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BARCHART MORNING CALL 2/26

|Includes:ADSK, AES, AMC, APA, AVGO, BA, CBI, CHK, CNP, CVC, DE, DLTR, EIX, FSLR, LB, LOW, NFX, QEP, RIG, RRD, SPN, TEG, Target Corporation (TGT), TJX, WFT, Y

BARCHART MORNING CALL

Wednesday, February 26th, 2014View Older Reports

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OVERNIGHT MARKETS AND NEWS

March E-mini S&Ps (ESH14 +0.11%) this morning are up +0.18% and European stocks are down -0.15% after Ukraine's currency, the hryvnia, weakened to a record low as the country's interim administration struggles to secure as much as $35 billion in financial aid to stave off a possible default. Losses in European stocks were limited after German Mar GfK consumer confidence unexpectedly rose to a 7-year high. Asian stocks closed mostly higher: Japan -0.54%, Hong Kong +0.54%, China +0.25%, Taiwan +0.29%, Australia +0.06%, Singapore -0.50%, South Korea +0.42%, India +0.65%. China's Shanghai Stock Index recovered from a 1-month low and finished higher after China's benchmark money-market rates fell to a 7-month low as efforts by the PBOC to weaken the yuan boosted the supply of cash in the financial system. Commodity prices are mixed. Apr crude oil (CLJ14 +0.52%) is up +0.35%. Apr gasoline (RBJ14 -0.11%) is down -0.14%. Apr gold (GCJ14 -0.51%) is down -0.24%. March copper (HGH14 +0.09%) is up +0.11% after LME copper inventories fell -2,750 MT to 276,400 MT, a 14-month low. Agriculture and livestock prices are mixed as nearest-futures (G14) Feb cattle climbed to a record high of $1.4695 a pound. The dollar index (DXY00 +0.11%) is up +0.02%. EUR/USD (^EURUSD) is down -0.04%. USD/JPY (^USDJPY) is up +0.11%. March T-note prices (ZNH14 -0.10%) are down -2.5 ticks.

German Mar GfK consumer confidence unexpectedly rose +0.2 to 8.5 from an upward revised 8.3 in Feb, higher than expectations of unch at 8.2 and the highest level in 7-years.

UK Q4 GDP was revised to +0.7% q/q and +2.7% y/y, slightly lower than the originally reported +0.7% q/q and +2.8% y/y. Q4 private consumption was revised down to +0.4% q/q from +0.6% q/q and Q4 government spending was revised down to +0.3% q/q from +0.5% q/q. Q4 exports were revised upward to +0.4% q/q from +0.2% q/q and Q4 imports were revised upward to -0.9% q/q from -1.0 q/q.

UK Q4 total business investment rose +2.4% q/q and +8.5% y/y, higher than expectations of +1.3% q/q.

U.S. STOCK PREVIEW

Today's Jan new home sales report is expected to show a decline of -3.4% to 400,000, adding to the decline of -7.0% to 414,000 seen in December. The markets will be watching to see if there is some recovery in mortgage activity after last week's drops that were likely caused mainly by bad weather. The MBA mortgage purchase sub-index last week fell sharply by -6.3% to a 2-1/2 year low of 160.7. The Treasury today will sell $35 billion in 5-year T-notes and $13 billion of 2-year floating rate notes. The Treasury will then wrap up this week's T-note package by selling $29 billion of 7-year T-notes on Thursday. There are 13 of the S&P 500 companies that report earnings today: Dollar Tree (consensus $1.05), Cablevision (0.09), Target (1.24), TJX (0.83), Chesapeake Energy (0.40), AES (0.29), CenterPoint Energy (0.28), Lowe's (0.31), Transocean (0.72), Autodesk (0.34), L Brands (0.34), Integrys Energy Group (0.94), Newfield Exploration (0.44).

