BARCHART MORNING CALL 10/1

BARCHART MORNING CALL

Wednesday, October 1st, 2014View Older Reports

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OVERNIGHT MARKETS AND NEWS

December E-mini S&Ps (ESZ14 -0.14%) this morning are down -0.10% and European stocks are down -0.09% after a gauge of Eurozone manufacturing activity last month was revised lower to its slowest pace of expansion in 15 months. Losses were contained after data showed Chinese manufacturing activity was stronger-than-expected last month. Greek stocks rallied sharply after the Financial Times reported that ECB President Draghi at Thursday's ECB policy meeting will unveil a plan to buy private-sector assets and will push for the central bank to buy bundles of Greek and Cypriot bank loans with "junk" ratings. Asian stocks closed mixed: Japan -0.56%, Hong Kong and China closed for holiday, Taiwan +0.26%, Australia +0.78%, Singapore -0.39%, South Korea -1.54%, India -0.23%. Commodity prices are mixed. Nov crude oil (CLX14 +0.67%) is up +0.36%. Nov gasoline (RBX14 +0.58%) is up +0.31%. Dec gold (GCZ14 -0.15%) is down -0.21%. Dec copper (HGZ14 +1.20%) is up +0.57%. Agriculture and livestock prices are lower with Dec corn down -0.47% at a fresh 5-year low. The dollar index (DXY00 +0.23%) is up +0.18%. EUR/USD (^EURUSD) is down -0.27%. USD/JPY (^USDJPY) is up +0.17% at a new 6-year high. Dec T-note prices (ZNZ14 +0.18%) are up +8.5 ticks at a 3-week high on carry-over support from a rally in German bunds to a 3-week high.
The German Sep Markit/BME manufacturing PMI was revised lower to 49.9 from the previously reported 50.3, the first time that manufacturing activity in Germany has contracted in 15 months.
The Eurozone Sep Markit manufacturing PMI was revised down to 50.3 from the previously reported 50.5, the slowest pace of expansion in 15 months.
The China Sep manufacturing PMI was unchanged at 51.1, better than expectations of -0.1 to 51.0.
The UK Sep Markit manufacturing PMI fell -0.6 to 51.6, weaker than expectations of +0.2 to 52.7 and the slowest pace of expansion in 17 months.
The Japan Q3 Tankan large manufacturing business conditions unexpectedly improved to 13 from 12 in Q2, better than expectations of decline to 10.

U.S. STOCK PREVIEW

Today’s Sep ISM manufacturing index is expected to show a -0.5 point decline to 58.5. Today’s Sep ADP employment report is expected to show an increase of +207,000, slightly better than August’s report of +204,000. Today’s Sep total vehicle sales report is expected to fall back to 16.80 million units from the 8-1/2 year high of 17.45 million posted in August.
There is one of the Russell 1000 companies that reports earnings today: Acuity Brands (consensus $1.22). Equity conferences this week include: Oracle OpenWorld 2014 on Mon-Wed, Unconventional Resources Conference Canada 2014 on Wed, and Paris Motor Show 2014-Press Days on Thu.

