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Barchart Morning Call 3/19


BARCHART MORNING CALL - Tuesday, March 19th, 2013>>View Older Reports

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June E-mini S&Ps (ESM13 +0.11%) this morning are little changed and have been able to shake off a further -0.70% loss today in the Euro Stoxx 50 index on the Cyprus depositor tax debacle. A small increase in Germany's Zew economic outlook index to a 3-year high provided some help to the markets overnight, except that the overall Eurozone Zew economic outlook index plunged by 9.0 points. Asian stock markets today closed mixed. The Nikkei index closed +2.03% and the China CSI 300 index closed +0.90%, but the Hang Seng index closed -0.19%. Commodity prices are slightly higher by +0.05% this morning. April crude oil (CLJ13 +0.27%) is up +0.10%, April gasoline (RBJ13 -0.55%) is down -0.81%, April gold (GCJ13-0.12%) is down -0.15%, May copper (HGK13 -0.23%) is down -0.20%, grains and softs are trading mostly higher, and livestock is trading lower. The dollar index (DXY00 +0.02%) this morning is virtually unchanged and EUR/USD (^EURUSD) is slightly lower by -0.09%. USD/JPY (^USDJPY) is up +0.13%. June 10-year T-notes (ZNM13 +0.13%) are up 6.5 ticks.
The Cyprus parliament is due to vote later today on the one-time tax on depositors. Cyprus banks and the Cyprus stock market are closed through at least Thursday. The Cyprus parliament has no real choice but to approve the depositor tax totaling 5.8 billion euros since it is being required by the troika for a 10 billion euro bailout and because Cyprus banks will be quickly drained of nearly all their deposits and funding if they reopen without the tax being levied and removed from accounts. However, Cypriot President Anatasiades has warned that he may not be able to get parliament to approve the effective confiscation of depositor funds. If parliament does not approve the tax, then Cyprus will be in an even bigger mess with no Eurozone bailout and with banks that have severely impaired deposits and even larger funding liabilities. French Finance Minister Moscovici today summed up the lack of a coherent Eurozone plan on the Cyprus bailout approach by saying "I don't think about plan B's. We're in a Plan A. Everyone has to assume their responsibilities."
Spain today successfully sold 4 billion euros of 3 and 9-month bills, hitting its maximum target. The 3-month bills were sold at an average 0.285%, down from 0.421% at the last 3-month auction on Feb 19. The 9-month bills were sold at an average 1.007%, down from 1.144% at the last auction. The bid cover ratios were 3.3 times for the 3-month bill and 2.45 times for the 9-month bills.
The German March Zew economic sentiment index rose slightly by +0.3 points to a 3-year high of 48.5 from 48.2 in Feb and was stronger than market expectations for a -0.1 point dip to 48.1. The German Zew current situation index rose to 13.6 from 5.2 in Feb and was substantially stronger than market expectations of 6.0.
The Eurozone Zew economic sentiment index fell sharply by -9.0 points to 33.4 from 42.4 in Feb.
Japan's final-Jan leading index CI was revised lower to 95.0 from the preliminary report of 96.3. The final-Jan coincident index was revised lower to 91.6 from 92.0.
Japan's Feb nationwide department store sales report of +0.3% y/y was slightly stronger than market expectations of +0.2% y/y. In addition, the Feb Tokyo department store sales report of +2.5% y/y was stronger than market expectations of +0.5% y/y.
The UK Feb PPI output (nsa) price index rose +0.8% m/m and +2.3% y/y, which was stronger than market expectations of +0.4% m/m and +1.8% y/y, which was an unwelcome development by the BOE on the inflation front. The Feb core output PPI price index eased to +1.3% y/y from +1.4% y/y in Jan but did not fall to +1.1% y/y as expected.
The UK Feb CPI report of +0.7% m/m and +2.8% was in line with market expectations and was up from -0.5% m/m and +2.7% y/y in Jan. The Feb core CPI was unchanged from Jan at +2.3% y/y, stronger than market expectations of +2.2% y/y.
Power has been mostly restored at Japan's troubled Fukushima nuclear power plant after a brief outage. A power outage of more than four days could have caused stored fuel rods at the plant to start overheating. There were no reported radiation leaks from today's power outage.

