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Barchart Morning Call 3/12



Tuesday, March 12th, 2013>>View Older Reports

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June E-mini S&Ps (ESM13 -0.21%) are trading mildly lower by -0.16% as the market is on hold ahead of U.S. economic reports later this week and the EU Summit on Thursday/Friday. European stocks are little changed and Asian stocks closed mostly lower. Japan closed -0.28%, Hong Kong closed-0.87%, and China closed -1.42%. Commodity prices are mildly lower by-0.10% this morning. April crude oil (CLJ13 +0.07%) is down -0.12%, April gasoline (RBJ13 -0.31%) is down -0.28%, April gold (GCJ13 +1.01%) is up +0.34%, May copper (HGK13 +0.34%) is down -0.21%, and agriculture prices are trading mostly lower. The dollar index (DXY00 +0.16%) is mildly higher by +0.16% while EUR/USD (^EURUSD) is down -0.31% and USD/JPY (^USDJPY) is down -0.50%. June 10-year T-note prices (ZNM13 +0.18%) are up 7 ticks.
The opposition Democratic Party of Japan said that it would oppose the nomination of Kikuo Iwata for deputy governor of the BOJ, who is one of the two deputy governors proposed by Prime Minister Abe to help BOJ governor nominee Kuroda implement a new and expanded asset purchase program. However, Prime Minister Abe may still be able to push Mr. Iwata through the confirmation process if he can gain the support of smaller parties.
Spain today successfully sold 3.85 billion euros of 12-month bills with a bid cover ratio of 1.85, a bit lower than 1.97 at the last sale of 12-month bills on Feb 12. However, the yield fell to 1.363% from 1.548% at the Feb 12 auction.
Italy today successfully sold 7.75 billion euros of 1-year bills with a bid cover ratio of 1.50, up from 1.38 last month. However, the yield rose to 1.28% from 1.09% at the last auction of 1-year bills on Feb 12. Investors absorbed the bills despite last Friday's downgrade of Italy's credit rating to BBB+ by Fitch.
UK Jan industrial production fell -1.2% m/m, more than reversing the +1.1% increase seen in December and showing a much weaker-than-expected report than expectations of +0.1%. However, the drop in UK industrial production was largely due to a decline in North Sea oil production due to the shutdown of the Schiehallion oil platform.
UK Jan total trade deficit of -2.362 billion pounds was narrower than market expectations of -3.2 billion pounds and was narrower than Jan's report of a revised -2.811 bln pounds (prelim -3.201 billion pounds). The narrower trade deficit was supportive for the pound.
Japan's Feb consumer confidence index rose by +1.0 point to 44.3 from 43.3 in Jan and was stronger than market expectations for a -0.3 point decline to 43.0.
The Germany Feb wholesale price index report of +0.1% m/m and +1.4% y/y was weaker than Jan's report of +0.3% m/m and +2.3% y/y.
Germany's final-Feb EU-harmonized CPI was left unrevised, as expected, at +0.8% m/m and +1.8% y/y.

Today is a light news day with only the 3-year T-note auction on the calendar. House Budget Chairman Paul Ryan today will release his fiscal 2014 budget. President Obama will be at Capitol Hill to meet with members of Congress on budget issues. There are earnings reports today from Costco (consensus $1.06), Laredo Petroleum (0.10), and Engility Holdings (0.50).
Conferences during the remainder of this week include Edison Electric Institute - International Utility Conference on Mon-Tue, Credit Suisse Global Services Conference on Mon-Wed, Bank of America Merrill Lynch Consumer & Retail Conference on Tue-Wed, World Biofuels Markets 2013 on Tue-Wed, China Healthcare Investment Conference on Tue-Wed, FIA International Derivatives Conference on Tue-Thu, Piper Jaffray Technology Media and Telecommunications Conference on Tue-Wed, Barclays Capital Healthcare Conference on Tue-Thu, UBS Global Consumer Conference on Wed-Thu, and Susquehanna Chemical Conference on Thu.

June E-mini S&Ps (ESM13 -0.21%) are mildly lower by -2.50 points (-0.16%) in mostly technical trade. The S&P 500 index on Monday 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) carry-over support from Friday's stronger-than-expected U.S. Feb payroll report and (2) the larger-than-expected increase in Germany's Jan exports (+1.4% versus expectations of +0.5%). The stock market shook off Fitch Ratings downgrade of Italy's debt rating and the weaker-than-expected Chinese Feb economic data on industrial production, retail sales and new yuan loans. Closes: S&P 500 +0.32%, Dow Jones +0.35%, Nasdaq +0.28%.


