Wed Mar 30 2016
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Live Index – Wed, 30 Mar 2016 Premarket

PREMARKET WORLD NEWS

World equity markets are showing solid gains this morning on relief about Fed Chair Yellen’s dovish comments yesterday, which resulted in delayed expectations for the Fed’s next rate hike. The market is now discounting the chances for a June rate hike at only about 30% versus 50% last week. June E-mini S&Ps (ESM16 +0.57%) are up +13.50 points (+0.66%) this morning and the Euro Stoxx 50 index is up +1.62%. European stocks were able to shake off today’s news that the European Commission’s March Eurozone executive and consumer confidence index fell by -0.9 points to a 1-year low of 103.0 from Feb’s 103.9, weaker than market expectations for a -0.1 point decline to 103.8. The poll was conducted before the March 22 terrorist attacks in Brussels.

China’s Shanghai Composite index today closed sharply higher by +2.77%. Japan’s Nikkei index closed -1.31%, but the other Asian stock markets closed higher: Hong Kong +2.15%, Taiwan +1.39%, Australia +0.11%, Singapore +1.90%, South Korea +0.41%, India +1.76%, Turkey +1.25%.

The dollar index (DXY00 -0.30%) this morning is down by another -0.19 points (-0.20%) on carry-over bearishness from yesterday’s dovish Yellen comments. EUR/USD (^EURUSD) is up +0.0028 (+0.25%) and USD/JPY (^USDJPY) is down -0.38 (-0.34%). June 10-year T-note prices (ZNM16 -0.02%) are down -1.5 ticks on reduced safe-haven demand with the rally in world stocks.

Commodity prices this morning are up by an average +0.64% on the dollar’s continued weakness. May WTI crude oil (CLK16 +1.67%) is up +0.64 (+1.67%) and May gasoline (RBK16 +0.20%) is up +0.0029 (+0.20%). May natural gas (NGK16 +0.66%) is up +0.25%. Precious metals prices are higher again today on the weak dollar but copper prices are lower: April gold (GCJ16 -0.08%) +2.1 (+0.17%), May silver (SIK16 +0.80%) +0.147 (+0.97%), May copper (HGK16 -0.61%) -0.016 (-0.70%).

Grains are narrowly mixed this morning with May corn slightly lower by -0.25 (-0.07), May soybeans slightly higher by +0.75 (+0.08%), and May wheat slightly lower by -0.50 (-0.10%). Softs are higher this morning on the weaker dollar: May sugar +0.21 (+1.32%), May coffee +.85 (+1.45%), May cocoa +37 (+1.25%), and May cotton +0.24 (+0.42%).

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) weekly MBA mortgage applications (previous -3.3% with purchase sub-index -1.0% and refi sub-index -4.9%), (2) Mar ADP employment change (expected +195,000, Feb +214,000), (3) the Treasury’s auction of $ 28 billion of 7-year T-notes, (4) Chicago Fed President Charles Evans’ speech on the economy and monetary policy at a Forecasters Club of New York luncheon, and (5) EIA Weekly Petroleum Status Report.

There are 6 of the Russell 1000 companies that report earnings today: Paycheck (consensus $ 0.50), Micron Technology (-0.09), Carnival (0.32), Alere (0.58), lululemon athletica (0.80), TerraForm Power (-0.21).

U.S. IPO’s scheduled to price today: City Office REIT (CIO).

Equity conferences this week include: Jefferies Animal Health Summit on Thu, William Blair Cancer Immunotherapy A Long-Awaited Reality Conference on Thu.

June E-mini S&Ps this morning are trading with a solid gain of +0.66% on optimism about today’s rally in world stocks. Tuesday’s closes: S&P 500 +0.88%, Dow Jones +0.56%, Nasdaq +1.67%. The S&P 500 on Tuesday closed with fairly sharp gains after Fed Chair Yellen said that that Fed needs to “proceed cautiously” in raising interest rates due to heightened risks from the global economy. Stocks also received a boost from the stronger-than-expected U.S. March consumer confidence index of +2.2 to 96.2 (vs expectations of 94.0) and the stronger-than-expected Jan CaseShiller Composite-20 house price index report of +0.8% m/m (vs expectations of +0.7%). There was also strength in tech stocks as the Nasdaq Composite rallied sharply by +1.67% to easily post a new 3-month high.