Today's main focus will be on (1) the Eurozone debt crisis as the Cyprus parliament struggles to approve the depositor tax, and (2) the outcome of the 2-day FOMC meeting that begins today. Today's Feb U.S. housing starts report is expected to show a +2.8% increase to 915,000 units, recovering a bit after the -8.5% decline to 890,000 seen in January. Earnings report today include Factset Research (consensus $1.24), DSW (0.72), Adobe Systems (0.31), Cintas (0.62), and Williams-Sonoma (1.29).
Conferences during the remainder of this week include Consumer Analyst Group of Europe (CAGE) Conference on Mon-Wed, Howard Weil Energy Conference on Mon-Wed, ISI Group Retail Summit on Tue, Barclays Emerging Payments Forum on Tue-Wed, Bank of America Merrill Lynch Global Industrials & EU Autos Conference on Tue-Thu, Gabelli Asset Management Specialty Chemicals & Agriculture Conference on Wed, International Strategy & Investment Group (ISI) Retail Summit on Wed, BB&T Commercial & Industrial Conference on Wed-Thu, J.P. Morgan Insurance Conference on Thu, National Coffee Association Annual Conference on Thu, Nomura Global Chemical Industry Leaders Conference on Thu, and The Future of Utilities - 18th Annual Conference on Tue-Thu.

June E-mini S&Ps (ESM13 +0.11%) this morning are slightly lower by -0.25points (-0.02%). The stock market continues to see downward pressure from Europe with the -0.70% sell-off in the Euro Stoxx 50 index and the ongoing debacle with the tax on Cyprus bank depositors. The S&P 500 index on Monday closed with fairly sharp losses as the Eurozone debt crisis returned with the dangerous precedent set by Eurozone officials of forcing depositors to help pay for bailout packages. In addition, the strong Chinese property price report on Sunday night increased the chances for more hawkish Chinese government action on the property markets. Closes: S&P 500 -0.55%, Dow Jones -0.43%, Nasdaq -0.25%.


  • DSW (DSW -0.83%) reported Q4 adjusted EPS of 69 cents, below the consensus of 72 cents.
  • FactSet (FDS -1.27%) reported Q2 adjusted EPS of $1.14, above the consensus of $1.11.
  • Electronic Arts (EA -0.90%) rallied 3% in after-hours trading after the company that it expects earnings and revenue in Q1 at the lower end or slightly below previous guidance of 57-72 cents (consensus 65 cents) and that the company's CEO John Riccitiello is leaving the company.
  • Fitch removed Equity Residential (EQR -0.89%) from rating watch negative and changed the outlook to stable.
  • Lululemon (LULU -3.77%) fell 6% in after-hours trading after the company cut its guidance for Q1 revenue to $333-$343 million from $350M-$355 million, versus the consensus of $353 million.
  • Hospitality Properties (HPT -0.11%) fell 4% in after-hours trading filing to sell 10 million shares of common stock.
  • Smith & Wesson (SWHC +1.74%) fileed a $250 million mixed securities shelf securities registration.

June 10-year T-notes (ZNM13 +0.13%) this morning are up +6.5 ticks on continued safe-haven demand. June 10-year T-note prices on Monday continued to rally on the return of the Eurozone debt crisis and on the weaker-than-expected NAHB housing market index. Closes: TYM3 +10, FVM3 +3.75.
The dollar index (DXY00 +0.02%) this morning is slightly higher by +0.03 points (+0.04%) and EUR/USD (^EURUSD) is slightly lower by -0.0012(-0.09%). USD/JPY (^USDJPY) is up +0.12 (+0.13%). The dollar index on Monday rallied sharply on increased safe-haven demand with the botched Cyprus bailout, which caused contagion to other nations and caused a sharp sell-off in global stocks. The Cyprus bailout, and the difficulty of getting the deposit tax passed by the Cyprus parliament caused a sharp sell-off in EUR/USD. Closes: Dollar index +0.43 (+0.53%), EUR/USD -0.0119(-0.91%), USD/JPY -0.07 (-0.07%).
April WTI crude oil (CLJ13 +0.27%) this morning is up +0.09 (+0.10%) and April gasoline (RBJ13 -0.55%) is down -0.0254 (-0.81%). Crude oil and gasoline on Friday closed mixed on downward pressure from the sharp rally in the dollar index and concerns about fuel demand with the return of the Eurozone debt crisis. CLJ3 +0.29 (+0.31%), RBJ3 -0.0349 (-1.10%).


