Mar E-mini S&Ps are up +0.12% as energy producing stocks climb with Jan WTI crude oil up +0.21%. Crude oil rose after Libyan oil-facility guards prevented two of the country’s biggest oil fields from resuming production. European stocks are down -0.09%, led by losses in mining stocks, as the price of Mar COMEX copper falls -1.42% to a 4-week low. Losses in European stocks were contained on signs that economic growth in Europe may be picking up steam after the German IFO business climate index climbed to a 2-3/4 year high. Asian stocks settled mostly lower: Japan -0.05%, Hong Kong -0.85%, China -0.16%, Taiwan -0.94%, Australia +0.53%, Singapore -0.84%, South Korea -0.24%, India -0.43%.
The dollar index is down -0.01%. EUR/USD is down -0.21%% after ECB Governing Council member Visco said the ECB stands ready to expand asset purchases if inflation fails to climb toward the ECB’s target. USD/JPY is down -0.52% ahead of the conclusion of the BOJ’s 2-day policy meeting.
Mar 10-year T-note prices are up +6 ticks.
ECB Governing Council member and Bank of Italy Governor Visco said “the macroeconomic forecasts produced by the Eurosystem still indicate a vey slow trend in inflation to drop back to levels in line with the ECB’s target. If the macroeconomic environment were to become less favorable, the Governing Council stands ready to further strengthen the program by expanding the monthly asset purchase rate and or its duration.”
China Nov new home prices rose in 55 of the 70 cites tracked by the governemnt, down from 62 cities that rose in Oct. Nov new home prices fell in 11 cities, compared with 7 that fell in Oct.
The German Dec IFO business climate rose +0.6 to 111.0, stronger than expectations of +0.2 to 110.6 and the highest in 2-3/4 years.
Key U.S. news today includes: (1) Dec Markit services PMI (expected +0.6 to 55.2, Nov -0.1 to 54.7), (2) USDA weekly grain export inspections.
Russell 1000 earnings reports today include: Lennar (consensus $ 1.28).
U.S. IPO’s scheduled to price today: travel none.
Equity conferences this week: none.
Bristol-Myers Squibb (BMY -0.05%) was upgraded to ‘Buy’ from ‘Hold’ at Jeffries with a price target of $ 69.
ETrade (ETFC -2.04%) was upgraded to ‘Buy’ from ‘Hold’ at SunTrust Robinson Humphrey with a price target of $ 40.
Costco (COST +0.19%) was upgraded to ‘Buy’ from ‘Neutral’ at Citigroup.
Carnival Cruise Lines (CCL -2.76%) dropped over 4% in pre-market trading after it was downgraded to ‘Hold’ from ‘Buy’ at Berenberg.
Ambac Financial Group (AMBC +0.15%) was downgraded to ‘Sell’ from ‘Neutral’ at MKM Partners.
BorgWarner (BWA +0.71%) was downgraded to ‘Market Perform’ form ‘Outperform’ at Wells Fargo Securities.
United Technologies (UTX +0.36%) was upgraded to ‘Outperform’ from ‘Neutral’ at Credit Suisse with a 12-month target price of $ 125.
Lowe’s (LOW -0.96%) was downgraded to ‘Neutral’ from ‘Buy’ at Citigroup.
Gulfport Energy (GPOR -5.65%) was upgraded to ‘Buy’ from ‘Neutral’ at Guggenheim Securities with a 12-month target price of $ 30.
Rsp Permian (RSPP +1.10%) was upgraded to ‘Buy’ from ‘Neutral’ at Guggenheim Securities with a 12-month target price of $ 55.
Continental Resources (CLR -0.63%) was rated new ‘Market Perform’ at FBR Capital Markets with a 12-month target price of $ 56.
Mar E-mini S&Ps this morning are up +2.75 points (+0.12%). The S&P 500 on Friday closed lower: S&P 500 -0.18%, Dow Jones -0.04%, Nasdaq -0.38%. Bullish factors included (1) the -18.7% plunge in U.S. Nov housing starts to 1.090 million, weaker than expectations of -7.0% to 1.23 million, (2) the -4.7% decline in U.S. Nov building permits to 1.201 million, weaker than expectations of -1.6% to 1.24 million, and (3) heightened geopolitical tensions after China seized a U.S. drone in international waters in the South China Sea.
Mar 10-year T-notes this morning are up +6 ticks. Mar 10-year T-notes on Friday closed lower: TYH7 -3.00, FVH7 +0.50. Bearish factors included (1) hawkish comments from Richmond Fed President Lacker who said he thinks the Fed “will need more than three rate hikes” in 2017, and (2) comments from St. Louis Fed President Bullard who said the Fed the Fed should consider shrinking its balance sheet starting next year.
The dollar index this morning is down -0.010 (-0.01%). EUR/USD is down -0.0022 (-0.21%). USD/JPY is down -0.61 (-0.52%). The dollar index on Friday closed lower: Dollar index -0.210 (-0.20%), EUR/USD +0.0037 (+0.36%), USD/JPY -0.25 (-0.21%). Bearish factors included (1) the weaker-than-expected U.S. Nov housing starts and building permits, and (2) the action by the New York Fed to cut its U.S. Q4 GDP estimate to 1.8% from a Dec 2 estimate of 2.7%, citing negative contributions from capacity utilization, industrial production and housing.
Jan WTI crude oil prices this morning are up +11 cents (+0.21%) and Jan gasoline is +0.0030 (+0.19%). Jan crude oil and gasoline on Friday closed higher: Jan crude +1.13 (+2.22%), Jan gasoline +0.0165 (+1.07%). Bullish factors included (1) a weaker dollar, and (2) the increase in the crack spread to a 2-week high, which may boost refinery demand for crude to refine into gasoline and distillate products.
|Monday, Dec 19|
|US||0945 ET||Dec Markit services PMI expected +0.6 to 55.2, Nov -0.1 to 54.7.|
|1100 ET||USDA weekly grain export inspections.|
|1330 ET||Fed Chair Janet Yellen delivers keynote address on the state of the job market at the University of Baltimores Midyear Commencement.|
|Tuesday, Dec 20|
|US||n/a||No economic reports or Fed speakers scheduled.|
|Lennar Corp||LEN US||6:00||Q4 2016 Earnings Release||Q4 2016||1.276|
|Lennar Corp||LEN US||11:00||Q4 2016 Earnings Call||Q4 2016|