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Barchart Morning Call

Barchart.com - 36 minutes ago

OVERNIGHT MARKETS AND NEWS

Dec E-mini S&Ps (ESZ17 +0.17%) this morning are up +0.16% at a new record nearest-futures high on signs of strength in Chinese manufacturing activity that is positive for global economic growth after the China Sep manufacturing PMI unexpectedly rose +0.7 to 52.4, the fastest pace of expansion in 5-1/3 years. European stocks fell back from a 4-month high and are down -0.05% on rising tensions in Spain after a violence-marred vote in Catalonia spurred the regional government there to press for independence from Spain. Asian stocks settled mostly higher: Japan +0.22%, Taiwan +0.78%, Australia +0.84%, Singapore +1.31%. Hong Long, China, South Korea and India all closed for holiday. Japanese stocks closed higher on increased economic optimism after the Japan Q3 Tankan showed business conditions among large manufacturers rose to the highest in 10-years.

The dollar index (DXY00 +0.51%) is up +0.52%. EUR/USD (^EURUSD) is down -0.57%. USD/JPY (^USDJPY) is up +0.24%.

Dec 10-year T-note prices (ZNZ17 -0.09%) are down -3 ticks at a new 2-1/2 month low.

The China Sep manufacturing PMI unexpectedly rose +0.7 to 52.4, stronger than expectations of -0.1 to 51.6 and the fastest pace of expansion in 5-1/3 years.

The Eurozone Sep Markit manufacturing PMI was revised downward to 58.1 from the originally reported 58.2, still the highest since the data series began in 2014.

The Japan Q3 Tankan large manufacturing business condition rose +5 to 22, stronger than expectations of +1 to 18 and a 10-year high.

ECB Governing Council member Georghadji said a pickup in inflation is "still largely dependent on the ECB's accommodative monetary policy stance and that only a sustained adjustment in the path of inflation would warrant the gradual withdrawal of our exceptional degree of monetary policy accommodation."

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) revised-Sep U.S. Markit manufacturing (expected unchanged at 53.0, prelim-Sep +0.2 to 53.0), (2) Sep ISM U.S. manufacturing index (expected -0.8 to 58.0, Aug +2.5 to 58.8), (3) Aug construction spending (expected +0.4%, Jul -0.6% m/m), (4) Dallas Fed President Robert Kaplan (voter) speaks in a moderated Q&A at an event hosted by the El Paso branch of the Dallas Fed, (5) USDA weekly grain export inspections, (6) USDA crop conditions and progress report.

Notable Russell 1000 earnings reports today include: Whiting Petroleum (consensus -$0.20).

U.S. IPO's scheduled to price today: PDL Community Bankcorp (PDLB).

Equity conferences this week: ADAS & Autonomous Vehicles USA Conference on Mon, Capital Link New York Maritime Forum on Mon, Eurosurfas Conference on Mon, PDA Universe of Pre-filled Syringes and Injection Devices Confernce on Mon, Deutsche Bank U.S. Leveraged Finance Conference on Mon-Wed, European Utility Week Conference on Tue, Global Gaming Conference - Panel on Tue, Helitech International Conference on Tue, NetApp Insight Investor Summit on Tue, Japan Pack Trade Show on Tue, Linley Processor Conference on Wed, Petaluma Area Chamber of Commerce Business Conference on Fri.

OVERNIGHT U.S. STOCK MOVERS

Akamai (AKAM +2.18%) was upgraded to 'Buy' from 'Neutral' at Guggenheim Securities with a target price of $54.

Stanley Black & Decker (SWK +0.97%) was upgraded to 'Overweight' from 'Equal-Weight' at Morgan Stanley with a target price of $169.

Citrix (CTXS +0.17%) was upgraded to 'Outperform' from 'Market Perform' at Wells Fargo Securities with a price target of $95.

Fifth Third Bancorp (FITB +1.41%) was downgraded to 'Underperform' from 'Neutral' at Baird.

Select Comfort (SCSS +0.39%) was upgraded to 'Outperform' from 'Market Perform' at Raymond James with a 12-month target price of $35.

PepsiCo (PEP -0.19%) was downgraded to 'Hold' from 'Buy' at Jeffries.

Union Pacific (UNP unch) was downgraded to 'Equal-Weight' from 'Overweight' at Morgan Stanley.

CSX Corp (CSX +1.06%) was downgraded to 'Underweight' from 'Equal weight' at Morgan Stanley who lowered their price target on the stock to $43.

Tiffany (TIF +0.92%) was upgraded to 'Buy' from 'Hold' at HSBC with a price target of $110.

Finish Line (FINL +3.17%) was downgraded to 'Neutral' from 'Positive' at Susquehanna Financial.

Trinity Industries (TRN +2.31%) jumped nearly 10% in after-hours trading after a federal appeals court in New Orleans overturned a 2015 ruling against TRN for a $663 million judgement that was awarded in a lawsuit the alleged the company defrauded the U.S. government with a faulty highway guardrail safety system.

TerraForm Power (TERP -0.83%) may move higher this morning after it reported Q2 adjusted Ebitda of $136 million, better than consensus of $119.7 million.

