Thu Jan 15 2015
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Live Index – Thu, 15 Jan 2015 Premarket

PREMARKET WORLD NEWS

March E-mini S&Ps (ESH15 +0.11%) this morning are down -0.57% and European stocks are up +0.21%. The unexpected decision by the Swiss National Bank (SNB) to abandon the Swiss franc’s cap against the euro roiled currency markets and sent Switzerland’s SMI Stock Index down to a 2-3/4 month low. The franc surged as much as 27% against the dollar and soared to a record against the euro after the SNB unexpectedly ended its 3-year minimum exchange rate of 1.20 franc per euro. The move by the SNB comes one week before the ECB meeting where the ECB may implement QE, a move that may add to pressure on the franc against the euro. Asian stocks closed mixed: Japan +1.86%, Hong Kong +0.99%, China +2.90%, Taiwan -0.16%, Australia -0.42%, Singapore +0.38%, South Korea -0.09%, India +2.66%. India’s Sensex Stock Index soared over 2% to a 5-week high after the Reserve Bank of India unexpectedly cut interest rates. Commodity prices are mixed. Feb crude oil (CLG15 +1.42%) is down -0.45%. Feb gasoline (RBG15 -0.04%) is down -1.46%. Feb gold (GCG15 +1.25%) is up +1.73% at a 2-3/4 month high on increased safe-haven demand after the move by the SNB to abandon its minimum exchange rate against the euro roiled currency markets. Mar copper (HGH15 +2.51%) is up +1.84%. Agriculture prices are higher. The dollar index (DXY00 -0.45%) is down -0.39%. EUR/USD (^EURUSD) is down -0.70% at an 11-year low. USD/JPY (^USDJPY) is down -0.73%. Mar T-note prices (ZNH15 +0.06%) are up +9.5 ticks.

The Swiss National Bank unexpectedly ended its 3-year minimum exchange rate of 1.20 franc per euro and moved the target range for the 3-month Libor to between -1.25% and -0.25% from the current range of between -0.75% and 0.25%. The Swiss franc soared to a record 85.17 centimes per euro after the action and sent the Swiss Market Index tumbling 11% to a 2-3/4 month low.

The Reserve Bank of India (RBI) unexpectedly cut the benchmark repurchase rate to 7.75% from 8.00%, the first rate cut in 20 months, and RBI Governor Rajan said that inflation will probably be below 6.0% by Jan 2016.

China Dec new yuan loans increased by 697.3 billion yuan, less than expectations of 880.0 billion yuan.

Japan Dec PPI fell -0.4% m/m, a bigger drop than expectations of -0.3% m/m and the fifth consecutive month that producer prices have remained unchanged or declined. On an annual basis, Dec PPY rose +1.9% y/y, less than expectations of +2.1% y/y and the slowest pace of increase in 9 months.

Japan Nov machine orders rose +1.3% m/m and fell -14.6% y/y, weaker than expectations of +4.4% m/m and -6.3% y/y with the -14.6% y/y drop the largest annual decline in 5 years.

U.S. STOCK PREVIEW

Today’s initial unemployment claims report is expected to show a small decline of -2,000 and today’s continuing claims report is expected to show a decline of -52,000 to 2.400 million. Today’s Dec final-demand PPI is expected to ease to +1.0% y/y from Nov’s +1.4% thanks mostly to the plunge in oil and gasoline prices. Today’s Jan NY Empire manufacturing survey of general business conditions report is expected to show a +8.58 point increase to 5.00, climbing back into positive territory after Dec’s -13.74 point plunge to a 2-year low of -3.58. Meanwhile, today’s Jan Philadelphia Fed business outlook index is expected to show a -5.6 point decline to 18.7, adding to December’s -15.9 point decline to 24.3.

There are 9 the S&P 500 companies that report earnings today with notable reports including: Citigroup (consensus $ 0.09), Intel (0.66), Bank of America (0.31), Lennar (0.96), Schlumberger (1.46). Equity conferences during the remainder of this week include: Biomarkers from Research to Clinic Conference on Fri.

