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BARCHART MORNING CALL 6/24

|Includes:AON, ATV, AV, CCL, CRAY, DAVE, DF, DPS, GME, ICE, IDXX, ITG, KMT, MU, NNN, NTAP, NUS, OPEN, ORLY, STR, T, VR, Walgreens Boots Alliance, Inc. (WBA)

BARCHART MORNING CALL

Tuesday, June 24th, 2014

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OVERNIGHT MARKETS AND NEWS

September E-mini S&Ps (ESU14 -0.18%) this morning are down -0.18% and European stocks are little changed, up +0.01%, after the German Jun IFO business conditions fell more than expected to a 6-month low, a sign that the European economy may be slowing. Losses in European stocks were limited on a possible short-term truce to the hostilities in Ukraine. The ruble strengthened against the dollar and the Russian Micex Stock Index rallied over 1% after pro-Russian forces in Ukraine called for a cease-fire, matching a truce made earlier by Ukraine President Poroshenko. Russian President Putin also asked the Russian house of parliament to cancel approval granted Mar 1 to use force in Ukraine. Asian stocks closed mostly higher: Japan +0.05%, Hong Kong +0.33%, China +0.50%, Taiwan +0.19%, Australia -0.38%, Singapore +0.14%, South Korea +1.16%, India +1.35%. Commodity prices are mixed. Aug crude oil (CLQ14 +0.13%) is up +0.07%. Aug gasoline (RBQ14 +0.14%) is up +0.07%. Aug gold (GCQ14 +0.52%) is up +0.52% at a 2-1/4 month high. July copper (HGN14 +0.03%) is up +0.13%. Agriculture and livestock prices are mixed with grains lower as U.S. crop conditions continue to be favorable, while livestock prices are higher after the USDA's Cold Storage report, released after the markets closed Monday, signaled lower beef and pork supplies. The dollar index (DXY00 -0.06%) is down -0.06%. EUR/USD (^EURUSD) is up +0.11%. USD/JPY (^USDJPY) is down -0.04%. Sep T-note prices (ZNU14 +0.14%) are up +6.5 ticks.

The German Jun IFO business climate fell -0.7 to 109.7, a bigger decline than expectations of -0.1 to 110.3 and the lowest in 6 months. The Jun IFO current assessment was unchanged at 114.8, weaker than expectations of +0.2 to 115.0. The Jun IFO expectations fell -1.4 to 104.8, a bigger decline than expectations of -0.2 to 106.0 and the lowest in 8 months.

U.S. STOCK PREVIEW

Today's April FHFA home price index is expected to show a solid gain of +0.5% m/m, adding to the +0.7% increase seen in March. Meanwhile, today's April Case-Shiller composite-20 home price index is expected to show an increase of +0.80% m/m, adding to March's sharp increase of +1.24% m/m. Today's May new home sales report is expected to show an increase of +1.6% to 440,000, adding to the +6.4% increase to 433,000 seen in April. Today's June U.S. consumer confidence index from the Conference Board is expected to show an increase of +0.5 points to 83.5, adding to the +1.3 point increase to 83.0 seen in May. Today's June Richmond Fed manufacturing index is expected to show a -1 point decline to 6 following the May report of unchanged at 7.

There are two of the Russell 1000 companies that report earnings today: Walgreen (consensus $0.94), Carnival (0.02). Equity conferences this week include: Smart Grid World Conference 2014 on Tue, Global Hunter Securities LLC Energy Conference on Tue-Wed, Oppenheimer Consumer Conference on Tue-Wed, Mobile Pharma Biztech 2014 on Wed-Thu.

OVERNIGHT U.S. STOCK MOVERS

Walgreen (WAG -1.09%) reported Q3 EPS of 91 cents, below consensus of 94 cents.

IDEXX (IDXX +0.52%) was upgraded to 'Buy' from 'Hold' at Canaccord.

O'Reilly Automotive (ORLY -0.77%) was initiated with an 'Overweight' at Morgan Stanley with a price target of $175.

Dr Pepper Snapple (DPS -1.18%) was downgraded to 'Neutral' from 'Buy' at Citigroup.

ITG (ITG -3.05%) was downgraded to 'Neutral' from 'Overweight' at JPMorgan Chase.

National Retail Properties (NNN -0.85%) was downgraded to 'Neutral' from 'Buy' at BofA/Merrill Lynch.

Wells Fargo downgraded IntercontinentalExchange (ICE +1.71%) to 'Market Perform' from 'Outperform.'

Aviva (AV -0.23%) was downgraded to 'Neutral' from 'Buy' at UBS.

Cray (CRAY -0.39%) announced that it has been awarded a $54 million contract to provide the Korea Meteorological Administration with supercomputers.

Dean Foods (DF -0.17%) fell over 7% in after-hours trading after Dow Jones reported that the company received subpoenas from federal authorities in an insider trading probe involving activist investor Carl Icahn.

SAB Capital Advisors reported a 9.4% passive stake in Famous Dave's (DAVE -2.80%) .

Priceline reported a 5.1% stake in OpenTable (OPEN +0.35%) .

Micron (MU -1.85%) reported Q3 EPS of 79 cents, well above consensus of 70 cents.

