BARCHART MORNING CALL 11/18

BARCHART MORNING CALL

Monday, November 18th, 2013View Older Reports

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OVERNIGHT MARKETS AND NEWS

December E-mini S&Ps (ESZ13 +0.17%) this morning are up +0.17% at a new record high and European stocks are up +0.88%. Asian stocks closed mixed: Japan -0.01%, Hong Kong +2.73%, China +3.33%, Taiwan +0.18%, Australia -0.31%, Singapore +0.05%, South Korea +0.31%, India +2.21%. China's Shanghai Stock Index jumped over 3% to a 3-week high after the government pledged to carry out the broadest expansion of economic freedoms since the 1990s. Commodity prices are mostly lower. Dec crude oil (CLZ13 -0.28%) is down -0.39%. Dec gasoline (RBZ13 -1.03%) is down -0.87%. Dec gold (GCZ13 -0.28%) is down -0.34% and Dec copper (HGZ13 unch) is down -0.16%. Agricultural prices are mixed. The dollar index (DXY00 -0.18%) is down -0.13% at a 1-week low. EUR/USD (^EURUSD) is up +0.09% and USD/JPY (^USDJPY) is down -0.04%. December T-note prices (ZNZ13 +0.01%) are up +1 tick.
ECB Governing Council member Nowotny said Eurozone inflation is "clearly" below the level that the ECB believes is in line with its definition of price stability and suggested the ECB may resort to quantitative easing to prevent deflation in the Eurozone when he said "if there should be a need for further measures, yes, we do have a number of measures in the arsenal" to fight low inflation.
Spain Sep non-performing loans, or defaults as a proportion of total lending at Spanish banks, rose to a record +12.7% according to data from the Bank of Spain. The stock of bad loans rose to 187.8 billion euros ($253.8 billion) during Sep with 6.9 billion euros in loans classified as in default.
In its monthly report, the Bundesbank said that "given expected low inflation rates over the medium term and weak economic developments, an expansive bias in monetary policy in the euro are is currently justified."
UK Nov Rightmove house prices fell -2.4% m/m, the biggest decline in 11-months, while on an annual basis prices rose +4.0% y/y, up from the +3.8% y/y pace in Oct.
The Eurozone Sep trade balance was a +14.3 billion euro surplus, bigger than expectations of a +13.0 billion euro surplus and the widest in 5-months.
The Xinhua News Agency reported that as part of the Communist Party reforms, China will expand farmers' land rights and develop a "mixed ownership economy" that helps state-owned assets maintain or increase their value and boost their competitiveness. The government will also accelerate convertibility of the yuan and the freeing-up of interest rates, improve treasury yield curves and let qualified private investors set up small-to-medium sized banks.

U.S. STOCK PREVIEW

This will be a busy week with a full U.S. economic calendar, comments by Mr. Bernanke on Tuesday, the Oct 29-30 FOMC minutes on Wednesday, and the 10-year TIPS auction on Thursday. Q3 earnings season is nearly over and there are only 25 of the S&P 500 companies that report earnings this week. Today’s Nov NAHB housing market index is expected to be unchanged at 55, which would leave the index just 3 points below the 8-year high of 58 posted in August. There are 6 of the Russell 1000 companies that report earnings today: Tyson Foods (consensus $0.70), Urban Outfitters (0.45), Brocade Communication Systems (0.18), Salesforce.com (0.09), Jacobs Engineering (0.87), UGI Corp (-0.08).
Conferences this week include the following: Dubai Airshow - Press Conferences on Mon, Wall Street Journal CEO Council Annual Meeting on Mon-Tue, KBW Securities Brokerage & Market Structure Conference on Tue, Gabelli & Co Inc Aircraft Supplier Conference on Tue, Morgan Stanley Global Consumer & Retail Conference on Tue-Wed, Citi Global Financial Conference on Tue-Wed, Lazard Capital Markets Healthcare Conference on Tue-Wed, Mitsubishi UFJ Securities Oil & Gas Corporate Access Day on Tue-Wed, UBS Global Technology Conference on Tue-Thu, Los Angeles Auto Show-Press Days on Tue-Thu, UBS Global Outlook Conference on Wed, Bloomberg Business Summit on Wed, Canaccord Genuity TMT Day on Wed, Goldman Sachs Metals & Mining Steel Conference on Wed-Thu, Morgan Stanley Technology Media & Telecoms Conference on Wed-Thu, Bank of America Merrill Lynch Global Energy Conference on Thu, Jefferies Global Health Care Conference on Thu, and 11th Annual MIT Sloan CFO Summit on Thu.

