US : Pre Market News – 26 Jul 2016

Sep E-mini S&Ps (ESU16 -0.08%) this morning are little changed as the market awaits tomorrow’s outcome of the 2-day FOMC meeting that begins today. The chances are virtually zero for a Fed rate hike but the market is still a little nervous that the FOMC may adopt slightly more hawkish language in its post-meeting statement. The Euro Stoxx 50 index this morning is mildly lower by -0.19%. Japanese stocks today closed down -1.43% after Japanese Finance Aso poured cold water on hopes for a big fiscal stimulus program when he said that the government will “leave actual policy measures to the BOJ.” Other Asian stock markets today closed mostly higher: Hong Kong +0.62%, China Shanghai +1.14%, Taiwan +0.37%, Australia +0.07%, Singapore +0.12%, South Korea +0.83%, India -0.42%, Turkey -0.48%.

The dollar index (DXY00 -0.23%) this morning is mildly lower by -0.27% this morning. EUR/USD (^EURUSD) is up +0.0012 (+0.11%). USD/JPY (^USDJPY) is sharply lower by -1.42 yen (-1.34%) on Japanese Finance Minister Aso’s comments that dampened hopes for an aggressive new round of Japanese fiscal stimulus. The BOJ meets later this week. Sterling is down -0.1% this morning after BOE MPC member Martin Weale said in an interview with the Financial Times that he favors immediate monetary stimulus because Brexit has shaken the UK economy more than he expected. The market is widely expecting the BOE at its meeting next week to cut interest rates by 25 bp from 0.50% in response to Brexit.

Sep 10-year T-note prices (ZNU16 +0.09%) this morning are up +3 ticks as the market awaits Wednesday’s FOMC announcement.

Commodity prices this morning are little changed on net. Sep WTI crude oil (CLU16 -1.16%) is down -0.43 (-1.00%) and Sep gasoline (RBU16 -1.44%) is down -0.0174 (-1.30%) on a continued slide on high crude oil and product inventories and the 2-month rise in U.S. active oil rigs that will boost U.S. oil production. Metals prices are mixed with some support from the weaker dollar index. Aug gold (GCQ16 +0.01%) is up +0.9 (+0.07), Sep silver (SIU16 +0.24%) is up +0.068 (+0.35%), and Sep copper (HGU16 -0.43%) is down -0.007 (-0.32%). Grains this morning are mixed with Dec corn down -0.25 (-0.07%), Sep soybeans up +7.00 (+0.72%), and Sep wheat down -2.75 (-0.64%). Softs this morning are trading higher with some support from the weaker dollar: Oct sugar +0.11 (+0.55%), Sep coffee +1.10 (+0.78%), Sep cocoa +6 (+0.21%), and Dec cotton +0.35 (+0.48%).

Key U.S. news today includes: (1) May S&P/CaseShiller composite-20 home price index (expected +0.2% m/m and +5.6% y/y, Apr +0.45% m/m and +5.44% y/y), (2) prelim-Jul Markit services PMI (expected +0.6 to 52.0, Jun 51.4. Jul Markit composite PMI, Jun 51.2), (3) Jul consumer confidence from the Conference Board (expected -2.5 to 95.5, Jun +5.6 to 98.0), (4) Jul Richmond Fed manufacturing survey (expected +3 to -4, Jun -6 to -7), (5) Jun new home sales (expected +1.6% to 560,000, May -6.0% to 551,000), (6) FOMC begins 2-day meeting, and (7) Treasury auctions $ 34 billion of 5-year T-notes.

There are 46 of the S&P 500 companies that report earnings today with notable reports including: Apple (consensus $ 1.39), Caterpillar (0.96), Verizon (0.92), McDonalds (1.39), Under Amour (0.03).

U.S. IPO’s scheduled to price today: Kadmon Holdings (KDMN).

Equity conferences this week include: none.

Sep E-mini S&Ps this morning are little changed as the market awaits the results of the 2-day FOMC meeting that begins today. Monday’s closes: S&P 500 -0.30%, Dow Jones -0.42%, Nasdaq -0.05%. The S&P 500 on Monday closed lower on concern that the FOMC at its Tue-Wed meeting might adopt more hawkish language and on long liquidation pressure after the sharp rally seen in the first half of July. Stocks were also undercut by weakness in energy producers after the -2.4% sell-off in Sep crude oil prices.

