Thursday, August 27, 2015

BARCHART MORNING CALL 8/27

OVERNIGHT MARKETS AND NEWS
September E-mini S&Ps (ESU15 +0.99%) are up +1.11% and European stocks are up +3.11% as a rally metals and crude oil buoyed mining and energy stocks. Emerging market stocks and currencies also gained as a rally in Chinese stocks improved overall market sentiment. Asian stocks closed higher: Japan +1.08%, Hong Kong +3.60%, China +5.34%, Taiwan +1.41%, Australia +1.17%, Singapore +2.52%, South Korea +0.54%, India +2.01%. China's Shanghai Composite swung from a loss of -0.7% to close up 5.34% in the final hour of trading and snapped a five-day losing streak after people familiar with the matter said the government intervened to boost stock prices. The Chinese government wants to stabilize equity prices and ensure that nothing detracts from a Sep 3 military parade that celebrates the 70th anniversary of the victory over Japan in WWII, according to people familiar with the matter.
The dollar index (DXY00 +0.30%) is up +0.37%. EUR/USD (^EURUSD) is down -0.17%. USD/JPY (^USDJPY) is up +0.21%.
Sep T-note prices (ZNU15 -0.02%) are little changed, up +0.5 of a tick.
Speaking at the Kansas City Fed's annual symposium in Jackson Hole, WY, Kansas City Fed President George said that it's "too soon" to tell whether recent market volatility is going to affect the U.S. economy and "what it means for monetary policy I think is not yet clear." As a result, the Fed will have to see what conditions look like at the time of the Sep FOMC meeting.
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) weekly initial unemployment claims (expected -2,000 to 275,000, previous +4,000 to 277,000) and continuing claims (expected -7,000 to 2.247 million, previous -24,000 to 2.254 million), (2) revised Q2 GDP (expected +3.2% vs previous +2.3%), (3) July pending home sales (expected +1.0% m/m and +8.3% y/y, Jun -1.8% m/m and +11.1% y/y), (4) Aug Kansas City Fed manufacturing activity (expected +3 to -4, Jul +2 to -7), (5) the Treasury's auction of $29 billion of 7-year T-notes, (6) the annual Kansas City Fed symposium in Jackson Hole, WY.
There are 7 of the S&P 500 companies that report earnings today: Tiffany (consensus 0.91), JM Smucker (1.24), Patterson Cos (0.52), Dollar General (0.94), Signet Jewelers (1.15), Autodesk (0.17), Gamestop (0.24).
U.S. IPO's scheduled to price today include: none.
Equity conferences during the remainder of this week include: Pareto Healthcare Conference on Fri.
OVERNIGHT U.S. STOCK MOVERS
Dollar General (DG +4.04%) reported Q2 EPS of 95 cents, better than consensus of 94 cents.
JM Smucker (SJM +2.15%) reported Q1 EPS of $1.32, higher than consensus of $1.24.
Tiffany & Co. (TIF +3.96%) reported Q2 EPS of 86 cents, below consensus of 91 cents.
Signet Jewelers Ltd. (SIG +3.17%) reported Q2 EPS of 78 cents, well below consensus of $1.15.
Patterson Cos. (PDCO +3.72%) reported Q1 EPS of 32 cents, weaker than consensus of 52 cents.
BofA/Merrill Lynch added AutoZone (AZO +2.66%) to the U.S. 1 List and maintained its 'Buy' rating and $865 price target on the stock.
Stifel upgraded Kansas City Southern (KSU +3.39%) to 'Hold' from 'Sell.'
The Financial TImes reports that Abbott Labs (ABT +2.52%) is prepping a $25 billion takeover offer for St. Jude Medical (STJ +1.58%) .
Stifel upgraded CSX (CSX +4.19%) to 'Buy' from 'Hold' with a price target of $35.
Waters (WAT +5.00%) was initiated with a 'Buy' at Cantor with a price target of $163.
Illumina (ILMN +3.20%) was initiated with a 'Buy' at Cantor with a price target of $265.
