Wednesday, February 26, 2014

BARCHART MORNING CALL 2/26


OVERNIGHT MARKETS AND NEWS
March E-mini S&Ps (ESH14 +0.11%) this morning are up +0.18% and European stocks are down -0.15% after Ukraine's currency, the hryvnia, weakened to a record low as the country's interim administration struggles to secure as much as $35 billion in financial aid to stave off a possible default. Losses in European stocks were limited after German Mar GfK consumer confidence unexpectedly rose to a 7-year high. Asian stocks closed mostly higher: Japan -0.54%, Hong Kong +0.54%, China +0.25%, Taiwan +0.29%, Australia +0.06%, Singapore -0.50%, South Korea +0.42%, India +0.65%. China's Shanghai Stock Index recovered from a 1-month low and finished higher after China's benchmark money-market rates fell to a 7-month low as efforts by the PBOC to weaken the yuan boosted the supply of cash in the financial system. Commodity prices are mixed. Apr crude oil (CLJ14 +0.52%) is up +0.35%. Apr gasoline (RBJ14 -0.11%) is down -0.14%. Apr gold (GCJ14 -0.51%) is down -0.24%. March copper (HGH14 +0.09%) is up +0.11% after LME copper inventories fell -2,750 MT to 276,400 MT, a 14-month low. Agriculture and livestock prices are mixed as nearest-futures (G14) Feb cattle climbed to a record high of $1.4695 a pound. The dollar index (DXY00 +0.11%) is up +0.02%. EUR/USD (^EURUSD) is down -0.04%. USD/JPY (^USDJPY) is up +0.11%. March T-note prices (ZNH14 -0.10%) are down -2.5 ticks.
German Mar GfK consumer confidence unexpectedly rose +0.2 to 8.5 from an upward revised 8.3 in Feb, higher than expectations of unch at 8.2 and the highest level in 7-years.
UK Q4 GDP was revised to +0.7% q/q and +2.7% y/y, slightly lower than the originally reported +0.7% q/q and +2.8% y/y. Q4 private consumption was revised down to +0.4% q/q from +0.6% q/q and Q4 government spending was revised down to +0.3% q/q from +0.5% q/q. Q4 exports were revised upward to +0.4% q/q from +0.2% q/q and Q4 imports were revised upward to -0.9% q/q from -1.0 q/q.
UK Q4 total business investment rose +2.4% q/q and +8.5% y/y, higher than expectations of +1.3% q/q.

U.S. STOCK PREVIEW
Today’s Jan new home sales report is expected to show a decline of -3.4% to 400,000, adding to the decline of -7.0% to 414,000 seen in December. The markets will be watching to see if there is some recovery in mortgage activity after last week’s drops that were likely caused mainly by bad weather. The MBA mortgage purchase sub-index last week fell sharply by -6.3% to a 2-1/2 year low of 160.7. The Treasury today will sell $35 billion in 5-year T-notes and $13 billion of 2-year floating rate notes. The Treasury will then wrap up this week’s T-note package by selling $29 billion of 7-year T-notes on Thursday. There are 13 of the S&P 500 companies that report earnings today: Dollar Tree (consensus $1.05), Cablevision (0.09), Target (1.24), TJX (0.83), Chesapeake Energy (0.40), AES (0.29), CenterPoint Energy (0.28), Lowe's (0.31), Transocean (0.72), Autodesk (0.34), L Brands (0.34), Integrys Energy Group (0.94), Newfield Exploration (0.44).
Equity conferences during the remainder of this week include: J. P. Morgan Global High Yield & Leveraged Finance Conference on Mon-Wed, RBC Capital Markets Healthcare Conference on Mon-Wed, 10th Regulatory and Compliance Congress on Tue-Wed, Robert W. Baird Business Solutions Conference Tue-Wed, Crude By Rail 2014 on Tue-Wed, Super Return International 2014 on Tue-Wed, Gabelli & Co Inc Industrial Flow & Infrastructure Conference on Wed, RBC Capital Markets Global Health Care Conference on Wed, Alembic Global Advisors Fourth Annual Global Chemical Conference on Wed, Keefe, Bruyette, & Woods Boston Bank Conference on Wed, KeyBanc Capital Markets Consumer Conference on Wed, Bank of America Merrill Lynch Global Agriculture Conference on Wed-Thu, Simmons Energy Conference on Thu, and Stifel Industrials Conference on Thu.

