Barchart Morning Call 5/3

BARCHART MORNING CALL

Friday, May 3rd, 2013View Older Reports

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OVERNIGHT MARKETS AND NEWS

June E-mini S&Ps (ESM13 -0.09%) this morning are down -0.08% ahead of this morning's U.S. April non-farm payrolls report. European stocks are up +0.03% as Eurozone government bond yields tumble. Spain’s 10-year bond yield fell as low as 3.94%, a 3-year low, while Italy's 10-year yield declined to as low as 3.68%, the lowest in 7 years amid speculation the ECB will take further steps to stimulate growth. Eurozone bond yields climbed from their lowest levels today after ECB Governing Council member Nowotny told reporters in Bratislava that ECB President Draghi's comments yesterday were "over-interpreted" by financial markets. Asian stocks closed mixed: Japan closed for holiday, Hong Kong +0.10%, China +1.77%, Taiwan +0.08%, Australia -0.01%, Singapore -0.95%, South Korea +0.43%, India -0.81%. Commodity prices are mostly higher. June WTI crude oil (CLM13 +0.40%) is up +0.51%, June gasoline (RBM13 +0.13%) is up +0.25%, June natural gas (NGM13 -0.02%) is down -0.77%, June gold (GCM13 +0.84%) is up +0.96%, July copper (HGN13 +4.20%) is up +4.12%. Agriculture prices are stronger. The dollar index (DXY00 -0.31%) is down -0.29%. EUR/USD (^EURUSD) is up +0.38% on hawkish comments from ECB Governing Council member Nowotny. USD/JPY (^USDJPY) is up +0.12%. June 10-year T-note futures prices (ZNM13 -0.02%) are down -1.5 ticks.
ECB Governing Council member Nowotny told reporters in Bratislava today that ECB President Draghi's comments yesterday were "over-interpreted" by financial markets and that policy makers have no plans to cut the deposit rate below zero.
The European Commission cut its 2013 Eurozone GDP forecast to a contraction of -0.4% y/y from a Feb prediction of -0.3% y/y. This follows a -0.6% y/y contraction in 2012 and will be the first ever back-to-back years of negative output for the Eurozone. The EU report predicts 2013 Eurozone unemployment will climb to a record 12.3% from 11.4% in 2012 and that an "increasing labor-market mismatch" will keep the jobless rate high in the medium term and bodes poorly for those who have been out of work for extended periods.
The Eurozone Mar PPI fell -0.2% m/m, right on expectations, and rose +0.7% y/y, slightly more than expectations of +0.6% y/y.
The UK Apr PMI services unexpectedly expanded +0.5 of a point to an 8-month high of 52.9, stronger than expectations of no change at 52.4.
The China Apr non-manufacturing PMI fell -1.1 points to 54.5 from 55.6 in Mar.
India's central bank cut interest rates for the third straight meeting today after the RBI lowered the repurchase rate by -25 bp to 7.25% from 7.50%.

U.S. STOCK PREVIEW

Today’s April payroll report is expected to improve to +148,000 from the poor report of +88,000 seen in March. Today’s April unemployment rate is expected to be unchanged from March’s 4-year low of 7.6%. Today’s Apr ISM non-manufacturing index is expected to show a -0.4 point decline to 54.0, adding to the -1.6 point decline to 54.4 seen in March. Today’s March factory orders report is expected to show a decline of -3.0% m/m, exactly offsetting the +3.0% increase seen in February. There are 13 of the S&P 500 companies that will report earnings today. Notable reports include Moody's Corp, Duke Energy, ADP, and Berkshire Hathaway.

