Date — October 6, 2016
OVERNIGHT MARKETS AND NEWS
Dec E-mini S&Ps (ESZ16 -0.16%) are down -0.21% and European stocks are down -0.24% as speculation mounts that the Fed will raise interest rates this year. Friday's monthly U.S. payroll report will be scoured for clues as to the timing of a Fed rate hike after Richmond Fed President Lacker said Wednesday night that a strong U.S. jobs report is going to bolster the case for an interest rate increase sooner rather than later. Mining stocks are raw-material producing companies are leading the overall market lower as the price of copper (HGZ16 -0.46%) falls -0.46% to a 3-week low. Asian stocks settled mostly higher: Japan +0.47%, Hong Kong +0.69%, China closed for holiday, Taiwan +0.13%, Australia +0.55%, Singapore +0.12%, South Korea +0.83%, India -0.41%. Japan's Nikkei Stock Index climbed to a 4-week high after a rally in USD/JPY to a 1-month high fueled gains in exporting companies.
The dollar index (DXY00 +0.23%) is up +0.20%. EUR/USD (^EURUSD) is down -0.16%. USD/JPY (^USDJPY) is up +0.14% at a 1-month high.
Dec 10-year T-note prices (ZNZ16 +0.05%) are up +3 ticks.
Richmond Fed President Lacker said a strong U.S. jobs report is going to bolster the case for an interest rate increase sooner rather than later, and that "every FOMC meeting is a live meeting" to raise interest rates.
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) Sep Challenger job cuts (Aug -21.8% y/y), (2) weekly initial unemployment claims (expected +2,000 to 256,000, previous +3,000 to 254,000) and continuing claims (expected +19,000 to 2.081 million, previous -46,000 to 2.062 million), (3) G-20 finance ministers and central bankers meet in Washington D.C., and (4) USDA weekly Export Sales.
Russell 1000 companies that report earnings today: none.
U.S. IPO's scheduled to price today: none.
Equity conferences during the remainder of this week include: ACI European Biomass to Power Conference on Wed, Seaport Global Securities Dallas Energy Day on Thu.
OVERNIGHT U.S. STOCK MOVERS
Twitter (TWTR +5.74%) tumbled 13% in pre-market trading after Alphabet said it is not interested in acquiring the company.
Trade Desk (TTD +3.99%) was rated a new 'Buy' at Cantor Fitzgerald with a 12-month target price of $30.
Raytheon (RTN -0.03%) was rated a new 'Outperform' at Baird with a 12-month target price of $170.
Walgreens Boots Alliance (WBA +0.34%) was rated a new 'Buy' at UBS with a price target of $94.
Yum! Brands (YUM -1.84%) slid over 2% in pre-market trading after it reported Q3 adjusted EPS of $1.09, less than consensus of $1.10, and said Q3 China comparable sales fell -1%, weaker than expectations of +4.1%.
Athenahealth (ATHN +0.58%) was rated a new 'Buy' at UBS with a price target of $147.
Zumiez (ZUMZ -1.03%) rallied over 10% in after-hours trading after it said Sep comparable sales were up +6.3%, stronger than expectations of down -0.4%, and after it raised its view on Q3 EPS to 29 cents-30 cents from a prior view of 21 cents-26 cents.
Resources Connection (RECN +1.35%) fell 3% in after-hours trading after it reported Q1 EPS of 15 cents, below consensus of 16 cents.
JD.com (JD +1.60%) jumped nearly 7% in after-hours trading after Wal-Mart raised its stake in the company to 10.8% from 5.9%.
Alnylam Pharmaceuticals (ALNY +2.52%) plunged nearly 40% in after-hours trading after the company said it will discontinue development of its reusiran saying the benefit-risk profile no longer supported continued dosing.
Scynexis (SCYX +6.90%) surged over 15% in after-hours trading after it reported full results from Phase 2 studies on patients using its SCY-078 for candida infections.
Idera Pharmaceuticals (IDRA +2.35%) slumped over 10% in after-hours trading after offering up to $50 million in shares of common stock.
Dec E-mini S&Ps (ESZ16 -0.16%) this morning are down -4.50 points (-0.21%). Wednesday's closes: S&P 500 +0.43%, Dow Jones +0.62%, Nasdaq +0.38%. The S&P 500 on Wednesday closed higher on the +5.7 point increase in the U.S. Sep ISM non-manufacturing PMI to 57.1, stronger than expectations of +1.6 to 53.0 and the fastest pace of expansion in 11 months. The stock market was also encouraged by the unexpected +0.2% increase in U.S. Aug factory orders, stronger than expectations of -0.2%. Energy producer stocks rallied after the price of crude oil climbed to a 3-1/4 month high.
Dec 10-year T-notes (ZNZ16 +0.05%) this morning are up +3 ticks. Wednesday's closes: TYZ6 -9.00, FVZ6 -5.25. Dec 10-year T-notes on Wednesday sold off to a 3-week low and closed lower on Chicago Fed President Evans' comment that he expects a Fed rate hike before the end of the year. Other negative factors including the stronger-than-expected Sep ISM non-manufacturing index and increased inflation expectations after the 10-year T-note breakeven inflation rate rose to a 4-1/2 month high.
