March E-mini S&Ps (ESH16 +0.84%) are up +0.76% and European stocks are up +0.78% as global stock and bond markets rallied after the BOJ unexpectedly adopted a negative interest rate. Also, Microsoft is up over 3% in pre-market trading after it reported better-than-expected earnings results after the close of trade yesterday, which gave technology stocks a lift. The BOJ's action to adopt a negative interest rate sent global bond yield tumbling with the 10-year Japanese bond yield down to a record low .090%, the German 10-year bund yield down to a 9-month low 0.334% and the U.S. T-note yield down to a 3-1/2 month low of 1.92%. Asian stocks settled higher: Japan +2.80%, Hong Kong +2.54%, China +3.09%, Taiwan +2.22%, Australia +0.59%, Singapore +2.60%, South Korea +0.25%, India +1.64%.
The dollar index (DXY00 +0.59%) is up +0.56%. EUR/USD (^EURUSD) is down -0.16%. USD/JPY (^USDJPY) is up +1.75% at a 5-week high as the BOJ's action to adopt a negative interest rate undercut the yen.
Mar T-note prices (ZNH16 +0.39%) are up +19 ticks at a contract high.
The BOJ unexpectedly voted 5-4 to put an interest rate of -0.1% on reserves held at the BOJ worth 10 trillion yen to 30 trillion yen initially and will apply only to new reserves that financial institutions deposit at the BOJ. BOJ Governor Kuroda said the BOJ "won't hesitate" to add further monetary stimulus if needed and has scope to make deeper cuts to the negative rate or to increase its asset purchases.
Japan Dec industrial production fell -1.4% m/m, weaker than expectations of -0.3% m/m and the biggest decline in 7 months.
Japan Dec overall household spending fell -4.4% y/y, weaker than expectations of -2.5% y/y and the biggest decline in 9 months.
The Eurozone Jan CPI estimate rose +0.4% y/y, right on expectations. Jan core CPI rose +1.0% y/y, higher than expectations of +0.9% y/y.
Key U.S. news today includes: (1) Q4 GDP expected +0.8% (q/q annualized), Q3 +2.0%) and Q4 personal consumption (expected +1.8%, Q3 +3.0%), (2) Q4 employment cost index (expected +0.6%, Q3 +0.6%), (3) Jan Milwaukee ISM (expected +1.47 to 50.00, Dec +3.19 to 48.53), (4) Jan Chicago PMI (expected +2.4 to 45.3, Dec -5.8 to 42.9), (5) University of Michigan final-Jan U.S. consumer sentiment index (expected -0.3 to 93.0, prelim-Jan +0.7 to 93.3), (6) San Francisco Fed President John Williams's speech at the Commonwealth Club in San Francisco.
There are 18 of the S&P 500 companies that report earnings today with notable reports including: MasterCard (consensus $0.70), American Airlines (1.97), Honeywell (1.58), Chevron (0.47), Phillips 66 (1.26),
U.S. IPO's scheduled to price today: Shimmick Construction (SCCI).
Equity conferences during the remainder of this week: none.
Microsoft (MSFT +1.64%) is up over 3% in pre-market trading after it reported Q2 adjusted EPS of 78 cents, above consensus of 71 cents.
Amazon.com (AMZN +8.91%) slumped over 10% in pre-market trading after it reported Q4 EPS of $1.00, well below consensus of $1.55, and said it sees Q1 operating income pf $100 million-$700 million, below consensus of $731.7 million.
Electronic Arts (EA +0.43%) tumbled 8% in pre-market trading after it said it sees Q4 adjusted EPS of 40 cents, below consensus of 50 cents, and then forecast fiscal 2016 adjusted EPS of $3.04, below consensus of $3.11.
Colgate-Palmolive (CL +1.12%) reported Q4 EPS of 73 cents, better than consensus of 72 cents.
Phillips 66 (PSX +1.25%) reported Q4 EPS of $1.31, higher than consensus og $1.26.
Amgen (AMGN -1.41%) rose over 1% in after-hours trading after it reported Q4 adjusted EPS of $2.61, higher than consensus of $2.29, and then raised guidance on fiscal 2016 adjusted EPS to $10.60-$11.00 from a November estimate of $10.35-$10.75, above consensus of $10.66.
Western Digital (WDC +4.63%) slid over 1% in after-hours trading after it forecast Q3 sales of $2.8 billion-$2.9 billion, below consensus of $3.23 billion.
Visa (V -2.23%) gained over 2% in after-hours trading after it reported Q1 adjusted EPS of 69 cents, higher than consensus of 68 cents.
Synaptics (SYNA -1.18%) fell nearly 2% in after-hours trading after it reported Q2 revenue of $470.5 million, below consensus of $477.9 million, and then lowered guidance on Q3 revenue to $430 million-$470 million, less than consensus of $501.4 million.
QLogic (QLGC +2.38%) surged over 10% in after-hours trading after it reported Q3 non-GAAP EPS of 33 cents, above consensus of 26 cents, and then raised guidance on Q4 adjusted EPS to 23 cents-27 cents, higher than consensus of 23 cents.
