BARCHART MORNING CALL 8/18

BARCHART MORNING CALL

Monday, August 18th, 2014View Older Reports

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OVERNIGHT MARKETS AND NEWS

September E-mini S&Ps (ESU14 +0.55%) this morning are up +0.49% at a 2-week high and European stocks are up +1.06% on reduced geopolitical tensions as Ukraine and Russia met for peace talks. The yield on Ireland's 10-year bond fell to 1.949%, the lowest since Bloomberg data began in 1991, after Fitch upgraded Ireland's credit rating to A- from BBB+. Asian stocks closed mixed: Japan +0.03%, Hong Kong unchanged, China +0.59%, Taiwan -0.71%, Australia +0.37%, Singapore -0.06%, South Korea -0.62%, India +1.10%. China's Shanghai Stock Index climbed to an 8-1/4 month high on speculation that sliding property prices will prompt the PBOC to loosen monetary policy in order to support the economy. China's 7-day repurchase rate also fell to a 1-3/4 month low of 3.20% after China Jul new home prices fell in 64 out of 70 cities tracked by the government. Commodity prices are mixed. Sep crude oil (CLU14 -0.96%) is down -1.01% after Kurdish forces made progress against militants in northern Iraq and after Libyan oil production rose to 540,000 bpd from 415,000 bpd on Aug 14. Sep gasoline (RBU14 -1.05%) is down -0.96%. Dec gold (GCZ14 -0.34%) is down -0.24%. Sep copper (HGU14 +0.13%) is unchanged. Agriculture prices are mixed. The dollar index (DXY00 +0.02%) is up +0.050% (+0.06%). EUR/USD (^EURUSD) is down -0.0011 (-0.08%). USD/JPY (^USDJPY) is up +0.11 (+0.11%). Sep T-note prices (ZNU14 -0.16%) are down -7 ticks.
In its monthly report for Aug, the Bundesbank said that "the economic outlook for the German economy has clouded over in the middle of the year in response to unfavorable international news and that expectations for a strengthening of economic momentum in the second half of 2014 underlying the spring projections are called into question by current data."
China July new-home prices fell in 64 of the 70 cities tracked by the National Bureau of Statistics, the most since Jan 2011 when the government changed the way it compiles the data.
China Jul foreign direct investment unexpectedly plunged -17.0% y/y, much weaker than expectations of +0.8% y/y and the largest decline in 5 years.
The Eurozone Jun trade balance (nsa) widened to a +16.8 billion surplus from +15.4 billion euros in May, the largest surplus in 7 months.
UK Aug Rightmove house prices fell -2.9% m/m, the second straight monthly decline and the biggest fall in 20 months. On an annual basis, Aug home prices rose +5.3% y/y, the smallest gain in 9 months.

U.S. STOCK PREVIEW

The market is expecting today’s Aug NAHB housing market index to be unchanged from July’s 6-month high of 53.  There is one S&P 500 company that reports earnings today:  Urban Outfitters (consensus $0.48).  Equity conferences this week include:  Enercom, Inc Oil & Gas Conference on Mon-Thu, and 8th Annual Forum on Transparency & Aggregate Spending on Tue-Wed.

OVERNIGHT U.S. STOCK MOVERS

Hewlett-Packard (HPQ -1.46%) was upgraded to 'Buy' from 'Neutral' at Monness Crespi.
Credit Suisse rates Union Pacific (UNP +0.26%) as an 'Outperform" and recommends building positions in the company as it raises its price target on the stock to $119 from $115.
RenaissanceRe (RNR +0.49%) was downgraded to 'Sell' from 'Hold' at Deutsche Bank.
WellCare (WCG -0.35%) was downgraded to 'Neutral' from 'Outperform' at Wedbush.
General Electric (GE -0.93%) was reinstated with an 'Outperform' at Credit Suisse with a price target of $30.
CNBC reports that Dollar General (DG -0.73%) offered to buy Family Dollar Stores ({=FDO for $78.50 a share.
Monster Beverage (MNST +30.48%) was downgraded to 'Hold' from 'Buy' at Jefferies due to valuation.
Raytheon (RTN +0.04%) was awarded a $109.1 million government contract for engineering services for the Patriot System Tracking Radar.
Becker Drapkin reported a 6.4% stake in Fuel Systems (FSYS +0.76%) .
Whale Rock Capital reported a 5.2% passive stake in Textura (TXTR +3.04%) .
SAB Capital Advisors reported a 6.4% passive stake in Colony Financial (CLNY +1.09%) .