MARKET COMMENTS

Dec S&P 500 E-mini stock futures (ESZ17 +0.17%) this morning are up +4.00 ponts (+0.16%) at a new all-time nearest-futures high. Friday's closes: S&P 500 +0.37%, Dow Jones +0.11%, Nasdaq +0.78%. The S&P 500 on Friday posted a new record high and closed higher on carry-over support from a rally in European stocks after the German Sep unemployment rate fell to 5.4%, the lowest since German reunification began and a sign of economic strength. U.S. stocks also received a boost from the unexpected +6.3 point increase in the Sep Chicago PMI to 65.2, stronger than expectations of -0.2 to 58.7.

Dec 10-year T-note prices (ZNZ17 -0.09%) this morning are down -3 ticks at a fresh 2-1/2 month low. Friday's closes: TYZ7 -7.50, FVZ7 -5.25. Dec 10-year T-notes on Friday closed lower on the unexpected increase in the Sep Chicago PMI report and on the rally in the S&P 500 to a new all-time high, which curbed the safe-haven demand for T-notes. Losses were limited after the U.S. Aug core PCE deflator rose by a less than expected +1.3% y/y, the smallest year-on-year increase in 2 years.

The dollar index (DXY00 +0.51%) this morning is up +0.48 (+0.52%). EUR/USD (^EURUSD) is down -0.0067 (-0.57%) and USD/JPY (^USDJPY) is up +0.27 (+0.24%). Friday's closes: Dollar Index -0.009 (-0.01%), EUR/USD +0.0028 (+0.24%), USD/JPY +0.17 (+0.15%). The dollar index on Friday closed little changed. The dollar index saw support from the report that President Trump and Treasury Secretary Mnuchin met with former Fed Governor Warsh, who is considered more hawkish than current Fed Chair Yellen, to discuss the Fed Chair position. The dollar was also boosted by the increase in T-note yields, which improves the dollar's interest rate differentials. Gains were limited after the U.S. Aug core PCE deflator rose by a less-than-expected +1.3% y/y, which was dovish for Fed policy.

Nov crude oil (CLX17 -2.03%) this morning is down -88 cents (-1.70%) and Nov gasoline (RBX17 -1.70%) is -0.0252(-1.58%). Friday's closes: Nov WTI crude +1.11 (+0.21%), Nov gasoline -0.0238 (-1.47%). Nov crude oil and gasoline on Friday settled mixed. Crude oil prices were undercut by the fall in the crack spread to a 5-week low, which may curb refinery demand for crude to refine into gasoline, and by the increase in active U.S. oil rigs in the week ended Sep 29 by 6 rigs to 750, the first increase in 7 weeks. Crude oil prices were supported by the rally in the S&P 500 to a new record high, which shows optimism in the economic outlook that is positive for energy demand.

Metals prices this morning are mixed with Dec gold (GCZ17 -0.72%) -8.3 (-0.65%) at a 1-1/2 month low, Dec silver (SIZ17-0.46%) -0.046 (-0.28%) at a 1-3/4 month low and Dec copper (HGZ17 +0.03%) +0.002 (+0.05%). Friday's closes: Dec gold -3.9 (-0.30%), Dec silver -0.171 (-1.02%), Dec copper -0.026 (-0.87%). Metals on Friday closed lower on the the rally in the S&P 500 to a new record high, which reduced the safe-haven demand for precious metals, and on a lack of inflation that reduces the demand for gold as an inflation hedge after the U.S. Aug core PCE deflator rose just +1.3% y/y, the smallest pace of increase in 2 years.

GLOBAL EVENT CALENDAR10/02/2017

Monday, Oct 2
US0945 ETRevised Sep U.S. Markit manufacturing PMI expected unchanged at 53.0, prelim-Sep +0.2 to 53.0.
1000 ETSep ISM U.S. manufacturing index expected -0.8 to 58.0, Aug +2.5 to 58.8. Sep ISM new orders, Aug -0.1 to 60.3. Sep ISM employment, Aug +4.7 to 59.9. Sep ISM prices paid expected +1.5 to 63.5, Aug unch at 62.0.
1000 ETAug construction spending expected +0.4%, Jul -0.6% m/m.
1100 ETUSDA weekly grain export inspections.
1400 ETDallas Fed President Robert Kaplan (voter) speaks in a moderated Q&A at an event hosted by the El Paso branch of the Dallas Fed.
1600 ETUSDA crop conditions and progress report.
Tuesday, Oct 3
US0830 ETFed Governor Jerome Powell discusses regulatory reform at a U.S. Financial Regulation event in Washington.
n/aSep total vehicle sales expected 17.00 million, Aug 16.03 million. Sep domestic vehicle sales expected 12.68 million, Aug 12.48 million.

U.S. STOCK CALENDAR10/02/2017

NameTickerTimeDescriptionPeriodEstimate
Whiting Petroleum CorpWLL USQ3 2017 Earnings ReleaseQ3 17-0.201
Telephone & Data Systems IncTDS USRoadshow - Day 1
United States Cellular Corp

USM US

Roadshow - Day 1

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