US : Pre Market News – 05 Dec 2016

PREMARKET WORLD 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.

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.

PREMARKET U.S. STOCKS

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.

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.

GLOBAL EVENT CALENDAR 12/05/2016
Monday, Dec 5
US0830 ETNew York Fed President William Dudley (voter) speaks on the economy and monetary policy at an event in New York.
0910 ETChicago Fed President Charles Evans (non-voter) speaks on current economic conditions and monetary policy at an event in Chicago.
0945 ETRevised Nov Markit services PMI expected +0.1 to 54.8, prelim-Nov -0.1 to 54.7.
1000 ETNov ISM non-manufacturing PMI expected +0.7 to 55.5, Oct -2.3 to 54.8.
1100 ETUSDA weekly grain export inspections.
1405 ETSt. Louis Fed President James Bullard (voter) speaks at Arizona State Universitys annual economic forecast luncheon.
1600 ETUSDA Weekly Crop Progress.
Tuesday, Dec 6
US0830 ETRevised Q3 non-farm productivity expected +3.3%, prelim-Q3 +3.1%. Revised Q3 unit labor costs expected unrevised at +0.3%.
0830 ETOct trade balance expected -$ 42.0 billion, Sep -$ 36.4 billion.
1000 ETOct factory orders expected +2.5%, Sep +0.3% and +0.6% ex transportation.
U.S. STOCK CALENDAR 12/05/2016
CompanyTickerTimeEvent DescriptionPeriodEstimate
Johnson Controls International plcJCI US8:00Analyst DayY 2016
SL Green Realty CorpSLG US9:00Investor ConferenceY 2016
Valspar Corp/TheVAL USQ4 2016 Earnings ReleaseQ4 20161.496
Patterson-UTI Energy IncPTEN USNovember 2016 Sales and Revenue Release – Activity Report2016
Multiple CompaniesDST USShareholders MeetingY 2016
FMC Technologies IncFTI USExtraordinary Shareholders Meeting – M&A VoteY 2016

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