Barchart Morning Call 9/16

Barchart Morning Call 9/16

Monday, September 16th, 2013View Older Reports

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OVERNIGHT MARKETS AND NEWS

December E-mini S&Ps (ESZ13 +1.07%) this morning are up +1.07% at a fresh contract high and European stocks are up +0.86%. Asian stocks closed mostly higher: Japan closed for holiday, Hong Kong +1.47%, China -0.42%, Taiwan +1.39%, Australia +0.54%, Singapore +1.90%, South Korea +1.16%, India +0.05%. Global stocks and bonds rallied, while the dollar fell to a 3-week low, after former Treasury Secretary Lawrence Summers withdrew his bid to become Fed Chairman. Market speculation is that Summers would have tightened Fed policy more than Janet Yellen, his main rival to replace outgoing Fed Chairman Ben Bernanke. Commodity prices are mixed. Oct crude oil (CLV13 -1.49%) is down -1.31% and Oct gasoline (RBV13 -1.75%) is down -1.44% as the threat of an imminent U.S. attack on Syria eased after U.S. Secretary of State Kerry and Russian Foreign Minister Lavrov agreed on Saturday on a framework for locating and destroying Syria's stockpiles of chemical weapons by mid-2014. Dec gold (GCZ13 +0.27%) is up +0.50% and Dec copper (HGZ13 +0.42%) is up +0.27%. Agricultural prices are mixed. The dollar index (DXY00 -0.37%) is down -0.31% at a 3-week low. EUR/USD (^EURUSD) is up +0.41% at a 2-week high and USD/JPY (^USDJPY) is down -0.48%. December T-note prices (ZNZ13 +0.70%) are up sharply by +27.5 ticks as they gapped up to a 1-month high after Lawrence Summers, a noted hawk, withdrew his candidacy to become the next Fed Chairman.
Eurozone Q2 labor costs rose +0.9% y/y, slower than a +1.7% y/y increase n Q1 that was revised up from the previously reported +1.6% y/y, and the slowest pace of increase since data began in 1996.
Eurozone Aug CPI rose +0.1% m/m, right on expectations, and was left unrevised at +1.3% y/y. The Aug core CPI was also left unrevised at +1.1% y/y.
UK Sep Rightmove house prices fell -1.5% m/m and rose +4.5% y/y.

U.S. STOCK PREVIEW

This will be a critical news week with the FOMC meeting on Tuesday/Wednesday and indications of whether there will be a government shut-down on Oct 1. Today brings Sep Empire manufacturing index (expected +0.8 to 9.0) and Aug industrial production (expected +0.4%). There are no major earnings reports today.
Equity conferences this week include: Morgan Stanley Industrials & Autos Conference on Mon-Wed, Capital Link Global Commodities Energy Freight Forum on Tue, Home Delivery World 2013 on Tue, Citi Global Industrials Conference on Tue-Wed, RBC Capital Markets Financial Institutions Conference on Tue-Wed, Credit Suisse Chemical & Ag Science Conference on Tue-Thu, BMO Capital Markets North American Real Estate Conference on Wed, Jefferies Advanced Analytics & Big Data Intelligence Summit on Wed, Mitsubishi UFJ Securities-Utility Corporate Access Day on Wed, 28th International Aluminum Conference on Wed-Thu, UBS Houston Energy Symposium on Wed-Thu, Credit Suisse Global Mining & Steel Conference on Thu, Mitsubishi UFJ Securities- Industrials Corporate Access Day on Thu.

