Tuesday, April 2nd, 2013
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OVERNIGHT MARKETS AND NEWS
June E-mini S&Ps (ESM13 +0.40%) this morning are up +0.42% on a +1.19% rally in the Euro Stoxx 50 index and reduced concerns about Europe. The Italian 10-year bond yield is down 4 bp this morning and the Cyprus stock market today reopened for the first time in two weeks with a loss of only -2.5%. Asian stocks today closed mixed. The Nikkei index today closed down -1.08%, the Hong Kong Hang Seng closed +0.31%, and China's CSI 300 index closed -0.27%. Commodity prices this morning are up +0.25%. May crude oil (CLK13 -0.18%) is down -0.08%, May gasoline (RBK13 -0.52%) is down -0.28%, June gold (GCM13 -0.22%) is down -0.19%, May copper (HGK13 -0.06%) is down -0.12%, and agriculture prices are trading mostly higher. The dollar index (DXY00 +0.05%) this morning is virtually unchanged, EUR/USD (^EURUSD) is slightly lower by -0.07%, and USD/JPY (^USDJPY) is up +0.09%. June 10-year T-note prices (ZNM13 -0.04%) are down 2 ticks.The Cyprus General Market Index fell by only -2.5% today after the Cyprus stock market finally reopened after being closed for two weeks during the bailout crisis. Cyprus officials are meeting with troika officials starting today to try to obtain easier bailout terms than on the initial deal.
North Korea now says that it plans to restart the plutonium-based nuclear reactor that was closed in 2007 as part of a disarmament deal. However, the U.S. has said it has still not detected any unusual troop movements in North Korea and therefore is not worried about any major military action from North Korea. The U.S. and South Korea nevertheless worry that North Korea may launch some limited military provocation. South Korea's Kospi stock index today fell moderately by -0.56%.
The Italian political deadlock continues as a 10-person committee formed by President Napolitano tries to negotiate a coalition government. There are only six weeks left until President Napolitano's term ends. The Italian 10-year bond yield today fell by 4 bp to 4.72%, giving back some of last week's 25 bp surge.
Japanese Prime Minister Abe today backed off his strong pressure on the BOJ a bit when he said that the BOJ should not pursue a 2% inflation target "at all costs" and that the BOJ may fail to reach the 2% target. He said in comments to Parliament that, "What is important is to aim steadily for the target." The BOJ at its 2-day meeting on Wed-Thur, the first chaired by the new BOJ Governor Kuroda, is unanimously expected to expand its asset purchase target.
Germany's final-March manufacturing PMI was revised slightly higher by +0.1 point to 49.0 from the preliminary report of 48.9. The Eurozone's final-March manufacturing PMI was revised +0.2 points higher to 46.8 from 46.6.
The UK March manufacturing PMI rose by +0.4 points to 48.3 from 47.9 in Feb, which was weaker than market expectations for a +0.8 point increase to 48.7.
The Eurozone Feb unemployment rate was reported at a record 12.0%, up by +0.1 point from the preliminary Jan report of 11.9%, although Jan was revised higher to +12.0%.
The market is waiting for today's German March CPI report, which is expected to ease to +1.3% y/y from +1.5% y/y in Feb. Four of the German states released their CPI reports today and the reports were in line with market expectations, showing increases ranging from +1.3% to +1.5% y/y.