OVERNIGHT U.S. STOCK MOVERS

Dean Foods (DF +0.61%) was downgraded to 'Hold' from 'Buy' at BB&T.
Panera Bread (PNRA +2.51%) was upgraded to 'Buy' from 'Hold' at Wunderlich.
Tyson Foods (TSN +1.34%) was upgraded to 'Neutral' from 'Underperform' at Credit Suisse.
Janus Capital (JNS -1.09%) was upgraded to 'Buy' from 'Hold' at Jefferies.
eBay (EBAY +7.54%) was downgraded to 'Hold' from 'Buy' at Jefferies.
Allergan (AGN -0.84%) was upgraded to 'Buy' from 'Hold' at Stifel.
Freeport McMoRan (FCX +0.77%) was initiated with a 'Buy' at Brean Capital with a price target of $39.
Lockheed Martin (LMT +0.78%) was awarded a $246.61 million modification to a previously awarded government contract to develop, test, and certify two Drag Chute Systems for the Low Rate Initial Production Lot VII F-35 Lightning II Joint Strike Fighter aircraft.
Tekmira (TKMR +2.22%) surged 20%, Hemispherx BioPharma (HEB unch) climbed 15%, NewLink Genetics (NLNK -7.11%) jumped 14%, and BioCryst (BCRX -6.77%) rose over 10% in after-hours trading after the CDC confirmed that an individual traveling from Liberia has been diagnosed with the Ebola virus in the U.S.
NRG Energy (NRG +0.23%) was upgraded to 'Strong Buy' from 'Buy' at ISI Group.
Dynegy (DYN -1.54%) and Exelon (EXC -0.06%) were both upgraded to 'Buy' from 'Hold' at ISI Group.

MARKET COMMENTS

Dec E-mini S&Ps (ESZ14 -0.14%) this morning are down -2.00 points (-0.10%). The S&P 500 index on Tuesday closed lower: S&P 500 -0.28%, Dow Jones -0.17%, Nasdaq +0.06%. Bearish factors included (1) the -7.6 point drop in Sep U.S. Sep consumer confidence (Conference Board) to 86.0, much weaker than expectations of -0.2 to 92.2 and the lowest in 4 months, (2) the -0.50% m/m drop in the Jul S&P/CaseShiller composite-20 home price index, weaker than expectations of -0.10%, and (3) the -3.8 point drop in the Sep Chicago PMI to 60.5, weaker than expectations of -2.3 to 62.0.
Dec 10-year T-notes (ZNZ14 +0.18%) this morning are up +8.5 ticks at a 3-week high. Dec 10-year T-note futures prices on Tuesday closed lower. Bearish factors included (1) hawkish comments from Dallas Fed President Fisher who said that as the economy continues to accelerate the Fed may need to raise rates in Q1-2015, and (2) speculation that Wednesday’s Sep ADP employment change will show strength in the U.S. labor market. Closes: TYZ4 -4.00, FVZ4 -1.50.
The dollar index (DXY00 +0.23%) this morning is up +0.157 (+0.18%). EUR/USD (^EURUSD) is down -0.0034 (-0.27%) and USD/JPY (^USDJPY) is up +0.19 (+0.17%) at a new 6-year high. The dollar index on Tuesday rallied to a 4-1/4 year high and closed higher. Bullish factors included (1) the slide in EUR/USD to a 2-year low on expectations for additional ECB stimulus after the Eurozone Sep CPI eased to a 4-3/4 year low of +0.3% y/y, and (2) the rally in USD/JPY to a 6-year high as the yen plunged on the divergent Fed/BOJ monetary policies. Closes: Dollar index +0.345 (+0.40%), EUR/USD -0.00549 (-0.43%), USD/JPY +0.149 (+0.14%).
Nov WTI crude oil (CLX14 +0.67%) this morning is up +33 cents (+0.36%) and Nov gasoline (RBX14 +0.58%) is up +0.0076 (+0.31%). Nov crude and Nov gasoline prices on Tuesday closed sharply lower: CLX4 -3.41 (-3.61%), RBXX4 -0.0769 (-3.06%). Nov crude retreated from a 3-1/2 week high on bearish factors that included (1) the rally in the dollar index to a new 4-1/4 year high, and (2) expectations that Wednesday’s weekly EIA inventory report will show that crude inventories rose by +1.5 mln bbl.

