Monday, March 3, 2014

BARCHART MORNING CALL 3/3

OVERNIGHT MARKETS AND NEWS
March E-mini S&Ps (ESH14 -1.05%) this morning are down -1.10% and European stocks are down sharply by -2.69% after Russian troops seized control of Ukraine's Crimea region. The situation threatens to escalate after Russian servicemen attacked Ukrainian army units in the last 24 hours, according to Ukraine's border guard service. U.S. Secretary of State Kerry is traveling to Kiev after discussing sanctions against Russia, and European Union foreign ministers will hold an emergency meeting. The Russian ruble tumbled to a record low, which prompted Bank Rossii, Russia's central bank, to unexpectedly hike the 1-week auction rate, the benchmark rate introduced in Sep, by 150 bp to 7.00%. Asian stocks closed mostly lower: Japan -1.27%, Hong Kong -1.47%, China +0.52%, Taiwan -0.44%, Australia -0.38%, Singapore -0.75%, South Korea -0.82%, India -0.82%. Commodity prices are sharply higher as escalating tension in Ukraine fuel concern that energy and agricultural supplies will be disrupted. Apr crude oil (CLJ14 +2.00%) is up +1.94% at a 5-1/4 month high. Apr gasoline (RBJ14 +1.95%) is up +1.97%. Apr gold (GCJ14 +1.82%) is up +1.73% at a 4-month high on increased safe-haven demand from the Ukraine crisis. May copper (HGK14 -0.71%) is down -0.86% at a 3-1/2 month low after manufacturing activity in China weakened to its slowest pace in 8-months. Agriculture prices are sharply higher with May corn up +3.24% at a 5-3/4 month high and May wheat up +5.35% at a 2-1/2 month high. The dollar index (DXY00 +0.27%) is up +0.24%. EUR/USD (^EURUSD) is down -0.29%. USD/JPY (^USDJPY) is down -0.53%. June T-note prices (ZNM14 +0.36%) are up +16 ticks on surge in safe-haven demand as global stocks slump on the Ukraine crisis.
The China Feb manufacturing PMI fell -0.3 to 50.2, a smaller decline than expectations of -0.4 to 50.1, but still the slowest pace of expansion in 8-months. The Feb non-manufacturing PMI rose +1.6 to 55.0.
The German Feb PMI manufacturing index was revised up to 54.8 from the originally reported 54.7.
The Eurozone Feb manufacturing PMI index was revised higher to 53.2 from the originally reported 53.0.
The UK Feb PMI manufacturing index rose +0.3 to 56.9 from an upward revised 56.6 in Jan, a faster pace of expansion than expectations of +0.1 to 56.8.
UK Jan mortgage approvals rose 76,900, more than expectations of 74,500 and the most in 6-years.
UK Jan net consumer credit rose +0.7 billion pounds, right on expectations.
U.S. STOCK PREVIEW
Today’s Feb ISM manufacturing index is expected to show a recovery of +0.7 points to 52.0 after the sharp -5.2 point drop to 51.3 seen in January. Today’s Feb total vehicle sales report is expected to improve to 15.40 million from 15.16 million in January. Today’s Jan personal income and consumption report is expected to be modest and show increases of +0.2% and +0.1%, respectively. Today’s Jan PCE deflator is expected to be unchanged from December at +1.1% y/y. Meanwhile, the Jan core PCE deflator is expected to ease to +1.1% y/y from +1.2% in December. There are 8 of the Russell 1000 companies that report earnins today: Nu Skin Enterprises (consensus $2.01), WP Carey (0.79), Ascena Retail Group (0.21), MBIA (0.17), McDermott International (0.16), URS Corp (0.18), Rockwood Holdings (0.32), Stratasys (0.49).
Equity conferences this week include: Morgan Stanley Utilities Conference on Mon, Citi Korea Investor Conference on Mon, JMP Securities Technology Research Conference on Mon-Tue,
Morgan Stanley Technology, Media & Telecom Conference on Mon-Thu, Citi Global Property CEO Conference on Mon-Wed, Cowen & Co. Healthcare Conference on Mon-Wed, Raymond James Institutional Investor Conference on Mon-Wed, Credit Suisse Healthcare Conference on Tue, IHS Energy CERAWeek Conference on Tue, UBS Natural Gas Electric Power and MLP Conference, Morgan Stanley European Medtech & Services Conference on Tue-Wed, Canadian Energy Research Institure (CERI) National Gas Conference on Tue, Pacific Crest Emerging Tech Summit conference on Wed, ISI Enterprise Infrastructure Conference on Wed, Mitsubishi Seattle Consumer Conference on Wed, Seattle Consumer Conference on Wed, Bank of America Merrill Lynch Refining Conference on Thu, and Jefferies Industrial Leaders Day on Thu.
