OVERNIGHT MARKETS AND NEWS

December E-mini S&Ps (ESZ15 +0.14%) are up +0.11% and European stocks are up +0.61% at a 2-1/2 month high on expectations of further stimulus from the ECB. Comments made late yesterday after European markets closed from ECB President Draghi gave stocks and European government bonds a boost when he said the ECB is "willing and able" to act to support the recovery. Also, energy producers and basic-resource companies gained as the price of crude oil and copper moved higher. On the negative side, automakers were lower led by a nearly 9% plunge in Volkswagen AG, as the emissions scandal widened after the company said it found faulty emissions readings for the first time in gasoline-powered vehicles. Asian stocks settled mostly higher: Japan +1.30%, Hong Kong +2.15%, China +4.31%, Taiwan +1.65%, Australia +0.06%, Singapore +1.36%, South Korea +0.08%, India -0.14%. China's Shanghai Composite climbed to a 2-1/4 month high on speculation the government will continue to support the recovery after comments made after Asian markets closed Tuesday from Chinese President Xi Jinping that China GDP should be no less than 6.5% over the next 5 years.

The dollar index (DXY00 +0.20%) is up +0.25%. EUR/USD (^EURUSD) is down -0.26% after comments from ECB President Draghi bolstered expectations for additional ECB stimulus. USD/JPY (^USDJPY) is up +0.13%.

Dec T-note prices (ZNZ15 +0.11%) are up +1.5 ticks.

Speaking as part of a panel on financial stability at an event hosted by the ECB, Fed Governor Brainard said he sees some encouraging aspects for the U.S. economic outlook but there are still some elements of slack in the U.S. economy. He added that core inflation "has remained somewhat below target" and that the Fed is carefully monitoring inflation expectations.

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) Fed Governor Lael Brainard's participation in a panel discussion on financial stability at the ECB in Frankfurt, (2) weekly MBA mortgage applications (previous -3.5% with purchase mortgage sub-index -3.1% and refi sub-index -3.8%), (3) welcoming remarks by Philadelphia Fed President Patrick Harker at an event on capital for communities in Philadelphia, PA, (4) Oct ADP employment (expected +180,000, Sep +200,000), (5) Sep U.S. trade deficit (expected -$41.00 billion, -$48.33 billion), (6) final-Oct Markit services PMI (expected +0.2 to 54.6, prelim-Oct -0.7 to 54.4), (7) Oct ISM non-manufacturing index (expected -0.4 to 56.5, Sep -2.1 to 56.9), (8) Fed Chair Yellen's appearance before the House Financial Services Committee on bank regulation, (9) the Treasury's auction of $26 billion of 2-year T-notes, (10) New York Fed President William Dudley's speech on the economy in New York, and (11) Fed Vice Chair Stanley Fischer's speech to the National Economists Club.

There are 26 of the S&P 500 companies that report earnings today with notable reports including: Facebook (consensus $0.52), Metlife (0.76), Prudential Financial (2.42), Transocean (0.65), Time Warner (1.09), Motorola Solutions (0.73), Marathon Oil (-0.41), Whole Foods (0.35),

U.S. IPO's scheduled to price today: HC2 Holdings (HCHC), Kura Oncology (KURO).

Equity conferences during the remainder of this week include: Goldman Sachs Industrials Conference on Tue-Wed, Citi China Investor Conference on Wed, Citi Industrials Conference on Wed, Citi Global Health Care Conference on Thu, Needham Next Generation Storage Networking Conference on Thu, Bernstein Technology Innovation Summit on Thu-Fri, BancAnalysts Association of Boston Conference on Thu-Fri.

 

 

 

OVERNIGHT U.S. STOCK MOVERS

Tesla (TSLA -2.54%) soared 8% in after-hours trading after it reported a Q3 adjusted loss of -58 cents, a bigger loss than consensus of -56 cents, but said it will deliver 17,000 to 19,000 vehicles in Q4, more than the 16,820 vehicles needed to reach its full-year target of 50,000 to 52,000 vehicles.

Allergan Plc (AGN -1.78%) reported Q3 EPS of $3.48, better than consensus of $3.18.

Becton Dickson (BDX +1.26%) reported Q4 EPS of $1.94, higher than consensus of $1.90.

