US : Pre Market News – 20 Oct 2016

Dec E-mini S&Ps (ESZ16 +0.12%) are up +0.14% on better-than-expected earnings results from American Express and European stocks are up +0.28% ahead of today’s ECB meeting, where investors will scour comments from ECB President Draghi for any changes to the central bank’s QE program. Stock gains were limited as a -1.10% decline in crude oil prices (CLX16 -1.09%) undercut energy producing stocks. The dollar rose in overnight trading on hawkish comments from New York Fed President Dudley who reiterated that he expects a Fed interest rate increase by the end of the year. Asian stocks settled mostly higher: Japan +1.39%, Hong Kong +0.30%, China -0.01%, Taiwan +0.36%, Australia +0.12%, Singapore -0.07%, South Korea +0.08%, India +0.52%. Japan’s Nikkei Stock Index rallied to a 4-1/2 month high as exporters strengthened after the yen fell for the first time in four sessions.

The dollar index (DXY00 +0.01%) is up +0.02%. EUR/USD (^EURUSD) is up +0.04%. USD/JPY (^USDJPY) is up +0.25%.

Dec 10-year T-note prices (ZNZ16 -0.01%) are up +0.5 of a tick.

New York Fed President Dudley (voter) said the Fed is “reasonably close” to its twin mandates on employment and inflation and “if the economy stays on the current trajectory, I do expect to see an interest-rate increase later this year.”

Key U.S. news today includes: (1) weekly initial unemployment claims (expected +4,000 to 250,000, previous unch at 246,000) and continuing claims (expected +7,000 to 2.053 million, previous -16,000 to 2.046 million), (2) Oct Philadelphia Fed business outlook index (expected -7.5 to 5.3, Sep +10.8 to 12.8), (3) Sep existing home sales (expected +0.4% to 5.35 million, Aug -0.9% to 5.33 million), (4) Sep leading indicators (expected +0.2%, Aug -0.2%), (5) Treasury auctions $ 5 billion 30-year TIPS, and (6) USDA weekly Export Sales.

Notable S&P 500 earnings reports today include: Microsoft (consensus $ 0.68), PayPal (0.35), American Airlines (1.69), PulteGroup (0.44), Walgreens (0.99), Verizon (0.99), Schlumberger (0.22).

U.S. IPO’s scheduled to price today: none.

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

American Express (AXP +1.95%) jumped over 5% in pre-market trading after it reported Q3 EPS of $ 1.24, well above consensus of 96 cents.

United Rentals (URI -1.13%) rose nearly 5% in after-hours trading after it lifted its lower end of its 2016 revenue estimate to $ 5.65 billion-$ 5.75 billion from a July 20 view of $ 5.60 billion-$ 5.80 billion.

Mattel (MAT -0.29%) rallied over 4% in after-hours trading after it reported Q3 net sales of $ 1.8 billion, above consensus of $ 1.78 billion.

eBay (EBAY +2.78%) dropped 7% in after-hours trading after it said it sees Q4 adjusted EPS continuing operations of 52 cents-54 cents, at the lower end of consensus of 54 cents.

Kinder Morgan (KMI +2.63%) was upgraded to ‘Outperform’ from ‘Neutral’ at Credit Suisse with a target price of $ 26.

Manitowoc (MTW +2.37%) tumbled 8% in after-hours trading after it said orders and backlog were down double digits during Q3 and it is temporarily shutting down some mobile output lines in Q4.

BJ’s Restaurants (BJRI +0.76%) dropped 6% in after-hours trading after it reported Q3 adjusted EPS of 30 cents, below consensus of 32 cents, and said comparable restaurant sales were down -3.4%, weaker than consensus of -1.9%.

FMC Technologies (FTI +1.09%) gained over 1% in after-hours trading after it reported Q3 EPS continuing operations of 35 cents, better than consensus 23 cents.

East West Bancorp (EWBC +1.25%) rose 2% in after-hours trading after it reported Q3 EPS of 76 cents, higher than consensus of 69 cents, and then raised guidance on full-year EPS to $ 2.91-$ 2.93 from a prior view of $ 2.83-$ 2.87.

