Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Morning Call 12/14

|Includes: ABM, BAND, CHD, Dr Pepper Snapple Group, Inc. (DPS-OLD), FLXN, FND, FOXA, NDSN, OMF, PIR, TAP, VZ
Summary

News.

Earnings.

Conference Calls.

Barchart Morning Call

Barchart.comThu Dec 14, 6:31AM CST

OVERNIGHT MARKETS AND NEWS

Mar E-mini S&Ps (ESH18 +0.07%) this morning are up +0.07% on increased optimism in the U.S. economic outlook after the Fed yesterday raised its U.S. 2018 GDP estimate to 2.5% from 2.1% and said it still didn't see inflation accelerating. As expected, the BOE today voted 9-0 to keep the benchmark interest rate unchanged at 0.50% and to maintain its 435-billion-pound asset purchase target. European stocks are down -0.41% ahead of the conclusion of today's ECB monetary policy meeting where ECB President Draghi may provide more clues as to when the central bank begins to taper its asset purchases. Losses in European stocks were limited on signs of strength in the European economy after the Eurozone Dec Markit manufacturing PMI unexpectedly rose +0.5 to a record 60.6. Asian stocks settled mostly lower: Japan -0.28%, Hong Kong -0.19%, China -0.32%, Taiwan +0.64%, Australia -0.18%, Singapore -0.95%, South Korea -0.44%, India +0.59%. Chinese stocks fell back after the PBOC tightened market liquidity following the Fed’s rate hike as it raised interest rates in open market operations when it sold 30 billion yuan of 7-day reverse-repurchase agreements at 2.50%, up from 2.45% in a previous sale, and sold 20 billion yuan of 28-day reverse repos at 2.80% from 2.75% previously.

The dollar index (DXY00 -0.04%) is down -0.02%. EUR/USD (^EURUSD) is up +0.01%. USD/JPY (^USDJPY) is up +0.13%.

Mar 10-year T-note prices (ZNH18 -0.11%) are down -6.5 ticks.

The German Dec Markit/BME manufacturing PMI unexpectedly rose +0.8 to a record 63.3 (data from 1996), stronger than expectations of -0.5 to 62.0.

The Eurozone Dec Markit manufacturing PMI unexpectedly rose +0.5 to a record 60.6, stronger than expectations of -0.4 to 59.7.

China Nov industrial production fell -0.1 to 6.1% y/y, right on expectations.

China Nov retail sale rose +10.2% y/y, slightly weaker than expectations of +10.3% y/y.

The Japan Dec Nikkei manufacturing PMI rose +0.6 to 54.2, the fastest pace of expansion since Jan 2014.

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) weekly initial unemployment claims (expected unch at 236,000, previous -2,000 to 236,000) and continuing claims (expected -8,000 to 1.900 million, previous -52,000 to 1.908 million), (2) Nov import price index (expected +0.7% and +3.2% y/y, Oct +0.2% m/m and +2.5% y/y) and Nov import price index ex-petroleum (expected +0.1%, Oct +0.1%), (3) Nov export price index (expected +0.3% m/m, Oct unch m/m and +2.7% y/y), (4) Nov retail sales (expected +0.3% and +0.6% ex autos, Oct +0.2% and +0.1% ex autos), (5) USDA weekly Export Sales, (6) Dec Markit manufacturing PMI (expected unch at 53.9, Nov -0.7 to 53.9) and Dec Markit services PMI (expected +0.2 to 54.7, Nov -0.8 to 54.5), (7) Oct business inventories (expected -0.1%, Sep unch).

Notable Russell 1000 earnings reports today include: Costco (consensus $1.34), Jabil (0.78), Oracle (0.68), Adobe (1.16).

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

Equity conferences this week: BMO Capital Markets Prescriptions for Success Healthcare Conference on Thu, Jefferies Office & Industrial Summit on Thu, SunTrust Financial, Technology, Business & Government Services conference on Thu, Cowen Energy & Natural Resources Conference on Fri.

OVERNIGHT U.S. STOCK MOVERS

Dr Pepper Snapple (DPS -0.42%) was rated a me 'Buy' at Deutsche Bank with a 12-month target price of $104.