OVERNIGHT U.S. STOCK MOVERS
Target (TGT +0.66%) reported Q4 adjusted EPS of $1.30, well ahead of consensus of 79 cents.
Lowe's (LOW +1.88%) reported Q4 EPS of 31 cents, right on expectations.
Chesapeake Energy (CHK -1.28%) reported Q4 EPS of 27 cents, well below consensus of 40 cents.
Dollar Tree (DLTR +0.67%) reported Q4 EPS of $1.02 weaker than consensus of $1.05.
Boeing (BA -2.17%) was awarded a $2.07 billion government contract modification for the procurement of 16 P-8A Multi-mission Maritime Aircraft full rate production Lot I aircraft and 16 Ancillary Mission Equipment kits for the U.S. Navy.
Weatherford (WFT -0.13%) reported Q4 adjusted EPS of 7 cents, right on consensus.
Alleghany (Y -0.25%) reported Q4 EPS of $6.99, better than consensus of $6.53.
Superior Energy (SPN +0.70%) reported Q4 adjusted EPS of 30 cents, below consensus of 31 cents.
Avago (AVGO -0.96%) reported Q1 EPS of 84 cents, stronger than consensus of 78 cents.
R.R. Donnelley (RRD -1.37%) reported Q4 EPS of 49 cents, higher than consensus of 38 cents.
AMC Entertainment (AMC +0.36%) reported Q4 EPS ex-items of 18 cents, right on expectations.
Chicago Bridge & Iron (CBI -0.97%) reported Q4 EPS o $1.80, well above consensus of $1.16.
First Solar (FSLR +0.48%) dropped over 10% in after-hours trading after it reported Q4 adjusted EPS of 89 cents, weaker than consensus of 99 cents, and then lowerd guidance on Q1 EPS to 50 cents-60 cents, well below consensus of 84 cents.
Edison International (EIX -0.50%) reported Q4 core EPS of 81 cents, better than consensus of 67 cents.

MARKET COMMENTS
Mar E-mini S&Ps (ESH14 +0.11%) this morning are up +3.25 points (+0.18%). The S&P 500 on Tuesday closed slightly lower. Bearish factors included (1) the -1.3 point drop in the U.S. Feb consumer confidence index from the Conference Board to 78.1, which was -1.9 points below expectations of 80.0, and (2) the sharp -18 point decline in the Richmond Fed manufacturing index to a 7-month low of -6. Bullish factors for stocks included (1) the +0.76% m/m rise in the Dec S&P CaseShiller composite-20 home price index, better than expectations of +0.6% m/m, and (2) better-than-expected Q4 earnings results. Closes: S&P 500 -0.13%, Dow Jones -0.17%, Nasdaq 100 -0.18%.
Mar 10-year T-notes (ZNH14 -0.10%) this morning are down -2.5 ticks. Mar 10-year T-note futures prices on Tuesday closed higher on economic concerns after U.S. Feb consumer confidence fell more than expected and the Feb Richmond Fed manufacturing index dropped to its lowest level in 7 months. Closes: TYH4 +11.50, FVH4 +6.25.
The dollar index (DXY00 +0.11%) this morning is up +0.020 (+0.02%). EUR/USD (^EURUSD) is down -0.0005 (-0.04%). USD/JPY (^USDJPY) is up +0.11 (+0.11%). The dollar index on Tuesday closed slightly lower after a bigger than expected decline in U.S. Feb consumer confidence fueled concerns about the sustainability of the U.S. economic recovery. EUR/USD fell back from its best levels after Russia’s Deputy Finance Minister said that the Ukraine has a “high” chance of defaulting on its debt, which would be euro-negative. Closes: Dollar index -0.062 (-0.08%), EUR/USD +0.00010 (+0.07%), USD/JPY -0.263 (-0.26%).
Apr WTI crude oil (CLJ14 +0.52%) this morning is up +36 cents (+0.35%) and Apr gasoline (RBJ14 -0.11%) is down -0.0043 (-0.14%). Apr crude and gasoline prices Tuesday closed lower. Negative factors for crude included (1) the larger-than-expected drop in U.S. Feb consumer confidence, (2) expectations for weekly EIA crude inventories to increase by +1.15 million bbl on Wed, and (3) severe winter weather forecast for the central and eastern U.S. that may reduce automobile travel and curb demand for gasoline. Closes: CLJ4 -0.99 (-0.96%), RBJ4 -0.0354 (-1.18%).

