Dec E-mini S&Ps (ESZ16 +0.14%) are up +0.09% and European stocks are down -0.02%, both little changed ahead of Fed Chair Yellen’s testimony this morning before the Joint Economic Committee of Congress. Dec WTI crude oil (CLZ16 +1.54%) is up +1.12% and is nudging energy producing stocks higher as OPEC and Russia prepare to meet in Doha for more talks on coordinating oil production cuts. Asian stocks settled mixed: Japan unch, Hong Kong -0.08%, China +0.11%, Taiwan +0.37%, Australia +0.20%, Singapore +0.70%, South Korea +0.06%, India -0.27%. Global government bond markets received a bid after the BOJ announced its first offer to buy an unlimited amount of Japanese government bonds in its attempt to control the yield curve. Global government bond yields have risen sharply over the past week and the BOJ’s action spurred short-covering in global bond markets.
The dollar index (DXY00 -0.39%) is down -0.39%. EUR/USD (^EURUSD) is up +0.38% after ECB Executive Board member Mersch warned against “excessive expectations” for ECB monetary policy. USD/JPY (^USDJPY) is down -0.06%.
Dec 10-year T-note prices (ZNZ16 +0.06%) are up +4.5 ticks.
ECB Executive Board member Mersch warned against “excessive expectations” for ECB monetary policy and said the ECB’s extraordinary stimulus measures are not intended to be permanent and should be withdrawn as soon as possible.
Philadelphia Fed President Harker said that he “has been supportive for a 25 bp rate hike in Sep, in Nov, and definitely supports a 25 bp rate hike at the Dec FOMC meeting.” He added “we don’t want to get behind the curve as when inflation stats to rise, it tends to rise quickly.”
Key U.S. news today includes: (1) Fed Chair Janet Yellen’s prepared speech released to the public ahead of her testimony before the Joint Economic Committee of Congress, (2) weekly initial unemployment claims (expected +3,000 to 257,000, previous -11,000 to 254,000) and continuing claims (expected -11,000 to 2.030 million, previous +18,000 to 2.041 million), (3) Oct housing starts (expected +10.7% to 1.159 million, Sep -9.0% to 1.047 million), (4) Oct CPI (expected +0.4% m/m and +1.6% y/y, Sep +0.3% m/m and +1.5% y/y) and Oct CPI ex food & energy (expected +0.2% m/m and +2.2% y/y, Sep +0.1% m/m and +2.2% y/y), (5) Nov Philadelphia Fed business outlook survey (expected -2.1 to 7.6, Oct -3.1 to 9.7), (6) New York Fed President William Dudley (voter) delivers welcoming remarks at a conference on international macroeconomics and finance hosted by the New York Fed, (7) Fed Chair Janet Yellen speaks on the economic outlook before the Joint Economic Committee of Congress, (8) Treasury auctions $ 11 billion of 10-year TIPS, and (9) USDA weekly Export Sales.
S&P 500 earnings reports today include: Wal-Mart (consensus $ 0.96), Best Buy (0.47), Staples (0.34), Applied Materials (0.65), Ross Stores (0.56), GAP (0.60), Intuit (0.03), Salesforce.com (0.21), Helmerich & Payne (-0.43), JM Smucker (1.93).
U.S. IPO’s scheduled to price today: none.
Equity conferences during the remainder of this week include: Morgan Stanley Global Consumer & Retail Conference on Tue-Thu, Bank of America Merrill Lynch Global Energy Conference on Wed-Thu, Jefferies London Health Care Conference on Wed-Thu, Canaccord Genuity Medical Technology and Diagnostics Forum on Thu, Vertical Research Partners Global Materials Conference on Thu, UBS Industrials and Transportation Conference on Thum, Morgan Stanley European Technology, Media & Telecom Conference on Fri.
Microsoft (MSFT +1.32%) was upgraded to ‘Buy’ from ‘Neutral’ at Goldman Sachs with a price target of $ 68.
Chipotle Mexican Grill (CMG +0.72%) was downgraded to ‘Sell’ from ‘Neutral’ at Guggenheim Securities.
Cisco (CSCO -0.41%) dropped over 4% in pre-market trading after it said it sees Q2 adjusted EPS of 55 cents-57 cents, weaker than consensus of 59 cents.
NetApp (NTAP -0.40%) jumped 10% in after-hours trading after it reported Q2 adjusted EPS of 60 cents, better than consensus of 54 cents.
Shopify (SHOP +1.10%) was rated a new ‘Buy’ at BTIG LLC with a 12-month target price of $ 55.
EQT Midstream Partners LP (EQM -2.31%) was rated a new ‘Buy’ at Drexel Hamilton LLC with a 12-month price target of $ 86.
