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Barchart Moring Call 9/10

Barchart Morning Call

BC - Tue Sep 10, 6:43AM CDT


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September E-mini S&Ps (ESU13 +0.64%) this morning are up +0.51% and European stocks are up +1.38%, both at 3-week highs, on strong Chinese economic data and reduced tensions in the Middle East. Asian stocks closed higher: Japan +1.54%, Hong Kong +0.99%, China +1.40%, Taiwan +0.20%, Australia +0.38%, Singapore +1.16%, South Korea +1.19%, India +3.77%. China's Shanghai Stock Index climbed to a 3-month high and boosted other global equity markets on signs that the Chinese economy is improving after China's industrial output rose more-than-expected at its fastest pace in 17-months. Commodity prices are mixed. Oct crude oil (CLV13 -1.52%) is down -0.77% and Oct gasoline (RBV13 -0.94%) is down -0.14% at a 4-week low after the U.S. said Russia's plan for Syria to surrender its chemical weapons may remove the need for a military strike against Syria. Dec gold (GCZ13 -1.36%) is down -1.05% and Dec copper (HGZ13 -0.06%) is up +0.12%. Agricultural and livestock prices are mixed. The dollar index (DXY00 +0.17%) is up +0.14%. EUR/USD (^EURUSD) is down -0.10% and USD/JPY (^USDJPY) is up +0.61%. December T-note prices (ZNZ13 -0.42%) are down -12.5 ticks on reduced safe-haven demand as global stocks surge.

China Aug industrial production climbed +10.4% y/y, stronger than expectations of +9.9% y/y and the most in 17-months. China Aug retail sales rose +13.4% y/y, better than expectations of +13.3% y/y and the fastest pace in 8-months.

China Aug new yuan loans were 711.3 billion yuan, less than expectations of 730.0 billion yuan.

President Obama, who will address the U.S on the Syrian situation at 9 pm EST tonight in a nationally televised speech, said late Monday that a Russian proposal to convince Syria to give up its chemical weapons is a "potentially positive development."

Japan Aug machine tool orders fell -1.8% y/y, the fifteenth consecutive month that machine tool orders have fallen on a year-over-year basis.

The minutes of the Aug 7-8 BOJ policy meeting showed that BOJ board members said that easing effects have firmly taking hold as JGB buys have put downward pressure on yields and that consumer-price expectations have turned favorable.

The Japan July tertiary industry index fell -0.4% m/m, a smaller decline than expectations of -0.5% m/m, although Jun was revised lower to -0.5% m/m from the originally reported -0.3% m/m.


President Obama today will press hard for Congressional authorization of a use-of-force resolution against Syria by having lunch meetings with Republicans and Democrats and by delivering a prime-time address this evening. The Treasury today will kick off this week's $66 billion coupon package by selling $32 billion in 3-year T-notes. There are no major earnings reports today.

Equity conferences during the remainder of this week include the following: Barclays Global Financial Services Conference on Mon-Wed, Morgan Stanley Healthcare Conference on Mon-Wed, Vertical Research Partners Industrial Conference on Mon-Wed, 2013 dbAccess Aviation and Transportation Conference on Tue, Raymond James European Investors North American Equities Conference on Tue, Asia Pacific Petroleum Conference on Tue, Deutsche Bank dbAccess Aviation and Transportation Conference on Tue, Clinical Trial Supply USA on Tue-Wed, Rodman & Renshaw Health Care Conference on Tue-Wed, DA Davidson & Co Engineering & Construction Conference on Tue-Wed, Robert W Baird and Co Health Care Conference on Tue-Wed, KeyBanc Capital Markets Basic Materials & Packaging Conference on Tue-Wed, Goldman Sachs Global Retailing Conference on Tue-Wed, Deutsche Bank Access Technology Conference on Tue-Wed, RBC Capital Markets Global Industrials Conference on Tue-Wed, Stifel Nicolaus & Co Health Care Conference on Tue-Thu, Biofuels International 2013 Conference on Wed, Credit Suisse Asian Technology Conference on Wed, UBS Global Paper & Forest Products Conference on Thu, UBS Best of Americas Conference on Thu-Fri, Bank of America Merrill Lynch Global Real Estate Conference on Wed-Fri, Bank of America Merrill Lynch Healthcare Conference on Wed-Thu, Goldman Sachs Global Commodities Conference on Wed-Thu, Bank of America Merrill Lynch Media, Communications & Entertainment Conference on Wed-Thu, Barclays Capital CEO Energy - Power Conference on Wed-Thu, Barclays CEO Energy Power Conference on Wed-Thu, CL King & Associates Inc Best Ideas Conference on Wed-Thu, Bank of America Merrill Lynch Canada Mining Conference on Thu, and Bloomberg Canadian Fixed Income Conference on Thu.


Jabil Circuit (JBL +1.65%) was upgraded to "Strong Buy" from "Buy" at Needham.

Interfax reported that Syria has accepted Russia's proposal on chemical weapons.

Marvell (MRVL +4.23%) was upgraded to "Overweight" from "Neutral" at JPMorgan.

Marathon Petroleum (MPC -1.75%) was downgraded to "Neutral" from "Outperform" at Credit Suisse.

Reuters reports that Apple (AAPL +1.60%) today is expected to introduce a cheaper version of the iPhone.

