Morning Call For Tuesday, Nov. 21
OVERNIGHT MARKETS AND NEWS
Dec E-mini S&Ps (ESZ17 +0.33%) this morning are up +0.23% and European stocks are up +0.39%. Better-than-expected Q3 earnings results from Lowe's pushed the stock up 3% in pre-market trading and helped lift the overall market. European stocks rose and the German 10-year bund yield fell to a 1-1/2 week low of 0.337% after Eurozone officials familiar with the matter said the ECB will take small, gradual steps next year as it moves to end its bond purchases next year. Asian stocks settled higher: Japan +0.70%, Hong Kong +1.91%, China +0.53%, Taiwan +1.08%, Australia +0.30%, Singapore +1.09%, South Korea +0.18%, India +0.36%. A rally Chinese financial stocks lifted the overall market on optimism that deleveraging efforts by the government will not be as strict as expected. Japanese stocks gained on optimism in the U.S. economic outlook after U.S. Oct leading indicators rose more than expected, which shows economic strength and should benefit Japanese exporters.
The dollar index (DXY00 +0.01%) is up +0.03%. EUR/USD (^EURUSD) is down -0.07%. USD/JPY (^USDJPY) is down -0.05%.
Dec 10-year T-note prices (ZNZ17 -0.01%) are up +0.5 of a tick.
According to Eurozone officials familiar with the matter, the ECB is likely to make small multiple adjustments in its guidance on monetary policy next year rather than any major change in language as it ends QE.
UK Oct public sector net borrowing rose +7.5 billion pounds, stronger than expectations of +6.5 billion pounds and the biggest increase in 6 months.
The UK Nov CBI trends total orders rose +19 to a 29-year high of 17, stronger than expectations of +5 to 3.
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) Oct Chicago Fed national activity index (expected +0.03 to 0.20, Sep +0.54 to +0.17), (2) Oct existing home sales (expected +0.2% to 5.40 million, Sep +0.7% to 5.39 million), (3) Treasury auctions $13 billion of 2-year floating-rate notes, (4) Fed Chair Janet Yellen speaks at New York University’s Stern Business School.
Notable Russell 1000 earnings reports today include: HP (consensus $0.44), salesforce.com (0.37), Burlington Stores (0.66), Eaton Vance (0.71), Dollar Tree (0.90), Medtronic (1.02), Lowe's (1.02), Analog Devices (1.36).
U.S. IPO's scheduled to price today: none.
Equity conferences this week: none.
OVERNIGHT U.S. STOCK MOVERS
Lowe's (LOW +1.55%) rose 3% in pre-market trading after it reported Q3 adjusted EPS of $1.05, better than consensus of $1.02.
Deere (DE +0.85%) was upgraded to 'Outperform' from 'Neutral' at Baird with a price target of $155.
T-Mobile (TMUS +0.47%) was upgraded to 'Buy' from 'Hold' at HSBC with a price target of $70.
Palo Alto Networks (PANW -0.13%) rose over 6% in after-hours trading after it reported Q1 adjusted EPS of 74 cents, higher than consensus of 68 cents, and then said it sees full-year adjusted EPS of $3.35 to $3.41, above consensus of $3.31.
Agilent Technologies (A +1.70%) lost nearly 5% in after-hours trading after it said it sees Q1 adjusted EPS of 55 cents=57 cents, weaker than consensus of 59 cents, and then said it sees full-year adjusted EPS of $2.50 to $2.56, below consensus of $2.59.
Black Knight (BKI +0.66%) fell 2% in after-hours trading after it announced a secondary offering of 5 million shares of common stock by affiliates of Thomas H. Lee Partners. L.P.
Planet Fitness (PLNT +0.23%) was initiated with a 'Buy' at D.A. Davidson with an 18-month target price of $42.
Comcast (CMCSA -0.91%) was initiated with a 'Buy' at Buckingham Research Group with a 12-month target price of $48.
Performance Food Group (PFGC +1.39%) lost more than 2% in after-hours trading after it announced a secondary offering of 5 million shares of common stock by an affiliate of Wellspring Capital Management.
Amtech Systems (ASYS +7.05%) rallied 13% in after-hours trading after it reported Q4 revenue of $54.7 million, above consensus of $46.9 million, and then said it sees Q1 revenue of $60 million-$70 million, better than consensus of $49.2 million.
China Cord Blood (CO +0.46%) climbed almost 4% in after-hours trading after it reported 2018 operating income was up +39.4% y/y to $11.5 million and that it added 23,647 new subscribers.
Vipshop Holdings Ltd (VIPS -5.42%) rose nearly 3% in after-hours trading after it reported Q3 revenue of $2.30 billion, higher than consensus of $2.28 billion,
Celsion (CLSN +7.00%) surged over 20% in after-hours trading after it was initiated with coverage at 'Outperform' at Oppenheimer with a 12-month target price of $9.
MARKET COMMENTS
Dec S&P 500 E-mini stock futures (ESZ17 +0.33%) this morning are up +6.00 points (+0.23%). Monday's closes: S&P 500 +0.13%, Dow Jones +0.31%, Nasdaq -0.09%. The S&P 500 on Monday closed higher on the +1.2% increase in U.S. Oct leading indicators index, stronger than expectations of +0.8% and the biggest increase in nearly 4 years. There was also strength in retail stocks ahead of this Friday's Black Friday shopping day, the kickoff of the holiday shopping season.
Dec 10-year T-note prices (ZNZ17 -0.01%) this morning are up +0.5 of a tick. Monday's closes: TYZ7 -7.00, FVZ7 -5.50. Dec 10-year T-notes on Monday closed lower on the stronger-than-expected U.S. Oct leading indicators index and on reduced safe-haven demand with the rally in stocks.
The dollar index (DXY00 +0.01%) this morning is up +0.024 (+0.03%). EUR/USD (^EURUSD) is down -0.0008 (-0.07%) and USD/JPY (^USDJPY) is down -0.06 (-0.05%). Monday's closes: Dollar Index +0.418 (+0.45%), EUR/USD -0.0057 (-0.48%), USD/JPY +0.52 (+0.46%). The dollar index on Monday closed higher on the stronger-than-expected U.S. Oct leading indicators index and on weakness in EUR/USD after ECB President Draghi said that "despite the firm economic recovery, inflation dynamics have yet to show convincing signs of a self-sustained upward trend."
Jan crude oil (CLF18 +0.41%) this morning is up +13 cents (+0.23%) and Jan gasoline (RBF18 +0.69%) is +0.0071 (+0.41%). Monday's closes: Jan WTI crude -0.29 (-0.51%), Jan gasoline -0.0064 (-0.37%). Jan crude oil and gasoline on Monday closed lower on a stronger dollar and on increased Iraq crude exports after JODI reported Iraq Sep crude exports rose +1.7% m/m and +17.6% y/y to 3.854 million bpd.
Metals prices this morning are higher with Dec gold (GCZ17 +0.19%) +2.8 (+0.22%), Dec silver (SIZ17 +0.67%) +0.098 (+0.58%) and Dec copper (HGZ17 +0.32%) +0.009 (+0.29%). Monday's closes: Dec gold -21.2 (-1.64%), Dec silver -0.531(-3.06%), Dec copper +0.0260 (+0.85%). Metals on Monday settled mixed. Metals prices were undercut by a stronger dollar and by the rally in stocks, which reduced safe-haven demand for precious metals. Copper closed higher on signs of tighter supplies after LME copper inventories fell -6,300 MT to a 2-1/4 month low of 241,400 MT.
Disclosure: None.