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Barchart Morning Call 3/4

Barchart Morning Call

BC - 2 hrs 12 mins ago

March E-mini S&Ps (ESH13 -0.10%) are down -0.35% on sell-offs in European (-0.33%) and Asian stocks and on the weak Chinese non-manufacturing PMI reported on Saturday. In addition, political comments over the weekend seemed to confirm that there is little change of rolling back the sequester cuts that began last Friday. Most Asian stock markets are trading lower today except for a +0.40% rally in Japan. Commodity prices are little changed on average this morning. April crude oil (CLJ13 +0.09%) is down -0.18%, April gasoline (RBJ13 +0.01%) is down -0.28%, April gold (GCJ13 +0.36%) is up +0.36%, May copper (HGK13 +0.54%) is down -0.07%, and agricultural prices are mixed. The dollar index (DXY00 +0.04%) is slightly higher by +0.07%. EUR/USD (^EURUSD) is down -0.16% and USD/JPY (^USDJPY) is down -0.09%. June 10-year T-notes (ZNM13 +0.01%) are up 3.5 ticks.
HSBC is down 2.5% in European trading after reporting that its profit fell 5.6% in 2012 after taking a $5.2 billion charge. HSBC was forced to revalue its impaired debt, pay a record penalty for compliance violations, and saw higher costs.
Chinese stocks fell sharply by 4.6% today in response to a new set of property market curbs to cool home prices that hit construction and developer stocks hard. The Chinese government cabinet late Friday announced measures such as higher down payments and mortgage rates on second homes in cities that have experienced steep home price increases. The cabinet also announced a 20% capital gains tax on existing home sales.
Chinese stocks were also hurt by Saturday's news that China's Feb non-manufacturing PMI from the National Bureau of Statistics fell by 1.7 points to 54.5 from 56.2 in Jan.
Japanese stocks were supported today and closed up +0.40% after Haruhiko Kuroda, who has been nominated as the new Bank of Japan chief, said he would do whatever it takes to end more than 15 years of deflation.
Japan's Feb monetary base surged to +15.0% y/y from +10.9% y/y in Jan.
The UK Feb construction PMI fell by -1.9 points to 46.8 from 48.7 in Jan and was weaker than market expectations for a +0.3 point increase to 49.0.
The Eurozone Jan PPI of +0.6% m/m and +1.9% y/y was closed to expectations and the year-on-year figure of +1.9% was down from +2.1% in Dec.
Italy's 10-year bond yield is up by 4 bp at 4.83% today as Italy's political parties struggle to form a government. Italy's Democratic Party leader Bersani is seeking to form a narrow government targeted on a limited number of legislative initiatives. However, ex-comic Grillo's party continues to say that it will not join any government with the established parties such as those of Bersani, Berlusconi, or Monti. A second election will need to be held if a ruling coalition cannot be found.

The markets this week will focus mainly on the U.S. fiscal situation after last Friday's sequester went into effect, a heavy schedule of overseas central bank meetings, and Friday U.S. payroll report (expected +160,000). There are only 5 of the Russell 1000 companies that report earnings today: Tech Data (consensus $1.76), Golar LNG (1.67), Stratasys (0.38), Ascena Retail (0.23), MFA Financial (0.20).

March E-mini S&Ps (ESH13 -0.10%) this morning are down -5.25 points (-0.35%) on weak European and Asian stocks and the decline in China's non-manufacturing PMI report. The S&P 500 index on Friday closed higher as concerns about federal spending cuts from sequestration were offset by (1) the stronger-than-expected Feb ISM manufacturing index which unexpectedly expanded to its best level in 20-months (+1.1 to 54.2), and (2) the +1.3 point increase to 77.6 in the Feb University of Michigan consumer confidence index. Other negatives included (1) carry-over weakness from a fall in European stocks after the Eurozone Jan unemployment rate unexpectedly rose +0.1 to a record high of 11.9%, and (2) the China Feb PMI manufacturing index which unexpectedly fell -0.3 to 50.1. Closes: S&P 500 +0.23%, Dow Jones +0.25%, Nasdaq +0.33%.


  • Hecla Mining (HL unch) offerred to buy Aurizon Mines (AZK) for CD$4.75 per share or CD$796 million.
  • Stratasys (SSYS +1.82%) reported Q4 adjusted EPS of 40 cents, above the consensus of 38 cents.
  • HSBC (HBC -1.10%) reported FY12 EPS of 74 cents, down 20% y/y.
  • Carl Icahn reported a 13.6% stake in Herbalife (HLF -0.47%).
  • Cubic Corporation (CUB +0.79%) announced that it has received three prime contracts from the Naval Air Warfare Center Training Systems Division worth up to $298.5 million to develop courseware in support of the Littoral Combat Ship Train.
  • Transocean (RIG -0.29%) reported Q4 adjusted EPS of 91 cents, better than consensus of 82 cents.
  • Myers Industries (MYE +0.34%) raised its quarterly dividend to 9 cents from 8 cents per share.
  • Praxair (PX +0.41%) announced that it expects the impact of the Venezuelan government's devaluation of the bolivar from 4.30 to 6.30 to result in an estimated charge to net income of approximately 8 cents per diluted share in Q1 due primarily to the remeasurement of the local Venezuelan balance sheet to reflect the new official 6.30 exchange rate.
  • PDL BioPharma (PDLI -2.66%) reported Q4 EPS of 34 cents, better than consensus of 32 cents.
  • Vanguard Natural (VNR -0.14%) reported Q4 adjusted EPS of 27 cents, weaker than consensus of 34 cents.
  • Eastern Insurance Holdings (EIHI -0.16%) increased its quarterly cash dividend to 9 cents per share from 7 cents per share.

