Barchart Morning Call 4/1

BARCHART MORNING CALL

Monday, April 1st, 2013View Older Reports

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OVERNIGHT MARKETS AND NEWS

June E-mini S&Ps (ESM13 +0.03%) this morning are little changed. The main supportive factor this morning is positive U.S. economic data last Friday when the markets were closed, which included (1) a +6.8 point increase in the final-March U.S. consumer confidence index from the University of Michigan, and (2) strong Feb personal income (+1.1%) and personal spending (+0.7%) reports. However, those reports were offset by weaker-than-expected Japanese Tankan report and Chinese manufacturing PMI reports released on Sunday. Many markets are closed today including Europe, Hong Kong, Australia, and New Zealand. The Nikkei index today closed down -2.12% while China's CSI 300 index closed slightly lower by -0.08%. May crude oil prices this morning are down -0.50%, May gasoline is down -0.31%, and May copper is down -1.46%. Corn prices are down -5.4% this morning and soybeans and wheat are each down about -1.3% as the selling continues after last Thursday's bearish USDA reports and limit-down closes. The dollar index (DXY00 -0.03%) this morning is slightly lower by -0.05%, EUR/USD (^EURUSD) is slightly lower by -0.02%, and USD/JPY (^USDJPY) is down -0.53%. March 10-year T-note futures (ZNM13 -0.13%) are down -3.5 ticks.
The U.S. markets this morning are reacting to last Friday's stronger-than-expected U.S. economic reports, which were released when the markets were closed but the U.S. government was open. Friday’s Feb personal income report of +1.1% was stronger than market expectations of +0.8%. The Feb personal spending report of +0.7% was slightly stronger than market expectations of +0.6%. The Feb PCE deflator rose to +1.3% y/y from a revised +1.3% in Jan and was weaker than market expectations of+1.4% y/y. The Feb core PCE deflator report of +1.3% y/y was unchanged from Jan and was in line with market expectations.
Friday’s final-March U.S. consumer confidence (Univ of Michigan) rose sharply by +6.8 points to a 4-month high of 78.6 from 71.8 in early-March and was stronger than market expectations for a +0.8 point increase to 72.6. The final-March report was up by +1.0 from Feb and was the third consecutive monthly gain.
The Japanese Tankan report released on Sunday night showed an improvement in Japanese confidence but the improvement was slightly less than market expectations. The Tankan large manufacturers index from the National Bureau of Statistics improved to -8 from -12 in Q4 but was weaker than market expectations of -7. The Tankan large manufacturers outlook index rose to -1 from -10 in Q4 but was weaker than market expectations of 1. The Q1 Tankan non-manufacturing index rose to 6 from 4 in Q4 but was weaker than market expectations of 8. The Tankan non-manufacturing outlook index rose to 9 from 3 in Q4 but was weaker than market expectations of 11. The Tankan Q1 capital expenditure report of -2.0% was much weaker than market expectations of +5.0% and Q4’s +6.8%.
The city of Beijing on Saturday announced that one-person households will not be allowed to buy second homes and that everyone will have to make larger down payments on second homes. Beijing home prices are up sharply by +5.9% y/y. Various levels of government in China have recently taken steps to cool property prices, which is negative for the Chinese construction sector and for commodity prices. Meanwhile, the city of Shanghai instituted a ban on mortgages for people buying a third home.
Chinese March new home prices rose sharply by +1.1% m/m and +3.9% y/y, according to SouFun Holdings, China's largest real estate website owner. The home price increases are expected to cause more cities and regions to introduce restrictions on property markets.
The March China manufacturing PMI reports released on Sunday night indicated an improvement in Chinese manufacturing confidence in March although the reports were slightly weaker than market expectations. The March manufacturing PMI rose by +0.8 points to 50.9 from 50.1 in Feb but was 0.3 points weaker than market expectations of 51.2. The HSBC March manufacturing PMI of 51.6 was 0.1 point below the flash estimate of 51.7, but was in line with market expectations and was up by +1.2 points from 50.4 in Feb.