Northrop Grumman (NOC +0.42%) was awarded a $219.15 million government contract that involves foreign military sales to Saudi Arabia.

PG&E (PCG +0.27%) said it will take a $110 million charge in Q3 to settle the claims of substantially all of the remaining plaintiffs who sought compensation for personal injury and property damages related to the rupture of one of the utility's natural gas transmission pipelines in San Bruno, California on September 9, 2010.

Gabelli reported a 5.22% stake in Leap Wireless (LEAP +0.06%) .

Pep Boys (PBY +1.68%) reported Q2 EPS of 10 cents, well below consensus of 19 cents.

SAC Capital reported a 8.1% stake in Clearwater Paper (CLW +0.43%) .

Five Below (FIVE +3.93%) reported Q2 EPS of 11 cents, better than consensus of 9 cents.

Casey's General Stores (CASY +1.49%) reported Q1 EPS of $1.43, stronger than consensus of $1.26.


Sep E-mini S&Ps (ESU13 +0.64%) this morning are up +8.50 points (+0.51%) at a 3-week high. The S&P 500 index on Monday climbed to a 3-week high and closed higher after signs of economic strength in China and Europe boosted the prospects for the global economy. China Aug exports climbed +7.2% y/y, stronger than expectations of +5.5% y/y, and the Eurozone Sep Sentix investor confidence rose +11.4 points to a 28-month high of 6.5. Closes: S&P 500 +1.00%, Dow Jones +0.94%, Nasdaq 100 +1.17%.

Dec 10-year T-notes (ZNZ13 -0.42%) this morning are down -12.5 ticks. Dec 10-year T-note prices on Monday closed higher on speculation the economy is not strong enough to allow the Fed to aggressively taper its bond purchases. Another supportive factor for T-notes is increased safe-haven demand on concern that a U.S. attack on Syria could lead to a wider conflict in the Middle East. Closes: TYZ3 +13.50, FVZ3 +11.50.

The dollar index (DXY00 +0.17%) this morning is up +0.114 (+0.14%). EUR/USD (^EURUSD) is down -0.0013 (-0.10%) and USD/JPY (^USDJPY) is up +0.61 (+0.61%). The dollar index on Monday fell to a 1-week low and closed lower. Undercutting the dollar was strength in stocks, which curbed safe-haven demand for the dollar, and strength in EUR/USD which rallied up to a 1-week high after the Eurozone Sep Sentix investor confidence rose +11.4 points to 6.5, stronger than expectations of +1.4 to -3.5 and its best level in 28 months. Closes: Dollar index -0.353 (-0.43%), EUR/USD +0.00769 (+0.58%), USD/JPY +0.463 (+0.47%).

Oct WTI crude oil (CLV13 -1.52%) this morning is down -84 cents (-0.77%) and Oct gasoline (RBV13 -0.94%) is down -0.0040 (-0.14%) at a 4-week low on reduced Middle East tensions. Oct crude oil and gasoline prices on Monday settled lower with Oct gasoline falling to a 2-week low. Bearish factors included (1) speculation that President Obama may fail to garner enough Congressional support for a military strike against Syria, and (2) comments from a member of the Libyan parliament energy committee who said that Libya's oil production rebounded to 600,000 barrels a day from 200,000 barrels a day. Closes: CLV3 -1.01 (-0.91%), RBV3 -0.0677 (-2.37%).


US 1300 ET Treasury auctions $32 billion 3-year T-notes.
  1630 ET API weekly U.S. oil statistics.
  n/a President Obama addresses the nation regarding a U.S. military strike on Syria.
CHI 0130 ET China Aug industrial production expected +9.9% y/y, July +9.7% y/y.
  0130 ET China Aug retail sales expected +13.3% y/y, July +13.2% y/y.
JPN 1950 ET Japan Q3 BSI business conditions all industry, Q2 5.9 q/q. Q3 BSI business conditions large manufacturing, Q2 5.0 q/q.
  1950 ET Japan Aug domestic CGPI expected +0.3% m/m and +2.3% y/y, July +0.5% m/m and +2.2% y/y.


Company Name Ticker Time Event Description Period Estimate
Warner Chilcott PLC WCRX US 3:00 Extraordinary Shareholders Meeting Y 2013  
Warner Chilcott PLC WCRX US 3:30 Annual General Meeting - M&A Vote    
McDonald's Corp MCD US 7:00 August 2013 Sales and Revenue Release 2013  
PVH Corp PVH US 8:30 Q2 2014 Earnings Call Q2 2014  
Actavis Inc ACT US 9:00 Extraordinary Shareholders Meeting - M&A Vote Y 2013  
Green Mountain Coffee Roasters Inc GMCR US 9:00 Investor Day Y 2013  
Hasbro Inc HAS US 10:00 Investor Day Y 2013  
Lions Gate Entertainment Corp LGF US 10:00 Annual General Meeting Y 2013  
Tempur Sealy International Inc TPX US 10:00 Investor Meeting Y 2013  
Yum Brands Inc YUM US   Investor & Analyst Meeting - Yum China - Day -2 Y 2013  
Theravance Inc THRX US   FDA Adcomm, Anoro Ellipta (LAMA/LABA), chronic obstructive pulmonary disease