Mar E-mini S&Ps (ESH17 -0.03%) are down -0.06% on light profit-taking after climbing to a new record nearest-futures high in overnight trade. European stocks are up +0.42% at a 2-1/2 week high on strength in bank stocks. U.S. stock indexes were undercut by a -0.68% decline in Mar WTI crude oil (CLH17 -0.60%) prices, which has put pressure on energy producing stocks. Crude oil fell back after the API reported late yesterday that U.S. crude inventories rose 9.94 million bbl last week. Asian stocks settled mostly higher: Japan +1.03%, Hong Kong +1.23%, China -0.15%, Taiwan +0.83%, Australia +0.94%, Singapore +0.52%, South Korea +0.34%, India -0.65%. China’s Shanghai Composite fell back from a 2-month high and closed lower on liquidity concerns after the 7-day repurchase rate, a gauge of interbank funding liquidity, jumped 29 bp to a 19-month high of 2.81%. Banks are hoarding cash amid concerns liquidity will tighten with more than $ 150 billion of loans coming due.
The dollar index (DXY00 +0.16%) is up +0.16% at a 3-1/2 week high. EUR/USD (^EURUSD) is down -0.21% at a 1-month low. USD/JPY (^USDJPY) is up +0.21% at a 2-1/2 week high. The dollar is higher on positive carry-over from Tuesday’s testimony from Fed Chair Yellen who said it “would be unwise” to wait too long to raise interest rates.
Mar 10-year T-note prices (ZNH17 -0.04%) are down -2.5 ticks.
Key U.S. news today includes: (1) weekly MBA mortgage applications (previous +2.3% with purchase sub-index +1.8% and refi sub-index +2.2%), (2) Feb Empire manufacturing index (+0.3 to 6.8, Jan -1.1 to 6.5), (3) Jan CPI (expected +0.3% m/m and +2.4% y/y, Dec +0.3% m/m and +2.1% y/y) and Jan CPI ex food & energy (expected +0.2% m/m and +2.1% y/y, Dec +0.2% m/m and +2.2% y/y), (4) Jan retail sales (expected +0.1% and +0.4% ex autos, Dec +0.6% and +0.2% ex autos), (5) Jan industrial production (expected unchanged, Dec +0.8%) and Jan manufacturing production (expected +0.2%, Dec +0.2%), (6) Fed Chair Yellen delivers semiannual monetary policy report to the House Financial Services Committee, (7) Feb NAHB housing market index (expected unch at 67, Jan -2 to 67), (8) Dec business inventories (expected +0.4%, Nov +0.7%), (9) Boston Fed President Eric Rosengren (non-voter) speaks at the New York Association for Business Economics luncheon, (10) Philadelphia Fed President Patrick Harker (voter) speaks on the economy at the La Salle University Annual Economic Outlook, (11) New York Fed President William Dudley (voter) has a moderated fireside chat at Cornell College of Business Annual New York City Predictions Event, (12) EIA Weekly Petroleum Status Report.
Notable S&P 500 earnings reports today include: Pepsico (consensus $ 1.16), Applied Materials (0.66), Marathon Oil (-0.14), Williams Cos (0.18), Cisco (0.56), TripAdvisor (0.31), Kraft Heinz (0.87).
U.S. IPO’s scheduled to price today: none.
Equity conferences: Credit Suisse Energy Summit on Mon-Wed, RSA Security Conference on Mon-Thu, Stifel Transportation and Logistics Conference on Tue-Wed, Goldman Sachs Technology and Internet Conference on Tue-Thu, Bank of America Merrill Lynch Insurance Conference on Wed-Thu, Leerink Partners Global Health Care Conference on Wed-Thu.
Under Armour (UA +4.08%) was downgraded to ‘Negative’ from ‘Positive’ at Susquehanna Financial with its price target cut to $ 14 from $ 24.
Agilent Technologies (A -0.26%) rose 4% in after-hours trading after it reported Q1 adjusted EPS continuing operations of 53 cents, above consensus of 49 cents, and said it sees full-year revenue of $ 4.33 billion-$ 4.35 billion, higher than consensus of $ 4.33 billion
Procter & Gamble (PG -0.51%) climbed 3% in after-hours trading after Trian Fund Management LP said it added the company to its investments in Q4.