Williams-Sonoma (WSM +2.53%) fell over 3% in after-hours trading after it reported Q2 EPS of 58 cents, right on consensus, but then lowered guidance on fiscal 2015 EPS to $3.35-$3.45, below consensus $3.48.
Guess (GES +7.30%) dropped over 6% in after-hours trading after it reported Q2 EPS of 21 cents, above consensus of 15 cents, but then lowered guidance on Q3 EPS to 8 cents-12 cents, below consensus of 18 cents.
Avago (AVGO +7.09%) reported Q3 EPS of $2.24, higher than consensus of $2.14.
PVH Corp. (PVH +2.03%) climbed over 3% in after-hours trading after it reported Q2 adjusted EPS of $1.37, better than consensus of $1.29.
MARKET COMMENTS
Sep E-mini S&Ps (ESU15 +0.99%) this morning are up +21.50 points (+1.11%). Wednesday's closes: S&P 500 +3.90%, Dow Jones +3.95%, Nasdaq +5.06%. The S&P 500 on Wednesday closed sharply higher on (1) signs of strength in the U.S. economy after Jul capital spending rose +2.2%, stronger than expectations of +0.3% and the biggest increase in 13 months, (2) increased M&A activity after Schlumberger agreed to buy Cameron for $14.8 billion, and (3) reduced chances of a Fed rate hike next month after New York Fed President Dudley said the recent turmoil in global financial markets makes the case for a Fed interest rate increase next month "less compelling."
Sep 10-year T-notes (ZNU15 -0.02%) this morning are up +0.5 of a tick. Wednesday's closes: TYU5 -4.00, FVU5 +1.25. Sep T-notes on Wednesday closed lower on reduced safe-haven demand after the sharp rally in stocks and on weak demand for the Treasury's $35 billion auction of 5-year T-notes that had a bid-to-cover ratio of only 2.34, the lowest in 6 years. T-notes found support on dovish comments from New York Fed President Dudley who said that recent global turmoil has made the case for a Fed rate hike In Sep "less compelling."
The dollar index (DXY00 +0.30%) this morning is up +0.350 (+0.37%). EUR/USD (^EURUSD) is down -0.0019 (-0.17%). USD/JPY (^USDJPY) is up +0.25 (+0.21%). Wednesday's closes: Dollar Index +0.570 (+0.60%), EUR/USD -0.02025 (-1.76%), USD/JPY +1.074 (+0.90%). The dollar index on Wednesday closed higher on the stronger-than-expected U.S. Jul durable goods orders report, which bolstered the outlook for U.S. economic growth. In addition, there was weakness in EUR/USD on speculation the ECB may expand stimulus measures after ECB Executive Board member Praet said that downside risks to the ECB's inflation goal have increased.
Oct crude oil (CLV15 +3.94%) this morning is up +$1.78 a barrel (+4.81%) and Oct gasoline (RBV15 +5.36%) is up +0.0775 (+6.30%). Wednesday's closes: CLV5 -0.71 (-1.81%), RBV5 -0.0444 (-3.43%). Oct crude and gasoline on Wednesday closed lower with Oct gasoline at a 7-month low. Crude oil prices were hurt by the stronger dollar, an unexpected +1.66 million bbl increase in weekly EIA gasoline inventories (vs expectations of -950,000 bbl), and the +1.44 million build in EIA distillate supplies to a 3-3/4 year high. Crude prices recovered from their worst levels after EIA crude stockpiles unexpectedly fell -5.45 million bbl to a 5-1/2 month low versus expectations for a +2.0 million bbl increase.
GLOBAL EVENT CALENDAR08/27/2015
US0830 ETWeekly initial unemployment claims expected -2,000 to 275,000, previous +4,000 to 277,000. Weekly continuing claims expected -7,000 to 2.247 million, previous -24,000 to 2.254 million.
0830 ETRevised Q2 GDP expected +3.2% (q/q annualized), previous +2.3%. Revised Q2 personal consumption expected +3.0%, previous +2.9%. Revised Q2 GDP price index, previous +2.0%. Revised Q2 core PCE deflator, previous +1.8% q/q.