Groupon (GRPN +5.22%) plunged over 25% in pre-market trading after it reported Q3 adjusted EPS of 5 cents, more than double consensus of 2 cents, but then lowered guidance on Q4 revenue to $815 million-$865 million, well below consensus of $956.3 million.

Nortek (NTK +1.13%) lowered guidance on fiscal 2015 net sales to $2.500 billion-$2.515 billion from an earlier estimate of $2.500 billion-$2.575 billion, below consensus of $2.560 billion.

U.S. Steel (X +0.94%) slumped over 10% in after-hours trading after it reported a Q3 EPS loss of -70 cents, a much wider loss than consensus of -20 cents and said it sees "significantly" lower shipments and average realized prices than previously projected for 2015.

Diplomat Pharmac (DPLO +1.88%) surged over 10% in after-hours trading after it reported Q3 adjusted EPS of 26 cents, well above consensus of 16 cents, and then raised guidance on fiscal 2015 EPS to 69 cents-73 cents from 56 cents-60 cents, above consensus of 59 cents.

Zendesk (ZEN +1.30%) jumped over 9% in after-hours trading after it reported Q3 adjusted EPS loss of -5 cents, a smaller loss than consensus of -9 cents.

MasTec (MTZ -0.81%) reported Q3 adjusted EPS of 26 cents, below consensus of 34 cents, and then lowered guidance on fiscal 2015 revenue to $4.1 billion-$4.15 billion, less than consensus of $4.27 billion.

Papa John's (PZZA -5.80%) slid over 7% in after-hours trading after it reported Q3 adjusted EPS of 45 cents, right on consensus, but reported Q3 revenue of $389.3 million, below consensus of $398.4 million.

Zillow (Z +3.65%) fell over 8% in after-hours trading after it reported an unexpected Q3 EPS profit of 7 cents, better than consensus for a -3 cent loss, but lowered guidance on Q4 revenue to $165 million-$170 million, below consensus of $179.1 million.

Parker Drilling (PKD -0.33%) reported a Q3 adjusted loss of -10 cents, a smaller loss than consensus of -13 cents.

MARKET COMMENTS

Dec E-mini S&Ps (ESZ15 +0.14%) this morning are up +2.25 points (+0.11%). Tuesday's closes: S&P 500 +0.27%, Dow Jones +0.50%, Nasdaq +0.32%. The S&P 500 on Tuesday rallied to a 3-1/4 month high and closed higher on underlying support from better-than-expected Q3 earnings and a rally in energy producers after crude oil prices climbed to a 2-week high. Stocks were undercut by the -1.0% decline in U.S. Sep factory orders, weaker than expectations of -0.9%.

Dec 10-year T-notes (ZNZ15 +0.11%) this morning are up +1.5 ticks. Tuesday's closes: TYZ5 -8.50, FVZ5 -5.00. Dec T-notes on Tuesday tumbled to a 2-1/2 month nearest-futures low and closed lower on reduced safe-haven demand with the rally in the S&P 500 to a 3-1/4 month high and on increased inflation expectations after the 10-year T-note inflation breakeven rate rose to a 1-1/2 month high.

The dollar index (DXY00 +0.20%) this morning is up +0.247 (+0.25%). EUR/USD (^EURUSD) is down -0.0029 (-0.26%). USD/JPY (^USDJPY) is up +0.16 (+0.13%). Tuesday's closes: Dollar Index +0.230 (+0.24%), EUR/USD -0.0052 (-0.47%), USD/JPY +0.31 (+0.26%). The dollar index on Tuesday closed higher on the jump in the 10-year T-note yield to a 2-1/2 month high and weakness in EUR/USD on divergent central bank policies with the Fed expected to raise interest rates while the ECB is expected to maintain or even expand QE.

Dec crude oil (CLZ15 +0.52%) this morning is up +9 cents (+0.19%) and Dec gasoline (RBZ15 +1.35%) is up +0.0137 (+0.95%). Tuesday's closes: CLZ5 +1.54 (+3.34%), RBZ5 +0.0657 (+4.78%). Dec crude oil and gasoline prices on Tuesday closed higher with Dec crude at a 2-week high and Dec gasoline at a 3-week high. Crude oil and gasoline prices rallied on expectations that Wednesday's weekly EIA data will show gasoline inventories fell -1.25 million bbl and the jump in the crack spread to a 1-month high, which may increase refinery demand for crude as refiners boost gasoline production to take advantage of the improved profit margins.