Fortinet (FTNT +2.05%) jumped over 7% in after-hours trading after it raised guidance on fiscal 2016 adjusted EPS to 67 cents-69 cents, above consensus of 67 cents.
Flextronics (FLEX -0.63%) climbed 4% in after-hours trading after it reported Q3 adjusted EPS of 35 cents, higher than consensus of 30 cents.
Skyworks Solutions (SWKS +4.26%) fell over 4% in after-hours trading after it reported Q1 adjusted EPS of $1.60, better than consensus of $1.58, but then lowered guidance on Q2 adjusted EPS to $1.24, below consensus of $1.32.
According to the WSJ, Xerox (XRX unch) will split itself into two companies; one company grouping hardware operations, and another that will house its service business.
Mar E-mini S&Ps (ESH16 +0.84%) this morning are up +14.25 points (+0.76%). Thursday's closes: S&P 500 +0.55%, Dow Jones +0.79%, Nasdaq +1.39%. The S&P 500 on Thursday closed higher on the rally in crude oil to a 3-week high, which lifted energy producing stocks, and the -16,000 decline in U.S. weekly initial unemployment claims to 278,000, a bigger decline than expectations of -12,000 to 281,000. Stocks were undercut by (1) concern that companies are cutting back on capital investment after U.S. Dec capital goods orders non-defense ex-aircraft fell -4.3%, weaker than expectations of -0.2% and the biggest decline in 10 months, and (2) the +0.1% m/m and +3.1% y/y increase in U.S. Dec pending home sales, weaker than expectations of +0.9% m/m and +4.8% y/y.
Mar 10-year T-notes (ZNH16 +0.39%) this morning are up +19 ticks at a contract high. Thursday's closes: TYH6 +5.50, FVH6 +4.00. Mar T-notes on Thursday closed higher on carryover support from a rally in German bunds to an 8-1/2 month high and on the weaker-than-expected U.S. Dec durable goods orders. T-notes were undercut by reduced safe-haven demand with the rally in stocks and by the rally in crude that boosted inflation expectations after the 10-year T-note breakeven inflation rate rose to a 1-week high.
The dollar index (DXY00 +0.59%) this morning is up +0.555 (+0.56%). EUR/USD (^EURUSD) is down -0.0018 (-0.16%). USD/JPY (^USDJPY) is up +2.08 (+1.75%) at a 5-week high. Thursday's closes: Dollar Index -0.392 (-0.40%), EUR/USD +0.0047 (+0.43%), USD/JPY +0.14 (+0.12%). The dollar index on Thursday dropped to a 2-week low and closed lower on negative carryover from Wednesday's post-FOMC meeting statement that adopted more dovish language and on the weaker-than-expected U.S. Dec durable goods orders report, which adds to evidence of slowing growth that may further delay additional Fed rate hikes.
Mar crude oil (CLH16 +0.93%) this morning is up +7 cents (+0.21%) and Mar gasoline (RBH16 -0.21%) is down -0.0060 (-0.55%). Thursday's closes: CLH6 +1.42 (+4.40%), RBH6 +0.0536 (+5.02%). Mar crude oil and gasoline on Thursday closed sharply higher with Mar crude at a 3-week high and Mar gasoline at a 2-1/2 week high. Crude oil prices were boosted by the fall in the dollar index to a 2-week low and by heavy fund short covering after Russia’s Energy Minister said he may meet with OPEC next month to discuss a potential coordinated cut in crude output.
|US||0830 ET||Q4 GDP expected +0.8% (q/q annualized), Q3 +2.0%. Q4 personal consumption expected +1.8%, Q3 +3.0%. Q4 GDP price index expected +0.8%, Q3 +1.3%. Q4 core PCE deflator expected +1.2% q/q, Q3 +1.4% q/q.|
|0830 ET||Q4 employment cost index expected +0.6%, Q3 +0.6%.|
|0830 ET||USDA weekly Export Sales.|
|0900 ET||Jan Milwaukee ISM expected +1.47 to 50.00, Dec +3.19 to 48.53.|
|0945 ET||Jan Chicago PMI expected +2.4 to 45.3, Dec -5.8 to 42.9.|
|1000 ET||University of Michigan final-Jan U.S. consumer sentiment index expected -0.3 to 93.0, prelim-Jan +0.7 to 93.3.|
