Uranium: Where Do We Go From Here? (Part 1)

Uranium has never really had a good reputation, and after the Fukushima disaster in 2011 it seemed like the nail was firmly in the coffin for the industry. Japan shut down all its remaining 48 reactors after the incident and Germany announced they would retire all their 17 reactors by 2022.

Despite the public’s negative perception, nuclear power has been the world’s fastest-growing source of industrial scale energy in every decade since the 1950s. Many countries are still committed to nuclear, among them the US, China, France, India, Saudi Arabia and South Korea, to name a few. And four years after the Fukushima disaster the Japanese government is in full swing to restart their reactors.

Moreover, Germany’s green revolution is proving costly as electricity prices are rising and their carbon footprint is spreading. And the country is arguably “cheating” by importing nuclear-generated electricity from France.

Nuclear is seen as a bad source of energy, but the truth is that nuclear plants have low emissions and they provide a steady source of necessary base load power (steady source of reliable electricity). Nuclear energy is in fact the most environmentally friendly way to produce electricity on a large scale.

Electricity supply is one of the main factors driving prosperity and quality of life in a country, and currently around 2 billion worldwide do not have access to electricity. Emerging market countries, especially China and India, want to increase their citizens’ living standards and access to electricity is key to achieving this goal. Electricity produced from nuclear has on average one of the lowest costs in the world and as mentioned before it provides a reliable stream of base-load power.

It seems that there might be some energy left in the nuclear market after all.

The Nuclear Market Is Expanding

Today 437 nuclear reactors are operable around the world, and 66 new ones are being built. A further 168 are planned and 322 are proposed. Countries without reactors will soon build their first ones, including Turkey, Kazakhstan, Indonesia, Vietnam, Egypt, Saudi Arabia and several of the Gulf emirates. Despite its bad reputation, uranium is still the only fuel that can produce base-load electricity economically and without emitting greenhouse gasses.

In the U.S., six new reactors are scheduled to come online by 2020. That’s in a country that hasn’t begun construction on a nuclear plant since 1977, nor commissioned one since 1985. The U.S. is the biggest producer of nuclear energy in the world (comprising more than 30% of worldwide total). There are 65 nuclear plants in the country, housing just over 100 reactors, which generate 20% of US electricity.

France is heavily dependent on nuclear power. In fact, about 75% of its electricity comes from uranium. In China 17 reactors are in operation and 29 more are being built. The country wants a fourfold capacity increase by 2020, which is not surprising given the pollution problems in the country. In India 20 plants are in operation and they are adding 7 more. In Africa several countries are exploring the possibility of nuclear power as currently 90% of the population is without electricity.

And what about Japan? In 2012 Russia signed an agreement with Japan that guarantees the availability of uranium enrichment services for Japanese utilities. Japan, despite Fukushima, seems unable to give up on nuclear power. And after Fukushima the new facilities will be safer. Containment systems at Fukushima were 40 years old, generations behind today’s containment systems, and would soon have been a candidate for decommissioning. Today’s reactors are much safer.

Rising Demand And Limited Supply Will Drive Prices Up

The World Nuclear Association predicts that demand for uranium will grow 33% from 2010 to 2020. In 2011 the world consumed 160 million pounds of yellowcake. In 2024 it will be consuming 200 million pounds annually – if available. On the supply side uranium mines are few. Only 20 countries in the world have a uranium mine, and half of global production comes from only 10 mines in six countries. This means a shortage is likely coming.

The International Energy Agency (IEA) has estimated electricity demand until 2035 and according to their estimates electricity is projected to grow 69% from 2011 to 2035, under their New Policies Scenario. This scenario is IEA’s baseline scenario and takes into account new measures that countries have planned to implement in the future, such as reducing greenhouse gasses. Under this scenario nuclear increases 66% to maintain its current share of worldwide electricity production of around 11%.

In 2012 the world consumed 25% more uranium than was produced from mines (shortfall of 40 million pounds) and the yearly deficit is likely to rise to 55 million by 2020.

