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Morning Call 9/1

|Includes: AVGO, BOX, Charter Communications, Inc. (CHTR), CPB, CRM, CTRP, F, FIVE, GM, HAIN, LB, LULU, OLLI, OXM, PAY, PI, PNY, SCVL, SMTC, WYNN

Morning Call

Thursday, September 1st, 2016View Older Reports

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OVERNIGHT MARKETS AND NEWS

Sep E-mini S&Ps (ESU16 +0.15%) are up +0.16% and European stocks are up +1.00% at a 2-week high amid positive signs for global growth. Manufacturing activity in China unexpectedly expanded at the fastest pace in nearly 2 years last month and manufacturing activity in the UK expanded at the fastest pace in 10 months. Mining stocks are leading gains in the overall market with Glencore Plc and Rio Tinto up over 1% as signs of stronger global manufacturing activity boosts copper prices. Asian stocks settled mixed: Japan +0.23%, Hong Kong +0.81%, China -0.72%, Taiwan -0.75%, Australia-0.32%, Singapore -0.15%, South Korea -0.33%, India -0.10%. Despite the stronger-than-expected Chinese manufacturing data, Chinese stocks closed lower on speculation the stronger data will reduce the chances of additional government stimulus. Japan's Nikkei Stock Index climbed to a 2-1/2 week high as exporter stocks rallied after USD/JPY rose to a 1-month high, which improves the earnings prospects of exporter companies.

The dollar index (DXY00 -0.03%) is down -0.03%. EUR/USD (^EURUSD) is down -0.08%. USD/JPY (^USDJPY) is up +0.25% at a 1-month high.

Dec T-note prices (ZNZ16 -0.16%) are down -8 ticks.

The UK Aug Markit manufacturing PMI rose +5.0 to 53.3, stronger than expectations of +0.8 to 49.0 and the fastest pace of expansion in 10 months.

The China Aug manufacturing PMI unexpectedly rose +0.5 to 50.4, stronger than expectations of -0.1 to 49.8 and the fastest pace of expansion in 1-3/4 years.

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) Aug Challenger job cuts (Jul -57.1% y/y), (2) weekly initial unemployment claims (expected +4,000 to 265,000, previous-1,000 to 261,000) and continuing claims (expected -2,000 to 2.143 million, previous -30,000 to 2.145 million), (3) revised Q2 non-farm productivity (expected -0.6%, prelim-Q1 -0.5%) and revised Q2 unit labor costs (expected +2.0%, prelim-Q2 +2.0%), (4) final-Aug Markit U.S. manufacturing PMI (expected unch at 52.1, prelim-Aug -0.8 to 52.1), (5) Jul construction spending (expected +0.5%, Jun -0.6% m/m), (6) Aug ISM manufacturing index (expected -0.6 to 52.0, Jul -0.6 to 52.6), (7) Aug total vehicle sales (expected 17.20 million, Jul 17.77 million), and (8) USDA weekly Export Sales.

Russell 1000 companies that report earnings today: Campbell Soup (consensus $0.50), Cooper Cos (2.28), VeriFone (0.40), lululemon athletica (0.38), Broadcom (2.76), Piedmont Natural Gas (-0.10), Hain Celestial Group (0.56).

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

Equity conferences during the remainder of this week include: none.

OVERNIGHT U.S. STOCK MOVERS

Charter Communications (CHTR +0.46%) rose nearly 4% in after-hours trading after it was announced that it will replace EMC in the S&P 500 after the close of trading on Wednesday, September 7.

Wynn Resorts (WYNN -0.92%) is up over 3% and Las Vegas Sands (LVS -1.47%) is up nearly 2% in pre-market trading after data showed Macau gross gaming revenue unexpectedly rose +1.1% in Aug, better than expectations of a -1.5% decline.

Ctrip.com International Ltd (CTRP unch) reported Q2 revenue of $683.5 million, above consensus of $656.7 million.

Box (BOX +3.15%) rallied 4% in after-hours trading after it raised guidance on full-year revenue to $394 million-$396 million from a prior view of $391 million-$395 million.

