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Barchart Morning Call 3/28



Thursday, March 28th, 2013>>View Older Reports

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June E-mini S&Ps (ESM13 +0.08%) are mildly higher by +0.21% this morning on a +0.50% rally in European stocks and expectations for generally strong U.S. economic reports today and tomorrow. U.S. and European stocks today have been able to shake off a further rise in Italian bond yields and credit default swap prices. Asian stocks today closed mostly lower. The Nikkei index closed down -1.26%, the Hang Seng closed -0.74%, and China's CSI 300 index closed -3.26%. Chinese stocks plunged today led by financial shares after the government put new restrictions on wealth-management products and called for new measures to deregulate interest rates, which will hurt bank earnings. Commodity prices are slightly higher by +0.07% today. May crude oil (CLK13 +0.12%) is up +0.19%, May gasoline (RBK13 -0.37%) is down -0.18%, April gold (GCJ13 -0.37%) is down -0.11%, May copper (HGK13 +0.17%) is down -0.09%, and agriculture prices are mixed. The dollar index (DXY00-0.16%) is down -0.16% and EUR/USD (^EURUSD) is up +0.13%. USD/JPY (^USDJPY) is down -0.33%. March 10-year T-note prices (ZNM13-0.07%) are unchanged ahead of today's 7-year T-note auction.
Banks in Cyprus finally reopened today after having been closed for nearly two weeks. The situation was generally calm today. Depositors were only allowed to withdraw a maximum of 300 euros per day and to transfer a maximum of 5,000 euros per month out of the country.
The Italian 10-year bond yield today rose by another 8 bp to 4.86% and 5-year credit default swaps rose by 14 bp to 309 bp as worries increase about Italy's political paralysis. Democratic Party leader Bersani later today is expected to formally tell Italian President Napolitano that he is unable to form a government. Mr. Napolitano is then expected to give an opportunity to one of the other party leaders to form a government. If no government can be formed, then another election will have to be held.
German Feb retail sales rose +0.4% m/m, which was stronger than market expectations for a drop of -0.6%.
German March unemployment rose by +13,000 to 2.94 million, which showed a weaker labor market than market expectations for a drop of-2,000. The German March unemployment rate was unchanged at 6.9%, 0.1 point above the 2-decade low of 6.8%.
Eurozone Feb M3 eased to +3.1% y/y from +3.5% in Jan and was weaker than market expectations of +3.1% y/y.

The U.S. stock market today will be closely watching (1) the reopening of Cyprus banks, and (2) the Italian political situation after the 10-year Italian yield soared by 20 bp yesterday after Democratic Party leader Bersani said he was unable to form a government, thus raising the possibility of a new election where the Euroskeptic Five Star Movement party would likely gain seats.
There are three U.S. economic reports today and two reports tomorrow when the markets are closed but the federal government is open. Today's weekly initial unemployment claims report is expected to show a small increase of +4,000 to 340,000, adding to last week's +2,000 increase to 336,000. Today's Q4 GDP report is expected to be revised higher to +0.5% from the last estimate of +0.1% q/q annualized. Today's March Chicago PMI index is expected to show a small decline of -0.3 to 56.5. The Chicago PMI increased sharply by a total of 6.8 points in Jan-Feb and posted a new 1-year high of 56.5 in February, indicating a substantial improvement in the Chicago-area manufacturing sector. The Feb core PCE deflator, the Fed's preferred inflation measure is expected to remain unchanged from Jan at +1.3%. Friday's final-March U.S. consumer confidence index from the University of Michigan is expected to be up by +0.9 to 72.7 from the early March level.
There are 6 of the Russell 1000 companies that report earnings today: Commercial Metals (consensus $0.18), Accenture (0.97), GameStop (2.09), Signet Jewelers (2.09), Mosaic (0.88), adn UTI Worldwide (0.13). Conferences today include CIBC Retail & Consumer Conference and Photon's 8th Solar Electric Utility Conference.
June E-mini S&Ps (ESM13 +0.08%) this morning are slightly higher by +1.75 points (+0.11%) on today's +0.50% rally in the Euro Stoxx 50 index and on expectations for generally strong U.S. economic reports today and tomorrow. The S&P 500 index on Wednesday closed mixed as a rally in healthcare insurance providers offset concern Europe's debt crisis may intensify. The Institute of International Finance said that banks in Portugal, Spain and Italy may come under funding pressure after the Cyprus bailout was done at the expense of bank creditors. Another negative was U.S. Feb pending home sales which fell -0.4% m/m and rose +5.0% y/y, weaker than expectations of -0.3% m/m and +8.7% y/y. Healthcare providers rallied after the U.S. Medicare program was granted authority to raise insurers' payments. Closes: S&P 500 -0.06%, Dow Jones -0.23%, Nasdaq 100 +0.12%.


