Barchart Morning Call 5/6

BARCHART MORNING CALL

Monday, May 6th, 2013View Older Reports

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OVERNIGHT MARKETS AND NEWS

June E-mini S&Ps (ESM13 -0.05%) this morning are down -0.05% and European stocks are down -0.45%. Asian stocks closed mostly higher: Japan closed for holiday, Hong Kong +0.99%, China +1.33%, Taiwan +0.42%, Australia +0.52%,Singapore +0.37%, South Korea -0.32%, India +0.50%. Commodity prices are mixed. June WTI crude oil (CLM13 +0.09%) is up +0.56% and jumped to a 1-month high in overnight trade after Israeli aircraft reportedly attacked a Syrian military research center on Sunday, which raises geopolitical risks in the Middle East. June gasoline (RBM13 -0.10%) is up +0.32%, June natural gas (NGM13 -0.49%) is down -0.84%, June gold (GCM13 +0.66%) is up +0.72%, July copper (HGN13 -0.57%) is down -0.26%. Agriculture prices are lower. The dollar index (DXY00 +0.06%) is up +0.07%. EUR/USD (^EURUSD) is down -0.10% after dovish comments from ECB Executive Board member Coeure weakened the euro. USD/JPY (^USDJPY) is up +0.19% as the yen posted a 1-week low. June 10-year T-note futures prices (ZNM13 -0.01%) are up +2 ticks.
Syria's Deputy Foreign Minister Mekdad said that recent Israeli airstrikes on his country were a "declaration of war" and that his government would retaliate in its own time. Israel has staged air strikes into Syria twice over the past 3 days reportedly targeting a shipment of missiles thought to be bound for Hezbollah militants in Lebanon, according to the Associated Press who cited unidentified Israeli officials.
The German Apr PMI Services index was unexpectedly revised up to 49.6 from the originally reported 49.2.
Eurozone Mar retail sales fell -0.1% m/m, right on expectations, and fell -2.4% y/y, weaker than expectations of -2.2% y/y.
The Eurozone Apr PMI Composite index was unexpectedly revised up to 46.9 from the originally reported 46.6.
The Eurozone May Sentix investor confidence rose +1.7 to -15.6, weaker than expectations of +2.1 to -15.2.
ECB Executive Board member Coeure said the ECB is ready to cut interest rates further if the economic outlook in the Eurozone worsens.
The China April HSBC Services PMI fell -3.2 points to 51.1 from 54.3 in March.
The Chinese yuan fell back from a 19-year high of 6.1521 against the dollar after China's currency regulator said it will increase scrutiny of cross-border capital flows entering the country disguised as trade bills.

U.S. STOCK PREVIEW

This week’s U.S. economic schedule is relatively light and is focused on this week’s $72 billion Treasury coupon package, Fed Chairman Bernanke’s keynote address on Friday, and another heavy earnings week. Q1 earnings season has peaked but there are still 46 of the S&P 500 companies that are scheduled to report this week. Q2 earnings growth for the S&P 500 companies is now expected at +5.1% y/y, better than +1.5% as of April 1, according to Thomson I/B/E/S. There are 6 of the S&P 500 companies that report earnings today: Sysco (consensus $0.43), Tyson Foods (0.45), Andarko (0.95), Frontier Communications (0.06), First Solar (0.75), EOG Resources (1.19), Vornado Realty (1.71).
Conferences this week include American Gas Association (AGA) Financial Forum on Mon, Mizuho Securities USA Healthcare Access Day on Tue, Barclays Chemical ROC Star Conference on Tue, Robert W. Baird Growth Stock Conference on Tue-Thu, Jefferies Global Technology, Media and Telecom Conference on Tue-Thu, ISI Bermuda Energy Conference on Wed, 17th Annual International Cash and Treasury Management Conference on Wed-Thu, Wells Fargo Industrial and Construction Conference on Wed-Thu, Skybridge Alternatives Conference (SALT)-Las Vegas on Wed-Thu, Sanford C. Bernstein & Co IT Services Conference on Thu.

OVERNIGHT U.S. STOCK MOVERS

Tyson Foods (TSN +1.30%) reported Q1 adjusted EPS of 36 cents, weaker than expectations of 45 cents.
Cognizant (CTSH +3.53%) was added to Evercore's "Conviction Buy List" with a $96 a share price target.
Dollar General (DG +0.19%) was upgraded to a "Buy" from "Neutral" at BofA/Merril and they raised their price target on the stock to $60 a share from $55.
Comerica (CMA +2.26%) was downgraded to "Neutral" from "Buy" at BTIG due to valuation.
Jefferies reaffirmed its "Buy" rating on Kraft Foods (KRFT +5.11%) and raised its price target on the stock to $60 a share from $52.
ADT Corp. (ADT +2.47%) was upgraded to "Equal Weight" from "Underweight" at Morgan Stanley based on valuation.
Harley-Davidson (HOG +0.35%) was initiated with an "Overweight" at Morgan Stanley with a price target of $62.
Apollo Global (APO +1.30%) reported Q1 EPS of $1.60, well ahead of consensus of $1.24.
Retailers including J.C. Penney (JCP +2.74%), Best Buy (BBY +0.99%), Barnes & Noble (BKS +1.37%), McDonald's (MCD +0.84%), Home Depot (HD +0.86%), and Gap (GPS +2.21%), lost a court bid to invalidate patents held by Alexsam related to systems that activate and recharge gift cards, according to a report by Bloomberg.
Lord, Abbett & Co. reported a 12.1% stake in Overhill Farms (OFI -1.30%).
Berkshire Hathaway (BRK) reported Q1 operating EPS of $2,302, better than consensus of $1,995.
Southwest Gas (SWX +0.42%) reported Q1 EPS of $1.73, better than consensus of $1.67.
Bunge North America reported a 10.14% passive stake in Renewable Energy (REGI +4.41%).
SAC Capital reported a 5.3% passive stake in RenaissanceRe (RNR -0.35%).