U.S. STOCK PREVIEW

The U.S. markets this week will focus mainly on Friday’s March unemployment report, which is expected to show a solid increase in payrolls of +200,000 and an unchanged unemployment rate of 7.7%. Other key U.S. economic reports this week include today’s March ISM manufacturing index (expected -0.2 to 54.0), Tuesday’s Feb factory orders report (expected +2.9%), Wednesday’s ADP employment report (expected +200,000), and Friday’s Feb U.S. trade deficit (expected slightly wider at -$44.7 billion versus -$44.4 billion in Jan). This is a busy week for Fed-speak with comments by Fed Chairman Bernanke on Thursday and eight different events for other Fed officials. This is a very light earning week with only three S&P 500 companies scheduled to report earnings (McCormick on Tuesday, and Monsanto and ConAgra Foods on Wednesday).
This is a very light earning week with only three S&P 500 companies scheduled to report earnings (McCormick on Tuesday, and Monsanto and ConAgra Foods on Wednesday). Conferences this week include Utility Corporate Access Day on Tuesday, Wells Fargo Tech Transformation Summit on Tuesday, Boston Biotech Business Development Conference on Tue-Wed, J.P. Morgan Private Builder/Private Equity Conference on Thursday, China Business Conference 2013 in NY on Friday, and Women in the World Summit 2013 on Friday.

June E-mini S&Ps this morning are slightly lower by -1.00 point (-0.06) with offsetting news between last Friday's firm U.S. economic reports as compared with weaker-than-expected Chinese manufacturing PMI and Japanese Tankan reports on Sunday night. The S&P 500 index on Thursday posted a new 5-1/2 year high on the upward revision in U.S. Q4 GDP to +0.4% from +0.1% and general optimism about the U.S. economy and earnings. Closes: S&P 500 +0.41%, Dow Jones +0.36%, Nasdaq 100 +0.31%. U.S. Q4 GDP on Thursday was revised higher to +0.4% from +0.1%, but Q4 personal consumption was revised lower to +1.8% from +2.1%. The March Chicago PMI report on Thursday fell by -4.4 points to 52.4, which was much weaker than the expected report of a small -0.3 point decline to 56.5. U.S. weekly unemployment claims on Thursday rose +16,000 to 357,000, which showed a weaker labor market than market expectations of 340,000. Continuing claims fell by -27,000 to a new 4-3/4 year low of 3.050 mln, which showed a stronger labor market than market expectations for a decline to 3.042 million.

OVERNIGHT U.S. STOCK MOVERS

• Yum's (YUM +0.87%) KFC will open over 40 restaurants in U.K. and Ireland, according to the Guardian newspaper.
• AT&T (T +0.19%) approved a new 300 million share repurchase program but said that it plans to slow the pace of its repurchases.
• The FDA approved Johnson & Johnson's (JNJ +0.32%) Invokana medication to treat Type 2 diabetes.
• 3M (MMM +0.97%) and Avery Dennison (AVY +0.65%) concluded various patent infringement and related lawsuits between the two companies.
• Cisco (CSCO +0.34%) increased its dividend by 3 cents to 17 cents per share.
• Amazon.com (AMZN +0.45%) announced an agreement to acquire Goodreads, a book enthusiastics website.

MARKET COMMENTS

June 10-year T-notes this morning are down 3.5 ticks. June 10-year T-note prices on Thursday closed mildly lower on reduced safe-haven demand with the 5-1/2 year high in the S&P 500 index. Closes: TYM3 -4.5, FVM3 -3.25.
The dollar index this morning is down -0.04 points (-0.05%) while EUR/USD is down -0.0002 (-0.02%). USD/JPY down -0.50 yen (-0.53%). The dollar index on Thursday fell back from Wednesday’s 8-month high and closed mildly lower on reduced safe-haven demand with the rally in the S&P 500 index to a new 5-1/2 year high. Meanwhile, EUR/USD closed mildly higher as Spanish and Italian bond yields on Thursday fell 2-3 bp, although the Italian 10-year bond yield closed sharply higher on the week by +25 bp at 4.76% on the Italian political deadlock. Closes: Dollar index -0.23 (-0.27%), EUR/USD +0.0036 (+0.28%), USD/JPY -0.31 (-0.33%).
May WTI crude oil this morning is down -0.49 (-0.50%) and May gasoline is down -0.0096 (-0.31). Crude oil and gasoline prices on Thursday closed mixed with crude oil seeing some strength and gasoline seeing weakness on the recent pickup in U.S. refinery operations after seasonal maintenance, which will boost demand for crude oil and increase the supply of gasoline. Closes: CLK3 +0.65 (+0.67%), RBK3 -0.0012 (-0.04%).