  • Costco (COST -0.58%) reported Q2 EPS at $1.24, well above the consensus of $1.06.
  • Bon-Ton Stores (BONT +1.02%) reported Q4 EPS of $3.71, well above the consensus of $3.57.
  • Dick's Sporting Goods (DKS -10.85%) was upgraded to a Conviction Buy rating from Buy by Goldman Sachs.
  • Apple's (AAPL +1.42%) price target was lowered to $420 from $500 by Jefferies as Jefferies sees a 25% chance that Apple with miss its Q1 guidance due to slowing sales.
  • LinkedIn (LNKD +0.12%) announced it will buy newsreader app Pulse for between $50 million and $100 million.
  • Pall Corporation (PLL -0.23%) has signed a 30-year agreement with Brazilian aerospace innovator Embraer (ERJ +2.48%) to supply hydraulic filter manifolds and assemblies for KC-390 aircraft.
  • Lakeland Industries (LAKE -0.20%) slumped over 20% in after-hours trading after the company reported a $11.5M goodwill impairment charge in Brazil.
  • iRobot (IRBT -0.48%) climbed over 9% in after-hours trading after it raised its guidance on Q1 EPS to 16 cents-20 cents, above a previous estimate of 0 cents-7 cents. It also raised its Q1 revenue estimate to of $102 million to $104 million, above a previous estimate of $98 million to $102 million, and above consensus of $100.36 million.
  • Rare Element Resources (REE -1.56%) announced rare earth element assay results from the final core holes completed during the 2012 drilling program at the company's 100% owned Bear Lodge property, located in northeastern Wyoming. The company said the drilling results confirm that the Bear Lodge deposits contain high grades of total rare earth oxide, including high abundances of combined Critical Rare Earth Oxides.
  • Cadence Design Systems (CDNS +0.69%) announced that it has entered into a definitive agreement to acquire Tensilica for approximately $380M in cash.
  • Diamond Foods (DMND +0.23%) fell over 5% in after-hours trading when it reported Q2 EPS ex-charges of 5 cents, below consensus of 6 cents, and said it expects net sales in the second half of fiscal 2013 to be down more on a year-over-year basis as compared to the first half of the fiscal year.
  • Casey's General Stores (CASY -0.17%) reported Q3 EPS of 40 cents, well below consensus of 47 cents.
  • Urban Outfitters (URBN +0.46%) reported Q4 EPS of 56 cents, slightly weaker than consensus of 57 cents.

June 10-year T-notes (ZNM13 +0.18%) are up +7 ticks on some short-covering after recent losses. June 10-year T-note prices on Monday settled little changed as an increase in safe-haven demand from Fitch's action to downgrade Italy's debt rating was offset by supply pressures before this week's $66 billion Treasury coupon auction package. Closes: TYM3 unch, FVM3 unch.
The dollar index (DXY00 +0.16%) is mildly higher by +0.13 points (+0.16%). EUR/USD (^EURUSD) is down -0.0041 (-0.31%) despite today's successful Spanish and Italian bill sales. USD/JPY (^USDJPY) is down -0.48 yen (-0.50%) with the yen showing some weakness on the possibility that one of Prime Minister Abe's choices for a BOJ deputy governor may not be confirmed. The dollar index on Monday finished slightly lower as stock market strength reduced safe-haven demand for the dollar. Gains in EUR/USD were limited after Fitch Ratings late Friday downgraded Italy's debt rating. USD/JPY strengthened after Japanese Jan machine orders fell more than expected (-13.1% m/m versus expectations of -1.7% m/m), which weakened the yen. Closes: Dollar index -0.12 (-0.15%), EUR/USD +0.0041 (+0.32%), USD/JPY +0.275 (+0.29%).
April WTI crude oil (CLJ13 +0.07%) is slightly lower by -0.11 (-0.12%) while April gasoline (RBJ13 -0.31%) is down -0.0088 (-0.28%). Crude oil and gasoline prices on Monday settled mixed. Stock market strength and dollar weakness offset weak Chinese economic data. April gasoline retreated from a 2-week high on speculation that U.S. refinery production will increase as summer driving season approaches. Closes: CLJ3 +0.11 (+0.12%), RBJ3 -0.0511 (-1.60%).


US 1300 ET Treasury sells $32 billion in 3-year T-notes.
  n/a House Budget Committee Chairman Paul Ryan releases his fiscal 2014 budget proposal.
  1400 ET Feb monthly budget statement expected -$220 bln.
  1630 ET API weekly U.S. oil statistics.
JPN 0100 ET Japan Feb consumer confidence expected 43.0, Jan 43.3.
GER 0300 ET German final-Feb CPI (EU harmonized) expected unrevised from preliminary +0.6% m/m and +1.8% y/y.
  0300 ET German Feb wholesale price index, Jan +0.3% m/m and +2.3% y/y.
UK 0530 ET U.K. Jan industrial production expected +0.1% m/m and-1.1% y/y, Dec +1.1% m/m and -1.7% y/y. an manufacturing production expected unch m/m and -1.0%y/y, Dec +1.6% m/m and -1.5% y/y.
  0530 ET UK Jan visible trade balance expected -8.89 bln pounds, Dec -8.897 bln pounds. Jan non-EU trade balance expected-4.5 bln pounds, Dec -4.239 bln pounds. UK Jan total trade balance expected -3.2 bln pounds, Dec -3.201 bln pounds.
  1100 ET U.K. Feb NIESR GDP estimate, Jan 0.0%.


Company Name Symbol Time Event Description Period EPS Est (US$)
Laredo Petroleum Holdings Inc LPI US Bef-mkt Q4 2012 Earnings Release Q4 2012 0.102
WW Grainger Inc GWW US 8:00 February 2013 Sales and Revenue Call 2013  
WW Grainger Inc GWW US 8:00 February 2013 Sales and Revenue Release 2013  
Discover Financial Services DFS US 8:30 Financial Community Briefing Y 2013  
Chevron Corp CVX US 9:00 Analyst Meeting Y 2013  
Laredo Petroleum Holdings Inc LPI US 10:00 Q4 2012 Earnings Call Q4 2012  
Costco Wholesale Corp COST US 11:00 Q2 2013 Earnings Call Q2 2013  
NextEra Energy Inc NEE US 13:00 Investor Conference Y 2013  
Thoratec Corp THOR US 13:00 Annual & Extraordinary General Meeting Y 2012  
Toro Co/The TTC US 14:30 Annual General Meeting Y 2013  
Engility Holdings Inc EGL US 17:00 Q4 2012 Earnings Call Q4 2012  
Engility Holdings Inc EGL US Aft-mkt Q4 2012 Earnings Release Q4 2012 0.495
Costco Wholesale Corp COST US   Q2 2013 Earnings Release Q2 2013 1.057
JDS Uniphase Corp JDSU US   Analyst Meeting Y 2013