2015-02-02

BARCHART MORNING CALL

Monday, February 2nd, 2015View Older Reports

Everything you need to know about the markets in one free daily newsletter.

E-mail:

You will also receive a free subscription to the Barchart family of newsletters.

OVERNIGHT MARKETS AND NEWS
March E-mini S&Ps (ESH15 +0.25%) this morning are up +0.38% as energy producers and oil service providers gained in pre-market trading after crude oil jumped to a 2-week high, while European stocks are down -0.12%, led by a plunge in Spanish bank stocks, on concern Spain may try to follow Greece in attempting to renegotiate the country's debt. The leader of Spain's anti-austerity party, Podemos, pledged to restructure Spain's debt if his party can convert its opinion-poll lead into victory in elections later this year. Asian stocks closed mixed: Japan -0.66%, Hong Kong -0.09%, China -2.34%, Taiwan +0.27%, Australia +0.66%, Singapore +0.95%, South Korea +0.29%, India -0.21%. China's Shanghai Stock Index fell to a 1-1/2 week low after a gauge of Chinese manufacturing signaled contraction for the first time in over two years. Commodity prices are mostly higher. Mar crude oil (CLH15 +0.58%) is up +3.11% at a 2-week high and Mar gasoline (RBH15 +2.84%) is up +5.00% at a 1-month high after a strike by oil workers in refineries that account for 10% of U.S. refining capacity enters its second day. Feb gold (GCG15 -0.24%) is down -0.24%. Mar copper (HGH15 +0.12%) is up +0.80%. Agriculture prices are higher. The dollar index (DXY00 -0.07%) is down -0.12%. EUR/USD (^EURUSD) is up +0.25%. USD/JPY (^USDJPY) is up +0.14%. Mar T-note prices (ZNH15 -0.02%) are down -0.5 of a tick.
The China Jan manufacturing PMI unexpectedly fell -0.3 to 49.8, weaker than expectations of +0.1 to 50.2 and the first time manufacturing activity has contracted in 28 months. The Jan non-manufacturing PMI fell -0.4 to 53.7, the slowest pace of expansion in a year.
The German Jan Markit/BME manufacturing PMI was revised downward to 50.9 from the originally reported 51.0.
UK Jan Markit manufacturing PMI rose +0.5 from an upward revised 52.7 in Dec to 53.0, better than expectations of +0.2 to 52.7.
Japan Jan vehicle sales fell -18.9% y/y, the biggest decline in 3-1/3 years and the sixth consecutive month sales have fallen.

U.S. STOCK PREVIEW
Today’s Jan ISM manufacturing index is expected to show a -0.8 decline to 54.7, which would be the third monthly decline in a row. Today’s Dec personal income report is expected to show a small increase of +0.2% and the Dec personal spending report is expected to show a decline of -0.2% m/m. Today’s Dec PCE deflator is expected to fall to +0.8% y/y from +1.2% in November. Meanwhile, today’s Dec core PCE deflator is expected to edge lower to +1.3% y/y from +1.4% in November.
There are 9 of the S&P 500 companies that report earnings today: Exxon (consensus $1.34), Pitney Bowes (0.51), Sysco (0.41), Avery Dennison (0.80), Anadarko Petroleum (0.86), Owens-Illinois (0.45), Hartford ((0.94), Torchmark (1.00), XL Group (0.88). Equity conferences this week include: ANS Conference on Nuclear Training and Education on Mon-Tue, In-Pharma Osaka 2015 on Tue, Media Insights & Engagement Conference on Tue-Thu, Cowen and Company Aerospace/Defense Conference & Transport Forum on Wed-Thu.

OVERNIGHT U.S. STOCK MOVERS
Tenneco (TEN -2.15%) reported Q4 adjusted EPS of $1.05, higher than consensus of 99 cents.
NuStar Energy (NS +3.11%) upgraded to 'Buy' from 'Neutral' at UBS.
Western Gas Partners (WES +1.12%) was reinstated with an 'Overweight' at Barclays with a price target of $84.
Delta Air Lines (DAL -5.78%) and Spirit Airlines (SAVE -7.09%) were both upgraded to 'Strong Buy' from 'Outperform' at Raymond James.
Wyndham (WYN -2.07%) was downgraded to 'Sell' from 'Hold' at Deutsche Bank.
Abercrombie & Fitch (ANF -2.18%) and Guess (GES -4.86%) were both downgraded to 'Sell' from 'Hold' at Evercore ISI.
1-800-Flowers.com (FLWS +3.14%) reported Q2 EPS of 68 cents, below consensus of 80 cents.
Diamond Foods (DMND -9.93%) was upgraded to 'Outperform' from 'Market Perform' at BMO Capital.
Pitney Bowes (PBI -0.29%) reported Q4 EPS of 51 cents, right on expectations
Sysco (SYY -1.83%) reported Q2 EPS of 41 cents, right on consensus.
Shire (SHPG -1.31%) announced that the U.S. FDA approved its Vyvanse Capsules, the first and only medication for the treatment of moderate to severe binge eating disorder in adults.
Nicholas Woodman reported a 44.9% passive stake in GoPro (GPRO -2.14%) .
JPMorgan Chase reported a 6.5% passive stake in Brandywine Realty (BDN -1.66%) .

