BARCHART MORNING CALL 3/26

BARCHART MORNING CALL

Wednesday, March 26th, 2014View Older Reports

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OVERNIGHT MARKETS AND NEWS

June E-mini S&Ps (ESM14 +0.34%) this morning are up +0.28% and European stocks are up +0.97% at a 2-week high after a gauge of German consumer confidence remained at a 7-1/4 year high. Also, in a sign that the European sovereign debt crisis continues to recede, the yield on Portugal's 5-year government bond fell to 3.007%, the lowest in over 4-years. U.S. stocks received support on comments from St. Louis Fed President Bullard who said the U.S. is in "good shape" to have economic growth of more than 3.0% for the remaining quarters in 2014. Asian stocks closed mostly higher: Japan +0.37%, Hong Kong +0.72%, China -0.16%, Taiwan +0.55%, Australia +0.75%, Singapore +1.26%, South Korea +1.40%, India +0.18%. Chinese stocks bucked the trend and closed lower after Li Daokui, a former member of the PBOC monetary policy committee, said that China is headed for a "mini crisis" in its regional debt market. Commodity prices are mixed. May crude oil (CLK14 +0.26%) is up +0.10%. May gasoline (RBK14 +0.35%) is up +0.32%. Apr gold (GCJ14 +0.25%) is up +0.28%. May copper (HGK14 -0.85%) is down -0.82%. Agriculture and livestock prices are mixed. The dollar index (DXY00 +0.14%) is up +0.14%. EUR/USD (^EURUSD) is down -0.17%. USD/JPY (^USDJPY) is up +0.12%. June T-note prices (ZNM14 -0.09%) are down -3 ticks.
Speaking at an Asian Investment Conference in Hong Kong, St. Louis Fed President Bullard, a non-voting member of the FOMC this year, said that the U.S. is in "good shape" to have economic growth of more than 3.0% for the remaining quarters in 2014 and may reach that pace for the full year and that the unemployment rate is likely to dip below 6.0% by the end of the year.
The German Apr GfK consumer confidence was unchanged at 8.5, right on expectations and the best level in 7-1/4 years.
The Japan Feb corporate service price index rose +0.7% y/y, slightly less than expectations of +0.8% y/y.

U.S. STOCK PREVIEW

Today’s Feb durable goods orders report is expected to show increases of +0.8% and +0.3% ex-transportation following January’s mixed report of -1.0% and +1.1% ex-transportation.  There is one of the Russell 1000 companies that report earnings today:  Paychex (consensus $0.42).  Equity conferences during the remainder of this week include: TAG Spring Consumer Conference on Tue, Gastech Conference & Exhibition on Mon-Wed, BB&T Capital Markets Commercial & Industrial Conference on Wed, CIBC Retail and Consumer Conference on Wed, JPMorgan Insurance Conference on Wed, Oracle Storage Summit New York on Wed, Jefferies Animal Health Day on Thu, and Jefferies Animal Health Day on Thu

OVERNIGHT U.S. STOCK MOVERS

Corning (GLW +2.29%) was upgraded to 'Positive' from 'Neutral' at Susquehanna.
Walgreens (WAG +3.28%) was downgraded to 'Neutral' from 'Outperform' at Macquarie.
Covanta (CVA +4.55%) was upgraded to 'Outperform' from 'Neutral' at RW Baird.
Carlyle Group (CG -1.01%) was upgraded to 'Buy' from 'Neutral' at UBS.
Garmin (GRMN -0.89%) was upgraded to 'Buy' from 'Neutral' at Citigroup.
Lockheed Martin (LMT +1.50%) was awarded a $698.03 million government contract to procure long lead parts, materials and components in support of 57 IX F-35 Lightning II Joint Strike Fighters.
Facebook (FB +1.23%) said it agreed to acquire Oculus VR for approximately $2 billion.
International Game (IGT +0.34%) fell over 8% in after-hours trading after it cut its fiscal 2014 adjusted EPS outlook to $1.00-$1.10 from $1.28-$1.38 and said it will reduce its global workforce by 7%.
Steelcase (SCS -0.55%) reported Q4 EPS of 18 cents, higher than consensus of 17 cents, which prompted Raymond James to upgrade the stock to 'Strong Buy' from 'Outperform.'
Peabody Coal (BTU +1.18%) and Arch Coal (ACI -0.64%) were both downgraded to 'Neutral' from 'Buy' at UBS.
PVH Corp. (PVH -1.71%) reported Q4 EPS of $1.43, better than consensus of $1.42, but then lowered guidance on fiscal 2014 EPS to $7.40 to $7.50, well below consensus of $7.81.