Rising demand cannot be rapidly met by increased supply. It takes minimum 10 years to go from decision to production on a uranium mine, and bringing a mine into production is more difficult than any other resource due to engineering challenges, safety requirements, permitting and environmental considerations. Tim Gitzel, CEO of Canadian uranium producer Cameco, believes that a price well north of $60-$70 is needed to get new players interested. Other analysts estimate that a price level of $80-85 is needed to bring new supply online. The spot price is currently around $36.

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Why Is The Price So Low Given Supply/Demand Imbalances?

The uranium spot price peaked in 2007 at around $140 per pound and then later crashed down below $50. It started to resume its upward trend in 2010, but then the Fukushima disaster occurred and the price started a slow and grinding decline. The price kept going lower, reaching $28 per pound in May 2014. It has since recovered to about $36 per pound in June 2015.

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Fukushima did not scare the world away from nuclear energy, however, and as mentioned above the world is currently consuming more uranium than is being produced each year, and has been doing so for the last 20 years.

But how is this possible? The answer is Russia. The country has been filling the supply gap for the last 20 years. After the Soviet Union fell, Russia agreed to down blend the equivalent of 20,000 nuclear warheads to reactor grade uranium, and sell it to the United States. The program was called Megatons to Megawatts and from 1993 to 2013 it helped fill the supply gap in the market. But the program has now ended. 2013 marked the end of 24 million pounds of secondary uranium supply entering the market each year (to put that into context, in 2011 the world consumed 160 million pounds). But even though the program has ended prices have not risen. There are several reasons why.

First, Japan previously accounted for 13% of global nuclear power generation, but that demand is now gone.

Second, at the time of Fukushima, Japanese utilities were holding three years of stockpiles, and they have since received a further two years of supplies that they committed to buying under long-term contracts. Japan dumped most of this supply on the spot market, which had a big impact on the price. Additionally, South Korea sold some of its inventory after Fukushima.

Third, the Fukushima disaster accelerated the retirement of other reactors, which added to one-time sales of uranium stockpiles. This was exemplified by the decommissioning of the San Onofre nuclear plant in California, which released about 10 million pounds on the market.

The fourth point is that in 2013 the U.S. Department of Energy shut down ConverDyn for most of the year for maintenance purposes. ConverDyn is the only U.S. plant that can convert yellowcake into uranium hexafluoride gas (UF6). Converting yellowcake to UF6 is a crucial step in producing fuel for reactors. Without a conversion plant supplies were building up so the U.S. Department of Energy started selling yellowcake and UF6, which depressed prices.

Finally, low-cost U-235 (enriched uranium that is used in reactors) from Russia is currently flooding the market. This might continue to about 2018, at which time all the cheap uranium will be gone.

A Closer Look At Japan

You can’t discuss nuclear energy today without mentioning Japan. Nuclear energy is currently not very popular in the country of the rising sun. This is not surprising given the Fukushima disaster, however according to the World Nuclear Association there were no deaths or serious radiation exposure that resulted from the disaster (the direct death toll of the tsunami, however, was around 19,000).

Despite the public’s negative perception the government is trying to revive the nuclear industry. After shutting down their reactors, electricity has become much more expensive and it’s hurting an already fragile economy. Japan is aiming to restart most of its 48 reactors, but there have been efforts to delay the process by local residents. It’s impossible to predict how many reactors will come back online, but currently the plan is for nuclear to provide about 20% of the nation’s electricity by 2030.

Japan is also endeavoring to significantly increase energy from renewable resources, however it will still be dependent on nuclear and imported fossil fuels. A diverse energy mix is sensible for any country, especially Japan who has few natural resources of its own.

