Wed May 25 2016
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Live Index – Wed, 25 May 2016 Premarket

PREMARKET WORLD NEWS

Jun E-mini S&Ps (ESM16 +0.39%) are up +0.37% and European stocks are up +1.35%, both at 3-week highs, on speculation a stronger U.S. economy can handle higher interest rates. A +1.09% rally in July WTI crude oil (CLN16 +1.07%) to a 7-1/4 month high is fueling gains in energy producing stocks and M&A activity is giving equities a lift as well with Hewlett Packard Enterprise up 11% in pre-market trading after it said it will merge its enterprise-services division with Computer Sciences Corp. in a deal valued at $ 8.5 billion for HP Enterprise shareholders. European stocks also found support on an increase in German business confidence after the German May IFO business climate rose to a 5-month high. Asian stocks settled mostly higher: Japan +1.57%, Hong Kong+2.71%, China -0.23%, Taiwan +1.15%, Australia +1.45%, Singapore +0.60%, South Korea +1.37%, India +2.28%.

The dollar index (DXY00 -0.03%) is up +0.02% at a 1-3/4 month high. EUR/USD (^EURUSD) is up +0.02%. USD/JPY (^USDJPY) is up +0.19%.

Jun T-note prices (ZNM16 -0.06%) are down -3 ticks.

The German May IFO business climate rose +1.0 to 107.7, stronger than expectations of +0.2 to 106.8 and a 5-month high.

The Chinese yuan tumbled to a 3-1/2 month low against the dollar after the PBOC weakened its reference rate by -0.3% to 6.5693 per dollar, the lowest in 5 years. The PBOC is attempting to guide the yuan lower and avoid panic selling as it deals with the prospects of a Fed rate hike that has boosted the dollar.

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) weekly MBA mortgage applications (previous -1.6% with purchase sub-index -5.7% and refi sub-index +1.4%), (2) Philadelphia Fed President Patrick Harker (non-voter) speaks at a forum on America’s economy in 2016 at the National Constitution Center in Philadelphia, (3) Mar FHFA house price index (expected +0.5% m/m, Feb +0.4% m/m), (4) prelim-May Markit U.S. services PMI (expected +0.2 to 53.0, Apr +1.5 to 52.8), (5) Minneapolis Fed President Neel Kashkari (non-voter) participates in a conversation about the relationship between the energy sector and monetary policy at a conference in Bismarck, ND, (6) Dallas Fed President Robert Kaplan (non-voter) speaks at the Greater Houston Partnership Thought Leader Series, (7) the Treasury auctions $ 34 billion of 5-year T-notes and $ 13 billion of 2-year floating-rate notes, and (8) EIA Weekly Petroleum Status Report.

There are 6 of the S&P 500 companies that report earnings today: Tiffany (consensus $ 0.68), HP (0.38), PVH Corp (1.43), NetApp (0.58), SCRA (0.48), Costco (1.22).

U.S. IPO’s scheduled to price today: GMS Inc (GMS), Reata Pharmaceuticals (RETA), US Foods Holding Co (USFD), Landcadia Holdings (LCAHU).

Equity conferences during the remainder of this week include: UBS Global Health Care Conference on Mon-Wed, J.P. Morgan Global Technology, Media and Telecom Conference on Mon-Wed, UBS Global Oil & Gas Conference on Tue-Wed, Wolfe Research Global Transportation & Industrials Conference on Tue-Wed.

PREMARKET U.S. STOCKS

Intuit (INTU +2.57%) rose 1% in after-hours trading after it reported Q3 adjusted EPS of $ 3.43, better than consensus of $ 3.21, and then raised guidance on full-year adjusted EPS to $ 3.63-$ 3.65 from a February 25 estimate of $ 3.45-$ 3.50.

Arthur J Gallagher (AJG +1.11%) rose nearly 1% in after-hours trading after it announced that it will replace Coca-Cola Enterprises in the S&P 500 after the close of trading Friday, May 27.

Dycom Industries (DY +1.30%) jumped over 8% in pre-market trading after it reported Q3 adjusted EPS of $ 1.08, well above consensus of 74 cents, and then said it sees Q4 adjusted EPS of $ 1.45-$ 1.60, higher than consensus of $ 1.36.

