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BARCHART MORNING CALL 9/27

|Includes:ACN, AKAM, ARCH, Bank of America Corporation (BAC), BBRY, CAG, CIM, FINL, GE, JPM, JW.A, MAA, NKE, OXY, PETM, RNET, THO

BARCHART MORNING CALL

Friday, September 27th, 2013View Older Reports

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OVERNIGHT MARKETS AND NEWS

December E-mini S&Ps (ESZ13 -0.40%) this morning are down -0.40% and European stocks are also down -0.40% over concern a shutdown of the federal government due to the U.S. budget impasse will hurt economic growth. Asian stocks closed mixed: Japan -0.26%, Hong Kong +0.35%, China +0.44%, Taiwan +0.56%, Australia +0.24%, Singapore +0.50%, South Korea +0.10%, India -0.84%. The U.S. Senate will vote today on an emergency budget to prevent a shutdown of the federal government when the new fiscal year begins on Tuesday. Commodity prices are mostly lower. Nov crude oil (CLX13 -0.45%) is down -0.60% and Nov gasoline (RBX13 -0.33%) is down -0.38% as the five permanent members of the UN Security Council prepare to vote later today on a resolution to eliminate Syria's chemical weapons. Dec gold (GCZ13 +0.87%) is up +0.07% and Dec copper (HGZ13 +0.29%) is up +0.12%. Agricultural and livestock prices are mixed. The dollar index (DXY00 -0.22%) is down -0.14%. EUR/USD (^EURUSD) is up +0.12% after Eurozone Sep economic confidence rose to a 2-year high. USD/JPY (^USDJPY) is down -0.46%. December T-note prices (ZNZ13 +0.14%) are up +3.5 ticks.

The Eurozone Sep business climate indicator rose +0.02 from Aug to -0.20, less than expectations of +0.11 to -0.10, but still the highest in 1-1/2 years. Sep economic confidence rose +1.6 to 96.9, better than expectations of +0.8 to 96.0 and the highest in 2 years.

UK Sep Lloyds business barometer of economic optimism rose +3 to 57, the highest since the data series began in 2002.

UK Sep GfK consumer confidence climbed +3 to -10, better than expectations of +2 to -11 and the highest in nearly 6 years.

UK Sep nationwide house prices increased +0.9% m/m and +5.0% y/y, higher than expectations of +0.5% m/m and +4.4% y/y with the +5.0% y/y increase the biggest annual gain in 3 years.

Japan Aug national CPI rose +0.9% y/y, higher than expectations of +0.8% y/y. Aug national CPI ex-fresh food rose +0.8% y/y, higher than expectations of +0.7% y/y, and Aug national CPI ex food & energy fell -0.1% y/y, right on expectations.

China Aug industrial profits year-to-date rose +12.8% y/y from +11.1% y/y in July, the most in 6 months.

U.S. STOCK PREVIEW
Today's final-Sep U.S. consumer confidence index from the University of Michigan is expected to show a +1.2 point increase to 78.0 from 76.8 in early-Sep. Today's Aug personal income and spending reports are expected to remain lackluster, suggesting that consumers will not be providing any significant near-term boost to the U.S. economy. Aug personal income is expected to improve to +0.4% from +0.1% in July and Aug personal spending is expected to improve to +0.3% from +0.1% in July. Today's Aug PCE deflator is expected to ease to +1.2% y/y from +1.4% in July. Meanwhile, the Aug core PCE deflator, which is the Fed's preferred inflation measure, is expected to edge higher to +1.3% /y from +1.2% y/y in July. There is one of the Russell 1000 companies that report earnings today: Chimera Investment Corp (consensus $0.11).

OVERNIGHT U.S. STOCK MOVERS

Bank of America (BAC -0.42%) and Goldman Sachs (GS -0.01%) wwere both downgraded to "Neutral" from "Buy" at Guggenheim.

BlackBerry (BBRY -0.75%) reported a Q2 adjusted EPS loss of -47 cents, a smaller loss than consensus of -49 cents.

Occidental Petroleum (OXY +0.72%) was upgraded to "Positive" from "Neutral" at Susquehanna.

Finish Line (FINL +0.45%) reported Q2 EPS of 54 cents, better than consensus of 45 cents.

The NY Times reports that the Justice Department has asked JPMorgan Chase (JPM +0.37%) to pay a higher fine for questionable mortgage practices than the roughly $7 billion that it has offered to pay.

Akamai (AKAM +1.32%) was downgraded to "Neutral" from "Buy" at B. Riley.

Arch Coal (ACI -1.52%) was downgraded to "Sell" from "Neutral" at Goldman.

KKR Fund reported a 28.4% stake in RigNet (RNET +3.43%) .

Thor Industries (THO -0.53%) reported Q4 EPS of $1.04, well ahead of consensus of 95 cents.

Nike (NKE +2.06%) rose over 6% in after-hours trading after it reported Q1 EPS of 86 cents, stronger than consensus of 78 cents.

PetSmart (PETM +0.76%) announced that it will increase its quarterly dividend from 16.5 cents to 19.5 cents per share beginning in the third quarter of fiscal 2013.

Accenture (ACN -0.33%) reported Q4 EPS of $1.01, right on consensus, although Q4 revenue of $7.1 billion was higher than consensus of $6.9 billion.

