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Barchart Morning Call 3/8


Barchart Morning Call - 3/8

Friday, March 8th, 2013>>View Older Reports

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June E-mini S&Ps (ESH13 +0.28%) are up +0.37% this morning on a +1.03% rally in European stocks and mostly higher stocks in Asia. The markets are encouraged by today's continued drop in Spanish and Italian bond yields and by a +22% increase in Chinese Feb exports and upward revision in Japan's Q4 GDP to +0.2% q/q annualized from -0.4%, although Germany's Jan industrial production was weaker than expected at unchanged. Commodity prices this morning are mildly higher by 0.13%. April crude oil (CLJ13 -0.49%) is down -0.21%, April gasoline (RBJ13 +0.77%) is up +0.49%, April gold (GCJ13 -0.01%) is up +0.15%, May copper (HGK13 -0.27%) is down-0.40%, and agriculture prices are trading mostly higher. The dollar index (DXY00 +0.22%) is mildly higher by +0.11%. EUR/USD (^EURUSD) is little changed and USD/JPY (^USDJPY) is sharply higher by +0.94% as Japan's Jan trade balance showed a large deficit of -1.5 trillion yen. June 10-year T-notes (ZNM13 -0.14%) are down 5.5 ticks.
China's Feb exports rose sharply by +21.8% y/y, which was down from +25.8% in Jan but was much stronger than market expectations of +8.1%. Meanwhile, Feb imports fell by -15.2% y/y, weaker than market expectations of -8.5% y/y. The Feb trade balance showed a surplus of $15.25 billion, down from the $29.15 billion surplus in Jan but better than market expectations for a deficit of -$6.9 billion.
The Spanish 10-year bond yield today fell by another 7 bp to a new 2-1/3 year low of 4.83% as market concern about Spain continues to ease. The Italian 10-year bond yield fell by 3 bp to 4.56%.
German Jan industrial production was unchanged m/m and -1.3% y/y, which was weaker than market expectations of +0.4% m/m and -1.2% y/y. The report provided further evidence to show how the German economy is stagnating due to the Eurozone recession.
Japan's Feb Eco Watchers outlook index rose to 57.7 from 56.5 in Jan, while the Feb current index rose to 53.2 from 49.5.
Japan's Jan adjusted current account balance rose to 365 billion yen from a revised 115 billion yen in Dec. Japan's Jan trade balance showed a big deficit of -1.479 trillion yen, which was a bit narrower than market expectations of -1.5 trillion yen.
Japan's Q4 GDP was revised upward to +0.2% q/q annualized from the preliminary report of -0.4%.
North Korea today scrapped the 1953 armistice that called a truce in the Korean war and canceled the hotline with South Korea after the UN approved new sanctions. South Korea this week warned North Korea that any military provocation may be met not only with retaliation on the site of the attack but also possibly on command leadership facilities.

Today's Feb payroll report is expected to show an increase of +160,000, which would be just slightly below the 6-month trend increase of +177,000, but slightly above January's increase of +157,000. Today's Feb unemployment rate is expected to be unchanged from January's 7.9% level. That would be 0.1 point above the 4-year low of 7.8% posted several times in late 2012.
There are three of the Russell 1000 companies that report earnings today: Foot Locker (consensus $0.73), Carnival (0.03), and Tahoe Resources (-0.15).

June E-mini S&Ps (ESH13 +0.28%) are up 5.75 points (+0.37%) on expectations for a solid payroll report this morning and on a sharp 1.03% rally in European stocks. The S&P 500 index on Thursday closed higher with the Dow at a record high and the S&P 500 at a 5-1/3 year high. Bullish factors included (1) the unexpected drop in weekly initial unemployment claims to a 6-week low, and (2) carry-over support from a rally in European stocks after S&P upgraded Portugal's credit rating and ECB President Draghi said the Eurozone economy will stabilize this year. Closes: S&P 500 +0.18%, Dow Jones +0.23%, Nasdaq +0.25%.


  • Foot Locker (FL +0.40%) reported Q4 adjusted EPS of 73 cents, right in line with the consensus of 73 cents.
  • Fuel Systems (FSYS +3.63%) reported Q4 adjusted EPS of 1 cents, better than the consensus for a 3-cent loss.
  • Continental Grain sent a letter to the Smithfield Foods (SFD +10.67%) board requesting that the board hire an investment bank to consider its strategic options, such as splitting the company into three independent companies.
  • Carl Icahn raised his stake in Herbalife (HLF unch) to 15.55% from 13.6%.
  • H&R Block (HRB -1.11%) reported an adjusted Q3 EPS loss of -22cents, worse than consensus of -1 cent, saying total Q3 revenues fell-29% due to "timing issues" from the IRS opening its e-file system on January 30, which resulted in delays to the start of the U.S. tax season.
  • WuXi PharmaTech (WX +0.46%) reported Q4 EPS of 38 cents, better than consensus of 30 cents.
  • Medifast (MED +0.58%) reported Q4 adjusted EPS of 28 cents, better than consensus of 25 cents, but lowered its guidance on Q1 EPS to 32 cents to 35 cents, below consensus of 45 cents.
  • Cooper Companies (COO -0.81%) reported Q1 EPS of $1.23, better than consensus of $1.19.
  • Quiksilver (ZQK +0.96%) reported a Q1 EPS loss of -16 cents, worse than consensus of -7 cents.
  • PowerSecure (POWR +5.30%) reported Q4 EPS of 13 cents, better than consensus of 11 cents.
  • TiVo (TIVO +0.96%) was initiated with an "Overweight" at Piper Jaffray with a share price target of $16.
  • Covanta (CVA -1.22%) announced that the Board of Directors has authorized a 10% increase of the company's quarterly cash dividend to 16.5 cents from 15 cents per share. The Board of Directors also increased the current share repurchase authorization to $150 million.
  • Emergent BioSolutions (EBS +0.07%) reported Q4 EPS of 44 cents, slightly weaker than consensus of 45 cents.
  • Finisar (FNSR +5.53%) reported Q3 adjusted EPS of 17 cents, slightly better than consensus of 16 cents.

