Morning Call For Tuesday, August 8
OVERNIGHT MARKETS AND NEWS
Sep E-mini S&Ps (ESU17 -0.10%) this morning are down -0.05% on concern a slowdown in global trade will weaken economic growth. China Jul exports rose less than expected and German Jun exports unexpectedly fell at the fastest pace in 1-3/4 years. European stocks are up +0.02% as energy stocks climb with Sep WTI crude oil (CLU17 +0.02%) up +0.22%. Gains in European stocks were limited after German Jun exports unexpectedly fell -2.8% m/m, the largest decline in 1-3/4 years. Also, strength in EUR/USD is undercutting European exporter stocks. Asian stocks settled mostly lower: Japan -0.30%, Hong Kong +0.59%, China +.07%, Taiwan -0.10%, Australia -0.52%, Singapore -0.08%, South Korea -0.18%, India -0.80%. Most Asian markets retreated on the weaker-than-expected China July trade data that bolstered economic growth concerns. Japanese stocks also weakened as bank stocks fell led by a slide in SoftBank.
The dollar index (DXY00 -0.15%) is down -0.17%. EUR/USD (^EURUSD) is up +0.17%. USD/JPY (^USDJPY) is down -0.32%.
Sep 10-year T-note prices (ZNU17 -0.01%) are little changed, down -1 tick.
The German Jun trade balance was in surplus by +22.3 billion euros, narrower than expectations of +23.0 billion euros. Jun exports unexpectedly fell -2.8% m/m, weaker than expectations of +0.2% and the largest decline in 1-3/4 years. Jun imports sank -4.5% m/m, weaker than expectations of +0.2% and the biggest decline in 8-1/3 years.
The China Jul trade balance widened to a surplus of $46.74 billion, more than expectations of a $45.00 billion and the largest surplus in 6-months. Jul exports rose +7.2% y/y, weaker than expectations of +11.0% y/y and the smallest increase in 5-months. Jul imports rose +11.0% y/y, weaker than expectations of +18.0% y/y and the smallest increase in 7-months.
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) Jun JOLTS job openings (expected +34,000 to 5.700 million, May -301,000 to 5.666 million), and (2) Treasury auctions $24 billion of 3-year T-notes.
Notable S&P 500 earnings reports today include: Walt Disney (consensus $1.55), Priceline (14.19), TripAdvisor (0.30), Gartner (0.85), Michael Kors (0.62), Henry Schein (1.74), Expeditors Intl (0.59), Ralph Lauren (0.94), CVS Health (1.31).
U.S. IPO's scheduled to price today: none.
Equity conferences this week: Pacific Crest Securities Conference on Mon-Tue, Jefferies Global Industrials Conference on Mon-Wed, MUFG Securities Seattle Investor Conference on Tue, Cowen and Company Communications Infrastructure Summit on Tue, Cowen & Co. Communications Infrastructure Summit on Tue, Oppenheimer Technology, Internet and Communications Conference on Tue-Wed, J.P. Morgan Auto Conference on Wed, Canaccord Genuity Growth Conference on Wed-Thu, Goldman Sachs Power, Utilities MLP and Pipeline Conference on Thu.
OVERNIGHT U.S. STOCK MOVERS
Beazer Homes (BZH +4.08%) was downgraded to 'Neutral' from 'Outperform' at Wedbush.
Amazon.com (AMZN +0.47%) was initiated with a 'Buy' at Mizuho Securities USA with a 12-month target price of $1,250.
Avis Budget Group (CAR +3.66%) declined over 8% in after-hours trading after it reported Q2 net revenue of $2.24 billion, weaker than consensus of $2.27 billion, and then lowered its full-year adjusted EPS estimate to $2.40-$2.85 from a prior view of $2.85-$3.50.
Twilo (TWLO +4.52%) jumped 13% in pre-market trading after it reported Q2 revenue of $95.9 million, higher than consensus of $86.2 million, and then raised guidance on full-year revenue to $371 million-$375 million from a prior view of $356 million-$362 million, above consensus of $359.8 million.
Essent Group Ltd (ESNT +1.60%) lost over 1% in after-hours trading after it announced that it had commenced a proposed underwritten public offering of 5.0 million shares of is common stock.
MyoKardia (MYOK +83.38%) slipped over 1% in after-hours trading after it announced that it had commenced a proposed underwritten public offering of 3.5 million shares of its common stock.
