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Barchart Morning Call 9/18

|Includes:ADBE, AYI, CAT, DKS, DLTR, DRI, ED, EXC, FedEx Corporation (FDX), FIVE, GIS, NOK, ORCL, PG

Barchart Morning Call

Wednesday, September 18th, 2013View Older Reports

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December E-mini S&Ps (ESZ13 +0.10%) this morning are up +0.10% and European stocks are higher by +0.58%. Asian stocks closed mixed: Japan +1.35%, Hong Kong -0.27%, China +0.21%, Taiwan -0.49%, Australia -0.25%, Singapore +0.41%, South Korea unch and India +0.80%. The markets await conclusion of the 2-day FOMC meeting today where expectations are high for the Fed to trim its monthly bond purchases. The spread between Spanish 10-year bonds and German bunds shrank to 239 bp, the least in 2 years, as global government bond markets climb on speculation the Fed will refrain from aggressively cutting stimulus. Commodity prices are mixed. Oct crude oil (CLV13 +0.52%) is up +0.72% and Oct gasoline (RBV13 +0.16%) is up +0.27%. Dec gold (GCZ13 -0.82%) is down -0.78% at a 5-week low on expectations for the Fed to trim stimulus and Dec copper (HGZ13 +0.50%) is up +0.31%. Agricultural prices are higher and livestock prices are weaker. The dollar index (DXY00 -0.01%) is down -0.04%. EUR/USD (^EURUSD) is down -0.06% and USD/JPY (^USDJPY) is down -0.18%. The British pound soared to an 8-month high against the dollar after the minutes of the last BOE policy meeting showed committee members voted unanimously to keep policy unchanged as an improving economic outlook prompted agreement that no more stimulus was needed. December T-note prices (ZNZ13 -0.09%) are down -1.5 ticks.

The minutes of the Sep 3-4 BOE monetary policy meeting showed committee members voted 9-0 to keep the bond-purchase program at 375 billion pounds and the benchmark interest rate at a record low o.5%. The minutes also showed that "no member judged that further stimulus was appropriate at present as domestically, there were increased signs that the recovery was taking hold."

Eurozone July construction output rose +0.3% m/m and fell -1.2% y/y, the fifth consecutive month output has fallen on a year-over-year basis.

China Aug property prices rose to their highest level this year as new housing costs rose in 69 out of 70 major Chinese cities, which challenges efforts by the government to reign in excessive speculation in China's housing market.


The FOMC concludes its 2-day meeting today with a policy announcement and a press conference by Fed Chairman Bernanke. The market is looking for a $10 billion cut in QE3 to $75 billion from the current $85 billion level. Today's Aug housing starts report is expected to show an increase of +2.7% to 920,000, adding to July's increase of +5.9% to 896,000. There are three of the Russell 1000 companies that report earnings today: FedEx (consensus $1.50), Oracle (0.56), and General Mills (0.70).

Equity conferences during the remainder of this week include: Morgan Stanley Industrials & Autos Conference on Mon-Wed, Citi Global Industrials Conference on Tue-Wed, RBC Capital Markets Financial Institutions Conference on Tue-Wed, Credit Suisse Chemical & Ag Science Conference on Tue-Thu, BMO Capital Markets North American Real Estate Conference on Wed, Jefferies Advanced Analytics & Big Data Intelligence Summit on Wed, Mitsubishi UFJ Securities-Utility Corporate Access Day on Wed, 28th International Aluminum Conference on Wed-Thu, UBS Houston Energy Symposium on Wed-Thu, Credit Suisse Global Mining & Steel Conference on Thu, Mitsubishi UFJ Securities- Industrials Corporate Access Day on Thu.


FedEx (FDX +1.01%) reported Q1 EPS of $1.53, stronger than consensus of $1.50.

General Mills (GIS +0.10%) reported Q1 EPS of 70 cents, right on expectations, although Q1 revenue of $4.37 billion was slightly higher than consensus $4.29 billion.

Nokia (NOK +0.48%) was upgraded to "Outperform" from "Neutral" at Credit Suisse.

Procter & Gamble (PG -0.41%) was downgraded to "Equal Weight" from "Overweight" at Barclays.

Acuity Brands (AYI +3.18%) was downgraded to "Neutral" from "Buy" at UBS due to valuation.

Consolidated Edison (ED +0.31%) was upgraded to "Neutral" from "Sell" at Goldman.

Caterpillar (CAT -0.13%) was downgraded to "Neutral" from "Outperform" at RW Baird.

Exelon (EXC +0.40%) was downgraded to "Sector Perform" from "Outperform" at RBC Capital.

