Live Index – Thu, 28 Aug 2014 Premarket

September E-mini S&Ps (ESU14 -0.24%) this morning are down -0.36% and European stocks are down -1,14% as the crisis in Ukraine escalates after the Ukrainian government said that a counteroffensive being waged by separatists in the eastern part of the country amounts to a Russian invasion. Ukrainian Prime Minister Yatsenyuk issued a plea for international help in defending against Russia’s army and that sanctions by the U.S. and the EU aren’t working. Russia’s Micex Stock Index tumbled nearly 2% and the ruble fell to a 6-month low against the dollar after the U.S. State Department said that “these incursions indicate a Russian-directed counteroffensive is likely underway in Donetsk and Luhansk.” A larger-than-expected decline in Eurozone Aug economic confidence to an 8-month low is another negative for European stocks. Asian stocks closed mostly lower: Japan -0.48%, Hong Kong -0.71%, China -0.70%, Taiwan -0.08%, Australia -0.47%, Singapore -0.34%, South Korea +0.12%, India +0.29%. Commodity prices are mixed. Oct crude oil (CLV14 +0.04%) is down -0.12%. Oct gasoline (RBV14 +0.23%) is up +0.07%. Dec gold (GCZ14 +0.84%) is up +0.91% at a 1-week high as escalation of the Ukraine crisis fuels safe-haven buying of gold. Sep copper (HGU14 -0.41%) is down -0.61%. Agriculture and livestock prices are mixed. The dollar index (DXY00 +0.04%) is up +0.10%. EUR/USD (^EURUSD) is down -0.14%. USD/JPY (^USDJPY) is down -0.24%. Sep T-note prices (ZNU14 +0.16%) are up +9 ticks at a 1-week high on carry-over support from a rally in European government bond markets as the 10-year German bund yield fell to a record low 0.866%.

Eurozone Aug economic confidence slipped -1.5 to 100.6, a larger decline than expectations of -0.7 to 101.5 and the weakest in 8 months. The Aug business climate indicator fell -0.1 to 0.16, a smaller drop than expectations of -0.07 to 0.10, but still the lowest in 10 months.

Eurozone Jul M3 money supply rose +1.8% y/y and +1.5% 3-mo avg, higher than expectations of +1.5% y/y and +1.3% 3-mo avg.

German Aug unemployment unexpectedly rose +2,000, more than expectations of a -5,000 decline. The Aug unemployment rate remained unch at 6.7%, right on expectations.

UK Aug CBI reported sales rose +16 to 37, a larger increase than expectations of +6 to 27 and matched Feb’s level as the highest in 2 years.

China Jul industrial profits slowed to an increase of +13.5% y/y from the +17.9% y/y pace in Jun.

Today’s weekly initial unemployment claims report is expected to show a small +2,000 increase to 300,000 following last week’s decline of -14,000 to 298,000. Meanwhile, continuing claims are expected to show an increase of +10,000 to 2.510 million after last week’s decline of -49,000 to 2.500 million. Today’s Q2 GDP report is expected to be revised slightly lower to +3.9% from the last estimate of +4.0%. Today’s July pending home sales report is expected to show an increase of +0.5% m/m, reversing about one-half of the -1.1% decline seen in June. The Treasury today will wrap up this week’s $ 106 billion T-note package by selling $ 29 billion of 7-year T-notes.

There are 8 of the Russell 1000 companies that reports earnings today: Abercrombie (consensus $ 0.11), Coty (0.05), Pall Corp (1.06), Signet Jewelers (0.98), Dollar General (0.83), Splunk (-0.02), Avago Technologies (1.05), Veeva Systems (0.07). Equity conferences during the remainder of this week include: ONS 2014 Conference on Mon-Thu, and MIT Sloan Latin America-China Conference on Fri.

Dollar General (DG +0.28%) reported Q2 EPS of 83 cents, right on consensus, although Q2 revenue of $ 4.72 billion was below consensus of $ 4.77 billion.

Pall Corp. (PLL -0.48%) reported Q4 EPS of $ 1.14, better than consensus of $ 1.06.

Signet Jewelers (SIG -0.36%) reported Q2 organic EPS of $ 1.00, better than consensus of 98 cents.

