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BARCHART MORNING CALL 6/25

|Includes:AAP, AKS, AMCX, AMG, APOL, ARIA, BBBY, BMY, CIT, EQIX, GIS, HBI, HIBB, HOG, IM, INFO, LMT, MCK, MON, PEG, QGEN, RJF, SLB, SLM, STR, TAP, TDG, TISI, VMI, WBA, WDR, Whole Foods Market, Inc. (WFM), YHOO

BARCHART MORNING CALL

Wednesday, June 25th, 2014View Older Reports

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OVERNIGHT MARKETS AND NEWS

September E-mini S&Ps (ESU14 +0.04%) this morning are up +0.10% and European stocks are down -0.44%. European stocks were undercut on concern that the violence in Ukraine between government forces and rebels may escalate. Ukrainian President Poroshenko called for immediate talks with Russia, Germany and France after pro-Russian rebels shot down a government helicopter in violation of a cease-fire. Three people briefed on the plans said the U.S. is preparing additional sanctions aimed at specific areas of the Russian economy, including energy and technology. On the positive side in Europe, the German Jul Gfk consumer confidence rose more than expected to a 7-1/2 year high. Asian stocks closed lower: Japan -0.71%, Hong Kong -0.06%, China -0.53%, Taiwan -0.04%, Australia -0.57%, Singapore -0.02%, South Korea -0.61%, India -0.22%. China's Shanghai Stock Index closed lower after a gauge of Chinese consumer sentiment tumbled to the lowest in 11 months. Commodity prices are mixed. Aug crude oil (CLQ14 +0.37%) is up +0.51% and surged nearly +$1.50 a barrel in overnight trade after the WSJ reported that federal officials told two U.S. energy companies that they can legally export light crude after minimal processing. Oil prices fell back from their best levels, however, after a spokesman for the U.S. Department of Commerce said that "there has been no change in policy on crude oil exports." U.S. crude oil exports have been banned for the past 41 years and with U.S. crude production at a 27-1/2 year high, the oil industry is pressuring the Obama administration to end the oil export ban. Aug gasoline (RBQ14 -0.67%) is down -0.62%. Aug gold (GCQ14 -0.54%) is down -0.58%. July copper (HGN14 -0.21%) is up +0.02%. Agriculture and livestock prices are mixed, although July lean hog prices are up +0.52% and posted an all-time nearest-futures high of $1.312 a pound in overnight trade. The dollar index (DXY00 -0.01%) is up +0.01%. EUR/USD (^EURUSD) is down -0.02%. USD/JPY (^USDJPY) is down -0.04%. Sep T-note prices (ZNU14 +0.10%) are up +2.5 ticks.

The German Jul GfK consumer confidence rose +0.3 to 8.9, better than expectations of +0.1 to 8.6 and he highest in 7-1/2 years.

UK Jun CBI reported monthly sales unexpectedly fell -12 to 4, weaker than expectations of +7 to 23 and the lowest volume of sales in 7 months.

The China Jun Westpac-MNI consumer sentiment indicator dropped -8.6 to 112.6, the lowest in 11 months.

The Japan May PPI services rose +3.6% y/y, more than expectations of +3.3% y/y and the largest increase in 23-1/2 years.

U.S. STOCK PREVIEW

Today's May durable goods orders report is expected to be unchanged overall and +0.3% ex-transportation following the April report of +0.6% and +0.3% ex-transportation. Today's Q1 GDP report is expected to show a downward revision to -1.8% (q/q annualized) from the last estimate of -1.0%. The Treasury today will sell $35 billion of 5-year T-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 four of the Russell 1000 companies that report earnings today: General Mills (consensus $0.72), Apollo Education Group (0.66), Monsanto (1.55), Bed Bath & Beyond (0.95). Equity conferences this week include: 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

Whole Foods Markets (WFM -0.74%) was initiated with an 'Overweight' at Morgan Stanley with a price target of $50.

Harley-Davidson (HOG -0.99%) was downgraded to 'Hold' from 'Buy' at KeyBanc.

Walgreens (WAG -1.70%) was upgraded to 'Buy' from 'Hold' at Jefferies with a price target of $87.

