Day Traders Diary


U.S. equity futures are trading higher again this morning, with positive responses to earnings reports helping the tone. AAPL headlined last night's earnings, and the stock is +4.2% as earnings and revenue/margin guidance surpassed low expectations. This is helping Nasdaq futures (+1.0%) outperform the broader market (S&P futures +0.3%).

Overnight, the global equity markets were mixed, amid a mixed bag of PMI readings across the various regions. Asia closed mostly lower, led by China (-0.5%), which saw the HSBC Flash PMI come in below expectations at 47.7 and down from its prior reading of 48.2 last month. Worse yet, the employment index hit a 4 year low. The Shanghai responded negatively, but managed to come off lows as speculation crept into markets on what China's next move might be if that 7% growth is going to be defended. An article from the China Securities Journal cited an NDRC researcher that China's Q4 GDP may fall below 7%.

Japan traded lower as well (Nikkei -0.3%), with weaker than expected trade balance data showing exports surprisingly fell below expectations. The rest of Asia was boosted by several of Apple's supply names, following its better than expected earnings and iPhone stats. The aussie saw weakness overnight on the back of cooler than expected Q2 CPI.

Europe opened higher, then accelerated on the back of better than expected Manufacturing PMIs in both Germany and France. This is helping to give the US equity futures an underlying boost on top of Apple's earnings.

As an additional note, the Washington Post article is handicapping Larry Summers as the favorite to take the Fed Chair seat.

Earnings/Guidance: (See Earnings Calendar for full list):

AAPL is +4% after co sold 31.2 mln iPhones in Q3 vs. the ~26 mln est; ASPs were lower than expected as co is selling more older model (iPhones4/4S) in emerging markets; co reported Q3 EPS of $7.47, $0.19 better than the Capital IQ Consensus of $7.28; revenues rose 0.9% YoY to $35.32 bln vs the $34.91 bln consensus; Q4 guidance was better than feared with rev just below consensus and gross margin in-line.

BRCM is -8% after beating Q2 EPS by $0.01 on in-line rev; co guided Q3 rev below consensus; stock has been downgraded by at least 6 firms this morning. PEP beat Q2 EPS on in-line rev; co reaffirmed FY13 EPS guidance

F is +3% after reporting pre-tax profit of $0.45 per share, $0.08 better than the Capital IQ Consensus of $0.37; auto sector rev rose 15% year/year to $36 bln vs the $35.25 bln consensus.

BA is +1% after beating Q2 ests and raising FY13 EPS and rev guidance

CAT is lower after missing Q2 ests and lowering FY13 EPS and rev guidance

VMW +14% after co reported Q2 earnings of $0.79 per share, $0.02 better than the Capital IQ Consensus Estimate of $0.77; revenues rose 10.4% year/year to $1.24 bln vs the $1.23 bln. VMW issued in-line guidance for Q3 and FY13.

PNRA -7.1% after co missed by $0.03, misses on revs; guides Q3 EPS below consensus; guides Q4 (Dec) EPS below consensus; guides FY13 EPS below consensus. This lower diluted earnings per share target reflects lower than previously expected growth in Company-owned comparable net bakery-cafe sales.

T -1.1% after co reported Q2 (Jun) earnings of $0.67 per share, excluding non-recurring items, $0.01 worse than the Capital IQ Consensus Estimate of $0.68; revenues rose 1.6% year/year to $32.08 bln vs the $31.83 bln consensus.

EMC +4.4% after co reported EPS in-line, revs in-line; reaffirms FY13 EPS guidance, revs guidance

MCO reported Q2 earnings of $1.00 per share, $0.12 better than the Capital IQ Consensus Estimate of $0.88; revenues rose 18.0% year/year to $756 mln vs the $722.25 mln consensus. Co reaffirms guidance for FY13, sees EPS of $3.49-3.59 vs. $3.52 Capital IQ Consensus Estimate.

KFN beat by $0.03, misses on revs; announces CEO retiring

WLT provided preliminary Q2 operating results: met coal sales decreased from prior quarter to 2.4 MMTs due to late arrival of vessels; co also reset dividend to $0.01 from $0.125 per share

Other news:

SRPT announces plans to submit New Drug Application to FDA for Eteplirsen for the treatment of Duchenne Muscular Dystrophy in First Half of 2014; SRPT to host conference call to discuss regulatory update for eteplirsen on Wednesday, July 24, 2013 at 8:00 am ET.

CRUS +3.9% (trading higher following Apple earnings; co is a supplier to Apple),

TTHI announced the exclusive licensing of worldwide rights to a novel small molecule transcriptional regulator ("TT-601") from Eli Lilly and Company for the treatment of osteoarthritis ("OA") pain.

Genentech (RHHBY) announced positive results from the Phase III CLL11 study.

The Japan Fair Trade Commission today notified Archer Daniels Midland Company (ADM) of its approval of ADM's proposed acquisition of GrainCorp Limited.

KOG announced that it upsized and priced a private offering of $400 million in aggregate principal amount of senior notes due 2022 in a private placement to eligible investors.

German American Bancorp (GABC) and United Commerce Bancorp (UCBN) announced signing of definitive merger agreement

DXPE will replace TRLG in the S&P SmallCap 600; SLXP to replace GDI in the S&P MidCap 400

Agios Pharma (AGIO) upsizes offering and prices 5,888,888 share IPO at $18.00 per share, above the expected range of $14-16 per share

Jones Energy (JONE) prices reduced 12.5 mln share IPO at $15.00, below the $17-19 expected range

Analyst Research (see Upgrades/Downgrades calendar for full list):

AMTD upgraded to Neutral from Sell at Goldman

WEN upgraded to Neutral from Sell at Goldman

LMT upgraded to Neutral from Underperform at BofA/Merrill

IRWD upgraded to Hold at Cantor Fitzgerald; tgt raised to $10

VMW upgraded to Buy from Neutral at Nomura

Compass Point is upgrading DR Horton (DHI) to Buy from Neutral and downgrading Lennar Corp (LEN) and Pulte Homes (PHM) to Neutral from Buy

STM downgraded to Underperform at BofA/Merrill

DD downgraded to Sector Perform from Outperform at RBC Capital Mkts

PCAR downgraded to Sell at McAdams Wright Ragen

TCB upgraded to Mkt Perform from Underperform at FBR Capital; tgt raised to $17 from $9.50

NSC downgraded to Underperform from Neutral at BofA/Merrill

BRCM downgraded to Market Perform at BMO Capital Markets, Citigroup, William Blair, Credit Suisse, RBC, B Riley and Mizuho

COST initiated with a Outperform/Buy at Williams Capital Group; tgt $132

Upcoming Events:

Econ Data/Fed Speakers/Other:

Markit Manufacturing PMI (9am)- Prior 51.9

All comments contained herein are for informational purposes only, and should not be considered as a solicitation to buy or sell any security. The firm does not guarantee the accuracy or completeness of the information or make any warranties regarding results from it's usage.