British Petroleum (BP +0.37%) was downgraded to ‘Underweight’ from ‘Equal Weight’ at Morgan Stanley.

Brown Forman (BF) was downgraded to ‘Hold’ from ‘Buy’ at Deutsche Bank.

Visa (V +0.18%) was downgraded to ‘Market Perform’ from ‘Outperform’ at Raymond James.

Genuine Parts (GPC -0.02%) was downgraded to ‘Neutral’ from ‘Buy’ at SunTrust.

Advance Auto Parts (AAP +1.01%) was initiated with a ‘Buy’ at SunTrust with a price target of $ 181 and O’Reilly Automotive (ORLY +0.23%) was also initiated with a ‘Buy’ at SunTrust with a price target of $ 193.

Williams-Sonoma (WSM +0.05%) slid 10% in after-hours trading after it reported Q2 EPS of 53 cents, right on consensus, although Q2 revenue of $ 1.04 billion was below consensus of $ 1.05 billion. The company then lowered guidance on fiscal 2014 EPS to $ 3.07-$ 3.17, below consensus of $ 3.20.

Guess (GES -0.74%) fell 8% in after-hours trading after it reported Q2 EPS of 26 cents, weaker than consensus of 29 cents, and then lowered guidance on fiscal 2015 EPS to $ 1.05-$ 1.20, well below consensus of $ 1.46.

Sep E-mini S&Ps (ESU14 -0.24%) this morning are down -7.25 points (-0.36%). The S&P 500 index Dow on Wednesday closed little changed: S&P 500 unch, Dow Jones +0.09%, Nasdaq +0.04%. Stocks found support on (1) optimism about the U.S. economic outlook that lifted the S&P 500 to a record high Tuesday, and (2) an easing of tensions in Ukraine after Russian President Putin met Ukraine President Poroshenko in Belarus and said that “Russia, for its part, will do everything for this peace process.” Valuation concerns limited gains in equities with stocks in the S&P 500 trading at 18 times reported earnings, the highest in 4 years.

Sep 10-year T-notes (ZNU14 +0.16%) this morning are up +9 ticks at a 1-week high. Sep 10-year T-note futures prices on Wednesday closed higher. Bullish factors included (1) carry-over support from a rally in European government bonds after 10-year bond yields in Germany, France, Italy, Finland and Spain all dropped to record lows, and (2) weakness in stocks that boosted safe-haven demand for T-notes. Closes: TYU4 +6.50, FVU4 +3.75.

The dollar index (DXY00 +0.04%) this morning is up +0.084 (+0.10%). EUR/USD (^EURUSD) is down -0.0018 (-0.14%) and USD/JPY (^USDJPY) is down -0.25 (-0.24%). The dollar index on Wednesday fell back from an 11-1/2 month high and closed lower. EUR/USD rebounded from a 11-1/2 month low and closed higher after (1) a Reuters report that unidentified ECB sources said the ECB is unlikely to add stimulus at next week’s meeting unless Eurozone August inflation data raises the risk of deflation, and (2) German Finance Minister Schaeuble’s comment that ECB President Draghi’s comments advocating support for Eurozone fiscal policy were “over-interpreted.” Closes: Dollar index -0.222 (-0.27%), EUR/USD +0.00259 (+0.20%), USD/JPY -0.186 (-0.18%).

Oct WTI crude oil (CLV14 +0.04%) this morning is down -11 cents (-0.12%) and Oct gasoline (RBV14 +0.23%) is up +0.0019 (+0.07%). Oct crude and gasoline prices on Wednesday settled mixed: CLV4 +0.02 (+0.02%), RBV4 -0.0154 (-0.59%). Bearish factors included (1) the +508,000 bbl increase in crude supplies at Cushing, OK, the delivery point for WTI futures, the fourth consecutive increase, and (2) the +0.6% increase in U.S. crude production in the week ended Aug 22 to a 27-3/4 year high of 8.631 million bpd. Supportive factors included (1) a weaker dollar, and (2) the -2.07 million bbl decline in weekly EIA crude inventories to a 7-month low of 360.5 million bbl, a bigger draw than expectations of -950,000 bbl.