Monday, February 3, 2014

BARCHART MORNING CALL 2/3

OVERNIGHT MARKETS AND NEWS
March E-mini S&Ps (ESH14 +0.07%) this morning are little changed, up +0.03%, while European stocks are down -0.31% as emerging market currencies weakened and after a gauge of Chinese manufacturing activity declined. Asian stocks closed lower: Japan -1.98%, Australia -0.04%, Singapore -1.20%, South Korea -1.14%, India -1.48%. Markets in China, Hong Kong and Taiwan were closed for holiday. Japan's Nikkei Stock Index tumbled to a 2-1/2 month low and India's S&P Sensex Stock Index also fell to a 2-1/2 month low after the Indian government cut its 2013 GDP growth forecast to 4.5% from 5.0%. Commodity prices are mixed. Mar crude oil (CLH14 +0.15%) is down -0.01%. Mar gasoline (RBH14 +0.19%) is up +0.19%. Apr gold (GCJ14 +0.64%) is up +0.41%. March copper (HGH14 +0.14%) is up +0.08% as it recovered from a 1-3/4 month low. Agriculture prices are mixed. The dollar index (DXY00 -0.13%) is down -0.16%. EUR/USD (^EURUSD) is up +0.14% after it recovered from a 2-1/4 month low when the Eurozone Jan manufacturing PMI was revised up to a 2-1/2 year high. USD/JPY (^USDJPY) is down -0.16% at a 1-3/4 month low as the slide in global stocks boosts the safe-haven demand for the yen. March T-note prices (ZNH14 -0.04%) are down -1 tick.
The China Jan manufacturing PMI fell -0.5 to 50.5, a 6-month low but right on expectations. The Jan non-manufacturing PMI fell -1.2 to 53.4, the slowest pace of expansion since data began in 2011.
The German Jan PMI manufacturing was revised upward to 56.5 from the originally reported 56.3, the fastest pace of expansion in 2-1/2 years.
The Eurozone Jan PMI manufacturing was revised upward to 54.0 from the originally reported 53.9, the fastest pace of expansion in 2-1/2 years.
The UK Jan PMI manufacturing fell -0.5 to 56.7, a bigger decline than expectations of unch at 57.3.
U.S. STOCK PREVIEW
Today’s Jan ISM manufacturing index is expected to show a -1.0 point decline to 56.1, adding to the -0.3 point decline to 57.0 seen in December. Today’s Jan total vehicle sales report is expected to improve to 15.60 million units from 15.30 million units in December. The Chinese markets are closed today through Thursday due the Chinese Lunar New Year holiday.
There are 10 of the S&P 500 companies that report earnings today: Sysco (consensus $0.40), Edwards Lifesciences (0.82), Anadarko Petroleum (0.90), Dun & Bradstreet (2.83), Yum Brands (0.80), Hartford Financial Services (0.90), Torchmark (1.46), Carefusion (0.54), General Growth Properties (0.35), and Principal Financial Group (0.94). Equity conferences this week include Defexpo India 2014 on Wed, Cowen and Company Aerospace Defense & Transportation Conference on Wed-Thu, Wind Power Finance & Investment Summit 2014 on Wed-Thu, UBS Industrials Conference on Thu, and India Auto Expo 2014 on Fri.
OVERNIGHT U.S. STOCK MOVERS
Goldman Sachs (GS -1.04%) was upgraded to 'Buy' from 'Neutral' at Guggenheim.
Northrop Grumman (NOC +2.03%) was upgraded to 'Buy' from 'Hold' at Drexel Hamilton.
NVIDIA (NVDA -0.13%) was upgraded to 'Neutral' from 'Negative' at Susquehanna.
Mattel (MAT -12.02%) was downgraded to 'Neutral' from 'Buy' at B. Riley and at SunTrust.
Herbalife (HLF -0.62%) raised guidance on Q4 adjusted EPS to $1.26-$1.30, higher than consensus of $1.17.
O'Reilly Automotive (ORLY -0.99%) was upgraded to 'Buy' from 'Neutral' at ISI Group.
Smith & Nephew (SNN -1.53%) to acquire ArthroCare (ARTC -0.46%) for nearly $1.7 billion.
Eaton Vance (EV -2.21%) was downgraded to 'Sell' from 'Neutral' at Goldman.
Hound Partners reported a 5.01% passive stake in Carter's (CRI -0.69%) .
New Enterprise Associates 13 reported a 18.0% passive stake in Prosensa (RNA +4.33%) .
Camber Capital reported a 5.97% passive stake in Amarin (AMRN +1.67%) .
Texas Oil & Gas Holdings reported a 14.33% stake in EP Energy (EPE -0.92%) .
MARKET COMMENTS
Mar E-mini S&Ps (ESH14 +0.07%) this morning are up +0.50 of a point (+0.03%). The S&P 500 on Friday posted a 1-1/2 month low and closed lower after emerging-market currencies slumped, but strength in U.S. economic data lifted stocks from their worst levels. U.S. Dec personal spending rose +0.4%, greater than expectations of +0.2%, while Nov was revised upward to +0.6% from the originally reported +0.5%. Also, the U.S. Jan University of Michigan consumer confidence climbed +0.8 to 81.2, higher than expectations of +0.6 to 81.0. Closes: S&P 500 -0.65%, Dow Jones -0.94%, Nasdaq 100 -0.30%.