|1500 ET||USDA bi-annual Cattle inventory.|
|1530 ET||San Francisco Fed President John Williams speaks at the Commonwealth Club in San Francisco.|
|JPN||0000 ET||Japan Dec housing starts expected +0.5% y/y to 888,000 annualized, Nov +1.7% y/y to 886,000 annualized.|
|0000 ET||Japan Dec construction orders, Nov +5.7% y/y.|
|n/a||BOJ announces interest rate decision.|
|GER||0200 ET||German Dec retail sales expected +0.4% m/m and +1.9% y/y, Nov +0.4% m/m and +2.3% y/y.|
|EUR||0400 ET||Eurozone Dec M3 money supply expected +5.2% y/y, Nov +5.1% y/y.|
|0500 ET||Eurozone Jan CPI estimate expected +0.4% y/y, Dec +0.2% y/y. Jan core CPI expected +0.9% y/y, Dec +0.9% y/y.|
|Air Products & Chemicals Inc||APD US||Bef-mkt||Q1 2016 Earnings Release||Q1 2016||1.705|
|Honeywell International Inc||HON US||Bef-mkt||Q4 2015 Earnings Release||Q4 2015||1.584|
|American Airlines Group Inc||AAL US||Bef-mkt||Q4 2015 Earnings Release||Q4 2015||1.969|
|Chevron Corp||CVX US||Bef-mkt||Q4 2015 Earnings Release||Q4 2015||0.473|
|Colgate-Palmolive Co||CL US||Bef-mkt||Q4 2015 Earnings Release||Q4 2015||0.72|
|Newell Rubbermaid Inc||NWL US||Bef-mkt||Q4 2015 Earnings Release||Q4 2015||0.563|
|Praxair Inc||PX US||Bef-mkt||Q4 2015 Earnings Release||Q4 2015||1.468|
|Tyco International Plc||TYC US||Bef-mkt||Q1 2016 Earnings Release||Q1 2016||0.42|
|PACCAR Inc||PCAR US||Bef-mkt||Q4 2015 Earnings Release||Q4 2015||1.018|
|Simon Property Group Inc||SPG US||Bef-mkt||Q4 2015 Earnings Release||Q4 2015||2.386|
|Seagate Technology PLC||STX US||Bef-mkt||Q2 2016 Earnings Release||Q2 2016||0.71|
|MasterCard Inc||MA US||Bef-mkt||Q4 2015 Earnings Release||Q4 2015||0.695|
|AbbVie Inc||ABBV US||Bef-mkt||Q4 2015 Earnings Release||Q4 2015||1.121|
|Baxalta Inc||BXLT US||Bef-mkt||Q4 2015 Earnings Release||Q4 2015||0.556|
|Whirlpool Corp||WHR US||6:00||Q4 2015 Earnings Release||Q4 2015||3.91|
|CONSOL Energy Inc||CNX US||6:45||Q4 2015 Earnings Release||Q4 2015||-0.093|
|Xerox Corp||XRX US||7:00||Q4 2015 Earnings Release||Q4 2015||0.283|
|Phillips 66||PSX US||7:00||Q4 2015 Earnings Release||Q4 2015||1.257|
|Tyco International Plc||TYC US||8:00||Q1 2016 Earnings Call||Q1 2016|
|Eastman Chemical Co||EMN US||8:00||Q4 2015 Earnings Call||Q4 2015|
|American Airlines Group Inc||AAL US||8:30||Q4 2015 Earnings Call||Q4 2015|
|Newell Rubbermaid Inc||NWL US||8:30||Q4 2015 Earnings Call||Q4 2015|
|Seagate Technology PLC||STX US||9:00||Q2 2016 Earnings Call||Q2 2016|
|MasterCard Inc||MA US||9:00||Q4 2015 Earnings Call||Q4 2015|
|AbbVie Inc||ABBV US||9:00||Q4 2015 Earnings Call||Q4 2015|
|WestRock Co||WRK US||9:00||Q1 2016 Earnings Call||Q1 2016|
|Honeywell International Inc||HON US||9:30||Q4 2015 Earnings Call||Q4 2015|
|Air Products & Chemicals Inc||APD US||10:00||Q1 2016 Earnings Call||Q1 2016|
|Whirlpool Corp||WHR US||10:00||Q4 2015 Earnings Call||Q4 2015|
|Xerox Corp||XRX US||10:00||Q4 2015 Earnings Call||Q4 2015|
|CONSOL Energy Inc||CNX US||10:00||Q4 2015 Earnings Call||Q4 2015|
|Chevron Corp||CVX US||11:00||Q4 2015 Earnings Call||Q4 2015|
|Colgate-Palmolive Co||CL US||11:00||Q4 2015 Earnings Call||Q4 2015|
|Praxair Inc||PX US||11:00||Q4 2015 Earnings Call||Q4 2015|
|Simon Property Group Inc||SPG US||11:00||Q4 2015 Earnings Call||Q4 2015|
|PACCAR Inc||PCAR US||12:00||Q4 2015 Earnings Call||Q4 2015|
|Phillips 66||PSX US||12:00||Q4 2015 Earnings Call||Q4 2015|
|Monsanto Co||MON US||14:30||Annual General Meeting||Y 2016|
|Broadcom Corp||BRCM US||Aft-mkt||Federal Realty Investment Trust Replaces Broadcom Corp in S&P 500|
|Walt Disney Co/The||DIS US||U.S. Box Office Release of Movie The Finest Hours""|
|Twenty-First Century Fox Inc||FOXA US||U.S. Box Office Release of Movie Kung Fu Panda 3""|
|Costco Wholesale Corp||COST US||Annual General Meeting|