Morning Call For October 22, 2015

OVERNIGHT MARKETS AND NEWS

December E-mini S&Ps (ESZ15 +0.40%) are up +0.37% and European stocks are up +0.22% as better-than-expected company Q3 earnings results gives the market a boost. Texas Instruments and Ebay are both up over 8% in pre-market trading and are leading the overall market higher after reporting strong Q3 earnings results. The markets now await the conclusion of today's ECB meeting and whether ECB President Draghi will signal if the central bank is moving toward more stimulus. Asian stocks settled mixed: Japan -0.64%, Hong Kong -0.63%, China +1.45%, Taiwan -0.01%, Australia +0.30%, Singapore +0.41%, South Korea -0.81%, India closed for holiday. China's Shanghai Composite closed higher on signs the government is set to expand funds for infrastructure projects to bolster growth, while Japan's Nikkei Stock Index closed lower, led by losses in pharmaceutical stocks, after a short-seller report on Valeant Pharmaceuticals International roiled U.S. health-care stocks.

The dollar index (DXY00 +0.06%) is up +0.08% at a 1-1/2 week high. EUR/USD (^EURUSD) is down -0.19% at a 1-1/2 week low on speculation ECB President Draghi may signal an expansion of QE at his press conference today following the ECB meeting. USD/JPY (^USDJPY) is down -0.18%.

Dec T-note prices (ZNZ15 -0.06%) are down -3.5 ticks.

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) weekly initial unemployment claims (expected +10,000 to 265,000, previous -7,000 to 255,000) and continuing claims (expected +32,000 to 2.190 million, previous -50,000 to 2.158 million), (2) Sep Chicago Fed national activity index (expected +0.21 to -0.20, Aug -0.92 to -0.41), (3) Aug FHFA house price index (expected +0.5% m/m, Jul +0.6% m/m), (4) Sep existing home sales (expected +1.5% to 5.39 million, Aug -4.8% m/m to 5.31 million), (5) Sep leading indicators (expected unch, Aug +0.1%), (6) Oct Kansas City Fed manufacturing activity (expected -1 to -9, Sep +1 to 8), (7) the Treasury's auction of $7 billion 30-year TIPS.

There are 46 of the S&P 500 companies that report earnings today with notable reports including: Amazon.com (consensus -$0.13), Microsoft (0.58), Caterpillar (0.77), Capital One (1.94), AT&T (0.69), PulteGroup (0.43), Southwest Airlines (0.92), Dr Pepper Snapple (1.03), Raytheon (1.43), Nasdaq (0.86), McDonalds (1.28),

U.S. IPO's scheduled to price today: Fuling Global (FORK), Oasmia Pharmaceutical (OASM).

Equity conferences during the remainder of this week include: none.

OVERNIGHT U.S. STOCK MOVERS

eBay (EBAY -0.86%) jumped over 8% in pre-market trading after it reported Q3 adjusted EPS of 43 cents, higher than consensus of 40 cents, and then raised guidance on fiscal 2015 EPS to $180-$1.82 from a July estimate of $1.72-$1.77, above consensus of $1.78.

Texas Instruments (TXN -1.01%) rose over 8% in pre-market trading after it reported Q3 EPS of 76 cents, higher than consensus of 67 cents, and then raised guidance on Q4 EPS to 64 cents-74 cents, above consensus of 62 cents.

Eli Lilly (LLY -1.00%) reported Q3 EPS of 89 cents, higher than consensus of 76 cents, and then raised guidance on fiscal 2015 EPS to $3.40-$3.45 from a July estimate of $3.20-$3.30, above consensus of $3.28.

Southwest Airlines (LUV -0.82%) reported Q3 EPS of 94 cents, better than consensus of 92 cents

Community Health Systems (CYH -3.34%) slumped over 15% in after-hours trading after it reported Q3 revenue of $4.85 billion, below consensus of $4.98 billion.