GLOBAL EVENT CALENDAR11/04/2015
US0530 ETFed Governor Lael Brainard takes part in a panel discussion on financial stability at the ECB in Frankfurt.
0700 ETWeekly MBA mortgage applications, previous -3.5% with purchase mortgage sub-index -3.1% and refi sub-index -3.8%.
0800 ETPhiladelphia Fed President Patrick Harker gives welcoming remarks at an event on capital for communities in Philadelphia, PA.
0815 ETOct ADP employment change expected +180,000, Sep +200,000.
0830 ETSep trade balance expected -$41.00 billion, -$48.33 billion.
0830 ETTreasury announces amount of 3-year T-notes (previous $24 billion), 10-year T-notes (previous $21 billion) and 30-year T-bonds (previous $13 billion) to be auctioned Nov 9-12 in the Nov quarterly refunding.
0945 ETFinal-Oct Markit services PMI expected +0.2 to 54.6, prelim-Oct -0.7 to 54.4. Final-Oct Markit composite PMI, prelim-Oct -0.5 to 54.5.
1000 ETOct ISM non-manufacturing index expected -0.4 to 56.5, Sep -2.1 to 56.9.
1000 ETFed Chair Yellen appears before the House Financial Services Committee on bank regulation.
1030 ETEIA Weekly Petroleum Status Report.
1300 ETTreasury auctions $26 billion of 2-year T-notes.
1430 ETNew York Fed President William Dudley speaks on the economy in New York.
1930 ETFed Vice Chair Stanley Fischer speaks to the National Economists Club.
JPN0100 ETJapan Oct consumer confidence expected +0.2 to 40.8, Sep 40.6.
GER0355 ETRevised German Oct Markit services PMI, previous +1.1 to 55.2.
EUR0400 ETRevised Eurozone Oct Markit composite PMI, previous +0.4 to 54.0.
0500 ETEurozone Sep PPI expected -0.5% m/m and -3.3% y/y, Aug -0.8% m/m and -2.6% y/y.
0545 ETECB President Mario Draghi speaks at an event in Milan, Italy.
UK0430 ETUK Oct Markit/CIPS services PMI expected +1.2 to 54.5, Sep 53.3.
U.S. STOCK CALENDAR11/04/2015

