Barchart Morning Call 3/25

Barchart Morning Call

Monday, March 25th, 2013View Older Reports

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OVERNIGHT MARKETS AND NEWS

June E-mini S&Ps (ESM13 +0.42%) are moderately higher by +0.43% on the Cyprus bailout agreement that was reached last night. The Euro Stoxx 50 index this morning is sharply higher by +1.64%. Asian stocks today closed mostly higher on the Cyprus bailout. The Nikkei index closed +1.69% and the Hang Seng closed +0.61% but China's CSI 300 index closed -0.20%. Commodity prices are little changed on average this morning. May crude oil (CLK13 +0.49%) is up +0.55%, May gasoline (RBK13 +0.53%) is up +0.31%, April gold (GCJ13 -0.47%) is down -0.29%, May copper (HGK13 -0.10%) is down -0.09%, grains are lower, and softs are mixed. The dollar index (DXY00 -0.01%) is slightly lower by -0.05% this morning while EUR/USD (^EURUSD) is up +0.08%. USD/JPY (^USDJPY) is up +0.31%. June 10-year T-notes (ZNM13 -0.25%) are down -10 ticks.
Cyprus and troika officials reached a bailout deal late last night that will give Cyprus its 10 billion euro bailout and avert a Cyprus banking system meltdown, sovereign default, and possible exit from the Eurozone. The deal will close Cyprus's second largest bank (Cyprus Popular Pcl) and will put heavy losses on large uninsured depositors, but will protect smaller depositors under the 100,000 euro deposit insurance limit. The Bank of Cyprus, the largest bank in Cyprus, will survive but uninsured depositors will lose up to 40% of their holdings. The Cyprus parliament does not need to vote on last night's deal since it already passed the necessary capital controls and the law to wind down Cyprus's second largest bank last Friday. However, parliamentary votes are necessary in some Eurozone countries to approve the loans being made from the European Stability Mechanism (ESM).
Cyprus banks and stock market were closed today for a national holiday. There has been no definitive word as yet when they will reopen. The ECB will now keep liquidity flowing to the Cyprus central bank and indirectly to the Cyprus banking system, thus allowing Cyprus banks to survive bank runs when they reopen.
Spanish and Italian bond prices have rallied on relief about the Cyprus deal. The Spanish 10-year bond yield this morning is down -3 bp at 4.81% and the Italian 10-year bond yield is down -7 bp at 4.44%.

U.S. STOCK PREVIEW

The markets this week will first react to Sunday night's Cyprus bailout. This is a busy news week ahead of Friday's Good Friday holiday. There are a slew of U.S. economic reports and the Treasury will sell $99 billion in T-notes. This is a light earnings week with only 9 of the S&P 500 companies reporting earnings. Monday: Apollo Group (consensus of $0.19) and Dollar General (0.90). Tuesday: SAIC (0.52). Wednesday: PVH (1.50), Red Hat (0.30), Paychex (0.39). Thursday: Mosaic (0.88), Accenture (0.97), Gamestop (2.09).
Conferences this week are light with the Good Friday holiday: Canada's Energy Technology Blueprint Summit on Tuesday, Photon's 10th Solar Silicon Conference on Tuesday, Bank of America Merrill Lynch New York Auto Summit on Wednesday, CIBC Retail & Consumer Conference on Thursday, and Photon's 8th Solar Electric Utility Conference on Thursday.

June E-mini S&Ps (ESM13 +0.42%) this morning are up +6.75 points (+0.43%) on the Cyprus bailout agreement that was reached last night, along with the sharp 1.64% rally in the Euro Stoxx 50 index today. The S&P 500 index on Friday settled higher. Stocks were boosted by carry-over support from strength in European equities on optimism that Cyprus would reach an 11th hour agreement before Monday’s ECB deadline for a cut -off of funding for Cypriot banks. A negative factor was the unexpected -0.7 point drop in the March German Ifo business climate index to 106.7, its first decline in five months. Closes: S&P 500 +0.72%, Dow Jones +0.63%, Nasdaq 100 +0.94%.