MARKET COMMENTS

Sep E-mini S&Ps (ESU14 -0.18%) this morning are down -3.50 points (-0.18%). The S&P 500 index on Monday closed little changed as the ongoing crisis in Iraq prompted long liquidation pressure. Losses were muted on bullish factors that included (1) reduced Chinese economic concerns after the Jun China HSBC flash manufacturing PMI rose +1.4 to 50.8, stronger than expectations of +0.3 to 49.7 and the fastest rate of expansion in 7 months, and (2) the +4.9% increase in U.S. May existing home sales to 4.89 million, better than expectations of +1.9% to 4.74 million and the highest level in 7 months. Closes: S&P 500 +0.17%, Dow Jones +0.15%, Nasdaq +0.05%.

Sep 10-year T-notes (ZNU14 +0.14%) this morning are up +6.5 ticks. Sep 10-year T-note futures prices on Monday closed little changed. A supportive factor for T-notes was carry-over support from a rally in German bunds after ECB President Draghi signaled that interest rates will probably remain low for at least another 2-1/2 years when he said "We have prolonged banks' access to unlimited liquidity up to the end of 2016. That is a signal." T-notes fell back from their best levels after May existing home sales rose more than expected to the highest level in 7 months. Closes: TYU4 -2.50, FVU4 -1.75.

The dollar index (DXY00 -0.06%) this morning is down -0.047 (-0.06%). EUR/USD (^EURUSD) is up +0.0015 (+0.11%). USD/JPY (^USDJPY) is down -0.04 (-0.04%). The dollar index on Monday closed lower on carry-over bearish sentiment toward the dollar after Fed Chair Yellen last Wednesday reiterated that the Fed remains committed to low interest rates for a "considerable time." EUR/USD fell back after ECB President Draghi said that the recovery "is still weak and unevenly distributed across the Eurozone" and that broad-based asset purchases will be "the answer" if the inflation outlook weakens further. Closes: Dollar Index -0.100 (-0.12%), EUR/USD +0.0004 (+0.03%), USD/JPY -0.107 (-0.10%).

Aug WTI crude oil (CLQ14 +0.13%) this morning is up +7 cents (+0.07%). Aug gasoline (RBQ14 +0.14%) is up +0.0022 (+0.07%). Aug crude and gasoline prices on Monday closed lower. The main bearish factor for oil prices was reduced concerns that Iraqi militants will take over the oil-producing regions of Iraq after government forces regained Iraq's border crossings with Jordan and Syria. Losses were limited on signs of economic strength in China, the world's second-largest crude oil consumer, after a gauge of Chinese manufacturing activity expanded at the fastest pace in 7 months. Closes: CLQ4 -0.71 (-0.66%) RBQ4 -0.0152 (-0.49%).

GLOBAL EVENT CALENDAR06/24/2014

US 0805 ET Philadelphia Fed President Charles Plosser speaks to the Economic Club of New York on the economic outlook and monetary policy.
  0900 ET Apr FHFA house price index expected +0.5% m/m, Mar +0.7% m/m.
  0900 ET Apr S&P/CaseShiller composite-20 home price index expected +0.80% m/m and +11.50% y/y, Mar +1.24% m/m and +12.37% y/y.
  1000 ET U.S. Jun consumer confidence (Conference Board) expected +0.5 to 83.5, May +1.3 to 83.0.
  1000 ET Jun Richmond Fed manufacturing index expected unch at 7, May unch at 7.
  1000 ET May new home sales expected +1.4% to 440,000, Apr +6.4% to 433,000.
  1130 ET Treasury auctions $13 billion 2-year floating rate notes.
  1300 ET Treasury auctions $30 billion 2-year T-notes.
GER 0400 ET German Jun IFO business climate expected -0.1 to 110.3, May 110.4. Jun IFO current assessment expected +0.2 to 115.0, May 114.8. Jun IFO expectations expected -0.2 to 106.0, May 106.2.
JPN 1950 ET Japan May corporate service price index expected +3.3% y/y, Apr +3.4% y/y.

U.S. STOCK CALENDAR06/24/2014

Company Name Ticker Time Event Description Period Estimate
Aon PLC AON US 3:00 Annual General Meeting Y 2014  
Walgreen Co WAG US 7:30 Q3 2014 Earnings Release Q3 2014 0.935
Walgreen Co WAG US 8:30 Q3 2014 Earnings Call Q3 2014  
NetApp Inc NTAP US 8:30 Analyst Day Y 2014  
Validus Holdings Ltd VR US 8:30 Acquisition of Western World Insurance Group, Inc by Validus Holdings Ltd Call    
Carnival Corp CCL US 10:00 Q2 2014 Earnings Call Q2 2014  
Carnival Corp CCL US   Q2 2014 Earnings Release Q2 2014 0.023
Kennametal Inc KMT US   Financial Community Meeting - Day 2 Y 2014  
Questar Corp STR US   Roadshow - Day 2 Y 2014  
AT&T Inc T US   AT&T Inc. - DirectTV Merger Testify Hearing    
Nu Skin Enterprises Inc NUS US   Annual General Meeting    
GameStop Corp GME US   Annual General Meeting    
DIRECTV DTV US   AT&T Inc. - DirectTV Merger Testify Hearing
Stocks: WBA, IDXX, ORLY, DPS, ITG, NNN, ICE, AV, CRAY, DF, DAVE, OPEN, MU, AON, NTAP, VR, CCL, KMT, STR, T, NUS, GME, ATV