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Barchart Morning Call 10/3



Thursday, October 3rd, 2013View Older Reports

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December E-mini S&Ps (ESZ13 -0.21%) this morning are down -0.25% and European stocks are also lower by -0.25% as the partial shutdown of the U.S. government enters a third day. Asian stocks closed mixed: Japan -0.09%, Hong Kong +1.00%, China and South Korea closed for holiday, Taiwan +1.73%, Australia +0.37%, Singapore -0.25%, India +1.97%. The inability of U.S. lawmakers to come up with a continuing resolution or a hike in the debt ceiling is starting to increase the cost of insurance against losses in Treasuries. The price of 5-year credit-default swaps linked to U.S. government debt jumped 2.7 bp on Wednesday to 35.5 bp, the highest in 6-months. On the positive side, the China Sep non-manufacturing index rose to a 6-month high and the Eurozone Sep PMI composite was revised up to a 2-1/4 year high, which signals strength in the global economy. Commodity prices are mixed. Nov crude oil (CLX13 -0.21%) is down -0.20% and Nov gasoline (RBX13 +0.50%)is up +0.48%. Dec gold (GCZ13 -0.95%)is down -1.11% and Dec copper (HGZ13 -0.53%) is down -0.45%. Agricultural and livestock prices are mixed. The dollar index (DXY00 -0.07%) is down -0.06% at a 7-3/4 month low as the continued shutdown of the U.S. government bolsters the case for the Fed to maintain QE. EUR/USD (^EURUSD) is up +0.16% at a 7-3/4 month high on stronger-than-expected Eurozone retail sales and USD/JPY (^USDJPY) is up +0.35%. December T-note prices (ZNZ13 -0.07%) are down -3 ticks.

The Eurozone Sep PMI composite was revised up +0.1 to 52.2 from the originally reported 52.1, the fastest pace of expansion in 2-1/4 years.

Eurozone Aug retail sales rose +0.7% m/m and fell -0.3% y/y, stronger than expectations of +0.2% m/m and -1.5% y/y.

The German Sep PMI services was revised down -0.7 to 53.7 from the originally reported 54.4, still the fastest pace of expansion in 7 months.

The China Sep non-manufacturing PMI rose +1.4 points from Aug to 55.4, the fastest pace of expansion in 6 months.

UK Sep PMI services unexpectedly declined -0.2 to 60.3, below expectations of unchanged at 60.5.

UK Sep Halifax house prices climbed +0.3% m/m and +6.2% 3-months/year, below expectations of +0.5% m/m and +6.4% 3-months/year.


A shut-down of nonessential government services goes into its third day today with no end in site. Today's weekly initial unemployment claims report is expected to show an increase of +9,000 to 314,000, more than reversing last week's unexpected -5,000 decline to 305,000. Meanwhile, today's continuing claims report is expected to show a decline of -23,000 to 2.800 million, reversing part of last week's +35,000 increase to 2.823 million. Today's Sep ISM non-manufacturing index is expected to show a -1.6 decline to 57.0, reversing part of the +2.6 point increase seen in August to a 7-3/4 year high of 58.6. Today's Aug factory orders report is expected to show a small increase of +0.3% following the fairly sharp decline of -2.4% seen in July. There is only one of the Russell 1000 companies that reports earnings today: Constellation Brands (consensus $0.88).


BlackBerry (BBRY +0.51%) was downgraded to "Underperform" from "Market Perform" at Bernstein.

DigiTimes reports that global photovoltaic installations are forecast to rise to a 3-year high in 2014 and exceed 40 GW for the first time, which should generate installation revenue of more than $86 billion.

Domino's Pizza (DPZ +0.16%) was downgraded to "Perform" from "Outperform" at Oppenheimer.

Facebook (FB -0.28%) was downgraded to "Hold" from "Buy" at Pivotal Research.

Five Below (FIVE +3.53%) was upgraded to "Buy" from "Neutral" at Sterne Agee.

AllThingsD reported that Lenovo (LNVGY -0.38%) has selected a Qualcomm (QCOM +0.28%) chip for its new K-Series smartphone, a change from the previous version which had used Intel's (INTC +0.26%) Atom chip.

Zsolt Rumy reported a 18.0% stake in Zoltek (ZOLT -0.18%) .

Randal Kirk reported a 26.2% stake in Oragenics (OGEN -1.29%) .

Whitestone REIT (WSR -1.04%) filed to sell 4 million shares of common stock.


Dec E-mini S&Ps (ESZ13 -0.21%) this morning are down -4.25 points (-0.25%). The S&P 500 index on Wednesday closed lower on concerns over an economic slowdown as the U.S. government remained shut down for a second day and after the Sep ADP employment change rose less than expected. The Sep ADP employment change increased +166,000, below expectations of +180,000. Closes: S&P 500 -0.07%, Dow Jones -0.39%, Nasdaq 100 +0.01%.