GLOBAL EVENT CALENDAR10/01/2014

US	0700 ET	Weekly MBA mortgage applications, previous -4.1% with purchase sub-index -0.3% and refi sub-index -7.0%.
	0815 ET	Sep ADP employment change expected +207,000, Aug +204,000.
	0945 ET	Revised Sep Markit manufacturing PMI expected unch at 57.9, prelim-Sep unch at 57.9.
	1000 ET	Sep ISM manufacturing PMI expected -0.5 to 58.5, Aug +1.9 to 59.0. Sep ISM employment, Aug -0.1 to 58.1. Sep ISM new orders, Aug +3.3 to 66.7. Sep ISM prices paid expected -1.0 to 57.0, Aug -1.5 to 58.0.
	1000 ET	Aug construction spending expected +0.5% m/m, Jul +1.8% m/m.
	1030 ET	EIA Weekly Petroleum Status Report.
	n/a	Sep total vehicle sales expected 16.80 million, Aug 17.45 million. Sep domestic vehicle sales expected 13.55 million, Aug 13.87 million.
JPN	0100 ET	Japan Sep vehicle sales, Aug -5.0% y/y.
GER	0355 ET	Revised German Sep Markit/BME manufacturing PMI, previous 50.3.
EUR	0400 ET	Revised Eurozone Sep Markit manufacturing PMI, previous 50.5.
UK	0430 ET	UK Sep Markit manufacturing PMI expected +0.2 to 52.7, Aug 52.5.

U.S. STOCK CALENDAR10/01/2014

Company Name	Ticker	Time	Event Description	Period	Estimate
Acuity Brands Inc	AYI US	Bef-mkt	Q4 2014 Earnings Release	Q4 2014	1.219
Patterson Cos Inc	PDCO US	7:30	Analyst and Investor Day	Y 2014
BOK Financial Corp	BOKF US	8:00	Investor Meeting	Y 2014
American Capital Agency Corp	AGNC US	9:15	Investor Day	Y 2014
Ford Motor Co	F US	9:30	September 2014 Sales and Revenue Release	2014
Ford Motor Co	F US	10:00	September 2014 Sales and Revenue Call	2014
Acuity Brands Inc	AYI US	10:00	Q4 2014 Earnings Call	Q4 2014
General Motors Co	GM US	10:30	Business Update Call - Call 1
Autodesk Inc	ADSK US	11:30	Investor Day	Y 2014
General Motors Co	GM US	13:25	Business Update Call - Call 2