Equity conferences during the remainder of this week include: J. P. Morgan Global High Yield & Leveraged Finance Conference on Mon-Wed, RBC Capital Markets Healthcare Conference on Mon-Wed, 10th Regulatory and Compliance Congress on Tue-Wed, Robert W. Baird Business Solutions Conference Tue-Wed, Crude By Rail 2014 on Tue-Wed, Super Return International 2014 on Tue-Wed, Gabelli & Co Inc Industrial Flow & Infrastructure Conference on Wed, RBC Capital Markets Global Health Care Conference on Wed, Alembic Global Advisors Fourth Annual Global Chemical Conference on Wed, Keefe, Bruyette, & Woods Boston Bank Conference on Wed, KeyBanc Capital Markets Consumer Conference on Wed, Bank of America Merrill Lynch Global Agriculture Conference on Wed-Thu, Simmons Energy Conference on Thu, and Stifel Industrials Conference on Thu.

OVERNIGHT U.S. STOCK MOVERS

Target (TGT +0.66%) reported Q4 adjusted EPS of $1.30, well ahead of consensus of 79 cents.

Lowe's (LOW +1.88%) reported Q4 EPS of 31 cents, right on expectations.

Chesapeake Energy (CHK -1.28%) reported Q4 EPS of 27 cents, well below consensus of 40 cents.

Dollar Tree (DLTR +0.67%) reported Q4 EPS of $1.02 weaker than consensus of $1.05.

Boeing (BA -2.17%) was awarded a $2.07 billion government contract modification for the procurement of 16 P-8A Multi-mission Maritime Aircraft full rate production Lot I aircraft and 16 Ancillary Mission Equipment kits for the U.S. Navy.

Weatherford (WFT -0.13%) reported Q4 adjusted EPS of 7 cents, right on consensus.

Alleghany (Y -0.25%) reported Q4 EPS of $6.99, better than consensus of $6.53.

Superior Energy (SPN +0.70%) reported Q4 adjusted EPS of 30 cents, below consensus of 31 cents.

Avago (AVGO -0.96%) reported Q1 EPS of 84 cents, stronger than consensus of 78 cents.

R.R. Donnelley (RRD -1.37%) reported Q4 EPS of 49 cents, higher than consensus of 38 cents.

AMC Entertainment (AMC +0.36%) reported Q4 EPS ex-items of 18 cents, right on expectations.

Chicago Bridge & Iron (CBI -0.97%) reported Q4 EPS o $1.80, well above consensus of $1.16.

First Solar (FSLR +0.48%) dropped over 10% in after-hours trading after it reported Q4 adjusted EPS of 89 cents, weaker than consensus of 99 cents, and then lowerd guidance on Q1 EPS to 50 cents-60 cents, well below consensus of 84 cents.

Edison International (EIX -0.50%) reported Q4 core EPS of 81 cents, better than consensus of 67 cents.

MARKET COMMENTS

Mar E-mini S&Ps (ESH14 +0.11%) this morning are up +3.25 points (+0.18%). The S&P 500 on Tuesday closed slightly lower. Bearish factors included (1) the -1.3 point drop in the U.S. Feb consumer confidence index from the Conference Board to 78.1, which was -1.9 points below expectations of 80.0, and (2) the sharp -18 point decline in the Richmond Fed manufacturing index to a 7-month low of -6. Bullish factors for stocks included (1) the +0.76% m/m rise in the Dec S&P CaseShiller composite-20 home price index, better than expectations of +0.6% m/m, and (2) better-than-expected Q4 earnings results. Closes: S&P 500 -0.13%, Dow Jones -0.17%, Nasdaq 100 -0.18%.

Mar 10-year T-notes (ZNH14 -0.10%) this morning are down -2.5 ticks. Mar 10-year T-note futures prices on Tuesday closed higher on economic concerns after U.S. Feb consumer confidence fell more than expected and the Feb Richmond Fed manufacturing index dropped to its lowest level in 7 months. Closes: TYH4 +11.50, FVH4 +6.25.

The dollar index (DXY00 +0.11%) this morning is up +0.020 (+0.02%). EUR/USD (^EURUSD) is down -0.0005 (-0.04%). USD/JPY (^USDJPY) is up +0.11 (+0.11%). The dollar index on Tuesday closed slightly lower after a bigger than expected decline in U.S. Feb consumer confidence fueled concerns about the sustainability of the U.S. economic recovery. EUR/USD fell back from its best levels after Russia's Deputy Finance Minister said that the Ukraine has a "high" chance of defaulting on its debt, which would be euro-negative. Closes: Dollar index -0.062 (-0.08%), EUR/USD +0.00010 (+0.07%), USD/JPY -0.263 (-0.26%).