Inphi (IPHI +2.13%) climbed nearly 6% in after-hours trading after it reported Q2 adjusted EPS from continuing operations of 35 cents, higher than consensus of 33 cents.
Tenet Healthcare (THC -0.48%) slumped 10% in after-hours trading after it reported Q2 net operating revenue of $4.8 billion, less than consensus of $4.9 billion, and then said it sees full-year revenue of $19.1 billion-$19.4 million, below consensus of $19.77 billion.
Quantenna Communications (QTNA -0.41%) rose over 5% in after-hours trading after it reported Q2 revenue of $47.1 million, better than consensus of $42.9 million, and then said it sees Q3 revenue of $49 million-$51 million, above consensus of $47.7 million.
Brookdale Senior Living (BKD -8.54%) climbed over 4% in after-hours trading after it reported Q2 revenue of $1.19 billion, higher than consensus of $1.14 billion.
FibroGen (FGEN -4.57%) soared over 50% in after-hours trading after its pamrevlumab drug met the primary endpoint of change in forced vital capacity in a Phase 2 study of patients with idiopathic pulmonary fibrosis.
Coherus Biosciences (CHRS -2.36%) lost almost 5% in after-hours trading after it said Q2 revenue fell to $1.4 million from $14.1 million y/y and Q2 R&D spending dropped to $34.5 million from $65.5 million.
Manitowoc (MTW +2.63%) rallied 9% in after-hours trading after it improved its view on full-year revenue to down about 5%-7% from a May 8 estimate of down 8%-10%.
Vonage Holdings (VG +0.91%) rallied nearly 5% in after-hours trading when it was announced that it will replace CoreSite Realty in the S&P SmallCap 600 before the open of trade on Thursday, Aug 10.
Depomed (DEPO -2.53%) dropped 10% in after-hours trading after it said it sees full-year revenue of $395 million-$410 million, below consensus of $416.3 million, and then said it received subpoenas from the U.S. Senate Committee on Homeland Security and Governmental Affairs for information on opioid sales and marketing.
MARKET COMMENTS
Sep S&P 500 E-mini stock futures (ESU17 -0.10%) this morning are down -1.25 points (-0.05%). Monday's closes: S&P 500 +0.16%, Dow Jones +0.12%, Nasdaq +0.59%. The S&P 500 index on Monday closed higher on strength in technology stocks and M&A activity after Rockwell Collins jumped over 3% on reports that it may be acquired by United Technologies. Stocks were undercut by carry-over weakness from a decline in European equities after German Jun industrial production unexpectedly fell -1.1% m/m, weaker than expectations of +0.2% m/m and the biggest decline in 6 months. There was also weakness in energy stocks after crude oil prices fell -0.38%.
Sep 10-year T-note prices (ZNU17 -0.01%) this morning are down -1 tick. Monday's closes: TYU7 +3.0, FVU7 +2.25. Sep 10-year T-notes on Monday closed higher on comments from St. Louis Fed President Bullard who said that Fed interest-rate policy should be on hold due to "unexpectedly low" price data. T-notes were also supported by the -0.38% slide in crude oil prices, which reduces inflation expectations. Gains were limited by supply pressures as the Treasury begins its quarterly refunding with Tuesday's $24 billion auction of 3-year T-notes.
The dollar index (DXY00 -0.15%) this morning is down -0.16 (-0.17%). EUR/USD (^EURUSD) is up +0.0020 (+0.17%) and USD/JPY (^USDJPY) is down -0.35 (-0.32%). Monday's closes: Dollar Index -0.110 (-0.12%), EUR/USD +0.0022 (+0.19%), USD/JPY +0.06 (+0.05%). The dollar index on Monday closed lower on slightly lower T-note yields, which reduced the dollar's interest rate differentials, and on dovish comments from St. Louis Fed President Bullard who said that Fed policy should remain on hold due to "unexpectedly low" price data.
Sep crude oil (CLU17 +0.02%) this morning is up +11 cents (+0.22%). Sep gasoline (RBU17 -0.96%) is -0.0123 (-0.75%). Monday's closes: Sep WTI crude -0.19 (-0.38%), Sep gasoline -0.0164 (-1.00%). Sep crude oil and gasoline on Monday closed lower on reduced compliance with crude production cuts by OPEC and non-OPEC oil producers after compliance with the production cuts fell to 86% in July, the lowest since Jan. Crude oil prices were also undercut by the fall in the crack spread to a 1-week low, which reduces incentive for refiners to purchase crude oil to refine into gasoline.
(Click on image to enlarge)
Disclosure: None.