American International Group (AIG +1.13%) dropped over 4% in after-hours trading after it reported a Q4 operating loss of -$ 2.72 a share, much weaker than consensus of 42 cents EPS.
Devon Energy (DVN +1.50%) gained over 1% in after-hours trading after it reported Q4 core EPS of 25 cents, above consensus of 21 cents.
Express Scripts Holding Co. (ESRX +0.48%) fell over 1% in after-hours trading after it reported Q4 revenue of $ 24.9 billion, below consensus of $ 26.3 billion, and said it sees Q1 adjusted EPS of $ 1.30-$ 1.34, weaker than consensus of $ 1.36.
Southwest Airlines (LUV -0.75%) rose over 1% in after-hours trading after Berkshire Hathaway said it added the company to its investments in Q4.
American Airlines Group (AAL -1.77%) gained 2% in after-hours trading after Berkshire Hathaway boosted its stake in the company to 8.79% from 4.2%.
Diamondback Energy (FANG +3.24%) gained almost 1% in after-hours trading after it reported Q4 adjusted EPS of 90 cents, well above consensus of 53 cents.
Fossil Group (FOSL -0.48%) sank 12% in after-hours trading after it reported Q4 EPS of $ 1.03, below consensus of $ 1.17, and said it sees a Q1 adjusted loss of -10 cents to -25 cents a share, well below consensus of a 7-cent gain.
SolarEdge Technologies (SEDG +7.43%) jumped nearly 6% in after-hours trading after it said it sees Q3 revenue of $ 110 million-$ 120 million, better than consensus of $ 108.4 million.
Potbelly (PBPB -2.64%) rose almost 3% in after-hours trading after it reported Q4 adjusted EPS of 15 cents, over double consensus of 7 cents.
LendingClub (LC -1.20%) slid over 6% in after-hours trading after it said it sees Q1 net revenue of $ 117 million-$ 122 million, less than consensus of $ 133.2 million.
NetScout Systems (NTCT -0.27%) gained 1% in after-hours trading after ValueAct Holdings LP said it added the stock to its investments.
Seacoast Banking (SBCF -0.87%) dropped 4% in after-hours trading after it announced an underwritten public offering of its common stock, although no amount was given.
Trupanion (TRUP +0.18%) slumped 15% in after-hours trading after it reported Q4 adjusted Ebitda of $ 302,000, well below consensus of $ 458,800.
Mar E-mini S&Ps (ESH17 -0.03%) this morning are down -1.50 points (-0.06%). The S&P 500 on Tuesday rallied to a new all-time high and closed higher: S&P 500 +0.40%, Dow Jones +0.45%, Nasdaq +0.27%. Bullish factors included (1) upbeat comments from Fed Chair Yellen who said the economy has continued to make progress toward the Fed’s goals, and (2) strength in energy producers as the price of crude oil rose %. Bearish factors included (1) the statement from Fed Chair Yellen who said “waiting too long to remove accommodation would be unwise,” and (2) increased price pressures on the wholesale level after U.S. Jan PPI ex food and energy rose +0.4% m/m and +1.2% y/y, stronger than expectations of +0.2% m/m and +1.1% y/y.
Mar 10-year T-notes (ZNH17 -0.04%) this morning are down -2.5 ticks. Mar 10-year T-notes in Tuesday tumbled to a 1-1/2 week low and closed lower: TYH7 -11.50, FVH7 -8.00. Bearish factors included (1) hawkish commentary from Fed Chair Yellen who said waiting too long to raise interest rates “would be unwise,” and (2) the larger-than-expected increase in U.S. Jan PPI ex food & energy, which bolsters the case for the Fed to increase interest rates sooner rather than later.