U.S. STOCK PREVIEW
Today’s Feb factory orders report is expected to show an increase of +2.9% m/m, which would more than reverse the -2.0% m/m decline seen in January. Today’s March total vehicle sales report is expected to edge lower to 15.30 million units from 15.33 million in February. In the Russell 1000, McCormick already reported Q1 EPS today of 57 cents (1 cent above the consensus), while Global Payments (consensus $0.89) will report after the close. The only other major earnings reports this week are Monsanto and ConAgra Foods on Wednesday. Conferences this week include Utility Corporate Access Day on Tuesday, Wells Fargo Tech Transformation Summit on Tuesday, Boston Biotech Business Development Conference on Tue-Wed, J.P. Morgan Private Builder/Private Equity Conference on Thursday, China Business Conference 2013 in NY on Friday, and Women in the World Summit 2013 on Friday.June E-mini S&Ps (ESM13 +0.40%) this morning are up +6.50 points (+0.42%) mainly due to the 1.19% rally this morning in the Euro Stoxx 50 index. The S&P 500 index on Monday closed moderately lower on long liquidation pressure sparked by the weaker-than-expected ISM manufacturing index. Closes: S&P 500 -0.45%, Dow Jones -.04%, Nasdaq 100 -0.77%.
OVERNIGHT U.S. STOCK MOVERS
- Apple (AAPL -3.11%) today was downgraded to a Buy from Conviction Buy at Goldman Sachs since Apple's recent product cycle has not been as impressive in user growth or market share as expected.
- Apple's (AAPL -3.11%) iPhone profits likely peaked in 2012 due to smartphone pricing pressure, according to a report released today by Jefferies.
- McCormick (MKC -1.14%) reported Q1 EPS of 57 cents, which was 1 cent above the consensus of 56 cents.
- BGC Partners (BGCP -7.45%) soared by 40% in after-hours trading after announcing the sale of its Treasuries platform to Nasdaq (NDAQ) for $750 million.
- Health insurers rallied in after-hours trading after CMS announced that insurers will get a 3.3% rate increase in 2014 as compared with previous information indicating a 2.3% reduction. Humana (HUM +8.55%) rallied 8%, UnitedHealth (UNH +3.08%) rallied 4%, and Aetna (AET +2.44%) rallied 3%.
- Urban Outfitters (URBN -0.85%) rallied 4% in after-hours trading after the company disclosed in its 10-K that Q1 comparable store sales were up by high single-digits.
- Shoe Carnival (SCVL -1.13%) fell 3% in after-hours trading after reporting disappointing Q1 guidance.
- Nordic American Tanker (NAT -4.59%) fell 10% in after-hours trading after filing a registration statement to sell $87 million of common stock.
- Nuance (NUAN unch) rallied 8% in after-hours trading after Carl Icahn reported a 9.27% passive stake in the company.
MARKET COMMENTS
June 10-year T-notes (ZNM13 -0.04%) this morning are down 2 ticks. June 10-year T-note prices on Monday closed mildly higher on the weaker-than-expected ISM manufacturing index. Closes: TYM3 +4.5, FVM3 +3.25.The dollar index (DXY00 +0.05%) this morning is little changed while EUR/USD (^EURUSD) is slightly lower by -0.0009 (-0.07%). USD/JPY (^USDJPY) is up +0.08 (+0.09%). The dollar index on Monday closed moderately lower on the drop in the ISM manufacturing index and concerns about whether the U.S. economy is headed for a soft spot. Closes: Dollar index -0.24 (-0.29%), EUR/USD +0.0030 (+0.23%), USD/JPY -0.99 (-1.05%).
May WTI crude oil (CLK13 -0.18%) this morning is slightly lower by -0.08 (-0.08%). May gasoline (RBK13 -0.52%) is down -0.0086 (-0.28%). Crude oil and gasoline prices on Monday closed slightly lower. WTI crude oil prices were pressured after Exxon on Friday was forced to shut-down its 96,000 bpd Pagasus pipeline carrying crude oil from Illinois to the Gulf Coast due to an oil spill near Mayflower, Arkansas. The shut down is likely to cause a bigger pile-up of oil at Cushing as more oil is diverted from Canada into the Cushing system. Crude oil was also pressured by the consensus for a 2.25 million barrel increase in crude oil inventories in Wednesday’s EIA report. Closes: CLK3 -0.16 (-0.16%), RBK3 -0.0091 (-0.29%).
