Barchart Morning Call
Barchart.com - Mon Feb 27, 6:45AM CST
OVERNIGHT MARKETS AND NEWS
Mar E-mini S&Ps (ESH17 -0.03%) are little changed, up +0.01% at a new record nearest-futures high, and European stocks are up +0.19%. Market activity is muted as stocks move sideways ahead of U.S. President Trump's address Tuesday before a joint session of Congress where he is expected to lay out his plans for tax and health-care reform and infrastructure spending. A +0.69% gain in Apr WTI crude oil prices (CLJ17 +0.74%) is giving energy producing stocks a boost after Russian Energy Minister Novak said that Russia had cut its oil output this month by more than the 117,000 bpd it had cut its oil production in Jan. European stocks and EUR/USD found support on favorable opinion polls for French presidential candidate Macron along with signs of confidence in the European recovery after Eurozone Feb economic confidence rose to a 5-3/4 year high. Asian stocks settled mostly lower: Japan -0.91%, Hong Kong -0.17%, China -0.76%, Taiwan closed for holiday, Australia -0.26%, Singapore -0.27%, South Korea -052%, India -0.28%. Japan's Nikkei Stock Index tumbled to a 2-week low as exporter stocks sold-off as USD/JPY fell to a 2-week low, which undercuts the earnings prospects of exporters with the stronger yen.
The dollar index (DXY00 -0.01%) is down -0.02%. EUR/USD (^EURUSD) is up +0.19%. USD/JPY (^USDJPY) is up +0.14%. GBP/USD is down -0.41% at a 1-week low after the Times of London reported that UK Prime Minister May is preparing for Scotland to potentially call an independence referendum in March to coincide with the UK's triggering of Article 50 to leave the EU.
Mar 10-year T-note prices (ZNH17 -0.11%)are down -4.5 ticks.
Eurozone Feb economic confidence rose +0.1 to 108.0, weaker than expectations of +0.2 to 108.1 but still the highest in 5-3/4 years.
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) Jan durable goods orders (expected +1.7% and +0.5% ex transportation, Dec -0.5% and +0.5% ex transportation), (2) Jan pending home sales (expected +1.0% m/m, Dec +1.6% m/m and -2.0% y/y), (3) Feb Dallas Fed manufacturing activity index (expected -2.7 to 19.4, Jan +4.4 to 22.1), (4) Dallas Fed President Robert Kaplan (voter) speaks at the University of Oklahoma Price College of Business, (5) USDA weekly grain export inspections.
Notable S&P 500 earnings reports today include: Priceline (consensus $12.97), TEGNA (0.66), AES (0.35), American Tower (1.38), Perrigo (1.62), Frontier Communications (-0.04), EOG Resources (-0.14), ONEOK (0.45), Albemarle (0.73).
U.S. IPO's scheduled to price today: none.
Equity conferences: Goldman Sachs Technology Conference on Mon, Keefe, Bruyette, & Woods Cards, Payments & Financial Technology Symposium on Mon, Morgan Stanley Technology, Media & Telecom Conference on Mon-Tue BMO Capital Markets Global Metals & Mining Conference on Mon-Tue, JMP Securities Technology Conference on Mon-Tue, JP Morgan Leveraged Finance Conference on Mon-Tue, GSMA Mobile World Congress on Mon-Tue, Morgan Stanley MLP Diversified Natural Gas, Utilities & Clean Tech Conference on Tue, UBS Utilities and Natural Gas Conference on Tue, Barclays MLP Corporate Access Day on Tue, Pacific Crest Emerging Technology Summit on Tue, Evercore ISI Industrial Conference on Tue, CITI Asset Management, Broker Dealer & Market Structure Conference on Wed, Gabelli & Company Pump, Valve & Water Systems Symposium on Wed, Wells Fargo Real Estate Securities Conference on Wed, ABA National Conference on Wed, EnerCom The Oil & Gas Conference on Wed, J.P. Morgan Gaming, Lodging, Restaurant & Leisure Management Access Forum on Thu, Bank of America Merrill Lynch Global Agriculture and Chemicals Conference on Wed-Thu, BTIG Healthcare Conference on Thu, Capital Link Master Limited Partnership Investing Forum on Thu, Simmons Energy Conference on Thu-Fri.