MARKET COMMENTS
Mar E-mini S&Ps (ESH15 +0.25%) this morning are up +7.50 poinrs (+0.38%). The S&P 500 index on Friday closed lower: S&P 500 -1.30%, Dow Jones -1.45%, Nasdaq -0.79%. Negative factors included (1) carry-over weakness from a slide in European stocks on deflation concerns after the Eurozone Jan CPI estimate fell by -0.6% y/y and matched the July 2009 decline as the biggest drop since the euro currency was introduced in 1999, and (2) U.S. economic concerns after U.S. Q4 GDP rose +2.6% q/q annualized, weaker than expectations of +3.0%.
Mar 10-year T-notes (ZNH15 -0.02%) this morning are down -0.5 of a tick. Mar 10-year T-note futures prices on Friday posted a contract high and closed higher and the 10-year T-note yield fell to a 1-1/2 year low of 1.65%. Closes: TYH5 +22.00, FVH5 +14.75. Bullish factors included (1) concern about a slowdown in the U.S. economy after Q4 GDP expanded at a 2.6% pace, weaker expectations of +3.0%, and (2) carry-over support from a rally in German bund prices to a record high on deflation concerns after Eurozone Jan CPI fell -0.6% y/y and matched the biggest drop since the euro currency was introduced in 1999.
The dollar index (DXY00 -0.07%) this morning is down -0.111 (-0.12%). EUR/USD (^EURUSD) is up +0.0028 (+0.25%). USD/JPY (^USDJPY) is up +0.16 (+0.14%). The dollar index on Friday closed higher: Dollar index +0.022 (+0.02%), EUR/USD -0.00400 (-0.35%), USD/JPY -0.765 (-0.65%). Bullish factors included (1) hawkish comments from St. Louis Fed President Bullard who said it is “reasonable” to expect an interest rate increase in June or July, and (2) weakness in EUR/USD on deflation concerns after Eurozone Jan core CPI rose +0.6% y/y, the slowest pace of increase since the euro currency was introduced in 1999.
Mar WTI crude oil (CLH15 +0.58%) this morning is up $1.50 (+3.11%) at a 2-week high and Mar gasoline (RBH15 +2.84%) is up +0.0739 (+5.00%) at a 1-month high. Mar crude oil and Mar gasoline on Friday closed sharply higher with Mar crude at a 1-week high and Mar gasoline at a 1-month high: CLH5 +3.71 (+8.33%), RBH5 +0.0875 (+6.29%). Bullish factors included (1) concern that the recent plunge in crude prices will curb U.S, oil output after the Baker Hughes operating oil rig count sank to a 3-year low of 1,223, (2) the unexpected increase in the Jan Chicago PMI, which spurred short covering in crude, and (3) the better-than-expected +4.3% increase in Q4 U.S. personal consumption, which signals increased fuel demand.

GLOBAL EVENT CALENDAR02/02/2015

US

0830 ET

Dec personal spending expected -0.2% m/m, Nov +0.6%. Dec personal income expected +0.2% m/m, Nov +0.4%.

0830 ET

Dec PCE deflator expected -0.3% m/m and +0.8% y/y, Nov -0.2% m/m and +1.2% y/y. Dec PCE core deflator expected unch m/m and +1.3% y/y, Nov unch m/m and +1.4% y/y.

0945 ET

Final Jan Markit manufacturing PMI, previous -0.2 to 53.7.

1000 ET

Dec construction spending expected +0.7% m/m, Nov -0.3%.

1000 ET

Jan ISM manufacturing index expected -0.8 to 54.7, Dec -3.2 to 55.5. Jan ISM new orders sub-index, Dec -8.7 to 57.3. Jan ISM employment sub-index, Dec +1.9 to 56.8. Jan ISM prices paid sub index expected +1.5 to 40.0, Dec -6.0 to 38.5.

1100 ET

USDA weekly grain export inspections.

JPN

0000 ET

Japan Jan vehicle sales, Dec -8.8% y/y.

GER

0355 ET

Revised German Jan Markit/BME manufacturing PMI, previous -0.3 to 51.0.

EUR

0300 ET

ECB Executive Board member Benoit Coeure and the central bank chiefs of Austria, Turkey, Portugal, Slovenia, Croatia and Finland meet at a conference in Budapest organized by the Bank of Hungary.

0400 ET

Revised Eurozone Jan Markit manufacturing PMI, previous +0.4 to 51.0.

UK

0430 ET

UK Jan Markit manufacturing PMI expected +0.2 to 52.7, Dec 52.5.

U.S. STOCK CALENDAR02/02/2015

Company

Ticker

Time

Event Description

Period

Estimate

Pitney Bowes Inc

PBI US

Bef-mkt

Q4 2014 Earnings Release

Q4 2014

0.505

Sysco Corp

SYY US

Bef-mkt

Q2 2015 Earnings Release

Q2 2015

0.408

Pitney Bowes Inc

PBI US

8:00

Q4 2014 Earnings Call

Q4 2014

Exxon Mobil Corp

XOM US

8:00

Q4 2014 Earnings Release

Q4 2014

1.339

Avery Dennison Corp

AVY US

8:30

Q4 2014 Earnings Release

Q4 2014

0.804

Exxon Mobil Corp

XOM US

9:30

Q4 2014 Earnings Call

Q4 2014

Sysco Corp

SYY US

10:00

Q2 2015 Earnings Call

Q2 2015

Avery Dennison Corp

AVY US

11:00

Q4 2014 Earnings Call

Q4 2014

XL Group PLC

XL US

17:00

Q4 2014 Earnings Call

Q4 2014

Anadarko Petroleum Corp

APC US

Aft-mkt

Q4 2014 Earnings Release

Q4 2014

0.859

Owens-Illinois Inc

OI US

Aft-mkt

Q4 2014 Earnings Release

Q4 2014

0.452

Hartford Financial Services Group Inc/The

HIG US

Aft-mkt

Q4 2014 Earnings Release

Q4 2014

0.935

Torchmark Corp

TMK US

Aft-mkt

Q4 2014 Earnings Release

Q4 2014

1.002

XL Group PLC

XL US

Aft-mkt

Q4 2014 Earnings Release

Q4 2014

0.881

Show more