OVERNIGHT U.S. STOCK MOVERS

Newell Rubbermaid (NEW) reported Q1 EPS of 35 cents, better than consebsus of 32 cents.
Moody's (MCO -0.41%) reported Q1 EPS of 97 cents, higher than consensus of 87 cents.
Regeneron Pharmaceuticals (REGN +4.78%) reported Q1 EPS of $1.78, stronger than consensus of $1.46.
Automatic Data Processing (ADP +0.85%) reported Q3 EPS of 99 cents, slightly higher than consensus of 98 cents.
CBOE Holdings (CBOE +0.56%) reported Q1 adjusted EPS of 50 cents, higher than consensus of 47 cents.
BlackBerry (BBRY -0.63%) announced that the U.S. Department of Defense has approved BlackBerry 10 smartphones and BlackBerry PlayBook tablets with BlackBerry Enterprise Service 10 to be used on Department of Defense networks.
Pilgrim's Pride (PPC +1.75%) reported Q1 EPS of 21 cents, slightly better than consensus of 20 cents.
Weight Watchers (WTW -0.17%) reported Q1 EPS of 87 cents, well ahead of consensus of 62 cents.
Green Mountain Coffee Roasters (GMCR +0.46%) announced that its Keurig K150 Series Commercial Brewing System has been certified by the National Sanitation Foundation for foodservice use.
Capital One (COF +1.45%) raiseed its quarterly dividend 20% from 25 cents to 30 cents per share.
Teradata (TDC +3.35%) fell over 9% in after-hours trading after it reported Q1 EPS of 43 cents, weaker than consensus of 53 cents, and said it sees fiscal 2013 EPS at the lower end of its $3.05-$3.20 range, consensus is $3.08.
Dole Food (DOLE +2.39%) reported Q1 EPS of 12 cents, lower than consensus of 14 cents.
Fluor (FLR +2.32%) reported Q1 EPS of $1.02, better than consensus of 96 cents.
Fortune Brands (FBHS +3.23%) reported Q1 adjusted EPS of 24 cents, much better than consensus of 16 cents, and raised guidance on fiscal 2013 EPS ex-items to $1.23-$1.33, higher than consensus of $1.23.
Athenahealth (ATHN -0.90%) fell over 5% in after-hours trading after it lowered its guidance on fiscal 2013 to an EPS of $1.05-$1.15, weaker than consensus of $1.22.
Chicago Bridge & Iron (CBI +2.56%) reported Q1 EPS of 82 cents, ahead of consensus of 74 cents.
Mohawk (MHK +0.35%) reported Q1 EPS ex-charges of 87 cents, better than consensus of 85 cents, and raised guidance on Q2 EPS to $158-$1.67, stronger than consensus of $1.56.
Gilead (GILD +4.07%) reported Q1 EPS of 48 cents, weaker than consensus of 50 cents.
LinkedIn (LNKD +3.52%) plunged over 10% in after-hours trading after it reported Q1 adjusted EPS of 45 cents, better than consensus of 31 cents, but lowered guidance on Q2 revenue to $342-$347 million, below consensus of $359.24 million.
Kraft Foods (KRFT -1.06%) reported Q1 EPS of 76 cents, well ahead of consensus of 64 cents.

MARKET COMMENTS

June E-mini S&Ps (ESM13 -0.09%) this morning are down -1.25 points (-0.08%). The S&P 500 index on Thursday posted a new record high and closed higher after weekly U.S. jobless claims fell to a 5-1/4 year low and after the ECB cut its benchmark interest rate to a record low and hinted at additional stimulus measures. U.S. weekly initial unemployment claims fell -18,000 to a 5-1/4 year low of 324,000, while the ECB said they “will remain accommodative for as long as needed.” Another bullish factor was the U.S. Mar trade deficit that narrowed to -$38.8 billion, better than expectations of -$42.3 billion, which should lead to an upward revision of Q1 GDP. Closes: S&P 500 +0.94%, Dow Jones +0.89%, Nasdaq 100 +1.32%.
June 10-year T-notes (ZNM13 -0.02%) this morning are down -1.5 ticks ahead of this morning's monthly payroll report. June 10-year T-note futures prices on Thursday settled slightly higher. Supportive factors included the action by the ECB to cut its benchmark rate to a record low with hints of additional stimulus measures, and trepidation ahead of Friday’s monthly U.S. payrolls report. Bearish factors included stock market strength and the unexpected fall in weekly U.S. jobless claims to a 5-1/4 year low. Closes: TYM3 +1.0, FVM3 +0.75.
The dollar index (DXY00 -0.31%) this morning is down -0.238 (-0.29%). EUR/USD (^EURUSD) is up +0.0050 (+0.38%) after ECB Governing Council member Nowotny said markets "over-interpreted" ECB President Draghi's comments Thursday that the ECB would consider a deposit rate below zero. USD/JPY (^USDJPY) is up +0.12 (+0.12%). The dollar index on Thursday closed higher after EUR/USD tumbled when ECB President Draghi hinted at additional stimulus measures from the ECB. Following the ECB meeting, in which the central bank cut its refinancing rate 25 bp as expected to a record low 0.50%, ECB President Draghi said policy makers had an open mind on a negative deposit rate and may start to charge banks to hold their excess reserves overnight at the ECB. Closes: Dollar index +0.751 (+0.92%), EUR/USD -0.01142 (-0.87%), USD/JPY +0.545 (+0.56%).
June WTI crude oil (CLM13 +0.40%) this morning is up 48 cents a barrel (+0.51%) and June gasoline (RBM13 +0.13%) is up +0.0069 (+0.25%). June crude oil and gasoline on Thursday settled sharply higher. The main bullish factors were the action by the ECB to cut interest rates to a record low along with hints of further stimulus and after U.S. weekly jobless claims unexpectedly tumbled to a 5-1/4 year low. Closes: CLM3 +2.96 (+3.25%), RBM3 +0.0532 (+1.96%).

