Live Index – Thu, 04 Dec 2014 Premarket

December E-mini S&Ps (ESZ14 +0.10%) this morning are up +0.06% and European stocks are up +0.44% at a 2-1/2 month high ahead of the conclusion of the ECB meeting and comments from ECB President Draghi that may shed clues on the possibility the ECB expands asset purchases to include government bonds. As expected, the BOE at the conclusion of its 2-day policy meeting maintained its 0.50% benchmark interest rate and kept its asset purchase target at 375 billion pounds. Asian stocks closed higher: Japan +0.94%, Hong Kong +1.72%, China +4.61%, Taiwan +0.54%, Australia +0.88%, Singapore +0.04%, South Korea +0.96%, India +0.42%. Japan’s Nikkei Stock Index climbed to a 7-1/3 year high as exporters rose as the rally in USD/JPY to a 7-1/3 year high boosts the earnings prospects of Japanese exporters. China’s Shanghai Stock Index surged over 4% to a 3-1/2 year high spurred on by an influx of money from Chinese investors who have opened stock accounts at the fastest pace in 3 years. Commodity prices are mixed. Jan crude oil (CLF15 -0.50%) is unchanged. Jan gasoline (RBF15 -0.30%) is up +0.05%. Feb gold (GCG15 -0.39%) is down -0.53%. Mar copper (HGH15 +0.84%) is up +0.89%. Agriculture prices are lower. The dollar index (DXY00 +0.02%) is up +0.03% at a new 5-1/2 year high. EUR/USD (^EURUSD) is down -0.01% at a new 2-1/4 year low. USD/JPY (^USDJPY) is up +0.11% at a new 7-1/3 year high after the Nikkei and Yomiuri newspapers reported that Prime Minister Abe’s Liberal Democratic Party will boost its majority at the Dec 14 election, which will give Abe a mandate to continue his reflationary, yen-negative, fiscal policies. Mar T-note prices (ZNH15 +0.02%) are up +1 tick.

The German Nov Markit construction PMI rose +2.0 to 53.5, the fastest pace of expansion in 9 months.

UK Nov Halifax house prices rose +0.4% m/m and +8.2% 3-mon/year-over-year, more than expectations of +0.3% m/m and +8.0% 3-mo/year-over-year.

Today’s initial claims series is expected to show a -18,000 decline, reversing most of last week’s +21,000 increase to 313,000. The market is expecting today’s initial unemployment claims report to show a small +2,000 increase to 2.318 million following last week’s decline of -17,000 to the 14-year low of 2.316 million. There are 6 of the Russell 1000 companies that report earnings today: Kroger (consensus $ 0.61), Sears (-3.31), Dollar General (0.80), Toro (0.15), Cooper Companies (2.03), Ulta Salon (0.84), SandRidge Energy (0.04). Equity conferences during the remainder of this week include: Credit Suisse Technology Conference on Tue-Thu, Goldman Sachs Global Automotive Conference on Thu, and SEMICON Japan 2014 on Thu.

CSX (CSX +2.19%) was upgraded to ‘Buy’ from ‘Neutral’ at Citigroup.

Wal-Mart (WMT -1.69%) was downgraded to ‘Neutral’ from ‘Buy’ at UBS.

Gentex (GNTX +2.26%) was upgraded to ‘Buy’ from ‘Hold’ at KeyBanc.

Sears Holdings (SHLD +0.91%) reported a Q3 EPS loss of -$ 5.15, a much bigger loss than one estimate of -$ 3.31.

Royal Caribbean (RCL +1.39%) will replace Bemis (BMS +0.27%) in the S&P 500 as of today’s close.

Costco (COST -0.26%) reported net sales of $ 9.43 billion for the month of November up +7% y/y.

Dollar General (DG -0.86%) reported Q3 EPS of 79 cents, below consensus of 80 cents.

Pfizer (PFE +0.57%) reported positive results from PROFILE 1014 study of anaplastic lymphoma kinase inhibitor XALKORI in previously untreated patients with ALK-positive advanced non-small cell lung cancer.

Synopsys (SNPS -0.30%) reported Q4 EPS of 64 cents, higher than consensus of 61 cents.

Avago (AVGO +3.18%) climbed over 5% in after-hours trading after it reported Q4 EPS of $ 1.99, well above consensus of $ 1.68.

