Thu Aug 20 2015
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Live Index – Thu, 20 Aug 2015 Premarket

PREMARKET WORLD NEWS

September E-mini S&Ps (ESU15 -0.75%) are down -0.75% at a 1-week low and European stocks are down -1.25% at a 1-1/4 month low on concern over emerging markets. The plunge in crude oil to a 6-1/3 year low has prompted Kazakhstan, Central Asia’s largest crude producer, to let its currency the tenge, float freely. The tenge immediately plunged 23% to a record low 257.21 per dollar and fueled a rally in gold prices (GCZ15 +0.84%) to a 1-month high. Kazakhstan was forced to devalue its currency in an attempt to stay competitive with China and Russia, its two top trading partners, after both countries devalued their currencies. The sell-off in emerging markets may continue as declining commodity prices curbs revenue and China’s surprise devaluation of the yuan last week may force other countries to devalue their currencies in order to stay competitive. Other emerging market currencies fell sharply as well with Turkey’s lira at a record low of 3 per dollar, the South African rand at a 14-year low of 13 per dollar, and Malaysia’s ringgit plunging to a 17-year low against the dollar. Energy producing stocks are lower as crude oil continues its slide and is down -1.53% (CLV15 -0.87%) at a fresh 6-1/3 year low. Asian stocks closed lower: Japan -0.94%, Hong Kong -1.77%, China -3.42%, Taiwan +0.10%, Australia -1.70%, Singapore -1.03%, South Korea -1.14%, India -1.16%. Weakness in commodity and energy producers hammered Asian stocks with Japan’s Nikkei Stock Index falling to a 1-1/4 month low. China’s Shanghai Composite tumbled over 3% amid concern a slowing economy and weaker yuan will spur capital outflows.

The dollar index (DXY00 -0.16%) is down -0.14% after Wednesday’s FOMC minutes from Jul 28-29 said that policy makers needed to see more improvement in the U.S. labor market and in the inflation rate before they begin to raise interest rates. EUR/USD (^EURUSD) is up +0.46%. USD/JPY (^USDJPY) is up +0.17%.

Sep T-note prices (ZNU15 +0.16%) are up +8 ticks at a 1-week high as the slump in global equity markets spurs safe-haven demand for government debt. The German 10-year bund yield fell to a 2-1/2 month low of 0.575%.

German Jul PPI was unch m/m and fell -1.3% y/y, right on expectations.

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) weekly initial unemployment claims (expected -4,000 to 270,000 and continuing claims expected -8,000 to 2.265 million), (2) Jul existing home sales (expected -1.1% to 5.43 million), (3) Jul leading indicators (expected +0.2%), and (4) the Aug Philadelphia Fed business outlook survey (expected +1.1 to 6.8).

There are 5 of the S&P 500 companies that reports earnings today: the Gap (consensus $ 0.64), Ross Stores (0.62), Hewlett-Packard (0.86), Intuit (-0.11), salesforce.com (0.18).

U.S. IPO’s scheduled to price today include: IMS Health Holdings ($ 31.40), Surgical Care Affiliates (37.95), First Foundation (19.25), Benefitfocus Inc. (36.75).

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

PREMARKET U.S. STOCKS

Union Pacific (UNP -0.67%) was downgraded to ‘Neutral’ from ‘Outperform’ at Macquarie.

Disney (DIS -0.46%) and Time Warner (TWX -1.51%) were both downgraded to ‘Market Perform’ from ‘Outperform’ at Bernstein.

Tech Data (TECD -0.55%) reported Q2 non-GAAP EPS of $ 1.43, well above consensus of 96 cents.

Lockheed Martin (LMT -0.65%) was upgraded to ‘Buy’ from ‘Neutral’ at Sterne Agee CRT.

Analog Devices (ADI +0.83%) was downgraded to ‘Reduce’ from ‘Neutral’ at Nomura.

Targa Resources (TRGP -3.21%) was downgraded to ‘Underperform’ from ‘Hold’ at Jefferies.

The recent sell-off in AMC Networks (AMCX -1.14%) provides a ‘great’ entry point, says Piper Jaffray, who reiterates their ‘Overweight’ rating on the stock with a $ 90 price target.

FrontFour Capital reported a 7.4% passive stake in North American Energy (NOA -0.53%) .

Fifth Third Bank (FITB -0.80%) was initiated with a ‘Buy’ at Sterne Agee CRT with a price target of $ 25.

L Brands (LB -0.21%) fell over 2% in after-hours trading after it reported Q2 EPS of 68 cents, right on consensus, but then lowered guidance on Q3 EPS to 40 cents-45 cents, weaker than consensus of 48 cents.

United Natural Foods (UNFI -0.75%) lowered guidance on fiscal 2016 EPS to $ 2.86-$ 2.98, below consensus of $ 3.05.

Mattel (MAT -1.70%) was initiated with an ‘Outperform’ at Oppenheimer with a price target of $ 28.

Leidos (LDOS -0.29%) was awarded a $ 4.3 billion contract by the U.S. Department of Defense as part of the Defense Healthcare Management System Modernization Program to provide an electronic health record solution, integration activities and deployment across the U.S. military health system.

SpartanNash (SPTN -1.93%) reported Q2 adjusted EPS of 53 cents, above consensus of 51 cents.

Synopsys (SNPS +0.62%) reported Q3 adjusted EPS of 63 cents, higher than consensus of 59 cents.

NetApp (NTAP -1.65%) shot up over 6% in after-hours trading after it reported Q1 EPS of 29 cents, better than consensus of 23 cents.

