OVERNIGHT MARKETS AND NEWS
September E-mini S&Ps (ESU14 +0.32%) this morning are up +0.23% on better-than-expected earnings results from Twitter and Amgen, while European stocks were up +0.13% after better-than-expected earnings from Barclays Plc offset weaker-than-expected earnings results from Schneider Electric SE and Holcim Ltd. Another positive for European stocks was the unexpected increase in Eurozone Jul economic confidence. Russia's Micex Stock Index climbed over 2% and the ruble gained for the first time in 5 days as investors judged the additional sanctions the U.S. and the EU imposed on Russia were milder than anticipated. Asian stocks closed mixed: Japan +0.18%, Hong Kong +0.37%, China -0.40%, Taiwan +0.59%, Australia +0.62%, Singapore -0.07%, South Korea +1.18%, India +0.37%. Japan's Nikkei Stock Index posted a 6-month high as exporter stocks rallied after the yen weakened to a 3-1/2 week low against the dollar, which boosts the earnings prospects of exporters. Commodity prices are mixed. Sep crude oil (CLU14 +0.41%) is up +0.34%. Sep gasoline (RBU14 -0.02%) is down -0.08%. Aug gold (GCQ14 +0.05%) is up +0.01%. Sep copper (HGU14 -0.12%) is down -0.30%. Agriculture and livestock prices are mixed. The dollar index (DXY00 +0.10%) is up +0.09% at a 5-1/2 month high ahead of the results of today's 2-day FOMC meeting. EUR/USD (^EURUSD) is down -0.07% at an 8-1/2 month low. USD/JPY (^USDJPY) is up +0.13% at a 3-1/2 week high. Sep T-note prices (ZNU14 -0.14%) are down -5 ticks.
The ECB's quarterly bank lending survey said that while Eurozone credit standards in Q2 remained "relatively tight," for the first time since Q2 of 2007, "Eurozone banks reported a net easing of credit standards on loans to enterprises in Q2 of 2014" and that "for loans to households, banks continued to ease credit standards in net terms."
Eurozone Jul economic confidence unexpectedly rose +0.1 to 102.2, better than expectations of -0.1 to 101.9. The Jul business climate indicator fell -0.04 to 0.17, a bigger decline than expectations of -0.02 to 0.20 and the lowest in 9 months.
Japan Jun industrial production fell -3.3% m/m, a larger decline than expectations of -1.2% m/m and the most in 3-1/4 years. On an annual basis, Jun industrial production rose +3.2% y/y, less than expectations of +5.2% y/y.
U.S. STOCK PREVIEW
The 2-day FOMC meeting concludes today with a policy announcement. Fed Chair Yellen will not deliver a press conference after today’s FOMC meeting. Today’s July ADP employment report is expected to show a solid increase of +230,000. Today’s Q2 GDP report is expected to show an increase of +3.0% (q/q annualized), more than reversing the -2.9% decline seen in Q1 but resulting in virtually no net growth in the U.S. economy in the first half of 2014. The Treasury today will sell $29 billion of 7-year T-notes and $15 billion of 2-year floating-rate notes, concluding this week’s $108 billion T-note package.
There are 36 of the S&P 500 companies that report earnings today with notable reports including: Valero (1.20), WellPoint (2.26), Humana (2.19), Southern Co (0.67), Kraft (0.82), AllState (0.66), Whole Foods (0.39), Williams Co (0.22). Equity conferences this week include the following: Institute of Validation technology on Tue-Thu, and Marcus Evans 13th Annual Outage Management for Power Plants Conference on Tue-Thu.
OVERNIGHT U.S. STOCK MOVERS
WellPoint (WLP -2.61%) reported Q2 EPS of $2.44, better than consensus of $2.26.
Marriott (MAR -0.73%) reported Q2 adjusted EPS of 71 cents, higher than consensus of 67 cents.
Express Scripts (ESRX +2.09%) reported Q2 adjusted EPS of $1.23, better than consensus of $1.22.
U.S. Steel (X -0.61%) reported a Q2 EPS loss of -12 cents, a much smaller loss than consensus of -29 cents.
Owens-Illinois (OI -1.04%) reported Q2 EPS of 80 cents, weaker than consensus of 82 cents.
Edwards Lifesciences (EW -0.54%) reported Q2 EPS of 88 cents, above consensus of 77 cents, and then raised guidance on fiscal 2014 EPS outlook to $3.24-$3.34, higher than consensus of $3.19.