Disney (DIS -0.39%) increased its annual dividend by 29 cents or 34% to $ 1.15 per share.

PVH Corp. (PVH +2.12%) slid nearly 2% in after-hours trading after it reported Q3 EPS of $ 2.56, better than consensus of $ 2.48, but then lowered guidance on fiscal 2014 EPs view to $ 7.25-$ 7.30 from $ 7.30-$ 7.40, below consensus of $ 7.37.

Guess (GES +1.28%) reported Q3 EPS of 24 cents, higher than consensus of 18 cents, but then lowered guidance on fiscal 2015 EPS view to $ 1.00-$ 1.10 from $ 1.05-$ 1.20, at the lower end of consensus of $ 1.10.

Aeropostale (ARO +3.91%) fell over 7% in after-hours trading after it reported a Q3 adjusted EPS loss of -45 cents, right on consensus, but then lowered guidance on Q4 EPS to a loss of -37 cents to -44 cents, a larger loss than consensus of -36 cents.

BHP Billiton (BHP +1.37%) was downgraded to ‘Neutral’ from ‘Buy’ at BofA/Merrill Lynch.

Rio Tinto (RIO +2.25%) was downgraded to ‘Underperform’ from ‘Buy’ at BofA/Merrill Lynch.

Dec E-mini S&Ps (ESZ14 +0.10%) this morning are up +1.25 points (+0.06%). The S&P 500 index on Wednesday rose to a fresh all-time high and closed higher: S&P 500 +0.38%, Dow Jones +0.18%, Nasdaq +0.16%. Bullish factors included (1) carry-over support from a rally in European equities on speculation ECB President Draghi may announce additional stimulus measures when he speaks on Thursday, and (2) the +2.2 point increase in the U.S. Nov ISM non-manufacturing index, stronger than expectations of +0.4 to 57.5. Gains were limited after the Nov ADP employment change increased by +208,000, weaker than expectations of +222,000.

Mar 10-year T-notes (ZNH15 +0.02%) this morning are up +1 tick. Mar 10-year T-note futures prices on Wednesday fell to a 1-week low and closed lower: TYH5 -2.00, FVH5 -2.75. Bearish factors included (1) the larger-than-expected +2.2 point increase in the Nov ISM non-manufacturing index, which could push the Fed closer to raising interest rates, and (2) reduced safe-haven demand for T-notes as stocks rallied.

The dollar index (DXY00 +0.02%) this morning is up +0.029 (+0.03%) at a new 5-1/2 year high. EUR/USD (^EURUSD) is down -0.0001 (-0.01%) at a new 2-1/4 year low. USD/JPY (^USDJPY) is up +0.13 (+0.11%) at a fresh 7-1/3 year high. The dollar index on Wednesday soared to a 5-1/2 year high and closed higher. Closes: Dollar index +0.309 (+0.35%), EUR/USD -0.00719 (-0.58%), USD/JPY +0.582 (+0.49%). Bullish factors included (1) the larger-than-expected increase in the U.S. Nov ISM non-manufacturing index, which bolsters the case for the Fed to raise interest rates sooner rather than later, (2) weakness in EUR/USD which fell to a 2-1/4 year low after the Eurozone Nov Markit composite PMI was revised lower to its slowest pace of expansion in 16 months, and (3) the rally in USD/JPY to a 7-1/3 year high on expectations for the BOJ to expand stimulus while the Fed stands pat.

Jan WTI crude oil (CLF15 -0.50%) this morning is unchanged and Jan gasoline (RBF15 -0.30%) is up +0.0009 (+0.05%). Jan crude and Jan gasoline on Wednesday settled mixed. Closes: CLF5 +0.50 (+0.75%), RBF5 -0.0046 (-0.25%). Supportive factors included (1) the unexpected -3.69 million bbl decline in weekly EIA crude inventories, versus expectations of +1.75 million bbl, and (2) the -694,000 bbl draw in crude supplies at Cushing, OK, the delivery point for WTI futures, the first decline in 4 weeks. Bearish factors included (1) the +2.14 million bbl increase in weekly EIA gasoline stockpiles, more than expectations of +1.5 million bbl, and (2) the rally in the dollar index to a 5-1/2 year high.