BARCHART MORNING CALL|
Thursday, March 27th, 2014View Older Reports
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OVERNIGHT MARKETS AND NEWS
June E-mini S&Ps (ESM14 +0.22%) this morning are up +0.24% and European stocks are up +0.03% as Ukraine reached a preliminary deal with the IMF for up to $27 billion of international support to avert default and limit economic damage from the 4-month long political crisis. Another boost to European stocks was the surge in UK Feb retail sales by more than three times expectations. Asian stocks closed mixed: Japan +1.01%, Hong Kong -0.24%, China -0.71%, Taiwan +0.48%, Australia -0.50%, Singapore +0.61%, South Korea +0.85%, India +0.54%. Commodity prices are mixed. May crude oil (CLK14 +0.63%) is up +0.10%. May gasoline (RBK14 +0.50%) is up +0.23%. Apr gold (GCJ14 -0.68%) is down -0.67% at a 1-1/2 month low on long liquidation fueled by expectations for the Fed to continue to taper QE3. May copper (HGK14 +0.93%) is up +0.96%. Agriculture and livestock prices are mixed. The dollar index (DXY00 +0.15%) is up +0.12%. EUR/USD (^EURUSD) is down -0.16% at a 3-week low on speculation the ECB at next week's policy meeting may push ahead with additional stimulus measures to weaken the euro. USD/JPY (^USDJPY) is up +0.18%. June T-note prices (ZNM14 -0.09%) are down -2 ticks.
Eurozone Feb M3 money supply rose +1.3% y/y and +1.2% 3-mon avg, right on expectations. Eurozone Feb lending to companies and households contracted -2.2% y/y, the 22nd consecutive month lending has contracted.
UK Feb retail sales ex autos rose +1.8% m/m, six times higher than expectations of +0.3% and the biggest increase in 9-months. On an annual basis retail sales ex autos rose +4.2% y/y, better than expectations of +2.9% y/y.
UK Feb retail sales including autos rose +1.7% m/m, over three times expectations of +0.5% m/m and the largest monthly gain in 9-months. On an annual basis, retail sales including autos rose +3.7% y/y, better than expectations of +2.45 y/y.
China Feb industrial profits rose +9.4% year-to-date y/y, the smallest increase in over a year.U.S. STOCK PREVIEW
Today's weekly initial unemployment claims report is expected to show a small increase of +4,000 to 324,000, adding to last week's increase of +5,000 to 320,000. Meanwhile, continuing claims are expected to fall -7,000 to 2.882 million, reversing part of last week's +41,000 increase to 2.889 million. Today's Q4 GDP report is expected to be revised slightly higher by +0.3 points to +2.7% (q/q annualized) from the last estimate of +2.4%. Today's Feb pending home sales report is expected to show an increase of +0.2% m/m, edging a bit higher after the small +0.1% increase seen in January. There are 5 of the Russell 1000 companies that report earnings today: Accenture (consensus $1.04), Leidos Holdings (0.45), Signet Jewelers (2.15), GameStop (1.93), Red Hat (0.37). Equity conferences during the remainder of this week include: Jefferies Animal Health Day on Thu, and Jefferies Animal Health Day on Thu
OVERNIGHT U.S. STOCK MOVERS
Baxter International (BAX +2.47%) announced plans to create two separate, independent global healthcare companies; one focused on developing and marketing innovative biopharmaceuticals and the other on life-saving medical products.
Signet Jewelers (SIG -1.17%) reported Q4 EPS of 2.18, higher than consensus of $2.15.
lululemon (LULU +0.50%) lowered guidance on fiscal 2014 EPS to $1.80-$1.90, weaker than consensus of $2.14.
Leidos (LDOS +0.37%) reported Q4 EPS of 56 cents, well above consensus of 45 cents.
Accenture PLC (ACN -0.66%) reported Q2 EPS of $1.03, less than expectations of $1.04, but then raised guidance on fiscal 2014 EPS view to $4.50-$4.62 from $4.44-$4.56, higher than consensus of $4.51.