PREMARKET U.S. STOCKS

Goldman Sachs downgraded Johnson & Johnson (JNJ -0.73%) to ‘Sell’ from ‘Neutral.’

Goldman Sachs upgraded Eli Lilly (LLY +0.55%) to ‘Neutral’ from ‘Sell.’

Fastenal (FAST -2.07%) reported Q4 EPS of 40 cents, right on consensus.

Bank of America (BAC -2.49%) reported Q4 EPS of 32 cents, better than consensus of 31 cents.

BlackRock (BLK -0.64%) reported Q4 EPS of $ 4.82, higher than consensus of $ 5.68.

Lennar (LEN -1.12%) reported Q4 EPS of $ 1.09, better than consensus of 96 cents.

Adobe Systems (ADBE -0.85%) rose over 2% in after-hours trading after it announced a $ 2.0 billion stock repurchase plan through fiscal 2017.

Northrop Grumman (NOC +0.07%) was awarded a $ 963.5M government contract for intercontinental ballistic missile, or ICBM, ground subsystems support.

Ashland (ASH -0.59%) Was initiated with an ‘Overweight’ at Piper Jaffray with a price target of $ 146.

BlackBerry (BBRY +29.76%) slumped 15% in after-hours trading after it denied a Reuters reports that it was approached by Samsung SSNLF about a potential takeover.

Sanders Capital reported a 5.58% passive stake in D.R. Horton (DHI +1.29%) , a 8.53% passive stake in Ryland Group (RYL +0.41%) and a 10.84% passive stake in Meritage Homes (MTH -1.97%) .

MARKET COMMENTS

Mar E-mini S&Ps (ESH15 +0.11%) this morning are down -11.50 points (-0.57%). The S&P 500 index on Wednesday tumbled to a 4-week low and closed lower: S&P 500 -0.58%, Dow Jones -1.06%, Nasdaq -0.49%. Bearish factors included (1) concern about a global economic slowdown after the World Bank cut its 2015 global GDP forecast to +3.0% from +3.4%, saying risks to the global economy are “significant and tilted to the downside,” and (2) the -0.9% drop in U.S. Dec retail sales, weaker than expectations of -0.1% and the biggest decline in 11 months, and the -1.0% plunge in Dec retail sales ex-autos, weaker than expectations of unch and the largest decline in 5-3/4 years.

Mar 10-year T-notes (ZNH15 +0.06%) this morning are up +9.5 ticks. Mar 10-year T-note futures prices on Wednesday rose to a contract high and the 10-year T-note yield fell to a 1-1/2 year low of 1.78%. Closes: TYH5 +14.50, FVH5 +9.50. Bullish factors included (1) concern about a global economic slowdown after the World Bank lowered its 2015 global GDP forecast, and (2) the weaker-than-expected U.S. Dec retail sales report, which may prompt the Fed to delay an interest rate hike.

The dollar index (DXY00 -0.45%) this morning is down -0.359 (-0.39%). EUR/USD (^EURUSD) is down -0.0082 (-0.70%) at an 11-year low. USD/JPY (^USDJPY) is down -0.86 (-0.73%). The dollar index on Wednesday fell to a 1-week low and closed lower: Dollar index -0.149 (-0.16%), EUR/USD +0.00166 (+0.14%), USD/JPY -0.602 (-0.51%). Bearish factors included (1) the bigger-than-expected decline in U.S. Dec retail sales, which fueled speculation the Fed may delay a rate hike, and (2) the slide in USD/JPY to a 4-week low as a sell-off in global stocks boosted safe-haven demand for the yen.