Barchart Morning Call 10/26

Barchart Morning Call

BC - 1 hr 50 mins ago

Overnight Developments

• Dec E-mini S&Ps are down -0.80% at a 1-1/2 month low and European stocks are down -0.58% as weaker-than-expected earnings results undercuts stock prices. Ericsson AB, the world's largest maker of mobile-phone networks, posted a 43% decline in Q3 profit, while Amazon, the biggest online retailer, posted its first quarterly net loss since 2003. Asian stocks also closed lower despite Japan increasing stimulus measures with Japan down -1.35%, China -1.89%, Australia -0.85%, South Korea -1.80% and India -0.71%. Commodities declined as well with Dec gold down -0.54%, Dec crude off by -0.52% and Dec copper down -0.58% to a 1-1/2 month low. EUR/USD slumped to a 2-week low after Spanish unemployment rose to a record in Q3. The dollar index climbed +0.24% to a 2-week high, while Dec 10-year T-notes are up +15 ticks as the slide in global equities fuels increased safe-haven demand for Treasuries.
• Q3 Spain unemployment rose +0.42 from Q2 to 25.02%, the second highest in the EU after Greece and the highest since Spain began keeping records in 1976, the year after dictator Franco's death led Spain to democracy.
• The German Nov GfK consumer confidence survey unexpectedly rose +0.2 from Oct to 6.3, stronger than expectations of unchanged and its highest level in 5 years.
• The German Sep import price index fell -0.7% m/m and rose +1.8% y/y, weaker than expectations of +0.3% m/m and +2.9% y/y.
• Q3 South Korea GDP rose +1.6% y/y, weaker than expectations of 1.7% y/y and the slowest pace since 2009.
• The Japanese government announced 750 billion yen ($9.4) billion of fiscal stimulus in an attempt to boost economic growth. Japan's Economy Minister Maehara said the government will tap discretionary budget funds to fund some of the stimulus but hasn't decided on how to fund further planned stimulus measures as lawmakers in Japan's Diet are blocking financing legislation. Japan's main opposition party has vowed to block a bill allowing the government to borrow 38.3 trillion yen ($477 billion) for this year's deficit as they press Prime Minister Noda to call early elections.
  Market Comments
  • Dec E-mini S&Ps this morning are down -11.25 points (-0.80%) to a fresh 1-1/2 month low. The S&P 500 index on Thursday closed mildly higher: S&P 500 +0.30%, Dow Jones +0.20%, Nasdaq 100 +0.08%. Bullish factors included some short-covering after recent losses, a 1.0% q/q increase in UK GDP, and reports that the BOJ next week will boost its asset-purchase program. Yesterday's Sep durable goods orders report of +9.9% was stronger than expectations of +7.5%, but the capital goods component was weaker than expected. Sep non-defensive capital goods orders ex-aircraft were unchanged versus expectations of +0.8%, and Aug was revised lower to +0.2% from +1.1%. The Sep pending home sales report of +0.3% was weaker than market expectations of +2.5%. The weekly initial unemployment claims report was in line with market expectations.
  • Dec 10-year T-notes this morning are up +15 ticks on increased safe-haven demand with the slide in global equities. Dec 10-year T-note prices on Thursday closed lower: TYZ2 -15, FVZ2 -8.75. Bearish factors included the mildly higher close in stocks, technical selling with the new 2-month low, and the poor reception seen for the 7-year T-note auction, which saw a bid cover ratio of 2.56 that was the lowest in more than three years. Fitch said that it is leaving America's AAA credit rating unchanged with a negative outlook and that it would not change anything until at least late 2013 as it waits to gauge Washington's budget moves next year.
  • The dollar index this morning is up by +0.24% to a 2-week high with EUR/USD down -0.30% to a 2-week low and USD/JPY down -0.61%. USD/JPY had posted a 4-month high overnight on expectations of further BOJ stimulus measures at next week's policy meeting, although USD/JPY fell back after a drop in stock prices boosted safe-haven demand for the yen. The dollar index on Thursday closed slightly higher: Dollar index +0.17 (+0.21%), EUR/USD -0.0040(-0.31%), USD/JPY +0.49 (+0.61%). The dollar index closed slightly higher as T-note yields rose and supported the dollar's interest rate differentials. However, bearish factors for the dollar included the slightly higher close in stocks, the weaker-than-expected U.S. pending home sales report, and reports that troika officials have reached a draft agreement with Greece. However, the hard part now is for Greek Prime Minister Samaras to see if he can push the new austerity measures through the Greek parliament without fracturing his coalition.
  • Dec WTI crude oil prices this morning are down -45 cents a barrel and Dec gasoline is down -0.97 cents a gallon. Dec crude oil on Thursday closed higher: CLZ2 +0.32 (+0.37%), RBZ2 +0.0410 (+1.58%). Crude oil and gasoline prices saw some short-covering. Gasoline received a boost from forecasts that Hurricane Sandy could be the worst storm to hit the Northeastern U.S. in a century, which could disrupt refinery operations and disrupt oil and gasoline shipments into NY Harbor where Nymex gasoline futures are priced.
  • For the complete subscription version of this daily report (plus a 13-page big-picture weekly report), along with the earliest possible delivery in the morning, please visit http://www.barchart.com/register/crbfms_usmc.php
    Today's U.S. Earnings Reports Earnings reports (ranked by market cap): MRK-Merck (Consensus:$0.93), CMCSA-Comcast (0.46), LVS-Las Vegas Sands (0.60), LYB-Lyondellbassel (1.44), VTR-Ventas (0.28), AON-Aon (0.90), WY-Weyerhaeuser (0.18), MCO-Moody's (0.62), DLR-Digital Realty (0.16), COL-Rockwell Collins (1.11), CVH-Coventry Health (0.72), NWL-Newell Rubbermaid (0.44), IPG-Interpublic (0.17), ARE-Aleandria Realty (0.31), LEA-Lear (1.20), BOKF-BOK Finl (1.22), LM-Legg Mason (0.52), AHGP-Alliance Holding (0.90), GT-Goodyear Tire (0.59), OSK-Oshkosh (0.47), UFS-Domitar (1.59), OHI-Omega Healthcare (0.27).
    Global Financial Calendar
    

