Morning Call For December 24, 2014


March E-mini S&Ps (ESH15 +0.06%) this morning are up +0.04% and European stocks are down -0.24% in uninspired holiday trade with most markets closing early for Christmas Eve. U.S. and European markets will also be closed for the Christmas holiday on Thursday. European stocks fell back after France reported Nov jobless claims rose 27,400, or +0.8%, to a record 3.49 million, as France's economy continues to struggle. Asian stocks closed mixed: Japan +1.24%, Hong Kong +0.07%, China -2.84%, Taiwan +0.97%, Australia +0.25%, Singapore +0.40%, South Korea +0.41%, India -1.08%. Japan's Nikkei Stock Index climbed to a 2-week high on the heels of a rally in the S&P 500 Tuesday to a record high. China's Shanghai Stock Index slipped to a 1-week low after the action by some brokerages in China to raise the threshold for margin trading prompted profit-taking from the recent run up in prices to a 4-3/4 year high. Commodity prices are mostly lower. Feb crude oil (CLG15 -2.12%) is down -1.59%. Feb gasoline (RBG15 -2.29%) is down -1.60%. Feb gold (GCG15 -0.05%) is down -0.10%. Mar copper (HGH15 -0.45%) is down -0.54%. Agriculture prices are mixed. The dollar index (DXY00 -0.19%) is down -0.18%. EUR/USD (^EURUSD) is up +0.22%. USD/JPY (^USDJPY) is down -0.23%. Mar T-note prices (ZNH15 -0.02%) are up +2 ticks.

Eurozone banks borrowed 23 million euros overnight from the ECB on Dec 23 from the previous day, the lowest since Dec 19. Eurozone banks deposited 37.9 billion euros overnight at the ECB on Dec 23, the lowest in one week. The ECB's current account holdings rose to 265.1 billion euros on Dec 23, the most in 11-1/2 months.

Japan Dec small business confidence fell -1.0 point to 46.7, the lowest in 7 months.



Today’s initial unemployment claims report is expected to show a slight +1,000 gain to 290,000 after last week’s -6,000 decline to 289,000.  Meanwhile, today's continuing claims report is expected to show a +2,000 increase to 2.375 million after last week’s -147,000 decline to 2.373 million.  The Treasury today will sell $29 billion of 7-year T-notes.  None of the the Russell 3000 companies report earnings today.  There are no equity conferences this week.  



BAE Systems (BAESY +0.07%) was awarded a contract worth up to $1.2 billion from the U.S. Army for the manufacturing and development of 289 Armored Multi-Purpose Vehicles, or AMPVs.

Virgin America (VA -0.36%) was initiated with a 'Buy' at Deutsche Bank with a price target of $44,

Sy Jacobs reported a 9.2% passive stake in Southern Missouri Bancorp (SMBC -2.53%) .

Perry Ellis (PERY -0.20%) files to sell 1.5 million shares of common stock for holders.

Oz Management reported a 5.39% passive stake in Qunar (QUNR -1.19%) .

The WSJ reported that Sony (SNE +0.38%) is mulling sale of its music publishing business that owns the copyrights to most of the Beatles’ songs and is estimated to be worth between $1.5 billion and $2 billion.

Canaan VII LP reported a 12.6% stake in LendingClub (LC -4.07%) .

Gabelli reported a 5.86% stake in Volcano (VOLC +0.22%) .

Cal-Maine Foods (CALM +0.64%) reported Q2 EPS of 76 cents, weaker than consensus of 85 cents.


Mar E-mini S&Ps (ESH15 +0.06%) this morning are up +0.75 of a point (+0.04%). The S&P 500 index on Tuesday rallied to a new all-time high and closed higher: S&P 500 +0.17%, Dow Jones +0.36%, Nasdaq -0.33%. Bullish factors included (1) the upward revision to U.S. Q3 GDP to +5.0% (q/q annualized, stronger than expectations of +4.3% and the fastest pace of expansion in 11 years, (2) the +0.6% increase in U.S. Nov personal spending, stronger than expectations of +0.5%, and (3) benign inflation pressures after the PCE core deflator, the Fed’s preferred measure of inflation, eased to +1.4% y/y from Oct’s +1.5%.

Mar 10-year T-notes (ZNH15 -0.02%) this morning are up +2 ticks. Mar 10-year T-note futures prices on Tuesday fell to a 2-week low and closed lower: TYH5 -22.50, FVH5 -10.75. Bearish factors included (1) the larger-than-expected upward revision to U.S. Q3 GDP, (2) the larger-than-expected increase in U.S. Nov personal spending, and (3) the rally in the S&P 500 to a record high, which curbed safe-haven demand for Treasuries.

The dollar index (DXY00 -0.19%) this morning is down -0.158 (-0.18%). EUR/USD (^EURUSD) is up +0.0027 (+0.22%). USD/JPY (^USDJPY) is down-0.28 (-0.23%). The dollar index on Tuesday rose to an 8-1/2 year and closed higher. Closes: Dollar index +0.294 (+0.33%), EUR/USD -0.00575(-0.47%), USD/JPY +0.64 (+0.53%). Bullish factors included (1) the upward revision in U.S. Q3 GDP to +5.0%, the fastest pace in 11 years, and (2) the stronger-than-expected U.S. Nov personal spending. The dollar came off of its best levels after Nov durable goods orders and Nov new home sales both unexpectedly declined.

Feb WTI crude oil (CLG15 -2.12%) this morning is down 91 cents (-1.59%) and Feb gasoline (RBG15 -2.29%) is down -0.0253 (-1.60%). Feb crude and Feb gasoline prices on Tuesday closed higher. Closes: CLG5 +1.86 (+3.37%), RBG5 +0.0250 (+1.61%). Bullish factors included (1) the upward revision in U.S. Q3 GDP to +5.0%, the fastest pace of expansion in 11 years, and (2) the rally in the S&P 500 to an all-time high, which bolstered confidence in the economic outlook and energy demand. Prices came off of their best levels after the dollar index rose to an 8-1/2 year high.



US 0700 ET Weekly MBA mortgage applications, previous -3.3% with purchase sub-index -6.9% and refi sub-index unch.
  0830 ET Weekly initial unemployment claims expected +1,000 to 290,000, previous -6,000 to 289,000. Weekly continuing claims expected +2,000 to 2.375 million, previous -147,000 to 2.373 million.
  1030 ET EIA Weekly Petroleum Status Report.
  1130 ET Treasury auctions $29 billion 7-year T-notes.
JPN 1850 ET Japan Nov PPI services expected +3.5% y/y, Oct +3.6% y/y.



Company Ticker Time Event Description Period Estimate
Actavis plc ACT US   PDUFA, nebivolol/valsartan fixed-dose combo, hypertension    

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