OVERNIGHT U.S. STOCK MOVERS

Packaging Corp. (PKG +0.65%) will acquire Boise (BZ +3.86%) for $12.55 per share in cash or $1.995 billion.
ChinaEdu (CEDU +0.14%) was downgraded to "Neutral" from "Overweight" at Piper Jaffray due to valuation.
According to DigiTimes, Samsung (SSNLF +2.71%) has cut its notebook component orders in September to about half of its original forecast and may also reduce its shipment forecast in 2013 to 13 million units from 13.8 million in 2012.
Under Armour (UA -2.59%) was downgraded to "Neutral" from "Positive" at Susquehanna.
Bristol-Myers (BMY -0.27%) was upgraded to "Overweight" from "Neutral" at JPMorgan.
Oaktree Capital (OAK +1.52%) was downgraded to "Neutral" from "Buy" at BofA/Merrill.
Barclays (BCS -0.31%) was upgraded to "Buy" from "Reduce" at Nomura.
Citigroup kept its "Buy" rating on United Natural Foods (UNFI +12.94%) and raised its price target on the stock to $80 from $64.
AstraZeneca (AZN +0.16%) was upgraded to "Buy" from "Sell" at Nordea.
ALPS Advisors reported a 5.0% passive stake in MarkWest Energy (MWE -1.21%) .

MARKET COMMENTS

Dec E-mini S&Ps (ESZ13 +1.07%) this morning are up sharply by +18.00 points (+1.07%) at a new contract high. The S&P 500 index on Friday closed higher on speculation that the weaker-than-expected Aug retail sales and Sep University of Michigan consumer confidence will prompt the Fed to be less aggressive when tapering stimulus. Another positive for stocks was the reduced chance for a U.S. military attack on Syria after Secretary of State Kerry reported “constructive” negotiations with Russian Foreign Minister Lavrov on a plan for Syria to surrender its chemical weapons. Closes: S&P 500 +0.27%, Dow Jones +0.49%, Nasdaq 100 +0.09%.
Dec 10-year T-notes (ZNZ13 +0.70%) this morning are up +27.5 ticks at a 1-month high. Dec 10-year T-note prices on Friday opened lower on the prospects of tighter monetary policy after the Nikkei reported that former Treasury Secretary Summers, a noted hawk, will be named the next Fed Chairman. T-note prices recovered and closed higher, though, after U.S. Aug retail sales and Sep University of Michigan consumer confidence came in weaker-than-expected. Another positive for T-note prices was the decline in the Aug core PPI to a 3-1/3 year low of +1.1% y/y. Closes: TYZ3 +4.00, FVZ3 unch.
The dollar index (DXY00 -0.37%) this morning is down -0.255 (-0.31%) at a 3-week low. EUR/USD (^EURUSD) is up +0.0054 (+0.41%) at a 2-week high and USD/JPY (^USDJPY) is down -0.48 (-0.48%). The dollar index on Friday closed slightly lower on speculation the weaker-than-expected U.S. Aug retail sales and Sep University of Michigan consumer confidence reports will limit the amount of stimulus the Fed cuts next week. Closes: Dollar index -0.037 (-0.05%), EUR/USD -0.00041 (-0.03%), USD/JPY -0.168 (-0.17%).
Oct WTI crude oil (CLV13 -1.49%) this morning is down -$1.42 (-1.31%) a barrel and Oct gasoline (RBV13 -1.75%) is down -0.0400 (-1.44%) as the risks of an imminent U.S. military attack on Syria recede. Oct crude oil and gasoline prices on Friday settled mixed. A rally in equities lifted gasoline, while crude was undercut on reduced chances of a U.S. military strike on Syria after Secretary of State Kerry reported that negotiations with Russian Foreign Minister Lavrov on a plan for Syria to surrender its chemical weapons was “constructive.” Crude was also pressured by the weaker-than-expected U.S. Aug retail sales and the Sep University of Michigan consumer confidence reports. Closes: CLV3 -0.39 (-0.36%), RBV3 +0.0069 (+0.25%).

GLOBAL EVENT CALENDAR09/16/2013

US	0830 ET	Sep Empire manufacturing index expected +0.76 to 9.00, Aug -1.22 to 8.24.
	0915 ET	Aug industrial production expected +0.4%, July unch. Aug manufacturing production expected +0.4% m/m, July -0.1% m/m. Aug capacity utilization expected +0.3 to 77.9%, July was -0.1 to 77.6%.
	1100 ET	USDA weekly grain export inspections.
	1600 ET	USDA Crop Progress.
EUR	0500 ET	Eurozone Q2 labor costs, Q1 +1.6% y/y.
	0500 ET	Revised Eurozone Aug CPI, previous +1.3% y/y. Revised Aug core CPI, previous +1.1% y/y.
JPN	n/a	Japanese markets closed for Respect-for-the-aged Day.

