Thursday, April 10th, 2014View Older Reports
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OVERNIGHT MARKETS AND NEWS
June E-mini S&Ps (ESM14 -0.01%) this morning are down -0.15% and European stocks are down -0.54% on concern over a slowdown in the ChinesJe economy after China's Mar exports unexpectedly fell for a second month. Asian stocks closed mostly higher: Japan unchanged, Hong Kong +1.51%, China +1.57%, Taiwan +0.20%, Australia +0.31%, Singapore -0.20%, South Korea +0.46%, India +0.06%. Hong Kong's Hang Seng Stock Index rose to a 2-3/4 month high and China's Shanghai Stock Index recovered from losses due to weak China Mar trade data and rallied up to a 1-1/2 month high after the government said it would allow a combined 23.5 billion yuan ($3.8 billion) of daily cross-border trading in equities with Hong Kong. China's Securities Regulatory Commission said investors will be able to trade 10.5 billion yuan of Hong Kong-listed stocks through the Shanghai exchange, and 13 billion yuan of mainland shares through Hong Kong. Commodity prices are mixed. May crude oil (CLK14 -0.23%) is down -0.19%. May gasoline (RBK14 -0.60%) is down -0.47%. Jun gold (GCM14 +1.30%) is up +1.24% at a 2-week high after the minutes of the latest FOMC meeting showed that several policy makers said projections for an interest-rate increase might be overstated. May copper (HGK14 -0.15%) is down -0.12%. Agriculture and livestock prices are mixed. The dollar index (DXY00 -0.01%) is down -0.05% at a 3-week low. EUR/USD (^EURUSD) is up +0.09% at a 2-week high. USD/JPY (^USDJPY) is down -0.34% at a 3-week low. June T-note prices (ZNM14 +0.15%) are up +9 ticks at a 3-week high.The China Mar trade balance climbed to a +$7.71 billion surplus, higher than expectations of a +$1.80 billion surplus. Mar exports unexpectedly fell for a second month as they dropped -6.6% y/y, weaker than expectations of a +4.8% y/y increase. Mar imports unexpectedly fell -11.3% y/y, weaker than expectations of a +3.9% y/y increase and the largest decline in 13 months.
As expected, the BOE maintained its benchmark interest rate at 0.50% and held the asset purchase target at 375 billion pounds.
The UK Mar RICS house price balance unexpectedly rose +10 to 57%, better than expectations of a -4 point decline to 43%.
Japan Mar machine tool orders surged +41.8% y/y, the largest increase in 2-3/4 years.
Japan Feb machine orders fell -8.8% m/m and rose +10.8% y/y, weaker than expectations of -2.6% m/m and +17.5% y/y.
U.S. STOCK PREVIEW
Today’s weekly initial unemployment claims report is expected to show a decline of -6,000 to 320,000, reversing part of last week’s +16,000 increase to 326,000. Meanwhile, continuing claims are expected to show a slight decline of -1,000 to 2.835 million after last week’s increase of +22,000 to 2.836 million. Today’s March import price index is expected to rise by +0.2% m/m, adding to the +0.9% increase seen in February. The Treasury today will conclude this week’s $64 billion coupon package by selling $13 billion of 30-year T-bonds. There are 2 of the Russell 1000 companies that report earnings today: Family Dollar Stores (consensus $0.90), Commerce Bancshares (0.68). There are no equity conferences during the remainder of the week.
OVERNIGHT U.S. STOCK MOVERS
Molson Coors (TAP +0.19%) was downgraded to 'Neutral' from 'Buy' at Nomura.Rite Aid (RAD +4.75%) reported Q4 EPS ex-items of 10 cents, more than double consensus of 4 cents.
Facebook (FB +7.25%) was upgraded to 'Buy' from 'Hold' at Pivotal Research.
Twitter (TWTR +1.70%) was upgraded to 'Hold' from 'Sell' at Cantor.
Pier 1 Imports (PIR -0.27%) reported Q4 EPS of 41 cents, right on consensus, although Q4 revenue of $515.8 million was slghtly better than consensus of $512.76 million.
Akamai (AKAM +1.34%) was upgraded to 'Buy' from 'Neutral' at B. Riley.
Family Dollar Stores (FDO +0.56%) reported Q2 EPS of 80 cents, well below consensus of 90 cents, and then lowered guidance on fiscal 2014 EPS ex-items to $3.05-$3.25, below consensus of $3.38.
Chevron (CVX +1.10%) warned in its interim update that earnings for Q1 2014 are expected to be lower than Q4, principally as a result of adverse foreign exchange effects and selected asset impairments and related charges.
Huber Capital reported a 10.14% passive stake in Uranium Energy (UEC +16.50%) .
Bed Bath & Beyond (BBBY +0.22%) fell 4% in after-hours trading after it reported Q4 EPS of $1.60, right on consensus, but reported Q4 revenue of $3.2 billion, less than consensus of $3.22 billion.
PriceSmart (PSMT +0.99%) reported Q2 EPS of 93 cents, better than consensus of 88 cents.
