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Barchart Morning Call 4/3

|Includes: AN, BP, CAG, CALL, CAT, GPN, HBI, HMC, ICE, MKC, Monsanto Company (MON), NFX, OXM, SIX, TM, TSLA, VOD, WBA, ZNGA, ZOLT


Wednesday, April 3rd, 2013>>View Older Reports

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June E-mini S&Ps (ESM13 +0.16%) are trading slightly higher by +0.11% as the market looks ahead to a positive ADP report today with a consensus of +200,000. The Euro Stoxx 50 index is down -0.49% today on some long liquidation pressure after recent gains. European stocks received some underlying support today as the IMF reached an agreement with Cyprus for a 1 billion euro contribution to its bailout. Asian stocks today closed mostly lower with the Hang Seng down -0.14% and China's CSI 300 index down -0.11%, but Japan's Nikkei index rallied sharply by +2.99% today. Chinese stocks were supported by solid increases in its non-manufacturing PMI reports but were undercut by the new cases of bird flu. Commodity prices are slightly lower by -0.06%. May crude oil (CLK13 -0.48%) is down -0.50%, May gasoline (RBK13 -1.00%) is down -1.23%, June gold (GCM13 -0.25%) is down -0.32%, May copper (HGK13 -0.43%) is down -0.61%, and agriculture prices are mostly higher. The dollar index (DXY00 -0.11%) and EUR/USD
(^EURUSD) this morning are virtually unchanged. USD/JPY (^USDJPY) is slightly higher by +0.07%. June 10-year T-note (ZNM13 -0.05%) prices are up +0.5 tick.
North Korea today prevented South Korean workers from entering the Gaeseong joint industrial zone, ratcheting up tensions another notch. North Korea earns about $100 million in profits from the business operations in the joint industrial park and South Korea makes about $400 million. So far North Korea has only halted South Koreans from traveling to the site but has not started to shut down the site entirely. There are still South Koreans who are effectively trapped in the zone and are unable to leave. There have still been no reports of unusual military movements in North Korea.
The Bank of Japan on Thursday will announce the outcome of its 2-day meeting. The market consensus is that new BOJ chief Kuroda will engineer a broad expansion of the BOJ's asset purchase program to meet its new goal of hitting a 2% inflation rate within two years.
The IMF today said that it reached a staff-level agreement with Cyprus to contribute 1 billion euros toward the 10 billion euro bailout. Italian 10-year bond yields today fell by another 3 bp to 4.59%, adding to yesterday's sharp decline of 14 bp. Spanish 10-year bond yields today fell by 4 bp to 4.91%.
Germany today successfully sold 3.29 billion of 5-year bonds at an average yield of 0.33%, down from 0.45% its last sale of 5-year bonds on March 6.
The March Eurozone CPI eased to +1.7% y/y from +1.8% in Feb but did not fall as far as the consensus of +1.6% y/y.
China's March non-manufacturing PMI from the National Bureau of Statistics rose by +1.1 point to 55.6 from 54.5 in Feb. Meanwhile, the March HSBC services PMI rose by +2.2 points to 54.3 from 52.1 in Feb. The increase in the non-manufacturing PMIs indicated that the non-manufacturing sectors of the Chinese economy picked up a little steam in March.
The UK March construction PMI rose by +1.4 points to 47.2 from 46.8 in Feb but was weaker than market expectations for a +1.2 point increase to 48.0.
Chinese investors became a little more concerned after a new H7N9 strain of bird flu killed two people in Shanghai. Five other people are infected with the virus and are in critical condition. WHO is investigating.

Today's March ADP employment report is expected to show a solid increase of +200,000, which would be very close to the +198,000 increase seen in February. Today's March ISM non-manufacturing index is expected to show a small decline of -0.2 to 55.8. There are only two major earnings reports today. ConAgra this morning reported Q3 earnings of 55 cents, slightly below the consensus of 56 cents. Monsanto reported Q2 earnings of $2.73, well above the consensus of $2.57.
Conferences through the rest of this week include Boston Biotech Business Development Conference on Tue-Wed, J.P. Morgan Private Builder/Private Equity Conference on Thursday, China Business Conference 2013 in NY on Friday, and Women in the World Summit 2013 on Friday.

June E-mini S&Ps (ESM13 +0.16%) are slightly higher by +1.75 points (+0.11%) on expectations for a strong ADP report this morning of +200,000 and on some optimism about a further decline in Italian and Spanish bond yields and solid increases in today's Chinese non-manufactuturing indexes. The S&P 500 index on Tuesday closed moderately higher on the stronger-than-expected U.S. Feb factory orders report and the sharp -14 bp drop in the Italian 10-year bond yield. Closes: S&P 500 +0.52%, Dow Jones +0.61%, Nasdaq 100 +0.84%.