Noble Energy (NBL -1.04%) was upgraded to ‘Buy’ from ‘Neutral’ at Sterne Agee CRT.

Best Buy (BBY -7.42%) was downgraded to ‘Hold’ from ‘Buy’ at Deutsche Bank.

Pilgrim’s Pride (PPC +0.20%) was downgraded to ‘Hold’ from ‘Buy’ at BB&T Capital Markets.

ON Semiconductor (ON +2.18%) gained 2% in after-hours trading after it was rated a new ‘Outperform’ at CLSA.

Axalta Coating Systems (AXTA +1.41%) fell nearly 1% in after-hours trading after it announced a sale of 25 million common shares by affiliates of the Carlyle Group.

Computer Sciences (CSC +1.86%) surged over 20% and Hewlett Packard Enterprises (HPE +1.12%) jumped 11% in pre-market trading after CSC announced that it will merge with HP Enterprise’s Services Unit.

Sportsman’s Warehouse Holdings (SPWH -2.10%) dropped 4% in after-hours trading after it said it sees fiscal-year 2017 adjusted EPS of 65 cents-73 cents, below consensus of 73 cents.

Chesapeake Energy (CHK +10.35%) rose over 2% in after-hours trading after it announced, for the second time in a month, a debt for equity swap as it attempts to strategically reduce its debt load.

American Axle & Manufacturing Holdings (AXL +2.68%) gained over 4% in after-hours trading after it announced that it will replace Education Realty in the Smallcap 600 after the close of trading Friday, May 27.

Nimble Storage (NMBL +2.08%) jumped over 10% in after-hours trading after it reported a Q1 adjusted EPS loss of -24 cents, a smaller loss than consensus of -26 cents, and then said it sees Q2 revenue of $ 93 million-$ 96 million, above consensus of $ 92.7 million.

MARKET COMMENTS

June E-mini S&Ps (ESM16 +0.39%) this morning are up +7.75 points (+0.37%) at a 3-week high. Tuesday’s closes: S&P 500 +1.37%, Dow Jones +1.22%, Nasdaq +2.05%. The S&P 500 on Tuesday rose to a 1-1/2 week high and closed sharply higher on carryover support from a rally in European stocks to a 3-week high after German Q1 capital investment rose +1.8% q/q (stronger than expectations of +1.4% q/q and the biggest increase in 2 years) and on the +16.6% surge in U.S. Apr new home sales to 619,000 (stronger than expectations of +2.4% to 523,000 and the most in 8-1/4 years). Stocks were also boosted by a rally in technology stocks led by a +2% gain in Alphabet and Microsoft.

June 10-year T-note prices (ZNM16 -0.06%) this morning are down -3 ticks. Tuesday’s closes: TYM6 -6.00, FVM6 -3.50. Jun T-notes on Tuesday closed lower on the surge in U.S. Apr new home sales to their highest in 8-1/4 years and reduced safe-haven demand with the the rally in the S&P 500 to a 1-1/2 week high.

The dollar index (DXY00 -0.03%) this morning is up +0.019 (+0.02%) at a fresh 1-3/4 month high. EUR/USD (^EURUSD) is up +0.0002 (+0.02%). USD/JPY (^USDJPY) is up +0.21 (+0.19%). Tuesday’s closes: Dollar Index +0.340 (+0.36%), EUR/USD -0.0004 (-0.04%), USD/JPY -0.91 (-0.83%). The dollar index on Tuesday rose to a 1-3/4 month high and closed higher on the stronger-than-expected U.S. Apr new home sales of +16.6%, which bolsters the case for the Fed to raise interest rates. The dollar was also boosted by weakness in EUR/USD which fell to a 1-3/4 month low after an unexpected decline in the German May ZEW survey expectations of economic growth.

July WTI crude oil (CLN16 +1.07%) is up +53 cents (+1.09%) at a 7-1/4 month high. July gasoline (RBN16 -0.70%) is down -0.0132 (-0.80%). Tuesday’s closes: CLN6 +0.54 (+1.12%), RBN6 +0.0084 (+0.51%). July crude oil and gasoline on Tuesday closed higher with July gasoline at a 9-1/2 month high on expectations for Wednesday’s EIA crude inventories to fall -2.25 million bbl and by the rally in the S&P 500 to a 1-1/2 week high. Crude oil prices were undercut by the rally in the dollar index to a 1-3/4 month high.

