Wed Mar 11 2015
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Live Index – Wed, 11 Mar 2015 Premarket

PREMARKET WORLD NEWS

March E-mini S&Ps (ESH15 +0.37%) this morning are up +0.44% as the market recovers from yesterday’s plunge and European stocks are up +1.74% after a plunge in EUR/USD to an 11-3/4 year low has fueled a rally in European exporters as the slide in EUR/USD boosts their earnings prospects. European government bond yields continue to fall as the 10-year German bund yield dropped to a record low 0.198% as the ECB buys Eurozone sovereign debt for a third day. Asian stocks closed mixed: Japan +0.31%, Hong Kong -0.75%, China +0.11%, Taiwan -0.14%, Australia -0.53%, Singapore -0.58%, South Korea +0.16%, India -0.18%. Chinese stocks rebounded from early losses and closed higher on speculation the government may boost stimulus measures to support the economy after Chinese Feb industrial production and retail sales rose less-than-expected. Japanese stocks recovered from losses and closed higher as the rally in USD/JPY Tuesday to a 7-1/2 year high improved the earnings prospects of Japanese exporters. Commodity prices are mixed. Apr crude oil (CLJ15 +0.39%) is up +0.08%. Apr gasoline (RBJ15 -0.83%) is down -0.92% at a 2-1/2 week low. Apr gold (GCJ15 -0.19%) is down -0.24%. May copper (HGK15 +0.32%) is up +0.36%. Agriculture prices are higher. The dollar index (DXY00 +0.85%) is up +0.78% at an 11-1/2 year high. EUR/USD (^EURUSD) is down -1.17% at an 11-3/4 year low. USD/JPY (^USDJPY) is up +0.35%. Jun T-note prices (ZNM15 -0.16%) are down -5 ticks.

ECB President Draghi said the aim of QE is to return inflation to the ECB’s goal of 2.0% and “we can deploy and will deploy monetary policy in a way that can and will stabilize inflation in line with our objective.”

China Feb retail sales rose +10.7% year-to-date, weaker than expectations of +11.6% year-to-date and the slowest pace of increase in 11 years.

China Feb industrial production rose +6.8% year-to-date, weaker than expectations of +7.7% year-to-date and the slowest pace of increase in 5-3/4 years.

UK Jan industrial production unexpectedly fell -0.1% m/m, weaker than expectations of +0.2% m/m. On an annual basis, Jan industrial production rose +1.3% y/y, right on expectations. UK Jan manufacturing production fell -0.5% m/m and rose +1.9% y/y, weaker than expectations of +0.2% m/m and +2.6% y/y.

Japan Feb PPI was unch m/m and rose +0.5% y/y, slightly stronger than expectations of unch m/m and +0.4% y/y.

Japan Jan machine orders fell -1.7% m/m and rose +1.9% y/y, stronger than expectations of -4.0% m/m and -1.0% y/y.

U.S. STOCK PREVIEW

The Treasury today will sell $ 21 billion of 10-year T-notes. There are three of the Russell 1000 companies that report earnings today: Memorial Resource Development (consensus $ 0.13), Axalta Coating Systems (0.23), Tahoe Resources (0.10).

Equity conferences during the remainder of this week include: Deutsche Bank Media, Internet & Telecom Conference on Mon-Wed, 11th Annual Private Banking Asia 2015 on Mon-Wed, Piper Jaffray Technology, Media and Telecommunications Conference on Tue-Wed, RBC Capital Markets Financial Institutions Conference on Tue-Wed, Credit Agricole Global High Yield Conference on Wed, Goldman Sachs TMT Leveraged Finance Conference on Wed, Barclays Capital Health Care Conference on Tue-Thu, Deutsche Bank Regional Banks Summit on Thu, Nomura – Conference: US Software Conference – New York on Thu.

 

 

 

 

 

PREMARKET U.S. STOCKS

Brown Shoe (BWS +0.25%) reported Q4 adjusted EPS of 20 cents, better than consensus of 16 cents.

Tiffany (TIF -1.15%) was upgraded to ‘Overweight’ from ‘Neutral’ at Atlantic Equities.

Citigroup kept its ‘Buy’ rating on Actavis (ACT -2.04%) and raised its price target on the stock to $ 360 from $ 325.

Scotts Miracle-Gro (SMG -0.50%) was upgraded to ‘Buy’ from ‘Neutral’ at SunTrust.

Credit Suisse (CS +6.67%) was upgraded to ‘Overweight’ from ‘Underweight’ at JPMorgan Chase.

Skyworks (SWKS -0.99%) will replace PetSmart (PETM -0.01%) in the S&P 500 as of today’s close.

EMC (EMC -3.27%) was downgraded to ‘Market Perform’ from ‘Outperform’ at Wells Fargo.

L-3 Communications (LLL -1.91%) was initiated with a ‘Buy’ at Buckingham with a price target of $ 155.

Credit Suisse initiated Buffalo Wild Wings (BWLD -1.77%) with an ‘Underperform’ and a price target of $ 175.

Credit Suisse initiated YUM! Brands (YUM -1.96%) with an ‘Underperform’ and a price target of $ 74.

Credit Suisse initiated Dunkin’ Brands (DNKN +0.21%) with an ‘Outperform’ and named it a Top Pick with a $ 56 price target.

Verifone (PAY -2.75%) reported Q1 EPS of 44 cents, better than consensus of 41 cents, but then lowered guidance on fiscal 2015 EPS view to $ 1.78-1.82 from $ 1.85-$ 1.90, below consensus of $ 1.90.