General Mills (GIS -1.05%) reported Q4 EPS of 67 cents, below consensus of 72 cents.

Valmont (VMI -0.27%) lost 5% in after-hours trading after it lowered guidance on fiscal 2014 EPS view to $9.35-$9.65 from a prior view of $10.00-$10.50, well below consensus of $10.37.

Lockheed Martin Space Systems (LMT -0.88%) has been awarded a $1.86 billion government contract modification to a previously awarded contract for Space-Based Infrared Systems Geosynchronous Earth Orbit 5 and 6 satellites, including performance incentives and options for acoustic testing and launch operations.

Affiliated Managers (AMG -0.89%) will replace Forest Labs (FRX +1.31%) in the S&P 500 as of the close on June 30.

Bristol-Myers (BMY +0.62%) rose 2% in after-hours trading after it said that a Phase 3 study of its drug nivolumab given to patients with advanced melanoma conducted by the independent Data Monitoring Committee showed evidence of superior overall survival rates.

Gabelli reported a 5.39% stake in AMC Networks (AMCX -0.07%) .

Hibbett Sports (HIBB +0.07%) was initiated with an 'Outperform' at BMO Capital with a price target of $64.

AK Steel (AKS -0.52%) said it will increase the base prices for for all of its stainless steel products, effective with shipments on July 6, by $40 per ton for automotive grades and by by $200 to $300 per ton for all non-automotive grades, depending on the product.

Team (TISI -1.81%) pre-announced that it expects to report adjusted Q4 EPS of 60 cents, below the company's previously issued adjusted earnings guidance for the current quarter of 65 cents-80 cents per share and below consensus of 71 cents.

MARKET COMMENTS

Sep E-mini S&Ps (ESU14 +0.04%) this morning are up +2.00 points (+0.10%). The S&P 500 index on Tuesday posted a record high early but then fell back the rest of the day and closed lower on concern the violence in Iraq may escalate after the WSJ reported that Syrian warplanes bombed several areas in western Iraq. Bullish factors included (1) the +3.0 point increase in Jun consumer confidence to 85.2, stronger than expectations of +0.5 to 83.5 and the highest in 6-1/3 years, and (2) the +18.6% surge in May new home sales to 504,000, much higher than expectations of +1.4% to 439,000 and the highest in 6 years. Closes: S&P 500 -0.64%, Dow Jones -0.70%, Nasdaq -0.15%.

Sep 10-year T-notes (ZNU14 +0.10%) this morning are up +2.5 ticks. Sep 10-year T-note futures prices on Tuesday closed higher on increased safe-haven demand after the S&P 500 fell back from a record high and closed lower. Bearish factors included (1) the larger-than-expected increase in May new home sales to the highest in 6 years, and (2) the increase in U.S. Jun consumer confidence to the best level in 6-1/3 years. Closes: TYU4 +9.50, FVU4 +4.25.

The dollar index (DXY00 -0.01%) this morning is up +0.008 (+0.01%). EUR/USD (^EURUSD) is down -0.0003 (-0.02%). USD/JPY (^USDJPY) is down -0.04 (-0.04%). The dollar index on Tuesday closed higher on signs of strength in the U.S. economy after (1) U.S. May new home sales rose to the highest in 6 years and (2) U.S. Jun consumer confidence climbed to the best level in 6-1/3 years. EUR/USD was little changed after the German Jun IFO business climate fell more-than-expected to the lowest level in 6 months. Closes: Dollar Index +0.055 (+0.07%), EUR/USD +0.0004 (+0.03%), USD/JPY +0.017 (+0.02%).

Aug WTI crude oil (CLQ14 +0.37%) this morning is up +54 cent (+0.51%). Aug gasoline (RBQ14 -0.67%) is down -0.0191 (-0.62%). Aug crude and gasoline prices on Tuesday settled mixed. Bullish factors included (1) concern that escalation of violence will lead to reduced oil exports from Iraq, OPEC's second biggest producer, and (2) better-than-expected U.S. economic data on home sales and consumer confidence, which is positive for fuel demand. Crude oil fell into negative territory after a Saudi official said that Saudi Arabia will respond to any shortage in global oil markets with increased production. Closes: CLQ4 -0.14 (-0.13%) RBQ4 +0.0173 (+0.56%).

