BARCHART MORNING CALL - Thursday, April 18th, 2013
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OVERNIGHT MARKETS AND NEWS
June E-mini S&Ps (ESM13 +0.34%) this morning are mildly higher by +0.31% on support from the +0.79% rally in the Euro Stoxx 50 index. European stocks received a boost from today's successful Spanish bond auction and the German Bundestag's approval of the Cyprus bailout package. Asian stocks today closed mostly lower. Japan's Nikkei index closed down -1.22% and the Hong Kong Hang Seng closed down -0.26%, but China's CSI 300 index closed +0.26%. Commodity prices are up by +0.36% this morning. May crude oil (CLK13 +1.35%) is up +1.08%, May gasoline (RBK13 +0.85%) is up +1.15%, May natural gas (NGK13 -0.05%) is down -0.50%, June gold (GCM13 +1.10%) is up +0.80%, May copper (HGK13 -1.02%) is down -0.94%, and agriculture prices are higher across the board except for a small loss in cotton prices. The dollar index (DXY00 -0.10%) is down -0.17% while EUR/USD (^EURUSD) is up +0.26%. USD/JPY (^USDJPY) is up +0.30%. June 10-year T-notes (ZNM13 -0.06%) are down -2.5 ticks.The Cyprus bailout is now in doubt after it was announced that the Cypriot parliament will vote on whether to accept the final package. There is no assurance that the Parliament will vote in favor of the package considering that the Parliament voted against the first bailout plan with the tax on all bank depositors. The vote is expected by the end of the month. Without the 10 billion euro bailout package from the Eurozone and IMF, Cyprus would likely default on its sovereign debt and could easily be forced out of the Eurozone. Separately, the lower house of the German parliament today approved Germany's participation in the Cyprus bailout.
Spain today successfully sold a 4.7 billion euro package of bonds, which was larger than the intended size of 4.5 billion euros. The package included bonds with maturities of 3, 5 and 10 years. The 10-year auction yield fell to 4.612%, lower than the 4.898% yield seen at the last auction on March 21. The benchmark 10-year Spanish bond yield today fell by 5 bp to 4.20%. Spain has now covered about 40% of its mid and long-term funding for this year.
Japan's March adjusted trade deficit of -922 billion yen was slightly narrower than market expectations of -935 billion yen and was narrower than the revised deficit of -1.093 trillion yen in Feb. March trade exports grew by +1.1% y/y, which was stronger than market expectations of +0.2% y/y and was an improvement from -2.9% y/y in Feb. March imports were up +5.5% y/y, weaker than market expectations of +6.3% y/y and the Feb report of +11.9% y/y.
Japan's March nationwide department store sales improved to +3.9% y/y from +0.3% y/y in Feb. Tokyo March department store sales improved to +6.4% y/y from +2.5% in Feb.
UK March retail sales ex-auto fuel fell -0.8% m/m, which was weaker than market expectations of -0.6%. However, Feb was revised higher to +2.1% m/m from +1.9%.
China's March home price data was strong once again, which will cause the Chinese government to continue its efforts to curb the property market. March new home prices rose in 68 of the 70 cities tracked in the survey, the most in about 1-1/2 years.
U.S. STOCK PREVIEW
Today’s weekly initial unemployment claims report is expected to show a small increase of +4,000 to 350,000. Meanwhile, today’s weekly continuing claims report is expected to show a decline of -6,000 to 3.073 mln, adding to last week’s decline of -12,000 to 3.079 mln. Today’s April Philadelphia Fed manufacturing index is expected to show an increase of +1.0 to 3.0. There are 29 of the S&P 500 companies that are scheduled to report earnings today. Notable reports today include Microsoft, Google, Morgan Stanley, Fifth Third Bancorp, Capital One, IBM, AMD, and Verizon. Conferences during the remainder of this week include LNG 17 Conference on Tue-Thursday, and HDI Annual 2013 Conference & Expo on Wed-Thursday.June E-mini S&Ps (ESM13 +0.34%) this morning are mildly higher by +4.75 points (+0.31%) on higher European stocks and on optimism about today's successful Spanish bond auctions. The S&P 500 index on Wednesday fell to a 1-week low and closed lower. Financial stocks slid on disappointing earnings results from Bank of America, while technology stocks declined when Intel, the world's largest semiconductor maker, reported a 2.5% drop in Q1 sales. Another negative for technology stocks was the plunge in Apple to a 1-year low when its audio-chip supplier, Cirrus Logic, predicted that its sales would miss estimates because of unsold inventory. Also pressuring stocks was negative carry-over from a fall in European equities on concern the European economy is slowing after European car sales in March fell for the 18th consecutive month to their lowest level in 20-years. Closes: S&P 500 -1.43%, Dow Jones -0.94%, Nasdaq 100 -1.99%.