PREMARKET U.S. STOCKS
  • Valeant (VRX +0.42%) is seeking to extend its 10Q filing date to July 31 but the company said it is “comfortable” with its current liquidity position and that it is well positioned to meet its obligations.
  • AllScripts (MDRX +5.43%) was raised to overweight by Morgan Stanley with a target of $ 16
  • State Street (STT +0.14%) agreed to buy GE Asset Management for up to $ 485 million
  • Foxxcon finalized a deal to buy Japan’s Sharp for $ 3.5 billion
  • Sonic (SONC -0.18%) rallied 4% in after-hours trading after beating earnings (18 cents vs 16-cent consensus) and boosting guidance.
  • Dave & Busters (PLAY +2.19%) reported Q4 EPS of 53 cents, better than the consensus of 43 cents.
  • Verint Systems (VRNT +0.95%) fell sharply by 12% in after-hours trading after reporting Q4 EPS of 90 cents, below the consensus of $ 1.17.
  • Landec Corp (LNDC +0.94%) fell -12% in after-hours trading after reporting EPS of 1 cents, below the consensus of 3 cents.
  • Dole Foods’ (DOLE +0.74%) outlook was revised to stable from positive by S&P.
  • Novartis (NVS -1.05%) is investigating allegations of bribery in Turkey, according to Reuters report.
  • Spotify is raising $ 1 billion in debt financing from TPG, Dragoneer and Goldman Sachs, according to Dow Jones.
  • Agios Pharm (AGIO +2.24%) rallied 2% in after-hours trading after being rated as a New Buy at SunTrust.
MARKET COMMENTS

June 10-year T-note prices are down -1.5 ticks on reduced safe-haven demand with the rally in world stocks. Tuesday’s closes: TYM6 +21.00, FVM6 +13.50. Jun 10-year T-notes on Tuesday rallied sharply on Fed Chair Yellen’s dovish comment that the Fed must move cautiously on raising interest rates due to international risks. In response, the yield on the Dec 2016 federal funds futures contract fell by -5.5 bp to 0.575%, illustrating delayed expectations for the Fed’s next rate hike.

The dollar index this morning is down by another -0.19 points (-0.20%) on carry-over bearishness from yesterday’s dovish Yellen comments. EUR/USD is up +0.0028 (+0.25%) and USD/JPY is down -0.38 (-0.34%). Tuesday’s closes: Dollar Index -0.796 (-0.83%), EUR/USD +0.0095 (+0.85%), USD/JPY -0.75 (-0.66%). The dollar index on Tuesday closed sharply lower on Fed Chair Yellen’s dovish speech in New York that resulted in delayed Fed rate hike expectations.

May WTI crude oil this morning is up +0.64 (+1.67%) and May gasoline is up +0.0029 (+0.20%) on support from the weaker dollar. Tuesday’s closes: CLK6 -0.88 (-2.16%), RBK6 -0.0142 (-0.95%). May crude and gasoline on Tuesday closed lower after Iran reiterated that it will not freeze production, although Iran did agree to attend the April 17 meeting among OPEC and non-OPEC oil producers to discuss a production freeze. Crude oil prices were also undercut by expectations for a 3.0 million bbl rise in Wednesday’s EIA U.S. crude oil inventories report.

GLOBAL EVENT CALENDAR03/30/2016
US0700 ETWeekly MBA mortgage applications, previous -3.3% with purchase sub-index -1.0% and refi sub-index -4.9%.
0815 ETMar ADP employment change expected +195,000, Feb +214,000.
1030 ETEIA Weekly Petroleum Status Report.
1300 ETTreasury auctions $ 28 billion of 7-year T-notes.
1300 ETChicago Fed President Charles Evans speaks on the economy and monetary policy at a Forecasters Club of New York luncheon.
JPN0000 ETJapan Feb vehicle production, Jan -5.8% y/y.
EUR0500 ETEurozone Mar economic confidence expected unch at 103.8. Mar business climate indicator expected +0.01 to 0.08, Feb 0.07.
0500 ETRevised Eurozone Mar consumer confidence, preliminary -0.9 to -9.7.
GER0800 ETGerman Mar CPI (EU harmonized) expected +0.7% m/m and unch y/y, Feb +0.4% m/m and -0.2% y/y.
UK1901 ETUK Mar Lloyds business barometer, Feb 28.
1905 ETUK Mar GfK consumer confidence expected -1 to -1, Feb 0.
U.S. STOCK CALENDAR03/30/2016
CompanyTickerTimeEvent DescriptionPeriodEstimate
Paychex IncPAYX USBef-mktQ3 2016 Earnings ReleaseQ3 20160.498
lululemon athletica IncLULU US9:00Q4 2016 Earnings CallQ4 2016
Paychex IncPAYX US9:30Q3 2016 Earnings CallQ3 2016
Carnival CorpCCL US10:00Q1 2016 Earnings CallQ1 2016
McCormick & Co Inc/MDMKC US10:00Annual General MeetingY 2016
Micron Technology IncMU US16:30Q2 2016 Earnings CallQ2 2016
Micron Technology IncMU USAft-mktQ2 2016 Earnings ReleaseQ2 2016-0.085
Carnival CorpCCL USQ1 2016 Earnings ReleaseQ1 20160.32
Equifax IncEFX USInvestor Meeting – Kansas CityY 2016
Equifax IncEFX USInvestor Meeting – DallasY 2016
Alere IncALR USQ4 2015 Earnings ReleaseQ4 20150.576
lululemon athletica IncLULU USQ4 2016 Earnings ReleaseQ4 20160.799
TerraForm Power IncTERP USQ4 2015 Earnings ReleaseQ4 2015-0.206

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