Dec 10-year T-notes (ZNZ13 -0.07%) this morning are down -3 ticks. Dec 10-year T-note prices on Wednesday closed higher after the Sep ADP employment change rose less than expected, which may prompt the Fed from reducing its bond purchases. Another positive for T-notes is the ongoing shutdown of the U.S. government, which may further constrict economic growth. Closes: TYZ3 +8.50, FVZ3 +6.00.

The dollar index (DXY00 -0.07%) this morning is down -0.047 (-0.06%) at a 7-3/4 month low. EUR/USD (^EURUSD) is up +0.0022 (+0.16%) at an 8-month high and USD/JPY (^USDJPY) is up +0.34 (+0.35%). The dollar index on Wednesday tumbled to a 7-3/4 month low after the smaller-than-expected increase in the Sep ADP employment change bolstered speculation the Fed will refrain from tapering QE. EUR/USD climbed to a 8-month high after the ECB refrained from additional stimulus measures following its policy meeting and on reduced European sovereign debt concerns after Italian Prime Minister Letta won a confidence vote in parliament, which avoids the need for another election. Closes: Dollar index -0.241 (-0.30%), EUR/USD +0.00528 (+0.39%), USD/JPY -0.64 (-0.65%).

Nov WTI crude oil (CLX13 -0.21%) this morning is down -21 cents (-0.20%) and Nov gasoline (RBX13 +0.50%) is up +0.0126 (+0.48%). Nov crude oil and gasoline prices on Wednesday closed sharply higher after the dollar index slumped to a 7-3/4 month low and after TransCanada said it will finish its Keystone pipeline from Cushing, OK to the Texas Gulf Coast by the end of the month. The 700,000 barrel-a-day pipeline will further reduce crude supplies at Cushing, OK, the delivery point for WTI futures. Crude prices shook off the bearish EIA report that showed weekly crude inventories surged +5.472 million bbl, double expectations of +2.5 million bbl, and gasoline stockpiles unexpectedly rose +3.495 million bbl, more than expectations for a -700,000 bbl draw. Closes: CLX3 +2.06 (+2.02%), RBX3 +0.0181 (+0.69%).


US 0730 ET Sep Challenger job cuts, Aug +56.5% y/y.
  0830 ET Weekly initial unemployment claims expected +9,000 to 314,000, previous -5,000 to 305,000. Weekly continuing claims expected -23,000 to 2.800 million, previous +35,000 to 2.823 million.
  0830 ET USDA weekly Export Sales.
  1000 ET Aug factory orders expected +0.3%, July -2.4%.
  1000 ET Sep ISM non-manufacturing index expected -1.6 to 57.0, Aug +2.6 to 58.6.
  1100 ET Treasury announces amounts of 3-year T-notes (previous $31 billion), 10-year T-notes (previous $21 billion) and 30-year T-bonds (previous $13 billion) to be auctioned Oct 8-10.
  1300 ET Atlanta Fed President Dennis Lockhart delivers welcoming remarks at a conference titles Recent Developments in the U.S. Labor Market: Analysis and Policy Responses.
  1330 ET Fed Governor Jerome Powell speaks at a St. Louis Fed conference on community banking.
GER 0355 ET Revised German Sep PMI services expected no change at 54.4.
EUR 0400 ET Revised Eurozone Sep PMI composite expected no change at 52.1.
  0500 ET Eurozone Aug retail sales expected +0.2% m/m and -1.5% y/y, July +0.1% m/m and -1.3% y/y.
UK 0430 ET UK Sep PMI services expected unch at 60.5, Aug 60.5.


Company Name Ticker Time Event Description Period Estimate
Constellation Brands Inc STZ US Bef-mkt Q2 2014 Earnings Release Q2 2014 0.878
Eli Lilly & Co LLY US 8:30 Investment Community Meeting Y 2013  
Ball Corp BLL US 9:30 Investor Briefing Y 2013  
Ball Corp BLL US 9:30 Management Briefing    
Constellation Brands Inc STZ US 10:30 Q2 2014 Earnings Call Q2 2014  
Mosaic Co/The MOS US 11:00 Annual General Meeting Y 2013  
Clorox Co/The CLX US 12:00 Analyst Day Y 2013  
Pfizer Inc PFE US   PDUFA, Aprela, menopause VMS/VVA, prevention of osteoporosis    
Pinnacle West Capital Corp PNW US   Investor Meeting -Day4 Y 2013  
Questar Corp STR US   Roadshow - Mid Atlantic - Day 1 Y 2013  
TECO Energy Inc TE US   Roadshow - Day 4 Y 2013  
Walgreen Co WAG US   September 2013 Sales and Revenue Release 2013