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BARCHART MORNING CALL 2/28

|Includes:CR, CRM, D, DECK, DIS, ESL, ETN, FOXA, GPS, Iron Mountain Inc. (IRM), MNST, MTZ, NRG, PGR, POM, PRGO, ROST, SWN, UHS, ZLC

BARCHART MORNING CALL

Friday, February 28th, 2014View Older Reports

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OVERNIGHT MARKETS AND NEWS

March E-mini S&Ps (ESH14 -0.11%) this morning are down -0.15% and European stocks are down -0.56% ahead of an expected downward revision to U.S. Q4 GDP. German bunds declined and EUR/USD rose after the Eurozone Feb CPI estimate rose a more-than-expected +0.8% y/y, which reduces pressure on the ECB to add to its stimulus measures. Asian stocks closed mixed: Japan -0.55%, Hong Kong +0.04%, China +1.15%, Taiwan closed for holiday, Australia -0.12%, Singapore +0.45%, South Korea +0.05%, India +0.63%. Commodity prices are mixed. Apr crude oil (CLJ14 -0.17%) is down -0.08%. Apr gasoline (RBJ14 -0.36%) is down -0.31%. Apr gold (GCJ14 -0.26%) is down -0.19%. March copper (HGH14 +0.05%) is up +0.11%. Agriculture and livestock prices are mostly higher. The dollar index (DXY00 -0.51%) is down -0.46% at a 2-month low. EUR/USD (^EURUSD) is up +0.61% at a 1-3/4 month high as stronger-than-expected Eurozone inflation data dampens speculation the ECB will add to stimulus when it convenes next week. USD/JPY (^USDJPY) is down -0.22%. March T-note prices (ZNH14 -0.12%) are down -6 ticks.

The Feb Eurozone CPI estimate rose +0.8% y/y, higher than expectations of +0.7% y/y. The Feb core CPI climbed +1.0% y/y, higher than expectations of +0.8% y/y.

The Eurozone Jan unemployment rate was unch at 12.0%, right on expectations.

German Jan retail sales rose +2.5% m/m, better than expectations of +1.0% m/m and the largest monthly gain in 6-3/4 years. On an annual basis, Jan retail sales unexpectedly rose +0.9% y/y, better than expectations of a -1.7% y/y decline.

UK Feb nationwide house prices rose +0.6% m/m and +9.4% y/y, better than expectations of +0.5% m/m and +9.0% y/y with the +9.4% y/y gain the largest annual increase in 3-1/2 years.

Japan Jan industrial production rose +4.0% m/m, the most in 2-1/2 years and stronger than expectations of +2.8% m/m. On an annual basis, Jan industrial production rose +10.6% y/y, stronger than expectations of +9.4% y/y and the most in 1-3/4 years.

Japan Jan retail sale rose +1.4% m/m and +4.4% y/y, better than expectations of +1.3% m/m and +3.8% y/y

Japan Jan national CPI climbed +1.4% y/y, higher than expectations of +1.3% y/y. Jan national CPI ex food & energy rose +0.7% y/y, right on expectations.

The Japan Jan jobless rate was unch at a 6-1/2 year low of 3.7%, right on expectations. The Jan job-to-applicant ratio rose +0.1 to 1.04, right on expectations and the highest in 6-1/2 years.

Japan Jan overall household spending rose +1.1% y/y, stronger than expectations of +0.5% y/y.

U.S. STOCK PREVIEW

Today's Q4 GDP report is expected to be revised lower to +2.5% (q/q annualized) from the preliminary report of +3.2%. The downward revision is expected to stem mainly from an expected downward revision in Q4 personal consumption to +2.9% from +3.3%. Today's Feb Chicago PMI is expected to show a -3.2 point decline to 56.4, adding to the -1.2 point decline to 59.6 seen in January. Today's final-Feb U.S. consumer confidence index from the University of Michigan is expected to be unchanged from early-Feb at 81.2. Today's Jan pending home sales report is expected to show a +1.8% m/m increase, recovering a bit after the sharp -8.7% drop seen in December. There are 3 of the S&P 500 companies that report earnings today: Iron Mountain (consensus $0.22), NRG Energy (0.23), Pepco Holdings (0.21). There are no equity conferences today.