June 10-year T-notes (ZNM13 +0.01%) this morning are up 3.5 ticks on some increased safe-haven demand with the sell-off in most global stock markets today. June 10-year T-note prices on Friday climbed to a 2-month high and closed higher after Jan personal income fell more-than-expected by the most in 20-years (-3.6%), along with concern the automatic spending cuts that began with Friday's sequestration will slow growth in the U.S. economy. T-note prices fell back from their best levels after U.S. Feb consumer confidence and ISM manufacturing activity unexpectedly strengthened. Closes: TYM3 +7.5, FVM3 +3.0.
The dollar index (DXY00 +0.04%) this morning is slightly higher by +0.06 (+0.07%). EUR/USD (^EURUSD) is down -0.0021 (-0.16%) and USD/JPY (^USDJPY) is down -0.08 (-0.09%). The dollar index on Friday soared to a 6-1/4 month high and closed higher as the beginning of the U.S. sequestration fueled safe-haven demand into the dollar. EUR/USD slumped to a 2-1/2 month low when the Eurozone Jan unemployment rate unexpectedly rose to a record high of 11.9%. Closes: Dollar index +0.36 (+0.44%), EUR/USD -0.00386 (-0.30%), USD/JPY +1.028 (+1.11%).
April WTI crude oil (CLJ13 +0.09%) this morning is down -0.16 (-0.18%) and April gasoline (RBJ13 +0.01%) is down -0.0087 (-0.28%). Crude oil and gasoline on Friday closed mixed. April crude posted a 2-month low after Chinese Feb manufacturing data expanded less than forecast, the dollar index surged to a 6-1/4 month high, and the U.S. sequestration began. April gasoline recovered from a 1-month low and closed higher, however, after the Feb ISM manufacturing index and Feb consumer confidence unexpectedly strengthened, which may boost fuel demand. Closes: CLJ3-1.37 (-1.49%), RBJ3 +0.0169 (+0.54%).


US 0800 ET Fed Vice Chairman Janet Yellen speaks at the 2013 NABE conference on ?A View from the Fed.?
  0945 ET Feb New York ISM , Jan 56.7.
  1100 ET USDA weekly grain export inspections.
  1145 ET Former Fed Chairman Paul Volcker speaks at the 2013 NABE conference on ?Lessons from the Financial Collapse-Learned or Forgotten??
EUR 0430 ET Eurozone Mar Sentix investor confidence expected -4.3, Feb -3.9.
  0500 ET Eurozone Jan PPI expected +0.5% m/m and +1.9% y/y, Dec-0.2% m/m and +2.2% y/y.
UK 0430 ET UK Feb construction PMI expected +0.3 to 49.0, Jan 48.7.
  1901 ET UK Feb BRC sales like-for-like expected +1.0%, Jan +1.9% y/y.
JPN 2030 ET Japan Jan labor cash earnings, Dec -1.7% y/y.
CHI 2045 ET China Feb HSBC services PMI, Jan 54.0.


Company Name Symbol Time Event Description Period EPS Est (US$)
Tech Data Corp TECD US Bef-mkt Q4 2013 Earnings Release Q4 2013 1.76
Golar LNG Ltd GOL NO Bef-mkt Y 2012 Earnings Release Y 2012 1.667
Stratasys Ltd SSYS US Bef-mkt Q4 2012 Earnings Release Q4 2012 0.383
Stratasys Ltd SSYS US 8:30 Q4 2012 Earnings Call Q4 2012  
Tech Data Corp TECD US 9:00 Q4 2013 Earnings Call Q4 2013  
Golar LNG Ltd GOL NO 9:30 Y 2012 Earnings Call Y 2012  
Dominion Resources Inc/VA D US 10:00 Analyst Meeting Y 2013  
Ascena Retail Group Inc ASNA US 16:00 Q2 2013 Earnings Release Q2 2013 0.228
Ascena Retail Group Inc ASNA US 16:30 Q2 2013 Earnings Call Q2 2013  
Cisco Systems Inc CSCO US   VirnetX vs. Cisco Patent-Infringement Trial Begins    
AutoNation Inc AN US   February 2013 Sales and Revenue Release 2013