OVERNIGHT U.S. STOCK MOVERS

• Dollar General (DG +0.52%) reported Q4 EPS of 97 cents, well above the consensus of 90 cents. The company also announced an additional $500 million share repurchase authorization.
• Dell (DELL) received two acquisition proposals in its "go shop process," one from Blackstone (BX -0.95%) and one from Carl Icahn.
• JA Solar (JASO -0.95%) reported Q4 EPS of a -$2.65 loss, much wider than the expected loss of -$1.53.
• Quicksilver Resources (KWK -8.84%) released a revised Q4 non-GAAP EPS of 5 cents, which had previously been reported as a -1 cent loss.
• Pernod Ricard USA, a subsidiary of Pernod Ricard (PDRDY +2.87%) , is voluntarily recalling Absolut TUNE, a mix of wine and vodka, because its label failed to disclose that the product contains sulfites. To date, the company has not received any reports of adverse reactions associated with this product.
• AK Steel (AKS -4.61%) said that the United States Court of Appeals for the Federal Circuit on March 20 denied ArcelorMittal's (MT -1.17%) petition for re-hearing in its patent infringement lawsuit involving aluminized boron steel.
• The U.S. Food and Drug Administration approved Novartis' (NVS +0.27%) TOBI Podhaler for the management of cystic fibrosis patients with Pseudomonas aeruginosa, a bacterium that causes lung infections.
• Caterpillar (CAT +0.75%) was awarded a U.S. government contract with a maximum $633 million for material handling equipment.
• Pilots at Piedmont Airlines, a wholly-owned subsidiary of US Airways (LCC -0.82%), voted to ratify a new five-year collective bargaining agreement that was reached on Feb. 1.

MARKET COMMENTS

June 10-year T-notes (ZNM13 -0.25%) this morning are down -10 ticks on reduced safe-haven demand with the Cyprus deal. June 10-year T-note prices on Friday fluctuated on either side of unchanged and finally settled slightly higher as the ongoing Cyprus banking crisis fueled safe-haven demand for Treasuries. Closes: TYM3 +3.5, FVM3 +1.5.
The dollar index (DXY00 -0.01%) this morning is slightly lower by -0.05%. EUR/USD (^EURUSD) is slightly higher by +0.0011 (+0.08%) on the Cyprus deal. USD/JPY (^USDJPY) is up +0.29 yen (+0.31%). The dollar index on Friday closed lower on reduced safe-haven demand as stocks rallied on optimism Cyprus will reach an 11th hour agreement before Monday’s ECB deadline for a cut-off of funding for Cypriot banks. Limiting gains in EUR/USD was the unexpected -0.7 point decline in the March German Ifo business climate index, its first drop in five months. Closes: Dollar index -0.364 (-0.44%), EUR/USD +0.0090 (+0.70%), USD/JPY -0.430 (-0.44%).
May WTI crude (CLK13 +0.49%) oil is up +0.52 (+0.55%) and May gasoline (RBK13 +0.53%) is up +0.0094 (+0.31%) on the prospects for an improved global economy with the Cyprus deal. Crude oil and gasoline prices on Friday settled mixed. The bullish factors of strong stocks and a weak dollar were overshadowed by the Cyprus bailout crisis. Gasoline weakened on speculation that gasoline output will soon increase as spring maintenance by refiners is nearly completed. Closes: CLK3 +1.26 (+1.36%), RBK3 -0.0085 (-0.28%).

GLOBAL EVENT CALENDAR03/25/2013

US	0830 ET	Feb Chicago Fed national activity index, Jan -0.32.
	1030 ET	March Dallas Fed manufacturing activity index expected 3.7, Feb 2.2.
	1215 ET	NY Fed President William Dudley speaks at Economic Club of New York.
	1315 ET	Fed Chairman Ben Bernanke, IMF Chief Economist Olivier Blanchard, Professor Lawrence Summers, and former ECB council member Axel Weber take part in a public discussion chaired by BOE Governor Mervyn King at London School of Economics.
	1100 ET	USDA weekly grain export inspections.
JPN	1950 ET	Japan Feb corporate service price index expected 0.0% y/y, Jan -0.2% y/y.

