OVERNIGHT MARKETS AND NEWS
December E-mini S&Ps (ESZ13 +0.37%) this morning are up +0.43% and European stocks are up +0.53% after a preliminary gauge of Chinese manufacturing activity grew more than expected. Gains were limited for European equities, however, after the Eurozone Oct PMI composite index expanded at a slower pace than expected. Asian stocks closed mixed: Japan +0.42%, Hong Kong -0.71%, China -0.74%, Taiwan +0.24%, Australia +0.31%, Singapore +0.41%, South Korea +0.50%, India -0.20%. China's Shanghai Stock Index closed lower on signs of tighter monetary policy after the 7-day repurchase rate, a gauge of funding availability in the banking system, jumped 65 bp to a 2-3/4 month high of 4.67%, which raises concern the PBOC is tightening liquidity to curb credit growth. Commodity prices are mixed. Dec crude oil (CLZ13 +0.35%) is up +0.35%. Dec gasoline (RBZ13 +0.43%) is up +0.26%. Dec gold (GCZ13+0.49%) is up +0.36% and Dec copper (HGZ13 -0.21%) is down -0.09%. Agricultural and livestock prices are mixed. The dollar index (DXY00 -0.09%) is down-0.09% at a fresh 8-3/4 month low as negative sentiment against the dollar persists. EUR/USD (^EURUSD) is up +0.17% at a 23-month high against the dollar and USD/JPY (^USDJPY) is down -0.03%. December T-note prices (ZNZ13 -0.06%) are down -3 ticks.
The Eurozone Oct PMI manufacturing index rose +0.2 to 51.3, slightly weaker than expectations of +0.3 to 51.4. The Oct PMI services index fell -0.3 to 50.9, weaker than expectations of unchanged at 52.2, while the Oct PMI composite index unexpectedly fell -0.7 to 51.5, a slower pace of expansion than expectations of +0.2 to 52.4.
The German Oct PMI manufacturing index rose +0.4 to 51.5, slightly better than expectations of +0.3 to 51.4, while the Oct PMI services index slipped -1.4 to 52.3, a slower pace of expansion than expectations of unch at 53.7.
The UK Oct CBI trends of total orders unexpectedly fell to -4 from 9 in Sep, weaker than expectations of +1 to 10. Oct CBI trends in selling prices fell to -2 from 3 in Sep, weaker than expectations of +1 to 4, while Oct CBI business optimism jumped to 24 from 7, better than expectations of +10 to 17 and matched the Apr 2010 level as the highest since Jan 1994.
The China Oct HSBC/Markit flash manufacturing PMI rose +0.7 to 50.9, a faster pace of expansion than expectations of +0.2 to 50.4.
U.S. STOCK PREVIEW
Today’s weekly initial unemployment claims report is expected to show a -18,000 decline to 340,000, adding to last week’s decline of -15,000 to 358,000. Meanwhile, today’s continuing claims report is expected to show a +11,000 increase to 2.870 million, reversing part of last week’s -43,000 decline to 2.859 million. Today’s Aug U.S. trade deficit is expected to widen mildly to -$39.5 billion from -$39.1 billion in July. Today’s Sep new home sales report is expected to show an increase of +1.0% to 425,000, adding to the +7.9% increase to 421,000 seen in August. The Treasury today will sell $7 billion in 30-year TIPS. There are 47 of the S&P 500 companies that report earnings today with notable reports including PulteGroup, T Rowe Price, Coca-Cola, Dow Chemical, International Paper, Raytheon, Ford, 3M, Amazon.com, Microsoft. There are no equity conferences scheduled during the remainder of the week.
OVERNIGHT U.S. STOCK MOVERS
International Paper (IP -0.34%) reported Q3 EPS of $1.05, much better than consensus of 93 cents.
Ford Motor (F -0.45%) reported Q3 EPS of 45 cents, better than consensus of 38 cents.
Ratheon (RTN +2.99%) reported Q3 EPS od $1.51, well ahead of consensus of $1.33.
Starwood Hotels & Resorts Worldwide (HOT -0.28%) reported Q3 EPS of 71 cents, stronger than consensus of 63 cents.
