BARCHART MORNING CALL 4/2

BARCHART MORNING CALL

Thursday, April 2nd, 2015View Older Reports

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OVERNIGHT MARKETS AND NEWS

June E-mini S&Ps (ESM15 -0.26%) this morning are down -0.32% ahead of an expected increase in U.S. weekly initial unemployment claims and an expected decline in Feb factory orders. European stocks are down -0.07% as a 2.4% fall in Daimler AG led a slide in European automakers. Deutsche Lufthansa AG fell nearly 3% after Barclays Plc cut its recommendation on the stock to 'Equal Weight' from 'Overweight.' The yield on the 10-year Greek bond climbed to a 1-1/2 week high of 11.905% after the ECB yesterday raised the cap on Emergency Liquidity Assistance provided to the Bank of Greece by 700 million euros, smaller than the 1 billion euros the ECB Governing Council granted last week. Greece is facing a funding crisis as its government continues to negotiate for additional EU aid. Asian stocks settled higher: Japan +1.46%, Hong Kong +0.77%, China +0.02%, Taiwan +0.97%, Australia +0.65%, Singapore +0.20%, South Korea +0.01%, India closed for holiday. Commodity prices are mostly lower. May crude oil (CLK15 -2.83%) is down -1.94% as Iran and world powers extended talks for an 8th day aimed at reaching a nuclear accord with Iran. The U.S. State Department said late Wednesday that Secretary of State Kerry had seen enough progress in the talks to warrant the continuation of negotiations. May gasoline (RBK15 -2.54%) is down -1.61%. Jun gold (GCM15 -0.34%) is down -0.31%. May copper (HGK15 -0.91%) is down -0.91%. Agriculture prices are mixed. The dollar index (DXY00 -0.35%) is down -0.29%. EUR/USD (^EURUSD) is up +0.58%. USD/JPY (^USDJPY) is down -0.13%. Jun T-note prices (ZNM15 +0.19%) are up +7.5 ticks at a 1-3/4 month high.
The recent surge in the Shanghai Stock Index to a 7-year high has been aided by margin buying. Chinese investors have been piling into the market after the PBOC cut interest rates twice since November. Traders have opened 2.8 million new accounts in the past 2 weeks and data shows the outstanding balance of margin debt on the Shanghai Stock Exchange rose above 1 trillion yuan ($161 billion) for the first time on Apr 1, a nearly fourfold jump from 1 year ago.
The UK Mar Markit/CIPS construction PMI fell -2.3 to 57.8, weaker than expectations of -0.3 to 59.8.

U.S. STOCK PREVIEW

Key news today includes (1) weekly initial unemployment claims (expected +5,000 to 287,000) and continuing claims (expected -11,000 to 2.405 million), (2) the Feb U.S. trade deficit (expected a bit narrower at -$41.2 billion vs -$41.8 billion in Jan), (3) Mar Challenger job cuts (Feb was +20.9% y/y), (4) the March New York ISM index (expected -1.1 to 62.0 after Feb's +18.6 to 63.1), (5) Feb factory orders (expected -0.4% after Jan's -0.2%), and (6) the Treasury's announcement of next week's package of 3-year, 10-year and 30-year auctions.
There is one of the Russell 1000 companies that reports earnings today: CarMax (consensus $0.60).
U.S. IPO's that start trading today include: Axalta Coatings (AXTA).
Equity conferences during the remainder of this week include: Goldman Sachs Biosimilars Conference on Thu.

OVERNIGHT U.S. STOCK MOVERS

Stryker (SYK -1.16%) was downgraded to 'Underweight' from 'Equal Weight' at Barclays.
Garmin (GRMN -0.95%) was downgraded to 'Neutral' from 'Buy' at Goldman Sachs.
Dick's Sporting (DKS -0.37%) was upgraded to 'Positive' from 'Neutral' at Susquehanna.
Credit Suisse maintained its 'Outperform' rating on Vail Resorts (MTN -0.96%) and raised their price target on the stock to $115 from $105.
CarMax (KMX -0.90%) reported Q4 EPS of 67 cents, higher than consensus of 60 cents.
WWE (WWE -2.93%) announced that WrestleMania 31 broke records for viewership, attendance, social and digital media engagement and merchandise sales.
Transocean (RIG +0.34%) said it sees a Q1 charge of $90 million-$110 million from disposal of the GSF Aleutian Key and Sedco 707 oil rigs.
Air Lease (AL +0.66%) was initiated with an 'Outperform' at Macquarie with a price target of $48.
Micron (MU unch) jumped over 4% in after-hours trading after it reported Q2 adjusted EPS of 81 cents, better than consensus of 73 cents. Micron they shed its gains and fell 1% after it lowered guidance on Q3 revenue to $3.85 billion-$4.05 billion, below consensus of $4.29 billion.
Macerich (MAC -6.64%) was upgraded to 'Neutral' from 'Underperform' at Credit Suisse.