Five Below (FIVE +2.30%) fell over 3% in after-hours trading after it filed to sell 7.1 million shares of common stock.

Adobe (ADBE unch) reported Q3 adjusted EPS of 32 cents, lower than consensus of 34 cents.


Dec E-mini S&Ps (ESZ13 +0.10%) this morning are up +1.75 points (+0.10%). The S&P 500 index on Tuesday closed higher. Stocks opened higher on the prospects for the global economic recovery to strengthen after the German Sep ZEW survey of expectations of economic growth rose +7.0 to a 3-1/3 year high of 49.6. Stocks maintained their advance and finished higher after the U.S. Aug CPI rose +0.1% m/m and +1.5% y/y, weaker than expectations of +0.2% m/m and +1.6% y/y, which bolstered speculation that weak inflation will prompt the Fed from aggressively cutting its stimulus measures. Closes: S&P 500 +0.42%, Dow Jones +0.23%, Nasdaq 100 +0.70%.

Dec 10-year T-notes (ZNZ13 -0.09%) this morning are down -1.5 ticks. Dec 10-year T-note prices on Tuesday closed higher after the smaller-than-expected increase in Aug CPI fueled speculation the Fed will limit its tapering of bond purchases. Closes: TYZ3 +5.50, FVZ3 +3.50.

The dollar index (DXY00 -0.01%) this morning is down -0.035 (-0.04%). EUR/USD (^EURUSD) is down -0.0008 (-0.06%) and USD/JPY (^USDJPY) is down -0.18 (-0.18%). The dollar index on Tuesday closed lower on speculation the Fed will not be aggressive when it begins to cut its bond purchases at this week's 2-day FOMC meeting. EUR/USD closed higher after the German Sep ZEW survey of expectations of economic growth rose +7.0 to a 3-1/3 year high of 49.6. Closes: Dollar index -0.152 (-0.19%), EUR/USD +.00346 (+0.18%), USD/JPY +0.059 (+0.06%).

Oct WTI crude oil (CLV13 +0.52%) this morning is up +76 cents (+0.72%) and Oct gasoline (RBV13 +0.16%) is +0.0072 (+0.27%). Oct crude oil and gasoline prices on Tuesday closed mostly lower with Oct crude at a 2-week low and Oct gasoline at a 2-1/4 month low. Bearish factors for crude prices included (1) reduced threat of an imminent U.S. attack on Syria after the U.S. and Russia agreed to eliminate Syria's stockpiles of chemical weapons, and (2) expectations that the Fed will taper QE3 at this week's FOMC meeting. Closes: CLV3 -1.17 (-1.10%), RBV3 +0.0010 (+0.03%).


US 0700 ET Weekly MBA mortgage applications, previous -13.5% with purchase sub-index -2.7% and refi sub-index 20.2%.
  0830 ET Aug housing starts expected +2.7% to 920,000, July +5.9% to 896,000. Aug building permits expected -0.4% to 950,000, July +3.9% to 954,000.
  1030 ET EIA Weekly Petroleum Status Report.
  1400 ET FOMC announces interest rate decision and updates its economic projections.
  1400 ET Fed expected to cut QE3 monthly purchases by $10 billion to $75 billion from current $85 billion with monthly MBS purchases unchanged at $40 billion and a $10 billion cut in monthly Treasury purchases to $35 billion from $45 billion.
  1430 ET Fed Chairman Ben Bernanke holds press conference following FOMC meeting.
UK 0430 ET Minutes of Sep 4-5 BOE monetary policy meeting.
EUR 0500 ET Eurozone July construction output, Jun +0.7% m/m and -3.0% y/y.
JPN 1950 ET Japan Aug trade balance expected -1.1113trillion yen, July -1.028 trillion yen. Aug exports expected +14.5% y/y, July +12.2% y/y. Aug imports expected +18.5% y/y, July +19.6% y/y.
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Company Name Ticker Time Event Description Period Estimate
FedEx Corp FDX US 7:30 Q1 2014 Earnings Release Q1 2014 1.499
Dollar Tree Inc DLTR US 8:00 Capital Markets Conference Y 2013  
Dick's Sporting Goods Inc DKS US 8:00 Analyst Day Y 2013  
FedEx Corp FDX US 8:30 Q1 2014 Earnings Call Q1 2014  
General Mills Inc GIS US 8:30 Q1 2014 Earnings Call Q1 2014  
Oracle Corp ORCL US Aft-mkt Q1 2014 Earnings Release Q1 2014 0.561
General Mills Inc GIS US   Q1 2014 Earnings Release Q1 2014 0.7
Darden Restaurants Inc DRI US   Annual General Meeting Y 2013  
Click to enlarge