OVERNIGHT U.S. STOCK MOVERS
Autodesk (ADSK -3.32%) was downgraded to 'Sell' from 'Neutral' at Citigroup.
Superior Energy (SPN +2.00%) was downgraded to 'Neutral' from 'Buy' at Guggenheim.
Darden (DRI +2.53%) lowered guidance on Q3 EPS to 82 cents, below consensus of 93 cents, citing severe winter weather that undercut restaurant sales.
Tyco (TYC -0.66%) said it will sell its security business in South Korea to Carlyle Group (CG +0.58%) for $1.93 billion.
Intuit INTU=}) was upgraded to 'Buy' from 'Neutral' at Citigroup.
U.S. Cellular (USM -3.81%) and Telephone and Data (TDS -2.36%) were both upgraded to 'Overweight' from 'Neutral' at JPMorgan.
Magna (MGA +2.21%) reported Q4 EPS of $2.03, well above consensus of $1.54.
Bloomberg reported that Las Vegas Sands (LVS +0.14%) said customer data was stolen recently in a cyber-attack on systems at its Pennsylvania property.
Raytheon (RTN +0.33%) was awarded $655.41 million government contract for two PATRIOT fire units and associated initial spares for the military of Kuwait.
In a regulatory filing, billionare investor Carl Icahn disclosed the purchase of an additional 33,515 shares of Herbalife (HLF -1.01%) .
VA Partners reported a 6.6% stake in Dresser-Rand (DRC +0.06%) .
Cooper Tire (CTB +0.08%) reported Q3 EPS of 0 cents, well below consensus of 38 cents, as the company said there was unusual items related to the terminated merger agreement with Apollo Tyres.
Moody's Investors Service raised its outlook on Germany's Aaa government bond rating to stable from negative.
Michael Weiss reported a 15.0% stake in Coronado (CNDO -3.73%) .
River Road Asset reported a 9.2% stake in Miller Energy (MILL +0.73%) .
MARKET COMMENTS
Mar E-mini S&Ps (ESH14 -1.05%) this morning are down sharply by -20.50 points (-1.10%) as escalating tensions in Ukraine prompts a sell-off in global stocks. The S&P 500 on Friday opened lower after U.S. Q4 GDP was revised lower to +2.4% from +3.2%, which was a slightly larger decline than expectations of +2.5%. Stocks recovered and rallied to a fresh record high and closed higher, however, on bullish factors that included (1) the unexpected +0.2 point rise in the Chicago Feb PMI that to 59.8, better than expectations of -3.2 to 56.4, and (2) the +0.4 point increase in the final-Feb University of Michigan U.S. consumer confidence index to 81.6, stronger than expectations of unch at 81.2. Closes: S&P 500 +0.49%, Dow Jones +0.46%, Nasdaq 100 +0.63%.
Jun 10-year T-notes (ZNM14 +0.36%) this morning are up +16 ticks at a 1-month high. Jun 10-year T-note futures prices Friday fell back from a 1-month high and closed lower. Bearish factors included (1) signs of economic growth after the unexpected increases in the Feb Chicago PMI and the U.S. Feb University of Michigan consumer confidence, and (2) the rally in the S&P 500 to a record high, which reduced safe-haven demand for T-notes. Closes: TYM4 -7.00, FVM4 -3.75.
The dollar index (DXY00 +0.27%) this morning is up +0.192 (+0.24%). EUR/USD (^EURUSD) is down -0.004 (-0.29%). USD/JPY (^USDJPY) is down -0.54 (-0.53%). The dollar index on Friday fell to a 2-month low and closed lower. Negative factors included (1) the rally in the S&P 500 to a record high, which reduced safe-haven demand for the dollar, and (2) strength in EUR/USD, which rallied to a 2-month high after the Feb Eurozone CPI estimate of +0.8% y/y was higher than expectations of +0.7% y/y and dampened speculation the ECB will expand its stimulus measures when it meets on Thursday. Closes: Dollar index -0.594 (-0.74%), EUR/USD +0.00912 (+0.67%), USD/JPY -0.384 (-0.38%).
