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December 2016
OVERNIGHT MARKETS AND NEWS
Dec E-mini S&Ps (ESZ16
+0.34%) are up +0.46% and European stocks are up +1.28% at a 3-week high as the
markets recovered from a brief sell-off after Italian voters voted 'No" to
Prime Minster Renzi's constitutional reforms. Dec mini S&Ps had dropped to
a 2-week low and EUR/USD (^EURUSD)tumbled to a 20-month low in overnight trade
after Italian Prime Minister Renzi announced his resignation. Italian bank
stocks sold-off and concerns heightened that contagion from Italy's crisis
would spread throughout the Eurozone.
However, the markets
reversed, recovered their losses, and stocks rallied sharply and EUR/USD is now
up +0.43% at a 2-week high. A +0.89% rally in Jan WTI crude oil (CLF17 +0.52%)
to a 16-1/2 month high gave energy producing stocks and the overall market a
boost, while European equities found support on signs of economic improvement
after Eurozone Oct retail sales rose by the most in 2 years and after the
Eurozone Nov composite PMI was revised upward to its fastest pace of expansion
in 11 months. rallied Asian stocks settled lower: Japan -0.82%, Hong Kong
-0.26%, China -1.21%, Taiwan -0.31%, Australia -0.80%. Singapore +0.81%, South
Korea -0.29%, India +0.45%.
China's Shanghai Composite
fell to a 2-week low and Japan's Nikkei Stock Index slid to a 1-week low on the
heels of Italian Prime Minister Renzi's resignation. Japanese stocks were also
undercut after Japan Nov consumer confidence unexpectedly fell to a 7-month
low.
The dollar index (DXY00
-0.08%) is down -0.18%. EUR/USD (^EURUSD) is up +0.43% at a 2-week high after
recovering from a 2-month low. USD/JPY (^USDJPY) is up +0.77%.
Mar 10-year T-note prices
(ZNH17 -0.15%) are down -5.5 ticks.
Eurozone Oct retail sales
rose +1.1% m/m, stronger than expectations of +0.8% m/m and the largest monthly
increase in 2 years.
The Eurozone Nov Markit
composite PMI was revised downward to 3.9 from the originally reported 54.1,
still the fastest pace of expansion in 11 months.
Japan Nov consumer
confidence unexpectedly fell -1.4 to 40.9, weaker than expectations of +0.5 to
42.8 and the lowest in 7 months. The Total Investment & Insurance Solutions
U.S. STOCK PREVIEW
Key U.S. news today
includes: (1) New York Fed President William Dudley (voter) speaks on the
economy and monetary policy at an event in New York, (2) Chicago Fed President
Charles Evans (non-voter) speaks on current economic conditions and monetary
policy at an event in Chicago, (3) revised Nov Markit services PMI (expected
+0.1 to 54.8, prelim-Nov -0.1 to 54.7), (4) Nov ISM non-manufacturing PMI
(expected +0.7 to 55.5, Oct -2.3 to 54.8), (5) St. Louis Fed President James
Bullard (voter) speaks at Arizona State University’s annual economic forecast
luncheon, (6) USDA weekly grain export inspections, (7) USDA Weekly Crop
Progress.
Russell 1000 earnings
reports today include: Valspar (consensus $1.50).
U.S. IPO's scheduled to
price today: none.
Equity conferences today:
American Society of Hematology Meeting on Mon, Raymond James Technology
Investors Conference on Mon-Tue, UBS Global Media and Communications Conference
on Mon-Wed, Barclays Gaming, Lodging, Leisure, Restaurant & Food Retail
Conference on Tue, Cowen & Co Ultimate Energy Conference on Tue, Wells
Fargo Securities Energy Symposium on Tue, Goldman Sachs U.S. Financial Services
Conference on Tue-Wed, Wells Fargo Pipeline, MLP and Utility Symposium on Wed,
Citi Global Health Care Conference on Wed-Thu, Barclays Global Technology, Media
and Telecommunications Conference on Wed-Thu, Bernstein Consumer Summit on
Wed-Thu, Capital One Southcoast Energy Conference on Wed-Thu, ACI European
Biopolymer Summit on Thu.The Total Investment & Insurance Solutions
OVERNIGHT U.S. STOCK MOVERS
Air Products &
Chemicals (APD +0.33%) was upgraded to 'Buy' from 'Neutral' at Citigroup.
