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BARCHART MORNING CALL 1/17

|Includes:AXP, BBY, BK, CMA, COF, GE, INTC, Morgan Stanley (MS), MTB, RDEN, SLB, SLM, SNWV, STI, SYY, TSCO

BARCHART MORNING CALL

Friday, January 17th, 2014View Older Reports

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OVERNIGHT MARKETS AND NEWS

March E-mini S&Ps (ESH14 +0.29%) this morning are up +0.33% and European stocks are up +0.32% on better-than-expected stock earnings results. Asian stocks closed mixed: Japan -0.08%, Hong Kong +0.64%, China -1.51%, Taiwan -0.19%, Australia -0.06%, Singapore +0.22%, South Korea -0.74%, India -0.95%. European stocks also received a boost on stronger-than-expected UK retail sales along with a drop in government bond yields. The yield on Portugal's 10-year bond fell for a sixth day after Standard & Poor's removed the country's debt rating from "creditwatch," which reduces the risk of a downgrade. Commodity prices are mixed. Feb crude oil (CLG14 +0.95%) is up +0.60%. Feb gasoline (RBG14 +0.92%) is up +0.37%. Feb gold (GCG14 -0.02%) is up +0.04%. March copper (HGH14 +0.49%) is down -0.25%. Agriculture and livestock prices are weaker. The dollar index (DXY00 +0.10%) is up +0.04%. EUR/USD (^EURUSD) is down -0.17%. USD/JPY (^USDJPY) is up +0.07%. March T-note prices (ZNH14 +0.08%) are up +1 tick.

Portugal's long-term government bond rating was removed from "creditwatch" by Standard & Poor's who said the action by the coalition Portuguese government to stick to the EU-led bailout program has reduced the risk of a credit downgrade.

UK Dec retail sales ex autos jumped +2.8% m/m, well ahead of expectations of +0.3% m/m and the biggest monthly gain in 5-1/2 years. On a year-over-year basis, Dec retail sales ex autos surged +6.1% y/y, nearly double expectations of and +3.2% y/y and the largest annual increase in 9-1/4 years.

UK Dec retail sales including autos jumped +2.6% m/m, well ahead of expectations of +0.3% m/m and the biggest monthly gain in 3-3/4 years. On a year-over-year basis, Dec retail sales including autos rose +5.3% y/y, over double expectations of +2.5% y/y and the biggest annual increase in 9-years.

Eurozone Nov construction output fell -0.6% m/m, the third straight monthly decline, and fell -1.7% y/y, the ninth consecutive year-over-year decrease.

Japan Dec consumer confidence unexpectedly fell -1.2 to 41.3, weaker than expectations of a +0.5 point increase to 43.0.

U.S. STOCK PREVIEW

Today's early-Jan U.S. consumer confidence index from the University of Michigan is expected to show a +1.0 point increase to 83.5, adding to the +7.4 point increase to 82.5 seen in December. Today's Dec housing starts report is expected to show a decline of -9.3% to 990,000, reversing part of the +22.1% surge to 1.091 million seen in November. Today's Dec industrial production report is expected to show a +0.3% m/m increase, adding to the +1.1% surge seen in November.

There are 7 of the S&P 500 companies that report earnings today with notable reports including Morgan Stanley (consensus $0.44), GE (0.53), Bank of New York Mellon (0.54), Schlumberger (1.32). There are no equity conferences today.

OVERNIGHT U.S. STOCK MOVERS

Morgan Stanley (MS -0.68%) reported Q4 EPS of 49 cents, stronger than consensus of 44 cents.

General Electric (GE -0.51%) reported Q4 EPS of 53 cents, right on consensus.

Comerica (CMA -0.63%) reported Q4 EPS of 77 cents, better than consensus of 74 cents.

Best Buy (BBY -28.59%) was downgraded to 'Neutral' from 'Buy' at UBS and at Goldman.

SunTrust Banks (STI -1.12%) reported Q4 EPS of 77 cents, higher than consensus of 70 cents.

Schlumberger (SLM -0.37%) reported Q4 EPS of $1.35, better than expectations of $1.32.

Tractor Supply (TSCO -1.16%) will replace Life Technologies (LIFE +0.01%) in the S&P 500 Index as of the close on Jan 23.

Elizabeth Arden (RDEN -1.43%) plunged 20% in after-hours trading after it said it sees Q2 EPS ex-items of $1.05-$1.08, well below consensus of $1.47, and then said it will withdraw its guidance on fiscal 2014 EPS.

Sysco (SYY +0.35%) fell over 2% in after-hours trading after Reuters reported that Florida, Indiana and other U.S. states are reviewing the merger of Sysco and U.S. Foods.

Con-way (CNW -1.31%) fell over 4% in after-hours trading after it said that it sees Q4 EPS approximating 21 cents, well below consensus of 39 cents.

American Express (AXP -0.53%) reported Q4 EPS of $1.21, weaker tthan consensus of $1.25.

Capital One (COF -0.77%) reported Q4 EPS of $1.45, below consensus of $1.54, and then was downgraded to 'Neutral' from 'Positive' at Susquehanna.

Intel (INTC -0.49%) slipped over 4% in after-hours trading after it reported Q4 EPS of 51 cents, below consensus of 52 cents, and said fiscal 2014 revenue will be flat vs. 2013 at $52.7 billion, below consensus of $53.21 billion.

