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BARCHART MORNING CALL 10/22

|Includes:ACE, AMGN, AVGO, COH, CTAS, DAL, DD, DFS, Dell Technologies Inc. (DVMT), FCX, FRX, FTI, HOG, JNPR, KMB, KSS, LMT, NBR, NFLX, PNR, R, RAI, RCII, RIG, RL, SIAL, SPGI, STT, TJX, TRV, TXN, UTX, VMW, WAT, WHR, WRB

BARCHART MORNING CALL

Tuesday, October 22nd, 2013View Older Reports

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OVERNIGHT MARKETS AND NEWS

December E-mini S&Ps (ESZ13 +0.01%) this morning are down -0.06% and European stocks are up +0.02% as the markets await this morning's U.S. Sep payrolls report for clues as to when the Fed may start to taper QE3. The payrolls report has been delayed over 2 weeks because of the partial government shutdown. Asian stocks closed mixed: Japan +0.13%, Hong Kong -0.52%, China -1.03%, Taiwan -0.01%, Australia +0.40%, Singapore +0.45%, South Korea -0.04%, India -0.14%. China's Shanghai Stock Index closed down over -1.00%, led by a slide in property developers, after home prices in China's four major cities rose by the most in 2-3/4 years and boosted speculation the government may tighten property curbs. Commodity prices are mixed. Dec crude oil (CLZ13 -0.27%) is down -0.25% at a 3-1/2 month low on negative carryover from Monday's EIA inventory report that showed U.S. crude inventories jumped to a 3-1/2 month high. Dec gasoline (RBZ13 +0.35%) is up +0.32%. Dec gold (GCZ13 -0.12%) is down -0.19% and Dec copper (HGZ13 +0.26%) is up +0.03%. Agricultural and livestock prices are mixed. The dollar index (DXY00 +0.04%) is up +0.05%. EUR/USD (^EURUSD) is down -0.04% and USD/JPY (^USDJPY) is up +0.16%. December T-note prices (ZNZ13 +0.02%) are up +1 tick.

China Sep property prices rose +20% y/y in Shenzhen and Guangzhou, +17% y/y in Shanghai and +16% y/y in Beijing, the biggest increases in 2-3/4 years, which raises concern of a property bubble than forces the government to tighten policies to rein in rising prices.

UK Sep public sector net borrowing rose +9.4 billion pounds, slower than expectations of +10.0 billion pounds, while Aug was revised down to an increase of +10.8 billion pounds from the originally reported +11.5 billion pounds.

U.S. STOCK PREVIEW

The postponed September U.S. unemployment report will be released today. Sep non-farm payrolls are expected to show an increase of +180,000, improving from August's report of +169,000. Today's Sep unemployment rate is expected to be unchanged from August's report of 7.3%. Today's Oct Richmond Fed manufacturing index is expected to be unchanged at 0.0, stabilizing after the -14.0 point drop to 0.0 seen in September. There are 30 of the S&P 500 companies that report earnings today with notable reports including Travelers, United Technologies, Delta Airlines, State Street, Kimberley-Clark, McGraw Hill, Robert Half, Broadcorp, and Amgen.

Equity conferences this week include: 15th Nikkei Global Management Forum on Mon-Tue, Bloomberg Dealmakers Summit on Tue, 4th Annual Manufacturing Strategies on Tue-Wed, Oil Council 2013 North America Assembly on Tue-Wed.

OVERNIGHT U.S. STOCK MOVERS

EMC Corp. (EMC +0.64%) reported Q3 EPS of 40 cents, below consensus of 45 cents.

Travelers Cos. (TRV +0.21%) reported Q3 EPS of $2.35, well ahead of consensus of $2.09.

Lockheed Martin (LMT -2.79%) reported Q3 EPS of $2.57, stronger than consensus of $2.27.

Harley-Davidson (HOG -0.27%) reported Q3 EPS of 73 cents, better than consensus of 72 cents.

Whirlpool (WHR -1.84%) reported Q3 EPS of $2.72, stronger than consensus of $2.63.

Delta Air Lines (DAL -1.28%) reported Q3 EPS of $1.41, better than consensus of $1.35.

Transocean (RIG +1.48%) rose over 4% in pre-market trading after it was announced that it will replace Dell (DELL +0.14%) in the S&P 500 as of the 10/28 close.

TJX (TJX -0.33%) raised its Q3 adjusted EPS view to 73 cents-74 cents from 69 cents-72 cents, better than consensus of 72 cents.

Texas Instruments (TXN +0.69%) fell over 3% in pre-market trading after it reported Q3 EPS of 56 cents, higher than consensus of 53 cents, but lowered guidance on Q4 EPS to 42 cents to 50 cents, below consensus of 51 cents.