GLOBAL EVENT CALENDAR04/01/2013

US	1000 ET	March ISM manufacturing index expected -0.2 to 54.0, Feb +1.1 to 54.2. Mar ISM prices-paid sub-index expected -1.5 to 60.0, Feb +5.0 to 61.5.
	1000 ET	Feb construction spending expected +1.0% m/m, Jan -2.1% m/m.
	1100 ET	USDA weekly grain export inspections.
JPN	0100 ET	Japan Mar vehicle sales, Feb -12.2% y/y.
	1950 ET	Japan March monetary base.
	2130 ET	Japan Feb labor cash earnings expected -0.1% y/y, Jan +0.1% y/y.
	n/a	Japan holiday.
UK	1901 ET	UK March Lloyds business barometer, Feb 13.
	n/a	UK holiday.
CH	n/a	China holiday.

U.S. STOCK CALENDAR04/01/2013

Company Name	Symbol	Time	Event Description	Period	EPS Est (US$)
Cal-Maine Foods Inc	CALM US	Bef-mkt	Q3 2013 Earnings Release	Q3 2013	1.4
Derma Sciences Inc	DSCI US	Bef-mkt	Q4 2012 Earnings Release	Q4 2012	-0.11
Bryn Mawr Bank Corp	BMTC US	8:30	Acquisition of MidCoast Community Bancorp, Inc by Bryn Mawr Bank Corp Call
Chesapeake Energy Corp	CHK US	8:30	Business Update Call
Fortegra Financial Corp	FRF US	8:30	Q4 2012 Earnings Call	Q4 2012
Forbes Energy Services Ltd	FES US	10:00	Q4 2012 Earnings Call	Q4 2012
Derma Sciences Inc	DSCI US	11:00	Q4 2012 Earnings Call	Q4 2012
Ares Commercial Real Estate Corp	ACRE US	11:00	Q4 2012 Earnings Call	Q4 2012
Shoe Carnival Inc	SCVL US	16:30	Q4 2013 Earnings Call	Q4 2013
Lifeway Foods Inc	LWAY US	16:35	Q4 2012 Earnings Call	Q4 2012
Lifeway Foods Inc	LWAY US	Aft-mkt	Q4 2012 Earnings Release	Q4 2012	0.025
ZaZa Energy Corp	ZAZA US	Aft-mkt	Q4 2012 Earnings Release	Q4 2012
Shoe Carnival Inc	SCVL US	Aft-mkt	Q4 2013 Earnings Release	Q4 2013	0.16
GenCorp Inc	GY US		Q1 2013 Earnings Release	Q1 2013
Apple Inc	AAPL US		Apple vs. Samsung - ITC Due to Release Findings
Harvest Natural Resources Inc	HNR US		Q4 2012 Earnings Release	Q4 2012	0.255
magicJack VocalTec Ltd	CALL US		Q4 2012 Earnings Release	Q4 2012	0.51
Forbes Energy Services Ltd	FES US		Q4 2012 Earnings Release	Q4 2012	0.02
LPL Financial Holdings Inc	LPLA US		Roadshow-Minneapolis	Y 2013
Ares Commercial Real Estate Corp	ACRE US		Q4 2012 Earnings Release	Q4 2012	0.197