GLOBAL EVENT CALENDAR05/03/2013

US	0830 ET	Apr non-farm payrolls expected +148,000, Mar +88,000. Apr private payrolls expected +160,000, Mar +95,000. Apr mfg payrolls expected +5,000, Mar -3,000. Apr unemployment rate expected unch at 7.6%. Mar -0.1 to 7.6%.
	0830 ET	Apr avg hourly earnings expected +0.2% m/m and +1.9% y/y, Mar unch m/m and +1.8% y/y. Apr avg weekly hours expected unch at 34.6, Mar +0.1 to 34.6.
	1000 ET	Mar factory orders expected -3.0%, Feb +3.0%.
	1000 ET	Apr ISM non-manufacturing index expected -0.4 to 54.0, Mar -1.6 to 54.4.
	1230 ET	Fed Governor Daniel Tarullo speaks on “Evaluating Progress in Regulatory Reforms to Promote Financial Stability” at a conference in Washington D.C.
	1245 ET	Richmond Fed President Jeffrey Lacker speaks on the economic outlook at a meeting of the Risk Management Association of Richmond.
UK	0430 ET	UK Apr PMI services expected -0.1 to 52.3, Mar 52.4.
EUR	0500 ET	Eurozone Mar PPI expected -0.2% m/m and +0.6% y/y, Feb +0.2% m/m and +1.3% y/y.
	0500 ET	European Commission releases economic growth forecasts.

U.S. STOCK CALENDAR05/03/2013

Company Name	Symbol	Time	Event Description	Period	EPS Est (US$)
Newell Rubbermaid Inc	NWL US	Bef-mkt	Q1 2013 Earnings Release	Q1 2013	0.315
Moody's Corp	MCO US	Bef-mkt	Q1 2013 Earnings Release	Q1 2013	0.874
Pepco Holdings Inc	POM US	Bef-mkt	Q1 2013 Earnings Release	Q1 2013	0.237
Host Hotels & Resorts Inc	HST US	6:00	Q1 2013 Earnings Release	Q1 2013	0.234
Regeneron Pharmaceuticals Inc	REGN US	6:30	Q1 2013 Earnings Release	Q1 2013	1.459
Spectra Energy Corp	SE US	6:30	Q1 2013 Earnings Release	Q1 2013	0.481
Duke Energy Corp	DUK US	7:00	Q1 2013 Earnings Release	Q1 2013	1.033
Fastenal Co	FAST US	7:00	April 2013 Sales and Revenue Release	2013
Automatic Data Processing Inc	ADP US	7:30	Q3 2013 Earnings Release	Q3 2013	0.982
American International Group Inc	AIG US	8:00	Q1 2013 Earnings Call	Q1 2013
Dun & Bradstreet Corp/The	DNB US	8:00	Q1 2013 Earnings Call	Q1 2013
Pinnacle West Capital Corp	PNW US	8:00	Q1 2013 Earnings Release	Q1 2013	0.105
Pitney Bowes Inc	PBI US	8:00	Investor Meeting	Y 2013
Newell Rubbermaid Inc	NWL US	8:30	Q1 2013 Earnings Call	Q1 2013
Automatic Data Processing Inc	ADP US	8:30	Q3 2013 Earnings Call	Q3 2013
Regeneron Pharmaceuticals Inc	REGN US	8:30	Q1 2013 Earnings Call	Q1 2013
Washington Post Co/The	WPO US	8:30	Q1 2013 Earnings Release	Q1 2013
Tenet Healthcare Corp	THC US	9:00	Annual General Meeting
Spectra Energy Corp	SE US	9:00	Q1 2013 Earnings Call	Q1 2013
Alcoa Inc	AA US	9:30	Annual General Meeting	Y 2013
Dominion Resources Inc/VA	D US	9:30	Annual General Meeting	Y 2013
Berkshire Hathaway Inc	BRK/A US	Aft-mkt	Q1 2013 Earnings Release	Q1 2013	1995.5
Ryder System Inc	R US		Annual General Meeting	Y 2013
Walt Disney Co/The	DIS US		U.S. Box Office Release of Movie Iron Man 3""
Walgreen Co	WAG US		April 2013 Sales and Revenue Release	2013
Leucadia National Corp	LUK US		Q1 2013 Earnings Release	Q1 2013