OVERNIGHT U.S. STOCK MOVERS
- Positive earnings reports in pre-market trading this morning include BB&T (BBTG) ($0.69 vs consensus of 0.68), UnitedHealth Group (UNHG) (1.16 vs 1.14), AutoNation (ANG) (0.68 vs 0.64), KeyCorp (KEYG) (0.44 vs 0.39), Fifth Third (FITBG) (0.44 vs 0.39), Omnicom (OMCG) (0.76 vs 0.75), PepsiCo (PEPG) (0.77 vs 0.71), Baxter (BAXG) (1.05 vs 1.047), Snap-On (SNAG) (1.40 vs 1.34), Morgan Stanley (MSG -0.94%) (0.61 vs 0.56), Verizon (VZG) (0.68 vs 0.66). Negative earnings reports this morning include Danaher (DHRG) (0.75 vs 0.77), Philip Morris (PMG) (1.29 vs 1.34), People's United Financial (PBCTG) (0.18 vs 0.183).
- Evercore resumed coverage of Google (GOOG -1.36%) with an "Overweight" rating on the stock with a target price of $950.
- Sallie Mae (SLM -2.21%) reported Q1 EPS of 61 cents, better than consensus of 59 cents, and raised its guidance on fiscal 2013 to $2.49, higher than consensus of $2.35.
- eBay (EBAY -1.60%) fell over 3% in after-hours trading after it reported Q1 EPS of 63 cents, slightly better than consensus of 62 cents, although it reported Q1 revenue of $3.75 billion, weaker than consensus of $3.77 billion, and lowered guidance on Q2 EPS to 61 cents to 63 cents, below consensus of 66 cents.
- Kinder Morgan (KMI -1.49%) reported Q1 EPS of 28 cents, weaker than consensus of 31 cents.
- American Express (AXP -0.71%) fell over 1% in after-hours trading after it reported Q1 EPS of $1.15, better than consensus of $1.12, although it reported Q1 revenue of $7.9 billion, weaker than consensus of $8.05 billion.
- SanDisk (SNDK -3.08%) climbed nearly 1% in after-hours trading after it reportedg Q1 adjusted EPS of 84 cents, better than consensus of 77 cents.
- Covanta (CVA -2.78%) reported a Q1 adjusted EPS loss of -21 cents, wider than consensus of -13 cents.
- Wintrust Financial (WTFC -1.06%) reported Q1 EPS of 65 cents, stronger than consensus of 59 cents.
- Theravance (THRX -1.23%) surged nearly 18% in after-hours trading when it announced that an FDA Advisory Committee recommends approval of Breo Ellipta as a once-daily inhaled treatment for the long-term, maintenance treatment of airflow obstruction in patients with chronic obstructive pulmonary disease, or COPD.
- Piper Jaffray (PJC -0.92%) announced that it has entered a definitive agreement to purchase Seattle-Northwest Securities in a transaction valued at approximately $21 million.
