Tuesday, December 17, 2013

Barchart Morning Call 12/17

OVERNIGHT MARKETS AND NEWS
March E-mini S&Ps (ESH14 unch) this morning are down -0.04% and European equities are down -0.52% ahead of the start of the 2-day FOMC meeting today where expectations are for the Fed to maintain its $85 billion pace of monthly bond purchases. Asian stocks closed mixed: Japan +0.83%, Hong Kong -0.20%, China -0.49%, Taiwan +0.47%, Australia +0.27%, Singapore +0.45%, South Korea +0.32%, India -0.23%. European stocks shrugged off the increase in German investor confidence for a fifth month after the Dec ZEW survey of expectations for economic growth soared to a 7-1/2 year high. Commodity prices are mostly lower. Jan crude oil (CLF14 -0.28%) is down -0.24%. Jan gasoline (RBF14 -0.21%) is down -0.23%. Feb gold (GCG14 -0.48%) is down -0.55%. March copper (HGH14 -0.17%) is down -0.06% as it fell back from a 1-3/4 month high that was made in overnight trade after copper stockpiles available for withdrawal from LME-licensed warehouses tumbled to a 5-year low of 130,825 MT. Agriculture and livestock prices are mixed. The dollar index (DXY00 +0.05%) is up +0.03%. EUR/USD (^EURUSD) is down -0.09%. USD/JPY (^USDJPY) is down -0.05%. March T-note prices (ZNH14 +0.13%) are up +4.5 ticks.
The German Dec ZEW survey expectations of economic growth jumped +7.4 to 62.0, much stronger than expectations of +0.4 to 55.0 and the highest level in 7-1/2 years. The Dec ZEW survey current situation rose +3.7 to 32.4, better than expectations of +1.2 to 29.9 and the best level in 1-1/2 years.
Eurozone Nov CPI fell -0.1% m/m and was left unrevised at +0.9% y/y, while core Nov CPI was revised down to a +0.9% y/y increase from the originally reported +1.0% y/y gain.
Eurozone Nov new car registrations rose +1.2%, the third consecutive monthly increase which is the most in 4 years.
UK Dec CBI trends full volume of total orders rose to 12, better than expectations of no change at 11 and the highest in 18-3/4 years. Dec CBI trends of selling prices rose to 11, stronger than expectations of no change at 5 and the strongest pace of increase in 10-months.
UK Nov CPI rose +0.1% m/m and +2.1% y/y, less than expectations of +0.2% m/m and +2.2% y/y, with the +2.1% y/y increase the slowest annual gain in 4-years.
The final Japan Nov machine tool orders were left unrevised at +15.4% y/y, the biggest increase in 23-months.
U.S. STOCK PREVIEW
Today’s Nov CPI is expected to strengthen a bit to +1.3% y/y from +1.0% in October. Meanwhile, the Nov core CPI is expected to be unchanged from Oct at +1.7% y/y. Today’s Dec NAHB housing market index is expected to show a +1 point increase to 55 following the November report of unchanged 54. Today’s Q3 current account deficit is expected to widen slightly to -$100.2 billion from -$98.9 billion in Q2. The FOMC today begins its 2-day meeting that has a chance of producing the Fed's initial QE3 tapering move. The Treasury today will sell $32 billion of 2-year T-notes. There are three of the Russell 1000 companies that report earnings today: FactSet (consensus $1.22), Jabil Circuit (0.54), VeriFone (0.26). Equity conferences during the remainder of this week include: Citi Group Connected Car & Telematics Mini-Conference on Tuesday.
OVERNIGHT U.S. STOCK MOVERS
Adobe (ADBE -3.93%) was upgraded to 'Buy' from 'Hold' at Argus.
Honeywell (HON +0.88%) lowered guidance on fiscal 2014 EPS to $5.35-$5.55, at the lower end of consensus of $5.55.
