BARCHART MORNING CALL
Tuesday, March 4th, 2014View Older Reports
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OVERNIGHT MARKETS AND NEWS
March E-mini S&Ps (ESH14 +1.14%) this morning are up sharply by +1.06% and European stocks rose +2.23% after Russian President Putin said Russia isn't considering taking over Crimea and would only send troops to Ukraine in an extreme case. Putin's comments signal the crisis won't escalate, which has boosted global stocks and undercut commodity prices that rallied sharply on Monday. Asian stocks closed mixed: Japan +0.47%, Hong Kong +0.70%, China -0.28%, Taiwan -0.55%, Australia +0.30%, Singapore +0.56%, South Korea -0.59%, India +1.26%. Another positive for U.S. stocks was comments from former Fed Chairman Bernanke who was speaking at a Global Financial Markets Forum in Abu Dhabi and said that the U.S. economy is seeing signs of progress and that there is "good reason to think U.S. GDP to grow around 3% this year." Commodity prices are mostly lower. Apr crude oil (CLJ14 -1.33%) is down -1.46%. Apr gasoline (RBJ14 -1.33%) is down -1.46%. Apr gold (GCJ14 -1.22%) is down -1.13%. May copper (HGK14 +0.47%) is up +0.30%. Agriculture and livestock prices are mixed. The dollar index (DXY00 -0.10%) is down -0.10%. EUR/USD (^EURUSD) is up +0.19%. USD/JPY (^USDJPY) is up +0.42%. June T-note prices (ZNM14 -0.36%) are down -16 ticks.In his first public remarks since former Ukraine President Yanukovych was ousted last month, Russian President Putin said he'd only send troops to Ukraine in an extreme case and that Yanukovych asked for military protection of ethnic Russians in his country. Putin said Russia isn't considering taking over Crimea and that Russian troops were performing military drills near the border of Ukraine and are expected back to their bases by March 7.
Eurozone Jan PPI fell -0.3% m/m and -1.4% y/y, more than expectations of -0.1% m/m and -1.3% y/y, with the -1.4% y/y drop the biggest annual decline in 4-years.
UK Feb PMI construction fell -2.0 to 62.6, a bigger decline than expectations of -1.4 to 63.2.
Japan Jan labor cash earnings unexpectedly fell -0.2% y/y, weaker than expectations of +0.3% y/y and the first decline in 3-months, while Dec was revised lower to +0.5% y/y from the originally reported +0.8% y/y.
U.S. STOCK PREVIEW
The main focus today will be on the situation in the Ukraine. There are 3 of the Russell 1000 companies that report earnins today: AutoZone (consensus $5.56), Veeva Systems (0.06), and Tech Data (1.93). Equity conferences this week include: 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
AutoZone (AZO +0.52%) reported Q2 EPS of $5.63, higher than consensus of $5.56.Intuitive Surgical (ISRG +2.03%) was downgraded to 'Hold' from 'Buy' at Cantor due to valuation.
Lennar (LEN -0.09%) was downgraded to 'Hold' from 'Buy' at KeyBanc due to valuation.
Magna (MGA +5.08%) was upgraded to 'Neutral' from 'Underweight' at JPMorgan.
Abercrombie & Fitch (ANF -0.91%) was upgraded to 'Outperform' from 'Neutral' at Credit Suisse.
Reuters reported that JPMorgan Chase (JPM -1.07%) will pay $400 million to settle lawsuits from bond insurer Syncora Guarantee.
Brookdale Senior Living reported an approximately 12.1% stake in Emeritus (ESC +0.70%) .
Starwood Hotels (HOT -2.11%) was downgraded to 'Neutral' from 'Buy' at Goldman.
William Chang reported a 17.3% stake and Eric Semler reported a 12.1% stake in Selmer Scientific (SMLR -2.73%) .
Hilton (HLT +0.58%) was upgraded to 'Buy' from 'Neutral' at Goldman.
J.C. Penney (JCP +9.34%) rose 2% in after-hours trading after Standard & Poor's Ratings Services revised its outlook on JCP to stable from negative.
Wells Fargo kept an 'Outperform' rating on Allergan (AGN -0.54%) and raised its price target on the stock to $139-$140 from $133-$134.
Ascena Retail (ASNA +3.17%) fell 3% in after-hours trading after it reported Q2 adjusted EPS of 23 cents, better than consensus of 20 cents, but then cut its fiscal 2014 EPS view to $1.00-$1.05 from $1.10-$1.15, below consensus of $1.15.
McDermott (MDR -2.64%) plunged 13% in after-hours trading after the company unexpectedly reported a Q4 EPS loss of -$1.37, well below consensus for a 15 cent profit.