Barchart Morning Call 3/26

BARCHART MORNING CALL

Tuesday, March 26th, 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 +0.06%) are mildly higher by +0.23% on hopes for strong U.S. economic reports today and on the fact that the Euro Stoxx 50 index this morning is up by +0.16%. Asian stocks today closed mixed. Japan's Nikkei index closed down -0.60% but the Hong Kong Hang Seng closed +0.27%. China's CSI 300 index closed down -1.46% on a report of tighter bank loans for property developers as the government continues it efforts to cool property prices. Commodity prices are mildly higher by +0.33% this morning. May crude oil (CLK13 +0.45%) is up +0.72%, May gasoline (RBK13 +0.24%) is up +0.43%, April gold (GCJ13 -0.44%) is down -0.42%, May copper (HGK13 +0.36%) is up +0.26%, and agriculture prices are trading mostly higher. The dollar index (DXY00 +0.01%) this morning is little changed while EUR/USD (^EURUSD) is up +0.18%. USD/JPY (^USDJPY) is up +0.22%. June 10-year T-note futures (ZNM13 -0.06%) prices are down -5.5 ticks on the mildly higher trade in U.S. and European stock indexes.
Cyprus banks are closed today and Wednesday but are currently expected to open on Thursday. When they do open, depositors will be restricted in withdrawing their cash and moving it out of the country to tight capital controls that the Cyprus parliament installed late last week. The capital controls will be lifted slowly to prevent bank runs and the quick exit of capital from the country and may last a matter of months. Eurozone officials and the Cyprus government on Sunday night agreed on a 10 billion euro bailout plan that involves closing Cyprus's second largest bank, splitting the largest Cyprus bank into a good bank and bad bank, and imposing heavy losses on large uninsured depositors and bank bond holders.
Democratic Party leader Pier Luigi Bersani today will meet with deputies of Silvio Berlusconi's People of Liberty party and its partner the Northern League as he tries to form a government without the Five Star Movement party headed by ex-comic Grillo, who refuses to be part of any government with the established parties. More than a month after the Feb 24-25 national election, the Italian political parties are still trying to form a government. A new election may yet be necessary. If Mr. Bersani cannot form a government by Thursday, then Italian President Napolitano will give the opportunity to another party leader.
Japan's Feb corporate service price index rose +0.1% y/y, which was higher than market expectations of unchanged and the Jan report of -0.2% y/y.
Japan's March small business confidence index rose to a new 6-year high of 49.7 from 46.0 in February. Small business confidence has risen sharply since late last year when Prime Minister Abe took over the reins of government with his verbally aggressive plan to boost the economy.
The China Security Journal today reported that many banks have started to reduce loans to property developers, which fueled increased concerns about weaker Chinese construction growth.

U.S. STOCK PREVIEW

There are five U.S. economic reports this morning and the Treasury will also sell $35 billion in 2-year T-notes today. The only earnings report today for the Russell 1000 stocks is SAIC (after-market) with a consensus of 52 cents. Conferences this week are light ahead of 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 are mildly higher by +3.50 points (+0.23%) on higher European stocks (Euro Stoxx 50 index +0.16%) and on hopes for strong U.S. economic reports this morning. The S&P 500 index on Monday closed mildly lower mainly on technical selling. The stock market was initially encouraged by Sunday night’s Cyprus bailout agreement, but optimism then soured after the Dutch finance minister said that the Cyprus bailout with its heavy losses placed on uninsured depositors should be viewed as a template for bank restructuring in other countries. That raised the spectre of continued bank runs in countries such as Spain and Italy. Closes: S&P 500 -0.33%, Dow Jones -0.44%, Nasdaq 100 -0.41%.

OVERNIGHT U.S. STOCK MOVERS

• T-Mobile (DTEGY -1.72%) is dropping subsidies for smartphones, according to WSJ, making it the first major U.S. wireless carrier to do so. This may encourage consumers to buy cheaper smartphones than those of Apple (AAPL +0.36%) and Samsung (SSNLF unch).
• Foster Wheeler (FWLT -0.80%) signed a service agreement with Valero Energy (VLO +0.09%).
• Children's Place (PLCE +0.99%) reported Q4 adjusted EPS of $1.15, above the consensus of $1.04.
• Sonic (SONC -1.01%) rallied 4% in after-hours trading on postive earnings.
• Focus Media (FMCN +2.03%) rallied +0.5% in after-hours trading after announcing earnings and that it will hold a shareholders meeting April 29 to vote on the proposed merger with Giovanna.
• Gordmans Stores (GMAN +1.50%) fell 3% in after-hours trading after reporting earnings.
• Magellan Health (MGLN -10.89%) fell 3% in after-hours trading after announcing it was not awarded a contract in Arizona.
• Calumet Specialty Products (CLMT +0.28%) fell 4% in after-hours trading after filing to sell 5.25 million common shares.