GLOBAL EVENT CALENDAR04/02/2013
| US | 0945 ET | Mar New York ISM index, Feb +2.1 to 58.8. |
| 1000 ET | Feb factory orders expected +2.9% m/m, Jan -2.0% m/m. | |
| 1300 ET | Minneapolis Fed President Narayana Kocherlakota delivers speech entitled “Improving the Outlook with Better Monetary Policy” in Grandforks ND to the Chamber of Commerce. | |
| 1330 ET | Atlanta Fed President Dennis Lockhart speaks at Kiwanis Club of Birmingham, Alabama. | |
| 1700 ET | March total vehicle sales expected 15.30 mln, Feb 15.33 mln. March domestic vehicle sales expected 12.08 mln, Feb 11.99 mln. | |
| 1630 ET | API weekly U.S. oil statistics. | |
| 1930 ET | Richmond Fed President Jeffrey Lacker and Chicago Fed President Charles Evans discuss “Monetary Policy: Opportunities and Limit” at Virginia Commonwealth University 2013 Spring Investors Circle. | |
| JPN | 0100 ET | Japan March vehicle sales, Feb -12.2% y/y. |
| EUR | 0400 ET | Eurozone final-March manufacturing PMI expected unrevised from early-March 46.6. |
| 0500 ET | Eurozone Feb unemployment rate expected 12.0%, Jan 11.9%. | |
| GER | 0355 ET | German final-March manufacturing PMI expected unrevised from early-March 48.9. |
| 0800 ET | German preliminary March CPI expected +0.4% m/m and +1.3% y/y, Feb +0.6% m/m and +1.5% y/y. Preliminary March CPI (EU harmonized) expected +0.3% m/m and +1.7% y/y, Feb +0.8% m/m and +1.8% y/y. | |
| UK | 0430 ET | UK March manufacturing PMI expected +0.8 to 48.7, Feb 47.9. |
| 0430 ET | UK Feb net consumer credit expected +400 mln pounds, Jan +400 mln pounds. Feb net lending secured on dwellings expected +400 mln pounds, Jan +100 mln pounds. | |
| 0430 ET | UK Feb mortgage approvals expected 53,700, Jan 54,700. | |
| 0430 ET | UK Feb M4 money supply, Jan +0.9% m/m and -0.8% y/y. | |
| 1901 ET | UK March BRC shop price index, Feb +1.1% y/y. | |
| CH | 2100 ET | China March non-manufacturing PMI (National Bureau of Statistics), Feb -1.7 to 54.5. |
| 2145 ET | China March HSBC services PMI, Feb -1.9 to 52.1. |
U.S. STOCK CALENDAR04/02/2013
| Company Name | Symbol | Time | Event Description | Period | EPS Est (US$) |
|---|---|---|---|---|---|
| McCormick & Co Inc/MD | MKC US | 4/2/2013 | Q1 2013 Earnings Call | Q1 2013 | |
| Ford Motor Co | F US | 4/2/2013 | March 2013 Sales and Revenue Release | 2013 | |
| Ford Motor Co | F US | 4/2/2013 | March 2013 Sales and Revenue Call | 2013 | |
| General Motors Co | GM US | 4/2/2013 | March 2013 Sales and Revenue Call | 2013 | |
| Global Payments Inc | GPN US | 4/2/2013 | Q3 2013 Earnings Call | Q3 2013 | |
| Global Payments Inc | GPN US | 4/2/2013 | Q3 2013 Earnings Release | Q3 2013 | 0.887 |
| McCormick & Co Inc/MD | MKC US | 4/2/2013 | Q1 2013 Earnings Release | Q1 2013 | 0.564 |
| General Motors Co | GM US | 4/2/2013 | March 2013 Sales and Revenue Release | 2013 | |
| LPL Financial Holdings Inc | LPLA US | 4/2/2013 | Roadshow- Chicago | Y 2013 |
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