MARKET COMMENTS

Dec E-mini S&Ps (ESZ13 -0.40%) this morning are down -6.75 points (-0.40%). The S&P 500 index on Thursday closed higher after weekly initial unemployment claims unexpectedly fell -5,000 to 305,000, better than expectations for a +16,000 increase to 325,000. Gains in stocks were limited by (1) the -1.6% decline in Aug pending home sales (weaker than expectations of -1.0% m/m), and (2) concern that the budget impasse in Washington could prompt a shutdown of the federal government and weaken the economic recovery. Closes: S&P 500 +0.35%, Dow Jones +0.36%, Nasdaq 100 +0.79%.

Dec 10-year T-notes (ZNZ13 +0.14%) this morning are up +3.5 ticks. Dec 10-year T-note prices on Thursday closed lower after weekly jobless claims unexpectedly fell. However, supportive factors included (1) the weaker-than-expected Aug pending home sales report of -1.6%, and (2) safe-haven demand over the battle in Washington over the continuing resolution and the debt ceiling. Closes: TYZ3 -6.00, FVZ3 -2.25.

The dollar index (DXY00 -0.22%) this morning is down -0.110 (-0.14%). EUR/USD (^EURUSD) is up +0.0016 (+0.12%) and USD/JPY (^USDJPY) is down -0.46 (-0.46%). The dollar index on Thursday closed higher as an unexpected decline in U.S. weekly initial unemployment claims bolstered speculation the Fed may taper QE3 as soon as next month. USD/JPY rose as the yen weakened on the Kyodo News report that Prime Minister Abe's administration pledged to "promptly" begin a study on reducing Japan's corporate tax rate. Closes: Dollar index +0.189 (+0.24%), EUR/USD -0.00371 (-0.27%), USD/JPY +0.546 (+0.55%).

Nov WTI crude oil (CLX13 -0.45%) this morning is down -62 cents (-0.60%) and Nov gasoline (RBX13 -0.33%) is down -0.0102 (-0.38%). Nov crude oil and gasoline prices on Thursday closed higher. Bullish factors included (1) signs of economic strength after U.S. weekly jobless claims unexpectedly fell -5,000, versus expectations of a +16,000 increase, and (2) strength in gasoline on speculation that supplies will be limited on reduced output due to seasonal refinery maintenance and turnarounds to winter-blends. Closes: CLX3 +0.37 (+0.36%), RBX3 +0.0303 (+1.14%).

GLOBAL EVENT CALENDAR09/27/2013

US 0545 ET Chicago Fed President Charles Evans speaks on current economic conditions and monetary policy at the Norges Bank Conference in Oslo, Norway.
  0830 ET Aug personal spending expected +0.3%, July +0.1%. Aug personal income expected +0.4%, July +0.1%. Aug PCE deflator expected +0.1% m/m and +1.2% y/y, July +0.1% m/m and +1.4% y/y. Aug PCE core deflator expected +0.1% m/m and +1.3% y/y, July +0.1% m/m and +1.2% y/y.
  0830 ET Boston Fed President Eric Rosengren delivers opening remarks at a conference on stable funding at the New York Fed.
  0955 ET Final U.S. Sep University of Michigan consumer confidence expected +1.2 to 78.0, previous -5.3 to 76.8.
  1015 ET Chicago Fed President Charles Evans speaks as part of a panel discussion titled Monetary and Macroprudential Policies Going Forward at the Norges Bank Conference in Oslo, Norway.
  1400 ET New York Fed President William Dudley speaks at an event in New York on national and regional economic conditions.
  1500 ET Q3 Quarterly Hogs & Pigs.
UK 0200 ET UK Sep nationwide house prices expected +0.5% m/m and +4.4% y/y, Aug +0.6% m/m and +3.5% y/y.
  0430 ET UK Sep Lloyds business barometer, Aug 54.
  0430 ET UK July index of services expected +0.5% m/m and +0.6% 3-mo/3-mo, June unch m/m and +0.6% 3-mo/3-mo.
EUR 0500 ET Eurozone Sep business climate indicator expected +0.11 to -0.10, Aug -0.21. Sep economic confidence expected +0.8 to 96.0, Aug 95.2.
  0500 ET Revised Eurozone Sep consumer confidence.
GER 0800 ET German Sep CPI (EU harmonized) expected unch m/m and +1.6% y/y, Aug unch m/m and +1.6% y/y.

U.S. STOCK CALENDAR09/27/2013

Company Name Ticker Time Event Description Period Estimate
General Electric Co GE US 7:15 Ottawa Chamber of Commerce Presents CEO, Elyse Allan    
ConAgra Foods Inc CAG US 9:30 Annual General Meeting Y 2013  
John Wiley & Sons Inc JW/A US 10:00 Investor and Analyst Day Y 2013  
Mid-America Apartment Communities Inc MAA US   Extraordinary Shareholders Meeting    
Mid-America Apartment Communities Inc MAA US   Special Meeting - M&A Vote    
Chimera Investment Corp CIM US   Q2 2012 Earnings Release Q2 2012 0.108
Stocks: BAC, BBRY, OXY, FINL, JPM, AKAM, ARCH, RNET, THO, NKE, PETM, ACN, GE, CAG, JW.A, MAA, CIM