MARKET COMMENTS
June E-mini S&Ps (ESM14 -0.01%) this morning are down -2.75 points (-0.15%). The S&P 500 on Wednesday closed higher. Bullish factors included (1) optimism that Q1 quarterly company earnings results will be positive for stocks after Alcoa started off the earnings season by reporting higher-then-expected profits, and (2) reduced interest rate concerns after the minutes of the Mar 18-19 FOMC meeting noted the Fed members said the projections for the timing of a Fed interest rate increase were exaggerated. Closes: S&P 500 +1.09%, Dow Jones +1.11%, Nasdaq +1.76%.Jun 10-year T-notes (ZNM14 +0.15%) this morning are up +9 ticks at a 3-week high. Jun 10-year T-note futures prices on Wednesday opened lower on reduced safe-haven demand after stocks rose, but T-notes erased their decline and rallied to a 3-week high after the minutes of the Mar 18-19 FOMC meeting said that the rise in median projections for the Fed to begin raising the Fed funds rate was exaggerated. Closes: TYM4 +5.00, FVM4 +6.25.
The dollar index (DXY00 -0.01%) this morning is down -0.041 (-0.05%) at a 3-week low. EUR/USD (^EURUSD) is up +0.0013 (+0.09%) at a 2-week high. USD/JPY (^USDJPY) is down -0.35 (-0.34%) at a 3-week low. The dollar index on Wednesday dropped to a 3-week low and closed lower. Bearish factors included (1) the dovish minutes of the Mar 18-19 FOMC meeting in which Fed members said projections for the timing of a Fed interest rate increase were overstated, and (2) strength in EUR/USD which rallied to a 2-week high on speculation the ECB will refrain from QE after the IMF on Tuesday raised its Eurozone 2014 GDP forecast to 1.2% from its Jan estimate of 1.0%. Closes: Dollar index -0.268 (-0.34%), EUR/USD +0.00585 (+0.42%), USD/JPY +0.186 (+0.18%).
May WTI crude oil (CLK14 -0.23%) this morning is down -20 cents (-0.19%) and May gasoline (RBK14 -0.60%) is down -0.0142 (-0.47%). May crude and gasoline prices on Wednesday posted 1-month highs and closed higher. Bullish factors included (1) the fall in the dollar index to a 3-week low, and (2) the -5.188 mln bbl plunge in weekly EIA gasoline inventories to a 4-1/2 month low versus expectations for a -940,000 bbl draw. Crude oil prices fell back from their best levels after the +4.03 million bbl surge in weekly EIA crude inventories to a 4-month high versus expectations of +970,000. Closes: CLK4 +1.04 (+1.01%). RBK4 +0.0283 (+0.95%).
GLOBAL EVENT CALENDAR04/10/2014
| US | 0830 ET | Weekly initial unemployment claims expected -6,000 to 320,000, previous +16,000 to 326,000. Weekly continuing claims expected -1,000 to 2.835 million, previous +22,000 to 2.836 million. |
| 0830 ET | Mar import price index expected +0.2% m/m and -0.9% y/y, Feb +0.9% m/m and -1.1% y/y. | |
| 0830 ET | USDA weekly Export Sales. | |
| 1100 ET | Treasury announces amount of 5-year TIPS to be auctioned Apr 17. | |
| 1130 ET | Chicago Fed President Charles Evans, ECB Vice President Vitor Constancio and RBI Governor Raghuram Rajan speak on a panel discussion on Global Monetary Policy and Emerging Markets in Washington D.C. | |
| 1300 ET | Treasury auctions $13 billion 30-year T-bonds. | |
| 1400 ET | Mar monthly budget statement expected -$71.0 billion, Feb -$193.5 billion. | |
| JPN | 0200 ET | Japan machine tool orders, Feb +26.15 y/y. |
| 1950 ET | Japan Mar domestic CGPI expected +0.1% m/m and +1.8% y/y, Feb -0.2% m/m and +1.8% y/y. | |
| EUR | 0400 ET | ECB publishes monthly report for April. |
| UK | 0700 ET | BOE announces interest rate decision and asset purchase target. |
| CHI | 2130 ET | China Mar CPI expected +2.4% y/y, Feb +2.0% y/y. Mar PPI expected -2.2% y/y, Feb -2.0% y/y. |
U.S. STOCK CALENDAR04/10/2014
| Company Name | Ticker | Time | Event Description | Period | Estimate |
|---|---|---|---|---|---|
| Family Dollar Stores Inc | FDO US | Bef-mkt | Q2 2014 Earnings Release | Q2 2014 | 0.895 |
| Commerce Bancshares Inc/MO | CBSH US | Bef-mkt | Q1 2014 Earnings Release | Q1 2014 | 0.677 |
| L Brands Inc | LB US | 7:30 | March 2014 Sales and Revenue Call | 2014 | |
| ConocoPhillips | COP US | 9:00 | Analyst Meeting | Y 2014 | |
| Family Dollar Stores Inc | FDO US | 10:00 | Q2 2014 Earnings Call | Q2 2014 | |
| Host Hotels & Resorts Inc | HST US | 10:00 | Investor Day | Y 2014 | |
| Gap Inc/The | GPS US | March 2014 Sales and Revenue Release | 2014 | ||
| Gap Inc/The | GPS US | March 2014 Sales and Revenue Call | 2014 | ||
| L Brands Inc | LB US | March 2014 Sales and Revenue Release | 2014 | ||
| Questar Corp | STR US | Roadshow - Day 3 | Y 2014 | ||
| Weyerhaeuser Co | WY US | Annual General Meeting | |||
| Adobe Systems Inc | ADBE US | Annual General Meeting | |||
| Costco Wholesale Corp | COST US | March 2014 Sales and Revenue Release | 2014 |
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