MARKET COMMENTS
June 10-year T-notes (ZNM13 -0.06%) this morning are down 2.5 ticks on reduced safe-haven demand with the mild rally in U.S. stocks. June 10-year T-note futures prices on Wednesday settled higher as a sell-off in stocks fueled safe-haven demand for Treasuries. T-notes also garnered support from comments from ECB Council member Weidman who said the ECB may cut interest rates if the economy warrants it. Closes: TYM3 +3.5, FVM3 -0.25.The dollar index (DXY00 -0.10%) this morning is down -0.14 points (-0.17%) as EUR/USD (^EURUSD) rose +0.0034 (+0.26%) on positive European news including the successful Spanish bond sale and the Bundestag's approval of the Cyprus bailout . USD/JPY (^USDJPY) is up +0.29 yen (+0.30%) going into the 2-day G-20 meeting where Japan will get at least some criticism about the weak yen. The dollar index on Wednesday closed higher on increased safe-haven demand as stocks fell, while EUR/USD weakened after the Dow Jones reported that Jens Weidmann, ECB Council member and Bundesbank President, said that the ECB "may" cut interest rates if new information warrants the move. Closes: Dollar index +0.935 (+1.14%), EUR/USD -0.01455 (-1.10%), USD/JPY +0.588 (+0.60%).
May WTI crude oil (CLK13 +1.35%) this morning is up +0.94 (+1.08%) and May gasoline (RBK13 +0.85%) is up +0.0313 (+1.15%). May crude oil and gasoline Wednesday closed lower with May crude matching Tuesday's 4-month low. Bearish factors included (1) the plunge in equities, which raises demand concerns, (2) the rally in the dollar, and (3) the increase in U.S. crude output to near a 21-year high. The EIA reported that U.S. crude production in the week ended Apr 12 rose by +0.4% to 7.208 million barrels a day, the highest since July 1992. Closes: CLK3 -2.04 (-2.30%), RBK3 -0.0528 (-1.90%).
GLOBAL EVENT CALENDAR04/18/2013
| US | n/a | G-20 finance ministers and central bank governors begin 2-day meeting in Washington. |
| 0830 ET | Weekly initial unemployment claims expected +4,000 to 350,000, previous -42,000 to 346,000. Weekly continuing claims expected -6,000 to 3.073 mln, previous -12,000 to 3.079 mln. | |
| 0830 ET | USDA weekly Export Sales. | |
| 0900 ET | Minneapolis Fed President Narayana Kocherlakota delivers speech at Ford Foundation at the Levy Institute’s 22nd Annual P. Minsky Conference. | |
| 0900 ET | Treasury announces 2-year, 5-year, and 7-year T-note auctions for April 23-25. | |
| 0930 ET | Richmond Fed President Jeffrey Lacker will make opening remarks at the Richmond Fed’s 2013 Credit Markets Symposium. | |
| 1000 ET | April Philadelphia Fed manufacturing index expected +1.0 to 3.0, March +14.5 to 2.0. | |
| 1000 ET | March leading indicators expected +0.1% m/m, Feb +0.5% m/m. | |
| 1100 ET | Treasury announces amounts of 2-year T-notes (previous $35 billion), 5-year T-notes (previous $35 billion) and 7-year T-notes (previous $29 billion) to be auctioned Apr 23-25. | |
| 1200 ET | Fed Governor Sarah Bloom Raskin speaks at the Hyman Minsky Conference on the State of the U.S. and World Economies. | |
| 1200 ET | Department of State meets on Keystone XL pipeline. | |