From the chart above we can see that LNG imports have increased about 60% since the Fukushima disaster. According to an article from the Wall Street Journal dated May 13th 2015, businesses say that the rise in electricity costs makes it harder to run a factory in Japan. And it now seems that utilities will pass double-digit price increases on to their customers as the industry is becoming deregulated in 2016. Utilities have had to draw on their cash reserves over the last few years to pay for their higher cost of importing fossil fuels, however some are running low on cash and a price increase might be the only solution to avoid bankruptcy. According to the Finance Ministry the cost of importing fuel rose 25% in 2011 and 10% in 2012.

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In an article dated 16th February 2015 by World Nuclear News, a report was cited saying around 90% of Japanese small and medium sized companies think their business would be adversely affected by rising electricity costs in the future. Companies said they might cope by reducing their staff, cutting salaries and reducing capital expenditures, measures which would negatively affect the Japanese economy.

Not only are higher electricity costs bad for businesses and the economy, but they can also be bad for the environment. Japan plans to continue its reliance on CO2-emitting coal to reduce the cost of importing liquefied natural gas. Japan previously had ambitious goals to reduce carbon emissions, but those plans have now been scrapped.

Germany’s Energy Revolution

The second country that comes up when discussing the nuclear industry is Germany. The country is aiming for what they call an “energy revolution”. Germany plans to shut down all its remaining (currently nine) nuclear reactors by 2022, and to wean the country off fossil fuels by mid century. The plan is to get 80% of the country’s electricity from renewable sources by 2050, however many people worry about the viability of this plan.

According to a Wall Street Journal article from 26th August 2014, the average price of electricity for German companies has jumped 60% over the past six years because the cost of subsidizing the renewable energy industry has been passed on to consumers. The price is now twice that paid in the U.S. Kurt Bock, the chief executive of BASF, the world’s largest chemical maker, said German industry is going to gradually lose its competitiveness. In fact, the company has decided to reduce its investment in Germany over the next five years from 33% of total investments, to 25%.

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In a survey done by PWC nearly 75% of small and medium sized German industrial businesses say rising energy costs are a major risk. In a survey done by the Chamber of Commerce in the U.S. around 75% of American businesses operating in Germany also said the Energy Revolution made the country less attractive for business. German companies also say that rising costs are a reason to start investing abroad, according to the German Chambers of Commerce and Industry.

To date the beneficiaries of the Energy Revolution have been investors in wind and solar installations. Although the price of electricity has declined because of the added capacity, a surcharge is added to pay for the subsidies that the government has given to the renewable industry. The renewable energy surcharge has nearly tripled since 2010 and today accounts for approximately 18% of German households’ electricity bill. According to Germany’s economics ministry, the subsidies amount to about €24 billion a year.

And last, the departure from nuclear energy has increased greenhouse gas emissions in Germany because utility companies have turned to uranium’s cheap cousin, coal. The government says it’s temporary, but critics say that renewable power is unpredictable and it could force the continued use of coal.

Conclusion

The long-term fundamentals for the uranium market are very attractive. Despite the Fukushima disaster, most nuclear power generating countries are still committed to nuclear power, and today there are more reactors under construction than before the disaster. Japan and Germany famously planned to completely reduce their dependence on nuclear power, however Japan is planning on restarting its reactors while Germany’s energy revolution might be faltering.

Despite supply/demand imbalances, prices are depressed due to a short/medium-term supply glut. Prices might stay low for the foreseeable future, especially now that oil and gas prices have tumbled, making fossil fuel-generated electricity less expensive. But in the longer term uranium prices should go up and for savvy investors this might represent a valuable buying opportunity.

In Part 2 of  Uranium: Where Do We Go From Here? We’ll offer a some more insight in to the Uranium market and the best way to invest in Uranium. Look for Part 2 of this article next week!

 

Contributions By Lars Haugen

Rebel Yell: Huntsman (HUN) Looks Ready To Buy

Is Huntsman Corporation (HUN) a Buy, Sell or Hold?

For those of you following my recommendation and updates of Huntsman Corporation (HUN) the following is a brief refresher and update. I’ll be updating and re-examining all of the stocks I have been covering –  FREE here in Wall Street Rebel.