US 0830 ET Feb housing starts expected +2.8% to 915,000, Jan -8.5%to 890,000. Feb building permits expected +2.1% to 923,000, Jan -0.6% to 904,000.
  0900 ET FOMC begins 2-day policy meeting.
  1630 ET API weekly U.S. oil statistics.
  n/a U.S. Treasury Secretary Jack Lew begins 2-day visit to China.
JPN 0100 ET Japan final-Jan leading index CI, prelim 96.3. Final-Jan coincident index CI, prelim 92.0.
  0130 ET Japan Feb nationwide department store sales, Jan +0.2% y/y. Feb Tokyo department store sales, Jan +0.5% y/y.
  n/a Haruhiko Kuroda takes over as BOJ Governor from outgoing Masaaki Shirakawa.
EUR 0300 ET EU27 Feb new car registrations, Jan -8.7% y/y.
  0600 ET Eurozone Jan construction output, Dec -1.7% m/m and-4.8% y/y.
  0600 ET Eurozone March Zew economic sentiment index, Feb 42.4.
GER 0600 ET German March Zew current situation index expected 6.0, Feb 5.2. March Zew economic sentiment expected 48.1, Feb 48.2.
UK 0530 ET UK Feb PPI input nsa expected +1.5% m/m and +0.8% y/y, Jan +1.3% m/m and +1.8% y/y. UK Feb PPI output nsa expected +0.4% m/m and +1.8% y/y, Jan +0.2% m/m and +2.0% y/y. Feb PPI output core nsa expected +0.3% m/m and +1.1% y/y, Jan +0.2% m/m and +1.4% y/y.
  0530 ET UK Feb CPI expected +0.7% m/m and +2.8% y/y, Jan -0.5%m/m and +2.7% y/y. Feb core CPI expected +2.2% y/y, Jan +2.3% y/y.
  0530 ET Feb RPI expected +0.8% m/m and +3.3% y/y, Jan -0.4%m/m and +3.3% y/y. Feb RPI ex-mortgage interest payments expected +3.2% y/y, Jan +3.3% y/y.
  0530 ET UK Jan ONS house price index expected +2.4% y/y, Dec +3.3% y/y.


Company Name Symbol Time Event Description Period EPS Est (US$)
FactSet Research Systems Inc FDS US Bef-mkt Q2 2013 Earnings Release Q2 2013 1.238
DSW Inc DSW US 7:00 Q4 2013 Earnings Release Q4 2013 0.716
DSW Inc DSW US 8:30 Q4 2013 Earnings Call Q4 2013  
FactSet Research Systems Inc FDS US 11:00 Q2 2013 Earnings Call Q2 2013  
Brocade Communications Systems Inc BRCD US 13:00 Roadshow - Irvine Y 2013  
NVIDIA Corp NVDA US 14:30 Financial Analyst Presentation Y 2013  
Adobe Systems Inc ADBE US 17:00 Q1 2013 Earnings Call Q1 2013  
Cintas Corp CTAS US 17:00 Q3 2013 Earnings Call Q3 2013  
Williams-Sonoma Inc WSM US 17:00 Q4 2013 Earnings Call Q4 2013  
Adobe Systems Inc ADBE US Aft-mkt Q1 2013 Earnings Release Q1 2013 0.311
Cintas Corp CTAS US Aft-mkt Q3 2013 Earnings Release Q3 2013 0.618
Williams-Sonoma Inc WSM US Aft-mkt Q4 2013 Earnings Release Q4 2013 1.293
Alliant Energy Corp LNT US   Investor Meeting - Chicago Y 2013  
RPM International Inc RPM US   Roadshow - Califonia Day 2 Y 2013  
United Parcel Service Inc UPS US   Roadshow - Day 2 Y 2013