H.B. Fuller (FUL -0.78%) reported Q1 adjusted EPS of 49 cents, less than consensus of 50 cents.
American Express (AXP -1.30%) said it will increase its quarterly dividend by 13% to 26 cents per share and that it will repurchase up to $4.4 billion of common shares during 2014 and up to an additional $1 billion in the first quarter of 2015.
Morgan Stanley (MS -1.17%) said it will double its dividend to 10 cents from 5 cents and also announced a $1 billion stock repurchase plan.
The Fed said that after its stress tests for this year it rejected the capital plans of Citigroup (C -0.28%) , HSBC North America Holdings (HSBC -0.43%) , RBS Citizens Financial Group (RBS -2.15%) , and Santander Holdings (SAN +0.99%) . The Fed also said it objected to the capital plan of Zions Bancorporation (ZION -1.31%) because the firm did not meet the minimum, post-stress tier-1 common ratio of 5 percent.
Paychex (PAYX -1.30%) rose 3% in after-hours trading after it reported Q3 EPS of 44 cents, better than consensus of 42 cents.MARKET COMMENTS
June E-mini S&Ps (ESM14 +0.22%) this morning are up +4.50 points (+0.24%). The S&P 500 on Tuesday erased an early rally and closed lower after President Obama said Russia's actions in Crimea must be met with condemnation, which raised concerns of escalation of the Ukraine crisis. Stocks had opened higher on bullish factors that included (1) the +2.2% increase in Feb durable goods orders, better than expectations of +0.8%, and (2) comments from St. Louis Fed President Bullard who said the U.S. is in "good shape" to have economic growth of more than +3.0% for the remaining quarters in 2014. Closes: S&P 500 -0.70%, Dow Jones -0.60%, Nasdaq -1.29%.
Jun 10-year T-notes (ZNM14 -0.09%) this morning are down -2 ticks. Jun 10-year T-note futures prices on Wednesday closed higher. T-notes moved higher on weaker stocks along with strong demand for the Treasury's $35 billion auction of 5-year T-notes that had a bid-to-cover ratio of 2.99, higher than the 12-auction average of 2.63 and the highest in 1-1/2 years. Closes: TYM4 +10.50, FVM4 +7.25.
The dollar index (DXY00 +0.15%) this morning is up +0.093 (+0.12%). EUR/USD (^EURUSD) is down -0.0022 (-0.16%) at a 3-week low. USD/JPY (^USDJPY) is up +0.18 (+0.18%). The dollar index on Wednesday closed higher. The dollar rose on supportive factors that included (1 the stronger than expected increase in U.S. Feb durable goods orders, and (2) comments from St. Louis Fed President Bullard, who said that the U.S. is in "good shape" to have economic growth of more than +3.0% for the remaining quarters in 2014. Closes: Dollar index +0.088 (+0.11%), EUR/USD -0.0045 (-0.33%), USD/JPY -0.222 (-0.22%).
May WTI crude oil (CLK14 +0.63%) this morning is up +10 cents (+0.10%) and May gasoline (RBK14 +0.50%) is up +0.0067 (+0.23%). May crude and gasoline prices on Wednesday closed higher with May crude at a 2-week high. Bullish factors included (1) the -1.3 million bbl drop in crude oil stockpiles at Cushing, OK, the delivery point for WTI futures, to a 2-yr low of 28.5 million bbl, and (2) the -5.101 million bbl plunge in EIA gasoline inventories to a 3-1/2 month low of 217.2 million bbl. Bearish factors centered on the +6.619 bbl surge in weekly EIA crude supplies to a 3-1/2 month high of 382 million bbl, the tenth consecutive increase and more than double expectations of a +2.85 million bbl increase. Closes: CLK4 +1.07 (+1.08%). RBK4 +0.0246 (+0.85%).GLOBAL EVENT CALENDAR03/27/2014
U.S. STOCK CALENDAR03/27/2014