MARKET COMMENTS

Mar E-mini S&Ps (ESH14 +0.29%) this morning are up +6.00 points (+0.33%). The S&P 500 on Thursday fell back from Wednesday's record high after mixed quarterly earnings results spurred profit-taking and long liquidation. Declines were subdued after U.S. weekly initial unemployment claims fell -2,000 to a 6-week low of 326,000 and after the Jan Philadelphia Fed manufacturing index rose +3.0 to 9.4, slightly stronger than expectations of 8.7. Closes: S&P 500 -0.13%, Dow Jones -0.39%, Nasdaq 100 +0.04%.

Mar 10-year T-notes (ZNH14 +0.08%) this morning are up +1 tick. Mar 10-year T-note futures prices on Thursday closed higher. Bullish factors included (1) increased safe-haven demand for T-notes as stocks faltered, and (2) U.S. Treasury data that showed China, the world's biggest holder of U.S. debt, increased its Treasury holdings in Nov by +$12.2 billion to record $1.317 trillion, and Japan, the world's second biggest holder of U.S. debt, increased its Treasury holdings in Nov by +$12 billion to a record $1.186 trillion. Closes: TYH4 +9.5, FVH4 +4.75.

The dollar index (DXY00 +0.10%) this morning is up +0.036 (+0.04%). EUR/USD (^EURUSD) is down -0.0023 (-0.17%). USD/JPY (^USDJPY) is up +0.07 (+0.07%). The dollar index on Thursday closed slightly lower. EUR/USD received a boost from comments from ECB Executive Board member Coeure who said Eurozone banks may not need another round of long-term loans as growth recovers in Europe. Closes: Dollar index -0.117 (-0.14%), EUR/USD +0.00146 (+0.11%), USD/JPY -0.206 (-0.20%).

Feb WTI crude oil (CLG14 +0.95%) this morning is up +56 cents (+0.60) and Feb gasoline (RBG14 +0.92%) is up +0.0096 (+0.37%). Feb crude oil and gasoline prices on Thursday closed lower. Pressuring crude prices was a report from OPEC saying that increased crude production from producers outside of OPEC will result in reduced demand for OPEC crude by -300,000 barrels a day this year compared with last year. Gasoline prices were undercut by negative carry-over from Wednesday's EIA inventory report that showed weekly EIA gasoline stockpiles surged +6.183 million bbl to an 11-month high of 233.152 million bbl. Closes: CLG4 -0.21 (-0.22%), RBG4 -0.0313 (-1.19%).

GLOBAL EVENT CALENDAR01/17/2014

US 0830 ET Dec housing starts expected at -9.3% to 990,000, Nov +22.1% to 1.091 million. Dec building permits expected at -0.5% to 1.012 million, Nov -2.1% to 1.017 million.
  0915 ET Dec industrial production expected +0.3% m/m, Nov +1.1%. Dec manufacturing production expected +0.3%, Nov +0.6% m/m. Dec capacity utilization expected +0.1 to 79.1%, Nov +0.8 to 79.0%.
  0955 ET Preliminary Jan U.S. consumer confidence (University of Michigan) expected +1.0 to 83.5, Dec +7.4 to 82.5.
  1230 ET Richmond Fed President Jeffrey Lacker speaks on the economic outlook to the Richmond chapter of the Risk Management Association.
JPN 0000 ET Japan Dec consumer confidence expected +0.5 to 43.0, Nov 42.5.
UK 0430 ET UK Dec retail sales ex autos expected +0.3% m/m and +3.2% y/y, Nov +0.4% m/m and +2.3% y/y. Dec retail sales including autos expected +0.3% m/m and +2.5% y/y, Nov +0.3% m/m and +2.0% y/y.
EUR 0500 ET Eurozone Nov construction output, Oct -1.2% m/m and -2.4% y/y.
CHI 2030 ET China Dec property prices.
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U.S. STOCK CALENDAR01/17/2014

Company Name Ticker Time Event Description Period Estimate
M&T Bank Corp MTB US Bef-mkt Q4 2013 Earnings Release Q4 2013 1.91
Schlumberger Ltd SLB US 6:00 Q4 2013 Earnings Release Q4 2013 1.322
SunTrust Banks Inc STI US 6:00 Q4 2013 Earnings Release Q4 2013 0.696
Bank of New York Mellon Corp/The BK US 6:30 Q4 2013 Earnings Release Q4 2013 0.541
General Electric Co GE US 6:30 Q4 2013 Earnings Release Q4 2013 0.534
Comerica Inc CMA US 6:40 Q4 2013 Earnings Release Q4 2013 0.743
Morgan Stanley MS US 7:15 Q4 2013 Earnings Release Q4 2013 0.44
Bank of New York Mellon Corp/The BK US 8:00 Q4 2013 Earnings Call Q4 2013  
Comerica Inc CMA US 8:00 Q4 2013 Earnings Call Q4 2013  
SunTrust Banks Inc STI US 8:00 Q4 2013 Earnings Call Q4 2013  
SLM Corp SLM US 8:00 Q4 2013 Earnings Call Q4 2013  
General Electric Co GE US 8:30 Q4 2013 Earnings Call Q4 2013  
Schlumberger Ltd SLB US 9:00 Q4 2013 Earnings Call Q4 2013
Click to enlarge
Stocks: MS, GE, CMA, BBY, STI, SLM, TSCO, RDEN, SYY, SNWV, AXP, COF, INTC, MTB, SLB, BK