Terex (TEX -3.37%) reported Q3 EPS of 77 cents, well above consensus of 59 cents, and raised guidance on fiscal 2013 EPS view to $2.05-$2.25 from $1.90-$2.10, above consensus of $1.98.
Visa (V -0.55%) increased its quarterly dividend to 40 cents a share from 33 cents.
Assurant (AIZ -1.20%) reported Q3 adjusted EPS of $1.68, well above consensus of $1.50.
Spartan Stores (SPTN -0.48%) reported Q2 adjusted EPS of 55 cents, stronger than consensus of 49 cents.
Everest Re (RE -1.42%) reported Q3 EPS of $4.81, better than consensus of $4.76.
Fortune Brands (FBHS -0.93%) raised guidance on fiscal 2013 EPS view to $1.47-$1.49 from $1.35-$1.43, stronger than consensus of $1.43.
Citrix (CTXS -1.04%) climbed 6% in after-hours trading after it reported Q3 EPS of 70 cents, better than consensus of 69 cents.
Swift Transportation (SWFT +1.24%) reported Q3 adjusted EPS of 29 cents, right on consensus, but reported Q3 revenue of $1.03 billion, better than consensus of $1.01 billion.
Skechers (SKX -0.71%) reported Q3 EPS of 53 cents, weaker than consensus of 61 cents.
Lam Research (LRCX -3.44%) reported Q1 EPS of 81 cents, better than consensus of 72 cents.
Symantec (SYMC -2.34%) fell over 10% in after-hours trading after it reported Q2 EPS of 50 cents, stronger than consensus of 44 cents, but then lowered guidance on fiscal 2014 EPS view to a loss of -1%-to up 1.5% from up 5%-7% against fiscal 2013.
AT&T (T +0.14%) reported Q3 adjusted EPS of 66 cents, better than consensus of 65 cents.
MARKET COMMENTS
Dec E-mini S&Ps (ESZ13 +0.37%) this morning are up +7.50 points (+0.43%). The S&P 500 index on Wednesday fell back on profit-taking after closing higher for 5 consecutive sessions. Bearish factors included (1) valuation concerns after the S&P 500 rose to 15.9 times estimated earnings Tuesday, close to a 4-year high, (2) negative carry-over from a slide in global stock markets on signs the PBOC may favor tighter monetary policy after China’s 7-day repurchase rate surged 47 bp as it has refrained from adding funds to the markets over the past week. Closes: S&P 500 -0.47%, Dow Jones -0.35%, Nasdaq 100 -0.62%.
Dec 10-year T-notes (ZNZ13 -0.06%) this morning are down -3 ticks. Dec 10-year T-note prices on Wednesday closed higher and the 10-year T-note slid to a 3-month low of 2.47%. Supportive factors included (1) the slide in global stocks that fueled safe-haven demand for Treasuries, and (2) speculation that the economy is not strong enough for the Fed to begin tapering its monthly bond purchases. Closes: TYZ3 +5, FVZ3 +0.75.
The dollar index (DXY00 -0.09%) this morning is down -0.074 (-0.09%) at a fresh 8-3/4 month low. EUR/USD (^EURUSD) is up +0.0024 (+0.17%) at a 23-month high and USD/JPY (^USDJPY) is down -0.03 (-0.03%). The dollar index on Wednesday fell to an 8-3/4 month low but bounced back and closed little changed as the slump in stocks lifted the safe-haven demand for the dollar. USD/JPY fell to a 2-week low as the yen strengthened on concern the PBOC may be leaning toward tighter monetary policy after the China 7-day repurchase rate jumped +47 bp to 4.05% as the PBOC has refrained from adding funds to markets over the past week. Closes: Dollar index +0.034 (+0.04%), EUR/USD -0.00049 (-0.04%), USD/JPY -0.755 (-0.77%).