Performance Food Group (PFGC +1.69%) slid over 2% in after-hours trading after it announced a secondary offering of 10 million shares of common stock.
Amgen (AMGN +0.12%) gained almost 1% in after-hours trading after it said migraine suffers treated in a second Phase 3 study of its erenumab drug significantly reduced their migraine days compared with a placebo.
L Brands (LB -1.14%) fell 2% in after-hours trading after it said it sees Q4 EPS of $ 1.85-$ 2.00, below consensus of $ 2.03.
First Solar (FSLR -1.11%) sank over 10% in after-hours trading after it said it sees 2017 adjusted EPS of break-even to 50 cents, well below consensus of $ 1.82.
Planet Fitness (PLNT +0.12%) dropped nearly 4% in after-hours trading after it announced a secondary offering of 15 million shares of common stock.
Aclaris Therapeutics (ACRS -2.43%) tumbled 10% in after-hours trading after it announced a public offering of $ 65 million of common stock.
Dec E-mini S&Ps (ESZ16 +0.14%) this morning are up +2.00 points (+0.09%). Wednesday’s closes: S&P 500 -0.16%, Dow Jones -0.29%, Nasdaq +0.58%. The S&P 500 on Wednesday closed lower on the U.S. Oct industrial production report of unchanged (weaker than expectations of +0.2%) and on concern that the Fed is closer to raising interest rates after St. Louis Fed President Bullard (voter) said that December would be a “reasonable time” to raise interest rates. Stocks were boosted by the lack of price pressures on the wholesale level after the U.S. Oct core PPI report of -0.2% m/m and +1.2% y/y was weaker than expectations of +0.2% m/m and +1.6% y/y.
Dec 10-year T-notes (ZNZ16 +0.06%) this morning are up +4.5 ticks. Wednesday’s closes: TYZ6 +1.50, FVZ6 -0.50. Dec 10-year T-notes on Wednesday recovered from a 10-1/4 month low and closed higher on the the weaker-than-expected U.S. Oct PPI report and the weaker-than-expected U.S. Oct manufacturing and industrial production data. Dec 10-year T-notes posted a 10-1/4 month low early in the session on hawkish comments from St. Louis Fed President Bullard who said that next month’s FOMC meeting would be a “reasonable time” to raise interest rates.
The dollar index (DXY00 -0.39%) this morning is down -0.390 (-0.39%). EUR/USD (^EURUSD) is up +0.0041 (+0.38%). USD/JPY (^USDJPY) is down -0.06 (-0.06%). Wednesday’s closes: Dollar index +0.180 (+0.18%), EUR/USD -0.0031 (-0.29%), USD/JPY -0.12 (-0.11%). The dollar index on Wednesday rose to a 13-1/2 year high and settled higher on hawkish comments from St. Louis Fed President Bullard who said that December would be a “reasonable time” to raise interest rates. In addition, the Chinese yuan fell to a 7-3/4 year low against the dollar on concern over President-elect Trump’s trade policies with China. EUR/USD fell to an 11-1/2 month low as the Fed is expected to raise interest rates while the ECB maintains or even expands its QE program.
Dec crude oil prices (CLZ16 +1.54%) are up +51 cents (+1.12%) and Dec gasoline (RBZ16 +1.61%) is up +0.0183 (+1.39%). Wednesday’s closes: Dec crude -0.24 (-0.52%), Dec gasoline -0.0181 (-1.36%). Dec crude oil and gasoline on Wednesday closed lower as Dec crude retreated from a 2-week high. Crude oil prices were undercut by the rally in the dollar index to a 13-1/2 year high and by the EIA report, which showed a +5.274 million bbl increase in weekly EIA crude inventories (vs expectations of +1.5 million bbl) and an unexpected +746,000 bbl increase in EIA gasoline inventories (vs expectations for a -700,000 bbl draw). Crude posted a 2-week high early in the session on optimism OPEC will be able to agree on production cuts after Russian Oil Minister Novak said he sees a “high chance” of an OPEC accord on Nov 30.