OVERNIGHT U.S. STOCK MOVERS

Iron Mountain (IRM -0.42%) reported Q4 EPS of 15 cents, well below consensus of 22 cents.

Pepco Holdings (POM -0.92%) reported Q4 EPS of 24 cents, higher than consensus of 21 cents.

Dominion (D -0.26%) was downgraded to 'Hold' from 'Buy' at Argus due to valuation.

Crane (CR -0.15%) was upgraded to 'Buy' from 'Neutral' at Citigroup.

Southwestern Energy (SWN +1.43%) reported Q4 adjusted EPS of 54 cents, better than consensus of 53 cents.

Universal Health (UHS -0.28%) reported Q4 EPS of $1.24, well ahead of consensus of $1.08.

MasTec (MTZ -0.39%) reported Q4 adjusted EPS of 53 cents, consensus 52 cents.

Gabelli reported an 8.08% stake in Zale (ZLC +0.37%) .

Esterline (ESL +0.87%) reported Q1 adjusted EPS of $1.08, stronger than consensus of $1.05.

Deckers Outdoor (DECK +2.83%) slumped 14% in after-hours trading after it reported Q4 EPS of $4.04, higher than consensus of $3.80, but then lowered guidance on Q1 EPS to a loss of -16 cents, well below consensus of a 10 cent profit.

Monster Beverage (MNST +0.23%) reported Q4 EPS of 44 cents, weaker than consensus of 46 cents.

Salesforce.com (CRM +3.89%) reported Q4 adjusted EPS of 7 cents, better than consensus of 6 cents.

Ross Stores (ROST +0.86%) reported Q4 EPS $1.02, right on consensus, but reported Q4 revenue of $2.74 billion, slightly below consensus of $2.75 billion.

Gap (GPS -0.52%) reported Q4 EPS of 68 cents, higher than consensus of 66 cents.

MARKET COMMENTS

Mar E-mini S&Ps (ESH14 -0.11%) this morning are down -2.75 points (-0.15%). The S&P 500 on Thursday opened lower on geopolitical concerns from the civil unrest in Ukraine, but shook off early losses and moved higher after U.S. Jan durable goods ex-transportation unexpectedly rose +1.1%, better than expectations of a -0.3% decline. Stock prices moved even higher after Fed Chair Yellen said the Fed may slow its tapering regime should the economy weaken. Closes: S&P 500 +0.49%, Dow Jones +0.46%, Nasdaq 100 +0.63%.

Mar 10-year T-notes (ZNH14 -0.12%) this morning are down -6 ticks. Mar 10-year T-note futures prices Thursday posted a 3-week high and closed higher. Bullish factors included (1) increased safe-haven demand from the civil unrest in Ukraine after Russia held troop exercises on its western border and put jet fighters on alert, and (2) the unexpected increase in weekly U.S. jobless claims. Prices came off of their best levels after U.S. Jan durable goods orders ex-transportation unexpectedly increased. Closes: TYH4 +7.50, FVH4 +3.75.

The dollar index (DXY00 -0.51%) this morning is down -0.371 (-0.46%) at a 2-month low. EUR/USD (^EURUSD) is up +0.0084 (+0.61%) at a 1-3/4 month high. USD/JPY (^USDJPY) is down -0.22 (-0.22%). The dollar index on Thursday fell back from a 2-week high and closed lower after a rally in stocks reduced safe-haven demand for the dollar. EUR/USD fell to a 2-week low after German Feb CPI eased to a 3-1/2 year low of +1.0% y/y, which boosted speculation the ECB may expand its easing measures at its meeting next week. EUR/USD recovered its losses, though, and closed higher after the IMF said it is "ready to respond" to aid requests from the Ukraine, which boosted the hryvnia and was positive for EUR/USD. Closes: Dollar index -0.144 (-0.18%), EUR/USD +0.00237 (+0.17%), USD/JPY -0.230 (-0.22%).

