BARCHART MORNING CALL 4/13

BARCHART MORNING CALL

Monday, April 13th, 2015View Older Reports

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OVERNIGHT MARKETS AND NEWS

June E-mini S&Ps (ESM15 -0.14%) this morning are down -0.14% as they fell back from a 3-week high ahead of Q1 corporate earnings reports this week. European stocks are up +0.22% at a 6-3/4 year high. Asian stocks settled mixed: Japan -0.01%, Hong Kong +2.73%, China +2.17%, Taiwan +0.51%, Australia -0.14%, Singapore +0.35%, South Korea +0.58%, India +0.57%. China's Shanghai Composite Index climbed to a 7-year high and gave most global bourses a boost on speculation that China may boost stimulus to spur economic growth after China Mar exports unexpectedly declined.
Commodity prices are mixed. May crude oil (CLK15 +1.20%) is up +1.28% and May gasoline (RBK15 +0.76%) is up +0.84% as skepticism among U.S. lawmakers over a nuclear deal with Iran bolstered speculation that an increase in Iranian crude exports may be delayed. Metals prices weakened as the dollar index climbed to a 4-week high. Jun gold (GCM15 -0.45%) is down -0.42%. May copper (HGK15 -0.22%) is unch. Agriculture prices are lower with May corn at a 3-week low, after weekend rains in the U.S. Midwest boosted soil moisture levels ahead of spring plantings.
The dollar index (DXY00 +0.52%) is up +0.60% at a 4-week high and EUR/USD (^EURUSD) is down -0.66% at a 4-week low as the ECB continues its QE program while the Fed readies the markets for an eventual interest rate increase. USD/JPY (^USDJPY) is up +0.36% at a 3-week high.
Jun T-note prices (ZNM15 -0.13%) are down -5 ticks at a 1-1/2 week low after a report Sunday from Morgan Stanley said that the U.S. 10-year T-note yield will rise to 2.40% by year-end as a rebound in economic growth pushes inflation higher.
The China Mar trade balance shrank to a surplus of +$3.08 billion, narrower than expectations of +$40.10 billion and the smallest trade surplus in 13 months. China Mar exports unexpectedly fell -14.6% y/y, weaker than expectations of +8.2% y/y, and China Mar imports fell -12.7% y/y, weaker than expectations of -10.0% y/y.
Japan Mar PPI rose +0.3% m/m and +0.7% y/y, stronger than expectations of -0.1% m/m and +0.4% y/y.
Japan Feb machine orders fell -0.4% m/m and rose +5.9% y/y, stronger than expectations of -2.2% m/m and +4.3% y/y.

U.S. STOCK PREVIEW

Key U.S. news today includes (1) the March Treasury budget statement (expected -$43.4 billion vs year-earlier -$36.9 billion).
There are two of the Russell 1000 companies that report earnings today: Commerce Bancshares (consensus $0.58), Ocwen Financial (0.27).
There are no U.S. IPO's that price or trade today.
Equity conferences this week include: Consumer Debt Forum on Mon, World Strategic Forum on Mon-Tue, Cantor Fitzgerald First Annual ETF and Indexing Forum on Wed.

