Morning Call For Wednesday, February 28

OVERNIGHT MARKETS AND NEWS

Mar E-mini S&Ps (ESH18 -0.06%) this morning are down -0.01% and European stocks are down -0.40% on Chinese economic concerns after the China Feb manufacturing PMI fell more than expected to its slowest pace of growth in 1-1/2 years. Chinese copper demand concerns are undercutting mining stocks and leading losses in the overall market as Mar COMEX copper (HGH18 -0.62%) falls -0.60% to a 2-week low. Losses in equities are limited as the 10-year T-note yield stabilizes below 2.90%. The downside in European stocks is contained after Eurozone Feb CPI rose at the slowest pace in 14-months, which may keep the ECB from ending QE. Asian stocks settled lower: Japan -1.44%, Hong Kong -1.36%, China -0.99%, Taiwan closed for holiday, Australia -0.68%, Singapore -0.63%, South Korea -1.25%, India -0.47%. Chinese stocks declined on weaker than expected Feb manufacturing activity and Japanese stocks moved lower after Japan Jan industrial output dropped at the fastest pace in 6-3/4 years.

The dollar index (DXY00 +0.18%) is up +0.16% at a 2-week high. EUR/USD (^EURUSD) is down -0.12% at a 1-1/4 month low. USD/JPY (^USDJPY) is down -0.23%.

Mar 10-year T-note prices (ZNH18 +0.09%) are up +2.5 ticks.

The Eurozone Feb CPI estimate rose +1.2% y/y, right on expectations and the slowest pace of increase in 14 months. The Feb core CPI rose +1.0% y/y, right on expectations.

The German Mar GfK consumer confidence fell -0.2 to 10.8, weaker than expectations of -0.1 to 10.9.

German Feb unemployment fell -22,000 to 2.393 million, better than expectations of -15,000. The Feb unemployment rate held at a record low of 5.4%, right on expectations.

Japan Jan industrial production fell -6.6% m/m, weaker than expectations of -4.0% m/m and the biggest decline in 6-3/4 years.

The China Feb manufacturing PMI fell -1.0 to 50.3, weaker than expectations of -0.2 to 51.1 and the slowest pace of expansion in 1-1/2 years.

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) weekly MBA mortgage applications (previous -6.6% with purchase sub-index -6.2% and refi sub-index -7.1%), (2) revised Q4 GDP expected +2.5% (q/q annualized) vs previous +2.6%, (3) Feb Chicago PMI (expected -1.7 to 64.0, Jan -2.1 to 65.7), (4) Jan pending home sales (expected +0.5% m/m, Dec +0.5% m/m and -1.8% y/y), and (5) EIA weekly Petroleum Status Report.

Notable S&P 500 earnings reports today include: salesforce.com (consensus $0.34), Monster Beverage (0.37), Lowe's (0.87), TJX (1.27), Analog Devices (1.29), Mylan (1.41), Universal Health Services (1.84), L Brands (2.05).

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

Equity conferences this week: Morgan Stanley Technology, Media & Telecom Conference on Mon-Wed, Simmons & Company International Energy Conference on Wed, Bank of America Merrill Lynch Global Agriculture and Chemicals Conference on Wed-Thu, Keefe, Bruyette, & Woods Cards, Payments & Financial Technology Symposium on Thu, Simmons Energy Conference - Panel on Thu.

OVERNIGHT U.S. STOCK MOVERS

Booking Holdings (BKNG -0.03%) jumped 7% in after-hours trading after it reported Q4 adjusted EPS of $16.86, well above consensus of $14.13.

Chevron (CVX -0.86%) was upgraded to 'Buy' from 'Neutral' at Bank of America Merrill Lynch with a price target of $138.

Lowe's (LOW -1.76%) slid over 5% in pre-market trading after it reported Q4 adjusted EPS of 74 cents, weaker than consensus of 87 cents.

Penumbra (PEN +0.14%) rallied almost 10% in after-hours trading after it forecast full-year revenue of $400 million to $405 million, better than consensus of $389.8 million.

Albemarle (ALB +1.34%) gained almost 3% in after-hours trading after it said it sees full-year adjusted EPS of $5.00 to $5.40, the midpoint above consensus of $5.14.

Express Scripts Holdings (ESRX +1.29%) rose 3% in after-hours trading after it said it expects 2018 adjusted EPS of $9.27 to $9.47, the midpoint above consensus of $9.34.

Celgene (CELG -0.74%) tumbled 7% in after-hours trading after the FDA determined the pharmacology sections in Celgene's NDA for its Ozanimod in treatment of patients with relapsing forms of Multiple Sclerosis were insufficient to permit a completed review.

Weight Watchers International (WTW -2.55%) jumped 6% in after-hours trading after it reported Q4 EPS of 91 cents, well above consensus of 31 cents, and said it sees full-year EPS of $2.40 to $2.70, better than consensus of $2.28.

Tesaro (TSRO +2.98%) sank almost 10% in after-hours trading after it reported a Q3 loss per share of -$3.35, a wider loss than consensus of -$2.39 a share.

