing expected +8.8 billion pounds, Jul -2.1 billion pounds.|
|0600 ET||UK Sep CBI trends total orders expected +1 to 0, Aug -1. Sep CBI trends selling prices expected +1 to -5, Aug 6.|
|EUR||1000 ET||Eurozone Sep consumer confidence expected -0.1 to -7.0, Aug -6.9.|
|CHI||2145 ET||China Sep Caixin manufacturing PMI expected +0.2 to 47.5, Aug -0.5 to 47.3.|
U.S. STOCK CALENDAR09/22/2015
|AutoZone Inc||AZO US||Bef-mkt||Q4 2015 Earnings Release||Q4 2015||12.682|
|General Mills Inc||GIS US||Bef-mkt||Q1 2016 Earnings Release||Q1 2016||0.689|
|Darden Restaurants Inc||DRI US||Bef-mkt||Q1 2016 Earnings Release||Q1 2016||0.575|
|FactSet Research Systems Inc||FDS US||Bef-mkt||Q4 2015 Earnings Release||Q4 2015||1.471|
|CarMax Inc||KMX US||Bef-mkt||Q2 2016 Earnings Release||Q2 2016||0.755|
|ConAgra Foods Inc||CAG US||7:30||Q1 2016 Earnings Release||Q1 2016||0.397|
|MEDNAX Inc||MD US||8:00||Analyst and Investor Day||Y 2015|
|General Mills Inc||GIS US||8:30||Q1 2016 Earnings Call||Q1 2016|
|Darden Restaurants Inc||DRI US||8:30||Q1 2016 Earnings Call||Q1 2016|
|CarMax Inc||KMX US||9:00||Q2 2016 Earnings Call||Q2 2016|
|Carnival Corp||CCL US||9:15||Q3 2015 Earnings Release||Q3 2015||1.626|
|ConAgra Foods Inc||CAG US||9:30||Q1 2016 Earnings Call||Q1 2016|
|AutoZone Inc||AZO US||10:00||Q4 2015 Earnings Call||Q4 2015|
|Carnival Corp||CCL US||10:00||Q3 2015 Earnings Call||Q3 2015|
|Bank of America Corp||BAC US||10:00||Extraordinary Shareholders Meeting||Y 2015|
|FactSet Research Systems Inc||FDS US||11:00||Q4 2015 Earnings Call||Q4 2015|
|Splunk Inc||SPLK US||12:00||Investor and Analyst Meeting||Y 2015|
|Parker-Hannifin Corp||PH US||13:00||Investor Meeting||Y 2015|
|Copart Inc||CPRT US||Aft-mkt||Q4 2015 Earnings Release||Q4 2015||0.385|