OVERNIGHT U.S. STOCK MOVERS

Tyson Foods (TSN +0.49%) reported Q4 adjusted EPS of 70 cents, better than consensus of 69 cents.
Bristow Group (BRS +0.94%) was upgraded to 'Neutral' from 'Sell' at Goldman.
Diebold (DBD +0.30%) was upgraded to 'Buy' from 'Hold' at KeyBanc.
Walter Energy (WLT +0.89%) and Nucor (NUE +0.96%) were both downgraded to 'Neutral' from 'Buy' at Citigroup.
Baxter (BAX +1.57%) was upgraded to 'Outperform' from 'Neutral' at Credit Suisse.
Boeing (BA +0.73%) rose 3.2% in pre-market trading after it secured new plane orders from Etihad Airways PJSC for its new 777X wide-body planes as well as for more 787 Dreamliners on the first day of the DUbai Air Show.
Microsoft (MSFT -0.47%) was downgraded to 'Underperform' from 'Neutral' at BofA/Merrill.
SuperValu (SVU -1.43%) was downgraded to 'Sell' from 'Neutral' at Goldman.
Fairfax Financial Holdings reported a 17.7% stake in BlackBerry (BBRY -0.62%) .

MARKET COMMENTS

Dec E-mini S&Ps (ESZ13 +0.17%) this morning are up +3.00 points (+0.17%) at a fresh record high. The S&P 500 index on Friday rallied up to another record high and closed higher. Supportive factors for stocks included (1) weaker-than-expected economic data on Nov Empire manufacturing that unexpectedly contracted -3.73 points to a 10-month low of -2.21, and Oct industrial production that unexpectedly fell -0.1%, weaker than expectations of +0.2%, which spurred speculation the Fed will maintain QE3 at current levels, and (2) carry-over support from Thursday's comments from Fed Chair nominee Yellen who said the Fed won't taper stimulus until the economy strengthens. Closes: S&P 500 +0.42%, Dow Jones +0.54%, Nasdaq 100 +0.22%.
Dec 10-year T-notes (ZNZ13 +0.01%) this morning are up +1 tick. Dec 10-year T-note prices on Friday closed lower. Strength in stocks undercut T-notes as the S&P 500 posted a record high and reduced the safe-haven demand for Treasuries. Declines were limited as the weaker-than-expected Nov Empire manufacturing and Oct industrial production bolstered speculation that the Fed will maintain its pace of bond buying. Closes: TYZ3 -2.50, FVZ3 -1.25.
The dollar index (DXY00 -0.18%) this morning is down -0.106 (-0.13%) at a 1-week low. EUR/USD (^EURUSD) is up +0.0012 (+0.09%) and USD/JPY (^USDJPY) is down -0.04 (-0.04%). The dollar index on Friday closed lower after weaker-than-expected U.S. economic data on Nov Empire manufacturing and Oct industrial production boosted speculation the Fed will maintain QE3. USD/JPY posted a 2-month high as the yen weakened on speculation the BOJ may increase its stimulus measures when it meets next on Nov 20-21. Closes: Dollar index -0.174 (-0.21%), EUR/USD +0.00374 (+0.28%), USD/JPY +0.176 (+0.18%).
Dec WTI crude oil (CLZ13 -0.28%) this morning is down -37 cents (-0.39%) and Dec gasoline (RBZ13 -1.03%) is down -0.0232 (-0.87%). Dec crude oil and gasoline prices on Friday closed mixed. Crude oil closed higher as the dollar weakened, while Dec gasoline closed lower after weaker-than-expected U.S. economic data on Nov Empire manufacturing and Oct industrial production signaled lower energy demand. Closes: CLZ3 -0.12 (-0.13%), RBZ3 +0.0557 (+2.12%).

GLOBAL EVENT CALENDAR11/18/2013

US	1000 ET	Nov NAHB housing market index expected unchanged at 55, Oct -2 to 55.
	1100 ET	USDA weekly grain export inspections.
	1215 ET	New York Fed President William Dudley speaks at Queens College in Flushing, NY.
	1330 ET	Philadelphia Fed President Charles Plosser speaks on the economic outlook at the Risk Management Associations annual conference.
	1600 ET	USDA Crop Progress.
EUR	0500 ET	Eurozone Sep trade balance expected +23.3 billion euros, Aug +12.3 billion euros.
CHI	2100 ET	China Oct foreign direct investment expected +5.7% y/y, Sep +4/9% y/y.

U.S. STOCK CALENDAR11/18/2013

Company Name	Ticker	Time	Event Description	Period	Estimate
Tyson Foods Inc	TSN US	Bef-mkt	Q4 2013 Earnings Release	Q4 2013	0.697
Jacobs Engineering Group Inc	JEC US	Aft-mkt	Q4 2013 Earnings Release	Q4 2013	0.871
UGI Corp	UGI US	Aft-mkt	Q4 2013 Earnings Release	Q4 2013	-0.078
Energen Corp	EGN US		Investment Community Meeting - Day 1