| 1300 ET | Treasury sells $18 billion in 5-year TIPS. | |
| UK | 0430 ET | UK March retail sales ex-auto fuel expected -0.6% m/m and +0.9% y/y, Feb +1.9% y/y and +3.3% y/y. March retail sales with auto fuel expected -0.6% m/m and -0.2% y/y, Feb +2.1% m/m and +2.6% y/y. |
| CH | 2200 ET | China March leading economic index. |
U.S. STOCK CALENDAR04/18/2013
| Company Name | Symbol | Time | Event Description | Period | EPS Est (US$) | ||
|---|---|---|---|---|---|---|---|
| Company Name | Company Ticker | Time | Event Description | Period | Estimate | Surprise | Guidance |
| Nucor Corp | NUE US | Bef-mkt | Q1 2013 Earnings Release | Q1 2013 | 0.243 | 0.225 | |
| PPG Industries Inc | PPG US | Bef-mkt | Q1 2013 Earnings Release | Q1 2013 | 1.54 | ||
| Sherwin-Williams Co/The | SHW US | Bef-mkt | Q1 2013 Earnings Release | Q1 2013 | 1.093 | 1.08 | |
| Snap-on Inc | SNA US | Bef-mkt | Q1 2013 Earnings Release | Q1 2013 | 1.342 | ||
| AutoNation Inc | AN US | Bef-mkt | Q1 2013 Earnings Release | Q1 2013 | 0.636 | ||
| Union Pacific Corp | UNP US | Bef-mkt | Q1 2013 Earnings Release | Q1 2013 | 1.956 | ||
| Peabody Energy Corp | BTU US | Bef-mkt | Q1 2013 Earnings Release | Q1 2013 | -0.14 | -0.15 | |
| KeyCorp | KEY US | Bef-mkt | Q1 2013 Earnings Release | Q1 2013 | 0.194 | ||
| BB&T Corp | BBT US | 5:45 | Q1 2013 Earnings Release | Q1 2013 | 0.683 | ||
| Danaher Corp | DHR US | 6:00 | Q1 2013 Earnings Release | Q1 2013 | 0.765 | 0.745 | |
| UnitedHealth Group Inc | UNH US | 6:00 | Q1 2013 Earnings Release | Q1 2013 | 1.14 | ||
| Fifth Third Bancorp | FITB US | 6:30 | Q1 2013 Earnings Release | Q1 2013 | 0.391 | ||
| Omnicom Group Inc | OMC US | 7:00 | Q1 2013 Earnings Release | Q1 2013 | 0.749 | ||
| PepsiCo Inc | PEP US | 7:00 | Q1 2013 Earnings Release | Q1 2013 | 0.707 | ||
| Baxter International Inc | BAX US | 7:00 | Q1 2013 Earnings Release | Q1 2013 | 1.047 | 1.04 | |
| Philip Morris International Inc | PM US | 7:00 | Q1 2013 Earnings Release | Q1 2013 | 1.342 | ||
| People's United Financial Inc | PBCT US | 7:00 | Q1 2013 Earnings Release | Q1 2013 | 0.183 | ||
| Morgan Stanley | MS US | 7:15 | Q1 2013 Earnings Release | Q1 2013 | 0.56 | ||
| Verizon Communications Inc | VZ US | 7:30 | Q1 2013 Earnings Release | Q1 2013 | 0.657 | ||
| PepsiCo Inc | PEP US | 8:00 | Q1 2013 Earnings Call | Q1 2013 | |||
| BB&T Corp | BBT US | 8:00 | Q1 2013 Earnings Call | Q1 2013 | |||
| Danaher Corp | DHR US | 8:00 | Q1 2013 Earnings Call | Q1 2013 | |||
| Freeport-McMoRan Copper & Gold Inc | FCX US | 8:00 | Q1 2013 Earnings Release | Q1 2013 | 0.712 | ||
| People's United Financial Inc | PBCT US | 8:00 | Q1 2013 Earnings Call | Q1 2013 | |||
| Amphenol Corp | APH US | 8:00 | Q1 2013 Earnings Release | Q1 2013 | 0.862 | 0.855 | |
| SLM Corp | SLM US | 8:00 | Q1 2013 Earnings Call | Q1 2013 | |||
| Omnicom Group Inc | OMC US | 8:30 | Q1 2013 Earnings Call | Q1 2013 | |||
| Baxter International Inc | BAX US | 8:30 | Q1 2013 Earnings Call | Q1 2013 | |||
| Verizon Communications Inc | VZ US | 8:30 | Q1 2013 Earnings Call | Q1 2013 | |||
