Brahcrt Morning Call 4/15

BARCHART MORNING CALL - Monday, April 15th, 2013View Older Reports

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OVERNIGHT MARKETS AND NEWS

June E-mini S&Ps (ESM13 -0.47%) this morning are trading moderately lower by -0.52% on the weaker-than-expected Chinese Q1 GDP report of +7.7% and the -0.79% sell-off in the Euro Stoxx 50 index this morning. Asian stocks closed lower across the board today thanks to the Chinese GDP report. Japan's Nikkei index closed -1.55%, Hong Kong's Hang Seng closed -1.43%, China's CSI 300 index closed -1.03%, Taiwan's TAIEX closed -0.74%, the Australian S&P 200 closed -0.91%, Singapore's Straight Times closed -0.30%, and South Korea's KOSPI 200 closed -0.19%. The dollar index (DXY00 -0.07%) this morning is little changed. EUR/USD (^EURUSD) is down -0.27% and USD/JPY (^USDJPY) is down -0.59%. June 10-year T-note (ZNM13 +0.06%) prices are up 3 ticks.
Commodity prices are sharply lower by -1.99% this morning. Precious metals prices this morning have plunged on heavy technical selling on the downside break that started last Friday. June gold (GCM13 -6.19%) is down -6.21% and May silver is down -10.73%. Gold continues to see weakness on reports that Cyprus may need to sell gold reserves to contribute to its bailout fund. May copper (HGK13 -3.48%) is down by -3.57% on sympathy selling with precious metals and on today's weaker-than-expected Chinese GDP report. May crude oil (CLK13 -1.77%) prices are down -2.98% and May gasoline (RBK13 -0.24%) is down -0.58%, but May natural gas (NGK13 +0.73%) is up +0.73%. Grains and softs are sharply lower.
China's Q1 real GDP growth was reported last night at 7.7% y/y, which was below market expectations of +8.0% and down slightly from +7.8% in Q4. On a quarter-on-quarter basis, Q1 real GDP was up +1.6% (+6.4% annualized).
China's March industrial production was up +8.9% y/y, which was below market expectations of +10.1%. On a year-to-date basis, March industrial production rose +9.5% y/y , which was below market expectations of +10.0% and was down from +9.9% in Feb. Separately, China's March retail sales were up +12.6% y/y, which was right on market expectations. On a year-to-date basis, March retail sales were up +12.4%, stronger than +12.3% in Feb but down from +12.5% in Feb.
Japan's final-Feb industrial production was revised higher to +0.6% m/m and -10.5% y/y from the preliminary report of -0.1% m/m and -11.0% y/y. Final-Feb capacity utilization was revised lower to +0.7% from +1.7%. Final-Feb machine tool orders were revised slightly higher to -21.5% y/y from -21.6%.
The Feb Eurozone adjusted trade surplus of 12.0 billion euros was larger than market expectations of 10.0 billion and was up from the revised 8.7 billion euros in Jan.
The World Bank today cut its 2013 GDP forecasts to +8.3% from 8.4% for China.

U.S. STOCK PREVIEW

The markets this week will focus mainly on (1) Q1 earnings season which gets into gear this week, (2) this week’s fairly heavy slate of U.S. economic reports, and (3) the G-20 meeting on Thursday and Friday in Washington among finance ministers and central bank governors. There are ten appearances by various Fed officials this week.
Q1 earnings season begins in earnest this week with 74 of the S&P 500 companies scheduled to report. This is a big week for financial earnings with Citigroup and Schwab reporting on Monday; Goldman, Blackrock, Northern Trust, and US Bancorp reporting on Tuesday; Bank of America, Bank of New York Mellon, and Amex reporting on Wednesday; Morgan Stanley, BB&T, Fifth Third, Keycorp, Capital One, and E-Trade on Thursday; and Suntrust and State Street reporting on Friday. Other key earnings reports this week include Intel and Yahoo on Tuesday; Ebay on Wednesday; Google and Microsoft on Thursday; and GE on Friday. The market consensus is for S&P 500 earnings growth of +1.1% in Q1, according to Thomson I/B/E/S. Earnings growth is then expected to improve to +6.0% in Q2, +10.2% in Q3, and +13.4% in Q4.
Conferences this week include Independent Petroleum Association of America Oil and Gas Investment Symposium on Mon-Wed, FT Global Commodities Summit on Tuesday, Japan New Economy Summit 2013 (NES) on Tue, IN3 Medical Device 360 on Tue-Wed, LNG 17 Conference on Tue-Thursday, and HDI Annual 2013 Conference & Expo on Wed-Thursday.

June E-mini S&Ps (ESM13 -0.47%) this morning are down -8.25 points (-0.52%) on the weaker-than-expected Chinese GDP report of +7.7% and the -0.79% sell-off this morning in the Euro Stoxx 50 index. The S&P 500 index on Friday closed lower on growth concerns after U.S. Mar retail sales unexpectedly fell -0.4%, weaker than expectations of no change and the biggest decline in 9 months. Stocks were further pressured after Apr U.S. consumer confidence (University of Michigan) unexpectedly fell -6.2 to a 16-month low of 72.3, weaker than expectations of no change at 78.6. Another negative for stocks was the decline in European equities as sovereign debt concerns resurfaced after an unidentified government official said that Cyprus will seek an increase to its 10-billion euro bailout from the EU. Closes: S&P 500 -0.28%, Dow Jones unch, Nasdaq 100 -0.09%.

