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BARCHART MORING CALL 9/19

|Includes:ARCC, CAG, CHL, CTAS, DIS, ESRX, FB, FDX, GD, GHC, INFO, JW.A, LSI-OLD, MLHR, MSFT, NKE, ORCL, PIR, Rite Aid Corporation (RAD), SCS, TECH, TIBX, TSLA, WFC

BARCHART MORNING CALL

Thursday, September 19th, 2013View Older Reports

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OVERNIGHT MARKETS AND NEWS

December E-mini S&Ps (ESZ13 +0.31%) this morning are up +0.44% at an all-time high and European stocks are up +1.18%. Asian stocks closed higher: Japan +1.18%, Hong Kong +1.67%, China, Taiwan and South Korea closed for holiday, Australia +1.10%, Singapore +1.81%, India +3.43%. Global stock and bond markets rallied after the Fed unexpectedly refrained from reducing the $85 billion pace of its monthly securities buying. Commodity prices are higher. Oct crude oil (CLV13 +0.55%) is up +0.60% and Oct gasoline (RBV13 +0.51%) is up +0.69%. Dec gold (GCZ13 +4.60%) is up +4.39% at a 1-week high and Dec copper (HGZ13 +1.86%) is up +1.86% at a 3-week high. Agricultural prices are stronger and livestock prices are mixed. The dollar index (DXY00 -0.12%) is down -0.12%. EUR/USD (^EURUSD) is up +0.26% at a 7-1/4 month high and USD/JPY (^USDJPY) is up +0.94%. December T-note prices are up +4 ticks.

Japan's Aug trade balance was in deficit by -960.3 billion yen, smaller than expectations of a -1.113 trillion yen deficit. Aug exports climbed +14.7% y/y, stronger than expectations of +14.5% y/y and the most in 3 years. Aug imports rose +16.0% y/y, weaker than expectations of +18.5% y/y.

The Japan July all-industry activity index rose +0.5% m/m, better than expectations of +0.3% m/m.

The Japan July leading index CI was revised up to 107.9 from the previously reported 107.8, and the July coincident index was revised up to 107.7 from the previously reported 106.4.

UK Aug retail sales ex autos unexpectedly fell -1.0% m/m, weaker than expectations of unch m/m and the biggest decline in 16-months, while Aug retail sales ex autos on an annual basis rose +2.3% y/y, weaker than expectations of +3.2% y/y. Aug retail sales including autos unexpectedly fell -0.9% m/m, weaker than expectations of +0.4% m/m and the biggest drop in 16-months, while Aug retail sales including autos on an annual basis rose +2.1% y/y, weaker than expectations of +3.3% y/y.

UK Sep CBI trends full volume of total orders rose to 9 from 0 in Aug, stronger than expectations of an increase to 2 and matched its highest level in 18 years. Sep CBI trends selling prices rose to 3 from 0 in Aug, stronger than expectations of 2.

In an interview published in the Danish newspaper Jyllands-Posten, ECB Council member Asmussen said that ECB interest rates will be low for some time and that "normalization" is not yet on the agenda. He added that he sees a very gradual recovery in the Eurozone the rest of this year and that the pace of the economic recovery will improve next year.

U.S. STOCK PREVIEW

Today's weekly initial unemployment claims report is expected to show an increase of +38,000 to 330,000, more than reversing last week's sharp decline of -31,000 to 292,000. Meanwhile, today's continuing claims report is expected to show a +29,000 increase to 2.900 million, reversing part of last week's decline of -73,000 to 2.871 million. Today's Aug existing home sales report is expected to show a -2.6% decline to 5.25 million, giving back part of the +6.5% surge to a 3-3/4 year high of 5.39 million seen in July. Today's Q2 current account balance is expected to narrow to -$97.0 billion from -$106.1 billion in Q1. Today's Sep Philadelphia Fed manufacturing index is expected to show a +1.0 point increase to 10.3, stabilizing after the -10.5 point decline to 9.3 seen in August. The Treasury today will sell $13 billion in 10-year TIPS. There are four of the Russell 1000 companies that report earnings today: IHS (consensus $1.17), ConAgra (0.39), Cintas (0.63), TIBCO (0.22).