MARKET COMMENTS

June E-mini S&Ps (ESM13 -0.05%) this morning are little changed, down -0.75 of a point (-0.05%). The S&P 500 index on Friday rallied to a record high and closed higher. Stocks found support from a larger-than-expected +165,000 increase in Apr non-farm payrolls (vs expectations of +140,000). March and Feb payrolls were revised upward by an additional +114,000. Also, the Apr unemployment rate unexpectedly fell -0.1 to a 4-1/3 year low of 7.5%. Stocks shook off the -4.0% fall in Mar factory orders (vs expectations of -2.9%), and the -1.3 point slide in the Apr ISM non-manufacturing index to 53.1, a bigger drop than expectations of -0.4 to 54.0. Closes: S&P 500 +1.05%, Dow Jones +0.96%, Nasdaq 100 +1.15%.
June 10-year T-notes (ZNM13 -0.01%) this morning are up +2 ticks. June 10-year T-note futures prices on Friday tumbled to a 3-week low and closed sharply lower. The stronger-than-expected Apr non-farm payrolls boosted the outlook for economic growth and sent the S&P 500 soaring to a record high, thus reducing the safe-haven demand for Treasuries. Closes: TYM3 -25.0, FVM3 -11.5.
The dollar index (DXY00 +0.06%) this morning is up slightly by +0.054 (+0.07%). EUR/USD (^EURUSD) is down -0.0013 (-0.10%) and USD/JPY (^USDJPY) is up +0.19 (+0.19%). The dollar index on Friday rallied initially on the stronger-than-expected Apr non-farm payrolls, but then shed its gains and closed lower on speculation the data wasn’t strong enough for the Fed to reduce its dollar-negative stimulus. EUR/USD received a boost after ECB Governing Council member Nowotny said markets “over-interpreted” ECB President Draghi’s comments Thursday that the ECB would consider a deposit rate below zero. Closes: Dollar index -0.099 (-0.12%), EUR/USD +0.00501 (+0.38%), USD/JPY +1.064 (+1.09%).
June WTI crude oil (CLM13 +0.09%) this morning is up +0.54 (+0.56%) and posted a fresh 1-month high in overnight trade after Israeli airstrikes into Syria over the weekend raised geopolitical risks in the Middle East. June gasoline (RBM13 -0.10%) is up +0.0090 (+0.32%). June crude oil and gasoline on Friday closed higher as June crude posted a 1-month high. Economic optimism boosted energy prices after U.S. Apr non-farm payrolls rose more than expected, which boosted the S&P 500 to a record high and stoked speculation that fuel demand will increase. Closes: CLM3 +1.62 (+1.72%), RBM3 +0.0448 (+1.61%).

GLOBAL EVENT CALENDAR05/06/2013

US	1100 ET	USDA weekly grain export inspections.
	1600 ET	USDA Crop Progress.
GER	0355 ET	Revised German Apr PMI services expected unch at 49.2.
EUR	0400 ET	Revised Eurozone Apr PMI composite expected unch at 46.5.
	0430 ET	Eurozone May Sentix investor confidence expected -15.0, Apr -17.3.
	0500 ET	Eurozone Mar retail sales expected -0.1% m/m and -2.2% y/y, Feb -0.3% /m and -1.4% y/y.
UK	1901 ET	UK Apr Lloyds employment confidence, Mar -45.
JPN	n/a	Markets closed for final day of Golden Week holiday.

U.S. STOCK CALENDAR05/06/2013

Company Name	Symbol	Time	Event Description	Period	EPS Est (US$)
Sysco Corp	SYY US	Bef-mkt	Q3 2013 Earnings Release	Q3 2013	0.428
Tyson Foods Inc	TSN US	Bef-mkt	Q2 2013 Earnings Release	Q2 2013	0.452
Covidien PLC	COV US	8:00	Q4 2013 Guidance Call	Q4 2013
Tyson Foods Inc	TSN US	9:00	Q2 2013 Earnings Call	Q2 2013
Sysco Corp	SYY US	10:00	Q3 2013 Earnings Call	Q3 2013
Celgene Corp	CELG US	13:00	Analyst & Investor Day	Y 2013
Target Corp	TGT US	16:15	Vancouver Board of Trade Presents President, Tony Fisher, Target Canada
Frontier Communications Corp	FTR US	16:30	Q1 2013 Earnings Call	Q1 2013
First Solar Inc	FSLR US	16:30	Q1 2013 Earnings Call	Q1 2013
Adobe Systems Inc	ADBE US	17:30	Analyst and Investor Meeting	Y 2013
Anadarko Petroleum Corp	APC US	Aft-mkt	Q1 2013 Earnings Release	Q1 2013	0.945
Frontier Communications Corp	FTR US	Aft-mkt	Q1 2013 Earnings Release	Q1 2013	0.058
First Solar Inc	FSLR US	Aft-mkt	Q1 2013 Earnings Release	Q1 2013	0.747
EOG Resources Inc	EOG US	Aft-mkt	Q1 2013 Earnings Release	Q1 2013	1.185
Vornado Realty Trust	VNO US	Aft-mkt	Q1 2013 Earnings Release	Q1 2013	1.712
Aflac Inc	AFL US		Annual General Meeting	Y 2013