  • Monsanto (MON -1.69%) reported Q2 adjusted EPS of $2.73, well above the consensus of $2.58.
  • ConAgra (CAG -0.22%) reported Q3 adjusted EPS of 55 cents, slightly below the consensus of 56 cents.
  • Japanese auto makers (TM -1.25%, HMC -1.00%, NSANY -0.75%) continued to see a Chinese sales slump in Q1, allowing rivals to pick up market share, according to a Reuters report.
  • Caterpillar (CAT -0.89%) was downgraded to Neutral from Buy at Goldman Sachs on a reduced outlook for iron ore prices and a cut in equipment capital spending.
  • Six Flags (SIX +0.63%) was initiated with a Conviction Buy with a target of $83.50 by Goldman Sachs
  • BP (BP +0.31%) is putting its U.S. wind power unit up for sale, according to FT
  • Oxford Industries (OXM -0.54%) fell 3% in after-hours trading after reporting Q4 EPS of 65 cents, below the consensus of 70 cents.
  • Vodafone (VOD +3.78% fell 3% in after-hours trading after Verizon (NYSE:VZ) disclosed in a regulatory filing that it is interested in buying Vodafone's stake in Verizon Wireless, but not in buying Vodafone itself.
  • MagicJack (CALL +6.94%) rallied 13% in after-hours trading after announcing positive earnings.
  • Zynga (ZNGA -2.85%) rallied 8% in after-hours trading after the company announced its first games involving real money in the U.K.
  • Newfield (NFX +0.78%) rallied 7% in after-hours trading after announcing a natural gas discovery.
  • Zoltek (ZOLT -0.16%) rallied 5% in after-hours trading after announcing it would conduct a review of strategic alternatives.
  • Global Payments (GPN -0.26%) fell 6% in after-hours trading after announcing negative earnings.
  • Tesla (TSLA +0.93%) fell 2% in after-hours trading after announcing a new financing product for its Model S. electric vehicle.

June 10-year T-notes (ZNM13 -0.05%) are up by +0.5 tick. June 10-year T-note prices on Tuesday closed mildly higher on reduced safe-haven demand with the rally in U.S. stocks and the sharp drop in the Italian 10-year bond yield. Closes: TYM3 -4.5, FVM3 -1.75.
The dollar index (DXY00 -0.11%) and EUR/USD (^EURUSD) are virtually unchanged this morning. EUR/USD (^USDJPY) received a little underlying support from news that the IMF reached an agreement with Cyprus for a 1 billion euro contribution to its bailout. USD/JPY is slightly higher by +0.07 yen (+0.07%) as the market looks ahead to Thursday's expected QE expansion announcement from the BOJ after its 2-day meeting. The dollar index on Monday closed mildly higher on the stronger-than-expected factory orders report while EUR/USD fell on worries that there may be a dovish outcome at Thursday's ECB meeting considering that the Eurozone Feb unemployment rate yesterday rose to a new record high of 12.0%. Closes: Dollar index +0.191 (+0.23%), EUR/USD -0.0029 (-0.23%), USD/JPY +0.21 (+0.23%).
May WTI crude oil (CLK13 -0.48%) is down -0.49 (-0.50%) and May gasoline (RBK13 -1.00%) is down -0.0373 (-1.23%) as bearish sentiment continues. Crude oil on Tuesday closed slightly higher but gasoline fell sharply as the market expects the surge in the refinery operation rate in the past two weeks to translate soon into higher gasoline production and higher inventories. Gasoline also saw technical selling as it appeared headed for a test of the recent 2-month low and a further correction of the Dec-Feb rally. Closes: CLK3 +0.12 (+0.12%), RBK3 -0.0607 (-1.96%).


US 0700 ET Weekly MBA mortgage applications, previous +7.7% with purchase sub-index +6.7% and refi sub-index +8.0%.
  0815 ET March ADP employment change expected +200,000, Feb +198,000.
  1000 ET March ISM non-manufacturing index expected -0.2 to 55.8, Feb +0.8 to 56.0.
  1030 ET DOE Weekly Petroleum Status Report.
  1530 ET San Francisco Fed President John Williams speaks on economy and monetary policy to Town Hall in Los Angeles.
  1700 ET St. Louis Fed President James Bullard introduces lecture by Glenn Hubbard, former Chairman of Economic Advisors, in St. Louis.
UK 0430 ET UK March construction PMI expected +1.2 to 48.0, Feb 46.8.
EUR 0500 ET Eurozone March CPI expected +1.6% y/y, Feb +1.8% y/y.
JPN n/a BOJ 2-day meeting begins.




Company Name Symbol Time Event Description Period EPS Est (US$)
Monsanto Co MON US Bef-mkt Q2 2013 Earnings Release Q2 2013 2.565
ConAgra Foods Inc CAG US 7:30 Q3 2013 Earnings Release Q3 2013 0.563
ConAgra Foods Inc CAG US 9:30 Q3 2013 Earnings Call Q3 2013  
Monsanto Co MON US 9:30 Q2 2013 Earnings Call Q2 2013  
McCormick & Co Inc/MD MKC US 10:00 Annual General Meeting Y 2013  
Hanesbrands Inc HBI US 18:30 Annual General Meeting    
Walgreen Co WAG US   March 2013 Sales and Revenue Release 2013  
AutoNation Inc AN US   March 2013 Sales and Revenue Release 2013  
IntercontinentalExchange Inc ICE US   March 2013 Sales and Revenue Release 2013