MARKET COMMENTS

Sep E-mini S&Ps (ESU14 +0.55%) this morning are up +9.50 points (+0.49%) at a 2-week high. The S&P 500 index on Friday fell back from a 2-week high and closed little changed: S&P 500 -0.01%, Dow Jones -0.30%, Nasdaq +0.46%. Bearish factors included (1) the -10.91 point drop in the Aug Empire manufacturing index, a bigger decline than expectations of -5.60 to 20.00, (2) the unexpected -2.6 point drop in the early-Aug University of Michigan U.S. consumer confidence to a 9-month low of 79.2, weaker than expectations of +0.7 to 82.5, and (3) concern about the escalation of the Ukraine conflict after Ukraine troops attacked an armed convoy that had crossed its border from Russia.
Sep 10-year T-notes (ZNU14 -0.16%) this morning are down -7 ticks. Sep 10-year T-note futures prices on Friday surged to an 8-1/2 month nearest-futures high. Bullish factors included (1) increased safe-haven demand on concern about an escalation of the Ukraine crisis after Ukraine troops attacked a military convoy that entered its country from Russia, and (2) economic concerns after the Aug Empire manufacturing index declined more than expected and the U.S. Aug University of Michigan consumer confidence unexpectedly dropped to a 9-month low. Closes: TYU4 +11.00, FVU4 +4.50.
The dollar index (DXY00 +0.02%) this morning is up +0.050 (+0.06%). EUR/USD (^EURUSD) is down -0.0011 (-0.08%) and USD/JPY (^USDJPY) is up +0.11 (+0.11%). The dollar index on Friday closed lower. Bearish factors included (1) U.S. economic concerns after the Aug Empire manufacturing index fell more than expected and the U.S. Aug University of Michigan consumer confidence unexpectedly fell to a 9-month low, and (2) strength in USD/JPY on increased safe-haven demand for the yen as stocks fell on concern about the escalation of the Ukraine crisis. Closes: Dollar index -0.164 (-0.20%), EUR/USD +0.00289 (+0.22%), USD/JPY -0.114 (-0.11%).
Sep WTI crude oil (CLU14 -0.96%) this morning is down -98 cents (-1.01%) and Sep gasoline (RBU14 -1.05%) is down -0.0258 (-0.96%). Sep crude and gasoline prices on Friday closed sharply higher: CLU4 +1.77 (+1.85%), RBU4 +0.0320 (+1.20%). Bullish factors included (1) a weaker dollar, (2) the stronger-than-expected U.S. Jul industrial production report, and (3) short-covering spurred by concern about the escalation of the Ukraine crisis after Ukraine troops attacked a convoy of Russian military vehicles entering Ukraine.

GLOBAL EVENT CALENDAR08/18/2014

US	1000 ET	Aug NAHB housing market index expected unch at 53, July +4 to 53.
	1100 ET	USDA weekly grain export inspections.
	1600 ET	USDA weekly crop progress.
EUR	0500 ET	Eurozone Jun trade balance expected +15.1 billion euros (nsa), May +15.4 billion euros (nsa).

U.S. STOCK CALENDAR08/18/2014

Company Name	Ticker	Time	Event Description	Period	Estimate
Urban Outfitters Inc	URBN US	16:00	Q2 2015 Earnings Release	Q2 2015	0.483
Urban Outfitters Inc	URBN US	17:00	Q2 2015 Earnings Call	Q2 2015
Regeneron Pharmaceuticals Inc	REGN US		PDUFA, Eylea, diabetic macular edema (DME)