Papa John's International (PZZA -1.59%) slid 7% in after-hours trading after it reported Q4 systemwide international comparable sales of +2.6%, well below consensus of +5.1%.

Camping World Holdings (CWH -4.04%) climbed 6% in after-hours trading after it reported Q4 adjusted proforma EPS of 25 cents, above consensus of 22 cents.

B&G Foods (BGS -2.50%) tumbled 13% in after-hours trading after it reported Q4 net sales of $473.7 million, weaker than consensus of $482.5 million, and said it sees full-year adjusted EPS of $2.05 to $2.25, below consensus of $2.26.

Axon Enterprise (AAXN -3.23%) jumped 16% in after-hours trading after it reported an unexpected profit of 13 cents EPS, better than consensus for -3 cents a share loss.

Etsy (ETSY -0.43%) rallied 13% in after-hours trading after it reported Q4 revenue of $136.3 million, above consensus of $132.4 million.

TiVo (TIVO -0.37%) climbed over 12% in after-hours trading after it reported Q4 adjusted Ebitda of $74.6 million, higher than consensus of $74.0 million, and said it hired Liontree Advisors to explore alternatives for the company.

Frontier Communications (FTR unch) dropped 8% in after-hours trading after it said it suspended its quarterly cash dividend.

Big 5 Sporting Goods (BGFV -5.56%) fell 3% in after-hours trading after it forecast a Q1 loss per share of -6 cents to -14cents, weaker than consensus for a loss of -4 cents per share.

MARKET COMMENTS

Mar S&P 500 E-mini stock futures (ESH18 -0.06%) this morning are down -0.25 points (-0.01%). Tuesday's closes: S&P 500 -1.33%, Dow Jones -1.16%, Nasdaq -1.27%. The S&P 500 on Tuesday fell back from a 3-week high and closed lower on the decline in U.S. Jan durable goods orders by -3.7% and -0.2% ex transportation, weaker than expectations of -2.0% and +0.4% ex transportation. Stocks were also undercut by the surge in T-note yields on hawkish comments from Fed Chair Powell who said that data since the Dec FOMC meeting suggests a strengthening economy, which signals additional Fed rate hikes. Stocks found some support on the +6.5 point increase in the Conference Board's Feb U.S. consumer confidence to a 17-1/4 year high of 130.8, stronger than expectations of +1.1 to 126.5.

Mar 10-year T-note prices (ZNH18 +0.09%) this morning are up +2.5 ticks. Tuesday's closes: TYH8 -15.00, FVH8 -9.75. Mar 10-year T-notes on Tuesday closed lower on hawkish comments from Fed Chair Powell who said that the U.S. "economic outlook remains strong" and that data since the Dec FOMC meeting suggests a strengthening economy, which bolsters the case for additional Fed rate hikes. T-notes were also undercut by the stronger-than-expected U.S. Feb consumer confidence index that climbed to a 17-1/4 year high.

The dollar index (DXY00 +0.18%) this morning is up +0.141 (+0.16%) at a 2-week high. EUR/USD (^EURUSD) is down -0.0015 (-0.12%) at a 1-1/4 month low and USD/JPY (^USDJPY) is down -0.25 (-0.23%). Tuesday's closes: Dollar Index +0.502 (+0.56%), EUR/USD -0.0084 (-0.68%), USD/JPY +0.40 (+0.37%). The dollar index on Tuesday climbed to a 2-week high and closed higher on the larger-than-expected increase in U.S. Feb consumer confidence to a 17-1/4 year high and on upbeat comments from Fed Chair Powell who said said that the data since the Dec FOMC meeting suggests a strengthening economy and that the U.S. "economic outlook remains strong."

Apr crude oil (CLJ18 -0.25%) this morning is down -15 cents (-0.24%) and Apr gasoline (RBJ18 -0.46%) is -0.0087 (-0.44%). Tuesday's closes: Apr WTI crude -0.90 (-1.41%), Apr gasoline -0.0185 (-0.92%). Apr crude oil and gasoline on Tuesday closed lower on the rally in the dollar index to a 2-week high and on IEA Executive Director Fatih Birol's comment that current "explosive growth" in U.S. oil production could extend beyond 2018. Crude oil prices were also undercut by expectations for Wednesday's weekly EIA oil inventories to climb +2.5 million bbl.

Metals prices this morning are mixed with Apr gold (GCJ18 +0.17%) +2.1 (+0.16%), Mar silver (SIH18 +0.12%) +0.024 (+0.15%), and Mar copper (HGH18 -0.62%) -0.019 (-0.60%) at a 2-week low. Tuesday's closes: Apr gold -14.2 (-1.07%), Mar silver -0.204 (-1.23%), Mar copper -0.0400 (-1.25%). Metals on Tuesday sold off to 2-week lows and closed lower on the rally in the dollar index to 2-week high and on hawkish comments from Fed Chair Powell who said that data since the Dec FOMC meeting suggests a strengthening economy, which bolsters the case for additional Fed rate hikes.