BARCHART MORNING CALL 3/13

BARCHART MORNING CALL 3/13

YOU ARE HERE: Stocks » News & Commentary » Barchart Morning Call

Wednesday, March 13th, 2013View Older Reports

Everything you need to know about the markets in one free daily newsletter.

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OVERNIGHT MARKETS AND NEWS

June E-mini S&Ps (ESM13 -0.24%) are mildly lower by -0.13% on sell-offs in overseas stocks. European stocks are down -0.49% this morning on a weaker-than-expected Eurozone industrial production report and long liquidation pressure. Asian stocks closed lower today with a -0.61% sell-off in Japan, a -1.46% sell-off in Hong Kong, and a -1.10% sell-off in China's CSI 300 index. Chinese stocks were pressured by ongoing worries about property curbs and hawkish comments by China's central bank chief. Commodity prices are little changed on average this morning. April crude oil (CLJ13 +0.11%) is up +0.37%, April gasoline (RBJ13 +0.26%) is up +0.81%, April gold (GCJ13 +0.18%) is up +0.03%, May copper (HGK13 -0.06%) is down -0.03%, and agriculture prices are mixed. The dollar index (DXY00 +0.06%) is unchanged, while EUR/USD (^EURUSD) is down -0.21%. USD/JPY (^USDJPY) is down -0.33% as the yen is seeing some additional strength as the ruling LDP party haggles with Japan's opposition parties over Prime Minister Abe's nominations for BOJ governor and his two deputies. June 10-year T-notes (ZNM13 +0.13%) are up 3 ticks.
President Obama today is in the second day of his 3-day (Tue-Thu) stretch of visits to Capitol Hill. Mr. Obama met with Senate Democrats yesterday and he will meet with House Republicans today. Mr. Obama will then meet with Senate Republicans and House Democrats on Thursday. Meanwhile, Senate leaders this week are working on the continuing resolution that must be passed by March 27 to keep the government operating through the end of the fiscal year in September.
Chinese property stocks fell today after a report that the city of Shenzhen banned developers from raising new home prices. The Chinese government recently told regions and cities in areas with strong home price increases to crack down on property speculation to slow the recent surge in home prices.
China's PBOC central bank chief Zhou Xiaochuan said that China needs to be on "high alert" since the February inflation figures were stronger than expected.
The Italian 10-year bond yield today rose by 7 bp to 4.68% after today's sale of 3-year bonds and 15-year bonds. The bid cover ratio for the 3-year of 1.28 was down from 1.37 at the Feb 13 auction and the yield rose to 2.48% from 2.30% at the Feb 13 auction. The 15-year bond carried a bid cover ratio of 1.28 and a yield of 4.90%.
Today's sale by Ireland of 10-year bonds for the first time since its 2010 bailout was successful, which was an important step to show that Ireland is slowly regaining access to the global bond markets.
Eurozone Jan industrial production fell -0.4% m/m, which was weaker than market expectations of -0.1% m/m. That followed a revised +0.9% m/m increase in December, up from the preliminary report of +0.7% m/m. On a year-on-year basis, Jan industrial production improved to -1.3% y/y from -1.7% y/y in Dec.