United Rentals (URI +1.50%) climbed nearly 4% in after-hours trading after it reported Q3 EPS of $2.57, better than consensus of $2.35.

Ameriprise (AMP -0.66%) reported Q3 operating EPS of $2.35, above consensus of $2.29

Kinder Morgan (KMI -1.60%) slid nearly 5% in after-hours trading after it reported Q3 EPS of 8 cents, well below consensus of 18 cents.

Citrix Systems (CTXS -5.27%) jumped over 7% in after-hours trading after it reported Q3 adjusted EPS of $1.04, well above consensus of 84 cents, and then raised guidance on fiscal 2105 EPS to $3.85-$3.90 from $3.65-$3.75, above consensus of $3.71.

Las Vegas Sands (LVS -1.01%) rose over 3% in after-hours trading after it reported Q3 adjusted EPS of 66 cents, above consensus of 63 cents.

American Express (AXP -0.57%) fell over 4% in after-hours trading after it reported Q3 EPS of $1.24, weaker than consensus of $1.31, and then lowered guidance on fiscal 2015 EPS to $5.20-$5.35, below consensus of $5.49.

CIT Group (CIT -0.70%) climbed over 2% in after-hours trading after it announced that CEO John Thain will retire effective Mar 2016 and Ellen Alemany will be the new CEO.

MARKET COMMENTS

Dec E-mini S&Ps (ESZ15 +0.40%) this morning are up +7.50 points (+0.37%). Wednesday's closes: S&P 500 -0.58%, Dow Jones -0.28%, Nasdaq -0.56%. The S&P 500 on Wednesday closed lower on global growth concerns after Japan Sep exports rose +0.6% y/y, less than expectations of +3.8% y/y and the smallest increase in 13 months. In addition, there was weakness in energy producers and mining stocks after the price of crude oil fell to a 2-1/2 week low and copper dipped to a 1-1/2 week low. Stocks found some underlying support from M&A activity after Western Digital bought SanDisk for $19 billion and Lam Research bought KLA-Tencor for $10.6 billion.

Dec 10-year T-notes (ZNZ15 -0.06%) this morning are down -3.5 ticks. Wednesday's closes: TYZ5 +10.00, FVZ5 +3.75. Dec T-notes on Wednesday closed higher on increased safe-haven demand for Treasuries after stocks closed lower and on reduced inflation expectations after crude oil fell to a 2-1/2 week low and copper dropped to a 1-week low.

The dollar index (DXY00 +0.06%) this morning is up +0.076 (+0.06%) at a 1-1/2 week high. EUR/USD (^EURUSD) is down -0.0022 (-0.19%) at a 1-1/2 week low. USD/JPY (^USDJPY) is down -0.22 (-0.18%). Wednesday's closes: Dollar Index +0.122 (+0.13%), EUR/USD -0.0007 (-0.06%), USD/JPY +0.09 (+0.08%). The dollar index on Wednesday rose to a 1-week high and closed higher on weakness in the commodity currencies of Canada and Australia versus the dollar after copper prices fell to a 1-1/2 week low and crude prices fell to a 2-1/2 week low. Also, USD/JPY rallied to a 1-week high on speculation the BOJ may need to expand QE after Japan Sep exports rose at the slowest pace in 13 months.

Dec crude oil (CLZ15 +1.46%) this morning is up +59 cents (+1.31%) and Dec gasoline (RBZ15 +1.85%) is up +0.0215 (+1.67%). Wednesday's closes: CLZ5 -1.03 (-2.23%), RBZ5 +0.0005 (+0.04%). Dec crude oil and gasoline on Wednesday settled mixed with Dec crude at a 2-1/2 week low. Crude oil prices were undercut by the -3% drop in the Shanghai Composite index and the +8.03 million bbl increase in weekly EIA crude inventories to a 4-1/2 month high versus expectations of a +3.5 million bbl increase. Gasoline prices closed higher after EIA gasoline stockpiles fell -1.52 million bbl, a bigger decline than expectations of -1.0 million bbl.

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