Huntsman Corporation (NYSE: HUN) was founded in 1970 and is based in Salt Lake City, Utah is a worldwide Chemical Manufacturer operates approximately 100 R&D-based facilities in over 30 countries. Its products are used in various applications, including adhesives, aerospace, automotive, construction products, personal care and hygiene, durable and non-durable consumer products, electronics, medical, packaging, paints and coatings, power generation, refining, synthetic fiber, textile chemicals, and dye industries. Huntsman Corporation a market capitalization of just under $5.6 billion and although it is a tightly held corporation I believe it may become a takeover target in the next 12-24 months thanks to a number of initiatives the company has undertaken in recent months.

An Overview of Huntsman’s Recent Projects

Huntsman’s business model can be broken down into the following five units: Polyurethanes, Performance Products, Advanced Materials, Textile Effects, and Pigments and Additives. And it is within these segments that many of the company’s most recent projects encompass.

In the referenced image above we’ll notice that Huntsman has a 100% ownership interest in six of the eight noted projects. These six projects include but are not limited to MDI expansion through its polyurethane segment in both the US and Netherlands, EO expansion through its Performance Products segment in the US, and lastly the expansion of its Multifunctional Resin operations through its Advanced Materials segment here in the US.

From a capital expenditure perspective, it should be noted that the company spent $601 million throughout 2014 and estimates it will spend $625 million throughout 2015.

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Huntsman’s Diamond In The Rough: Aerospace Revenue Growth

One of the most compelling points of interest for an investor to consider when it comes to Huntsman is clearly the revenue that is being generated by the Aerospace unit of its Advanced Materials segment.  For starters, its CAGR between 2009 and 2014 was a very impressive 14% and if orders to continue to pile on (especially when it comes to the 125 Airbus A350’s and the 48 777x’s that are due to be completed by 2017) there’s a very good chance its CAGR could exceed 17.5% by Q4 2017.

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In addition to the above mentioned completions we, as both existing shareholders and potential investors, need to keep a close eye on both Huntsman’s ability to demonstrate both double digit revenue growth within the unit and maintain the rate at which long-term builds are completed. If Huntsman is capable of showing consistency in both areas, there’s a very good chance its stock will demonstrate very favorable returns over the next 24-to-36 months.

The Restructuring of its P&A Segment Could Mean Stronger Long-Term Growth

Anytime a company intends on increasing its cost savings by reducing operational expenses, radars start to flash and potential investors begin to take a closer look at the company’s plan. In the case of Huntsman the plan is a simple three-step process that clearly spells out how the company plans on demonstrating a $175 million dollar reduction in costs.

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The process, which encompasses a work force reduction, the closure of its Calais, France TiO2 facility and the consolidation of four US-based Color Pigment sites includes the removal of just under 1100 full-time positions and nearly 100 KT (kilo-tons) of pigment-based capacity. Although the reduction in capacity is a notable variable, Huntsman realizes the most cost-related savings through the elimination of nearly 1100 jobs. With that said, I don’t think the company its entirely finished with its P&A restructuring, especially since there’s a slight chance we could see the company’s P&A cost savings exceed $200 million by 2018 given the measures it has taken since the start of 2015.

Should we expect similar cost savings initiatives to occur within Huntsman’s remaining segments? In no uncertain terms, the answer is YES. Given the impressive success of its P&A cost savings initiative (that was first enacted in early 2015), there’s a very good chance we could see both job cuts and the sale of its underperforming non-core assets sales occur in the next 24-to-36 months.

Huntsman Prepares Itself For A Major Boost In The Demand For Polyethramine

On May 5th it was announced that Jacobs Engineering Group (NYSE: JEC) had been awarded an engineering, procurement and construction management (EPCM) contract for an expansion program at Huntsman Corporation’s world scale polyetheramine facility in Singapore.

