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MORNING CALL 12/7

|Includes: ARMH, BIG, CMG, GRPN, HRB, INOV, MFRM, MNK, Vail Resorts, Inc. (MTN), NYRT, PBY-OLD, PFE, PII, PM, SLG, TSN

MORNING CALL

Monday, December 7th, 2015

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OVERNIGHT MARKETS AND NEWS

December E-mini S&Ps (ESZ15 +0.20%) are up +0.14% after Friday's stronger-than-expected U.S. Nov non-farm payrolls boosted confidence that the economy is strong enough to handle an expected interest rate increase at next week's FOMC meeting. Stock index futures fell back from their best levels as energy producers declined after the price of crude oil (CLF16 -1.58%) tumbled below $40 a barrel to a 3-week low on negative carryover from last Friday when when OPEC made no pretense of any attempt to cut production and instead raised its production target to 31.5 million bpd from 30 million bpd. European stocks are up +1.58 % on speculation last week's rout in equities was overdone after ECB stimulus measures disappointed. European stocks shrugged off the weaker-than-expected German Oct industrial production and Eurozone Dec Sentix investor confidence. Asian stocks settled mixed: Japan +0.99%, Hong Kong -0.15%, China +0.34%, Taiwan +0.66%, Australia +0.08%, Singapore +0.76%, South Korea -0.61%, India -0.42%.

The dollar index (DXY00 +0.46%) is up +0.44%. EUR/USD (^EURUSD) is down -0.64%. USD/JPY (^USDJPY) is up +0.28%.

Mar T-note prices (ZNH16 -0.02%) are little changed, up +0.5 of a tick.

German Oct industrial production rose +0.2% m/m and was unch y/y, weaker than expectations of +0.8% m/m and +0.7% y/y.

The Eurozone Dec Sentix investor confidence rose +0.6 to 15.7, less than expectations of +1.9 to 17.0.

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) St. Louis Fed President James Bullard's speech about the U.S. economy and monetary policy at Ball State University in Muncie, IN, and (2) Oct consumer credit (expected +$19.0 billion, Sep +$28.918 billion).

There are 8 of the Russell 1000 companies report earnings today: H&R Block (consensus -$0.48).

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

Equity conferences this week include: American Society of Hematology Meeting on Mon, Raymond James Technology and Communications Investors Conference on Mon-Wed, UBS Global Media and Communications Conference on Mon-Wed, Business Insider's Ignition Future of Digital Conference on Tue, Citi Global Technology Conference on Tue, Barclays Global Technology, Media and Telecommunications Conference on Tue-Wed, Goldman Sachs U.S. Financial Services Conference on Tue-Wed, Oppenheimer Health Care Conference on Tue-Wed, Wells Fargo Energy Symposium, Bank of America Merrill Lynch Paper, Packaging and Builders Conference on Wed-Thu, Capital One Financial Corp Energy Conference on Wed-Thu, 10th Annual Energy Conference on Thu.

OVERNIGHT U.S. STOCK MOVERS

Vail Resorts (MTN -0.59%) reported a Q1 EPS loss of -$.163, a smaller loss than consensus of -$1.75.

Polaris industries (PII -4.19%) was downgraded to 'Neutral' from 'Buy' at UBS.

Tyson Foods (TSN +1.09%) was downgraded to 'Equal Weight' from 'Overweight' at Stephens.

Philip Morris International (PM +2.70%) fell nearly 5% in pre-market trading on a report from Tass news service that a Russian senator proposes raising the smoking age in Russia to 21 from 18.

Mattress Firm (MFRM +2.06%) said it sees fiscal 2015 sales of $2.53 billion-$2.55 billion, on the low end of estimates of $2.55 billion.

New York REIT (NYRT +2.24%) rose over 3% in after-hours trading after a person with knowledge of the negotiations said that SL Green SLG is close to acquiring the company.

Groupon (GRPN +0.66%) fell over 1% in after-hours trading after it said that its Chief Technology Officer, Sri Viswanath, resigned as of Dec 2. This follows the departure of CEO Eric Lfkofsky a month ago.

Chipotle Mexican Grill (CMG -0.73%) tumbled nearly 10% in pre-market trading after it said it sees Q4 comparable sales down 8%-11% if recent sales trends continue.

Pep Boys-Manny Moe & Jack's (PBY +3.22%) surged 12% in after-hours trading after billionaire investor Carl Icahn reported a 12% stake in the company.

Big Lots (BIG -6.32%) was downgraded to 'Neutral' from 'Overweight' at Piper Jaffray.