CBS (CBS -1.38%) was rated a new 'Overweight' at Stephens with a 12-month target price of $70.

Nordson (NDSN +2.17%) rallied over 9% in after-hours trading after it reported Q4 adjusted EPS of $1.38, higher than consensus of $1.33, and then said it sees Q1 EPS of $1.29 to $1.39, well above consensus of 94 cents.

Verizon (VZ -0.56%) was downgraded to 'Hold' from 'Buy' at HSBC.

Floor & Decor (FND -0.35%) was rated a new 'Buy' at Stifel with a 12-month target price of $51.

Twenty-First Century Fox (FOXA -3.96%) gained more than 1% in after-hours trading after the WSJ reported that Disney is likely to value Fox at just over $40 a share.

Molson Coors (TAP -0.81%) was rated a new 'Buy' at Deutsche Bank with a 12-month target price of $89.

Church & Dwight (CHD -0.54%) was rated a new 'Buy' at Deutsche Bank with a 12-month target price of $54.

ABM Industries (ABM -0.18%) slumped 10% in after-hours trading after it said it sees full-year adjusted EPS from continuing operations of $1.70 to $1.80, below consensus of $2.04.

Flexion Therapeutics (FLXN +3.38%) rose nearly 4% in after-hours trading after it entered into a definitive agreement with GeneQuine Biotherapeutics to acquire the global rights to the GQ-203 non-opioid osteoarthritis treatment.

OneMain Holdings (OMF -3.02%) dropped 7% in after-hours trading after it reported holder Springleaf Financial Holdings was offering 7.5 million shares of OMF via Morgan Stanley.

Bandwith (BAND +6.42%) rallied over 10% in after-hours trading after it reported Q3 continuing operations EPS of 11 cents, above consensus of 9 cents, and said it sees Q4 adjusted EPS of breakeven to up 1 cents\, higher than consensus of -2 cent loss.

Pier 1 Imports (PIR +6.96%) plunged over 20% in after-hours trading after it said it sees Q4 adjusted EPS of 16 cents to 24 cents, weaker than consensus of 38 cents, and said it sees full-year adjusted EPS of 17 cents to 25 cents, below consensus of 41 cents.

MARKET COMMENTS

Mar S&P 500 E-mini stock futures (ESH18 +0.07%) this morning are up +2.00 points (+0.07%). Wednesday's closes: S&P 500 -0.05%, Dow Jones +0.33%, Nasdaq +0.17%. The S&P 500 on Wednesday rose to a new record high but fell back and settled little changed. Stocks were supported by optimism that lawmakers will soon pass tax-reform legislation after the number two Senate leader, Senate Majority Whip Cornyn, said House and Senate leaders are "very close" on a tax deal. Stocks were also boosted by the FOMC's substantial hike in its U.S. 2018 GDP estimate to 2.5% from a 2.1% estimate in Sep. Stocks were undercut by weakness in energy stocks after crude oil prices fell -0.95% and by the Fed's +25 bp hike in its funds rate target range by 25 bp to 1.25% to 1.50%.

Mar 10-year T-note prices (ZNH18 -0.11%) this morning are down -6.5 ticks. Wednesday's closes: TYH8 +15.50, FVH8 +10.25. Mar 10-year T-notes on Wednesday closed higher on the U.S. Nov core CPI report of +1.7% y/y (weaker than expectations of +1.8% y/y) and the post-FOMC meeting statement that said inflation will remain below the Fed's 2% target in the near term but "stabilize" around the target in the medium-term, which was dovish for Fed policy.

The dollar index (DXY00 -0.04%) this morning is down -0.02 (-0.02%). EUR/USD (^EURUSD) is up +0.0001 (+0.01%) and USD/JPY (^USDJPY) is up +0.15 (+0.13%). Wednesday's closes: Dollar Index -0.672 (-0.71%), EUR/USD +0.0084 (+0.72%), USD/JPY -1.01 (-0.89%). The dollar on Wednesday closed lower on the surprise election win by Democrat Doug Jones over Republican Roy Moore for Senator of Alabama, which narrows the GOP majority in Congress and will make harder for Republicans to pass their tax reform bill if they cannot pass it before Mr. Jones is seated in January. The dollar was also undercut by the weaker-than-expected U.S. Nov core CPI report of +1.7% y/y, which was dovish for Fed monetary policy.