Citrix (CTXS +0.18%) was
upgraded to 'Buy' from 'Neutral' at Mizuho Securities USA with a price target
of $100.
Marvell Technology Group
Ltd (MRVL +0.29%) was downgraded to 'Sell' from 'Neutral' at Goldman Sachs.
Hilton (HLT +0.20%) was
upgraded to 'Buy' from 'Sell' at MKM Partners with a 12-month target price of
$28.
McDonald's (MCD -0.19%) was
upgraded to 'Buy' from 'Neutral' at Nomura with a12-month target price of $139.
Nike (NKE -0.38%) was
upgraded to 'Buy' from 'Hold' at HSBC with a price target of $60.
Quantenna Communications
(QTNA -1.06%) was upgraded to 'Strong Buy' from 'Buy' at Needham & Co with
a 12-month target price of $25.
Globus Medical (GMED
+0.55%) rose nearly 3% in after-hours trading after it was named to replace
Talen Energy in the S&P MidCap 400 effective after the close of trading
Tuesday, December 6.
HomeStreet (HMST -0.68%)
climbed over 3% in after-hours trading after it was named to replace UMB
Financial in the S&P SmallCap 400 effective after the close of trading
Tuesday, December 6.
B&G Foods (BGS +0.47%)
gained over 1% in after-hours trading after it acquired Victoria Fine Foods for
$70 million in cash.
Zendesk (ZEN +1.63%) slid
over 5% in after-hours trading after the company said two of its SVPs were
leaving the company, Marcus Bragg effective December 7, and Amanda Kleha
effective December 30. The Total Investment & Insurance Solutions
MARKET COMMENTS
Dec E-mini S&Ps (ESZ16
+0.34%) this morning are up +10.00 points (+0.46%). Friday's closes: S&P
500 +0.04%, Dow Jones -0.11%, Nasdaq +0.11%. The S&P 500 on Friday closed
slightly higher on the +178,000 increase in U.S. Nov non-farm payrolls (close
expectations of +180,000) and the unexpected -0.3 point drop in the U.S. Nov
unemployment rate to 4.6%, stronger than expectations of unchanged at 4.9% and
the lowest in 9-1/4 years. Stocks were undercut by the weaker-than-expected
U.S. Nov hourly earnings report of -0.1% m/m and +2.5% y/y (vs expectations of
+0.2% m/m and +2.8% y/y) where the -0.1% m/m drop was the first monthly decline
in 23 months.
Mar 10-year T-notes (ZNH17
-0.15%) this morning down -5.5 ticks. Friday's closes: TYH7 +15.50, FVH7
+11.25. Mar 10-year T-notes on Friday closed higher on the unexpected -0.1% m/m
decline in U.S. Nov average hourly earnings, weaker than expectations of +0.2%
m/m, which was good for the inflation outlook. T-notes also received carry-over
support from a rally in German bunds on increased safe-haven demand ahead of
Sunday's constitutional referendum in Italy.
The dollar index (DXY00
-0.08%) this morning is down -0.180 (-0.18%). EUR/USD (^EURUSD) is up +0.0046
(+0.43%) at a 2-week high. USD/JPY (^USDJPY) is up +0.87 (+0.77%). Friday's
closes: Dollar index -0.270 (-0.27%), EUR/USD +0.0003 (+0.03%), USD/JPY -0.59
(-0.52%). The dollar index on Friday closed lower on the weaker-than-expected
U.S. Nov hourly earnings report, which took a little pressure off the Fed for
rate hikes. There was also strength in EUR/USD which climbed to a 2-week high
after the Eurozone Oct PPI rose +0.8% m/m, the largest monthly increase in 4
years.
Jan crude oil prices (CLF17
+0.52%) this morning are up +46 cents (+0.89%) at a 16-1/2 month high and Jan
gasoline (RBF17 +0.26%) is up +0.0123 (+0.79%) at a 1-month high. Friday's
closes: Jan crude +0.62 (+1.21%), Jan gasoline +0.0077 (+0.50%). Jan crude oil
and gasoline on Friday closed higher on a weaker dollar and on continued
support from Wednesday's OPEC production cut agreeement.The Total Investment
& Insurance Solutions
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