Equity conferences during the remainder of this week include: Credit Suisse Chemical & Ag Science Conference on Tue-Thu, 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.

OVERNIGHT U.S. STOCK MOVERS

Rite Aid (RAD +0.27%) reported Q2 EPS of 3 cents, better than consensus of a -4 cent loss.

Disney (DIS +0.19%) was downgraded to "Equal Weight" from "Overweight" at Morgan Stanley.

FedEx (FDX +5.03%) was downgraded to "Neutral" from "Buy" at Goldman.

IHS Inc. (IHS +0.84%) reported Q3 adjusted EPS of $1.27, better than consensus of $1.18.

Pier 1 Imports (PIR +0.64%) reported Q2 EPS of 17 cents, lower than consensus of 21 cents.

ConAgra Foods (CAG +0.69%) reported Q1 EPS of 37 cents, weaker than consensus of 39 cents.

Bloomberg reports that Wells Fargo (WFC +1.07%) is cutting 1,800 mortgage processing jobs in addition to the 3,000 cuts it announced earlier this quarter.

General Dynamics (GD +0.28%) was awarded a $187.53 million government contract for conversion of 44 each M1A1 and 40 each M1A2 model vehicles to a M1A2S configuration in support of the Kingdom of Saudi Arabia.

Deutsche Bank keeps a Buy rating on Tesla (TSLA -0.01%) and raises its price target on the stock to $200 from $160.

Steelcase (SCS +1.36%) fell over 5% in after-hours trading after ot reported Q2 EPS ex-charge of 24 cents, weaker than consensus of 26 cents.

Herman Miller (MLHR +0.33%) dropped nearly 3% in after-hours trading after it reported Q1 adjusted EPS of 43 cents, right on consensus, and reported Q1 revenue of $468.1 million, slightly better than consensus of $465.1 million.

Oracle (ORCL +1.83%) fell over 3% in after-hours trading after it reported Q1 adjusted EPS of 59 cents, better than consensus of 56 cents, but then lowered guidance on Q2 EPS view to 65 cents-70 cents, below consensus of 69 cents.

MARKET COMMENTS

Dec E-mini S&Ps (ESZ13 +0.31%) this morning are up +7.50 points (+0.44%) at a record high. The S&P 500 index on Wednesday catapulted up to a record high and closed higher after the Fed unexpectedly refrained from cutting QE3, saying it wants "more evidence" of growth progress before tapering stimulus. On the negative side, the Fed cut its U.S. 2013 GDP estimate to 2.0%-2.3% from June's 2.3%-2.6% and cut its 2014 GDP estimate to 2.9%-3.1% from June's 3.0%-3.5%. Closes: S&P 500 +1.22%, Dow Jones +0.95%, Nasdaq 100 +1.27%.

Dec 10-year T-notes (ZNZ13 +0.15%) this morning are up +4 ticks. Dec 10-year T-note prices on Wednesday closed sharply higher after the Fed unexpectedly maintained the pace of its monthly Treasury purchases. Other positives for T-notes included (1) the Fed's cut in its U.S. GDP estimates for 2013 and 2014, and (2) the weaker-than-expected U.S. Aug housing starts and building permits. Closes: TYZ3 +1-14/32, FVZ3 +28.75.

The dollar index (DXY00 -0.12%) this morning is down -0.093 (-0.12%). EUR/USD (^EURUSD) is up +0.0035 (+0.26%) and USD/JPY (^USDJPY) is up +0.92 (+0.94%). The dollar index on Wednesday plunged to a 7-month low and closed sharply lower after the Fed unexpectedly refrained from cutting its $85 billion in monthly bond purchases. Another negative for the dollar was the action by the Fed to cut its 2013 and 2014 U.S. GDP estimates. Closes: Dollar index -0.906 (-1.12%), EUR/USD +.01628 (+1.22%), USD/JPY -1.189 (-1.20%).