MARKET COMMENTS

June E-mini S&Ps (ESM14 +0.34%) this morning are up +5.25 points (+0.28%). The S&P 500 on Tuesday closed higher. Stocks rose on optimism over the U.S. economic outlook after U.S. Mar consumer confidence (Conference Board) rose +4.0 points to a 6-year high of 82.3, a bigger increase than expectations of +0.4 to 78.5. Gains were limited as Feb new home sales fell -3.3% to a 5-month low of 440,000, a bigger decline than expectations of -4.9% to 445,000. Closes: S&P 500 +0.44%, Dow Jones +0.56%, Nasdaq +0.34%.
Jun 10-year T-notes (ZNM14 -0.09%) this morning are down -3 ticks. Jun 10-year T-note futures prices on Tuesday closed higher. A larger-than-expected decline in U.S. Feb new home sales to a 5-month low offset a jump in U.S. Mar consumer confidence to its best level in 6 years. Closes: TYM4 +1.50, FVM4 +2.75.
The dollar index (DXY00 +0.14%) this morning is up +0.109 (+0.14%). EUR/USD (^EURUSD) is down -0.0024 (-0.17%). USD/JPY (^USDJPY) is up +0.12 (+0.12%). The dollar index on Tuesday closed little changed. The dollar garnered support from an increase in U.S. Mar consumer confidence to a 6-year high, while EUR/USD retreated after the German Mar IFO business climate fell more than expected. Closes: Dollar index +0.010 (+0.01%), EUR/USD -0.00126 (-0.09%), USD/JPY +0.015 (+0.01%).
May WTI crude oil (CLK14 +0.26%) this morning is up +10 cents (+0.10%) and May gasoline (RBK14 +0.35%) is up +0.0093 (+0.32%). May crude and gasoline prices on Tuesday closed lower. Crude prices erased early gains and closed lower after the Houston Ship Canal was partially reopened, which reduced concerns that crude production at refineries along the Gulf Coast will be sharply reduced. Another bearish factor is the outlook for weekly EIA crude stockpiles on Wed to rise +2.815 million bbl, their tenth consecutive increase. Limiting losses was the larger-than-expected increase in U.S. Mar consumer confidence to a 6-year high. Closes: CLK4 -0394 (-0.39%). RBK4 -0.0040 (-0.14%).

GLOBAL EVENT CALENDAR03/26/2014

US	0200 ET	St. Louis Fed President James Bullard speaks at a conference in Hong Kong on the topic Central Banks: Will policy making ever be conventional again?
	0700 ET	Weekly MBA mortgage applications, previous -1.2% with purchase sub-index -0.9% and refi sub-index -1.3%.
	0830 ET	Feb durable goods orders expected +0.8% and +0.3% ex-transportation, Jan -1.0% and +1.1% ex-transportation. Feb non-defensive ex-aircraft capital goods orders, Jan +1.5%.
	0945 ET	Mar Markit services PMI expected +0.7 to 54.0, Feb 53.3.
	1030 ET	EIA Weekly Petroleum Status Report.
	1130 ET	Treasury auctions $13 billion 2-year floating-rate notes.
	1300 ET	Treasury auctions $35 billion 5-year T-notes.
	2020 ET	St. Louis Fed President James Bullard speaks at a conference in Hong Kong on the topic What are the prospects for U.S. monetary policy?
GER	0300 ET	German Apr GfK consumer confidence expected unch at 8.5, Mar 8.5.
CHI	2130 ET	China Feb industrial profits, Jan +12.2% year-to-date y/y.

U.S. STOCK CALENDAR03/26/2014

Company Name	Ticker	Time	Event Description	Period	Estimate
PVH Corp	PVH US	9:00	Q4 2014 Earnings Call	Q4 2014
Flowserve Corp	FLS US	9:00	Analyst Day	Y 2014
Iron Mountain Inc	IRM US	9:00	Investor Day	Y 2014
Cabela's Inc	CAB US	9:30	Analyst Day	Y 2014
McCormick & Co Inc/MD	MKC US	10:00	Annual General Meeting	Y 2014
Xcel Energy Inc	XEL US		Investors Meeting - Day 2	Y 2014