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27Th July 2016
OVERNIGHT MARKETS AND NEWS
Sep E-mini S&Ps (ESU16 +0.15%) this morning are mildly higher by +0.2% and the
Euro Stoxx 50 index is up +1.1% on a +6% rally in Apple overnight and on
Japanese Prime Minister Abe's announcement of a 28 trillion yen ($265 billion)
fiscal stimulus package. Mr. Abe was not expected to announce the package size
until next week but he likely wanted to increase the pressure on the BOJ for
new monetary policy stimulus measures at its Thursday-Friday meeting. Apple in
yesterday's post-close quarterly results said that iPhone demand picked up and
the company's Q4 sales guidance was above the market consensus. The markets
remain on edge, however, ahead of today's FOMC post-meeting statement. A
negative factor for European stocks today was a -4% sell-off
in Deutsche Bank after the bank said that it barely earned a profit due to a
drop in trading revenue and job-reduction costs. Twitter is down -11% overnight
due to disappointing Q3 revenue guidance. The Chinese stock market closed lower
today after a media report that China's banking regulator is considering moves
to tighten up wealth management products.
The Total Investment & Insurance Solutions
Asian stocks today,
except for China, closed higher: Japan +1.72%, Hong Kong +0.40%, China Shanghai -1.91%, Taiwan +0.43%, Australia
+0.04%, Singapore +0.27%, South Korea unchanged, India +0.17%, Turkey +0.88%.
The dollar index (DXY00 +0.15%)
this morning is trading slightly higher by +0.08%. EUR/USD (^EURUSD)
is up +0.0012 (+0.11%). USD/JPY (^USDJPY)
is up +0.84 (+0.80%) this morning as the yen moved lower on PM Abe's
fiscal-stimulus announcement which increased the pressure on the BOJ for more
monetary stimulus. GBP/USD is down -0.0037 (-0.28%) this morning despite today's
slightly stronger than-expected UK Q2 GDP report of +0.6% q/q and +2.2% (vs
expectations of +0.5% q/q and +2.1%). The UK Q2 GDP data precedes the June 23
Brexit vote and will not deter the BOE next week from likely cutting rates a
notch.
Sep 10-year T-note prices (ZNU16 -0.07%) this morning are down -3 ticks
on reduced safe-haven demand due to higher global stocks. In addition, T-notes
are still seeing weakness after the poor demand for yesterday's 5-year T-note
auction. The Treasury today will sell $15 billion of 2-year floating rate notes
and on Thursday will sell $28 billion of 7-year T-notes. The Total Investment & Insurance Solutions
Commodity prices this morning are mildly
lower by -0.16%. Sep crude oil (CLU16 -0.44%) is down by another -0.20 (-0.47%) and Sep gasoline (RBU16-0.16%) is down -0.0021 (-0.16%) after the API on Tuesday
reported that Cushing oil inventories rose +1.4 million bbls and that U.S.
crude oil inventories rose by +827,000 bbls. Metals prices this morning are
steady to lower on a slightly stronger dollar: Aug gold (GCQ16 -0.08%) -0.7 (-0.05%), Sep silver (SIU16 -0.07%) +0.007 (+0.04%), Sep copper (HGU16 -0.56%) -0.016 (-0.70%). Grain prices this morning
are mixed as the focus remains on weather: Dec corn unchanged, Nov soybeans
+4.50 (+0.46%), Sep wheat -0.50 (-0.12%). Softs this morning are
mixed: Oct sugar -0.15 (-0.77%), Sep coffee +1.10 (+0.78%),
Sep cocoa +7 (+0.25%), Dec cotton -0.08 (-0.11%). The Total Investment & Insurance Solutions
Key U.S. news today includes: (1) weekly MBA
mortgage applications (previous -1.3% with purchase sub-index -2.0% and refi sub-index down -0.9%), (2) Jun durable goods orders
(expected -1.4% and +0.3% ex-transportation, May -2.3% and -0.3% ex-transportation), (3) Jun pending
home sales (expected +1.2% m/m and +3.0% y/y, May -3.7% m/m and +2.4% y/y), (4) Treasury
auctions $15 billion of 2-year floating-rate notes, (5) 2-day FOMC policy
meeting ends with post-meeting statement (no Fed Chair press conference), and
(6) EIA Weekly Petroleum Status Report.
The Total Investment & Insurance Solutions
There are 54 of the S&P 500 companies
that report earnings today with notable reports including: Facebook (0.82),
Coca-Cola (0.58), Waste Management (0.71), Comcast (0.81), Nasdaq (0.88),
Boeing (-0.94), Amgen (2.74), Whole Foods (0.37), Wynn Resorts (0.90). The Total Investment & Insurance Solutions
U.S. IPO's scheduled to
price today: Kinsdale Capital Group (KNSL).
Equity conferences this
week include: none.
Sep E-mini S&Ps this morning are mildly
higher by +0.2% on a +6% rally in Apple overnight and on Japanese Prime
Minister Abe's announcement of a 28 trillion yen ($265 billion) fiscal stimulus
package. Tuesday's closes: S&P 500 +0.03%, Dow Jones -0.10%, Nasdaq +0.24%. The S&P 500
on Tuesday closed little changed. Stocks were undercut by technical selling and
concern that the FOMC at its Tue-Wed meeting might adopt more hawkish language.