MARKET COMMENTS
Mar E-mini S&Ps (ESH14 +1.14%) this morning are up +19.50 points (+1.06%). The S&P 500 on Monday closed lower on carry-over weakness from a plunge in global stocks on concern the action by Russia’s military to seize control of Ukraine’s Crimea region may escalate into a wider conflict. Positive U.S. economic data limited declines after the Feb ISM manufacturing index rose +1.9 to 53.2, stronger than expectations of +0.7 to 52.0, and Jan construction spending unexpectedly rose +0.1% m/m, stronger than expectations of -0.5% m/m. Closes: S&P 500 -0.74%, Dow Jones -0.94%, Nasdaq 100 -0.75%.Jun 10-year T-notes (ZNM14 -0.36%) this morning are down -16 ticks. Jun 10-year T-note futures prices on Monday closed higher and the yield on the 10-year T-note fell to a 1-month low of 2.589% on increased safe-haven demand after global stocks slumped on the Russian military’s invasion of Crimea. T-note prices fell back from their best levels after U.S. Jan personal spending and the Feb ISM manufacturing index rose more than expected. Closes: TYM4 +14.50, FVM4 +7.00.
The dollar index (DXY00 -0.10%) this morning is down -0.083 (-0.10%). EUR/USD (^EURUSD) is up +0.0026 (+0.19%). USD/JPY (^USDJPY) is up +0.43 (+0.42%). The dollar index on Monday closed higher as the ongoing Ukraine crisis fueled a global stock market sell-off that boosted the safe-haven demand for the dollar and the yen. USD/JPY fell to a 3-1/2 week low as the yen strengthened on safe-haven demand. Increased geopolitical risks in North Korea also boosted the dollar after North Korea’s military fired 2 short-range missiles off of its east coast. Closes: Dollar index +0.386 (+0.48%), EUR/USD -0.0067 (-0.49%), USD/JPY -0.298 (-0.29%).
Apr WTI crude oil (CLJ14 -1.33%) this morning is down -$1,53 a barrel (-1.46%) and Apr gasoline (RBJ14 -1.33%) is down -0.0441 (-1.46%). Apr crude and gasoline prices Monday closed higher with Apr crude at a 5-1/2 month high. Supportive factors included (1) increased geopolitical tensions after Russian troops seized control of Ukraine’s Crimea region and (2) stronger-than-expected U.S. economic data on Feb ISM manufacturing activity and Jan construction spending, which were supportive indicators for energy demand. Closes: CLJ4 +2.33 (+2.27%), RBJ4 +0.0429 (+1.44%).
GLOBAL EVENT CALENDAR03/04/2014
| US | 1000 ET | Former Bank of Israel governor Stanley Fischer appears before the Senate Banking Committee in his confirmation hearings on his nomination as Fed Vice Chair. |
| 1000 ET | Mar IBD/TIPP economic optimism expected +0.1 to 45.0, Feb 44.9 | |
| 1615 ET | Richmond Fed President Jeffrey Lacker speaks on the economy at the Council for Economic Educations economic summit in New York. | |
| UK | 0430 ET | UK Feb PMI construction expected -1.4 to 63.2, Jan 64.6 |
| 1901 ET | UK Feb BRC shop price index expected -1.1%, Jan -1.0% y/y. | |
| EUR | 0500 ET | Eurozone Jan PPI expected -0.1% m/m and -1.3% y/y, Dec +0.2% m/m and -0.8% y/y. |
U.S. STOCK CALENDAR03/04/2014
| Company Name | Ticker | Time | Event Description | Period | Estimate |
|---|---|---|---|---|---|
| AutoZone Inc | AZO US | Bef-mkt | Q2 2014 Earnings Release | Q2 2014 | 5.556 |
| MBIA Inc | MBI US | 8:00 | Q4 2013 Earnings Call | Q4 2013 | |
| St Joe Co/The | JOE US | 8:00 | Extraordinary Shareholders Meeting | ||
| SandRidge Energy Inc | SD US | 8:00 | Analyst Meeting | Y 2014 | |
| Anadarko Petroleum Corp | APC US | 8:30 | Investor Conference | ||
| Leucadia National Corp | LUK US | 9:00 | Business Update Call | ||
| FLIR Systems Inc | FLIR US | 9:00 | Analyst and Investor Day | Y 2014 | |
| TransDigm Group Inc | TDG US | 9:00 | Annual General Meeting | Y 2014 | |
| Xylem Inc/NY | XYL US | 9:00 | Executive Update Call | ||
| AutoZone Inc | AZO US | 10:00 | Q2 2014 Earnings Call | Q2 2014 | |
| QUALCOMM Inc | QCOM US | 12:30 | Annual General Meeting | Y 2014 | |
| Vectren Corp | VVC US | 12:30 | Financial Community Meeting | Y 2014 | |
| Applied Materials Inc | AMAT US | 14:00 | Annual General Meeting | Y 2013 | |
| Caterpillar Inc | CAT US | 16:00 | Analyst Meeting | Y 2014 | |
| Veeva Systems Inc | VEEV US | 16:30 | Q4 2014 Earnings Call | Q4 2014 | |
| Veeva Systems Inc | VEEV US | Aft-mkt | Q4 2014 Earnings Release | Q4 2014 | 0.059 |
| Joy Global Inc | JOY US | Annual General Meeting | |||
| Hologic Inc | HOLX US | Annual General Meeting | |||
| AutoNation Inc | AN US | February 2014 Sales and Revenue Release | 2014 | ||
| Tech Data Corp | TECD US | 23:59 | Q4 2014 Earnings Release | Q4 2014 | 1.933 |
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