OVERNIGHT U.S. STOCK MOVERS

• Thermo Fisher (TMO -0.40%) announced an agreement to buy Life Technologies (LIFE) for $76 per share in cash.
• Sprint (S -0.64%) is up 8% in pre-market trading after DISH Network (DISH) proposed a merger at $7 per share.
• Suncor (SU -3.17%) announced an agreement to sell the majority of its Western Canadian natural gas and crude oil business for $1 billion to Centrica plc and Qatar Petroleum International.
• PowerSecure (POWR +0.72%) announced an agreement to acquire Solais Lighting for $15 million.
• The European Commission has accepted Google's (GOOG -0.04%) settlement proposal to settle an antitrust probe, according to a report in the NY Times.
• Procter & Gamble (PG +0.51%) announced an increase in its quarterly dividend by 7% to 60.15 cents per share.
• Verizon Wireless (VZ +0.69%) announced that customers on a two-year agreement will be eligible for an upgrade at 24 months instead of the current 20 month early upgrade eligibility, beginning with customers whose contract expire January 2014.
• BioSante Pharmaceuticals (BPAX unch) and ANI Pharmaceuticals announced that they have entered into a new merger agreement pursuant to which an acquisition subsidiary of BioSante will merge into ANI.
• UniTek Global (UNTK +3.79%) said it sees its fiscal year 2012 revenue at $442.5 million to $447.0 million, lower than consensus of $450.31 million and said it will restate recent financial results due to revenue recognition issues.

MARKET COMMENTS

June 10-year T-notes (ZNM13 +0.06%) this morning are up 3 ticks on some increased safe-haven demand with today's sell-off in global stocks. June 10-year T-note futures prices on Friday settled higher after weaker-than-expected U.S. Mar retail sales and Apr University of Michigan consumer confidence fueled speculation the Fed won’t end its QE measures anytime soon. Closes: TYM3 +14.0, FVM3 +5.5.
The dollar index (DXY00 -0.07%) this morning is slightly lower by -0.02 points (-0.02%). EUR/USD (^EURUSD) is down -0.0035 (-0.27%) and USD/JPY (^USDJPY) is down -0.58 yen (-0.59%). The dollar index on Friday closed slightly higher. The dollar found support on increased safe-haven demand as stocks fell, but support was undercut on concern the Fed will maintain its dollar-negative QE after both U.S. Mar retail sales and April University of Michigan consumer confidence unexpectedly declined. Closes: Dollar index +0.064 (+0.08%), EUR/USD +0.0010 (+0.08%), USD/JPY -1.315 (-1.32%).
May WTI crude oil (CLK13 -1.77%) this morning is down -$2.72 (-2.98%) and May gasoline (RBK13 -0.24%) is down -0.0162 (-0.58%) on this morning's plunge in commodity prices and on disappointment with the Chinese GDP report. May crude oil and gasoline prices fell sharply Friday as May crude posted a 1-month low and May gasoline slid to a 3-month low. The main bearish factors were the unexpected declines in U.S. Mar retail sales and in the Apr University of Michigan consumer confidence, which raises demand concerns. Closes: CLK3 -2.22 (-2.37%), RBK3 -0.0292 (-1.03%).

GLOBAL EVENT CALENDAR04/15/2013

US	0830 ET	April Empire manufacturing index expected -2.2 to 7.0, March -0.8 to 9.2.
	1000 ET	April NAHB housing market index expected +1 to 45, March -2 to 44.
	1100 ET	USDA weekly grain export inspections.
	1600 ET	USDA Crop Progress.
JPN	0030 ET	Japan final-Feb industrial production, early-Feb -0.1% m/m and -11.0% y/y. Final-Feb capacity utilization, early-Feb +1.7% m/m.
	0200 ET	Japan final-March machine tool orders.
EUR	0500 ET	Eurozone Feb Eurozone trade balance expected 5.0 billion euros, Jan -3.9 bln euros. Feb trade balance sa expected 10.0 billion euros, Jan 9.0 bln euros.

U.S. STOCK CALENDAR04/15/2013

Company Name	Symbol	Time	Event Description	Period	EPS Est (US$)
Charles Schwab Corp/The	SCHW US	Bef-mkt	Q1 2013 Earnings Release	Q1 2013	0.158
M&T Bank Corp	MTB US	Bef-mkt	Q1 2013 Earnings Release	Q1 2013	1.979
First Republic Bank/CA	FRC US	Bef-mkt	Q1 2013 Earnings Release	Q1 2013	0.731
Citigroup Inc	C US	8:00	Q1 2013 Earnings Release	Q1 2013	1.168
M&T Bank Corp	MTB US	10:30	Q1 2013 Earnings Call	Q1 2013
Citigroup Inc	C US	11:00	Q1 2013 Earnings Call	Q1 2013
American Express Co	AXP US	11:15	Economic Club of Washington, D.C. Presents CEO Kenneth I. Chenault
CareFusion Corp	CFN US	11:30	Annual General Meeting	Y 2013
First Republic Bank/CA	FRC US	14:00	Q1 2013 Earnings Call	Q1 2013
Goodyear Tire & Rubber Co/The	GT US	16:30	Annual General Meeting
Brown & Brown Inc	BRO US	Aft-mkt	Q1 2013 Earnings Release	Q1 2013	0.39
Allergan Inc/United States	AGN US		PDUFA, Levadex, acute treatment of migraine