US : Pre Market News – 13 Jan 2017

PREMARKET WORLD NEWS

Mar E-mini S&Ps (ESH17 +0.09%) are up +0.11% and European stocks are up +0.71% after upbeat comments late Thursday evening from Fed Chair Yellen who said the U.S. economy faces no serious short-term obstacles with low unemployment and wage growth beginning to pick up. Stock gains were limited on global growth concerns after China Dec exports declined more than expected. Also, a -1.13% decline in Feb WTI crude prices (CLG17 -1.08%) is undercutting energy producing stocks. Asian stocks settled mixed: Japan +0.80%, Hong Kong +0.47%, China -0.21%, Taiwan -0.33%, Australia -0.79%, Singapore +1.07%, South Korea -0.76%, India -0.03%. Chinese stocks closed lower as exporting companies sold-off on earnings concerns after China Dec exports fell more than expected.

The dollar index (DXY00 -0.15%) is down -0.17%. EUR/USD (^EURUSD) is up +0.39% and found support on a jump in German Dec wholesale prices by the most in 4-years, which bolsters the case for the ECB to taper QE. USD/JPY (^USDJPY) is down -0.04%.

Mar 10-year T-note prices (ZNH17 +0.11%) are up +4 ticks.

Fed Chair Yellen said late Thursday evening that the U.S. economy faces no serious short-term obstacles, but must deal with long-term challenges of low productivity and income inequality. She said “unemployment has now reached a low level; the labor market is generally strong and wage growth is beginning to pick up. Inflation has moved up from a very low level, and it’s a little bit under our 2% objective, but it’s very close.”

The German Dec wholesale price index rose +1.2% m/m and +2.8% y/y, the fastest pace of increase in 4 years.

The China Dec trade balance shrank to a surplus of +$ 40.82 billion, narrower than expectations of +$ 47.55 billion and the smallest surplus in 8 months. Dec exports fell -6.1% y/y, weaker than expectations of -4.0% y/y. Dec imports rose +3.1% y/y, stronger than expectations of +3.0% y/y.

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) Dec retail sales (expected +0.7% and +0.5% ex autos, Nov +0.1% and +0.2% ex autos), (2) Dec PPI final demand (expected +0.3% m/m and +1.6% y/y, Nov +0.4% m/m and +1.3% y/y) and Dec PPI ex food & energy (expected +0.1% m/m and +1.5% y/y, Nov +0.4% m/m and +1.6% y/y), (3) Philadelphia Fed President Patrick Harker (voter) speaks on economic mobility at an event in Philadelphia, (4) Nov business inventories (expected +0.6%, Oct -0.2%), (5) preliminary-Jan University of Michigan U.S. consumer sentiment index (expected +0.3 to 98.5, Dec +4.4 to 98.2), (6) Dec monthly budget statement (expected -$ 25.0 billion, Nov -$ 136.7 billion).

S&P 500 earnings reports today include: JPMorgan (consensus $ 1.43), Bank of America (0.38), BlackRock (5.02), PNC Financial (1.85), Wells Fargo (1.00).

U.S. IPO’s scheduled to price today: none.

Equity conferences today: none.

PREMARKET U.S. STOCKS

Bank of America (BAC -0.65%) is up +0.5% in pre-market trading after it reported Q4 adjusted EPS of 40 cents, better than consensus of 38 cents

GrubHub (GRUB +0.54%) rose 2% in pre-market trading after being upgraded by Morgan Stanley to ‘Overweight’ from ‘Equal-weight’

BlackRock (BLK -0.70%) reported Q4 adjusted EPS of $ 5.14, stronger than consensus of $ 5.02.

GameStop (GME +0.45%) was downgraded to ‘Neutral’ from ‘Outperform’ at Macquarie Research with a 12-month target price of $ 23.

Tractor Supply (TSCO -0.72%) was upgraded to ‘Outperform’ from ‘Neutral’ at Wedbush.

Zillow Group (ZG +1.80%) was downgraded to ‘Equal-weight’ from ‘Overweight’ at Morgan Stanley.

Independence Realty Trust (IRT -0.44%) was rated a new ‘Outperform’ at Baird with a 12-month target price of $ 10.

Signet Jewelers (SIG -0.40%) slid over 1% in after-hours trading after Corvex Management sold 2.5 million shares in a block trade.

WPX Energy (WPX -1.36%) lost 1% in after-hours trading after it announced a public offering of 42 million shares of common stock.

Pandora Media (P +0.93%) jumped 7% in after-hours trading after it said it sees Q4 revenue above its October 25 forecast of $ 362 million-$ 374 million citing strong advertising.

Two Harbors Investment (TWO -0.45%) fell nearly 2% in after-hours trading after it proposed a public offering of $ 250 million of senior convertible notes due 2022.

Uranium Resources (URRE -1.88%) slumped 17% in after-hours trading after it proposed a public offering of common stock, although no size or terms of the offering were mentioned.

Nivalis Therapeutics (NVLS -2.64%) gained 2% in after-hours trading after it announced restructuring plans to “reduce operational costs and preserve cash” while exploring strategic alternatives and named CFO Michael Carruthers as interim president effective Jan 15.

MARKET COMMENTS

Mar E-mini S&Ps (ESH17 +0.09%) this morning are up +2.50 points (+0.11%). Thursday’s closes: S&P 500 -0.21%, Dow Jones -0.32%, Nasdaq -0.17%. The S&P 500 on Thursday dropped to a 1-week low and closed lower on some continued disappointment that President-elect Trump did not provide specifics on any of his fiscal-stimulus plans in Wednesday’s press conference. There was also continued weakness in pharmaceutical and biotech stocks after President-elect Trump said he would force drug makers to bid for government business to save the government money. Stocks found some support from the +10,000 rise in U.S. weekly jobless claims to 247,000, less than expectations of +20,000 to 255,000.