GLOBAL EVENT CALENDAR05/25/2016
US0700 ETWeekly MBA mortgage applications, previous -1.6% with purchase sub-index -5.7% and refi sub-index +1.4%.
0900 ETPhiladelphia Fed President Patrick Harker (non-voter) speaks at a forum on Americas economy in 2016 at the National Constitution Center in Philadelphia.
0900 ETMar FHFA house price index expected +0.5% m/m, Feb +0.4% m/m. Q1 house price purchase index, Q4 +1.4% q/q.
0945 ETPrelim-May Markit services PMI expected +0.2 to 53.0, Apr +1.5 to 52.8. May composite PMI, Apr +1.1 to 52.4.
1030 ETEIA Weekly Petroleum Status Report.
1130 ETTreasury auctions $ 13 billion of 2-year floating-rate notes.
1140 ETMinneapolis Fed President Neel Kashkari (non-voter) participates in a conversation about the relationship between the energy sector and monetary policy at a conference in Bismarck, ND.
1300 ETTreasury auctions $ 34 billion of 5-year T-notes.
1400 ETDallas Fed President Robert Kaplan (non-voter) speaks at the Greater Houston Partnership Thought Leader Series.
GER0200 ETGerman Jun GfK consumer confidence expected unch at 9.7, May +0.3 to 9.7.
0400 ETGerman May IFO business climate expected +0.2 to 106.8, Apr 106.6. May IFO current assessment expected +0.1 to 113.3, Apr 113.2. May IFO expectations expected +0.4 to 100.8, Apr 100.4.
EUR0630 ETECB Vice President Vitor Constancio speaks at an event in London titled The International Monetary and Financial System-A European Perspective.
JPN1950 ETJapan Apr PPI services expected +0.2% y/y, Mar +0.2% y/y.
U.S. STOCK CALENDAR05/25/2016
CompanyTickerTimeEvent DescriptionPeriodEstimate
Tiffany & CoTIF USBef-mktQ1 2017 Earnings ReleaseQ1 20170.677
Aflac IncAFL US8:00Analyst MeetingY 2016
Tiffany & CoTIF US8:30Q1 2017 Earnings CallQ1 2017
Agilent Technologies IncA US9:00Analyst and Investor MeetingY 2016
ONEOK IncOKE US10:00Annual General MeetingY 2016
Southern Co/TheSO US10:00Annual General MeetingY 2016
Fidelity National Information Services IncFIS US10:00Annual General MeetingY 2016
Dollar General CorpDG US10:00Annual General Meeting
Exxon Mobil CorpXOM US10:30Annual General MeetingY 2016
Marathon Oil CorpMRO US11:00Annual General MeetingY 2016
DENTSPLY SIRONA IncXRAY US11:00Annual General Meeting
PayPal Holdings IncPYPL US11:00Annual General MeetingY 2016
Stericycle IncSRCL US12:00Annual General MeetingY 2016
Molson Coors Brewing CoTAP US13:00Annual General MeetingY 2016
HP IncHPQ US17:00Q2 2016 Earnings CallQ2 2016
NetApp IncNTAP US17:00Q4 2016 Earnings CallQ4 2016
CSRA IncCSRA US17:00Q4 2016 Earnings CallQ4 2016
HP IncHPQ USAft-mktQ2 2016 Earnings ReleaseQ2 20160.378
PVH CorpPVH USAft-mktQ1 2017 Earnings ReleaseQ1 20171.433
NetApp IncNTAP USAft-mktQ4 2016 Earnings ReleaseQ4 20160.577
CSRA IncCSRA USAft-mktQ4 2016 Earnings ReleaseQ4 20160.48
Costco Wholesale CorpCOST US21:00Q3 2016 Earnings ReleaseQ3 20161.221
Chevron CorpCVX USAnnual General Meeting
PPL CorpPPL USAnnual General Meeting
Amphenol CorpAPH USAnnual General Meeting
Juniper Networks IncJNPR USAnnual General Meeting
BlackRock IncBLK USAnnual General Meeting

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