0830 ETUSDA weekly Export Sales.
1000 ETJul pending home sales expected +1.0% m/m and +8.3% y/y, Jun -1.8% m/m and +11.1% y/y.
1100 ETAug Kansas City Fed manufacturing activity expected +3 to -4, Jul +2 to -7.
1300 ETTreasury auctions $29 billion of 7-year T-notes.
n/aAnnual Kansas City Fed symposium in Jackson Hole, WY.
GER0200 ETGerman Jul import price index expected -0.3% m/m and -1.4% y/y, Jun -0.5% m/m and -1.4% y/y.
UK0200 ETUK Aug nationwide house prices expected +0.4% m/m and +3.1% y/y, Jul +0.4% m/m and +3.5% y/y
1905 ETUK Aug GfK consumer confidence expected unch at 4.
EUR0400 ETEurozone Jul M3 money supply expected +4.9% y/y and +5.0% 3-mo avg, Jun +5.0% y/y and +5.1% 3-mo avg.
JPN1930 ETJapan Jul jobless rate expected unch at 3.4%. Jul job-to-applicant ratio expected unch at 1.19.
1930 ETJapan Jul overall household spending expected +0.5% y/y, Jun -2.0% y/y.
1930 ETJapan Jul national CPI expected +0.2% y/y, Jun +0.4% y/y. Jul national CPI ex-fresh food expected -0.2% y/y, Jun +0.1% y/y. Jul national CPI ex food & energy expected +0.6% y/y, Jun +0.6% y/y.
1930 ETJapan Aug Tokyo CPI expected +0.1% y/y, Jul +0.2% y/y. Aug Tokyo CPI ex-fresh food expected -0.2% y/y, Jul -0.1% y/y. Aug Tokyo CPI ex food & energy expected +0.3% y/y, Jul +0.3% y/y.
1950 ETJapan Jul retail sales expected +0.6% m/m and +1.1% y/y, Jun -0.6% m/m and +1.0% y/y.
CHI2130 ETChina Jul industrial profits, Jun -0.3% y/y.
U.S. STOCK CALENDAR08/27/2015
CompanyTickerTimeEvent DescriptionPeriodEstimate
JM Smucker Co/TheSJM USBef-mktQ1 2016 Earnings ReleaseQ1 20161.24
Tiffany & CoTIF USBef-mktQ2 2016 Earnings ReleaseQ2 20160.909
Patterson Cos IncPDCO USBef-mktQ1 2016 Earnings ReleaseQ1 20160.522
Dollar General CorpDG USBef-mktQ2 2016 Earnings ReleaseQ2 20160.941
Signet Jewelers LtdSIG US7:00Q2 2016 Earnings ReleaseQ2 20161.15
JM Smucker Co/TheSJM US8:30Q1 2016 Earnings CallQ1 2016
Tiffany & CoTIF US8:30Q2 2016 Earnings CallQ2 2016
Signet Jewelers LtdSIG US8:30Q2 2016 Earnings CallQ2 2016
PVH CorpPVH US9:00Q2 2016 Earnings CallQ2 2016
Patterson Cos IncPDCO US10:00Q1 2016 Earnings CallQ1 2016
Dollar General CorpDG US10:00Q2 2016 Earnings CallQ2 2016
Intel CorpINTC US12:00Investor DayY 2015
Autodesk IncADSK US17:00Q2 2016 Earnings CallQ2 2016
GameStop CorpGME US17:00Q2 2016 Earnings CallQ2 2016
Autodesk IncADSK USAft-mktQ2 2016 Earnings ReleaseQ2 20160.173
GameStop CorpGME USAft-mktQ2 2016 Earnings ReleaseQ2 20160.241
Equifax IncEFX USInvestor Meeting - Los AngelesY 2015
Amgen IncAMGN USPDUFA, evolocumab, dyslipidemia
United Parcel Service IncUPS USRoadshow - TorontoY 2015
Posted by Jim Van Meerten at
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