Semtech (SMTC +1.29%) gained over 2% in after-hours trading after it reported Q2 adjusted EPS of 35 cents, higher than consensus of 33 cents.

Ollie's Bargain Outlet Holdings (OLLI -1.17%) climbed 6% in after-hours trading after it reported Q2 adjusted EPS of 21 cents, better than consensus of 18 cents, and then raised guidance on full-year adjusted EPS to 88 cents-90 cents from a prior view of 85 cents-87 cents.

salesforce.com (CRM -0.51%) tumbled over 8% in after-hours trading after it said it sees Q3 adjusted EPS of 20 cents-21 cents, below consensus of 24 cents.

Shoe Carnival (SCVL +0.64%) fell nearly 6% in after-hours trading after it reported Q2 EPS of 22 cents, weaker than consensus of 27 cents, and then said it sees fiscal year comparable sales up +1.5% -2.0%, below a May 19 view of up 1% to 3%.

Impinj (PI +0.31%) rose 5% in after-hours trading after it reported Q2 adjusted EPS of 6 cents, double consensus of 3 cents.

Five Below (FIVE -0.56%) slid over 4% in after-hours trading after it reported Q2 comparable sales rose +3.1%, below consensus of +3.4%.

Oxford Industries (OXM -2.01%) jumped nearly 10% in after-hours trading after it reported Q2 adjusted EPS continuing operations of $1.48, better than expectations of $1.38.

MARKET COMMENTS

Sep E-mini S&Ps (ESU16 +0.15%) this morning are up +3.50 points (+0.16%). Wednesday's closes: S&P 500 -0.24%, Dow Jones -0.29%, Nasdaq -0.10%. The S&P 500 on Wednesday closed lower on the -4.3 point decline in the Aug Chicago PMI to 51.5, weaker than expectations of -1.8 to 54.0. There was also weakness in energy producer stocks as crude oil tumbled -3.56% to a 2-week low. In addition, there was increased concern about a Fed rate hike after the Aug ADP employment report showed an increase of +177,000 and July was revised upward to +194,000 from +179,000.

Dec 10-year T-notes (ZNZ16 -0.16%) this morning are down -8 ticks. Wednesday's closes: TYZ6 unch, FVZ6 +0.50. Dec T-notes on Wednesday closed little changed. T-note prices were undercut by the slightly larger-than-expected increase in the Aug ADM employment report of +177,000 and by the stronger-than-expected U.S. July pending home sales report. T-notes received a boost from the slide in stocks and the weaker-than-expected Aug Chicago PMI.

The dollar index (DXY00 -0.03%) this morning is down -0.033 (-0.03%). EUR/USD (^EURUSD) is down -0.0009 (-0.08%). USD/JPY (^USDJPY) is up +0.26 (+0.25%) at a new 1-month high. Wednesday's closes: Dollar index -00324 (-0.03%), EUR/USD +0.0015 (+0.13%), USD/JPY +0.47 (+0.46%). The dollar index on Wednesday climbed to a 3-week high but fell back and closed slightly lower. The dollar was boosted by the stronger-than-expected Aug ADP employment change and weakness in the yen after USD/JPY soared to a 1-month high on expectations for further BOJ stimulus measures in September. The dollar shed its advance after the Aug Chicago PMI fell more than expected.

Oct crude oil (CLV16 -0.13%) this morning is down -3 cents (-0.07%) and Oct gasoline (RBV16 -0.94%) is down -0.0124 (-0.93%). Wednesday's closes: CLV6 -1.65 (-3.56%), RBV6 -0.0356 (-2.59%). Oct crude oil and gasoline on Wednesday sold off to new 2-week lows and closed lower. Crude oil prices were undercut by the rally in the dollar index to a 3-week high and the +2.28 million bbl increase in EIA crude inventories, more than expectations of +1.5 million bbl.