Mar 10-year T-notes (ZNH17 +0.11%) this morning are up +4 ticks. Thursday’s closes: TYH7 +2.50, FVH7 +1.50. Mar 10-year T-notes on Thursday closed higher and the 10-year T-note yield fell to a 6-week low of 2.305%. T-note prices were boosted by the sell-off in the S&P 500 to a 1-week low, which boosted the safe-haven demand for T-notes, and by strong foreign demand for the Treasury’s $ 12 billion auction of 30-year T-bonds that had a bid-to-cover ratio of 2.32, above the 12-auction average of 2.29. In addition, indirect bidders, a proxy for foreign buyers, bought 66.7% of the auction, above the 12-auction average of 61.4%.

The dollar index (DXY00 -0.15%) this morning is down -0.17 (-0.17%). EUR/USD (^EURUSD) is up +0.0032 (+0.30%). USD/JPY (^USDJPY) is down -0.05 (-0.04%). Thursday’s closes: Dollar index -0.43 (-0.42%), EUR/USD +0.0031 (+0.29%), USD/JPY -0.69 (-0.60%). The dollar index on Thursday tumbled to a 1-month low and closed lower on continued liquidation of long dollar positions on disappointment that President-elect Trump did not discuss his administration’s fiscal stimulus plans at Wednesday’s press conference. The dollar was also undercut by reduced dollar interest rate differentials after the 10-year T-note yield dropped to a 1-1/4 month low. USD/JPY fell to a 1-month low as weakness in stocks boosted the safe-haven demand for the yen.

Feb WTI crude oil prices (CLG17 -1.08%) this morning are down -60 cents (-1.13%) and Feb gasoline (RBG17 -0.52%) is -0.0092 (-0.57%). Thursday’s closes: Feb crude +0.78 (+1.49%), Feb gasoline +0.0247 (+1.55%). Feb crude oil and gasoline on Thursday closed higher on the sell-off in the dollar index to a 1-month low and on signs of falling OPEC oil production after Saudi Arabia’s Energy Minister Al-Falih said that Saudi oil production is now below 10 million bpd, a deeper cut than the 10.058 million bpd it had agreed to and the lowest production in 22 months. Crude oil also found continued support from Wednesday’s EIA data that showed strong refinery demand for crude after U.S. refiners used 17.1 million bpd of crude last week, the most since data began in 1989.

GLOBAL EVENT CALENDAR 01/13/2017
Friday, Jan 13
US0830 ETDec retail sales expected +0.7% and +0.5% ex autos, Nov +0.1% and +0.2% ex autos.
0830 ETDec PPI final demand expected +0.3% m/m and +1.6% y/y, Nov +0.4% m/m and +1.3% y/y. Dec PPI ex food & energy expected +0.1% m/m and +1.5% y/y, Nov +0.4% m/m and +1.6% y/y.
0930 ETPhiladelphia Fed President Patrick Harker (voter) speaks on economic mobility at an event in Philadelphia.
1000 ETNov business inventories expected +0.6%, Oct -0.2%.
1000 ETPreliminary-Jan University of Michigan U.S. consumer sentiment index expected +0.3 to 98.5, Dec +4.4 to 98.2.
1400 ETDec monthly budget statement expected -$ 25.0 billion, Nov -$ 136.7 billion.
Tuesday, Jan 17
US0830 ETJan Empire manufacturing survey general business conditions expected -1.2 to 7.8, Dec +7.5 to 9.0.
0845 ETNew York Fed President Dudley (voter) speaks at a National Retail Federation Conference on consumer behavior.
1100 ETUSDA weekly grain export inspections.
1800 ETSan Francisco Fed President John Williams (non-voter) speaks at the Sacramento Business Review Economic Forecast event.
U.S. STOCK CALENDAR 01/13/2017
CompanyTickerTimeEvent DescriptionPeriodEstimate
BlackRock IncBLK USBef-mktQ4 2016 Earnings ReleaseQ4 20165.022
First Republic Bank/CAFRC USBef-mktQ4 2016 Earnings ReleaseQ4 20161.025
JPMorgan Chase & CoJPM US6:45Q4 2016 Earnings ReleaseQ4 20161.427
Bank of America CorpBAC US6:45Q4 2016 Earnings ReleaseQ4 20160.377
PNC Financial Services Group Inc/ThePNC US6:45Q4 2016 Earnings ReleaseQ4 20161.845
First Horizon National CorpFHN US7:00Q4 2016 Earnings ReleaseQ4 20160.254
Wells Fargo & CoWFC US8:00Q4 2016 Earnings ReleaseQ4 20160.999
Bank of America CorpBAC US8:30Q4 2016 Earnings CallQ4 2016
BlackRock IncBLK US8:30Q4 2016 Earnings CallQ4 2016
First Horizon National CorpFHN US9:30Q4 2016 Earnings CallQ4 2016
JPMorgan Chase & CoJPM US10:00Q4 2016 Earnings CallQ4 2016
John Wiley & Sons IncJW/A US10:00Investor DayY 2017
First Republic Bank/CAFRC US10:00Q4 2016 Earnings CallQ4 2016
PNC Financial Services Group Inc/ThePNC US11:00Q4 2016 Earnings CallQ4 2016
Wells Fargo & CoWFC US11:30Q4 2016 Earnings CallQ4 2016
GameStop CorpGME USDecember 2016 Sales and Revenue Release2016

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