AT&T (T +0.89%) will sell Connecticut wireline operations to Frontier (FTR -0.90%) for $2 billion.
Facebook (FB +0.92%) was upgraded to 'Positive' from 'Neutral' at Susquehanna.
Public Storage (PSA +0.98%) was downgraded to 'Underperform' from 'Market Perform' at BMO Capital.
Medtronic (MDT +0.81%) was upgraded to 'Buy' from 'Neutral' at Goldman.
Hewlett-Packard (HPQ +0.49%) was upgraded to 'Overweight' from 'Neutral' at JPMorgan.
Western Digital (WDC +3.30%) was upgraded to 'Overweight' from 'Neutral' at JPMorgan with a price target of $100.
Citigroup keeps its 'Buy' rating on Yahoo! (YHOO unch) and raised its price target on the stock to $46 from $39.
Huntington Ingalls (HII +1.73%) was upgraded to 'Buy' from 'Hold' at Deutsche Bank who also raised their price target on the stock to $100 from $78.
Plains All American (PAA -0.29%) was downgraded to 'Hold' from 'Buy' at Deutsche Bank who also lowered their price target on the stock to $55 fom $66.
Williams (WMB +3.15%) climbed over 2% in after-hours trading after Corvex disclosed a 5.28% stake in Williams.
KKR Financial (KFN -0.84%) surged over 30% in after-hours trading after it was acquired by KKR (KKR +0.40%) for $2.6 billion.
Boeing (BA +0.67%) rose 3% in after-hours trading after it raised its quarterly dividend by 50% to 73 cents per share and authorized a $10 billion share repurchase plan.
MARKET COMMENTS
Mar E-mini S&Ps (ESH14 unch) this morning are little changed, down -0.75 of a point (-0.04%). The S&P 500 index on Monday closed higher on hopes that the stronger-than-expected economic data means the economy will keep on rolling even after the Fed starts to taper QE3. U.S. Nov industrial production rose +1.1% m/m, greater than expectations of +0.6% m/m and the biggest increase in a year. Strength in stocks was limited by Chinese growth concerns after the China Dec HSBC/Markit flash manufacturing PMI unexpectedly fell -0.3 to a 3-month low of 50.5, weaker than expectations of +0.1 to 50.9. Closes: S&P 500 +0.63%, Dow Jones +0.82%, Nasdaq 100 +0.56%.
Mar 10-year T-notes (ZNH14 +0.13%) this morning are up +4.5 ticks. Mar T-notes on Monday closed little changed as strength in stocks offset Chinese growth concerns. A positive for T-note prices was the larger-than-expected upward revision in U.S. Q3 non-farm productivity to 3.0%, the best level in 3-3/4 years and a sign that inflation may remain subdued. Gains in T-notes were limited after Nov industrial production rose sharply by +1.1%. Closes: TYH4 +0.50, FVH4 -0.25.
The dollar index (DXY00 +0.05%) this morning is up +0.026 (+0.03%). EUR/USD (^EURUSD) is down -0.0012 (-0.09%) and USD/JPY (^USDJPY) is down -0.05 (-0.05%). The dollar index on Monday closed lower. EUR/USD rose after Eurozone Dec PMI manufacturing expanded at the fastest pace in 2-1/2 years and USD/JPY fell back as the yen strengthened on speculation the BOJ may not expand its stimulus measures after the Japan Q4 Tankan business conditions of large manufacturers rose to 16, the highest level in 7 years. Closes: Dollar index -0.140 (-0.17%), EUR/USD +0.00179 (+0.13%), USD/JPY -0.197 (-0.19%).