OVERNIGHT U.S. STOCK MOVERS

British Petroleum (BP +0.46%) was downgraded to 'Neutral' from 'Buy' at BofA/Merrill Lynch.
Marathon Oil (MRO +1.43%) was upgraded to 'Buy' from 'Neutral' at BofA/Merrill Lynch.
Netflix (NFLX +3.43%) was upgraded to 'Buy' from 'Neutral' at UBS who also raised their price target on the stock to $565 from $370.
Sempra Energy (SRE -0.05%) was upgraded to 'Buy' from 'Neutral' at Goldman Sachs with a price target of $130.
Helmerich & Payne (HP -1.15%) was downgraded to 'Hold' from 'Buy' at Jefferies.
Freeport McMoRan (FCX -2.56%) was upgraded to 'Buy' from 'Neutral' at Citigroup.
BHP Billiton (BHP -0.04%) and Rio Tinto (RIO -1.61%) were both downgraded to 'Neutral' from 'Buy' at Citigroup.
UPS (UPS +0.09%) will invest $1.06 billion in a Europe expansion, according to Reuters.
Grainger (GWW -0.06%) may be 10%-20% undervalued, according to a weekend article by Barron's.
Avon (AVP -1.86%) "could still pay off" with a doubling of its stock price in coming years, according to a weekend column by Barron's.
Accenture (ACN -0.82%) may rally by 26% over next three years, according to a weekend article by Barron's.
Newmont Mining (NEM +0.45%) may may rally by 55%, according to a weekend article by Barron's.

MARKET COMMENTS

June E-mini S&Ps (ESM15 -0.14%) this morning are down -3.00 points (-0.14%). Friday's closes: S&P 500 +0.52%, Dow Jones +0.55%, Nasdaq +0.43%. The S&P 500 index on Friday closed moderately higher and posted a new 2-1/2 week high. The market extended the week's rally as GE returned to its industrial roots by announcing an effective spin-off of GE Capital and as market optimism continues about the recent spate of M&A activity.
Jun 10-year T-notes (ZNM15 -0.13%) this morning are down -5 ticks at a 1-1/2 week low. Friday's closes: TYM5 -1, FVM5 -1.75. June 10-year T-notes on Friday remained on the defensive and closed slightly lower on stock market strength and carry-over pessimism about the poor demand seen for Thursday's 30-year bond auction.
The dollar index (DXY00 +0.52%) this morning is up +0.594 (+0.60%) at a 4-week high. EUR/USD (^EURUSD) is down -0.0070 (-0.66%) at a 4-week low. USD/JPY (^USDJPY) is up +0.43 (+0.36%) at a 3-week high. Friday's closes: Dollar Index +0.19 (+0.19%), EUR/USD -0.0055 (-0.52%), USD/JPY -0.36 (-0.30%). The dollar index on Friday extended the weekly rally and closed just moderately below March’s 12-year high. The dollar continued to see strength on Friday after Wednesday's FOMC minutes noted that "several" FOMC members favored a rate hike as early as June.
May WTI crude oil (CLK15 +1.20%) this morning is up +66 cents (+1.28%). May gasoline (RBK15 +0.76%) is up +0.0151 (+0.84%). Friday's closes: CLK5 +0.85 (+1.67%), RBK5 +0.0481 (+2.73%). May crude oil and gasoline on Friday closed moderately higher on some continued short-covering after Wednesday's 6% plunge. Crude oil prices on Wednesday plunged on the +10.95 million bbl surge in EIA U.S. crude oil inventories and on doubts about an Iranian nuclear agreement after Iran Supreme Leader Khamenei insisted that sanctions would have to be dropped immediately upon a final nuclear agreement, not phased in as the preliminary agreement contemplated.

GLOBAL EVENT CALENDAR04/13/2015

US	1100 ET	USDA weekly grain export inspections.
	1400 ET	March Treasury budget statement expected -$43.4 billion, year-earlier -$36.9 billion.
	1600 ET	USDA weekly crop progress.
UK	1901 ET	UK Mar BRC sales like-for-like, Feb +0.2% y/y.

U.S. STOCK CALENDAR04/13/2015

Company	Ticker	Time	Event Description	Period	Estimate
Commerce Bancshares Inc/MO	CBSH US	Bef-mkt	Q1 2015 Earnings Release	Q1 2015	0.579
Laredo Petroleum Inc	LPI US	14:30	Analyst Meeting	Y 2015
Goodyear Tire & Rubber Co/The	GT US		Annual General Meeting
Ocwen Financial Corp	OCN US		Q4 2014 Earnings Release	Q4 2014	0.269