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Barchart Morning Call 2/22


Barchart Morning Call

BC - 51 mins ago

March E-mini S&Ps this morning are up +0.47% on a sharp 1.57% rally in European stocks on the stronger-than-expected increase in the IFO business climate index to a 10-month high. Asian stocks today closed mixed with Japan up +0.68% but with Hong Kong down -0.54% and China down -0.53%. Commodity prices are up +0.32%. April crude oil is up +0.30%, April gasoline is up +0.63%, April gold is up +0.11%, March copper is up +0.23%, and agricultural prices are trading mostly higher. The dollar index is slightly lower by -0.06% on some long liquidation pressure after this week's sharp rally. EUR/USD is down -0.14% and USD/JPY is up +0.16%. March 10-year T-notes are down 1 tick.
The German IFO business climate index rose by 3.1 points to a 10-month high of 107.4 from a revised 104.3, which was stronger than market expectations for an increase to only 104.9. The expectations index rose sharply by 4.0 points to 104.6 from a revised 100.6 in Jan, which was stronger than market expectations for a report of 101.4.
Eurozone banks will repay only 61.1 billion euros of their second round of 3-year LTROs (longer-term refinancing operation), which is a disappointing number since it is only half of the market consensus of about 120 billion euros. Banks will return another 1.7 billion euros of the first LTRO. That leads to a total of 212.3 billion euros worth of LTRO loans to be repaid early, which is about one-fifth of the total LTRO loans granted of about 1 trillion euros. The early LTRO repayment is a good sign that at least some banks in the Eurozone are healthy enough to feel comfortable giving up some of their emergency liquidity since access to the private funding markets is slowly returning.
The European Commission today forecast that Eurozone GDP in 2013 will fall by -0.3%, which was a weaker report than its previous forecast in November for a slight increase of +0.1%. The Commission raised its 2013 unemployment forecast to 12.2% from the previous forecast of 11.8% and the 2012 level of 11.4%. The Commission reduced its forecast for 2013 German GDP growth to +0.5% from +0.8%. The Commission is forecasting that the Greek economy will contract by another 4.4% this year. The Eurozone GDP situation is expected to improve in 2014 with only one of the Eurozone countries showing negative growth versus 7 countries showing negative growth in 2013.
China reported today that new home prices rose in January from the previous month in 53 of the 70 cities covered by the survey, 1 point below the figure of 54 cities in December. New home prices surged by 2.2% m/m in Shenzhen, the city showing the strongest increase. The report will make the Chinese government even more nervous about surging home prices and will encourage the government to maintain and extend restrictions to try to curb home price increases. The Chinese government this year is also expected to raise interest rates at least once. The Chinese central bank government earlier this week ordered regions and municipalities to institute another round of restrictions to crack down on property speculation.

There are no U.S. economic reports today, leaving the market to trade on further assessment of the sequester situation. There are four S&P 500 companies reporting earnings today: Interpublic (consensus $0.53), Abercrombie ((1.96), Pinnacle West Capital Corp ((.17), and the Washington Post.

March E-mini S&Ps this morning are up +7.00 points (+0.47%) on some short-covering after this week's sharp sell-off on the FOMC minutes and on support from the sharp 1.57% rally in European stocks this morning. The S&P 500 index on Thursday fell to a 2-week low and finished with moderate losses after U.S. weekly jobless claims rose by +20,000 to 362,000 and after the Feb Philadelphia Fed manufacturing index unexpectedly fell by -6.7 to an 8-month low of -12.5. Limiting losses was the unexpected +0.4% increase in U.S. Jan existing home sales to 4.92 million units. Closes: S&P 500 -0.63%, Dow Jones -0.34%, Nasdaq -1.04%.


  • Hewlett-Packard (HPQ +2.40%) rose over 5% in after-hours trading after CEO Meg Whitman said that although the company's restructuring program remained on track, the overall turnaround would not be linear.
  • Interpublic Group (IPG -1.84%) reported Q4 EPS ex-items of 82 cents, well above the consensus of 53 cents.
  • Cabot Oil & Gas (COG +0.32%) reported Q4 adjusted EPS of 27 cents, above consensus of 21 cents.
  • Newmont Mining (NEM -0.02%) reported adjusted Q4 EPS $1.11, above consensus of 97 cents, and announced it increased its attributable gold reserves by 0.4 million ounces, net of depletion, to 99.2 million ounces in 2012.
  • Public Storage (PSA -0.30%) raised its quarterly dividend 14% to $1.25 per share to shareholders of record as of March 13.
  • Atlas Air (AAWW -2.53%) will be added to the S&P 600 and Kilroy Realty (KRC -0.95%) will be deleted as of 2/28 close.
  • Novatel Wireless (NVTL -3.24%) reported a Q4 EPS loss of -38 cents, bigger than consensus of -26 cents, and lowered its guidance on Q1 EPS to a loss of -17 cents to -19 cents, worse than consensus of -16cents.
  • Nordson (NDSN -2.75%) reported Q1 adjusted EPS of 62 cents, below consensus of 68 cents, and lowered its guidance on Q2 EPS to 78 cents to 87 cents, below consensus of 93 cents.
  • Digimarc (DMRC +2.36%) reported Q4 EPS of 14 cents, below consensus of 17 cents.
  • AVG Technologies (AVG +0.69%) reported Q4 adjusted EPS of 32 cents, above consensus of 26 cents, and raised guidance on Q1 EPS to 35 cents to 40 cents, higher than consensus of 31 cents.
  • Flowserve (FLS -1.21%) announced a 16.7% quarterly dividend increase to 42 cents a share, bigger than expectation of an increase to 40 cents, replenished buyback authorization of $750 million, and also approved a 3-for-1 stock split, subject to shareholder action.