Rent-A-Center (RCII +0.33%) reported Q3 EPS of 51 cents, well below consensus of 65 cents, and lowered guidance on fiscal 2013 EPS view to $2.80-$2.85, below consensus of $3.11.

Kohl's (KSS -0.54%) reported that its stores will open at 8 p.m. on Thanksgiving Day Nov 28 and remain open for 28 straight hours through midnight Friday Nov 29 nationwide.

W. R. Berkley (WRB -0.20%) reported Q3 operating EPS of 77 cents, higher than consensus of 74 cents.

Discover (DFS -0.39%) fell 4% in after-hours trading after it reported Q3 EPS of $1.20, below consensus of $1.21.

VMware (VMW +1.50%) surged 13% in after-hours trading after it reported Q3 EPS of 84 cents, better than consensus of 82 cents.

Netflix (NFLX +6.44%) jumped 11% in after-hours trading after it reported Q3 EPS of 52 cents, better than consensus of 49 cents, and raised guidance on Q4 EPS to 47 cents to 73 cents, above consensus of 46 cents.

MARKET COMMENTS

Dec E-mini S&Ps (ESZ13 +0.01%) this morning are down -1.00 point (-0.06%). The S&P 500 index on Monday posted another record high but fell back and closed little changed. Stocks received support on speculation the Fed will maintain stimulus after Chicago Fed President Evans said tapering QE3 "is going to take longer" because of the fiscal strife in Washington. Negative factors for stocks included (1) concerns over global economic growth after Japan Sep exports rose +11.5% y/y, weaker than expectations of +15.6% y/y, and (2) long liquidation ahead of the release of the U.S. Sep employment report on Tuesday. Closes: S&P 500 +0.01%, Dow Jones -0.05%, Nasdaq 100 +0.22%.

Dec 10-year T-notes (ZNZ13 +0.02%) this morning are up +1 tick. Dec 10-year T-note prices on Monday closed lower. Negative factors for T-note prices included (1) reduced safe-haven demand after the S&P 500 rallied up to a fresh all-time high, and (2) position squaring ahead of Tuesday's Sep non-farm payrolls report. Losses were limited after Chicago Fed President Evans said tapering QE3 "is going to take longer" because of the fiscal strife in Washington. Closes: TYZ3 -4.5, FVZ3 -2.50.

The dollar index (DXY00 +0.04%) this morning is up +0.043 (+0.05%). EUR/USD (^EURUSD) is down -0.0005 (-0.04%) and USD/JPY (^USDJPY) is up +0.16 (+0.16%). The dollar index on Monday close slightly higher. The dollar rose as the yen weakened after Japan Sep exports climbed +11.5% y/y, weaker than expectations of +15.6% y/y, and after BOJ Governor Kuroda who said the BOJ will continue easing until 2% inflation has been sustainably achieved. Closes: Dollar index +0.041 (+0.05%), EUR/USD -0.0009 (-0.07%), USD/JPY +0.447 (+0.46%).

Dec WTI crude oil (CLZ13 -0.27%) this morning is down -25 cents (-0.25%) at a fresh 3-1/2 month low and Dec gasoline (RBZ13 +0.35%) is up +0.0084 (+0.32%). Dec crude oil and gasoline prices on Monday closed lower as crude prices fell to a 3-1/2 month low. Bearish factors included (1) the +4.0 million bbl increase in EIA crude inventories to a 3-1/2 month high of 374.5 million bbl for the week ended Oct 11, more than expectations of +3.0 million bbl and (2) the +366,000 barrel increase in inventories at Cushing, OK, the delivery point for WTI futures. Limiting losses in gasoline was the -2.57 million bbl decline in weekly EIA gasoline inventories, more than expectations of -1.0 million bbl. Closes: CLZ3 -1.43 (-1.41%), RBZ3 -0.0157 (-0.59%).

GLOBAL EVENT CALENDAR10/22/2013

US 0830 ET Sep non-farm payrolls expected +180,000, Aug +169,000. Sep private payrolls expected +180,000, Aug +152,000. Sep manufacturing payrolls expected +5,000, Aug +14,000. Sep unemployment rate expected unch at 7.3%, Aug -0.1 to 7.3%.
  0830 ET Sep avg hourly earnings expected +0.2% m/m and +2.1% y/y, Aug +0.2% m/m and +2.2% y/y. Sep avg weekly hours expected unch at 34.5 hours, Aug 34.5 hours.
  1000 ET Oct Richmond Fed manufacturing index expected unchanged at 0.0, Sep -14.0 to 0.0.
  1500 ET Sep USDA Cold Storage.
  1630 ET API weekly U.S. oil statistics.
UK 0430 ET UK Sep public sector net borrowing expected +10.0 billion pounds, Aug +11.5 billion pounds.