U.S. STOCK PREVIEW

Today’s Feb retail sales report is expected to show a solid increase of +0.5% m/m both overall and excluding auto sales. That would follow the weak Jan report of +0.1% m/m and +0.2% m/m ex-autos. President Obama today will travel to Capitol Hill to meet with House Republicans. There are no earnings reports today from the Russell 1000 companies.
Conferences during the remainder of this week include Credit Suisse Global Services Conference on Mon-Wed, Bank of America Merrill Lynch Consumer & Retail Conference on Tue-Wed, World Biofuels Markets 2013 on Tue-Wed, China Healthcare Investment Conference on Tue-Wed, FIA International Derivatives Conference on Tue-Thu, Piper Jaffray Technology Media and Telecommunications Conference on Tue-Wed, Barclays Capital Healthcare Conference on Tue-Thu, UBS Global Consumer Conference on Wed-Thu, and Susquehanna Chemical Conference on Thu.

June E-mini S&Ps (ESM13 -0.24%) are down -2.00 points (-0.13%) on weak overseas stocks. The S&P 500 index on Tuesday fell back from a 5-1/3 year high and closed lower, although the Dow posted a record high and closed higher. Bearish factors included (1) stretched valuations after the S&P 500 rose to 15.3 times earnings, a 22-month high, and (2) weakness in technology stocks led by a slide in Apple after IDC predicted Apple will lose market share in the tablet market and after Jefferies cut its price target on Apple to $420 from $500. Closes: S&P 500 -0.24%, Dow Jones +0.02%, Nasdaq -0.39%.

OVERNIGHT U.S. STOCK MOVERS

• Bunge (BG +0.49%) was reiterated as a top pick at Citigroup with a target of $105 after saying that every segment in Bunge's business is positioned to improve in 2013.
• H&R Block (HRB +1.35%) improperly filed Form 8863, which is used to claim educational credits, on over 600,000 tax returns, which will delay refunds for those filings by up to six weeks, according to a MarketWatch report that cites comments from an IRS spokeswoman, who said the error impacts roughly 10% of the 6.6M returns containing Form 8863.
• Kronos Worldwide (KRO +1.16%) reported a Q4 EPS loss of -16 cents, a bigger loss than consensus of -5 cents.
• The Federal Aviation Administration approved the Boeing (BA +1.47%) certification plan for the redesigned 787 battery system, after thoroughly reviewing Boeing's proposed modifications and the company's plan to demonstrate that the system will meet FAA requirements.
• Dole Food (DOLE +0.60%) reported a Q4 EPS loss of -59 cents, worse than consensus of -2 cents.
• Synergetics (SURG +1.40%) reported a Q2 EPS loss of -5 cents, weaker than consensus of a 7 cent profit.
• Inter Parfums (IPAR -0.64%) reported Q4 EPS of 21 cents, better than consensus of 18 cents.
• Engility Holdings (EGL +1.14%) reported Q4 adjusted EPS of 77 cents, well ahead of consensus of 50 cents, and raised its guidance on fiscal year 2013 EPS to $3.25-$3.55, better than consensus of $2.60.
• GAIN Capital (GCAP +3.35%) reported a Q4 adjusted EPS loss of -9 cents, weaker than consensus of a 5 cent profit.
• Acadia Healthcare (ACHC +0.04%) initiated with a Buy at Cantor.
• GenMark (GNMK +0.09%) reported a Q4 EPS loss of -15 cents, better than consensus of a -21 cent loss.