| Union Pacific Corp | UNP US | 8:45 | Q1 2013 Earnings Call | Q1 2013 | |||
| UnitedHealth Group Inc | UNH US | 8:45 | Q1 2013 Earnings Call | Q1 2013 | |||
| Philip Morris International Inc | PM US | 9:00 | Q1 2013 Earnings Call | Q1 2013 | |||
| Noble Corp | NE US | 9:00 | Q1 2013 Earnings Call | Q1 2013 | |||
| KeyCorp | KEY US | 9:00 | Q1 2013 Earnings Call | Q1 2013 | |||
| AES Corp/VA | AES US | 9:30 | Annual General Meeting | ||||
| Fifth Third Bancorp | FITB US | 9:30 | Q1 2013 Earnings Call | Q1 2013 | |||
| Morgan Stanley | MS US | 10:00 | Q1 2013 Earnings Call | Q1 2013 | |||
| Snap-on Inc | SNA US | 10:00 | Q1 2013 Earnings Call | Q1 2013 | |||
| Freeport-McMoRan Copper & Gold Inc | FCX US | 10:00 | Q1 2013 Earnings Call | Q1 2013 | |||
| People's United Financial Inc | PBCT US | 10:00 | Annual General Meeting | Y 2013 | |||
| eBay Inc | EBAY US | 11:00 | Annual General Meeting | Y 2013 | |||
| PPG Industries Inc | PPG US | 11:00 | Annual General Meeting | Y 2013 | |||
| Sherwin-Williams Co/The | SHW US | 11:00 | Q1 2013 Earnings Call | Q1 2013 | |||
| Texas Instruments Inc | TXN US | 11:00 | Annual General Meeting | Y 2013 | |||
| AutoNation Inc | AN US | 11:00 | Q1 2013 Earnings Call | Q1 2013 | |||
| Peabody Energy Corp | BTU US | 11:00 | Q1 2013 Earnings Call | Q1 2013 | |||
| Amphenol Corp | APH US | 13:00 | Q1 2013 Earnings Call | Q1 2013 | |||
| Nucor Corp | NUE US | 14:00 | Q1 2013 Earnings Call | Q1 2013 | |||
| PPG Industries Inc | PPG US | 14:00 | Q1 2013 Earnings Call | Q1 2013 | |||
| Huntington Bancshares Inc/OH | HBAN US | 14:00 | Annual General Meeting | Y 2013 | |||
| Chipotle Mexican Grill Inc | CMG US | 16:00 | Q1 2013 Earnings Release | Q1 2013 | 2.13 | ||
| Capital One Financial Corp | COF US | 16:05 | Q1 2013 Earnings Release | Q1 2013 | 1.618 | ||
| E*TRADE Financial Corp | ETFC US | 16:05 | Q1 2013 Earnings Release | Q1 2013 | 0.12 | ||
| International Business Machines Corp | IBM US | 16:05 | Q1 2013 Earnings Release | Q1 2013 | 3.049 | ||
| Google Inc | GOOG US | 16:30 | Q1 2013 Earnings Call | Q1 2013 | |||
| Intuitive Surgical Inc | ISRG US | 16:30 | Q1 2013 Earnings Call | Q1 2013 | |||
| International Business Machines Corp | IBM US | 16:30 | Q1 2013 Earnings Call | Q1 2013 | |||
| Chipotle Mexican Grill Inc | CMG US | 16:30 | Q1 2013 Earnings Call | Q1 2013 | |||
| Advanced Micro Devices Inc | AMD US | 17:00 | Q1 2013 Earnings Call | Q1 2013 | |||
| Capital One Financial Corp | COF US | 17:00 | Q1 2013 Earnings Call | Q1 2013 | |||
| E*TRADE Financial Corp | ETFC US | 17:00 | Q1 2013 Earnings Call | Q1 2013 | |||
| Microsoft Corp | MSFT US | 17:30 | Q3 2013 Earnings Call | Q3 2013 | |||
| Advanced Micro Devices Inc | AMD US | Aft-mkt | Q1 2013 Earnings Release | Q1 2013 | -0.174 | ||
| Google Inc | GOOG US | Aft-mkt | Q1 2013 Earnings Release | Q1 2013 | 10.671 | ||
| Intuitive Surgical Inc | ISRG US | Aft-mkt | Q1 2013 Earnings Release | Q1 2013 | 3.965 | ||
| Microsoft Corp | MSFT US | Aft-mkt | Q3 2013 Earnings Release | Q3 2013 | 0.681 |
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