  • Blackberry (BBRY +0.76%) is up 7% this morning after reporting Q1 adjusted EPS of 22 cents, which was much better than the consensus for a 30-cent loss.
  • Accenture (ACN +0.46%) reported Q2 adjusted EPS of $1.00, slightly above the consensus of 97 cents.
  • AmerisourceBergen (ABC -0.02%) raised its FY13 continuing ops EPS guidance to $3.04-3.14 from $2.96-3.06.
  • Mosaic (MOS -0.09%) reported Q3 EPS with items of 81 cents, below the consensus of 88 cents.
  • Winnebago (WGO -1.93%) reported Q2 EPS of 22 cents, well above the consensus of 15 cents.
  • H.B. Fuller (FUL -1.62%) reported Q1 adjusted EPS of 49 cents, weaker than consensus of 50 cents.
  • Standard & Poor's Ratings Services raised its ratings outlook on JPMorgan Chase (JPM -1.79%) to stable from negative due to the remediation of risks in its CIO unit.
  • PVH Corp. (PVH -1.01%) reported Q4 adjusted EPS of $1.60, higher than consensus of $1.50.
  • Genworth (GNW -0.29%) climbed over 2% in after-hours trading after it announced the sale of its wealth management business for $412.5 million.
  • Greenbrier (GBX +0.66%) rallied 6% in after-hours trading after it announced that it received new orders in Jan-March for 5,400 railcar units valued at around $575 million.
  • Ford (F -0.68%) said it sees South American full year 2013 pre-tax results "about breakeven" due to challenges from currency valuations and inflation.
  • Verint Systems (VRNT -0.63%) rallied 6% in after-hours trading after reporting Q4 adjusted EPS of 91 cents, well above the consensus of 75 cents.
  • Red Hat (RHT +1.46%) plunged 12% in after-hours trading after reporting Q4 revenue of $347.9 million, below consensus of $349.6 million and cutting its Q1 guidance to 30 cents to 31 cents, below the consensus of 32 cents.
  • Paychex (PAYX -0.23%) reported Q3 EPS of 40 cents, better than consensus of 39 cents.

June 10-year T-notes (ZNM13 -0.07%) this morning are unchanged. The T-note market is looking ahead to today's 7-year T-note sale and the raft of U.S. economic reports that will be released today and tomorrow. June 10-year T-note prices on Wednesday soared to a 3-1/2 month high and closed higher on increased safe-haven demand over concern that turmoil in Italy may keep it from forming a coalition government. T-note prices ignored weak demand for the Treasury's $35 billion auction of 5-year T-notes that had a bid-to-cover ratio of 2.73, lower than the 12-auction average of 2.86. Closes: TYM3 +13.6, FVM3 +6.2.
The dollar index (DXY00 -0.16%) this morning is down -0.14 points (-0.16%) on some reduced safe-haven demand with the rally in the U.S. and European stocks. EUR/USD (^EURUSD) is up +0.0017 (+0.13%) and USD/JPY (^USDJPY) is down -0.31 yen (-0.33%). The dollar index on Wednesday climbed to a 7-3/4 month high on increased safe-haven demand as EUR/USD slumped to a 4-month low and fueled a slide in stocks on increased Italian political uncertainty after Italian Democratic Party leader Bersani said there is no possibility of a broad coalition to resolve the political deadlock caused by the Feb 24-25 general election. Another negative for EUR/USD was the bigger than expected decline in March Eurozone economic confidence which fell by -1.1 to 90.0, weaker than expectations of -0.6 to 90.5. Closes: Dollar index +0.355 (+0.43%), EUR/USD -0.0081 (-0.63%), USD/JPY +0.008 (+0.01%).
May WTI crude oil (CLK13 +0.12%) this morning is up +0.18 (+0.19%) while May gasoline (RBK13 -0.37%) is down -0.0055 (-0.18%). Crude oil and gasoline prices on Wednesday recovered from early losses and closed higher on bullish factors that included (1) the -1.596 million bbl decline in weekly DOE gasoline stockpiles, more than expectations of -1.0 million bbl and (2) the -4.513 million bbl plunge in weekly DOE distillate inventories to a 4-month low of 115.3 million bbl, more than five times expectations of a -850,000 bbl draw. Bearish factors centered on (1) a rally in the dollar index to a 7-3/4 month high, (2) the +3.256 million bbl increase in weekly DOE crude oil inventories to a 9-month high of 385.9 million bbl, more than expectations of a +1.3 million bbl gain, and (3) weakness in stocks on concern the European debt crisis may worsen. Closes: CLK3 +0.18 (+0.19%), RBK3 +0.0105 (+0.34%).