Jan WTI crude oil (CLF14 -0.28%) this morning is down -23 cents (-0.24%) and Jan gasoline (RBF14 -0.21%) is down -0.0060 (-0.23%). Jan crude oil and gasoline prices on Monday closed higher. Jan crude rebounded from a 2-week low and closed higher on bullish factors that included (1) the +1.1% m/m increase in U.S. Nov industrial production, the biggest increase in a year and a sign of economic growth and energy demand, and (2) reduced oil output in Libya after Libyan rebels refused to hand over three oil ports to the government that have been shut since July and have cut Libyan Nov oil production to 210,000 barrels a day, the least since 2011. Closes: CLF4 +0.88 (+0.91%), RBF4 +0.0144 (+0.55%).
GLOBAL EVENT CALENDAR12/17/2013
US0830 ETNov CPI expected +0.1% m/m and +1.3% y/y, Oct -0.1% m/m and +1.0% y/y. Nov CPI ex food & energy expected +0.1% m/m and +1.7% y/y, Oct +0.1% m/m and +1.7% y/y.
0830 ETQ3 current account balance expected -$100.2 billion, Q2 -$98.9 billion.
1000 ETDec NAHB housing market index expected +1 to 55, Nov unch at 54.
1300 ETTreasury auctions $32 billion 2-year T-notes.
1630 ETAPI weekly U.S. oil statistics.
n/aFOMC begins 2-day policy meeting.
JPN0100 ETRevised Japan Nov machine tool orders.
1850 ETJapan Nov trade balance expected -1.351 trillion yen, Oct -1.092 trillion yen. Nov exports expected +18.0% y/y, Oct +18.6% y/y. Nov imports expected +21.4% y/y, Oct +26.2% y/y.
EUR0200 ETEurozone Nov new car registrations, Oct +4.7%.
0500 ETEurozone Q3 labor costs, Q2 +0.9% y/y.
0500 ETRevised Eurozone Nov CPI, previous -0.1% m/m and +0.9% y/y. Revised Nov CPI core, previous +1.0% y/y.
UK0430 ETUK Nov PPI input prices expected -0.5% m/m and -1.0% y/y, Oct -0.6% m/m and -0.3% y/y.
0430 ETUK Nov PPI output prices expected unch m/m and +0.9% y/y, Oct -0.3% m/m and +0.8% y/y. Nov output core prices expected unch m/m and +0.9% y/y, Oct +0.1% m/m and +0.9% y/y.
0430 ETUK Nov CPI expected +0.2% m/m and +2.2% y/y, Oct +0.1% m/m and +2.2% y/y. Nov core CPI expected +1.8% y/y, Oct +1.7% y/y.
0430 ETUK Nov RPI expected +0.1% m/m and +2.7% y/y, Oct unch m/m and +2.6% y/y. Nov RPI ex mortgage interest payments expected +2.7% y/y, Oct +2.7% y/y.
0600 ETUK Dec CBI trends total orders expected unch at 11, Nov 11. Dec CBI trends selling prices expected unch at 5, Nov 5.
GER0500 ETGerman Dec ZEW survey expectations expected +0.4 to 55.0, Nov 54.6. Dec ZEW current situation expected +1.2 to 29.9, Nov 28.7.
CHI2030 ETChina Nov property prices.
U.S. STOCK CALENDAR12/17/2013
Company NameTickerTimeEvent DescriptionPeriodEstimate
FactSet Research Systems IncFDS USBef-mktQ1 2014 Earnings ReleaseQ1 20141.223
Weyerhaeuser CoWY US8:30Investor MeetingY 2013
AGCO CorpAGCO US8:30Analyst MeetingY 2013
Pentair LtdPNR US8:30FY 2014 Guidance CallY 2014
Honeywell International IncHON US9:00FY 2014 Guidance CallY 2014
Noble Energy IncNBL US9:00Analyst DayY 2013
Teleflex IncTFX US9:00Investor and Analyst DayY 2013
Jabil Circuit IncJBL USAft-mktQ1 2014 Earnings ReleaseQ1 20140.543
VeriFone Systems IncPAY USAft-mktQ4 2013 Earnings ReleaseQ4 20130.257
Posted by Jim Van Meerten at
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