March 10-year T-notes this morning are down 1 tick on reduced safe-haven demand. March 10-year T-note prices on Thursday rallied to a 3-1/2 week high on increased safe-haven demand as stocks faltered, U.S. weekly jobless claims rose more than expected, and the Feb Philadelphia Fed manufacturing index unexpectedly fell to an 8 month low. Closes: TYH3 +10.5, FVH3 +4.5.
The dollar index this morning is slightly lower by -0.05 points (-0.06%) on reduced safe-haven demand with the rally in stocks. EUR/USD is down-0.0018 (-0.14%) despite today's positive German IFO report since the European Commission revised most of the Eurozone GDP growth figures lower. USD/JPY is up +0.15 (+0.16%). The dollar index on Thursday rallied sharply for a second day and posted a new 5-1/2 month high and closed higher on carry-over support from Wednesday's hawkish FOMC minutes. EUR/USD slipped to a 1-1/4 month low after German and Eurozone PMI reports for Feb were weaker than market expectations. Closes: Dollar index +0.392 (+0.48%), EUR/USD -0.00906 (-0.68%), USD/JPY -0.452(-0.48%).
April WTI crude oil this morning is up +0.28 (+0.30%) and April gasoline is up +0.96 points (+0.31%). Crude oil and gasoline prices closed lower as April crude posted a 6-week low and Apr gasoline fell to a 2-week low. Bearish factors included (1) the rally in the dollar index to a 5-1/2 month high, (2) the 4.13 million bbl increase in weekly DOE crude inventories, double expectations of a 2.0 million bbl increase, and (3) data from the EIA that showed U.S. oil production rose +0.8% to 7.118 million barrels a day in the week ended Feb 15, the most since Aug of 1992. April gasoline pared its losses after weekly DOE gasoline stockpiles fell -2.88 million bbl, a bigger decline than expectations of -900,000 bbl. Closes: CLJ3 -2.38(-2.50%), RBJ3 -0.0245 (-0.75%).


US 0830 ET USDA weekly Export Sales.
  1030 ET Fed Governor Jerome Powell and Boston Fed President Eric Rosengren speak on U.S. monetary policy at forum in Chicago sponsored by University of Chicago?s Booth School of Business.
  1500 ET USDA Cold Storage.
  1500 ET USDA Cattle on Feed.
GER 0200 ET Revised German Q4 GDP expected no change at -0.6% q/q and +0.1% y/y nsa.
  0400 ET German Feb IFO business climate expected 104.9, Jan 104.2. Feb current assessment expected 108.5, Jan 108. Feb expectations expected 101.4, Jan 100.5.
EUR 0500 ET European Commission releases economic growth forecasts.


Company Name Symbol Time Event Description Period EPS Est (US$)
Pinnacle West Capital Corp PNW US Bef-mkt Q4 2012 Earnings Release Q4 2012 0.17
Abercrombie & Fitch Co ANF US 7:00 Q4 2013 Earnings Release Q4 2013 1.958
American International Group Inc AIG US 8:00 Q4 2012 Earnings Call Q4 2012  
Abercrombie & Fitch Co ANF US 8:30 Q4 2013 Earnings Call Q4 2013  
Interpublic Group of Cos Inc/The IPG US 8:30 Q4 2012 Earnings Call Q4 2012  
Cabot Oil & Gas Corp COG US 9:30 Q4 2012 Earnings Call Q4 2012  
Newmont Mining Corp NEM US 10:00 Q4 2012 Earnings Call Q4 2012  
Flowserve Corp FLS US 11:00 Q4 2012 Earnings Call Q4 2012  
Pinnacle West Capital Corp PNW US 12:00 Q4 2012 Earnings Call Q4 2012  
Wynn Resorts Ltd WYNN US 12:00 Extraordinary Shareholders Meeting Y 2013  
Public Storage PSA US 13:00 Q4 2012 Earnings Call Q4 2012  
Washington Post Co/The WPO US   Q4 2012 Earnings Release Q4 2012  
Interpublic Group of Cos Inc/The IPG US   Q4 2012 Earnings Release Q4 2012 0.536