Apr WTI crude oil (CLJ14 +0.52%) this morning is up +36 cents (+0.35%) and Apr gasoline (RBJ14 -0.11%) is down -0.0043 (-0.14%). Apr crude and gasoline prices Tuesday closed lower. Negative factors for crude included (1) the larger-than-expected drop in U.S. Feb consumer confidence, (2) expectations for weekly EIA crude inventories to increase by +1.15 million bbl on Wed, and (3) severe winter weather forecast for the central and eastern U.S. that may reduce automobile travel and curb demand for gasoline. Closes: CLJ4 -0.99 (-0.96%), RBJ4 -0.0354 (-1.18%).

GLOBAL EVENT CALENDAR02/26/2014

US 0700 ET Weekly MBA mortgage applications, previous -4.1% with purchase sub-index -6.3% and refi sub-index -2.7%.
  1000 ET Jan new home sales expected -3.4% to 400,000, Dec -7.0% to 414,000.
  1030 ET EIA Weekly Petroleum Status Report.
  1130 ET Treasury auctions $13 billion 2-year floating rate notes.
  1200 ET Boston Fed President Eric Rosengren speaks about the economic outlook to the Boston Economic Club.
  1300 ET Treasury auctions $35 billion 5-year T-notes.
GER 0200 ET German Mar GfK consumer confidence expected unch at 8.2, Feb 8.2.
UK 0430 ET Revised UK Q4 GDP, previous +0.7% q/q and +2.8% y/y.
Click to enlarge

U.S. STOCK CALENDAR02/26/2014

Company Name Ticker Time Event Description Period Estimate
Dollar Tree Inc DLTR US Bef-mkt Q4 2014 Earnings Release Q4 2014 1.05
Cablevision Systems Corp CVC US Bef-mkt Q4 2013 Earnings Release Q4 2013 0.089
Target Corp TGT US Bef-mkt Q4 2014 Earnings Release Q4 2014 1.24
TJX Cos Inc/The TJX US Bef-mkt Q4 2014 Earnings Release Q4 2014 0.825
Chesapeake Energy Corp CHK US Bef-mkt Q4 2013 Earnings Release Q4 2013 0.4
AES Corp/VA AES US Bef-mkt Q4 2013 Earnings Release Q4 2013 0.294
CenterPoint Energy Inc CNP US Bef-mkt Q4 2013 Earnings Release Q4 2013 0.279
Lowe's Cos Inc LOW US Bef-mkt Q4 2014 Earnings Release Q4 2014 0.309
Dollar Tree Inc DLTR US 9:00 Q4 2014 Earnings Call Q4 2014  
Apache Corp APA US 9:00 Investor Day Y 2014  
Chesapeake Energy Corp CHK US 9:00 Q4 2013 Earnings Call Q4 2013  
AES Corp/VA AES US 9:00 Q4 2013 Earnings Call Q4 2013  
QEP Resources Inc QEP US 9:00 Q4 2013 Earnings Call Q4 2013  
Lowe's Cos Inc LOW US 9:00 Q4 2014 Earnings Call Q4 2014  
Range Resources Corp RRC US 9:00 Q4 2013 Earnings Call Q4 2013  
Transocean Ltd RIG US Aft-mkt Q4 2013 Earnings Release Q4 2013 0.72
Autodesk Inc ADSK US Aft-mkt Q4 2014 Earnings Release Q4 2014 0.339
L Brands Inc LB US Aft-mkt Q4 2014 Earnings Release Q4 2014 1.613
Integrys Energy Group Inc TEG US Aft-mkt Q4 2013 Earnings Release Q4 2013 0.936
Deere & Co DE US   Annual General Meeting    
Newfield Exploration Co NFX US   Q4 2013 Earnings Release Q4 2013 0.442
Click to enlarge
Stocks: TGT, LOW, CHK, DLTR, BA, WFT, Y, SPN, AVGO, RRD, AMC, CBI, FSLR, EIX, CVC, TJX, AES, CNP, APA, QEP, RIG, ADSK, LB, TEG, DE, NFX