Feb WTI crude oil (CLG15 +1.42%) this morning is down -22 cents (-0.45%) and Feb gasoline (RBG15 -0.04%) is down -0.0197 (-1.46%). Feb crude oil and Feb gasoline on Wednesday closed sharply higher: CLG5 +2.59 (+5.64%), RBG5 +0.0848 (+6.69%). The main bullish factor was a weaker dollar that spurred short covering. Bearish factors included (1) the +5.39 million bbl increase in weekly EIA crude inventories to a 6-1/2 month high of 387.8 million bbl, more than expectations of +1.75 million bbl, (2) the +1.7 million bbl jump in crude supplies at Cushing, OK, the delivery point of WTI futures, to 33.9 million bbl, a 10-1/2 month high, and (3) the +0.7% increase in U.S. crude production in the week ended Jan 9 to 9.192 million bpd, the highest in over 40 years.

GLOBAL EVENT CALENDAR01/15/2015
US0830 ETWeekly initial unemployment claims expected -2,000 to 292,000, previous -4,000 to 294,000. Weekly continuing claims expected -52,000 to 2.400 million, previous +101,000 to 2.452 million.
0830 ETJan Empire manufacturing survey of general business conditions expected +8.58 to 5.00, Dec -3.58.
0830 ETDec final demand PPI expected -0.4% m/m and +1.0% y/y, Nov -0.2% m/m and +1.4% y/y. Dec final demand PPI ex food & energy expected +0.1% m/m and +1.9% y/y, Nov unch m/m and +1.8% y/y.
0830 ETUSDA weekly Export Sales.
1000 ETJan Philadelphia Fed business outlook survey expected -5.6 to 18.7, Dec 24.3.
EUR0500 ETEurozone Nov trade balance expected +20.0 billion euros, Oct +19.4 billion euros.
JPN1850 ETJapan Nov tertiary industry index expected +0.2% m/m, Oct -0.2% m/m.
U.S. STOCK CALENDAR01/15/2015
CompanyTickerTimeEvent DescriptionPeriodEstimate
BlackRock IncBLK USBef-mktQ4 2014 Earnings ReleaseQ4 20144.679
First Republic Bank/CAFRC USBef-mktQ4 2014 Earnings ReleaseQ4 20140.716
Lennar CorpLEN US6:00Q4 2014 Earnings ReleaseQ4 20140.96
Bank of America CorpBAC US7:00Q4 2014 Earnings ReleaseQ4 20140.313
Commerce Bancshares Inc/MOCBSH US7:00Q4 2014 Earnings ReleaseQ4 20140.659
Fastenal CoFAST US7:00Q4 2014 Earnings ReleaseQ4 20140.395
Citigroup IncC US8:00Q4 2014 Earnings ReleaseQ4 20140.088
PPG Industries IncPPG US8:11Q4 2014 Earnings ReleaseQ4 20141.988
Bank of America CorpBAC US8:30Q4 2014 Earnings CallQ4 2014
BlackRock IncBLK US8:30Q4 2014 Earnings CallQ4 2014
MSC Industrial Direct Co IncMSM US9:00Annual General Meeting
NRG Energy IncNRG US9:00Investor Meeting – Day 2Y 2015
Fastenal CoFAST US10:00Q4 2014 Earnings CallQ4 2014
Greif IncGEF US10:00Q4 2014 Earnings CallQ4 2014
First Republic Bank/CAFRC US10:00Q4 2014 Earnings CallQ4 2014
Lennar CorpLEN US11:00Q4 2014 Earnings CallQ4 2014
Citigroup IncC US11:00Q4 2014 Earnings CallQ4 2014
Citigroup IncC US11:30TMAC Presents John Landry: Top Issues Facing Treasury Departments in 2015
PPG Industries IncPPG US14:00Q4 2014 Earnings CallQ4 2014
People’s United Financial IncPBCT US16:00Q4 2014 Earnings ReleaseQ4 20140.211
Intel CorpINTC US17:00Q4 2014 Earnings CallQ4 2014
People’s United Financial IncPBCT US17:00Q4 2014 Earnings CallQ4 2014
Schlumberger LtdSLB USAft-mktQ4 2014 Earnings ReleaseQ4 20141.459
Intel CorpINTC USAft-mktQ4 2014 Earnings ReleaseQ4 20140.659
Best Buy Co IncBBY USQ4 2015 Sales and Revenue ReleaseQ4 2015

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