U.S. STOCK CALENDAR10/22/2013

Company Name Ticker Time Event Description Period Estimate
Pentair Ltd PNR US Bef-mkt Q3 2013 Earnings Release Q3 2013 0.856
Lockheed Martin Corp LMT US Bef-mkt Q3 2013 Earnings Release Q3 2013 2.266
Ryder System Inc R US Bef-mkt Q3 2013 Earnings Release Q3 2013 1.445
Travelers Cos Inc/The TRV US Bef-mkt Q3 2013 Earnings Release Q3 2013 2.085
United Technologies Corp UTX US Bef-mkt Q3 2013 Earnings Release Q3 2013 1.543
Delta Air Lines Inc DAL US Bef-mkt Q3 2013 Earnings Release Q3 2013 1.348
Freeport-McMoRan Copper & Gold Inc FCX US Bef-mkt Q3 2013 Earnings Release Q3 2013 0.625
Harley-Davidson Inc HOG US Bef-mkt Q3 2013 Earnings Release Q3 2013 0.715
Sigma-Aldrich Corp SIAL US Bef-mkt Q3 2013 Earnings Release Q3 2013 0.993
State Street Corp STT US Bef-mkt Q3 2013 Earnings Release Q3 2013 1.18
Kimberly-Clark Corp KMB US Bef-mkt Q3 2013 Earnings Release Q3 2013 1.397
Reynolds American Inc RAI US Bef-mkt Q3 2013 Earnings Release Q3 2013 0.856
Forest Laboratories Inc FRX US Bef-mkt Q2 2014 Earnings Release Q2 2014 0.143
EI du Pont de Nemours & Co DD US 6:00 Q3 2013 Earnings Release Q3 2013 0.408
Whirlpool Corp WHR US 6:00 Q3 2013 Earnings Release Q3 2013 2.632
Regions Financial Corp RF US 7:00 Q3 2013 Earnings Release Q3 2013 0.213
EMC Corp/MA EMC US 7:00 Q3 2013 Earnings Release Q3 2013 0.453
Coach Inc COH US 7:00 Q1 2014 Earnings Release Q1 2014 0.763
Waters Corp WAT US 7:00 Q3 2013 Earnings Release Q3 2013 1.225
McGraw Hill Financial Inc MHFI US 7:15 Q3 2013 Earnings Release Q3 2013 0.773
EMC Corp/MA EMC US 8:30 Q3 2013 Earnings Call Q3 2013  
Coach Inc COH US 8:30 Q1 2014 Earnings Call Q1 2014  
Waters Corp WAT US 8:30 Q3 2013 Earnings Call Q3 2013  
McGraw Hill Financial Inc MHFI US 8:30 Q3 2013 Earnings Call Q3 2013  
Pentair Ltd PNR US 9:00 Q3 2013 Earnings Call Q3 2013  
Travelers Cos Inc/The TRV US 9:00 Q3 2013 Earnings Call Q3 2013  
EI du Pont de Nemours & Co DD US 9:00 Q3 2013 Earnings Call Q3 2013  
United Technologies Corp UTX US 9:00 Q3 2013 Earnings Call Q3 2013  
Harley-Davidson Inc HOG US 9:00 Q3 2013 Earnings Call Q3 2013  
Reynolds American Inc RAI US 9:00 Q3 2013 Earnings Call Q3 2013  
State Street Corp STT US 9:30 Q3 2013 Earnings Call Q3 2013  
Broadcom Corp BRCM US Aft-mkt Q3 2013 Earnings Release Q3 2013 0.682
ACE Ltd ACE US Aft-mkt Q3 2013 Earnings Release Q3 2013 2.247
Nabors Industries Ltd NBR US Aft-mkt Q3 2013 Earnings Release Q3 2013 0.19
FMC Technologies Inc FTI US Aft-mkt Q3 2013 Earnings Release Q3 2013 0.586
Amgen Inc AMGN US Aft-mkt Q3 2013 Earnings Release Q3 2013 1.775
Juniper Networks Inc JNPR US Aft-mkt Q3 2013 Earnings Release Q3 2013 0.311
Cintas Corp CTAS US   Annual General Meeting
Stocks: DVMT, TRV, LMT, HOG, WHR, DAL, RIG, TJX, TXN, RCII, KSS, WRB, DFS, VMW, NFLX, PNR, R, UTX, FCX, SIAL, STT, KMB, RAI, FRX, DD, RL, COH, WAT, SPGI, AVGO, ACE, NBR, FTI, AMGN, JNPR, CTAS