MARKET COMMENTS

Sep E-mini S&Ps (ESU15 -0.75%) this morning are down -15.50 points (-0.75%) at a 1-week low. Wednesday’s closes: S&P 500 -0.83%, Dow Jones -0.93%, Nasdaq -0.69%. The S&P 500 closed lower Wednesday after crude oil plunged to a 6-1/3 year low, which undercut energy producers, while raw-material and industrial stocks closed lower on China growth concerns after copper fell to a 6-year low. Stocks briefly recovered from their worst levels after the Jul 28-29 FOMC meeting minutes said that policy makers need to see further improvement in the labor market and inflation before they begin to raise interest rates.

Sep 10-year T-notes (ZNU15 +0.16%) this morning are up +8 ticks at a 1-week high. Wednesday’s closes: TYU5 +20.50, FVU5 +13.00. Sep T-notes closed higher Wednesday after stocks sold-off, which boosted the safe-haven demand for T-notes, and after crude oil skid to a 6-1/3 year low, which reduced inflation expectations as the 10-year T-note inflation breakeven rate dropped to a 7-month low.

The dollar index (DXY00 -0.16%) this morning is down -0.131 (-0.14%). EUR/USD (^EURUSD) is up +0.0051 (+0.46%). USD/JPY (^USDJPY) is up +0.21 (+0.17%). Wednesday’s closes: Dollar Index -0.681 (-0.70%), EUR/USD +0.00975 (+0.88%), USD/JPY +0.022 (+0.02%). The dollar closed lower Wednesday after the Jul 28-29 FOMC minutes said that policy members wanted to see improvement in the labor market and inflation before they start to hike interest rates. Another negative for the dollar was the fall in USD/JPY to a 2-week low as the swoon in stocks boosted the safe-haven demand for the yen.

Oct crude oil (CLV15 -0.87%) this morning is down -63 cents (-1.53%0 at a contract low and Oct gasoline (RBV15 -1.93%) is down -0.0351 (-2.48%) at a contract low. Wednesday’s closes: CLV5 -2.26 (-5.24%), RBV5 -0.0737 (-4.97%). Oct crude Wednesday fell to a contract low and nearest-futures (U15) crude slumped to a 6-1/3 year low after weekly EIA crude inventories unexpectedly rose (+2.62 million bbl vs. expectations of a -820,000 bbl decline). Crude prices were also pressured after crude stockpiles at Cushing, OK, the delivery point of WTI futures, rose +326,000 bbl, the first increase in 4 weeks.

GLOBAL EVENT CALENDAR08/20/2015
US0245 ETSan Francisco Fed President John Williams delivers keynote address at the Bank of Indonesia-BIS Research Conference in Jakarta, Indonesia.
0830 ETWeekly initial unemployment claims expected -4,000 to 270,000, previous +5,000 to 274,000. Weekly continuing claims expected -8,000 to 2.265 million, previous +15,000 to 2.273 million.
0830 ETUSDA weekly Export Sales.
1000 ETJul existing home sales expected -1.1% to 5.43 million, Jun +3.2% m/m to 5.49 million.
1000 ETJul leading indicators expected +0.2%, Jun +0.6%.
1000 ETAug Philadelphia Fed business outlook survey expected +1.1 to 6.8, Jul -9.5 to 5.7.
1100 ETTreasury announces amount of 2-year T-notes (previous $ 26 billion), 2-year floating-rate notes (previous $ 15 billion), 5-year T-notes (previous $ 35 billion) and 7-year T-notes (previous $ 29 billion) to be auctioned Aug 25-27.
1300 ETTreasury auctions $ 16 billion of 5-year TIPS in reopening of April 5-year TIPS maturing Apr-2020.
2020 ETMinneapolis Fed President Narayan Kocherlakota speaks in Seoul at a Bank of Korea event titled Macroeconomic Policy and Price Measurement Issues in a Low Inflation Environment.
GER0200 ETGerman Jul PPI expected unch m/m and -1.3% y/y, Jun -0.1% m/m and -1.4% y/y.
UK0430 ETUK Jul retail sales including auto fuel expected +0.4% m/m and +4.4% y/y, Jun -0.2% m/m and +4.0% y/y. Jul retail sales ex auto fuel expected +0.4% m/m and +4.3% y/y, Jun -0.2% m/m and +4.2% y/y.
0600 ETUK Aug CBI trends total orders expected unch at -10. Aug CBI trends selling prices, Jul 1.
EUR0730 ETECB Governing Council member Ewald Nowotny speaks on an academic panel about Europes Crisis: Monetary Policy, Financial Markets, or Real Investment?
JPN2135 ETJapan Aug Nikkei manufacturing PMI, Jul 51.2.
CHI2145 ETChina Aug Caixin flash manufacturing PMI expected +0.4 to 48.2, Jul 47.8.
U.S. STOCK CALENDAR08/20/2015
CompanyTickerTimeEvent DescriptionPeriodEstimate
L Brands IncLB US9:00Q2 2016 Earnings CallQ2 2016
Gap Inc/TheGPS US16:00Q2 2016 Earnings ReleaseQ2 20160.64
Ross Stores IncROST US16:00Q2 2016 Earnings ReleaseQ2 20160.623
Hewlett-Packard CoHPQ USAft-mktQ3 2015 Earnings ReleaseQ3 20150.856
Intuit IncINTU USAft-mktQ4 2015 Earnings ReleaseQ4 2015-0.112
salesforce.com incCRM USAft-mktQ2 2016 Earnings ReleaseQ2 20160.175

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