Oct WTI crude oil (CLV13 +0.55%) this morning is up +65 cents (+0.60%) and Oct gasoline (RBV13 +0.51%) is up +0.0189 (+0.69%). Oct crude oil and gasoline prices on Wednesday closed sharply higher. Bullish factors included (1) the plunge in the dollar index to a 7-month low after the Fed refrained from cutting QE3, (2) the -4.37 million bbl slide in weekly EIA crude oil inventories to a 17-month low of 355.6 million bbl, and (3) the unexpected drop in weekly EIA gasoline supplies by -1.63 million bbl to a 4-month low of 216 million bbl. Closes: CLV3 +2.65 (+2.51%), RBV3 +0.0810 (+3.04%).

GLOBAL EVENT CALENDAR09/19/2013

US 0830 ET Weekly initial unemployment claims expected +38,000 to 330,000, previous -31,000 to 292,000. Weekly continuing claims expected +29,000 to 2.900 million, previous -73,000 to 2.871 million.
  0830 ET Q2 current account balance expected -$97.0 billion, Q1 -$106.1 billion.
  0830 ET USDA weekly Export Sales.
  1000 ET Sep Philadelphia Fed manufacturing index expected +1.0 to 10.3, Aug -10.5 to 9.3.
  1000 ET Aug existing home sales expected -2.6% to 5.25 million, July +6.5% to 5.39 million.
  1000 ET Aug leading indicators expected +0.6% July +0.6%.
  1100 ET Treasury announces amounts of 2-year T-notes (previous $34 billion), 5-year T-notes (previous $35 billion) and 7-year T-notes (previous $29 billion) to be auctioned Sep 24-26.
  1220 ET Cleveland Fed President Sandra Pianalto delivers a speech titled Looking for Common Ground and New Solutions in Household and Consumer Finance at the 2013 Policy Summit on Housing, Human Capital and Inequality.
  1300 ET Treasury auctions $13 billion of 10-year TIPS.
JPN 0030 ET Japan July all-industry activity index expected +0.3%, June -0.6% m/m.
UK 0430 ET UK Aug retail sales ex autos expected unch m/m and +3.2% y/y, July +1.1% m/m and +3.1% y/y. Aug retail sales including autos expected +0.4% and +3.3% y/y, July +1.1% m/m and +3.0% y/y.
  0600 ET UK Sep CBI trends of total orders expected 2, Aug 0. Sep CBI trends of avg selling prices expected 2, Aug 0.
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U.S. STOCK CALENDAR09/19/2013

Company Name Ticker Time Event Description Period Estimate
IHS Inc IHS US Bef-mkt Q3 2013 Earnings Release Q3 2013 1.17
ConAgra Foods Inc CAG US 7:30 Q1 2014 Earnings Release Q1 2014 0.392
IHS Inc IHS US 8:00 Q3 2013 Earnings Call Q3 2013  
Clean Harbors Inc CLH US 8:30 Investor Day Y 2013  
Ares Capital Corp ARCC US 8:30 Investor Day Y 2013  
ConAgra Foods Inc CAG US 9:30 Q1 2014 Earnings Call Q1 2014  
Express Scripts Holding Co ESRX US 11:45 Economic Club of Canada Presents President, Michael Biskey    
NIKE Inc NKE US 13:00 Annual General Meeting Y 2013  
Microsoft Corp MSFT US 16:00 Financial Analyst Meeting Y 2013  
Techne Corp TECH US 16:30 Strategy Update Call    
TIBCO Software Inc TIBX US 16:30 Q3 2013 Earnings Call Q3 2013  
LSI Corp LSI US 17:00 ITC Decision Due in LSI & Realtek Patent-Infringement Case    
Cintas Corp CTAS US 17:00 Q1 2014 Earnings Call Q1 2014  
Cintas Corp CTAS US Aft-mkt Q1 2014 Earnings Release Q1 2014 0.632
TIBCO Software Inc TIBX US Aft-mkt Q3 2013 Earnings Release Q3 2013 0.22
Washington Post Co/The WPO US   Shareholders Day Y 2013  
John Wiley & Sons Inc JW/A US   Annual General Meeting Y 2013  
Facebook Inc FB US   Facebook CEO, Mark Zuckerberg, Meet with Republicans in the House  
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