U.S. STOCK CALENDAR09/16/2013

Company Name	Ticker	Time	Event Description	Period	Estimate
Praxair Inc	PX US	10:00	Investor Day	Y 2013
Humana Inc	HUM US		Investor Meeting	Y 2013

Barchart Morning Call 11/6

Barchart Morning Call

BC - Tue Nov 06, 7:00AM CST

Overnight Developments

• Dec E-mini S&Ps this morning are mildly higher by +0.32% going into today's election with support from today's +0.70% rally in European stocks. European stocks have been able to shake off today's generally weak European economic data. The big Asian stock markets closed lower today with Japan down -0.36%, Hong Kong down -0.28%, and China down -0.42%. Commodity prices are trading higher almost across the board today and are up by an average +0.52%. Dec crude oil is up +0.69%, Dec gasoline is up +1.03%, Dec gold is up +0.57%, Dec copper is up +0.45%, and agriculture prices are all trading higher. The dollar index is slightly lower by -0.08 points (-0.09%) and EUR/USD is up +0.0006 (+0.05%). Dec 10-year T-note prices are down -4 ticks.
• The markets are waiting to assess the outcome of today's U.S. election, which will at least significantly reduce the uncertainty level for the markets. The first big news will be available when polls close in key eastern states at 8 PM ET. The markets are hoping for a decisive election outcome by late tonight or the early morning hours. The markets hoping that the decision isn't delayed by recounts or court challenges that would cause substantial uncertainty and could even delay the results by a matter of days.
• Greek workers began a 48-hour general strike today to protest austerity measures. Meanwhile, doubts continue about whether the Greek parliament will be able to approve the 13.5 billion euro austerity package that is required for Greece to receive its next tranche of bailout aid. European Union Economic and Monetary Affairs Commissioner Olli Rehn said yesterday that the target for a Greek deal is an EU finance ministers meeting this coming Monday (Nov 12), although target that could easily slip since Eurozone officials still haven't decided how to plug the 30 billion euro hole in Greece's long-term deficit reduction plan. Greek Prime Minister Samaras submitted the austerity bill to parliament late Monday. The Greek parliament is expected to vote on the plan on Wednesday and then vote on the budget on Sunday (Nov 11).
• The Australian central bank today left its overnight cash rate target unchanged at 3.25% versus some market hopes for a rate cut. The bank cited a more stable global economy as the reason for leaving its rate unchanged. AUD/USD is up +0.64% today on the lack of a rate cut.
• Germany's final-Oct services PMI was revised lower by -0.9 points to 48.4 from the early-Oct level of 49.3, leaving the index down by 1.3 points from the Sep level of 49.7. The final-Oct Eurozone services PMI was revised slightly lower by -0.2 points to 46.0 from the early-Oct level of 46.2, leaving the index down by -0.1 point from Sep's level of 46.1.
• German Sep factory orders fell by -3.3% m/m and -4.7% y/y, which was weaker than market expectations of -0.4% m/m and -1.5% y/y.
• UK Sep industrial production fell -1.7% m/m and -2.6% y/y, which was weaker than market expectations of -0.6% m/m and -1.6% y/y. The UK Sep manufacturing production report of +0.1% m/m and -1.0% y/y was weaker than market expectations of +0.4% m/m and -0.8% y/y.
• The Eurozone Sep PPI report of +0.2% m/m and +2.7% y/y was in line with market expectations.
  Market Comments