Amgen (AMGN +0.54%) rose 3% in after-hours trading after it reported Q2 EPS of $2.37, well above consensus of $2.07,and then raised guidance on fiscal 2014 EPS view to $8.20-$8.40 from $7.90-$8.20, higher than consensus of $8.09.
Global Payments (GPN +0.41%) reported Q4 cash EPS of $1.09, higher than consensus of $1.07.
Aflac (AFL -0.80%) reported Q2 EPS of $1.78, stronger than consensus of $1.59.
Fiserv (FISV +0.02%) reported Q2 EPS of 81 cents, better than consensus of 80 cents.
Amdocs (DOX -1.85%) reported Q3 EPS of 81 cents, higher than consensus of 79 cents.
Twitter (TWTR +1.74%) surged over 20% in after-hours trading after it reported Q2 EPS of 2 cents, higher than consensus of a -1 cent loss, and then raised guidance on 2014 revenue to $1.31 billion-$1.33 billion, better than consensus of $1.27 billion.
Buffalo Wild Wings (BWLD +1.47%) reported Q2 EPS of $1.25, better than consensus of $1.20.
American Express (AXP -0.16%) reported Q2 EPS of $1.43, above consensus of $1.38.
Ternium (TX +0.07%) reported Q2 EPS of 66 cents, well below consensus of 81 cents.
Sep E-mini S&Ps (ESU14 +0.32%) this morning are up +4.50 points (+0.23%). The S&P 500 index on Tuesday closed lower: S&P 500 -0.45%, Dow Jones -0.42%, Nasdaq -0.21%. Bearish factors included (1) the +9.34% increase in the May S&P/CaseShiller Composite-20 home price index, less than expectations of +9.90% y/y and the slowest pace of increase in 15 months, and (2) concerns about new sanctions on Russia. Limiting weakness in stocks was the +4.5 point jump in Jul U.S. consumer confidence (Conference Board) to 90.9, the highest in 6-3/4 years.
Sep 10-year T-notes (ZNU14 -0.14%) this morning are down -5 ticks. Sep 10-year T-note futures prices on Tuesday closed higher. Bullish factors included (1) the unexpected -0.31% m/m decline in May S&P/CaseShiller Composite-20 home price index, the largest decline in 29 months, and (2) carry-over support from a rally in German bunds after the yield on the 10-year bund fell to 1.11%, the lowest since Bloomberg data began in 1989. T-note prices fell from their best levels after Jul U.S. consumer confidence rose more than expected to its highest in 6-3/4 years. Closes: TYU4 +8.00, FVU4 +3.50.
The dollar index (DXY00 +0.10%) this morning is up +0.073 (+0.09%) at a fresh 5-1/2 month high. EUR/USD (^EURUSD) is down -0.0009 (-0.07%) at an 8-1/2 month low and USD/JPY (^USDJPY) is up +0.13 (+0.13%) at a 3-1/2 week high. The dollar index on Tuesday climbed to a 5-1/2 month high and closed higher on expectations the dollar’s interest rate differentials will improve versus the euro and yen with the Fed expected to tighten monetary policy before the ECB and BOJ. EUR/USD tumbled to an 8-month low on concern the ECB will be forced to loosen monetary policy further as additional sanctions against Russia undercut European growth prospects. Closes: Dollar index +0.189 (+0.23%), EUR/USD -0.00308 (-0.23%), USD/JPY +0.261 (+0.26%).
Sep WTI crude oil (CLU14 +0.41%) this morning is up +34 cents (+0.34%) and Sep gasoline (RBU14 -0.02%) is down -0.0024 (-0.08%). Sep crude and gasoline prices on Tuesday settled mixed: CLU4 -0.70 (-0.69%), RBU4 +0.0187 (+0.66%). Sep crude fell to a 2-week low on bearish factors that included (1) the rally in the dollar index to a 5-1/2 month high and (2) concern that the shutdown of a Coffeyville, Kansas refinery because of a fire will curb the refinery’s crude demand and boost crude supplies at Cushing, OK, the delivery point for WTI futures. Gasoline closed higher on concern about reduced gasoline production after the shutdown of the 115,000 bpd refinery in Coffeyville, Kansas along with the shutdown of a 70,000 bpd refinery in St. John, New Brunswick.
GLOBAL EVENT CALENDAR07/30/2014
U.S. STOCK CALENDAR07/30/2014