MARKET COMMENTS

June 10-year T-notes (ZNM13 +0.13%) are up 3 ticks ahead of today's sale of 10-year T-notes. June 10-year T-note prices on Tuesday closed higher as a slide in equities prompted short-covering and fueled an increase in safe-haven demand for Treasuries. Closes: TYM3 +8.5, FVM3 +4.0.
The dollar index (DXY00 +0.06%) is unchanged. EUR/USD (^EURUSD) is down -0.0028 (-0.21%) on the weak Eurozone industrial production report and a mildly disappointing Italian bond auction today. USD/JPY (^USDJPY) is down -0.32 (-0.33%) as the market frets about PM Abe's difficulty in pushing through his dovish BOJ nominations although he is expected to prevail in the end. The dollar index on Tuesday closed slightly higher as stock market weakness boosted safe-haven demand for the dollar. EUR/USD fell back after comments from ECB Council member Weidmann fueled speculation the ECB may maintain its easy monetary policy, which is euro negative. USD/JPY fell back from a 3-1/2 year high and closed lower on the possibility that one of Prime Minister Abe’s choices for a BOJ deputy governor may not be confirmed, which boosted the yen. Closes: Dollar index +0.014 (+0.02%), EUR/USD -0.0015 (-0.12%), USD/JPY -0.199 (-0.20%).
April WTI crude oil (CLJ13 +0.11%) is up +0.34 (+0.37%) while April gasoline (RBJ13 +0.26%) is up +0.0255 (+0.81%). Crude oil and gasoline prices on Tuesday closed mixed. The main bullish factor was the narrowing of the WTI/Brent spread which fell for the fifth straight session to its lowest level in 5 weeks and boosted the April WTI crude futures contract. A bearish factor for crude was the action by the EIA to cut its global oil consumption forecast for this year to 90.13 million barrels a day from a forecast last month of 90.21 million barrels a day. Closes: CLJ3 +0.48 (+0.52%), RBJ3 -0.0022 (-0.07%). Expectations for Wednesday's weekly DOE inventory data are for crude stockpiles to grow by +2.35 million bbl, gasoline supplies to fall -1.25 million bbl, distillate inventories to decline -2.0 million bbl and the refinery utilization rate to slip -0.1 to 82.1%.

GLOBAL EVENT CALENDAR03/13/2013

US	0700 ET	Weekly MBA mortgage applications, previous +14.8% with purchase sub-index +15.0% and refi sub-index +14.8%.
	0830 ET	Feb import price index expected +0.5% m/m, Jan +0.6% m/m and -1.3% y/y.
	0830 ET	Feb retail sales expected +0.5% m/m, Jan +0.1% m/m. Feb retail sales ex-autos expected +0.5% m/m, Jan +0.2% m/m. Feb retail sales ex-autos and ex-gas expected +0.3% m/m, Jan +0.2% m/m.
	1000 ET	Jan business inventories expected +0.3%, Dec +0.1%.
	1030 ET	DOE Weekly Petroleum Status Report.
	1300 ET	Treasury auction of $21 billion in 10-year T-notes.
EUR	0600 ET	Eurozone Jan industrial production expected -0.1% m/m and -2.0% y/y, Dec +0.7% m/m and -2.3% y/y.

U.S. STOCK CALENDAR03/13/2013

Company Name	Symbol	Time	Event Description	Period	EPS Est (US$)
Starwood Hotels & Resorts Worldwide Inc	HOT US	0:30	Investor and Analyst Day	Y 2013
Progressive Corp/The	PGR US	Bef-mkt	February 2013 Sales and Revenue Release	2013
LyondellBasell Industries NV	LYB US	8:30	Investor Day	Y 2013
Analog Devices Inc	ADI US	9:00	Annual General Meeting	Y 2013
Toll Brothers Inc	TOL US	12:00	Annual General Meeting
Franklin Resources Inc	BEN US	13:00	Annual General Meeting
Concur Technologies Inc	CNQR US	14:00	Annual General Meeting	Y 2013
F5 Networks Inc	FFIV US	14:00	Annual General Meeting	Y 2013
EMC Corp/MA	EMC US		EMC and VMware Strategic Forum for Institutional Investors
Apple Inc	AAPL US		Samsung Co. vs. Apple, Inc.-ITC Final Decision Due on Apple Patents
VMware Inc	VMW US		EMC and VMware Strategic Forum for Institutional Investors
LyondellBasell Industries NV	LYB US		Investor Day