Mar 10-year T-notes (ZNH14 -0.04%)this morning are down -1 tick. Mar 10-year T-note futures prices on Friday rallied up to a 2-1/2 month high as a slide in global stocks and in emerging-market currencies fueled safe-haven demand for Treasuries. Other supportive factors included (1) slower-than-expected Eurozone inflation, which boosted European bond markets on speculation the ECB may boost its stimulus measures, and (2) month-end buying by bond-fund managers who purchased longer-maturity Treasuries to extend the duration of their debt holdings with the bond indexes that they track. T-notes came off of their best levels after stocks recovered from their worst levels. Closes: TYH4 +9.50, FVH4 +4.75.
The dollar index (DXY00 -0.13%) this morning is down -0.132 (-0.16%). EUR/USD (^EURUSD) is up +0.0019 (+0.14%). USD/JPY (^USDJPY) is down -0.16 (-0.16%) at a 1-3/4 month low. The dollar index on Friday closed higher as stronger-than-expected U.S. Dec personal spending and Jan University of Michigan consumer confidence bolstered the outlook for the Fed to keep tapering QE3. EUR/USD slumped to a 5-week low after the Eurozone Jan CPI estimate rose a smaller-than-expected +0.7% y/y, which may pressure the ECB to boost its stimulus measures. USD/JPY retreated as the yen gained after the Japan Dec national CPI ex-fresh food rose a greater-than-expected +1.3% y/y, which reduces the case for additional stimulus from the BOJ. Closes: Dollar index +0.226 (+0.28%), EUR/USD -0.00685 (-0.51%), USD/JPY -0.689 (-0.67%).
Mar WTI crude oil (CLH14 +0.15%) this morning is down -1 cent (-0.01%) and Mar gasoline (RBH14 +0.19%) is up +0.0050 (+0.19%). Mar crude oil and gasoline prices on Friday closed lower on concern the turmoil in emerging markets may spread and slow the global economy. Crude prices came off of their worst levels after U.S. Dec personal spending and the Jan University of Michigan consumer confidence rose more than expected. Closes: CLH4 -0.74 (-0.75%), RBH4 -0.0429 (-1.60%).
GLOBAL EVENT CALENDAR02/03/2014
US1000 ETJan ISM manufacturing index expected -1.0 to 56.0, Dec -0.3 to 57.0. Jan ISM prices paid sub-index expected +0.3 to 53.8, Dec +1.0 to 53.5.
1000 ETDec construction spending expected +0.3% m/m, Nov +1.0% m/m.
1100 ETUSDA weekly grain export inspections.
1700 ETJan total vehicle sales expected 15.70 million, Dec 15.30 million. Jan domestic vehicle sales expected 12.0 million, Dec 11.65 million.
JPN0000 ETJapan Jan vehicle sales, Dec +18.7% y/y.
GER0355 ETRevised German Jan PMI manufacturing, previous 56.3.
EUR0400 ETRevised Eurozone Jan PMI manufacturing, previous 53.9.
UK0430 ETUK Jan PMI manufacturing expected -0.2 to 57.1, Dec 57.3.
CHIn/aChinese markets are closed Monday-Thursday for Lunar New Year holiday.
U.S. STOCK CALENDAR02/03/2014
Company NameTickerTimeEvent DescriptionPeriodEstimate
Sysco CorpSYY USBef-mktQ2 2014 Earnings ReleaseQ2 20140.4
Ford Motor CoF US9:30January 2014 Sales and Revenue Release2014
Sysco CorpSYY US10:00Q2 2014 Earnings CallQ2 2014
Ford Motor CoF US10:00January 2014 Sales and Revenue Call2014
Edwards Lifesciences CorpEW US16:00Q4 2013 Earnings ReleaseQ4 20130.823
Edwards Lifesciences CorpEW US17:00Q4 2013 Earnings CallQ4 2013
CareFusion CorpCFN US17:00Q2 2014 Earnings CallQ2 2014
Anadarko Petroleum CorpAPC USAft-mktQ4 2013 Earnings ReleaseQ4 20130.904
Dun & Bradstreet Corp/TheDNB USAft-mktQ4 2013 Earnings ReleaseQ4 20132.834
Yum! Brands IncYUM USAft-mktQ4 2013 Earnings ReleaseQ4 20130.795
Hartford Financial Services Group IncHIG USAft-mktQ4 2013 Earnings ReleaseQ4 20130.895
Torchmark CorpTMK USAft-mktQ4 2013 Earnings ReleaseQ4 20131.456
CareFusion CorpCFN USAft-mktQ2 2014 Earnings ReleaseQ2 20140.54
General Growth Properties IncGGP USQ4 2013 Earnings ReleaseQ4 20130.351
Principal Financial Group IncPFG USQ4 2013 Earnings ReleaseQ4 20130.933
Posted by Jim Van Meerten at
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