It should be noted that Polyetheramine is used as an ingredient or additive to improve the properties of many products, including paint, adhesives and composites and since Huntsman is a major producer of all three, an increase in global demand could some serious profitability over the next 7-to-10 years. From an infrastructure perspective, Jacobs will be responsible for the detailed engineering and design, procurement of major equipment, and the subsequent management of all construction services. Initial project-based construction is expected to begin by mid-2015 and be completed by late-2016.

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Recommendation: Open a new positions on a dip to $22 a share or lower. This should be a great money maker if you can get your shares at these very attractive levels!

My upside target is over $30 by the end of the year assuming that Huntsman’s cost-saving initiatives don’t go beyond its P&A segment. If such initiatives encompass the company’s additional segments, we could see HUN’s share price vault over $$34 a share.

 

Quick Recap on Tuesday Action

Tuesday’s action was a struggle from the get go. For the tenth time in 2015, the S&P 500 lost  -1.18%. So far, in the prior nine such drops, the next day the S&P 500 was higher two times by more than one percent and slightly less than one percent. What will it be on Wednesday?

Stocks of note moving on earnings after the close included Herbalife (HLF) higher by +15% and Fossil (FOSL) by +5%. Drops post earnings included Noodles (NDLS) falling -18% and SkullCandy (SKULL) dropping by -10%.

Futures Higher & IPOs Pick Up Speed

In After Hours Trading

IPOs on deck today Foamix Pharmaceuticals, ProQr Therapeutics and Viking Therapeutics. Secondaries on deck today EPR FANG NEWM ONTY SUI.

In After Hours Trading (Best to Worst absolute beats/misses [+.02 or greater/-.02 or worse]): CLC+.05, UNFI+.02.

IPO Financial provides our capital raise data.

What’s Happening This Morning

US futures: S&P 500 +8, Dow Jones +55 and NDX +15.50 with fair values lower helping the open. Asia higher ex Hong Kong and Europe higher. Copper, silver and gold lower. WTI Crude and Brent Oil Futures lower. Natural Gas is lower. $ is lower vs Euro, lower vs. Pound and higher vs. Yen. US 10 year Treasury yield flat. Prices as of 7:50 a.m.

Earnings Expected

Earnings due after the close (by market cap descending): ORCL, RHT, TIBX.

Due Friday morning (by market cap descending): none of note.

Market Matters: Futures Up Slightly

August 27, 2014

In After Hours Trading

No IPOs on deck this week so far. Secondaries on deck today MPAA. Tpyically, this is the lightest week of the year.

In After Hours Trading (Best to Worst absolute beats/misses [+.02 or greater/-.02 or worse]): HEI+.06, SLH-.10

IPO Financial provides our capital raise data.

What’s Happening This Morning

US futures: S&P 500 +0.50, Dow Jones +11 and NDX +1 with fair values lower helping gains. Asia and Europe mixed. Copper and silver lower and gold higher. WTI Crude and Brent Oil Futures higher. Natural Gas is higher. $ is lower vs Euro, lower vs. Pound and lower vs. Yen. US 10 year Treasury yield -2. Prices as of 7:30 a.m.

Earnings Expected

Earnings due after the close (by market cap descending): WDAY, WSM, BYI

Due Thursday morning (by market cap descending): TD, DG, PLL, SIG, COTY, ANF

Reported Earnings This Morning

Reported Earnings This Morning (Best to Worst absolute beats/misses [+.02 or greater/-.02 or worse]): SDRL+.52, TIF+.11, MIK+.06, DCI+.03, BF.B-.02.

Futures Higher

In After Hours Trading

No IPOs on deck today. Secondaries on deck today CLRB NEO.

IPO Financial provides our capital raise data.

In After Hours Trading (Best to Worst absolute beats/misses [+.02 or greater/-.02 or worse]): SINA+.08, ADSK+.07, A+.04

What’s Happening This Morning

US futures: S&P 500 +4.50, Dow Jones +45 and NDX +13 with fair values lower helping gains. Asia and Europe higher. Copper higher with silver and gold higher. WTI Crude and Brent Oil Futures higher. Natural Gas is lower. $ is lower vs Euro, lower vs. Pound and higher vs. Yen. US 10 year Treasury yield -1. Prices as of 7:30 a.m. EDT THERE WILL BE NO MARKET MATTERS NEXT WEEK AS WE WILL BE ON VACATION. IT WILL RETURN AUGUST 25th.