June 10-year T-notes (ZNM13 -0.14%) are down 5.5 ticks on reduced safe-haven demand with the rally in U.S. and European stock indexes. June 10-year T-note prices on Thursday slid to a 1-1/2 week low on the decline in unemployment claims and on reduced safe-haven demand with the Dow at a new record high and with Standard & Poor's upgrading Portugal's credit rating to stable from negative. Closes: TYM3 -15.5, FVM3 -7.75.
The dollar index (DXY00 +0.22%) is up +0.09 points (+0.11%). EUR/USD (^EURUSD) is virtually unchanged. USD/JPY (^USDJPY) is sharply higher by +0.89 yen (+0.94%) on today's Japanese trade deficit news. The dollar index on Thursday closed lower on reduced safe-haven demand as stocks rallied. EUR/USD strengthened after Standard & Poor's upgraded Portugal's credit rating outlook to stable from negative and after ECB President Draghi said the Eurozone economy will stabilize this year. USD/JPY posted a 3-1/2 year high on speculation the BOJ will expand its yen-negative monetary stimulus measures: Dollar index -0.378 (-0.46%), EUR/USD +0.0140 (+1.08%), USD/JPY +0.758 (+0.80%).
April WTI crude oil (CLJ13 -0.49%) is down -0.19 (-0.21%) and April gasoline (RBJ13 +0.77%) is up +0.0154 (+0.49%). Crude oil and gasoline prices on Thursday closed mixed as crude oil gained on economic optimism after the Dow rallied to another record high. However, gasoline weakened on signs of adequate supplies after the DOE on Wednesday reported that U.S. gasoline inventories in the important PADD1 district that includes NY Harbor (where Nymex gasoline is priced) rose by +651,000 bbl. Closes: CLJ3 +1.13 (+1.25%), RBJ3 -0.0014 (-0.04%).


US 0830 ET Feb non-farm payrolls expected +160,000, Jan +157,000. Feb private payrolls expected +167,000, Jan +166,000. Feb manufacturing payrolls expected +10,000, Jan +4,000. Feb unemployment rate expected unchanged at 7.9%, Jan +0.1 to 7.9%.
  0830 ET U.S. Feb average hourly earnings expected +0.2% m/m and +2.1% y/y, Jan +0.2% m/m and +2.1% y/y. Feb average weekly hours all-employees expected unchanged at 34.4 hours, Jan 34.4 hours.
  1000 ET Jan wholesale inventories expected +0.3% m/m, Dec -0.1%m/m.
JPN 0000 ET Jan Feb Eco watchers survey outlook, Jan 56.5. Feb Eco watchers survey current, Jan 49.5.
GER 0600 ET German Jan industrial production expected +0.4% m/m and-1.2% y/y, Dec +0.3% m/m and -1.1% y/y.
CHI 2030 ET China Feb CPI expected +3.0% y/y, Jan +2.0% y/y. Feb PPI expected -1.5% y/y, Jan -1.6% y/y.


Company Name Symbol Time Event Description Period EPS Est (US$)
Foot Locker Inc FL US Bef-mkt Q4 2013 Earnings Release Q4 2013 0.726
Foot Locker Inc FL US 9:00 Q4 2013 Earnings Call Q4 2013  
Analog Devices Inc ADI US   ITC Scheduled to Release Findings for Dover Corp vs Analog Devices    
Carnival Corp CCL US   Q1 2013 Earnings Release Q1 2013 0.032
Walt Disney Co/The DIS US   Box Office Release of Movie Oz the Great and Powerful""    
Dover Corp DOV US   ITC Scheduled to Release Findings for Dover Corp vs Analog Devices    
Hawaiian Electric Industries Inc HE US   Financial Community Meeting - Day 3 Y 2013  
Hill-Rom Holdings Inc HRC US   Annual General Meeting    
McDonald's Corp MCD US   February 2013 Sales and Revenue Release 2013  
Thor Industries Inc THO US   Q2 2013 Earnings Release Q2 2013 0.38
Tahoe Resources Inc THO CN   Q4 2012 Earnings Release Q4 2012 -0.147