Energy producers continued to be undercut by the ongoing sell-off in Sep crude
oil prices. Stocks received support from the stronger-than-expected U.S.
consumer confidence index (-0.1 to
97.3 vs expectations for a decline 96.0) and June new home sales report
(+3.5%). The Total Investment &
Insurance Solutions
Apple (AAPL -0.69%) rallied +6% in overnight trading after its
earnings report included news that iPhone sales were stronger than expected and
that revenue fell by less than expected.
The Total Investment & Insurance Solutions
·
Twitter (TWTR -1.07%) is down -11% in overnight trading on
weaker-than-expected Q3 revenue guidance of $590-610 million, far below the consensus of
$681 million, which fueled recent concerns that the company is struggling to
boost advertising revenue as user growth stagnates.
·
·
Earnings reports this
morning have nearly all beaten expectations. Notable results include Anthem (ANTM -1.71%) (3.33 vs 3.23 consensus), Coca-Cola ({=KO) (0.60
vs 0.58), Comcast (CMCSA -0.43%)
(0.83 vs 0.81), State Street (STT +0.92%) (1.46 vs 1.27), Rockwell (ROK +2.08%) (1.55 vs 1.46), Nasdaq (NDAQ +0.09%) (0.91 vs 0.88), Waste Management (WM +0.19%) (0.74 vs 0.71),
·
Analog Devices (ADI +3.87%) rallied +7% in after-hours trading after the
earlier announcement that it is buying Linear Technology (LLTC +28.93%) for $14.8 billion at a premium of 24% to
Monday's closing price. Linear Technology on Tuesday closed up +29%. The Total Investment & Insurance Solutions
·
·
Fiesta Restaurant
Group (FRGI -6.96%)
rallied +2% in after-hours trading after being named to the S&P SmallCap
600 index.
·
·
LogMeIn (LOGM +6.74%) rallied 19% in after-hours trading after news
that the company will merge with Citrix's (CTXS +1.19%) GoTo family of products. Citrix fell -1.2% in after-hours trading on the news.
·
·
Edwards Sciences (EW +1.72%) rallied by +6% in after-hours trading after
reporting above-consensus ex-items adjusted EPS of 76 cents (vs the 70 cent
consensus) and raising its 2016 earnings guidance for the third quarter in a
row.
·
·
Panera Bread (PNRA -4.32%) rallied +4% in after-hours trading after
reporting better than expected adjusted EPS of $1.78 (vs consensus $1.74).
·
·
Akamai Technologies (AKAM +0.33%) fell by -10% in after-hours trading after missing
Q2 revenue estimates.
·
·
Juniper Networks (JNPR +0.67%) fell -1% in after-hours trading after its Q3
earnings guidance of 48-54 cents
missed the consensus of 54 cents. Q2 adjusted EPS of 50 cents was above the
47-cent consensus.
·
Sep 10-year T-note prices this morning are
down -3 ticks on reduced safe-haven demand due
to higher global stocks and on supply overhang ahead of the Treasury's auction
of 2-year floating rate notes today and 7-year T-notes on Thursday. Tuesday's
closes: TYU6 +2, FVU6 +0.75. Sep 10-year T-notes on Tuesday closed mildly
higher on the soft stock market and the continued decline in crude oil prices,
which dampened inflation expectations. T-notes were undercut by poor demand for
Tuesday's 5-year T-note auction, which saw the lowest bid cover ratio since
2009. T-notes were also undercut by some concern that the FOMC at its Tue-Wed
meeting might adopt more hawkish language in its post-meeting statement. The Total Investment & Insurance Solutions
The dollar index this
morning is trading slightly higher by +0.08%. EUR/USD is up +0.0012 (+0.11%).
USD/JPY is up +0.84 (+0.80%) this morning as the yen moved lower on PM Abe's
fiscal-stimulus announcement which increased the pressure on the BOJ for more
monetary stimulus. Tuesday's closes: Dollar index -0.13 (-0.13%), EUR/USD -0.0009 (-0.08%), USD/JPY -1.15 (-1.09%). The dollar index on Tuesday
closed mildly lower. The yen rallied sharply by +1.09% on Tuesday on Japanese
Finance Minister Aso's comment that the government will "leave actual
policy measures to the BOJ," which doused hopes for a big Japanese fiscal
stimulus program. The dollar found support on ideas the FOMC at its Tue-Wed
meeting might adopt slightly more hawkish post-meeting statement language.
Sep crude oil is down by another -0.20 (-0.47%) and Sep gasoline is down -0.0021 (-0.16%) after the API on Tuesday
reported that Cushing oil inventories rose +1.4 million bbls and that U.S.
crude oil inventories rose by +827,000 bbls. Tuesday's closes: CLU6 -0.21 (-0.49%), RBU6 +0.0101 (+0.76%). Sep
crude oil and gasoline closed mixed on Tuesday. Crude oil was undercut by
continued technical selling as Sep crude oil fell to a new 3-month low and by
continued concern about the crude oil glut and the increasing number of active
U.S. oil wells. Crude oil was supported by the mildly lower dollar index and
expectations for Wednesday's weekly EIA report to show a -2.5 million
bbl decline in U.S. crude oil inventories.
The Total Investment & Insurance Solutions
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