  • Dec E-mini S&Ps this morning are up +4.50 points (+0.32%) on the +0.70% rally in the Euro Stoxx 50 index this morning. Otherwise, stock investors are simply holding their ground ahead of today's election results. The S&P 500 index on Monday closed mildly higher: S&P 500 +0.22%, Dow Jones +0.15%, Nasdaq +0.63%. The U.S. stock market on Monday was boosted by some short-covering after last Friday's sharp sell-off. The Nasdaq received a boost from a 1.4% rally in Apple after news it sold 3 million of its iPad mini on its debut weekend. U.S. stocks were undercut by the news that the U.S. Oct ISM non-manufacturing index fell by -0.9 points to 54.2, which was mildly weaker than market expectations for a -0.6 point drop to 54.5.
  • Dec 10-year T-notes this morning are down 4 ticks on today's higher trade in the U.S. and European stock indexes.. Dec 10-year T-note prices on Monday closed moderately higher: TYZ2 +11.5, FVZ2 +4.75. Bullish factors included some safe-haven demand ahead of the election and with increased concerns about Greece. The T-note market shook off supply overhang concerns ahead of the $72 billion refunding operation that begins Tuesday with the Treasury's sale of $35 billion in 3-year T-notes.
  • The dollar index this morning is slightly lower by -0.08 points (-0.09%) on reduced safe-haven demand with the mildly higher trade in E-mini S&Ps. EUR/USD is up +0.0006 (+0.05%) and USD/JPY is down -0.12 (-0.15%). The dollar index on Monday closed mildly higher: Dollar index +0.11 (+0.13%), EUR/USD -0.0039 (-0.30%), USD/JPY -0.14 (-0.17%). Bullish factors included (1) some safe-haven demand ahead of Tuesday's U.S. election, (2) weakness in EUR/USD on worries about whether the Greek parliament will be able to approve the 13.5 billion euro austerity package that is necessary for Greece to obtain its next 31.5 billion euro tranche of aid and stay in the Eurozone, and (3) some technical strength in the dollar index with the rally to a new 2-mont high and technical weakness in EUR/USD with the new 2-month low.
  • Dec WTI crude oil prices this morning are up +0.59 (+0.69%) and Dec gasoline is up +0.0271 (+1.03%). Dec crude oil and gasoline prices on Monday closed higher: CLZ2 +0.79 (+0.93%), RBZ2 +0.0466 (+1.81%). Bullish factors include (1) pent-up demand for fuel in Northeastern U.S. with refineries slowly getting back to normal, and (2) news of a temporary shut-down of Valero's Port Arthur, Texas refinery after a fire. Israeli Prime Minister Netanyahu said yesterday that if he wins another term as Prime Minister at Israel's election in January, Iran's nuclear program will no longer exist by the end of his term. The market consensus for Wednesday's DOE report is for a +1.5 million barrel rise in crude oil inventories, a -1.5 million barrel drop in gasoline inventories, a -1.25 million barrel drop in distillate inventories, and a -1.5 point drop in the refinery utilization rate to 86.2% of capacity.
  • 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): CVS-CVS Caremark (Consensus:$0.84), NWSA-News Corp (0.37), EMR-Emerson (1.05), DTV-DirectTV (0.92), DISCA-Discovery Communications (0.63), MRO-Marathon Oil (0.65), MMC-Marsh & McLennan (0.38), SRE-Sempra Energy (1.00), DISH-Dish Network (0.56), HCN-Health Care REIT (0.26), LMCA-Liberty Media (0.94), RAX-Rackspace Hosting (0.19), CPN-Calpine (0.41), EXPD-Expeditors (0.43), CHTR-Charter Communications (-0.33), OAK-Oaktree Capital (0.74), NYX-NYSE Euronext (0.41), SCG-Scana (0.89), DNR-Denbury Resource (0.33), DOX-Amdocs (0.70), FOSL-Fossil (1.16).
    Global Financial Calendar
    