Earnings Expected

Earnings due after the close (by market cap descending): none

Due Monday morning (by market cap descending): none

Rags & Mags: Inside Wall Street

USA Today: Carl Icahn places a bet on Gannet (GCI). Chiquita Brands (CQB) rejects $13 takeover. General Electric may sell appliance business.

 

 

Futures Higher

In After Hours Trading

IPOs on deck today C1 Financial. Secondaries on deck today CLRB REXR RICE ZOES.

IPO Financial provides our capital raise data.

In After Hours Trading (Best to Worst absolute beats/misses [+.02 or greater/-.02 or worse]): AZPN+.10, VIPS+.09, NTAP+.03, CSCO+.02, SLW-.02.

What’s Happening This Morning

US futures: S&P 500 +1.50, Dow Jones +18 and NDX +4 with fair values lower helping gains. Asia mixed and Europe higher. Copper lower with silver higher and gold down. WTI Crude and Brent Oil Futures lower. Natural Gas is lower. $ is lower vs Euro, higher vs. Pound and lower vs. Yen. US 10 year Treasury yield -1. Prices as of 7:30 a.m. EDT

Earnings Expected

Earnings due after the close (by market cap descending): AMAT, A, JWN, ADSK, DDS, WB, SINA.

Due Friday morning (by market cap descending): JD, EL.

Rags & Mags: Inside Wall Street

USA Today: Cisco (CSCO) to cut 6,000 jobs. Dow Jones Industrial Average turn back to positive for the year. Shortage of hot cars due to demand.

NY Times: Lands’ End customers upset about delivery of GQ after purchases. GQ had swimsuit model on cover. Amazon (AMZN) offers a card reader and will compete against VeriFone and PayPal as well as Square.

Politico: Edward Snowden out with more NSA secrets on 8/26 in Wired. Project MonsterMind.

Reported Earnings This Morning

Reported Earnings This Morning (Best to Worst absolute beats/misses [+.02 or greater/-.02 or worse]): KSS+.06.

Data Points

Yesterday saw 2313 stocks rise and 773 fall on the NYSE. NASDAQ saw 1813 rise and 891 fall.

The SP 500 broke its 50 day exponential moving average yesterday but is above the 200 day exponential moving average. The Russell 2000 is now back below its 50 day moving exponential average and below its 200 day exponential moving average as well.

The 10 day spread moving average of breadth is now in cash. The Madison Market Timing Indicator is now invested.

YTD 3943 (-406) stocks are higher for the year and 2937 (+469) are lower. Updated 8/5/14 Close. We will update over the weekend. Prior Update 7/14/14 close.

Economics

Weekly Natural Gas Inventories due out at 10:30 a.m. EDT.

Politico

President Obama on vacation next two weeks in Martha’s Vineyard.

Congress is on recess for the next five weeks and markets should like this vacation from the political nonsense.

Conference & Analyst Meetings

Analyst and investor meetings of note today HUM. Jefferies Annual Global Industrials Conference. Canaccord Genuity Annual Growth Conference.

Conference of Note

Walmart (WMT) Manufacturing Summit.

M & A News

Key Upgrades and Downgrades

Firm Upgrades Downgrades
JP Morgan
Goldman Sachs LUX
Morgan Stanley
Deutsche Bank
Citigroup PGR
Merrill Lynch
Wachovia/Wells Fargo
Credit Suisse
Banc of America
UBS
Piper Jaffray
Needham
Jefferies
Stifel
Keefe Bruyette
Raymond James
Credit Agricole
Sanford Bernstein
RBC
Friedman Billings
Robert W. Baird TBPH

Futures Higher

In After Hours Trading

IPOs on deck today Capnia, Otonomy, . Secondaries on deck today CLDN INSM NCT SFM SUNE.