GLOBAL EVENT CALENDAR06/25/2014

US 0700 ET Weekly MBA mortgage applications, previous -9.2% with purchase sub-index -4.7% and refi sub-index -12.7%.
  0830 ET May durable goods orders expected unch and +0.3% ex transportation, Apr +0.6% and +0.3% ex transportation. May non-defense capital goods orders ex-aircraft expected +0.5%, April -1.2%.
  0830 ET Q1 GDP expected revised weaker to -1.8% from -1.0% (q/q annualized). Q1 personal consumption expected revised to +2.5% from +3.1%. Q1 GDP price index expected unrevised at +1.3%. Q1 core PCE expected unrevised at +1.2%.
  0945 ET June Markit U.S. Services PMI expected -0.1 to 58.0, May +3.1 to 58.1. June U.S. Composite PMI, May +2.8 to 58.4.
  1000 ET Treasury Secretary Jacob Lew testifies to the Senate Banking Committee on the Financial Stability Oversight Council annual report.
  1030 ET EIA Weekly Petroleum Status Report.
  1300 ET Treasury auctions $35 billion 5-year T-notes.
GER 0200 ET German July GfK consumer confidence expected +0.1 to 8.6, Jun 8.5.
UK 0600 ET UK Jun CBI reported sales expected +7 to 23, May 16.
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U.S. STOCK CALENDAR06/25/2014

Company Name Ticker Time Event Description Period Estimate
General Mills Inc GIS US Bef-mkt Q4 2014 Earnings Release Q4 2014 0.719
Apollo Education Group Inc APOL US Bef-mkt Q3 2014 Earnings Release Q3 2014 0.661
Monsanto Co MON US Bef-mkt Q3 2014 Earnings Release Q3 2014 1.551
CIT Group Inc CIT US 8:00 Investor Day Y 2014  
General Mills Inc GIS US 8:30 Q4 2014 Earnings Call Q4 2014  
Apollo Education Group Inc APOL US 8:30 Q3 2014 Earnings Call Q3 2014  
Advance Auto Parts Inc AAP US 8:30 Investor and Analyst Meeting Y 2014  
Hanesbrands Inc HBI US 8:30 Acquisition of DBApparel of Sun Capital Partners, Inc by Hanesbrands, Inc Call    
McKesson Corp MCK US 9:00 Investor Day Y 2014  
Waddell & Reed Financial Inc WDR US 9:00 Investor Day Y 2014  
Monsanto Co MON US 9:30 Q3 2014 Earnings Call Q3 2014  
ARIAD Pharmaceuticals Inc ARIA US 10:00 Annual General Meeting Y 2014  
Equinix Inc EQIX US 10:00 Investor Day Y 2014  
Schlumberger Ltd SLB US 11:00 Investors Conference - Day 2 Y 2014  
Yahoo! Inc YHOO US 11:00 Annual General Meeting Y 2014  
SLM Corp SLM US 11:00 Annual General Meeting Y 2014  
IHS Inc IHS US 12:00 CABE Presents Energy Rivalry" with Kevin Birn"    
Ingram Micro Inc IM US 12:25 Investor Day Y 2014  
TransDigm Group Inc TDG US 12:45 Analyst Day Y 2014  
Molson Coors Brewing Co TAP US 13:30 Analyst Meeting Y 2014  
Bed Bath & Beyond Inc BBBY US 16:15 Q1 2015 Earnings Release Q1 2015 0.945
Bed Bath & Beyond Inc BBBY US 17:00 Q1 2015 Earnings Call Q1 2015  
Public Service Enterprise Group Inc PEG US   Investor Meeting Y 2014  
Questar Corp STR US   Roadshow - Day 3 Y 2014  
Raymond James Financial Inc RJF US   May 2014 Sales and Revenue Release - Operating Data 2014  
Click to enlarge
Stocks: WFM, HOG, WBA, GIS, VMI, LMT, AMG, BMY, AMCX, HIBB, AKS, TISI, APOL, MON, CIT, AAP, HBI, MCK, WDR, ARIA, EQIX, SLB, YHOO, SLM, INFO, IM, TDG, TAP, BBBY, PEG, STR, RJF, QGEN