Live Index – Mon, 21 Sep 2015 Premarket
December E-mini S&Ps (ESZ15 +0.64%) are up +0.22% and European stocks are up +0.42% as a late rally in Chinese stocks gave a boost to global markets. Gains in European stocks were muted after Volkswagen AG plunged over 20% after it admitted to cheating on U.S. air pollution tests for years. Emerging markets fell on concern the Fed may still raise interest rates this year after San Francisco Fed President Williams said on Saturday that Thursday’s decision by the Fed to raise interest rates was a “close call.” Asian stocks closed mixed: Japan closed for holiday, Hong Kong -0.75%, China +1.89%, Taiwan -1.83%, Australia -2.02%, Singapore +0.09%, South Korea -1.82%, India -0.10%. China’s Shanghai Composite reversed a loss of as much as 1.2% to close up +1.89% as Chinese industrial and technology companies rose on speculation that Chinese President Xi Jinping’s visit to the U.S. this week may lead to an increase in orders from the U.S.
The dollar index (DXY00 +0.66%) is up +0.48%. EUR/USD (^EURUSD) is down -0.19%. USD/JPY (^USDJPY) is up +0.39%.
Dec T-note prices (ZNZ15 -0.28%) are down -8 ticks.
Speaking Saturday at an event in Nashville, TN, St. Louis Fed President Bullard said he argued for a short-term interest rate hike at Thursday’s FOMC meeting and that there is a “strong case” for “normalizing” U.S. monetary policy.” He added that the Fed is “ready to go” in October on an interest rate increase if conditions warrant.
Speaking in New York at a symposium on China Saturday, San Francisco Fed President Williams said that Thursday’s FOMC decision was a “close call” and that despite the “significant challenges and risks” posed by global developments, he expects a Fed rate increase sometime this year.
Key U.S. news today includes: (1) Aug existing home sales (expected -1.6% to 5.50 million, Jul +2.0% to 5.59 million), and (2) Atlanta Fed President Dennis Lockhart’s comments on the economy to the Buckhead Rotary Club in Atlanta.
There are 3 companies in the Russell 1000 index that report earnings today: Lennar Corp (consensus $ 0.79), (2) Red Hat (0.44), Thor Industries (1.30).
U.S. IPO’s scheduled to price today include: none.
Equity conferences this week include: Cown & Company Fall Oilfield Tour on Mon, Raymond James North American Equities Conference on Tue, Scotia Capital Fertilizer & Chemicals Conference on Tue, and Mitsubishi UFJ Securities: Utilities Conference – New York on Thu.
Lennar (LEN -2.32%) reported Q3 EPS of 96 cents, well above consensus of 79 cents.
Goldman Sachs (GS -2.96%) was upgraded to ‘Outperform’ from ‘Perform’ at Oppenheimer.
D.R. Horton (DHI -1.68%) was downgraded to ‘Hold’ from ‘Buy’ at Deutsche Bank.
AerCap (AER -2.01%) and Integra LifeSciences (IART -0.11%) were both upgraded to Buy from Neutral at BofA/Merrill Lynch.
Precision Castparts (PCP -0.22%) was downgraded to ‘Sector Perform’ from ‘Outperform’ at RBC Capital.
lululemon (LULU -1.71%) was upgraded to ‘Overweight’ from ‘Equal Weight’ at Morgan Stanley.
PayPal (PYPL -1.20%) was upgraded to ‘Buy’ from ‘Hold’ at Stifel.
Molson Coors (TAP +2.15%) was upgraded to ‘Buy’ from ‘Hold’ at Societe Generale.
Micron (MU -5.55%) was initiated with an ‘Overweight’ at Barclays with a $ 20 price target.
HCP (HCP +0.57%) was downgraded to ‘Sell’ from ‘Neutral’ at Goldman Sachs.
AB InBev (BUD -0.42%) was downgraded to ‘Sector Perform’ from ‘Outperform’ at RBC Capital.