    Friday 10/26/12
    United States
    0830 ET	U.S. Q3 GDP expected +1.9% q/q annualized, Q2 +1.3%. Q3 personal consumption expected +2.1%, Q2 +1.5%. Q3 GDP price index expected +2.1%, Q2 +1.6%. Q3 core PCE expected +1.3% q/q, Q2 +1.7% q/q.
    0955 ET	Final-Oct U.S. consumer confidence (University of Michigan) expected -0.1 to 83.0, early-Oct +4.8 to 83.1.
    Germany
    0200 ET	German Nov GfK consumer confidence survey expected unch at 5.9, Oct 5.9.
    0200 ET	German Sep import price index expected +0.3% m/m and +2.9% y/y, Aug +1.3% m/m and +3.2% y/y.
    CHI
    2130 ET	China Sep industrial profits, -3.1% ytd y/y.

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Barchart Morning Call 7/27

Barchart Morning Call

BC - 23 mins ago

Overnight Developments

• Sep E-mini S&Ps this morning are slightly higher by +0.24% on continued optimism that the ECB appears ready to restart its bond buying program, although the Bundesbank today restated its opposition to the program. European stocks are trading mildly higher by +0.21%. Commodity prices are trading up +0.58% on average with crude oil up +0.34%, gold up +0.39%, copper up +1.06%, and agricultural prices trading mostly higher. The dollar index is trading slightly lower while EUR/USD is up +0.17%. Sep 10-year T-notes are down 7.5 ticks.
• Asian stocks today closed higher on support from Thursday's sharp rally in the U.S. stock market: Japan +1.46%, Hong Kong +2.02%, china +0.07%, Taiwan +2.21%, Australia +1.50%, Singapore -0.20%, South Korea +2.93%, India +1.20%, Turkey +0.06%.
• France's Le Monde today reported that that ECB is preparing to restart its Securities Market Program and start buying bonds again of troubled countries such as Spain and Italy. That will be followed by bond purchases in the secondary market by the Eurozone's bailout facilities. However, the Bundesbank's spokesman today said that restarting the ECB's bond buying program is not the best way to resolve the crisis. Bundesbank officials in the past have opposed the ECB's bond purchase program because it blurs the line between monetary and fiscal policy, takes the pressure off countries to make the necessary fiscal consolidation to regain the trust of bond investors, and puts impaired securities on the ECB's balance sheet.
• German Chancellor Merkel and French President Hollande plan to speak today at 1PM Paris time by telephone to discuss how to help Spain as quickly as possible and to implement last month's summit agreements.
• Spain's Q2 unemployment rate rose by 0.2 points to a new record high of 24.6%, underlining the severe state of the Spanish economy.
• Chinese industrial company earnings in Jan-June fell 2.2% y/y, underlining the profit pressure that companies are under due to slower Chinese GDP growth.
• Japan's July CPI fell -0.2% y/y, down from +0.2% y/y in June and weaker than market expectations of unchanged. The report highlighted that Japan remains subject to deflationary pressure despite years of near-zero interest rates and large quantitative easing programs. Separately, Japan's June retail trade fell -1.2% m/m, which was much weaker than market expectations for a gain of +0.2% m/m and a reversal from the +0.7% m/m gain seen in May.
  Market Comments