U.S. STOCK CALENDAR03/25/2013

Company Name	Symbol	Time	Event Description	Period	EPS Est (US$)
Apollo Group Inc	APOL US	7:00	Q2 2013 Earnings Release	Q2 2013	0.191
Dollar General Corp	DG US	7:00	Q4 2013 Earnings Release	Q4 2013	0.902
Apollo Group Inc	APOL US	8:00	Q2 2013 Earnings Call	Q2 2013
Dollar General Corp	DG US	10:00	Q4 2013 Earnings Call	Q4 2013
MGM Resorts International	MGM US	12:40	Toronto Region Board of Trade Presents Bill Hornbuckle & Wayne Barwise

Barchart Morning Call 3/18

BARCHART MORNING CALL 3/18

Monday, March 18th, 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 -0.79%) this morning are sharply lower by -0.95% after Eurozone officials with their Cyprus bailout agreement on Saturday managed to spark contagion concerns for other Eurozone countries with an ill-advised tax on bank deposits. The Euro Stoxx 50 index is down sharply by -1.90% today. The Euro Stoxx 600 Bank stock index this morning is down -2.21%. Asian stocks closed sharply lower across the board thanks to the Cyprus bank deposit tax plan. The Japanese Nikkei index closed -2.71% today, the Hong Kong Hang Seng closed -2.00%, and the Chinese CSI 300 index closed -1.47%. Global stocks are also reacting negatively to the strong Chinese property price report released on Sunday night, which is likely to attract further government measures to try to halt the rise in prices. Commodity prices are sharply lower by -0.80% on the sharp rally in the dollar index and fears about weaker economic growth and commodity demand. April crude oil (CLJ13 -1.02%) is down -1.22%, April gasoline (RBJ13 -1.38%) is down -1.88%, April gold (GCJ13 +0.62%) is up +0.43%, May copper (HGK13 -2.26%) is down -2.51%, and grain and softs prices are lower across the board. The dollar index (DXY00 +0.50%) is up +0.43% this morning, while EUR/USD (^EURUSD) is down -0.94% and USD/JPY (^USDJPY) is down -0.40%. June 10-year T-notes (ZNM13 +0.36%) are sharply higher by +17 ticks.
The Cyprus parliament is due to vote today on a tax levy on bank deposits that would effectively confiscate part of depositor funds in banks to contribute toward the bailout that the Cyprus government and banking system needs to stay afloat. The tax will be 6.75% on deposits up to 100,000 billion euros and 9.9% on deposits in accounts with more than 100,000 euros. There is a report that the president of Cyprus is trying to get those tax rates reduced by Eurozone officials to make the plan more palatable to the Cyprus parliament. Eurozone officials made the deposit tax a condition of a 10 billion euro bailout package agreed upon on Saturday. Cypriot depositors lined up over the weekend at ATMs to try to withdraw cash from bank accounts before the tax takes effect. However, a bank holiday has been declared for today to allow time for the tax to be approved by the Cypriot parliament and for the tax to be withheld. There is no guarantee that the Cyprus parliament today will approve the tax. If the tax is not approved, then there will be an even bigger mess since there will be a huge bank run as soon as the banks reopen. The tax on depositors is the first time that a Eurozone bailout has forced depositors to contribute to a bank and government bailout that was caused, not by the depositors, but by the government and bank management. The deposit tax is likely to cause a continued slow bank run at other banks in the Eurozone such as in Italy and Spain as depositors fear that their cash might be next for a tax. Eurozone officials have once again shot themselves in the foot in trying to contain the Eurozone debt crisis as politics intrudes on sensible solutions.
The bank deposit levy in Cyprus has caused the Italian 10-year bond yield today to rise by 9 bp to 4.68% and the Spanish 10-year bond yield to rise by 9 bp to 5.00%. Meanwhile, the German 10-year bond yield today fell by 6 bp to 1.39% on safe-haven demand.
The Eurozone Jan trade balance (seasonally adjusted) of 9.0 billion euros was narrower than market expectations of 10.9 billion euros and was down from a revised 10.3 billion euros in Dec (prelim 12.0 bln euros).
UK March Rightmove house prices rose by +1.7% m/m and +1.2% y/y, which was stronger than market expectations of +1.7% m/m and +1.1% y/y.
China's Feb property price report, released Sunday night NY time, showed a further increase in Chinese property prices that is likely to cause the government to institute further controls to try to halt the surge in property prices. Prices on new residential apartments rose on a year-on-year basis in 62 of the 70 cities surveyed, up from 53 in Jan, 40 in Dec, 25 in Nov and 12 in Oct. Prices on existing residential prices rose in 49 of the 70 cities surveyed, up from 36 in Jan and 25 in Dec. On a month-on-month basis, prices in Feb rose in 66 of 70 cities surveyed on new residential apartments and in 66 of 70 cities surveyed on existing residential apartments.