OVERNIGHT U.S. STOCK MOVERS
Reynolds American (RAI -0.08%) was downgraded to 'Market Perform' from 'Outperform' at Wells Fargo Securities.
Carnival Cruise Lines (CCL +0.20%) was upgraded to 'Buy' from 'Hold' at Argus with a price target of $64.
Tesla (TSLA +0.39%) was downgraded to 'Sell' from 'Neutral' at Goldman Sachs with a price target of $185.
Sina Corp China (SINA +4.35%) was downgraded to 'Neutral' from 'Accumulate' at GuoTai JunAn with a target price of $74.
Illumina (ILMN -0.63%) was upgraded to 'Buy' from 'Hold' at Evercore ISI with a price target of $190.
Hanesbrands (HBI +2.20%) was downgraded to 'Equal-Weight' from 'Overweight' at Morgan Stanley.
Terex (TEX +1.47%) was upgraded to 'Buy' from 'Hold' at Deutsche Bank.
Urban Outfitters (URBN +2.21%) was downgraded to 'Sell' from 'Neutral' at MKM Partners.
Merck (MRK +0.47%) said its V212 investigational inactivated varicella zoster virus for prevention of shingles met its primary endpoint in a Phase 3 shingles study.
Raytheon (RTN +0.12%) gained nearly 1% in after-hours trading after it received a $1.07 billion contract from the U.S. Air Force.
Earthlink (ELNK -3.76%) climbed over 3% in after-hours trading after it disclosed in a regulatory filing that shareholders approved an agreement and plan of merger with Windstream.
MARKET COMMENTS
Mar E-mini S&Ps (ESH17 -0.03%) this morning are up +0.25 of a point (+0.01%) at a new all-time nearest-futures high. Friday's closes: S&P 500 +0.15%, Dow Jones +0.05%, Nasdaq +0.21%. The S&P 500 on Friday closed higher on the +0.6 point rise in the U.S. Feb University of Michigan consumer sentiment index to 96.3 (stronger than expectations of +0.3 to 96.0) and on data from EPFR Global showing that U.S. equity funds saw net inflows of $3 billion in the week to Feb 22, the third increase in the last four weeks. Stocks were undercut by the +3.7% increase in U.S. Jan new home sales to 555,000 (weaker than expectations of +6.4% to 571,000) and the -0.84% decline in crude oil prices, which undercut energy producing stocks.
Mar 10-year T-notes (ZNH17 -0.11%) this morning are down -4.5 ticks. Friday's closes: TYH7 +18.00, FVH7 +1.25. Mar 10-year T-notes on Friday rallied to a 2-1/2 month nearest-futures high and closed higher on carry-over support from a rally in German bunds to a 1-3/4 month high on increased safe-haven demand due to political risks in France. T-notes were also boosted by the slide in crude oil prices which reduced inflation expectations and pushed the 10-year T-note breakeven inflation rate down to a 4-session low.
The dollar index (DXY00 -0.01%) this morning is down -0.02 (-0.02%). EUR/USD (^EURUSD) is up +0.0020 (+0.19%). USD/JPY (^USDJPY) is up +0.16 (+0.14%). Friday's closes: Dollar index +0.04 (+0.04%), EUR/USD -0.0019 (-0.18%), USD/JPY -0.49 (-0.44%). The dollar index on Friday closed higher on the stronger-than-expected U.S. Feb University of Michigan consumer sentiment index and on weakness in EUR/USD on European political risks from the French presidential election. Gains in the dollar were limited as the 10-year T-note yield fell to a 5-week low, which undercuts the dollar's interest rate differentials.
Apr WTI crude oil prices (CLJ17 +0.74%) this morning are up +37 cents (+0.69%) and Apr gasoline (RBJ17 +1.03%) is up +0.0149 (+0.86%). Friday's closes: Apr crude -0.46 (-0.84%), Apr gasoline -0.0111 (-0.64%). Apr crude oil and gasoline on Friday closed lower on negative carry-over from Thursday's EIA data that showed a +0.3% increase in U.S. crude production in the week ended Feb 17 to a 10-1/2 month high of 9.001 million bpd and the +564,000 bbl increase in U.S. crude inventories to a record 518.7 million bbl (EIA data from 1982). Crude oil was also undercut by data from Baker Hughes that showed U.S. active oil rigs in the week ended Feb 24 rose 5 to 602, the most in 16-1/2 months.