|Thursday, Nov 17|
|US||0800 ET||Fed Chair Janet Yellens prepared speech released to the public ahead of her testimony before the Joint Economic Committee of Congress.|
|0830 ET||Weekly initial unemployment claims expected +3,000 to 257,000, previous -11,000 to 254,000. Weekly continuing claims expected -11,000 to 2.030 million, previous +18,000 to 2.041 million.|
|0830 ET||Oct housing starts expected +10.7% to 1.159 million, Sep -9.0% to 1.047 million. Oct building permits expected -2.5% to 1.195 million, Sep +6.3% to 1.225 million.|
|0830 ET||Oct CPI expected +0.4% m/m and +1.6% y/y, Sep +0.3% m/m and +1.5% y/y. Oct CPI ex food & energy expected +0.2% m/m and +2.2% y/y, Sep +0.1% m/m and +2.2% y/y.|
|0830 ET||Nov Philadelphia Fed business outlook survey expected -2.1 to 7.6, Oct -3.1 to 9.7.|
|0830 ET||USDA weekly Export Sales.|
|0850 ET||New York Fed President William Dudley (voter) delivers welcoming remarks at a conference on international macroeconomics and finance hosted by the New York Fed.|
|1000 ET||Fed Chair Janet Yellen speaks on the economic outlook before the Joint Economic Committee of Congress.|
|1100 ET||Treasury announces amount of 2-year T-notes (previous $ 26 billion), 2-year floating-rate notes (previous $ 16 billion), 5-year T-notes (previous $ 34 billion) and 7-year T-notes (previous $ 28 billion) to be auctioned Nov 21-23.|
|1300 ET||Treasury auctions 10-year TIPS.|
|Friday, Nov 18|
|US||0930 ET||Kansas City Fed President Esther George (voter) speaks at a Dallas Fed and Kansas City Fed joint conference on Oil and the Economy: Adapting to a New Reality.|
|1000 ET||Oct leading indicators expected +0.1%, Sep +0.2%.|
|1100 ET||Nov Kansas City Fed manufacturing activity.|
|1330 ET||Dallas Fed President Robert Kaplan (non-voter) takes part in a moderated Q&A at the Dallas Fed and Kansas City Fed joint conference on Oil and the Economy: Adapting to a New Reality.|
|1500 ET||USDA Oct Cattle on Feed.|
|2145 ET||Fed Governor Jerome Powell speaks at a San Francisco Fed conference on the global trade slowdown and its implications for emerging Asia.|
|Helmerich & Payne Inc||HP US||Bef-mkt||Q4 2016 Earnings Release||Q4 2016||-0.428|
|Staples Inc||SPLS US||Bef-mkt||Q3 2017 Earnings Release||Q3 2017||0.337|
|Best Buy Co Inc||BBY US||7:00||Q3 2017 Earnings Release||Q3 2017||0.471|
|JM Smucker Co/The||SJM US||7:00||Q2 2017 Earnings Release||Q2 2017||1.927|
|Wal-Mart Stores Inc||WMT US||7:00||Q3 2017 Earnings Release||Q3 2017||0.958|
|Wal-Mart Stores Inc||WMT US||7:00||Q3 2017 Earnings Call – Pre-recorded||Q3 2017|
|Best Buy Co Inc||BBY US||8:00||Q3 2017 Earnings Call||Q3 2017|
|Becton Dickinson and Co||BDX US||8:30||Analyst Day||Y 2016|
|JM Smucker Co/The||SJM US||8:30||Q2 2017 Earnings Call||Q2 2017|
|L Brands Inc||LB US||9:00||Q3 2017 Earnings Call||Q3 2017|
|Wells Fargo & Co||WFC US||9:00||October 2016 Sales and Revenue Release||2016|
|Staples Inc||SPLS US||9:00||Q3 2017 Earnings Call||Q3 2017|
|F5 Networks Inc||FFIV US||9:00||Analyst and Investor Meeting||Y 2016|
|Wells Fargo & Co||WFC US||10:00||October 2016 Sales and Revenue Call||2016|
|Helmerich & Payne Inc||HP US||11:00||Q4 2016 Earnings Call||Q4 2016|
|Teradata Corp||TDC US||11:00||Analyst Day||Y 2016|
|Intel Corp||INTC US||15:30||Analyst Meeting||Y 2016|
|Applied Materials Inc||AMAT US||16:00||Q4 2016 Earnings Release||Q4 2016||0.654|
|Ross Stores Inc||ROST US||16:00||Q3 2017 Earnings Release||Q3 2017||0.559|
|Gap Inc/The||GPS US||16:15||Q3 2017 Earnings Release||Q3 2017||0.6|
|Ross Stores Inc||ROST US||16:15||Q3 2017 Earnings Call||Q3 2017|
|Gap Inc/The||GPS US||16:30||Q3 2017 Earnings Call||Q3 2017|
|Applied Materials Inc||AMAT US||16:30||Q4 2016 Earnings Call||Q4 2016|
|Intuit Inc||INTU US||16:30||Q1 2017 Earnings Call||Q1 2017|
|salesforce.com Inc||CRM US||17:00||Q3 2017 Earnings Call||Q3 2017|
|Intuit Inc||INTU US||Aft-mkt||Q1 2017 Earnings Release||Q1 2017||0.03|
|salesforce.com Inc||CRM US||Aft-mkt||Q3 2017 Earnings Release||Q3 2017||0.211|
|American Express Co||AXP US||Credit-card Charge-offs and Delinquencies|
|Equifax Inc||EFX US||Investor Meeting||Y 2016|