The dollar index (DXY00 +0.16%) this morning is up +0.16 (+0.16%) at a 3-1/2 week high. EUR/USD (^EURUSD) is down -0.0022 (-0.21%) at a 1-month low. USD/JPY (^USDJPY) is up +0.24 (+0.21%) at a 2-week high. The dollar index on Tuesday rallied to a 3-week high and closed higher: Dollar index +0.18 (+0.18%), EUR/USD -0.0020 (-0.19%), USD/JPY +0.52 (+0.46%). Bullish factors included (1) comments from Fed Chair Yellen who said it would be “unwise” to wait too long to remove accommodation, which increased the chances of a Fed rate hike at the Mar FOMC meeting, and (2) weakness in EUR/USD, which fell to a 1-month low after Eurozone Q4 GDP expanded at a +1.7% y/y pace, slower than expectations of +1.8% y/y, and after Eurozone Dec industrial production fell -1.6% m/m, the biggest decline in 10 months.
Mar WTI crude oil prices (CLH17 -0.60%) this morning are down -36 cents (-0.68%) and Mar gasoline (RBH17 -0.14%) is -0.0027 (-0.17%). Mar crude oil and gasoline on Tuesday closed higher: Mar crude +0.27 (+0.51%), Mar gasoline +0.0021 (+0.14%). The main bullish factor is optimism that OPEC is adhering to its supply cuts after Saudi Arabia said it reduced its Jan crude production by -717,600 bpd, the most in 8 years. Bearish factors included (1) the rally in the dollar index rose to a 3-week high, and (2) expectations for Wednesday’s weekly EIA crude inventories to increase by +3.5 million bbl.
|Wednesday, Feb 15|
|US||0700 ET||Weekly MBA mortgage applications, previous +2.3% with purchase sub-index +1.8% and refi sub-index +2.2%.|
|0830 ET||Feb Empire manufacturing survey general business conditions expected +0.3 to 6.8, Jan -1.1 to 6.5.|
|0830 ET||Jan CPI expected +0.3% m/m and +2.4% y/y, Dec +0.3% m/m and +2.1% y/y. Jan CPI ex food & energy expected +0.2% m/m and +2.1% y/y, Dec +0.2% m/m and +2.2% y/y.|
|0830 ET||Jan retail sales expected +0.1% and +0.4% ex autos, Dec +0.6% and +0.2% ex autos.|
|0915 ET||Jan industrial production expected unch, Dec +0.8%. Jan manufacturing production expected +0.2%, Dec +0.2%. Jan capacity utilization expected unch at 75.5%, Dec +0.6 to 75.5%.|
|1000 ET||Fed Chair Yellen delivers semiannual monetary policy report to the House Financial Services Committee.|
|1000 ET||Feb NAHB housing market index expected unch at 67, Jan -2 to 67.|
|1000 ET||Dec business inventories expected +0.4%, Nov +0.7%.|
|1030 ET||EIA Weekly Petroleum Status Report.|
|1200 ET||Boston Fed President Eric Rosengren (non-voter) speaks at the New York Association for Business Economics luncheon.|
|1245 ET||Philadelphia Fed President Patrick Harker (voter) speaks on the economy at the La Salle University Annual Economic Outlook.|
|1915 ET||New York Fed President William Dudley (voter) has a moderated fireside chat at Cornell College of Business Annual New York City Predictions Event.|
|Thursday, Feb 16|
|US||0830 ET||Weekly initial unemployment claims expected +11,000 to 245,000, previous -12,000 to 234,000. Weekly continuing claims expected -23,000 to 2.055 million, previous +15,000 to 2.078 million.|
|0830 ET||Jan housing starts expected unch at 1.226 million, Dec +11.3% to 1.226 million. Jan building permits expected +0.2% to 1.230 million, Dec +1.3% to 1.228 million.|
|0830 ET||Feb Philadelphia Fed business outlook survey expected -5.6 to 18.0, Jan +3.9 to 23.6.|