MARKET COMMENTS

Mar E-mini S&Ps (ESH15 +0.37%) this morning are up +9.00 points (+0.44%). The S&P 500 index on Tuesday sold off to a 1-month low and closed sharply lower: S&P 500 -1.70%, Dow Jones -1.85%, Nasdaq -1.90%. Bearish factors included (1) comments from Dallas Fed President Fisher who said the Fed should raise interest rates before the economy reaches full employment as policy makers are better off tightening monetary policy earlier and more gradually than later and more quickly, (2) deflation concerns in China after China Feb PPI fell -4.8% y/y, weaker than expectations of -4.3% y/y and the fastest pace of decline in 5-1/3 years, and (3) concern that the 12% rally in the dollar index over the past 3 months to an 11-1/2 year high will undercut the profitability of multi-national U.S. companies.

Jun 10-year T-notes (ZNM15 -0.16%) this morning are down -5 ticks. Jun 10-year T-note futures prices on Tuesday closed higher. Closes: TYM5 +16.00, FVM5 +7.00. Bullish factors included (1) carry-over support from a rally in German bunds to an all-time high as the ECB bought European government bonds in the second day of its QE program, (2) reduced inflation expectations after the 10-year T-note inflation breakeven rate fell to a 2-week low, and (3) increased safe-haven demand for T-notes after the S&P 500 tumbled to a 1-month low.

The dollar index (DXY00 +0.85%) this morning is up +0.767 (+0.78%) at an 11-1/2 year high. EUR/USD (^EURUSD) is down -0.0125 (-1.17%) at an 11-3.4 year low. USD/JPY (^USDJPY) is up +0.43 (+0.35%). The dollar index on Tuesday surged to an 11-1/2 year high and closed higher: Dollar index +1.030 (+1.06%), EUR/USD -0.01541 (-1.42%), USD/JPY -0.022 (-0.02%). Bullish factors included (1) hawkish comments from Dallas Fed President Fisher who said the Fed should raise interest rates before the economy reaches full employment, and (2) weakness in EUR/USD which slumped to an 11-3/4 year low as the ECB bought European government bonds on the second day of its QE program. USD/JPY fell back from a 7-1/2 year high and closed lower as the slide in stocks fueled safe-haven demand for the yen.

Apr WTI crude oil (CLJ15 +0.39%) this morning is up +4 cents (+0.08%) and Apr gasoline (RBJ15 -0.83%) is down -0.0167 (-0.92%) at a 2-1/2 week low. Apr crude oil and gasoline prices on Tuesday closed lower with Apr crude at a 1-week low and Apr gasoline at a 1-1/2 week low: CLJ5 -1.71 (-3.42%), RBJ5 -0.0602 (-3.21%). Bearish factors included (1) the rally in the dollar index to an 11-1/2 year high, (2) the slump in the S&P 500 to a 1-month low, and (3) expectations for Wednesday’s weekly EIA crude inventories to increase by +4.5 million bbl.

GLOBAL EVENT CALENDAR03/11/2015
US 0700 ET Weekly MBA mortgage applications, previous +0.1% with purchase sub-index -0.2% and refi sub-index +0.5%.
1030 ET EIA Weekly Petroleum Status Report.
1300 ET Treasury auctions $ 21 billion 10-year T-notes.
1630 ET Fed releases bank stress test results.
GER 0300 ET German Q4 labor costs, Q3 +0.2% q/q and +2.3% y/y.
EUR 0400 ET ECB President Mario Draghi speaks at a conference in Frankfurt, GE.
UK 0530 ET UK Jan industrial production expected +0.2% m/m and +1.3% y/y, Dec -0.2% m/m and +0.5% y/y.
0530 ET UK Jan manufacturing production expected +0.2% m/m and +2.6% y/y, Dec +0.1% m/m and +2.4% y/y.
2001 ET UK Feb RICS house price balance expected 6%, Jan 7%.
JPN 1950 ET Japan Jan tertiary index expected +0.5% m/m, Dec -0.3% m/m.
1950 ET Japan Q1 BSI large manufacturing business conditions, Q4 8.1. Q1 BSI large all-industry business conditions expected 6.0, Q4 5.0.
U.S. STOCK CALENDAR03/11/2015
Company Ticker Time Event Description Period Estimate
Memorial Resource Development Corp MRD US Bef-mkt Q4 2014 Earnings Release Q4 2014 0.131
Axalta Coating Systems Ltd AXTA US Bef-mkt Q4 2014 Earnings Release Q4 2014 0.225
Principal Financial Group Inc PFG US 7:30 Investor Conference Y 2015
Axalta Coating Systems Ltd AXTA US 8:00 Q4 2014 Earnings Call Q4 2014
General Electric Co GE US 8:30 Investor Meeting – Technology Y 2015
Analog Devices Inc ADI US 9:00 Annual General Meeting
NextEra Energy Inc NEE US 13:00 Investor Conference Y 2015
MetLife Inc MET US 14:30 Investor Meeting Y 2015
Memorial Resource Development Corp MRD US 15:00 Q4 2014 Earnings Call Q4 2014
Skyworks Solutions Inc SWKS US Aft-mkt Skyworks Solutions Replaces PetSmart Inc. in S&P 500
Skyworks Solutions Inc SWKS US Aft-mkt Maximus Inc. Replaces Skyworks Solutions in S&P MidCap 400
PetSmart Inc PETM US Aft-mkt Skyworks Solutions Replaces PetSmart Inc. in S&P 500
Tahoe Resources Inc THO CN Aft-mkt Q4 2014 Earnings Release Q4 2014 0.103
Energen Corp EGN US Investment Community Meeting – Day 3 Y 2015
Franklin Resources Inc BEN US Annual General Meeting

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