Barchart Morning Call 3/8

Barchart Morning Call - 3/8

Friday, March 8th, 2013View Older Reports

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OVERNIGHT MARKETS AND NEWS

June E-mini S&Ps (ESH13 +0.28%) are up +0.37% this morning on a +1.03% rally in European stocks and mostly higher stocks in Asia. The markets are encouraged by today's continued drop in Spanish and Italian bond yields and by a +22% increase in Chinese Feb exports and upward revision in Japan's Q4 GDP to +0.2% q/q annualized from -0.4%, although Germany's Jan industrial production was weaker than expected at unchanged. Commodity prices this morning are mildly higher by 0.13%. April crude oil (CLJ13 -0.49%) is down -0.21%, April gasoline (RBJ13 +0.77%) is up +0.49%, April gold (GCJ13 -0.01%) is up +0.15%, May copper (HGK13 -0.27%) is down -0.40%, and agriculture prices are trading mostly higher. The dollar index (DXY00 +0.22%) is mildly higher by +0.11%. EUR/USD (^EURUSD) is little changed and USD/JPY (^USDJPY) is sharply higher by +0.94% as Japan's Jan trade balance showed a large deficit of -1.5 trillion yen. June 10-year T-notes (ZNM13 -0.14%) are down 5.5 ticks.
China's Feb exports rose sharply by +21.8% y/y, which was down from +25.8% in Jan but was much stronger than market expectations of +8.1%. Meanwhile, Feb imports fell by -15.2% y/y, weaker than market expectations of -8.5% y/y. The Feb trade balance showed a surplus of $15.25 billion, down from the $29.15 billion surplus in Jan but better than market expectations for a deficit of -$6.9 billion.
The Spanish 10-year bond yield today fell by another 7 bp to a new 2-1/3 year low of 4.83% as market concern about Spain continues to ease. The Italian 10-year bond yield fell by 3 bp to 4.56%.
German Jan industrial production was unchanged m/m and -1.3% y/y, which was weaker than market expectations of +0.4% m/m and -1.2% y/y. The report provided further evidence to show how the German economy is stagnating due to the Eurozone recession.
Japan's Feb Eco Watchers outlook index rose to 57.7 from 56.5 in Jan, while the Feb current index rose to 53.2 from 49.5.
Japan's Jan adjusted current account balance rose to 365 billion yen from a revised 115 billion yen in Dec. Japan's Jan trade balance showed a big deficit of -1.479 trillion yen, which was a bit narrower than market expectations of -1.5 trillion yen.
Japan's Q4 GDP was revised upward to +0.2% q/q annualized from the preliminary report of -0.4%.
North Korea today scrapped the 1953 armistice that called a truce in the Korean war and canceled the hotline with South Korea after the UN approved new sanctions. South Korea this week warned North Korea that any military provocation may be met not only with retaliation on the site of the attack but also possibly on command leadership facilities.

U.S. STOCK PREVIEW

Today’s Feb payroll report is expected to show an increase of +160,000, which would be just slightly below the 6-month trend increase of +177,000, but slightly above January’s increase of +157,000. Today’s Feb unemployment rate is expected to be unchanged from January’s 7.9% level. That would be 0.1 point above the 4-year low of 7.8% posted several times in late 2012.
There are three of the Russell 1000 companies that report earnings today: Foot Locker (consensus $0.73), Carnival (0.03), and Tahoe Resources (-0.15).

June E-mini S&Ps (ESH13 +0.28%) are up 5.75 points (+0.37%) on expectations for a solid payroll report this morning and on a sharp 1.03% rally in European stocks. The S&P 500 index on Thursday closed higher with the Dow at a record high and the S&P 500 at a 5-1/3 year high. Bullish factors included (1) the unexpected drop in weekly initial unemployment claims to a 6-week low, and (2) carry-over support from a rally in European stocks after S&P upgraded Portugal’s credit rating and ECB President Draghi said the Eurozone economy will stabilize this year. Closes: S&P 500 +0.18%, Dow Jones +0.23%, Nasdaq +0.25%.

OVERNIGHT U.S. STOCK MOVERS

• Foot Locker (FL +0.40%) reported Q4 adjusted EPS of 73 cents, right in line with the consensus of 73 cents.
• Fuel Systems (FSYS +3.63%) reported Q4 adjusted EPS of 1 cents, better than the consensus for a 3-cent loss.
• Continental Grain sent a letter to the Smithfield Foods (SFD +10.67%) board requesting that the board hire an investment bank to consider its strategic options, such as splitting the company into three independent companies.
• Carl Icahn raised his stake in Herbalife (HLF unch) to 15.55% from 13.6%.
• H&R Block (HRB -1.11%) reported an adjusted Q3 EPS loss of -22 cents, worse than consensus of -1 cent, saying total Q3 revenues fell -29% due to "timing issues" from the IRS opening its e-file system on January 30, which resulted in delays to the start of the U.S. tax season.
• WuXi PharmaTech (WX +0.46%) reported Q4 EPS of 38 cents, better than consensus of 30 cents.
• Medifast (MED +0.58%) reported Q4 adjusted EPS of 28 cents, better than consensus of 25 cents, but lowered its guidance on Q1 EPS to 32 cents to 35 cents, below consensus of 45 cents.
• Cooper Companies (COO -0.81%) reported Q1 EPS of $1.23, better than consensus of $1.19.
• Quiksilver (ZQK +0.96%) reported a Q1 EPS loss of -16 cents, worse than consensus of -7 cents.
• PowerSecure (POWR +5.30%) reported Q4 EPS of 13 cents, better than consensus of 11 cents.
• TiVo (TIVO +0.96%) was initiated with an "Overweight" at Piper Jaffray with a share price target of $16.
• Covanta (CVA -1.22%) announced that the Board of Directors has authorized a 10% increase of the company's quarterly cash dividend to 16.5 cents from 15 cents per share. The Board of Directors also increased the current share repurchase authorization to $150 million.
• Emergent BioSolutions (EBS +0.07%) reported Q4 EPS of 44 cents, slightly weaker than consensus of 45 cents.
• Finisar (FNSR +5.53%) reported Q3 adjusted EPS of 17 cents, slightly better than consensus of 16 cents.