Dec WTI crude oil (CLZ13 +0.35%) this morning is up +34 cents (+0.35%) and Dec gasoline (RBZ13 +0.43%) is up +0.0066 (+0.26%). Dec crude oil and gasoline prices on Wednesday tumbled to 3-3/4 month lows and closed lower. Bearish factors that included (1) the +5.246 million bbl jump in weekly EIA crude inventories to a 3-1/2 month high of 379.78 bbl, larger than expectations of +3.0 million bbls, (2) the 6.3% w/w increase in U.S. crude oil production in the week ended Oct 18 to 7.896 million barrels a day, a new 24-1/2 year high, and (3) data from China Oil, Gas & Petrochemicals showing that China Sep crude stockpiles rose +1.4% m/m to a record 237.6 million bbl. Closes: CLZ3 -1.44 (-1.46%), RBZ3 -0.0671 (-2.57%).
GLOBAL EVENT CALENDAR10/24/2013
| US | 0830 ET | Weekly initial unemployment claims expected -18,000 to 340,000, previous -15,000 to 358,000. Weekly continuing claims expected +11,000 to 2.870 million, previous -43,000 to 2.859 million. |
| 0830 ET | Aug trade balance expected -$39.5 billion, July -$39.1 billion. | |
| 0830 ET | USDA weekly Export Sales. | |
| 1000 ET | Sep new home sales expected +1.0% to 425,000, Aug +7.9% to 421,000. | |
| 1100 ET | Treasury announces amounts of 2-year T-notes (previous $33 billion), 5-year T-notes (previous $35 billion) and 7-year T-notes (previous $29 billion) to be auctioned Oct 28-30 | |
| 1300 ET | Treasury auctions $7 billion 30-year TIPS. | |
| GER | 0330 ET | German Oct PMI manufacturing expected +0.3 to 51.4, Sep 51.1. Oct services PMI expected unch at 53.7, Sep 53.7. |
| EUR | 0400 ET | Eurozone Oct PMI manufacturing expected +0.3 to 51.4, Sep 51.1. Oct services PMI expected unch at 52.2, Sep 52.2. Oct PMI composite expected +0.2 to 52.4, Sep 52.2. |
| UK | 0600 ET | UK Oct CBI trends total orders expected +1 to 10, Sep 9. Oct CBI trends selling prices expected +1 to 4, Sep 3. Oct CBI business optimism expected +10 to 17, Sep 7. |
| JPN | 1930 ET | Japan Sep national CPI expected +0.9% y/y, Aug +0.9% y/y. Sep national CPI ex fresh food expected +0.7% y/y, Aug +0.8% y/y. Sep national CPI ex food & energy expected unch y/y, Aug -0.1% y/y. |
| 1930 ET | Japan Oct Tokyo CPI expected +0.5% y/y, Sep +0.5% y/y. Oct Tokyo CPI ex-fresh food expected +0.3% y/y, Sep +0.2% y/y. Oct Tokyo CPI ex food & energy expected -0.3% y/y, Sep -0.3% y/y. | |
| 1950 ET | Japan Sep corporate service price index expected +0.8% y/y, Aug +0.6% y/y. |
U.S. STOCK CALENDAR10/24/2013
| Company Name | Ticker | Time | Event Description | Period | Estimate |
|---|---|---|---|---|---|
| Mead Johnson Nutrition Co | MJN US | Bef-mkt | Q3 2013 Earnings Release | Q3 2013 | 0.799 |
| Noble Energy Inc | NBL US | Bef-mkt | Q3 2013 Earnings Release | Q3 2013 | 0.967 |
| Diamond Offshore Drilling Inc | DO US | Bef-mkt | Q3 2013 Earnings Release | Q3 2013 | 1.161 |