MARKET COMMENTS

June 10-year T-notes are down 5.5 ticks on reduced safe-haven demand with higher U.S. and European stock indexes this morning and on some supply overhang as the Treasury starts to sell $99 billion in T-notes today. June 10-year T-note prices on Monday closed slightly higher as the U.S. stock market ended up closing lower. Closes: TYM3 +2, FVM3 +0.5.
The dollar index this morning is virtually unchanged while EUR/USD is up +0.0023 (+0.18%). USD/JPY is up +0.21 yen (+0.22%). The dollar index on Monday closed moderately higher and EUR/USD closed lower since the market was already fairly certain that a Cyprus bailout would be reached and then decided to focus more on the negative implication of the bailout for bank deposit runs in other troubled countries. Closes: Dollar index +0.45 (+0.55%), EUR/USD -0.0136 (-1.05%), USD/JPY -0.29 (-0.31%).
May WTI crude oil this morning is up +0.68 (+0.72%) and May gasoline is up +0.0132 (+0.43%). Crude oil and gasoline prices on Monday closed higher on relief about the Cyprus bailout and on expectations for firmer U.S. crude oil demand after last week’s news of a sharp +2.5 point increase in the U.S. refinery utilization rate on the end of maintenance runs. Gasoline prices lagged on expectations for higher gasoline output in coming weeks. Closes: CLK3 +1.10 (+1.17%), RBK3 +0.0030 (+0.10%).

GLOBAL EVENT CALENDAR03/26/2013

US	0110 ET	Dallas Fed President Richard Fisher speaks in Abu Dhabi to Global Interdependence Center Banking Series on “An Economic and Monetary Policy Outlook: Where Does the United States Go from Here?
	0830 ET	Feb durable goods orders expected +3.9% m/m, Jan -4.9% m/m. Feb durable goods orders ex-transportation expected +0.5% m/m, Jan +2.3% m/m. Feb non-defense capital goods orders ex-defense expected -1.0% m/m, Jan +6.3% m/m.
	0900 ET	Jan Case-Shiller Composite-20 Home Price index expected +0.8% m/m and +7.9% y/y, Dec +0.9% m/m and +6.8% y/y.
	1000 ET	March Richmond Fed manufacturing index expected unch at 6.0, Feb +18.0 to 6.0.
	1000 ET	March U.S. consumer confidence (Conference Board) expected -2.1 to 67.5, Feb +11.2 to 69.6.
	1000 ET	Feb new home sales expected -3.9% to 420,000, Jan +15.6% to 437,000.
	1300 ET	Treasury sells $35 billion in 2-year T-notes.
	1630 ET	API weekly U.S. oil statistics.
UK	0700 ET	UK Mar CBI reported sales expected 15, Feb 8.
JPN	0000 ET	Japan March small business confidence, Feb 46.

U.S. STOCK CALENDAR03/26/2013

Company Name	Symbol	Time	Event Description	Period	EPS Est (US$)
Neogen Corp	NEOG US	Bef-mkt	Q3 2013 Earnings Release	Q3 2013	0.273
Children's Place Retail Stores Inc/The	PLCE US	Bef-mkt	Q4 2013 Earnings Release	Q4 2013	1.04
Children's Place Retail Stores Inc/The	PLCE US	8:30	Q4 2013 Earnings Call	Q4 2013
CLARCOR Inc	CLC US	9:00	Annual General Meeting
Apple Inc	AAPL US	10:00	Apple vs Samsung - Trial Continues
ZaZa Energy Corp	ZAZA US	10:00	Business Update Call
Neogen Corp	NEOG US	11:00	Q3 2013 Earnings Call	Q3 2013
Fortegra Financial Corp	FRF US	11:00	Q4 2012 Earnings Call	Q4 2012
Target Corp	TGT US	11:30	Canadian Club of Toronto Presents, President Tony Fisher
United Parcel Service Inc	UPS US	13:00	Shareholders Meeting	Y 2013
General Cable Corp	BGC US	13:00	Investor Day	Y 2013
Envivio Inc	ENVI US	17:00	Q4 2013 Earnings Call	Q4 2013
SAIC Inc	SAI US	17:00	Q4 2013 Earnings Call	Q4 2013
Mattress Firm Holding Corp	MFRM US	17:00	Q4 2013 Earnings Call	Q4 2013
Landec Corp	LNDC US	Aft-mkt	Q3 2013 Earnings Release	Q3 2013	0.17
Envivio Inc	ENVI US	Aft-mkt	Q4 2013 Earnings Release	Q4 2013	-0.163
SAIC Inc	SAI US	Aft-mkt	Q4 2013 Earnings Release	Q4 2013	0.515
Mattress Firm Holding Corp	MFRM US	Aft-mkt	Q4 2013 Earnings Release	Q4 2013	0.318
Public Service Enterprise Group Inc	PEG US		Investor Meeting - Toronto	Y 2013