ARM Holdings Plc (ARMH +0.55%) was downgraded to 'Market Perform' from 'Outperform' at Northland Securities with a 12-month price target of $52.

MARKET COMMENTS

Dec E-mini S&Ps (ESZ15 +0.20%) this morning are up +3.00 points (+0.14%). Friday's closes: S&P 500 +2.05%, Dow Jones +2.12%, Nasdaq +2.37%. The S&P 500 on Friday closed sharply higher on the +211,000 increase in U.S. Nov non-farm payrolls, stronger than expectations of +200,000 and the upward revision in Oct to +298,000 from +271,000, which kept the U.S. economy in a strong light.

Mar 10-year T-notes (ZNH16 -0.02%) this morning are up +0.5 of a tick. Friday's closes: TYH6 +12.00, FVH6 +4.25. Mar T-notes on Friday recovered from a 3-week low and closed higher on the as-expected +0.2% m/m and +2.3% y/y increase in U.S. Nov avg hourly earnings, which may keep the pace of Fed tightening gradual as the data shows slack wage pressures. In addition, the wider than expected U.S. trade deficit report sparked expectations for a weaker Q4 GDP report.

The dollar index (DXY00 +0.46%) this morning is up +0.428 (+0.44%). EUR/USD (^EURUSD) is down -0.0070 (-0.64%). USD/JPY (^USDJPY) is up +0.35 (+0.28%). Friday's closes: Dollar Index +0.733 (+0.75%), EUR/USD -0.0059 (-0.546%), USD/JPY +0.50 (+0.41%). The dollar index on Friday closed higher on the larger-than-expected increase in U.S. Nov non-farm payrolls, which bolsters the case for a Fed interest rate increase at the Dec 15-16 FOMC meeting, and comments from Philadelphia Fed President Harker who said the Fed should raise interest rates "sooner rather than later."

Jan crude oil (CLF16 -1.58%) this morning is down -74 cents (-1.85%) at a 3-week low and Jan gasoline (RBF16 -0.94%) is down -0.0132 (-1.04%) at a 2-week low. Friday's closes: CLF6 -0.94 (-2.29%), RBF6 -0.0120 (-0.93%). Jan crude oil and gasoline on Friday closed lower with Jan crude at a 2-1/2 week low and Jan gasoline at a 1-1/2 week low. Bearish factors included (1) a stronger dollar, and (2) the failed OPEC meeting where OPEC made no pretense of any attempt to cut production and instead raised its production target.

GLOBAL EVENT CALENDAR12/07/2015

US 1100 ET USDA weekly grain export inspections.
  1230 ET St. Louis Fed President James Bullard speaks about the U.S. economy and monetary policy at Ball State University in Muncie, IN.
  1500 ET Oct consumer credit expected +$19.0 billion, Sep +$28.918 billion.
JPN 0000 ET Japan Oct leading index CI expected +1.3 to 102.9, Sep 101.6. Oct coincident index expected +1.8 to 114.1, Sep 112.3.
  1850 ET Revised Japan Q3 GDP expected +0.2% q/q annualized, previous -0.8% q/q annualized. Q3 deflator, previous +2.0% y/y.
  2330 ET Japan Nov bankruptcies, Oct -7.25% y/y.
GER 0200 ET German Oct industrial production expected +0.8% m/m and +0.6% y/y, Sep -1.1% m/m and +0.2% y/y.
EUR 0300 ET ECB Vice President Vitor Constancio delivers opening remarks at an ECB workshop on Money Markets and Central Bank Balance Sheets.
  0430 ET Eurozone Dec Sentix investor confidence expected +1.9 to 17.0, Nov 15.1.
UK 1901 ET UK Nov BRC sales like-for-like expected +0.5% y/y, Oct -0.2% y/y.
CHI n/a China Nov trade balance expected +$64.15 billion, Oct +$61.64 billion. Nov exports expected -5.0% y/y, Oct 6.9% y/y. Nov imports expected -11.8% y/y, Oct -18.8% y/y

U.S. STOCK CALENDAR12/07/2015

Company Ticker Time Event Description Period Estimate
Multiple Companies PFE US 8:00 Cellectis, Pfizer and Servier UCART19 Collaboration Call    
SL Green Realty Corp SLG US 13:00 Investor Conference Y 2015  
Mallinckrodt PLC MNK US 13:00 Investor Briefing Y 2015  
Inovalon Holdings Inc INOV US 13:00 Investor Day Y 2015  
H&R Block Inc HRB US Aft-mkt Q2 2016 Earnings Release Q2 2016 -0.482