|0830 ET||USDA weekly Export Sales.|
|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 Feb 21-23.|
|Progressive Corp/The||PGR US||Bf-mkt||January 2017 Sales and Revenue Release||2017|
|Entergy Corp||ETR US||6:30||Q4 2016 Earnings Release||Q4 2016||0.118|
|PepsiCo Inc||PEP US||6:30||Q4 2016 Earnings Release||Q4 2016||1.158|
|Wyndham Worldwide Corp||WYN US||6:30||Q4 2016 Earnings Release||Q4 2016||1.297|
|American International Group||AIG US||8:00||Q4 2016 Earnings Call||Q4 2016|
|Analog Devices Inc||ADI US||8:00||Q1 2017 Earnings Release||Q1 2017||0.74|
|PepsiCo Inc||PEP US||8:00||Q4 2016 Earnings Call||Q4 2016|
|Express Scripts Holding Co||ESRX US||8:30||Q4 2016 Earnings Call||Q4 2016|
|Wyndham Worldwide Corp||WYN US||8:30||Q4 2016 Earnings Call||Q4 2016|
|Analog Devices Inc||ADI US||10:00||Q1 2017 Earnings Call||Q1 2017|
|Entergy Corp||ETR US||11:00||Q4 2016 Earnings Call||Q4 2016|
|Devon Energy Corp||DVN US||11:00||Q4 2016 Earnings Call||Q4 2016|
|Franklin Resources Inc||BEN US||12:30||Annual General Meeting|
|Time Warner Inc||TWX US||15:00||Extraordinary Shareholders Meet – M&A Vote||Y 2017|
|Applied Materials Inc||AMAT US||16:00||Q1 2017 Earnings Release||Q1 2017||0.657|
|Equinix Inc||EQIX US||16:01||Q4 2016 Earnings Release||Q4 2016||3.226|
|Cisco Systems Inc||CSCO US||16:30||Q2 2017 Earnings Release||Q2 2017||0.561|
|Cisco Systems Inc||CSCO US||16:30||Q2 2017 Earnings Call||Q2 2017|
|Applied Materials Inc||AMAT US||16:30||Q1 2017 Earnings Call||Q1 2017|
|CBS Corp||CBS US||16:30||Q4 2016 Earnings Call||Q4 2016|
|Stericycle Inc||SRCL US||17:00||Q4 2016 Earnings Call||Q4 2016|
|Marriott International Inc/MD||MAR US||17:00||Q4 2016 Earnings Release||Q4 2016||0.842|
|Kraft Heinz Co/The||KHC US||17:00||Q4 2016 Earnings Call||Q4 2016|
|International Flavors-Fragrances||IFF US||Aft-mkt||Q4 2016 Earnings Release||Q4 2016||1.16|
|Marathon Oil Corp||MRO US||Aft-mkt||Q4 2016 Earnings Release||Q4 2016||-0.14|
|Williams Cos Inc/The||WMB US||Aft-mkt||Q4 2016 Earnings Release||Q4 2016||0.182|
|CBS Corp||CBS US||Aft-mkt||Q4 2016 Earnings Release||Q4 2016||1.094|
|NetApp Inc||NTAP US||Aft-mkt||Q3 2017 Earnings Release||Q3 2017||0.743|
|Stericycle Inc||SRCL US||Aft-mkt||Q4 2016 Earnings Release||Q4 2016||0.972|
|Cimarex Energy Co||XEC US||Aft-mkt||Q4 2016 Earnings Release||Q4 2016||0.602|
|CF Industries Holdings Inc||CF US||Aft-mkt||Q4 2016 Earnings Release||Q4 2016||-0.039|
|TripAdvisor Inc||TRIP US||Aft-mkt||Q4 2016 Earnings Release||Q4 2016||0.309|
|Kraft Heinz Co/The||KHC US||Aft-mkt||Q4 2016 Earnings Release||Q4 2016||0.879|
|NetApp Inc||NTAP US||17:30||Q3 2017 Earnings Call||Q3 2017|
|Equinix Inc||EQIX US||17:30||Q4 2016 Earnings Call||Q4 2016|
|American Express Co||AXP US||Credit-card Charge-offs and Delinquencies|
|JPMorgan Chase & Co||JPM US||Credit-card Charge-offs and Delinquencies|
|Bank of America Corp||BAC US||Credit-card Charge-offs and Delinquencies|
|Citigroup Inc||C US||Credit-card Charge-offs and Delinquencies|
|Capital One Financial Corp||COF US||Credit-card Charge-offs and Delinquencies|
|Alliance Data Systems Corp||ADS US||Credit-card Charge-offs and Delinquencies|
|Discover Financial Services||DFS US||Credit-card Charge-offs and Delinquencies|
|Synchrony Financial||SYF US||Credit-card Charge-offs and Delinquencies|