GLOBAL EVENT CALENDAR02/26/2014
US0700 ETWeekly MBA mortgage applications, previous -4.1% with purchase sub-index -6.3% and refi sub-index -2.7%.
1000 ETJan new home sales expected -3.4% to 400,000, Dec -7.0% to 414,000.
1030 ETEIA Weekly Petroleum Status Report.
1130 ETTreasury auctions $13 billion 2-year floating rate notes.
1200 ETBoston Fed President Eric Rosengren speaks about the economic outlook to the Boston Economic Club.
1300 ETTreasury auctions $35 billion 5-year T-notes.
GER0200 ETGerman Mar GfK consumer confidence expected unch at 8.2, Feb 8.2.
UK0430 ETRevised UK Q4 GDP, previous +0.7% q/q and +2.8% y/y.

U.S. STOCK CALENDAR02/26/2014
Company NameTickerTimeEvent DescriptionPeriodEstimate
Dollar Tree IncDLTR USBef-mktQ4 2014 Earnings ReleaseQ4 20141.05
Cablevision Systems CorpCVC USBef-mktQ4 2013 Earnings ReleaseQ4 20130.089
Target CorpTGT USBef-mktQ4 2014 Earnings ReleaseQ4 20141.24
TJX Cos Inc/TheTJX USBef-mktQ4 2014 Earnings ReleaseQ4 20140.825
Chesapeake Energy CorpCHK USBef-mktQ4 2013 Earnings ReleaseQ4 20130.4
AES Corp/VAAES USBef-mktQ4 2013 Earnings ReleaseQ4 20130.294
CenterPoint Energy IncCNP USBef-mktQ4 2013 Earnings ReleaseQ4 20130.279
Lowe's Cos IncLOW USBef-mktQ4 2014 Earnings ReleaseQ4 20140.309
Dollar Tree IncDLTR US9:00Q4 2014 Earnings CallQ4 2014
Apache CorpAPA US9:00Investor DayY 2014
Chesapeake Energy CorpCHK US9:00Q4 2013 Earnings CallQ4 2013
AES Corp/VAAES US9:00Q4 2013 Earnings CallQ4 2013
QEP Resources IncQEP US9:00Q4 2013 Earnings CallQ4 2013
Lowe's Cos IncLOW US9:00Q4 2014 Earnings CallQ4 2014
Range Resources CorpRRC US9:00Q4 2013 Earnings CallQ4 2013
Transocean LtdRIG USAft-mktQ4 2013 Earnings ReleaseQ4 20130.72
Autodesk IncADSK USAft-mktQ4 2014 Earnings ReleaseQ4 20140.339
L Brands IncLB USAft-mktQ4 2014 Earnings ReleaseQ4 20141.613
Integrys Energy Group IncTEG USAft-mktQ4 2013 Earnings ReleaseQ4 20130.936
Deere & CoDE USAnnual General Meeting
Newfield Exploration CoNFX USQ4 2013 Earnings ReleaseQ4 20130.442
Posted by Jim Van Meerten at
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