Apr WTI crude oil (CLJ14 +2.00%) this morning is up +$1.99 a barrel (+1.94%) at a 5-1/4 month high and Apr gasoline (RBJ14 +1.95%) is up +0.0588 (+1.97%). Apr crude and gasoline prices Friday closed higher. Bullish factors included (1) the slide in the dollar index to a 2-month low, (2) the unexpected increase in the Feb Chicago PMI, and (3) the unexpected increase in the U.S. Feb University of Michigan consumer confidence. Gains were limited after U.S. Q4 GDP was revised lower than expected, a sign of weaker energy demand. Closes: CLJ4 +0.19 (+0.19%), RBJ4 +0.0169 (+0.57%).
GLOBAL EVENT CALENDAR03/03/2014
US0830 ETJan personal spending expected +0.1%, Dec +0.4%. Jan personal income expected +0.2%, Dec unch. Jan PCE deflator expected +0.1% m/m and +1.1% y/y, Dec +0.2% m/m and +1/1% y/y. Jan PCE core deflator expected +0.1% m/m and +1.1% y/y, Dec +0.1% m/m and +1.2% y/y.
1000 ETFeb ISM manufacturing index expected +0.7 to 52.0, Jan -5.2 to 51.3. Feb ISM prices paid expected -3.1 to 57.4, Jan +7.0 to 60.5. Feb ISM new orders sub-index, Jan -13.2 to 51.2.
1000 ETJan construction spending expected -0.5% m/m, Dec +0.1% m/m.
1100 ETUSDA weekly grain export inspections.
n/aFeb total vehicle sales expected 15.40 million, Jan 15.16 million. Feb domestic vehicle sales expected 11.90 million, Jan 11.94 million.
JPN0000 ETJapan Feb vehicle sales, Jan +27.5% y/y.
2030 ETJapan Jan labor cash earnings expected +0.3% y/y, Dec +0.5% y/y.
GER0355 ETRevised German Feb PMI manufacturing, previous 54.7.
EUR0400 ETRevised Eurozone Feb PMI manufacturing, previous 53.0.
0900 ETECB President Mario Draghi speaks at the Quarterly Hearing before the Committee on Economic and Monetary Affairs of the European Parliament.
UK0430 ETUK Feb PMI manufacturing expected +0.3 to 57.0, Jan 56.7.
0430 ETUK Jan net consumer credit expected +0.7 billion pounds, Dec +0.6 billion pounds.
0430 ETUK Jan mortgage approvals expected 74,500, Dec 71,600.
0430 ETUK Jan M4 money supply, Dec -1.4% m/m and +0.2% y/y.
U.S. STOCK CALENDAR03/03/2014
Company NameTickerTimeEvent DescriptionPeriodEstimate
Nu Skin Enterprises IncNUS US3/3/2014Q4 2013 Earnings ReleaseQ4 20132.012
WP Carey IncWPC US3/3/2014Q4 2013 Earnings ReleaseQ4 20130.79
BioMarin Pharmaceutical IncBMRN US3/3/2014Q4 2013 Earnings CallQ4 2013
Stratasys LtdSSYS US3/3/2014Q4 2013 Earnings CallQ4 2013
Ford Motor CoF US3/3/2014February 2014 Sales and Revenue Release2014
Ford Motor CoF US3/3/2014February 2014 Sales and Revenue Call2014
Rockwood Holdings IncROC US3/3/2014Q4 2013 Earnings CallQ4 2013
Nu Skin Enterprises IncNUS US3/3/2014Q4 2013 Earnings CallQ4 2013
WP Carey IncWPC US3/3/2014Q4 2013 Earnings CallQ4 2013
Ascena Retail Group IncASNA US3/3/2014Q2 2014 Earnings ReleaseQ2 20140.213
Ascena Retail Group IncASNA US3/3/2014Q2 2014 Earnings CallQ2 2014
McDermott International IncMDR US3/3/2014Q4 2013 Earnings CallQ4 2013
URS CorpURS US3/3/2014Q4 2013 Earnings CallQ4 2013
MBIA IncMBI US3/3/2014Q4 2013 Earnings ReleaseQ4 20130.17
McDermott International IncMDR US3/3/2014Q4 2013 Earnings ReleaseQ4 20130.163
URS CorpURS US3/3/2014Q4 2013 Earnings ReleaseQ4 20130.175
Rockwood Holdings IncROC US3/3/2014Q4 2013 Earnings ReleaseQ4 20130.321
Stratasys LtdSSYS US3/3/2014Q4 2013 Earnings ReleaseQ4 20130.494
Posted by Jim Van Meerten at
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