Barchart Morning Call 3/15

Barchart Morning Call

Barchart.com - 1 hr 3 mins ago

Overnight Developments

• Global stocks this morning are mixed with the Euro Stoxx 50 down -0.12% and Jun S&Ps up +2.40 points. 10-year Treasuries dropped to a 4-1/2 month low and the dollar index fell back from a 1-3/4 month high as the market awaits U.S. reports on unemployment claims and manufacturing activity. The euro rebounded from a 4-week low against the dollar after strong demand was seen at Spanish and French auctions of government debt. Spain sold 3 billion euros of securities maturing between 2015 and 2018 and had a bid-to-cover ratio of 4.13 on 976 million euros of 3.25% notes due in 2016, stronger than the 2.21 ratio seen at a similar auction in Jan, while France sold 3.26 billion euros of benchmark 5-year debt at an average yield of 1.78%, below the 1.93% seen at a similar auction last month. The British pound weakened against the dollar after Fitch Ratings lowered the outlook on Britain's sovereign debt to "negative" from "stable," indicating a "slightly greater" than 50% chance its AAA credit rating will be reduced within 2 years.
• Asian stocks today closed mostly lower with Japan up +0.72%, China -0.75%, Australia -0.22%, South Korea -0.03%, India -1.36%. Japan's Nikkei 225 Stock Index climbed to a 7-1/2 month high as a fall in the yen to an 11-month low against the dollar buoyed the earnings outlook for exporters. Mining stocks in Australia and China declined and dragged their respective bourses lower as gold and copper prices slumped. As expected, the RBI kept interest rates unchanged for a third consecutive month after it left India's repurchase rate at 8.5%, although it kept its easing bias intact when it said "recent growth-inflation dynamics have prompted the Reserve Bank to indicate that no further tightening is required and that future actions will be towards lowering the rates."

Overnight U.S. Stock News

• June S&Ps this morning are trading up +2.40 points. The U.S. stock market Wednesday fell back from their best levels and settled a tad higher on increased economic optimism from the Fed's upbeat assessment of the economy on Tuesday along with strength in most bank stocks that passed the Fed's stress tests: Dow Jones +0.12%, S&P 500 -0.12%, Nasdaq Composite +0.03%. The S&P 500 posted a 3-3/4 year high, the Dow rose to a 4-year high and the Nasdaq climbed to an 11-year high. Bullish factors Wednesday included (1) carry-over support from Tuesday's rally after the Fed said economic conditions improved, (2) strength in most U.S. bank stocks after the Fed said 15 of the nation's 19 largest banks could maintain adequate capital levels even in a recession, (3) increased economic optimism after the VIX volatility index or "fear gauge" that typically moves in a direction opposite to stock prices, held near Tuesday's 5-year low of 13.99, and (4) reduced European sovereign-debt concerns after Fitch Ratings raised Greece's credit rating 4 levels to B- from restricted default with a stable outlook.
• Bearish factors Wednesday included (1) weakness in insurance companies on speculation the industry may face tighter capital rules, (2) comments from former Fed Chairman Volcker who said he sees a "long slog" before the U.S. attains adequate economic growth, and (3) the surge in the 10-year T-note yield to a 4-1/4 month high of 2.287%.
• Guess? (GES) may be active on the downside today after the company forecast full-year earnings of no more than $2.65 a share, well below analysts' estimates of $3.16 a share.