Nokia (NOK -2.08%) was upgraded to ‘Buy’ from ‘Hold’ at Deutsche Bank.
Atmel (ATML -2.15%) surged 24% in pre-market trading after it agreed to be taken over by Dialog Semiconductor for $ 4.6 billion.
Dec E-mini S&Ps (ESZ15 +0.64%) this morning are up +4.25 points (+0.22%). The S&P 500 Friday closed lower: S&P 500 -1.62%, Dow Jones -1.74%, Nasdaq -1.39%. Bearish factors included (1) concerns about global growth after the Fed said they refrained from raising interest rates at Thursday’s FOMC meeting due to the recent market turmoil caused after China devalued the yuan, (2) the +0.1% increase in Aug leading indicators, weaker than expectations of +0.2%, and (3) weakness in energy producers as crude oil plunged.
Dec 10-year T-notes (ZNZ15 -0.28%) this morning are down -8 ticks. Dec T-notes Friday rallied to a 2-week high and closed higher: TYZ5 +21.50, FVZ5 +9.50. Bullish factors included (1) carryover support from Thursday’s action by the Fed to keep interest rates unchanged, and (2) increased safe-haven demand for T-notes after stocks slumped.
The dollar index (DXY00 +0.66%) this morning is up +0.452 (+0.48%). EUR/USD (^EURUSD) is down -0.0022 (-0.19%). USD/JPY (^USDJPY) is up +0.47 (+0.39%). The dollar index Friday recovered from a 3-week low and closed higher: Dollar Index +0.313 (+0.33%), EUR/USD -0.00137 (-1.20%), USD/JPY -0.03 (-0.02%). Bearish factors included (1) weakness in EUR/USD after which fell back from a 3-week high and closed lower on comments from ECB Executive Board member Coeure who said that risks to Eurozone economic growth are on the downside and the ECB is ready to extend QE beyond Sep 2016 if needed, and (2) expectations for improved dollar interest rate differentials on the outlook for the Fed to still raise interest rates before the ECB, BOJ or PBOC.
Oct crude oil (CLV15 +1.97%) this morning is up +84 cents (+1.88%) and Oct gasoline (RBV15 +2.56%) is up +0.0348 (+2.57%). Oct crude oil and gasoline Friday closed sharply lower: CLV5 -2.22 (-4.73%), RBV5 -0.0105 (-0.76%). Bearish factors included (1) the slump in global stocks that undercuts confidence in the economic outlook and energy demand, (2) a rebound in the dollar after the dollar index recovered from a 3-week low and closed higher, and (3) the ongoing oil glut with U.S. crude inventories nearly 100 million bbl above the 5-year seasonal average.
|US||1000 ET||Aug existing home sales expected -1.6% to 5.50 million, Jul +2.0% to 5.59 million.|
|1100 ET||USDA weekly grain export inspections.|
|1300 ET||Atlanta Fed President Dennis Lockhart speaks on the economy to the Buckhead Rotary Club in Atlanta.|
|1600 ET||USDA weekly crop progress.|
|GER||0200 ET||German Aug PPI expected -0.3% m/m and -1.6% y/y, Jul unch m/m and -1.3% y/y.|
|Lennar Corp||LEN US||6:00||Q3 2015 Earnings Release||Q3 2015||0.788|
|Time Warner Cable Inc||TWC US||10:00||Extraordinary Shareholders Meeting||Y 2015|
|Lennar Corp||LEN US||11:00||Q3 2015 Earnings Call||Q3 2015|
|Thor Industries Inc||THO US||16:15||Q4 2015 Earnings Release||Q4 2015||1.3|
|Red Hat Inc||RHT US||17:00||Q2 2016 Earnings Call||Q2 2016|
|Red Hat Inc||RHT US||Aft-mkt||Q2 2016 Earnings Release||Q2 2016||0.441|
|Patterson Cos Inc||PDCO US||Annual General Meeting|
|Charter Communications Inc||CHTR US||Annual General Meeting – M&A Vote|