Apr WTI crude oil (CLJ14 -0.17%) this morning is down -8 cents (-0.08%) and Apr gasoline (RBJ14 -0.36%) is down -0.0093 (-0.31%). Apr crude and gasoline prices Thursday closed lower. Negative factors included (1) the unexpected rise in U.S weekly jobless claims, and (2) comments from Fed Chair Yellen who reiterated that the Fed will maintain its pace of tapering QE3. Bullish factors included strength in stocks and the weaker dollar. Closes: CLJ4 -0.19 (-0.19%), RBJ4 -0.0252 (-0.84%).

GLOBAL EVENT CALENDAR02/28/2014

US 0500 ET Dallas Fed President Richard Fisher speaks on monetary policy at the Swiss National Bank in Zurich.
  0830 ET Revised Q4 GDP expected +2.5% q/q annualized, previous +3.2%. Q4 personal consumption expected +2.9%, previous +3.3%. Q4 GDP price index expected unrevised at +1.3%. Q4 core PCE deflator expected unrevised at +1.1% q/q.
  0945 ET Feb Chicago PMI expected -3.2 to 56.4, Jan -1.2 to 59.6.
  0955 ET Final-Feb U.S. consumer confidence index (University of Michigan) expected unch at 81.2, early-Feb -1.3 to 81.2.
  1000 ET Jan pending home sales expected +1.8% m/m and -10.8% y/y, Dec -8.7% m/m and -6.1% y/y.
  1015 ET Fed Governor Jeremy Stein along with Minneapolis Fed President Narayana Kocherlakota, Chicago Fed President Charles Evans and Philadelphia Fed President Charles Plosser will speak on a panel discussion on interactions between monetary policy and financial stability.
JPN 0000 ET Japan Jan construction orders, Dec +4.9% y/y.
  0000 ET Japan Jan housing starts expected +15.0% y/y to 1.012 million, Dec +18.0% to 1.055 million.
GER 0200 ET German Jan retail sales expected +1.0% m/m and -1.7% y/y, Dec -1.7% m/m and -1.5% y/y.
UK 0200 ET UK Feb nationwide house prices expected +0.5% m/m and +9.0% y/y, Jan +0.7% m/m and +8.8% y/y.
EUR 0500 ET Eurozone Feb unemployment rate expected unch at 12.0%, Jan 12.0%.
  0500 ET Eurozone Feb CPI estimate expected +0.7% y/y and core CPI expected +0.8% y/y.
CHI 2000 ET China Feb manufacturing PMI expected -0.5 to 50.0, Jan -0.5 to 50.5.
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U.S. STOCK CALENDAR02/28/2014

Company Name Ticker Time Event Description Period Estimate
Iron Mountain Inc IRM US Bef-mkt Q4 2013 Earnings Release Q4 2013 0.219
NRG Energy Inc NRG US Bef-mkt Q4 2013 Earnings Release Q4 2013 0.23
Pepco Holdings Inc POM US Bef-mkt Q4 2013 Earnings Release Q4 2013 0.21
Perrigo Co Plc PRGO US 8:00 Investor Day Y 2014  
Iron Mountain Inc IRM US 8:30 Q4 2013 Earnings Call Q4 2013  
Eaton Corp PLC ETN US 8:30 Analyst Meeting Y 2014  
Progressive Corp/The PGR US 9:00 Investor Relations Conference Call    
NRG Energy Inc NRG US 9:00 Q4 2013 Earnings Call Q4 2013  
Southwestern Energy Co SWN US 10:00 Q4 2013 Earnings Call Q4 2013  
Pepco Holdings Inc POM US 10:00 Q4 2013 Earnings Call Q4 2013  
Twenty-First Century Fox Inc FOXA US   U.S. Box Office Release of Movie Son of God""    
Walt Disney Co/The DIS US   U.S. Box Office Release of Movie The Wind Rises""  
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Stocks: IRM, POM, D, CR, SWN, UHS, MTZ, ZLC, ESL, DECK, MNST, CRM, ROST, GPS, NRG, PRGO, ETN, PGR, FOXA, DIS