Today's Market Focus

• June 10-year T-notes this morning are down -7 ticks. T-note prices Wednesday plunged to a 3-1/4 month low on carry-over weakness from Tuesday's slide in prices after the Fed's upbeat assessment of the economy reduced speculation for further easing: TYM2 -1-11.5/32, FVM2 -23.7, EDU2 -1.0. The 10-year T-note yield climbed to a 4-1/4 month high of 2.287%. Bearish factors Wednesday included (1) increased inflation expectations after the 10-year break-even rate, a gauge of the outlook for consumer prices derived from the difference between yields on conventional and inflation-linked bonds, rose to 2,39 bp, the highest in 7-1/2 months, (2) reduced safe-haven demand for Treasuries as the S&P 500 climbed to a 3-3/4-year high and after Fitch Ratings raised Greece's credit rating 4 levels to B- from restricted default with a stable outlook, and (3) technical selling as T-note prices accelerated lower to their lowest level this year. Bullish factors included (1) the weaker-than-expected Feb U.S. import price index (+0.4% m/m and +5.5% y/y versus expectations of +0.6% m/m and +5.9% y/y with the +5.5% annual gain the smallest increase in 14 months, and (2) decent demand for the Treasury's $13 billion auction of 30-year T-bonds that had a bid-to-cover ratio of 2.70, stronger than the 12-auction average of 2.68.
• The dollar index this morning is weaker with the dollar/yen -0.24 yen and the euro/dollar +0.16 cents. The dollar index Wednesday rallied to a 1-3/4 month high as interest rate differentials moved in the dollar's favor and after the yen plunged to an 11-month low against the dollar after a MOF official said Japan's fiscal situation is worse than Greece: Dollar Index +0.372, USD/JPY +0.785, EUR/USD -0.00509. Bullish factors included (1) improved U.S. interest rate differentials that increases demand for dollars after the spread between U.S. and German 2-year note yields increased to 17 bp, the most since June 2010, (2) weakness in the yen after the International Bureau at Japan's MOF said Japan's debt-to-GDP ratio has risen to 230% and that the large amount of the nation's debt held by domestic financial institutions makes the Japanese financial system more vulnerable to fiscal shocks than Europe, and (3) the fall in the euro to a 3-week low against the dollar after Jan Euro-Zone industrial production was weaker than expected. Bearish factors included (1) the larger-than-expected increase in the Q4 U.S. current account balance which widened to a deficit of -$124.1 billion, the most in 3 years and (2) reduced safe-haven demand for the dollar after Fitch Ratings raised Greece's credit rating 4 levels to B- from restricted default with a stable outlook on optimism that a debt swap will reduce the risk that Greece reneges on its debt obligations.
• Apr crude oil prices this morning are up +17 cents a barrel and Apr gasoline is -0.80 of a cent per gallon. Crude oil and gasoline prices Wednesday settled lower as a stronger dollar and Saudi comments that it will meet any supply shortages overshadowed record Chinese crude imports: CLJ12 -$1.28, RBJ -0.76. Apr gasoline posted a 1-1/2 week high but erased its gains and closed lower. Bullish factors included (1) the larger-than-expected decline in weekly DOE distillate supplies to a 3-1/2 month low (-4.68 million bbl to 134.8 million bbl versus expectations of -1.45 million bbl) and (2) strong crude demand in China, the world's second-largest oil consumer, after Feb China crude imports rose to a record 23.64 MMT, up +1% m/m and +18.5% y/y. Bearish factors included (1) the rally in the dollar index to a 1-3/4 month high, which discourages investment demand in commodities, (2) the as-expected +1.75 million bbl increase in weekly DOE crude stockpiles to a 6-month high of 347.4 million bbl, and (3) comments from Saudi Arabian Oil Minister Ali al-Naimi who said "Saudi Arabia and others remain poised to make good any shortfall, perceived or real, in global crude supplies."

Today's U.S. Earnings Reports Earnings reports (confirmed releases, sorted by mkt cap): ROST-Ross Stores (BEST earnings consensus $0.85), AMCX-AMC Networks (0.60), SCHL-Scholastic (-0.70), PWRD-Perfect World Co. Ltd. (0.56), RNF-Rentech Nitrogen Partners LP (0.63), DOLE-Dole Food (-0.09), QRE-QR Energy LP (0.37), CATO-Cato Corp. (0.34), NAT-Nordic American Tankers Ltd. (-0.34), GEVA-Synageva BioPharma (-0.38), GTY-Getty Realty (0.48), MAPP-MAP Pharmaceuticals (-0.29).
Global Financial Calendar

Thursday 3/15/12
United States
0830 ET	Weekly initial unemployment claims expected -5,000 to 357,000, previous +8,000 to 362,000. Weekly continuing claims expected -8,000 to 3.408 million, previous +10,000 to 3.416 million.
0830 ET	Mar Empire manufacturing index expected -2.0 to 17.5, Feb +6.0 to 19.5.
0830 ET	Feb PPI expected +0.5% m/m and +3.3% y/y, Jan +0.1% m/m and +4.1% y/y. Feb PPI ex food and energy expected +0.2% m/m and +2.9% y/y, Jan +0.4% m/m and +3.0% y/y.
0900 ET	Jan net long-term TIC flows expected +$38.5 billion, Dec+$17.9 billion.
1000 ET	Mar Philadelphia Fed manufacturing index expected +1.8 to 12.0, Feb +2.9 to 10.2.
1100 ET	Treasury announces amount of 10-year TIPS to be auctioned Mar 22 (previous $15 billion).
1630 ET	Weekly money supply report and Fed balance sheet.
Euro-Zone
0500 ET	ECB publishes monthly report for March.
0600 ET	Q4 Euro-Zone employment, Q3 -0.1% q/q and +0.3% y/y.
0600 ET	Q4 Euro-Zone labor costs expected +2.3% y/y, Q3 +2.7% y/y.
n/a	G-20 begins 2-day summit in Mexico City.

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