U.S. STOCK PREVIEW

This week’s main focus will be on (1) the Eurozone debt crisis with the weekend Cyprus bailout announcement, and (2) the 2-day FOMC meeting that concludes on Wednesday. The Senate and House this week need to iron out the continuing spending resolution that is necessary to keep the government operating past next Wednesday (March 27). Today’s March NAHB housing market index is expected to show a +1 point increase to 47, reversing the -1 point dip to 46 seen in February. This is a light earnings week with only 14 of the S&P 500 companies scheduled to release earnings. Key reports include Adobe on Tuesday; Lennar, FedEx and Oracle on Wednesday; Nike, Ross stores, and Discover Financial Services on Thursday; and Darden Restaurants and Tiffany on Friday.
Conferences this week include Barclays Select Series Insurance Forum on Monday, ROTH OC Growth Stock Conference on Mon, Consumer Analyst Group of Europe (CAGE) Conference on Mon-Wed, Howard Weil Energy Conference on Mon-Wed, ISI Group Retail Summit on Tue, Barclays Emerging Payments Forum on Tue-Wed, Bank of America Merrill Lynch Global Industrials & EU Autos Conference on Tue-Thu, Gabelli Asset Management Specialty Chemicals & Agriculture Conference on Wed, International Strategy & Investment Group (ISI) Retail Summit on Wed, BB&T Commercial & Industrial Conference on Wed-Thu, J.P. Morgan Insurance Conference on Thu, National Coffee Association Annual Conference on Thu, Nomura Global Chemical Industry Leaders Conference on Thu, and The Future of Utilities - 18th Annual Conference on Tue-Thu.

June E-mini S&Ps this morning are sharply lower by -14.75 points (-0.95%) on the flare-up in the Eurozone debt crisis thanks to the Eurozone bailout for Cyprus that requires a tax on bank deposits. The S&P 500 index on Friday closed slightly lower. The S&P 500 eked out a fresh 5-1/3 year high early after Feb U.S. industrial production rose +0.7% m/m, better than expectations of +0.4%, but stocks fell back and closed lower after an unexpected drop in Mar U.S. University of Michigan consumer confidence to a 15-month low (-4.8 to 71.8 versus expectations of +0.4 to 78.0) led to profit taking. Limiting declines was the larger-than-expected increase in Feb capacity utilization to its best level in 4-3/4 years (+0.4 to 79.6% versus expectations of +0.3 to 79.4%). Closes: S&P 500 -0.16%, Dow Jones -0.17%, Nasdaq -0.28%.