US 0830 ET Weekly initial unemployment claims expected +4,000 to 340,000, last +2,000 to 336,000. Weekly continuing claims expected-11,000 to 3.042 mln, last +5,000 to 3.053 mln.
  0830 ET Q4 GDP revision expected +0.5% from last +0.1% q/q annualized. Q4 personal consumption expected unrevised from +2.1%. Q4 GDP price index expected unrevised from +0.9%. Q4 core PCE expected unrevised from last +0.9%.
  0830 ET USDA weekly Export Sales.
  0900 ET March Milwaukee NAPM expected -0.5 to 56.0, Feb 56.5.
  0945 ET March Chicago PMI expected -0.3 to 56.5, Feb +1.2 to 56.8.
  1100 ET March Kansas City Fed manufacturing activity index expected -2, Feb -10.
  1200 ET USDA Quarterly Grain Stocks.
  1200 ET USDA Prospective Planting report.
  1300 ET Treasury sells $29 billion in 7-year T-notes.
  1500 ET USDA Quarterly Hogs & Pigs report.
GER 0300 ET German Feb retail sales expected -0.6% m/m and +1.2% y/y, Jan +3.0% m/m and +2.4% y/y.
  0455 ET German March unemployment change expected -2,000, Feb -3,000. March unemployment rate expected 6.9%, Feb 6.9%.
EUR 0500 ET Eurozone Feb M3 money supply expected +3.2% y/y, Jan +3.5% y/y.
UK 0300 ET UK March nationwide house prices expected +0.2% m/m and +0.9% y/y, Feb +0.2% m/m and unch y/y.
  0530 ET UK Jan index of services expected -0.2% 3mo/3mo, Dec -0.4% 3mo/3mo.
JPN 1930 ET Japan Feb jobless rate expected unch at 4.2%, Jan 4.2%. Feb job-to-applicant ratio expected 0.86, Jan 0.85.
  1930 ET Japan Feb overall household spending expected +0.1% y/y, Jan +2.4% y/y.
  1930 ET Japan Feb national CPI expected -0.7% y/y, Jan was -0.3% y/y. Feb CPI ex-fresh food expected -0.4% y/y, Jan was -0.2% y/y. Feb CPI ex-food and energy expected -0.9% y/y, Jan -0.7% y/y.
  1930 ET Japan March Tokyo CPI expected -0.9% y/y, Feb -0.9% y/y. March CPI ex-fresh food expected -0.6% y/y, Feb was -0.6% y/y. March CPI ex-fresh food and energy expected -1.0% y/y, Feb -1.0% y/y.
  1950 ET Japan Feb industrial production expected +2.5% m/m and -8.5% y/y, Jan +0.3% m/m and -5.8% y/y.


Company Name Symbol Time Event Description Period EPS Est (US$)
Commercial Metals Co CMC US Bef-mkt Q2 2013 Earnings Release Q2 2013 0.178
Accenture PLC ACN US Bef-mkt Q2 2013 Earnings Release Q2 2013 0.971
GameStop Corp GME US Bef-mkt Q4 2013 Earnings Release Q4 2013 2.086
Signet Jewelers Ltd SIG US 7:00 Q4 2013 Earnings Release Q4 2013 2.089
Mosaic Co/The MOS US 7:00 Q3 2013 Earnings Release Q3 2013 0.876
Becton Dickinson and Co BDX US 8:00 BD Simplist Approval Call    
Chicago Bridge & Iron Co NV CBI US 8:00 Investor Day Y 2013  
Accenture PLC ACN US 8:00 Q2 2013 Earnings Call Q2 2013  
UTi Worldwide Inc UTIW US 8:00 Q4 2013 Earnings Release Q4 2013 0.134
Signet Jewelers Ltd SIG US 8:30 Q4 2013 Earnings Call Q4 2013  
PVH Corp PVH US 9:00 Q4 2013 Earnings Call Q4 2013  
Mosaic Co/The MOS US 9:00 Q3 2013 Earnings Call Q3 2013  
Paychex Inc PAYX US 10:30 Q3 2013 Earnings Call Q3 2013  
Commercial Metals Co CMC US 11:00 Q2 2013 Earnings Call Q2 2013  
Forest City Enterprises Inc FCE/A US 11:00 Q4 2013 Earnings Call Q4 2013  
UTi Worldwide Inc UTIW US 11:00 Q4 2013 Earnings Call Q4 2013  
eBay Inc EBAY US 11:00 Analyst Day Y 2013  
GameStop Corp GME US 11:00 Q4 2013 Earnings Call Q4 2013  
Public Service Enterprise Group Inc PEG US   Investor Meeting - Chicago Y 2013  
Chicago Bridge & Iron Co NV CBI US   Investor Day    
MetroPCS Communications Inc PCS US   Extraordinary Shareholders Meeting Y 2013