GLOBAL EVENT CALENDAR09/01/2016

    Thursday, Sep 1
US 0730 ET Aug Challenger job cuts, Jul -57.1% y/y.
  0830 ET Weekly initial unemployment claims expected +4,000 to 265,000, previous -1,000 to 261,000. Weekly continuing claims expected unch at 2.145 million, previous -30,000 to 2.145 million.
  0830 ET Revised Q2 non-farm productivity expected -0.6%, prelim-Q1 -0.5%. Revised Q2 unit labor costs expected +2.0%, prelim-Q2 +2.0%.
  0830 ET USDA weekly Export Sales.
  0945 ET Revised Aug Markit manufacturing PMI expected unch at 52.1, prelim-Aug -0.8 to 52.1.
  1000 ET Jul construction spending expected +0.5%, Jun -0.6% m/m.
  1000 ET Aug ISM manufacturing index expected -0.6 to 52.0, Jul -0.6 to 52.6. Aug ISM new orders, Jul +0.4 to 60.3. Aug ISM employment, Jul -1.3to 51.4. Aug ISM prices paid expected -0.2 to 54.8, Jul -5.5 to 55.0.
  n/a Aug total vehicle sales expected 17.20 million, Jul 17.77 million. Aug domestic vehicle sales expected 13.50 million, Jul 13.77 million.
    Friday, Sep 2
US 0830 ET Aug non-farm payrolls expected +180,000, Jul +255,000. Aug private payrolls expected +180,000, Jul +217,000. Aug manufacturing payrolls expected -4,000, Jul +9,000. Aug unemployment rate expected -0.1 to 4.8%, Jul unch at 4.9%.
  0830 ET Aug avg hourly earnings expected +0.2% m/m and +2.5% y/y, Jul +0.3% m/m and +2.6% y/y. Aug avg weekly hours all-employees expected unch at 34.5 hours, Jul unch at 34.5 hours.
  0830 ET Jul trade balance expected -$41.5 billion, Jun -$44.5 billion.
  0945 ET Aug New York ISM, Jul +15.3 to 60.7.
  1000 ET Jul factory orders expected +2.0%, Jun -1.5% and +0.4% ex transportation.
  1300 ET Richmond Fed President Jeffrey Lacker (non-voter) speaks to the Virginia Association of Economists and the Richmond Association for Business Economics on Interest Rate Benchmarks.
JPN 0100 ET Japan Aug consumer confidence index expected +0.5 to 41.8, Jul -0.5 to 41.3.
UK 0430 ET UK Aug Markit/CIPS construction PMI expected +0.4 to 46.3, Jul -0.1 to 45.9.
EUR 0200 ET ECB Governing Council member Ardo Hansson takes part in a parliamentary hearing about EU future outlook in the aftermath of the Brexit referendum.
  0500 ET Eurozone Jul PPI expected +0.1% m/m and -2.9% y/y, Jun +0.7% m/m and -3.1% y/y.

U.S. STOCK CALENDAR09/01/2016

Company Ticker Time Event Description Period Estimate
Campbell Soup Co CPB US 7:15 Q4 2016 Earnings Release Q4 2016 0.498
L Brands Inc LB US 7:30 August 2016 Sales and Revenue Call - Pre-Recorded 2016  
Campbell Soup Co CPB US 8:30 Q4 2016 Earnings Call Q4 2016  
Ford Motor Co F US 9:15 August 2016 Sales and Revenue Release 2016  
Ford Motor Co F US 10:00 August 2016 Sales and Revenue Call 2016  
VeriFone Systems Inc PAY US Aft-mkt Q3 2016 Earnings Release Q3 2016 0.404
lululemon athletica Inc LULU US Aft-mkt Q2 2017 Earnings Release Q2 2017 0.38
Broadcom Ltd AVGO US Aft-mkt Q3 2016 Earnings Release Q3 2016 2.762
L Brands Inc LB US   August 2016 Sales and Revenue Release 2016  
Piedmont Natural Gas Co Inc PNY US   Q3 2016 Earnings Release Q3 2016 -0.095
Hain Celestial Group Inc/The HAIN US   Q4 2016 Earnings Release Q4 2016 0.559
General Motors Co GM US   August 2016 Sales and Revenue Release 2016