• Today is a big day for earnings results with 46 of the SPX companies scheduled to report.
• Positive earnings results so far this morning include du Pont (DD +0.66%) (1.24 vs consensus of 1.10), Centene (CNC -0.17%) (1.10 vs 1.09), Avery Denison (AVY -0.47%) (1.09 vs 1.01), Waters Corp (WAT -0.64%) (1.58 vs 1.45), DTE Energy (DTE -0.59%) (0.98 vs 0.89), United Technologies ({=UTX) (1.82 vs 1.68), Baxter (BAX -0.47%) (0.46 vs 0.40), Verizon (VZ -0.41%) (0.94 vs 0.92), Masco (MAS +1.30%) (0.46 vs 0.43), Fidelity National Information Services (FIS -0.10%) (0.90 vs 0.87), Valero (VLO +0.82%) (1.07 vs 0.99).
• Negative earnings results this morning include Reynolds American (RAI +0.04%) (0.58 vs 0.61), Starwood (HOT +0.18%) (0.71 vs 0.73), KeyCorp (KEY -1.10%) (0.27 vs 0.28), Nielsen (NLSN -1.06%) (0.71 vs 0.715), and Under Armour (UA +1.73%) (0.01 vs 0.04).
• Annheuser-Busch InBev (ABI Euronext) raised its offer for SABMiller Plc (SAB London) by 2.3% to 79 billion pounds to account for the Brexit-related plunge in sterling.
• Commerzbank AG (CMZB) is down nearly 5% this morning after reporting a deterioration of a capital strength ratio and helped drag down other European banks ahead of Friday’s stress-test results.
• CoreLogic (CLGX -0.69%) rallied +6% in after-hours trading on positive earnings results along with higher 2016 guidance and a boost in full-year repurchase target.
• Texas Instruments (TXN +1.11%) rallied +5% in after-hours trading on positive earnings results of 76 cents vs expectations of 72 cents.
• Celgene (CELG +0.38%) fell -3% in after-hours trading on disappointing news about its “Remarc” product.
• Las Vegas Sands (LVS +1.01%) rallied +3% in after-hours trading despite weaker-than-expected earnings results as the company indicated a possible turnaround in Macau.
• Gilead Sciences (GILD +2.31%) fell -4% in after-hours trading after reducing its 2016 sales forecast.
• MB Financial (MBFI +0.26%) will replace First Niagra (FNFG) in the S&P MidCap 400.

Sep 10-year T-note prices this morning up 3 ticks. Monday’s closes: TYU6 -2, FVU6 -3. Sep 10-year T-notes on Monday closed mildly lower on supply overhang amidst this week’s $ 103 billion T-note package and on some concern that the FOMC at its Tue-Wed meeting might adopt more hawkish language in its post-meeting statement. T-notes found some support from the mild sell-off in stocks and on the -2.6% drop in crude oil prices, which pushed the 10-year breakeven inflation expectations rate lower by -2 bp to 1.50%.

The dollar index this morning is mildly lower by -0.27% mainly due to yen strength as USD/JPY fell sharply by -1.42 yen (-1.34%) on reduced hopes for a large Japanese fiscal stimulus package. Monday’s closes: Dollar index -0.18 (-0.19%), EUR/USD +0.0018 (+0.16%), USD/JPY -0.32 (-0.30%). The dollar index on Monday edged to a new 4-1/2 month high but fell back and closed mildly lower. The dollar was undercut by some long liquidation pressure in the dollar index after posting a new 4-1/2 month high. In addition, EUR/USD saw some strength on the stronger-than-expected German IFO business climate index, which fell -0.4 points to 108.3, stronger than market expectations of -1.2 to 107.5. The dollar index found some support on the possibility that the FOMC in its post-meeting statement to be released on Wednesday might adopt slightly more hawkish language.

Sep WTI crude oil is down -0.43 (-1.00%) and Sep gasoline is down -0.0174 (-1.30%) on a continued slide on high crude oil and product inventories and the 2-month rise in U.S. active oil rigs that will boost U.S. oil production. Monday’s closes: CLU6 -1.06 (-2.40%), RBU6 -0.0280 (-2.06%). Sep crude oil and gasoline closed sharply lower on Monday on technical selling with a new 3-month low in Sep crude oil and on carry-over pressure from last Friday’s Baker Hughes report that the number of active U.S. oil rigs rose by +14 rigs to 371, bringing the 8-week upward rebound to a total of +55 rigs (+17.4%).