Core Laboratories NV (CLB +2.78%) fell over 1% in after-hours trading after it said it sees Q4 EPS of 38 cents-40 cents, weaker than consensus of 41 cents.

Landstar Systems (LSTR unch) climbed nearly 5% in after-hours trading after it said it sees Q4 EPS of 85 cents-90 cents, higher than consensus of 82 cents.

WD-40 Co. (WDFC -2.50%) gained over 1% in after-hours trading after it reported Q4 EPS of 99 cents, above consensus of 82 cents.

DXP Enterprises (DXPE +0.07%) sank 17% in after-hours trading after it reported preliminary Q3 sales of $ 228 million-$ 231 million, below consensus of $ 250.7 million.

Select Comfort (SCSS +2.13%) plunged over 15% in after-hours trading after it reported Q3 WPS of 56 cents, weaker than consensus of 57 cents, and then lowered guidance on full-year EPS to $ 1.15-$ 1.25 from a prior view of $ 1.25-$ 1.45.

Dec E-mini S&Ps (ESZ16 +0.12%) this morning are up +3.00 points (+0.14%). Wednesday’s closes: S&P 500 +0.22%, Dow Jones +0.22%, Nasdaq -0.06%. The S&P 500 on Wednesday closed higher on a rally in energy producer stocks as the price of crude oil jumped by +2.6% to a 1-1/4 year high. Stocks were also boosted by +6.3% increase in U.S. Sep building permits, a proxy for future construction, to 1.225 million, stronger than expectations of +1.1% to 1.165 million and the most in 10 months. Stocks were undercut by the unexpected -9.0% decline in U.S. Sep housing starts to a 1-1/2 year low of 1.047 million, weaker than expectations of +2.9% to 1.175 million.

Dec 10-year T-notes (ZNZ16 -0.01%) this morning are up +0.5 of a tick. Wednesday’s closes: TYZ6 -1.00, FVZ6 unch. Dec 10-year T-notes on Wednesday fell back from a 2-week high and closed lower on the upbeat Fed Beige Book that bolstered the case for a Fed rate hike. T-notes were also undercut by reduced safe-haven demand with the rally in stocks. T-notes found support on the unexpected decline in U.S. Sep housing starts to a 1-1/2 year low.

The dollar index (DXY00 +0.01%) this morning is up +0.018 (+0.02%). EUR/USD (^EURUSD) is up +0.0004 (+0.04%). USD/JPY (^USDJPY) is up +0.26 (+0.25%). Wednesday’s closes: Dollar index +0.025 (+0.03%), EUR/USD -0.0007 (-0.06%), USD/JPY -0.43 (-0.41%). The dollar index on Wednesday closed higher on the Fed’s Beige Book that said “most districts indicated a modest or moderate pace of expansion,” which supports the case for a Fed interest rate increase sooner rather than later. The dollar was also boosted by the slide in EUR/USD to a 2-3/4 month low on long liquidation ahead of Thursday’s ECB meeting.

Nov WTI crude oil (CLX16 -1.09%) this morning is down -57 cents (-1.10%) and Nov gasoline (RBX16 -0.61%) is down -0.0105 (-0.69%). Wednesday’s closes: Nov crude +1.31 (+2.60%), Nov gasoline +0.0058 (+0.39%). Nov crude oil and gasoline on Wednesday closed higher with Nov crude at a 1-1/4 year high. Crude oil prices were boosted by comments from Saudi Arabia’s Minister of Energy and Industry, Khalid Al-Falih, who said that many nations have given “strong signals” that they are willing to join OPEC in cutting production to secure a continued improvement in oil prices. Crude oil was also boosted by the unexpected -5.25 million bbl draw in EIA crude inventories to an 8-1/2 month low versus expectations of +1.875 million bbl. In addition, Cushing crude oil inventories fell by -1.63 million bbl to a 10-month low.