The dollar index (DXY00 +0.23%) this morning is up +0.197 (+0.20%). EUR/USD (^EURUSD) is down -0.0018 (-0.16%). USD/JPY (^USDJPY) is up +0.14 (+0.14%). Wednesday's closes: Dollar index -0.044 (-0.05%), EUR/USD +0.0001 (+0.01%), USD/JPY +0.60 (+0.58%). The dollar index on Wednesday closed slightly lower on the smaller-than-expected increase in Sep ADP employment and on strength in the currencies of the crude-exporting countries of Russia and Canada after the price of crude oil climbed to a 3-1/4 month high. The dollar found support on Chicago Fed President Evans' comment that he expects the Fed to increase interest rates once by the end of the year.
Nov WTI crude oil (CLX16 -0.14%) this morning is down -6 cents (-0.12%) and Nov gasoline (RBX16 -1.43%) is down -0.0218 (-1.46%). Wednesday's closes: Nov crude +1.01 (+2.07%), Nov gasoline -0.0180 (-1.20%). Nov crude oil and gasoline on Wednesday settled mixed with Nov crude at a 3-1/4 month high. Crude oil prices were boosted by the unexpected decline in EIA crude inventories for a fifth week, down -2.98 million bbl to an 8-month low (versus expectations were for a build of +1.5 million bbl) and the -0.4% decline in U.S. crude production. There was also concern that Hurricane Matthew may disrupt crude supplies on the East Coast and cause a further drawdown in U.S. crude supplies in the weeks ahead. Nov gasoline retreated from a 1-1/2 month high and closed lower on speculation that Hurricane Matthew will cause gasoline demand to plunge as businesses close and economic activity declines as the hurricane makes its way up the U.S. East Coast.
GLOBAL EVENT CALENDAR10/06/2016
|Thursday, Oct 6|
|US||0730 ET||Sep Challenger job cuts, Aug -21.8% y/y.|
|0830 ET||Weekly initial unemployment claims expected +2,000 to 256,000, previous +3,000 to 254,000. Weekly continuing claims expected +19,000 to 2.081 million, previous -46,000 to 2.062 million.|
|0830 ET||USDA weekly Export Sales.|
|1100 ET||Treasury announces amount of 3-year T-notes (previous $24 billion), 10-year T-notes (previous $20 billion) and 30-year T-bonds (previous $12 billion) to be auctioned Oct 12-13.|
|n/a||G-20 finance ministers and central bankers meet in Washington D.C.|
|Friday, Oct 7|
|US||0830 ET||Sep non-farm payrolls expected +173,000, Aug +151,000. Sep private payrolls expected +170,000, Aug +126,000. Sep manufacturing payrolls expected -4,000, Aug -14,000. Sep unemployment rate expected unch at 4.9%, Aug unch at 4.9%.|
|0830 ET||Sep avg hourly earnings expected +0.3% m/m and +2.6% y/y, Aug +0.1% m/m and +2.4% y/y. Sep avg weekly hours all employees expected +0.1 to 34.4 hours, Aug -0.1 to 34.3 hours.|
|1000 ET||Aug wholesale inventories expected -0.1%, Jul unch. Aug wholesale trade sales expected +0.1% m/m, Jul -0.4% m/m.|
|1030 ET||Fed Vice Chair Stanley Fischer speaks at the Institute of International Finance annual meeting.|
|1245 ET||Cleveland Fed President Loretta Mester (voter) speaks before the Shadow Open Market Committee.|
|1500 ET||Aug consumer credit expected +$16.5 billion, Jul +$17.713 billion.|
|1500 ET||Kansas City Fed President Esther George (voter) speaks on the U.S. economic outlook at the Institute of International Finance annual meeting.|
|1600 ET||Fed Governor Lael Brainard takes part in a panel discussion at the IMF on trade as an engine for growth.|
U.S. STOCK CALENDAR10/06/2016
|RPM International Inc||RPM US||3:00||Annual General Meeting|
|L Brands Inc||LB US||7:30||September 2016 Sales and Revenue Call - Pre-Recorded||2016|
|Wal-Mart Stores Inc||WMT US||9:00||Investment Community Meeting||2016|
|Lam Research Corp||LRCX US||9:00||KLA-Tencor Corp and Lam Research Corp Divestment Call|
|Yum! Brands Inc||YUM US||9:15||Q3 2016 Earnings Call||Q3 2016|
|KLA-Tencor Corp||KLAC US||10:00||KLA-Tencor Corp and Lam Research Corp Divestment Call|
|Progressive Corp/The||PGR US||13:00||Investor Meeting||Y 2016|
|Gap Inc/The||GPS US||16:15||September 2016 Sales and Revenue Release||2016|
|L Brands Inc||LB US||September 2016 Sales and Revenue Release||2016|
|Xcel Energy Inc||XEL US||Investor Meeting - Day 3||Y 2016|
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