Live Index – Thu, 24 Jul 2014 Premarket

Sep E-mini S&Ps (ESU14 +0.21%) this morning are slightly higher by +0.13% on support from positive Chinese and Eurozone PMI reports and a +0.75% rally in the Euro Stoxx 50 index. The Russian Micex index this morning is slightly higher by +0.03% after the +0.4% rally on Wednesday and +1.55% rally on Tuesday. Asian stocks today closed higher nearly across the board: Japan -0.29%, Hong Kong +0.71%, China +1.78%, Taiwan +0.30%, Australia +0.20%, Singapore +0.39%, South Korea +0.06%, India +0.48%, and Turkey +1.07%. Sep 10-year T-notes (ZNU14 -0.12%) this morning are down -5.5 ticks due to higher global stocks and the strong Chinese and European PMI reports. The dollar index (DXY00 -0.10%) is slightly lower by -0.04% while EUR/USD (^EURUSD) is up +0.07% and USD/JPY (^USDJPY) is up +0.16%.

Commodity prices are moderately higher today by +0.32%. Sep WTI crude oil (CLU14 -0.19%) is down -0.35% and Sep gasoline (RBU14 +0.07%) is down -0.21%. Aug gold (GCQ14 -0.40%) is down -0.38% and Sep silver (SIU14 -0.36%) is down -0.38%, but Sep copper (HGU14 +1.47%) is up +1.25%. Grain, cattle and softs prices are trading higher.

The HSBC Chinese manufacturing PMI was reported last night at +1.3 points to a new 1-1/2 year high of 52.0, stronger than market expectations of +0.3 to 51.0. The Chinese manufacturing PMI has now risen very sharply by a total of +4.0 points in the past four months from the 1-year low of 48.0 posted in March.

Today’s July Markit/BME German manufacturing PMI rose by +0.9 to 52.9, which was substantially stronger than market expectations of -0.1 to 51.9. The German services PMI rose by +2.0 points to 56.6 from 54.6 in May, which was substantially stronger than market expectations of -0.1 to 54.5. The July Markit Eurozone manufacturing PMI rose by +0.1 to 51.9 from 51.8 in June, which was slightly stronger than market expectations of -0.1 to 51.7. The Markit Eurozone July services PMI rose by +1.6 points to 54.5 from 52.8 in June, which was substantially stronger than market expectations of -0.1 to 52.7. Eurozone business confidence has clearly improved since the ECB in early June launched its package of easing measures.

UK June retail sales including autos rose by +0.1% m/m and +3.6% y/y, which was weaker than market expectations of +0.3% m/m and +3.9% y/y. UK May retail sales fell by -0.5% m/m.

New Zealand’s central bank earlier today raised its policy rate by 25 bp to 3.50% but said it is now likely to pause after four rate hikes this year.

EU officials today will start considering a basket of possible new sanctions on Russia. Final decisions are not expected until next week’s EU summit on Wednesday (Aug 30).

Today’s weekly initial unemployment claims report is expected to show a small increase of +5,000 to 307,000, more than reversing last week’s decline of -3,000 to 302,000. Meanwhile, continuing claims are expected to show a +3,000 increase to 2.510 million after last week’s sharp -79,000 decline to 2.507 million. Today’s June new home sales report is expected to fall by -5.8% to 475,000, reversing about one-third of the +18.6% surge to a 6-year high of 504,000 seen in May.

There are 50 of the S&P 500 companies that report earnings today with notable reports including: Amazon.com (consensus $ -0.15), Caterpillar (1.52), Visa (2.10), Coca-Cola Enterprises (0.88), Starbucks (0.66), PulteGroup (0.25), T Rowe Price (1.12), Boston Scientific (0.19), GM (0.59), Ford (0.36), Raytheon (1.59), NASDAQ (0.68). Equity conferences during the remainder of this week include: Wells Fargo Small Cell Symposium on Thu.

Sep E-mini S&Ps this morning are slightly higher by +2.50 points (+0.13%) on positive Chinese and Eurozone PMI reports. The S&P 500 index on Wednesday rallied to a new record high and closed mildly higher: S&P 500 +0.18%, Dow Jones -0.16%, Nasdaq +0.40%. Bullish factors included (1) general optimism about Q2 earnings, (2) strength in tech stocks led by Apple on anticipation of a sales surge with the release of new products, and (3) the lack of serious sanctions from Europe against Russia in response to the downing of the Malaysian plane. A bearish factor was the IMF’s cut in its U.S. GDP forecast for 2014 to +1.7% from June’s +2.0% forecast due to the -2.9% decline in Q1 GDP growth.

• There are 27 of the S&P 500 companies that have already reported earnings this morning. Notable winners include Ford (F -0.22%) ($ 0.40 vs the consensus of $ 0.36), Caterpillar (CAT -1.53%) (1.69 vs 1.52), Nasdaq (NDAQ -0.72%) (0.70 vs 0.68), Coca-Cola Enteprises (CCE +0.66%) (0.90 vs 0.88).
• GM (GM -0.93%) reported Q2 EPS ex-items of 28 cents, slightly below the consensus of 59 cents.
• Amazon (AMZN -0.75%), Visa (V -0.03%), Starbucks (SBUX +0.51%) and others report after the close today.
• Facebook (FB +2.92%) in after-hours trading yesterday reversed initial losses and rallied 5% following its Q2 earnings call. The rally in Facebook helped boost other social media stocks such as Twitter (TWTR +0.27%), LinkedIn (LNKD +3.79%), and Yelp (YELP +0.19%).
• AT&T (T -0.17%) fell 1% in after-hours trading after reporting earings.
• Angie’s List (ANGI -3.97%) and Tripadvisor (TRIP +3.06%) plunged more than 10% late yesterday after their respective earnings reports.
• Cliffs Natural (CLF +2.18%) fell more than 1% late yesterday after a disappointing earnings report.
• Teradyne (TER -2.92%) fell 4% late yesterday after a disappointing earnings report.

Sep 10-year T-notes this morning are down -5.5 ticks due to strong Chinese and Eurozone PMI reports and today’s continued rally in global stocks. Sep 10-year T-note futures prices on Wednesday closed unchanged with some continued underlying support from safe-haven demand tied to the Ukraine situation. Closes: TYU4 unch, FVU4 +1.75.

The dollar is slightly lower by -0.04% while EUR/USD is up +0.07% and USD/JPY is up +0.16%. The dollar index on Wednesday closed little changed, consolidating Tuesday’s modest gains. EUR/USD continues to see weakness on concern that the Ukraine-Russia crisis may yet undercut the European economy. Closes: Dollar index +0.11 (+0.01%), EUR/USD -0.0001 (-0.01), USD/JPY +0.02 (+0.02%).

Sep WTI crude oil this morning is down -0.36 (-0.35%) and Sep gasoline is down -0.0061 (-0.21%). Aug crude and gasoline prices on Wednesday closed mixed: CLU4 +0.62 (+0.61%), RBU4 -0.0078 (-0.27%). Crude oil saw some support from the weekly EIA report, which showed a sharp -3.97 million bbl drop in U.S. crude oil inventories and a -1.45 million bbl drop in Cushing crude oil inventories. Meanwhile, gasoline was undercut by the EIA’s report of a sharp +3.38 million rise in gasoline inventories.