| PulteGroup Inc | PHM US | Bef-mkt | Q3 2013 Earnings Release | Q3 2013 | 0.365 |
| Precision Castparts Corp | PCP US | Bef-mkt | Q2 2014 Earnings Release | Q2 2014 | 2.83 |
| Bemis Co Inc | BMS US | Bef-mkt | Q3 2013 Earnings Release | Q3 2013 | 0.603 |
| T Rowe Price Group Inc | TROW US | Bef-mkt | Q3 2013 Earnings Release | Q3 2013 | 0.965 |
| Boston Scientific Corp | BSX US | Bef-mkt | Q3 2013 Earnings Release | Q3 2013 | 0.092 |
| McKesson Corp | MCK US | Bef-mkt | Q2 2014 Earnings Release | Q2 2014 | 2.043 |
| Alexion Pharmaceuticals Inc | ALXN US | Bef-mkt | Q3 2013 Earnings Release | Q3 2013 | 0.792 |
| Coca-Cola Enterprises Inc | CCE US | Bef-mkt | Q3 2013 Earnings Release | Q3 2013 | 0.8 |
| AutoNation Inc | AN US | Bef-mkt | Q3 2013 Earnings Release | Q3 2013 | 0.766 |
| Dow Chemical Co/The | DOW US | Bef-mkt | Q3 2013 Earnings Release | Q3 2013 | 0.536 |
| EQT Corp | EQT US | Bef-mkt | Q3 2013 Earnings Release | Q3 2013 | 0.488 |
| Hershey Co/The | HSY US | Bef-mkt | Q3 2013 Earnings Release | Q3 2013 | 1.008 |
| Celgene Corp | CELG US | Bef-mkt | Q3 2013 Earnings Release | Q3 2013 | 1.543 |
| International Paper Co | IP US | Bef-mkt | Q3 2013 Earnings Release | Q3 2013 | 0.925 |
| Ball Corp | BLL US | 6:00 | Q3 2013 Earnings Release | Q3 2013 | 0.932 |
| Starwood Hotels & Resorts Worldwide Inc | HOT US | 6:00 | Q3 2013 Earnings Release | Q3 2013 | 0.634 |
| Xcel Energy Inc | XEL US | 7:00 | Q3 2013 Earnings Release | Q3 2013 | 0.771 |
| Zimmer Holdings Inc | ZMH US | 7:00 | Q3 2013 Earnings Release | Q3 2013 | 1.243 |
| Altria Group Inc | MO US | 7:00 | Q3 2013 Earnings Release | Q3 2013 | 0.636 |
| Raytheon Co | RTN US | 7:00 | Q3 2013 Earnings Release | Q3 2013 | 1.331 |
| Colgate-Palmolive Co | CL US | 7:00 | Q3 2013 Earnings Release | Q3 2013 | 0.726 |
| Ford Motor Co | F US | 7:00 | Q3 2013 Earnings Release | Q3 2013 | 0.375 |
| Xerox Corp | XRX US | 7:15 | Q3 2013 Earnings Release | Q3 2013 | 0.249 |
| 3M Co | MMM US | 7:30 | Q3 2013 Earnings Release | Q3 2013 | 1.754 |
| Southwest Airlines Co | LUV US | 7:30 | Q3 2013 Earnings Release | Q3 2013 | 0.336 |
| Cameron International Corp | CAM US | 7:30 | Q3 2013 Earnings Release | Q3 2013 | 0.831 |
| FLIR Systems Inc | FLIR US | 7:30 | Q3 2013 Earnings Release | Q3 2013 | 0.322 |
| Zimmer Holdings Inc | ZMH US | 8:00 | Q3 2013 Earnings Call | Q3 2013 | |
| Boston Scientific Corp | BSX US | 8:00 | Q3 2013 Earnings Call | Q3 2013 | |
| FLIR Systems Inc | FLIR US | 8:00 | Q3 2013 Earnings Call | Q3 2013 | |
| Assurant Inc | AIZ US | 8:00 | Q3 2013 Earnings Call | Q3 2013 | |
| PulteGroup Inc | PHM US | 8:30 | Q3 2013 Earnings Call | Q3 2013 | |
| McKesson Corp | MCK US | 8:30 | Q2 2014 Earnings Call | Q2 2014 | |
| Equifax Inc | EFX US | 8:30 | Q3 2013 Earnings Call | Q3 2013 | |
| Franklin Resources Inc | BEN US | 8:30 | Q4 2013 Earnings Release | Q4 2013 | 0.865 |