MARKET COMMENTS

Jun E-mini S&Ps (ESM15 -0.26%) this morning are down -6.50 points (-0.32%). Wednesday's closes: S&P 500 -0.40%, Dow Jones -0.44%, Nasdaq -0.52%. The stock market closed lower on Wednesday mainly because of weak U.S. economic reports with ADP employment rising by only +189,000 (vs expectations of +225,000) and with the March U.S. ISM manufacturing index falling by -1.4 points to a 1-3/4 year low of 51.5.
Jun 10-year T-notes (ZNM15 +0.19%) this morning are up +7.5 ticks at a 1-3/4 month high. Wednesday's closes: TYM5 +15.00, FVM5 +7.00. June 10-year T-notes on Wednesday rallied to a new 1-3/4 month high on the weaker-than-expected ADP and ISM reports, which sparked expectations for a delayed Fed rate hike and tame inflation. T-notes also received a carry-over boost from German bunds as the 10-year German bund yield fell to a new record low of 0.151%.
The dollar index (DXY00 -0.35%) this morning is down -0.284 (-0.29%). EUR/USD (^EURUSD) is up +0.0062 (+0.58%). USD/JPY(^USDJPY) is down -0.15 (-0.13%). Wednesday's closes: Dollar index -0.172 (-0.17%), EUR/USD +0.00319 (+0.30%), USD/JPY -0.373 (-0.31%). The dollar index closed mildly lower on Wednesday due to the weaker-than-expected U.S. ADP and ISM reports, which suggested that the Fed may delay a rate hike. Meanwhile, EUR/USD received a boost from news that the Mar Eurozone Mar Markit manufacturing PMI was revised higher to a 10-month high.
May WTI crude oil (CLK15 -2.83%) this morning is down -97 cents (-1.94%) and May gasoline (RBK15 -2.54%) is down -0.0295 (-1.61%). Wednesday's closes: CLK5 +2.49 (+5.23), RBK5 +0.0530 (+2.99%). May crude oil and gasoline prices on Wednesday rallied sharply due to the lower close in the dollar and the EIA report showing a -0.4% decline in U.S. oil production, the first decline in 8 weeks. Gasoline received a boost from the EIA report showing that gasoline inventories fell by -4.26 million bbl to a 3-month low of 229.1 million bbl. Crude oil prices were held back by the EIA report showing that U.S. crude oil inventories rose +4.77 million bbl to a new record high and that Cushing crude oil inventories rose by +2.63 million bbl to a record high 58.9 million bbl.

GLOBAL EVENT CALENDAR04/02/2015

US	0730 ET	Mar Challenger job cuts, Feb +20.9% y/y.
	0830 ET	Weekly initial unemployment claims expected +5,000 to 287,000, previous -9,000 to 282,000. Weekly continuing claims expected -11,000 to 2.405 million, previous -6,000 to 2.416 million.
	0830 ET	Feb trade balance expected -$41.2 billion, Jan -$41.8 billion.
	0830 ET	USDA weekly Export Sales.
	0945 ET	Mar New York ISM expected -1.1 to 62.0, Feb +18.6 to 63.1.
	1000 ET	Feb factory orders expected -0.4%, Jan -0.2%.
	1100 ET	Treasury announces amount of 3-year T-notes (previous $24 billion), 10-year T-notes (previous $21 billion), and 30-year T-bonds (previous $13 billion) to be auctioned Apr 7-9.
UK	0430 ET	UK Mar Markit/CIPS construction PMI expected -0.3 to 59.8, Feb 60.1.
EUR	0730 ET	ECB publishes an account of the Mar 4-5 monetary policy meeting.

U.S. STOCK CALENDAR04/02/2015

Company	Ticker	Time	Event Description	Period	Estimate
CarMax Inc	KMX US	Bef-mkt	Q4 2015 Earnings Release	Q4 2015	0.599
Plum Creek Timber Co Inc	PCL US	8:00	Analyst Meeting	Y 2015
CarMax Inc	KMX US	9:00	Q4 2015 Earnings Call	Q4 2015
Starwood Property Trust Inc	STWD US	9:00	Investor Day	Y 2015
Synopsys Inc	SNPS US	11:00	Annual General Meeting	Y 2015
Sabre Corp	SABR US	12:00	Investor Day	Y 2015
Applied Materials Inc	AMAT US	14:00	Annual General Meeting	Y 2015
PNC Financial Services Group Inc/The	PNC US		Board Meeting
Rite Aid Corp	RAD US		March 2015 Sales and Revenue Release	2015
AutoNation Inc	AN US		March 2015 Sales and Revenue Release	2015
Delta Air Lines Inc	DAL US		March 2015 Sales and Revenue Release - Traffic Results	2015