GLOBAL EVENT CALENDAR02/27/2017
Monday, Feb 27
US
0830 ET
Jan durable goods orders expected +1.7% and +0.5% ex transportation, Dec -0.5% and +0.5% ex transportation. Jan capital goods new orders non-defense ex aircraft & parts expected +0.5%, Dec +0.7%.
1000 ET
Jan pending home sales expected +1.0% m/m, Dec +1.6% m/m and -2.0% y/y.
1030 ET
Feb Dallas Fed manufacturing activity expected -2.7 to 19.4, Jan +4.4 to 22.1.
1100 ET
USDA weekly grain export inspections.
1100 ET
Dallas Fed President Robert Kaplan (voter) speaks at the University of Oklahoma Price College of Business.
Tuesday, Feb 28
US
0830 ET
Revised Q4 GDP expected +2.1% (q/q annualized), previous +1.9% (q/q annualized). Q4 personal consumption expected unrevised at +2.5%. Q4 GDP price index expected unrevised at +2.1%. Q4 core PCE expected unrevised at +1.3% q/q.
0830 ET
Jan wholesale inventories expected +0.4%, Dec +1.0% m/m. Jan retail inventories, Dec unch m/m.
0900 ET
Dec S&P CoreLogic composite-20 home price index expected +0.7% m/m and +5.3% y/y, Nov +0.88% m/m and +5.27% y/y.
0945 ET
Feb Chicago PMI expected +2.7 to 53.0, Jan -3.6 to 50.3.
1000 ET
Feb Conference Board U.S. consumer confidence index expected -0.8 to 111.0, Jan -1.5 to 111.8.
1000 ET
Feb Richmond Fed manufacturing index expected -2 to 10, Jan +4 to 12.
1500 ET
Philadelphia Fed President Patrick Harker (voter) speaks on the economic outlook at Temple University.
1530 ET
San Francisco Fed President John Williams (non-voter) delivers an outlook speech to the Santa Cruz Chamber of Commerce.
1850 ET
St. Louis Fed President James Bullard (non-voter) gives the Spring 2017 GWU Alumni Lecture in Economics at George Washington University.
2100 ET
President Trump delivers speech to joint session of Congress.
U.S. STOCK CALENDAR02/27/2017
Company
Ticker
Time
Event Description
Period
Estimate
TEGNA Inc
TGNA US
Bf-mkt
Q4 2016 Earnings Release
Q4 2016
0.664
AES Corp/VA
AES US
6:00
Q4 2016 Earnings Release
Q4 2016
0.354
American Tower Corp
AMT US
7:00
Q4 2016 Earnings Release
Q4 2016
1.42
American Tower Corp
AMT US
8:30
Q4 2016 Earnings Call
Q4 2016
AES Corp/VA
AES US
9:00
Q4 2016 Earnings Call
Q4 2016
TEGNA Inc
TGNA US
10:00
Q4 2016 Earnings Call
Q4 2016
Perrigo Co PLC
PRGO US
16:00
Q4 2016 Earnings Release
Q4 2016
1.616
Priceline Group Inc/The
PCLN US
16:00
Q4 2016 Earnings Release
Q4 2016
12.963
Frontier Communications Corp
FTR US
16:05
Q4 2016 Earnings Release
Q4 2016
-0.035
Frontier Communications Corp
FTR US
16:30
Q4 2016 Earnings Call
Q4 2016
Perrigo Co PLC
PRGO US
16:30
Q4 2016 Earnings Call
Q4 2016
Priceline Group Inc/The
PCLN US
16:30
Q4 2016 Earnings Call
Q4 2016
EOG Resources Inc
EOG US
Aft-mkt
Q4 2016 Earnings Release
Q4 2016
-0.144
ONEOK Inc
OKE US
Aft-mkt
Q4 2016 Earnings Release
Q4 2016
0.458
Albemarle Corp
ALB US
Aft-mkt
Q4 2016 Earnings Release
Q4 2016
0.718
Berkshire Hathaway Inc
BRK/A US
Q4 2016 Earnings Release
Q4 2016
2716.6