Tue May 26 2015
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Live Index – Tue, 26 May 2015 Premarket

PREMARKET WORLD NEWS

June E-mini S&Ps (ESM15 -0.13%) this morning are down -0.16% on signs the Fed is nearer to raising interest rates after comments from Cleveland Fed President Mester echoed Friday’s comments from Fed Chair Yellen that the U.S. economy is close to the point where it can support higher interest rates. Stock prices recovered from their worst levels on increased M&A activity after Charter Communications agreed to buy Time Warner Cable for about $ 55 billion.European stocks are little changed with gains held in check as Spanish bank stocks slumped after local elections in Spain showed growing support for anti-austerity parties, while the 10-year Greek bond yield climbed to a 4-week high of 11.97% amid an impasses in negotiations for Greek bailout funds after ECB Governing Council member Hansson said an agreement on Greece is “not in sight yet.” Asian stocks closed mostly higher: Japan +0.12%, Hong Kong +0.92%, China +2.02%, Taiwan +0.25%, Australia +0.91%, Singapore -0.03%, South Korea -0.23%, India -0.41%. Japan’s Nikkei Stock Index rallied up to a new 15-year high as exporters surged after the yen fell to a 7-3/4 year low against the dollar. China’s Shanghai Stock Index pushed up to a 7-1/3 year high on optimism that government plans to boost foreign access to markets will boost inflows after the government announced Friday that cross-border sales of stock funds will begin Jul 1. China’s government also announced a stock exchange link between Shenzhen and Hong Kong will start next year.

Commodity prices are mostly lower with the rally in the dollar. Jul crude oil (CLN15 -0.64%) is down -0.52% and Jul gasoline (RBN15 -0.17%) is down -0.17%. Metals prices are weaker. Jun gold (GCM15 -0.80%) is down -0.81% at a 1-1/2 week low. Jul copper (HGN15 -0.69%) is down -0.59%. Agricultural prices are mixed.

The dollar index (DXY00 +0.91%) is up +0.98% at a 4-week high. EUR/USD (^EURUSD) is down -0.57% at a 4-week low. USD/JPY (^USDJPY) is up +0.80% at a 7-3/4 year high.

Jun T-note prices (ZNM15 +0.23%) are up +9 ticks.

Cleveland Fed President Loretta Mester said that if economic data come in according to her forecasts then the “time is near” for the federal funds rate to be raised.

Fed Vice Chairman Stanley Fisher said the Fed’s first rate increase will be a matter of “going from an ultra-expansionary monetary policy to an extremely expansionary monetary policy” and that the “Fed’s processes are not date determined, they are data determined.”

U.S. STOCK PREVIEW

Key U.S. reports today include: (1) Apr durable goods orders (expected -0.5% and +0.3% ex-transportation after March’s +4.4% and +0.4% ex-transportation), (2) Mar FHFA house price index (expected +0.7% m/m after Feb’s +0.7% m/m), (3) Mar S&P CaseShiller composite-20 home price index (expected +0.90% m/m and +4.60% y/y after Feb’s +0.93% m/m and +5.03% y/y), (4) preliminary-May Markit U.S. services PMI (expected -0.9 to 56.5 after April’s -1.8 to 57.4), (5) Apr new home sales (expected +5.0% to 505,000 after March’s -11.4% to 481,000), (6) May consumer confidence from the Conference Board (expected -0.2 to 95.0 after April’s -6.2 to 95.2), (7) May Richmond Feb manufacturing index (expected +3 to 0 after April’s +5 to -3), (8) May Dallas Fed manufacturing outlook level of general business activity (expected +4.5 to -11.5 after April’s +1.4 to 16.0), (9) the Treasury’s auction of $ 26 billion of 2-year T-notes, (10) a speech by Fed Vice Chairman Stanley Fischer on “The Federal Reserve and the Global Economy” at a conference at Tel Aviv University in Israel, and (11) a speech by Richmond Fed President Jeffrey Lacker to the LSU Graduate School of Banking titled “From Country Banks to SIFIs: The 100-year Quest for Financial Stability.”

There are 3 of the Russell 1000 companies that report earnings today: AutoZone (9.52), Tidewater (0.54), Workday (-0.08).

U.S. IPO’s scheduled to price today include: none.

Equity conferences this week include: BMO Capital Markets Global Energy Invitational Conference on Wed, D. A. Davidson & Co Technology Forum on Wed, Stifel, Nicolaus & Co. Dental & Veterinary Conference on Wed, Citi Global Consumer Conference on Wed-Thu, Cowen and Company Technology Media & Telecom Conference on Wed-Thu, US Ethane & LPG Export Asia 2015 on Wed-Thu, Sanford C. Bernstein Strategic Decisions Conference on Wed-Fri, KeyBanc Capital Markets Industrial, Automotive & Transportation Conference on Thu, American Society of Clinical Oncology Meeting on Fri.

PREMARKET U.S. STOCKS

Macerich (MAC -0.40%) was downgraded to ‘Underperform’ from ‘Neutral’ at Credit Suisse.

First Solar (FSLR -1.47%) was downgraded to ‘Underperform’ from ‘Sector Perform’ at RBC Capital.

Children’s Place (PLCE -0.47%) was downgraded to ‘Neutral’ from ‘Overweight’ at Piper Jaffray.

L Brands (LB -1.13%) and Dollar General (DG +0.37%) were both upgraded to ‘Conviction Buy’ from ‘Buy’ at Goldman Sachs.

Ann Inc. (ANN -0.13%) was downgraded to ‘Neutral’ from ‘Buy’ at Mizuho.