    Global Calendar - Tuesday 11/6/12
    United States
    n/a	U.S. Election Day.
    0745 ET	ICSC (Int'l Council of Shopping Centers) weekly retailer sales.
    0855 ET	Redbook weekly retailer sales.
    1130 ET	Weekly 4-week T-bill auction.
    1300 ET	Treasury auctions $32 billion in 3-year T-notes.
    1630 ET	API weekly U.S. oil statistics.
    Japan
    0000 ET	Japan Sep coincident index expected 91.2, Aug 93.5. Sep leading index expected 91.8, Aug 93.2.
    Germany
    0355 ET	German final-Oct services PMI expected unch from prelim of 49.3.
    0600 ET	German Sep factory orders expected -0.5% m/m and -1.5% y/y, Aug -1.3% m/m and -4.8% y/y.
    Euro-Zone
    0400 ET	Eurozone final-Oct services PMI expected unch from prelim 46.2. Final-Oct composite PMI expected unch from prelim 45.8.
    0500 ET	Eurozone Sep PPI expected +0.2% m/m and +2.6% y/y, Aug +0.9% m/m and +2.7% y/y.
    United Kingdom
    0430 ET	UK Sep industrial production expected -0.6% m/m and -1.6% y/y, Aug -0.5% m/m and -1.2% y/y. Sep manufacturing production expected +0.4% m/m and -0.8% y/y, Aug -1.1% m/m and -1.2% y/y.
    1000 ET	UK Oct NIESR GDP estimate, previous +0.8%.
    1901 ET	UK Oct BRC shop price index, Sep +1.0% y/y.

    Barchart.com provides Financial Quotes, Charts and Technical Analysis for Stock and Commodity Traders.