CompanyTickerTimeEvent DescriptionPeriodEstimate
Becton Dickinson and CoBDX USBef-mktQ4 2015 Earnings ReleaseQ4 20151.899
WEC Energy Group IncWEC USBef-mktQ3 2015 Earnings ReleaseQ3 20150.59
Time Warner IncTWX USBef-mktQ3 2015 Earnings ReleaseQ3 20151.088
Regeneron Pharmaceuticals IncREGN USBef-mktQ3 2015 Earnings ReleaseQ3 20153.213
Allergan plcAGN USBef-mktQ3 2015 Earnings ReleaseQ3 20153.177
Chesapeake Energy CorpCHK USBef-mktQ3 2015 Earnings ReleaseQ3 2015-0.136
Henry Schein IncHSIC USBef-mktQ3 2015 Earnings ReleaseQ3 20151.467
Cognizant Technology Solutions CorpCTSH USBef-mktQ3 2015 Earnings ReleaseQ3 20150.759
NRG Energy IncNRG USBef-mktQ3 2015 Earnings ReleaseQ3 20150.741
Spectra Energy CorpSE USBef-mktQ3 2015 Earnings ReleaseQ3 20150.221
Michael Kors Holdings LtdKORS USBef-mktQ2 2016 Earnings ReleaseQ2 20160.892
Motorola Solutions IncMSI US7:00Q3 2015 Earnings ReleaseQ3 20150.729
Twenty-First Century Fox IncFOXA US7:30Q1 2016 Earnings ReleaseQ1 20160.375
Alcoa IncAA US8:00Investor DayY 2015
Becton Dickinson and CoBDX US8:00Q4 2015 Earnings CallQ4 2015
Cardinal Health IncCAH US8:00Annual General MeetingY 2015
Cognizant Technology Solutions CorpCTSH US8:00Q3 2015 Earnings CallQ3 2015
Michael Kors Holdings LtdKORS US8:00Q2 2016 Earnings CallQ2 2016
Motorola Solutions IncMSI US8:30Q3 2015 Earnings CallQ3 2015
Twenty-First Century Fox IncFOXA US8:30Q1 2016 Earnings CallQ1 2016
Regeneron Pharmaceuticals IncREGN US8:30Q3 2015 Earnings CallQ3 2015
Allergan plcAGN US9:00Q3 2015 Earnings CallQ3 2015
Chesapeake Energy CorpCHK US9:00Q3 2015 Earnings CallQ3 2015
Coach IncCOH US9:00Annual General Meeting
NRG Energy IncNRG US9:00Q3 2015 Earnings CallQ3 2015
Spectra Energy CorpSE US9:00Q3 2015 Earnings CallQ3 2015
Henry Schein IncHSIC US10:00Q3 2015 Earnings CallQ3 2015
Time Warner IncTWX US10:30Q3 2015 Earnings CallQ3 2015
ONEOK IncOKE US11:00Q3 2015 Earnings CallQ3 2015
Allergan plcAGN US11:00R&D DayY 2015
Newfield Exploration CoNFX US11:00Q3 2015 Earnings CallQ3 2015
Devon Energy CorpDVN US11:00Q3 2015 Earnings CallQ3 2015
Cimarex Energy CoXEC US11:00Q3 2015 Earnings CallQ3 2015
Lam Research CorpLRCX US12:30Annual General MeetingY 2015
Apartment Investment & Management CoAIV US13:00Q3 2015 Earnings CallQ3 2015
WEC Energy Group IncWEC US14:00Q3 2015 Earnings CallQ3 2015
KLA-Tencor CorpKLAC US15:00Annual General Meeting
Computer Sciences CorpCSC US16:15Q2 2016 Earnings ReleaseQ2 20161.155
QUALCOMM IncQCOM US16:45Q4 2015 Earnings CallQ4 2015
CenturyLink IncCTL US17:00Q3 2015 Earnings CallQ3 2015
Computer Sciences CorpCSC US17:00Q2 2016 Earnings CallQ2 2016
Whole Foods Market IncWFM US17:00Q4 2015 Earnings CallQ4 2015
Microchip Technology IncMCHP US17:00Q2 2016 Earnings CallQ2 2016
Facebook IncFB US17:00Q3 2015 Earnings CallQ3 2015
CenturyLink IncCTL USAft-mktQ3 2015 Earnings ReleaseQ3 20150.686
Kimco Realty CorpKIM USAft-mktQ3 2015 Earnings ReleaseQ3 20150.368
Marathon Oil CorpMRO USAft-mktQ3 2015 Earnings ReleaseQ3 2015-0.414
QUALCOMM IncQCOM USAft-mktQ4 2015 Earnings ReleaseQ4 20150.863
Whole Foods Market IncWFM USAft-mktQ4 2015 Earnings ReleaseQ4 20150.345
Microchip Technology IncMCHP USAft-mktQ2 2016 Earnings ReleaseQ2 20160.629
Transocean LtdRIG USAft-mktQ3 2015 Earnings ReleaseQ3 20150.654
Prudential Financial IncPRU USAft-mktQ3 2015 Earnings ReleaseQ3 20152.419
MetLife IncMET USAft-mktQ3 2015 Earnings ReleaseQ3 20150.759
CF Industries Holdings IncCF USAft-mktQ3 2015 Earnings ReleaseQ3 20150.733
Facebook IncFB USAft-mktQ3 2015 Earnings ReleaseQ3 20150.52
WestRock CoWRK USAft-mktQ4 2015 Earnings ReleaseQ4 20150.946
Costco Wholesale CorpCOST US21:00October 2015 Sales and Revenue Release2015
Western Digital CorpWDC USAnnual General Meeting
Perrigo Co PLCPRGO USAnnual General Meeting
Perrigo Co PLCPRGO USAnnual General Meeting
Linear Technology CorpLLTC USAnnual General Meeting
AutoNation IncAN USOctober 2015 Sales and Revenue Release2015
United Parcel Service IncUPS USRoadshow - Day1Y 2015