OVERNIGHT U.S. STOCK MOVERS

• Siemens (SI -0.06%) was upgraded to Buy from Neutral at BofA/Merrill.
• Nike's (NKE +0.16%) price target was raised by BoA/Merrill to $68 from $60 and a Buy was reiterated on positive pricing and sales trends.
• Krispy Kreme (KKD -2.74%) issued FY2014 guidance of an adjusted EPS 53-57 cents, below the consensus of 58 cents.
• Toyota (TM +0.38%) is recalling 209,000 FJ Cruiser SUVs, according to a report in the Detroit News.
• Airbus (EADSY +1.47%) won a $20 billion order from Lion Air, according to a report by Reuters.
• Amerseco (AMRC -0.52%) reported Q4 EPS of 11 cents, below the consensus of 14 cents.
• Quicksilver Resources (KWK +1.09%) disclosed in a regulatory filing that on Friday that it will restate its quarterly reports for 2012 due to non-cash related errors to derivative accounting treatment. The restatement is expected to produce an overall increase to net income of $133 million.
• Crimson Exploration (CXPO +1.59%) reported a Q4 EPS loss ex-charges of -8 cents, worse than consensus of -4 cents.
• Boeing (BA +2.14%) was awarded a $99.9 million government contract for production assets, spares, repairs and sustainment for the joint direct attack munitions system. Work is expected to be completed by Jan. 31, 2016.
• Lockheed Martin (LMT +0.22%) is being awarded a $105.87 million government contract for contractor logistics support, legacy sustainment and combined task force support for the Space Based Infrared Systems. Work is expected to be completed by Sept. 30, 2016.
• Vascular Solutions (VASC -2.28%) issued a nationwide recall of Guardian II hemostasis valves used in catheterization procedures due to a defect in certain lots that pose a slightly increased risk of air leakage that may lead to an air embolism, which could result in serious injury or death. No injuries have been reported in association with this issue.

MARKET COMMENTS

June 10-year T-notes this morning are trading sharply higher by 17 ticks on increased safe-haven demand with the sharp sell-off in stocks and flare-up in the Eurozone debt crisis. June 10-year T-note prices on Friday climbed to a 1-week high and closed higher. Bullish factors included (1) the unexpected decline in Mar U.S. University of Michigan consumer confidence to a 15-month low, which undercut stocks and boosted the safe-haven demand for Treasuries, and (2) Treasury data that showed China, the world's biggest holder of U.S. debt, increased its U.S. debt holdings in Jan by $44.1 billion, the biggest increase in 1-1/2 years. Closes: TYM3 +13.0, FVM3 +7.0.
The dollar index this morning is up +0.36 points (+0.43%) on the Eurozone debt ceiling flare-up while EUR/USD is down -0.0123 (-0.94%. USD/JPY is down -0.38 yen (-0.40%). The dollar index on Friday slipped to a 1-week low and closed lower as an unexpected drop in the March U.S. University of Michigan consumer confidence fueled speculation the Fed will keep its dollar negative easy monetary policies in place. EUR/USD received a boost after EU members endorsed an easing of austerity terms for France and several other countries. Closes: Dollar index -0.333 (-0.40%), EUR/USD +0.00706 (+0.54%), USD/JPY -0.839 (-0.87%).
April WTI crude oil this morning is down -1.14 (-1.22%) while April gasoline is down -0.0595 (-1.88%). Crude oil and gasoline prices on Friday closed higher. The slide in the dollar index to a 1-week low helped propel April crude to a 2-1/2 week high, while the stronger-than-expected U.S. Feb industrial production bolstered the economic outlook and the prospects for energy demand. Closes: CLJ3 +0.42 (+0.45%), RBJ3 +0.0225 (+0.72%).

GLOBAL EVENT CALENDAR03/18/2013

US	1000 ET	Mar NAHB housing market index expected +1 to 47, Feb -1 to 46.
	1100 ET	USDA weekly grain export inspections.
	n/a	Iran expert-level nuclear talks with world powers in Istanbul.
EUR	0600 ET	Eurozone Jan trade balance (sa) expected +10.9 bln euros, Dec +12.0 bln euros. Jan trade balance expected -3.5 bln euros, Dec +11.7 bln euros.
CHI	2200 ET	China Feb leading economic index from Conference Board.

