Friday, July 27, 2018

07/27/2018 - **Overnight Markets and News**



**Overnight Markets and News**

Sep S&P 500 E-minis (ESU18 -0.03%) this morning are trading slightly higher as the market anticipates a strong Q2 U.S. GDP report this morning with a consensus estimate of +4.2%.  Stocks are also seeing support from a +4% pre-market gain in Amazon.com, which rallied on much stronger than expected Q2 earnings.  However, Twitter is sharply lower by -15% in pre-market trading after disappointing news in a shareholder letter with an expected decline in users and weaker-than-expected earnings.

The EuroStoxx 50 index is up +0.5% on favorable earnings and upward momentum after this week's sharp rally to a 5-week high.  Asian stocks today closed mostly higher:  Japan Nikkei Index +0.56%, Hong Kong Hang Seng +0.08%, China Shanghai Composite -0.30%, Taiwan TAIEX Index +0.59%, Australian S&P 200 +0.89%, Singapore Str. Times -0.11%, South Korea KOSPI 200 +0.28%, India BSE Sensex 30 +0.95%, Turkey ISE National 100 +0.28%.

Sep 10-year T-notes (ZNU18 unch) this morning are up 1 tick with some support from the BOJ's continued defense of its JGB yield target.  The dollar index (DXY00 +0.14%) this morning is slightly higher by +0.07%, with EUR/USD (^EURUSD -0.15%) down -0.08% and USD/JPY (^USDJPY -0.03%) down -0.09%.  EUR/USD was undercut by today's slightly weaker-than-expected French Q2 GDP report of +1.7% y/y versus expectations of +1.9% y/y.


The BOJ today again defended the 0.1% upper limit of its 10-year JGB yield target by offering to buy an unlimited amount of 5-10 year bonds at 0.1%, lower than the 0.11% level purchase level earlier this week.  The 10-year JGB yield has risen this week on speculation that the BOJ at its meeting this coming Monday/Tuesday may tweak its policy in a tighter direction.

China extended its review period for the Qualcomm-NXP deal as it seeks to deflect blame for the companies saying that the deal is dead.




**U.S. Stock Preview**

Key U.S. news today includes: (1) Q2 GDP (expected +4.2% q/q annualized, Q1 +2.0%), (2) revised-Jul University of Michigan U.S. consumer sentiment index (expected unch at 97.1, prelim-Jul -1.1 to 97.1).

Notable S&P 500 earnings reports today include: Twitter (consensus $0.16), Exxon Mobil (1.26), Ventas (1.00), Moody's Corp (1.88), Aon (1.64), AbbVie (1.98), Weyerhaeuser (0.43), Cabot Oil (0.20), Goodyear (0.61), Iron Mountain (0.53), Merck (1.03), Colgate-Palmolive (0.77), Phillips 66 (2.19), Chevron (2.08), Franklin Resources (0.74).

U.S. IPO's scheduled to price today: none.

Equity conferences during the remainder of this week: none.




**Overnight U.S. Stock Movers**

Amazon.com (AMZN -2.98%) climbed nearly 3% in after-hours trading after it reported Q2 operating income of $2.98 billion, above consensus of $1.71 billion, and forecast Q3 operating income of $1.4 billion to $2.4 billion, higher than consensus of $1.2 billion.

Twitter (TWTR -2.89%) is sharply lower by -15% in pre-market trading after disappointing news contained in its shareholder letter with an expected decline in users and weaker than expected earnings.

Chipotle Mexican Grill (CMG -1.08%) rose 5% in after-hours trading after it reported Q2 comparable sales rose +3.3%, higher than consensus of +2.7%.

Expedia (EXPE -1.38%) jumped 11% in after-hours trading after it reported Q2 adjusted EPS of $1.38, stronger than consensus of 89 cents.

Boston Beer (SAM -4.71%) slumped 16% in after-hours trading after it reported Q2 EPS of $1.98, well below consensus of $2.81.

Edwards Lifesciences (EW -0.04%) slid more than 5% in after-hours trading after it forecast Q3 adjusted EPS of 93 cents to $1.03, below consensus of $1.08.

Lam Research (LRCX +2.58%) fell more than 3% in after-hours trading after it forecast Q1 revenue of $2.30 billion, below consensus of $2.76 billion.

Maxim Integrated Products (MXIM +0.27%) gained almost 2% in after-hours trading after it reported Q4 adjusted EPS of 73 cents, higher than consensus of 70 cents, and then forecast Q1 adjusted EPS of 72 cents to 78 cents, stronger than consensus of 69 cents.

Electronic Arts (EA -3.14%) tumbled almost 7% in after-hours trading after it forecast full-year adjusted revenue of about $5.55 billion, weaker than consensus of $5.60 billion.

National Instruments (NATI +0.62%) rallied more than 6% in after-hours trading after it reported Q2 adjusted EPS of 34 cents, better than consensus of 25 cents, and then forecast Q3 adjusted EPS of 32 cents to 46 cents, the midpoint higher than consensus of 32 cents. 

First Solar (FSLR -0.68%) fell more than 7% in after-hours trading after it forecast full-year gross margin of +20.5% to +21.5%, below consensus of +22.1%.

Starbucks (SBUX -0.33%) gained 1% in after-hours trading after it reported Q3 comparable sales rose +1.0%, better than consensus of +0.8%.

Juniper Networks (JNPR +0.18%) dropped 7% in after-hours trading after it forecast Q3 revenue of $1.14 billion to $1.20 billion, weaker than consensus of $1.22 billion.

Cypress Semiconductor (CY +2.03%) rose almost 3% in after-hours trading after it forecast Q3 adjusted EPS of 36 cents to 40 cents, higher than consensus of 35 cents.




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