Dec E-mini S&Ps (ESZ16 unch) are little changed, down -0.07%, as they consolidate just below Tuesday’s all-time high. European stocks are down -0.65% due to a slide in Italian bank stocks. On the positive side for European stocks is strength in European manufacturing activity after the Eurozone Nov Markit manufacturing PMI unexpectedly expanded at the fastest pace in 2-3/4 years. Losses in equities were limited as energy producers gained with Jan WTI crude oil (CLF17 -0.31%) up +0.19% after the API reported late Tuesday that U.S. crude supplies fell -1.28 million bbl last week. The 10-year German bund yield jumped from a 2-week low and moved higher after Reuters reported that the ECB is seeking to lend out more bonds to avert a market freeze. Asian stocks settled mixed: Japan closed for holiday, Hong Kong -0.01%, China -0.22%, Taiwan +0.49%, Australia +1.31%, Singapore +0.62%, South Korea +0.51%, India +0.35%.
The dollar index (DXY00 +0.10%) is up +0.02%. EUR/USD (^EURUSD) is down -0.08%. USD/JPY (^USDJPY) is up +0.01%.
Dec 10-year T-note prices (ZNZ16 -0.01%) are down -1.5 ticks on carry-over weakness from a slide in German bund prices.
Reuters reported that the ECB is looking for ways to make it easier for banks to borrow bonds it has purchased, so that they can be used for collateral for repo loans, according to unidentified people familiar with the ECB.
The Eurozone Nov Markit manufacturing PMI unexpectedly rose +0.2 to 53.7, stronger than expectations of -0.2 to 53.3 and the fastest pace of expansion in 2-3/4 years.
Key U.S. news today includes: (1) weekly MBA mortgage applications (previous -9.2% with purchase sub-index -6.2% and refi sub-index -10.9%), (2) Oct durable goods orders (expected +1.7% and +0.2% ex transportation, Sep -0.3% and +0.1% ex transportation), (3) weekly initial unemployment claims (expected +15,000 to 250,000, previous -19,000 to 235,000) and continuing claims (expected +37,000 to 2.014 million, previous -66,000 to 1.977 million), (4) Sep FHFA house price index (expected +0.6% m/m, Aug +0.7% m/m), (5) Nov Markit manufacturing PMI (expected +0.1 to 53.5, Oct +1.9 to 53.4), (6) Oct new home sales (expected -0.5% to 590,000, Sep +3.1% to 593,000), (7) final-Nov University of Michigan U.S. consumer sentiment index (expected unch at 91.6, prelim-Nov +4.2 to 91.6), (8) the Treasury’s auction of $ 13 billion of 2-year floating-rate notes and $ 28 billion of 7-year T-notes, (9) the minutes of the Nov 1-2 FOMC meeting, and (10) EIA Weekly Petroleum Status Report.
S&P 500 earnings reports today include: Deere (consensus $ 0.40).
U.S. IPO’s scheduled to price today: none.
Equity conferences during the remainder of this week include: none.
Eli Lilly (LLY -0.85%) slumped 12% in pre-market trading after its solanezumab drug did not meet the primary endpoint in a Phase 3 study in people with mild dementia due to Alzheimer’s disease.
Deere & Co (DE -0.31%) climbed nearly 3% in pre-market trading after it reported Q4 EPS of 90 cents, well above consensus of 39 cents, and then raised its full-year EPS view to $ 4.43 from a prior view of $ 3.84.
Cognizant Technology Solutions (CTSH -3.48%) was downgraded to ‘Market Perform’ from ‘Outperform’ at William Blair.
McKesson Corp (MCK -0.01%) was downgraded to ‘Underperform’ from ‘Neutral’ at Credit Suisse with a price target of $ 131.
GameStop (GME +2.77%) lost almost 1% in after-hours trading after it reported Q3 revenue of $ 1.96 billion, less than consensus of $ 1.99 billion.
Carnival (CCL +0.99%) was upgraded to ‘Outperform’ from ‘Market Perform’ at Bernstein with a 12-month target price of $ 63.
Norwegian Cruise Line Holdings Ltd (NCLH +1.67%) was downgraded to ‘Market Perform’ from ‘Outperform’ at Bernstein.
HP Inc. (HPQ -0.31%) fell over 2% in after-hours trading after it said it sees Q1 adjusted EPS of 35 cents-38 cents, below consensus of 38 cents.
Urban Outfitters (URBN +4.95%) dropped 8% in after-hours trading after it reported Q3 EPS of 40 cents, weaker than consensus of 44 cents.
Hewlett Packard Enterprise (HPE -1.08%) slipped over 1% in after-hours trading after it reported Q4 net revenue of $ 12.5 billion, below consensus of $ 12.8 billion.
Veeva Systems (VEEV -0.50%) rose over 5% in after-hours trading after it reported Q3 adjusted EPS of 22 cents, above consensus of 16 cents, and then raised guidance on fiscal 2017 adjusted EPS to 68 cents from an August 30 view of 60 cents-61 cents.