Marvell (MRVL -8.56%) was upgraded to ‘Overweight’ from ‘Equal Weight’ at Morgan Stanley.

Deere (DE +4.35%) was downgraded to ‘Neutral’ from ‘Outperform’ at Baird.

Charter Communications (CHTR -1.86%) agreed to buy Time Warner Cable (TWC +3.42%) for about $ 55 billion.

Chico’s (CHS -0.35%) was upgraded to ‘Buy’ from ‘Neutral’ at Mizuho.

AutoZone (AZO -0.39%) reported Q3 EPS of $ 9.57, better than consensus of $ 9.52.

Glenhill Advisors reported a 7.0% stake in Pep Boys (PBY -1.51%) .

Barron’s reports that General Motors (GM +0.34%) stock trades at 7.5 times forward earnings, and is about 55% cheaper than the broad market, making it significantly undervalued.

Polaris Venture Partners reported a 8.2% stake in Tyr Pharma (LIFE +2.96%) .

MARKET COMMENTS

June E-mini S&Ps (ESM15 -0.13%) this morning are down -3.50 points (-0.16%). Friday’s closes: S&P 500 -0.22%, Dow Jones -0.29%, Nasdaq -0.05%. The S&P 500 on Friday closed lower after Fed Chair Yellen said she expects to raise interest rates this year.

June 10-year T-notes (ZNM15 +0.23%) this morning are up +9 ticks. Friday’s closes: TYM5 -14.00, FVM5 -10.75. Jun T-notes on Friday closed lower on the Yellen comments and on the +0.3% m/m and +1.8% y/y increase in U.S. core CPI, more than expectations of +0.2% m/m and +1.7% y/y.

The dollar index (DXY00 +0.91%) this morning is up +0.941 (+0.98%) at a 4-week high. EUR/USD (^EURUSD) is down -0.0063 (-0.57%) at a 4-week low. USD/JPY (^USDJPY) is up +0.97 (+0.80%) at a 7-3/4 year high. Friday’s closes: Dollar Index +0.759 (+0.80%), EUR/USD -0.0109 (-0.98%), USD/JPY +0.473 (+0.39%). The dollar index on Friday shook off early losses and rallied to a 3-week high on increased expectations for a Fed rate hike after Fed Chair Yellen said she expects the economy to continue to improve and that the Fed will raise interest rates sometime this year.

July WTI crude oil (CLN15 -0.64%) this morning is down -31 cents (-0.52%). July gasoline (RBN15 -0.17%) is down -0.0034 (-0.17%). Friday’s closes: CLN5 -1.00 (-1.65%), RBN5 -0.0139 (-0.67%). Jul crude oil and gasoline on Friday closed lower on the rally in the dollar index to a 3-week high and on expectations for the U.S. crude oil glut to persist as U.S. crude supplies remain 100 million barrels above the 5-year seasonal average.

GLOBAL EVENT CALENDAR05/26/2015
US0830 ETApr durable goods orders expected -0.5% and +0.3% ex transportation, Mar +4.4% and +0.4% ex transportation. Apr capital goods new orders non-defense ex-aircraft & parts expected +0.3%, Mar +0.6%.
0900 ETMar FHFA house price index expected +0.7% m/m, Feb +0.7% m/m. Q1 house price index, Q4 +1.40% q/q.
0900 ETMar S&P CaseShiller composite-20 home price index expected +0.90% m/m and +4.60% y/y, Feb +0.93% m/m and +5.03% y/y.
0945 ETPreliminary-May Markit U.S. services PMI expected -0.9 to 56.5, Apr -1.8 to 57.4. May Markit U.S. composite PMI, Apr -2.2 to 57.0.
1000 ETApr new home sales expected +5.0% to 505,000, Mar -11.4% to 481,000.
1000 ETMay consumer confidence (Conference Board) expected -0.2 to 95.0, Apr -6.2 to 95.2.
1000 ETMay Richmond Feb manufacturing index expected +3 to 0, Apr +5 to -3.
1030 ETMay Dallas Fed manufacturing outlook level of general business activity expected +4.5 to -11.5, Apr +1.4 to 16.0.
1100 ETUSDA weekly grain export inspections.
1230 ETFed Vice Chairman Stanley Fischer speaks on The Federal Reserve and the Global Economy at a conference at Tel Aviv University in Israel.
1300 ETTreasury auctions $ 26 billion of 2-year T-notes.
1600 ETUSDA weekly crop progress.
2010 ETRichmond Fed President Jeffrey Lacker delivers a speech to the LSU Graduate School of Banking titled From Country Banks to SIFIs: The 100-year Quest for Financial Stability.
UK0600 ETUK May CBI reported sales, Apr 12.
CHI2130 ETChina Apr industrial profits, Mar -0.4% y/y.
U.S. STOCK CALENDAR05/26/2015
CompanyTickerTimeEvent DescriptionPeriodEstimate
AutoZone IncAZO USBef-mktQ3 2015 Earnings ReleaseQ3 20159.516
Merck & Co IncMRK US9:00Annual General MeetingY 2015
AutoZone IncAZO US10:00Q3 2015 Earnings CallQ3 2015
DreamWorks Animation SKG IncDWA US14:00Annual General Meeting
Workday IncWDAY US17:00Q1 2016 Earnings CallQ1 2016
Tidewater IncTDW USAft-mktQ4 2015 Earnings ReleaseQ4 20150.537
Workday IncWDAY USAft-mktQ1 2016 Earnings ReleaseQ1 2016-0.079
Silgan Holdings IncSLGN USAnnual General Meeting
Extra Space Storage IncEXR USAnnual General Meeting

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