| Franklin Resources Inc | BEN US | 8:30 | Q4 2013 Earnings Call - Pre-Recorded | Q4 2013 | |
| Hershey Co/The | HSY US | 8:30 | Q3 2013 Earnings Call | Q3 2013 | |
| 3M Co | MMM US | 9:00 | Q3 2013 Earnings Call | Q3 2013 | |
| Altria Group Inc | MO US | 9:00 | Q3 2013 Earnings Call | Q3 2013 | |
| Ball Corp | BLL US | 9:00 | Q3 2013 Earnings Call | Q3 2013 | |
| Raytheon Co | RTN US | 9:00 | Q3 2013 Earnings Call | Q3 2013 | |
| Dow Chemical Co/The | DOW US | 9:00 | Q3 2013 Earnings Call | Q3 2013 | |
| Ford Motor Co | F US | 9:00 | Q3 2013 Earnings Call | C3 2013 | |
| Celgene Corp | CELG US | 9:00 | Q3 2013 Earnings Call | Q3 2013 | |
| International Paper Co | IP US | 9:00 | Q3 2013 Earnings Call | Q3 2013 | |
| Leggett & Platt Inc | LEG US | 9:00 | Q3 2013 Earnings Call | Q3 2013 | |
| Mead Johnson Nutrition Co | MJN US | 9:30 | Q3 2013 Earnings Call | Q3 2013 | |
| Cameron International Corp | CAM US | 9:30 | Q3 2013 Earnings Call | Q3 2013 | |
| Xcel Energy Inc | XEL US | 10:00 | Q3 2013 Earnings Call | Q3 2013 | |
| Noble Energy Inc | NBL US | 10:00 | Q3 2013 Earnings Call | Q3 2013 | |
| Diamond Offshore Drilling Inc | DO US | 10:00 | Q3 2013 Earnings Call | Q3 2013 | |
| Precision Castparts Corp | PCP US | 10:00 | Q2 2014 Earnings Call | Q2 2014 | |
| Bemis Co Inc | BMS US | 10:00 | Q3 2013 Earnings Call | Q3 2013 | |
| Alexion Pharmaceuticals Inc | ALXN US | 10:00 | Q3 2013 Earnings Call | Q3 2013 | |
| Coca-Cola Enterprises Inc | CCE US | 10:00 | Q3 2013 Earnings Call | Q3 2013 | |
| Teradyne Inc | TER US | 10:00 | Q3 2013 Earnings Call | Q3 2013 | |
| Xerox Corp | XRX US | 10:00 | Q3 2013 Earnings Call | Q3 2013 | |
| EQT Corp | EQT US | 10:30 | Q3 2013 Earnings Call | Q3 2013 | |
| Franklin Resources Inc | BEN US | 10:30 | Q4 2013 Earnings Call | C4 2013 | |
| Cabot Oil & Gas Corp | COG US | Aft-mkt | Q3 2013 Earnings Release | Q3 2013 | |
| Chubb Corp/The | CB US | Aft-mkt | Q3 2013 Earnings Release | Q3 2013 | 1.901 |
| Cliffs Natural Resources Inc | CLF US | Aft-mkt | Q3 2013 Earnings Release | Q3 2013 | 0.746 |
| Flowserve Corp | FLS US | Aft-mkt | Q3 2013 Earnings Release | Q3 2013 | 0.84 |
| Amazon.com Inc | AMZN US | Aft-mkt | Q3 2013 Earnings Release | Q3 2013 | -0.103 |
| Express Scripts Holding Co | ESRX US | Aft-mkt | Q3 2013 Earnings Release | Q3 2013 | 1.083 |
| Western Digital Corp | WDC US | Aft-mkt | Q1 2014 Earnings Release | Q1 2014 | |
| Wynn Resorts Ltd | WYNN US | Aft-mkt | Q3 2013 Earnings Release | Q3 2013 | 1.665 |
| Microsoft Corp | MSFT US | Aft-mkt | Q1 2014 Earnings Release | Q1 2014 | 0.542 |
| Cerner Corp | CERN US | Aft-mkt | Q3 2013 Earnings Release | Q3 2013 | 0.355 |
| Cincinnati Financial Corp | CINF US | Aft-mkt | Q3 2013 Earnings Release | Q3 2013 | 0.63 |
| Johnson & Johnson | JNJ US | FDA Adcomm, simeprevir, Hepatitis C |
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