  • Sep E-mini S&Ps this morning are up +3.25 points (+0.24%) on continued optimism that the ECB appears ready to start buying Spanish and Italian bonds in the secondary market. Facebook is down 10% in European trading this morning after reporting slower sales growth and narrower profit margins late yesterday afternoon. Starbucks is down 10% in European trading after fiscal Q4 earnings guidance was weaker than expected. The U.S. stock market on Thursday closed sharply higher: S&P 500 +1.65%, Dow Jones +1.67%, Nasdaq 100 +1.40%. Bullish factors centered on ECB President Draghi's strong statement that the ECB will do whatever it needs to do to support the euro and his implicit promise to push peripheral bond yields lower. Spanish and Italian bond yields plunged on Mr. Draghi's comments, making funding costs a little more reasonable for Spain and Italy. U.S. stock market participants are also hopeful that the Fed may announce a QE3 program at either next week's FOMC meeting or the next meeting in September.
  • Sep 10-year T-notes this morning are down 7.5 ticks on reduced safe-haven demand. Sep 10-year T-note prices on Thursday closed moderately lower: -6.5, FVU2 -2.25. T-note prices fell on reduced safe-haven demand with the sharp rally in stocks and the sharp decline in Spanish and Italian bond yields.
  • The dollar index this morning is slightly lower by -0.082 points (-0.10%) while EUR/USD is up +0.0021 (+0.17%) on the ECB's apparent intention to restart its bond buying program. USD/JPY is down -0.09 (-0.12%). The dollar index on Thursday closed sharply lower: Dollar index -0.716 (-0.86%), EUR/USD +0.0125 (+1.03%), USD/JPY +0.05 (+0.06%). The dollar index fell and EUR/USD rallied on Mr. Draghi's strong promise of support for the Eurozone and his implication that something big might be in the works. The ECB meets next Thursday and could be ready to announce new support measures for the Eurozone.
  • Sep WTI crude oil prices this morning are mildly higher by +0.30 (+0.34%) and Sep gasoline is up +0.0164 +0.60%) on some optimism about Europe with the ECB stepping in to try to reduce Spanish and Italian bond yields. Crude oil and gasoline prices on Thursday closed moderately higher: CLU2 +0.42 (+0.47%), RBU2 +0.0208 (+0.77%). Bullish factors centered on the sharp sell-off in the dollar index and the improved economic sentiment that came with ECB President Draghi's strong statement of support for the Eurozone.
  • For the complete subscription version of this daily report (plus a 13-page big-picture weekly report), along with the earliest possible delivery in the morning, please visit http://www.barchart.com/register/crbfms_usmc.php
    Today's U.S. Earnings Reports Earnings reports (ranked by market cap): Chevron (Consensus $3.22), MRK-Merck (1.01), LYB-Lyndellbasell (1.40), Newmont Mining (0.93), AON-Aon Plc (1.02), WY-Weyerhaeuser (0.10), DTE-DTE Energy (0.70), KKR-KKR & Co (0.16), CPN-Calpine (0.01), DHI-DR Horton (0.20), NWL-Newell Rubbermaid (0.45), HP-Helmerich & Payne (1.15), CVH-Coventry Health (0.64), NVE-NV Energy (0.18), BOKF-BOK Financial (1.13), NS-Nustar Energy (0.30).
    Global Financial Calendar
    

    Friday 7/27/12
    United States
    0830 ET	Q2 GDP expected +1.4% annualized, Q1 +1.9% q/q annualized. Q2 personal consumption expected +1.3%, Q1 +2.5%. Q2 GDP price index expected +1.6%, Q1 +2.0%. Q2 PCE expected +1.8% q/q, Q1 +2.3% q/q.
    0955 ET	Final-July U.S. consumer confidence index (University of Michigan) unchanged from early-July at 72.0, early-July -1.2 to 72.0.
    Germany
    0800 ET	Jul German CPI (EU harmonized) expected +0.4% m/m and +1.9% y/y, Jun -0.2% m/m and +2.0% y/y. German state July CPIs.

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