Jan crude oil (CLF18 -0.48%) this morning is down -20 cents (-0.35%) and Jan gasoline (RBF18 +0.16%) is +0.0020 (+0.12%). Wednesday's closes: Jan WTI crude -0.54 (-0.95%), Jan gasoline -0.0509 (-3.00%). Jan crude oil and gasoline on Wednesday closed lower on the +0.8% increase in U.S. crude production the week ended Dec 8 to a 46-year high of 9.78 million bpd, and by the +5.664 million bbl surge in EIA gasoline inventories, more than twice expectations of a +2.3 million bbl build. Crude oil prices were supported by a weak dollar and by the -5.117 million bbl decline in EIA crude inventories, more than expectations of -2.8 million bbl.

Metals prices this morning are higher with Feb gold (GCG18 +0.89%) +10.3 (+0.82%), Mar silver (SIH18 +1.24%) +0.216 (+1.36%) and Mar copper (HGH18 +0.29%) +0.012 (+0.39%) at a 1-week high. Wednesday's closes: Feb gold +6.9 (+0.56%), Mar silver +0.201 (+1.28%), Mar copper +0.0305 (+1.01%). Metals on Wednesday closed higher with Mar copper at a 1-week high. Metals prices were boosted by a weaker dollar and the stronger than expected Eurozone Oct industrial production report, which was supportive for copper demand. Copper was boosted by signs of tighter supplies after LME copper inventories fell -1,875 MT to a 1-week low of 191,600 MT.

GLOBAL EVENT CALENDAR12/14/2017

Thursday, Dec 14
US 0830 ET Weekly initial unemployment claims expected unch at 236,000, previous -2,000 to 236,000. Weekly continuing claims expected -8,000 to 1.900 million, previous -52,000 to 1.908 million.
0830 ET Nov import price index expected +0.7% and +3.3% y/y, Oct +0.2% m/m and +2.5% y/y. Nov import price index ex-petroleum expected +0.1%, Oct +0.1%.
0830 ET Nov export price index expected +0.3% m/m, Oct unch m/m and +2.7% y/y.
0830 ET Nov retail sales expected +0.3% and +0.6% ex autos, Oct +0.2% and +0.1% ex autos.
0830 ET USDA weekly Export Sales.
0945 ET Dec Markit manufacturing PMI expected -0.2 to 53.7, Nov -0.7 to 53.9. Dec Markit services PMI expected +0.1 to 54.6, Nov -0.8 to 54.5.
Friday, Dec 15
US 0830 ET Dec Empire manufacturing survey general business conditions expected -0.6 to 18.8, Nov -10.8 to 19.4.
0915 ET Nov industrial production expected +0.3%, Oct +0.9%. Nov manufacturing production expected +0.3%, Oct +1.3%. Nov capacity utilization expected +0.2 to 77.2%, Oct +0.6 to 77.0%.

U.S. STOCK CALENDAR12/14/2017

Name Ticker Time Description Period Estimate
Delta Air Lines Inc DAL US 8:30 Investor Day
Nordson Corp NDSN US 8:30 Q4 2017 Earnings Call Q4 17
Danaher Corp DHR US 9:30 Investor and Analyst Meeting
Costco Wholesale Corp COST US 15:15 Q1 2018 Earnings Release Q1 18 1.339
Jabil Inc JBL US Aft-mkt Q1 2018 Earnings Release Q1 18 0.781
Oracle Corp ORCL US Aft-mkt Q2 2018 Earnings Release Q2 18 0.682
Adobe Systems Inc ADBE US 16:05 Q4 2017 Earnings Release Q4 17 1.157
Jabil Inc JBL US 16:30 Q1 2018 Earnings Call Q1 18
Adobe Systems Inc ADBE US 17:00 Q4 2017 Earnings Call Q4 17
Oracle Corp ORCL US 17:00 Q2 2018 Earnings Call Q2 18
Costco Wholesale Corp COST US 17:00 Q1 2018 Earnings Call Q1 18