Nimble Storage (NMBL +1.65%) tumbled 8% in after-hours trading after it said it sees a Q4 adjusted loss per share of 013 cents to -15 cents, a wider loss than consensus of -12 cents.
Dec E-mini S&Ps (ESZ16 unch) this morning are down -1.50 points (-0.07%). Tuesday’s closes: S&P 500 +0.22%, Dow Jones +0.35%, Nasdaq +0.31%. The S&P 500 on Tuesday posted a new all-time high and closed higher on the unexpected +2.0% increase in U.S. Oct existing home sales, stronger than expectations of -0.6% to 5.44 million and the most in 9-1/2 years. There was also a rally in commodity-producer stocks on speculation the Trump administration’s pledge to cut taxes and increase fiscal spending will spur economic growth. Energy-producer stocks were undercut by weakness in crude oil prices which fell back from a 3-week high and closed down -0.70% on doubts about whether OPEC can agree on crude production cuts.
Dec 10-year T-notes (ZNZ16 -0.01%) this morning are down -1.5 ticks. Tuesday’s closes: TYZ6 +5.00, FVZ6 +3.50. Dec 10-year T-note futures on Tuesday closed higher on carry-over support from a rally in German 10-year bund prices to a 1-1/2 week high and on decent demand for the Treasury’s $ 34 billion auction of 5-year T-notes that had a bid-to-cover ratio of 2.44, slightly above the 12-auction average of 2.42.
The dollar index (DXY00 +0.10%) this morning is up +0.020 (+0.02%). EUR/USD (^EURUSD) is down -0.0009 (-0.08%). USD/JPY (^USDJPY) is up +0.01 (+0.01%). Tuesday’s closes: Dollar index -0.010 (-0.01%), EUR/USD -0.0003 (-0.03%), USD/JPY +0.32 (+0.29%). The dollar index on Tuesday closed slightly lower on the decline in U.S. government bond yields, which reduces the dollar’s interest-rate differentials, and on long liquidation pressure after the sharp run-up in the dollar index to Friday’s 13-1/2 year high.
Jan crude oil prices (CLF17 -0.31%) this morning are up +9 cents (+0.19%) and Jan gasoline (RBF17 -0.54%) is down -0.0002 (-0.01%). Tuesday’s closes: Jan crude -0.34 (-0.70%), Jan gasoline +0.0034 (+0.24%). Jan crude and gasoline on Tuesday settled mixed. Crude oil prices were undercut by doubts about whether OPEC can agree on crude production cuts after two OPEC delegates said that OPEC talks have not yet resolved the question if Iran and Iraq will participate in any production cuts and deferred the matter the Nov 30 OPEC meeting in Vienna. Crude oil was also undercut by expectations that Wednesday’s EIA inventories will show crude supplies rose by +1.2 million bbls and gasoline stockpiles rose by +700,000 bbl. Crude oil prices were boosted by a weaker dollar and by continued hopes that OPEC will agree to cut production when it meets next week in Vienna after a delegate from Nigeria said that “there is certainty that everybody is on board.”
|Wednesday, Nov 23|
|US||0700 ET||Weekly MBA mortgage applications, previous -9.2% with purchase sub-index -6.2% and refi sub-index -10.9%.|
|0830 ET||Oct durable goods orders expected +1.7% and +0.2% ex transportation, Sep -0.3% and +0.1% ex transportation. Oct capital goods new orders nondefense ex aircraft expected +0.3%, Sep -1.3%.|
|0830 ET||Weekly initial unemployment claims expected +15,000 to 250,000, previous -19,000 to 235,000. Weekly continuing claims expected +37,000 to 2.014 million, previous -66,000 to 1.977 million.|
|0900 ET||Sep FHFA house price index expected +0.6% m/m, Aug +0.7% m/m. Q3 house price purchase index, Q2 +1.2%.|
|0945 ET||Nov Markit manufacturing PMI expected +0.1 to 53.5, Oct +1.9 to 53.4.|
|1000 ET||Oct new home sales expected -0.5% to 590,000, Sep +3.1% to 593,000.|
|1000 ET||Final-Nov University of Michigan U.S. consumer sentiment index expected unch at 91.6, prelim-Nov +4.2 to 91.6.|
|1030 ET||EIA Weekly Petroleum Status Report.|
|1130 ET||Treasury auctions $ 13 billion of 2-year floating-rate notes.|
|1300 ET||Treasury auctions $ 28 billion of 7-year T-notes.|
|1400 ET||Minutes of the Nov 1-2 FOMC meeting.|
|Friday, Nov 25|
|US||0830 ET||Oct wholesale inventories expected +0.2%, Sep +0.1%. Oct retail inventories, Sep +0.3%.|
|0830 ET||USDA weekly Export Sales.|
|Deere & Co||DE US||Bef-mkt||Q4 2016 Earnings Release||Q4 2016||0.402|
|Williams Cos Inc/The||WMB US||9:00||Annual General Meeting||Y 2016|
|Deere & Co||DE US||10:00||Q4 2016 Earnings Call||Q4 2016|