MARKET COMMENTS

June 10-year T-notes (ZNM13 -0.14%) are down 5.5 ticks on reduced safe-haven demand with the rally in U.S. and European stock indexes. June 10-year T-note prices on Thursday slid to a 1-1/2 week low on the decline in unemployment claims and on reduced safe-haven demand with the Dow at a new record high and with Standard & Poor’s upgrading Portugal’s credit rating to stable from negative. Closes: TYM3 -15.5, FVM3 -7.75.
The dollar index (DXY00 +0.22%) is up +0.09 points (+0.11%). EUR/USD (^EURUSD) is virtually unchanged. USD/JPY (^USDJPY) is sharply higher by +0.89 yen (+0.94%) on today's Japanese trade deficit news. The dollar index on Thursday closed lower on reduced safe-haven demand as stocks rallied. EUR/USD strengthened after Standard & Poor’s upgraded Portugal’s credit rating outlook to stable from negative and after ECB President Draghi said the Eurozone economy will stabilize this year. USD/JPY posted a 3-1/2 year high on speculation the BOJ will expand its yen-negative monetary stimulus measures: Dollar index -0.378 (-0.46%), EUR/USD +0.0140 (+1.08%), USD/JPY +0.758 (+0.80%).
April WTI crude oil (CLJ13 -0.49%) is down -0.19 (-0.21%) and April gasoline (RBJ13 +0.77%) is up +0.0154 (+0.49%). Crude oil and gasoline prices on Thursday closed mixed as crude oil gained on economic optimism after the Dow rallied to another record high. However, gasoline weakened on signs of adequate supplies after the DOE on Wednesday reported that U.S. gasoline inventories in the important PADD1 district that includes NY Harbor (where Nymex gasoline is priced) rose by +651,000 bbl. Closes: CLJ3 +1.13 (+1.25%), RBJ3 -0.0014 (-0.04%).

GLOBAL EVENT CALENDAR03/08/2013

US	0830 ET	Feb non-farm payrolls expected +160,000, Jan +157,000. Feb private payrolls expected +167,000, Jan +166,000. Feb manufacturing payrolls expected +10,000, Jan +4,000. Feb unemployment rate expected unchanged at 7.9%, Jan +0.1 to 7.9%.
	0830 ET	U.S. Feb average hourly earnings expected +0.2% m/m and +2.1% y/y, Jan +0.2% m/m and +2.1% y/y. Feb average weekly hours all-employees expected unchanged at 34.4 hours, Jan 34.4 hours.
	1000 ET	Jan wholesale inventories expected +0.3% m/m, Dec -0.1% m/m.
JPN	0000 ET	Jan Feb Eco watchers survey outlook, Jan 56.5. Feb Eco watchers survey current, Jan 49.5.
GER	0600 ET	German Jan industrial production expected +0.4% m/m and -1.2% y/y, Dec +0.3% m/m and -1.1% y/y.
CHI	2030 ET	China Feb CPI expected +3.0% y/y, Jan +2.0% y/y. Feb PPI expected -1.5% y/y, Jan -1.6% y/y.

U.S. STOCK CALENDAR03/08/2013

Company Name	Symbol	Time	Event Description	Period	EPS Est (US$)
Foot Locker Inc	FL US	Bef-mkt	Q4 2013 Earnings Release	Q4 2013	0.726
Foot Locker Inc	FL US	9:00	Q4 2013 Earnings Call	Q4 2013
Analog Devices Inc	ADI US		ITC Scheduled to Release Findings for Dover Corp vs Analog Devices
Carnival Corp	CCL US		Q1 2013 Earnings Release	Q1 2013	0.032
Walt Disney Co/The	DIS US		Box Office Release of Movie Oz the Great and Powerful""
Dover Corp	DOV US		ITC Scheduled to Release Findings for Dover Corp vs Analog Devices
Hawaiian Electric Industries Inc	HE US		Financial Community Meeting - Day 3	Y 2013
Hill-Rom Holdings Inc	HRC US		Annual General Meeting
McDonald's Corp	MCD US		February 2013 Sales and Revenue Release	2013
Thor Industries Inc	THO US		Q2 2013 Earnings Release	Q2 2013	0.38
Tahoe Resources Inc	THO CN		Q4 2012 Earnings Release	Q4 2012	-0.147