IPO Financial provides our capital raise data.

In After Hours Trading (Best to Worst absolute beats/misses [+.02 or greater/-.02 or worse]): URS+.76, FOSL+.02.

What’s Happening This Morning

US futures: S&P 500 +10, Dow Jones +70 and NDX +22 with fair values lower helping gains. Asia and Europe higher. Copper lower with silver higher and gold flat to down. WTI Crude and Brent Oil Futures lower. Natural Gas is lower. $ is higher vs Euro, higher vs. Pound and higher vs. Yen. US 10 year Treasury yield +1. Prices as of 7:55 a.m. EDT

Earnings Expected

Earnings due after the close (by market cap descending): CSCO,NTAP, VIPS, NTES, SLW.

Due Thursday morning (by market cap descending): WMT, PRGO, KSS, AAP, HSH, PWE.

Rags & Mags: Inside Wall Street

USA Today: Debt threatens retirement. Are electric utility stocks safe?

Reported Earnings This Morning

Reported Earnings This Morning (Best to Worst absolute beats/misses [+.02 or greater/-.02 or worse]): DE+.11.

Futures Up Mildly

In After Hours Trading

5 IPOs on deck this week. Secondaries on deck this week CLDN. Nothing on track for today.

IPO Financial provides our capital raise data.

In After Hours Trading (Best to Worst absolute beats/misses [+.02 or greater/-.02 or worse]): VTR+.02, OPK+.02.

What’s Happening This Morning

US futures: S&P 500 +2.75, Dow Jones +18 and NDX +4.75 with fair values flat. Asia higher ex Shanghai and Europe lower. Copper higher with silver lower and gold higher. WTI Crude and Brent Oil Futures lower. Natural Gas is higher. $ is higher vs Euro, higher vs. Pound and higher vs. Yen. US 10 year Treasury yield flat. Prices as of 7:45 a.m. EDT.

Earnings Expected

Earnings due after the close (by market cap descending): CREE, KING, FOSL, JKHY, URS.

Due Wednesday morning (by market cap descending): DE, M, ARES, PF, CAE.

Rags & Mags: Inside Wall Street

USA Today: Falling battery costs help Tesla (TSLA). Dow Jones Industrial Average is still negative for the year.

Reported Earnings This Morning

Reported Earnings This Morning (Best to Worst absolute beats/misses [+.02 or greater/-.02 or worse]): AER+.50, TW+.09, VAL+.05, FLO-.02.

Futures Strong

In After Hours Trading

IPOs on deck today Green Bancorp, Independence Contract Drilling, Ryerson Holding. Secondaries on deck today SPR.

IPO Financial provides our capital raise data.

In After Hours Trading (Best to Worst absolute beats/misses [+.02 or greater/-.02 or worse]): SCTY+.47, MDVN+.28, ANET+.22, MELI+.16, LGF+.14, ED+.12, CSC+.09, CFN+.07, CBS+.06, MNST+.06, UBNT+.05, NVDA+.05, AL+.05, NFG+.03, AGO+.03, FRT+.02, SFM+.02, NWSA-.03, DAR-.04, ALNY-.08, GXP-.08, FI-.08, SLXP-.11, SEMG-.75

What’s Happening This Morning

US futures: S&P 500 +9.30, Dow Jones +66 and NDX +22 with fair values higher cutting into gains. Asia and Europe higher. Copper higher with silver and gold flat to down. WTI Crude higher and Brent Oil Futures lower. Natural Gas is higher. $ is higher vs Euro, lower vs. Pound and higher vs. Yen. US 10 year Treasury yield +1. Prices as of 7:45 a.m. EDT.

Earnings Expected

Earnings due after the close (by market cap descending): VTR, HTZ, NUAN, RAX, OPK, MR.

Due Tuesday morning (by market cap descending): TW, VAL, AER, KATE, FLO.