U.S. STOCK CALENDAR03/18/2013

Company Name	Symbol	Time	Event Description	Period	EPS Est (US$)
Numerex Corp	NMRX US	Bef-mkt	Q4 2012 Earnings Release	Q4 2012	0.125
Pernix Therapeutics Holdings	PTX US	Bef-mkt	Q4 2012 Earnings Release	Q4 2012	0.021
Ameresco Inc	AMRC US	Bef-mkt	Q4 2012 Earnings Release	Q4 2012	0.135
KiOR Inc	KIOR US	Bef-mkt	Q4 2012 Earnings Release	Q4 2012	-0.322
Sterling Construction Co Inc	STRL US	6:00	Q4 2012 Earnings Release	Q4 2012	0.036
Horizon Pharma Inc	HZNP US	8:00	Q4 2012 Earnings Call	Q4 2012
Ameresco Inc	AMRC US	8:30	Q4 2012 Earnings Call	Q4 2012
Numerex Corp	NMRX US	9:00	Q4 2012 Earnings Call	Q4 2012
Pernix Therapeutics Holdings	PTX US	9:00	Q4 2012 Earnings Call	Q4 2012
Cumulus Media Inc	CMLS US	9:00	Q4 2012 Earnings Release	Q4 2012	0.06
KCAP Financial Inc	KCAP US	9:00	Q4 2012 Earnings Call	Q4 2012
MDC Holdings Inc	MDC US	10:00	Annual General Meeting
Sterling Construction Co Inc	STRL US	10:00	Q4 2012 Earnings Call	Q4 2012
Miller Energy Resources Inc	MILL US	10:00	Annual General Meeting
KiOR Inc	KIOR US	10:00	Q4 2012 Earnings Call	Q4 2012
Crimson Exploration Inc	CXPO US	10:30	Q4 2012 Earnings Call	Q4 2012
Vantage Drilling Co	VTG US	10:30	Extraordinary Shareholders Meeting
Cumulus Media Inc	CMLS US	11:00	Q4 2012 Earnings Call	Q4 2012
Houston Wire & Cable Co	HWCC US	11:00	Q4 2012 Earnings Call	Q4 2012
West Coast Bancorp/OR	WCBO US	11:30	Extraordinary Shareholders Meeting
Greatbatch Inc	GB US	13:00	Investor Day	Y 2013
Parkervision Inc	PRKR US	16:30	Q4 2012 Earnings Call	Q4 2012
FalconStor Software Inc	FALC US	16:30	Q4 2012 Earnings Call	Q4 2012
Rockwell Medical Technologies Inc	RMTI US	16:30	Q4 2012 Earnings Call	Q4 2012
Intersections Inc	INTX US	17:00	Q4 2012 Earnings Call	Q4 2012
Towerstream Corp	TWER US	17:00	Q4 2012 Earnings Call	Q4 2012
Acorn Energy Inc	ACFN US	Aft-mkt	Q4 2012 Earnings Release	Q4 2012	-0.22
Parkervision Inc	PRKR US	Aft-mkt	Q4 2012 Earnings Release	Q4 2012
FalconStor Software Inc	FALC US	Aft-mkt	Q4 2012 Earnings Release	Q4 2012
Rockwell Medical Technologies Inc	RMTI US	Aft-mkt	Q4 2012 Earnings Release	Q4 2012	-0.657
Intersections Inc	INTX US	Aft-mkt	Q4 2012 Earnings Release	Q4 2012
FutureFuel Corp	FF US	Aft-mkt	Q4 2012 Earnings Release	Q4 2012	0.19
Towerstream Corp	TWER US	Aft-mkt	Q4 2012 Earnings Release	Q4 2012	-0.107
CH Energy Group Inc	CHG US		Q4 2012 Earnings Release	Q4 2012	0.82
Maxwell Technologies Inc	MXWL US		Q4 2012 Earnings Release	Q4 2012	0.077
Central European Distribution Corp	CEDC US		Q4 2012 Earnings Release	Q4 2012
Cross Country Healthcare Inc	CCRN US		Q4 2012 Earnings Release	Q4 2012	-0.021
Gold Resource Corp	GORO US		Q4 2012 Earnings Release	Q4 2012	0.22
Houston Wire & Cable Co	HWCC US		Q4 2012 Earnings Release	Q4 2012	0.208
Employers Holdings Inc	EIG US		Investor Meeting -Day2	Y 2013
Horizon Pharma Inc	HZNP US		Q4 2012 Earnings Release	Q4 2012	-0.467