Barchart Morning Call - 8/7

Barchart Morning Call

BC - Tue Aug 07, 7:00AM CDT

Overnight Developments

• Sep E-mini S&Ps this morning are trading mildly higher by +0.27% on support from the 0.78% rally in European stocks and generally stronger-than-expected earnings reports. The market is shaking off bad news that includes a poor German factory orders report, the fourth quarter of negative Italian GDP growth, and a plunge in Standard Charter on accusations by U.S. authorities of illegal Iran dealings. Spanish stocks are up 1.09% and Italian stocks are up +0.95%. Commodity prices are up by an average +0.34% with Sep crude oil up +0.23%, Dec gold up +0.09%, Sep copper up +0.97%, and agricultural commodities trading mostly higher. The dollar index is slightly lower by -0.12% while EUR/USD is up +0.12%. Sep 10-year T-notes are down -7.5 ticks.
• Asian stocks today closed mildly higher: Japan +0.88%, Hong Kong +0.37%, China +0.14%, Taiwan +0.13%, Australia +0.44%, Singapore -0.13%, South Korea +0.01%, India +1.08%, Turkey -0.67%.
• Standard Chartered Plc fell 23% in London trading after the bank is likely to face billions of dollars of costs related to U.S. authorities charging the bank with money laundering tied to its dealings with Iranian banks. The London-based bank may also lose its banking license in New York due to allegations the bank hid $250 billion in transations with Iranian banks over 7 years.
• The Swiss central bank reported today that Switzerland's foreign-currency reserves in July rose 11.3% to 406.5 billion Swiss francs ($420 billion) as the central bank sells francs and buys foreign currencies to try to enforce its Swiss franc ceiling of 1.20 Swiss francs per euro. Switzerlands foreign-currency reserves have soared by 44% since September 6 when the Swiss government announced the attempt to curb the Swiss franc's gain tied to safe-haven investment.
• German June factory orders fell -1.7% m/m and -7.8% y/y, which was weaker than market expectations of -0.8% m/m and -8.0% y/y. The report illustrated that Germany is under economic pressure as orders from the Eurozone drop due to austerity and recessions in southern Europe.
• UK June manufacturing production fell -2.9% m/m and -4.3% y/y, which was less than market expectations of -4.3% m/m and -5.7% y/y.
• Italy's Q2 GDP was reported at -0.7% q/q and -2.5% y/y, which was in line with market expectations. That was the fourth consecutive quarterly decline as the Italian recession continues.
  Market Comments
  • Sep E-mini S&Ps this morning are up +0.27% with support from the +0.78% rally in European stocks and general support from stronger-than-expected earnings reports. The stock market on Monday closed mildly higher and the S&P 500 index edged to a new 3-month high: S&P 500 +0.23%, Dow Jones +0.16%, Nasdaq 100 +0.68%. Bullish factors included German Chancellor Merkel government's approval of the ECB's bond buying plan, carry-over support from last Friday's stronger-than-expected U.S. July payroll report of +163,000, and relief that Knight Capital over the weekend received a $400 million capital injection that prevented any systemic stock market disruptions early this week when the bad trades were due to settle.
  • Sep 10-year T-notes this morning are down -7.5 ticks on reduced safe-haven demand with the rally in global stocks today. T-note prices on Monday closed mildly higher: TYU2 +6.5, FVU2 +4.75. T-note prices on Monday rallied mildly on some short-covering after last Friday's sharp sell-off on the stronger-than-expected payroll report.
  • The dollar index this morning is mildly lower by -0.10 (-0.12%) with EUR/USD up +0.12% and USD/JPY up +0.13%. The dollar index on Monday closed mildly lower: Dollar index -0.10 (-0.12%), EUR/USD +0.0014 (+0.11%), USD/JPY -0.22 (-0.28%). The dollar index closed mildly lower on Monday as safe-haven demand dissipated a bit with the capital injection for Knight Capital, with the Merkel government's approval of the ECB's bond buying plan, and with an IMF official saying that "good progress" was made in discussions over the past week with Greece. Troika officials over the weekend wrapped up their initial assessment of Greece's austerity progress and will return in September for a final assessment and negotiations over the next quarterly bailout payment.
  • Sep WTI crude oil prices this morning are mildly higher by +0.21 (+0.23%) and Sep gasoline is up +0.0159 (+0.54%). Crude oil and gasoline prices on Monday closed mixed: CLU2 +0.68 (+0.74%), RBU2 -0.0049 (-0.17%). Oil prices saw some continued support from last Friday's U.S. payroll report and from Monday's mildly lower close in the dollar index. Tropical Storm Ernesto may strengthen into a hurricane today but is moving westward towards the Yucatan Peninsula of Mexico and is not expected to move into the Gulf of Mexico to cause disruption to Gulf oil and gas production. The market consensus for Wednesday's weekly DOE report is for a 1.6 million barrel decline in crude oil inventories, and a 2 million barrel decline in gasoline inventories, and an unchanged level of distillate inventories.
  • 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): DIS-Walt Disney (Consensus $0.93), CVS-CVS Caremark (0.80), ESRX-Express Scripts (0.82), EMR-Emerson Electric (1.00), PCLN-Priceline (7.36), FE-FirstEnergy (0.64), PCG-PG&E Corp (0.82), MMC-Marsh & McLennan (0.58), ETE-Energy Transfer (0.46), SIRI-Siruis XM Radio (0.02), CHTR-Charter Communications (-0.21), CHD-Church & Dwight (0.55), EXPD-Expeditors (0.43), TAP-Molson Coors (1.20), NUAN-Nuance Communications (0.40), XL-XL Group (0.55), RAX-Rackspace Hosting (0.18), Transdigm (1.70), MPEL-Melco Crown (0.17), OAK-Oaktree Capital (0.61), MGM-MGM Resorts (-0.15).
    Global Financial Calendar
    

    Tuesday 8/7/12
    United States
    0745 ET	ICSC (Int'l Council of Shopping Centers) weekly retailer sales.
    0855 ET	Redbook weekly retailer sales.
    1130 ET	Weekly 4-week T-bill auction.
    1300 ET	Treasury auctions $32 billion of 3-year T-notes.
    1430 ET	Fed Chairman Bernanke speaks in Washington DC on financial education.
    1500 ET	Jun consumer credit expected +$11.0 bln, May +$17.118 bln.
    1630 ET	API weekly U.S. oil statistics.
    United Kingdom
    0430 ET	U.K. June industrial production expected -3.9% m/m and -5.4% y/y, May +1.0% m/m and -1.6% y/y.
    0430 ET	U.K. June manufacturing production expected -4.5% m/m and -5.7% y/y, May +1.2% m/m and -1/7% y/y.
    Germany
    0600 ET	German June factory orders expected -0.8% m/m and -7.0% y/y, May +0.6% m/m and -5.4% y/y.

    Barchart.com provides Financial Quotes, Charts and Technical Analysis for Stock and Commodity Traders.