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Barchart Morning Call 7/8

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Monday, July 8th, 2013>>View Older Reports

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September E-mini S&Ps (ESU13 +0.49%) this morning are up +0.52% at a 2-week high and European stocks are up +2.09% on carry-over from Friday's stronger-than-expected U.S. Jun non-farm payrolls. Asian stocks closed lower: Japan down -1.40%, Hong Kong -1.31%, China -2.84%, Taiwan -1.44%, Australia -0.67%, Singapore -0.45%, South Korea -0.91%, India -0.88%. Egyptian stocks tumbled nearly 3% and Aug WTI crude oil (CLQ13 -0.49%) climbed to a 14-month high before falling back on escalating violence between Egypt's military and supporters of deposed President Mursi. Commodity prices are mixed. Aug crude is down -0.21%. Aug gasoline (RBQ13 -0.42%) is down -0.33%, Aug gold (GCQ13+1.57%) is up +1.48% on a weaker dollar, and Sep copper (HGU13 +0.28%) is up +0.44%. Agricultural prices are higher. The dollar index (DXY00 -0.02%) retreated from a fresh 3-year high on stronger stocks and is down -0.11%. EUR/USD (^EURUSD) is up +0.19% and USD/JPY (^USDJPY) fell back from a 5-week high and is down -0.06%. India's rupee fell to a record low 61.2125 per dollar as Friday's stronger-than-expected U.S. payrolls report prompts investors to shun emerging market assets in favor of dollar assets. September T-note prices (ZNU13+0.03%) are up +6 ticks as they recover from a fresh contract low, while the 10-year T-note yield rebounded from a fresh 23-month high overnight of 2.75%.
The German May trade balance shrunk to a 13.1 billion euro surplus from a revised 18.0 billion euro surplus in April. May exports unexpectedly fell -2.4% m/m, weaker than expectations of a +0.1% m/m increase and the biggest decline in 17-months. May imports rose +1.7% m/m, stronger than expectations of no change.
German May industrial production fell -1.0% m/m (sa) and -1.0% y/y (nsa), weaker than expectations of -0.5% m/m (sa) and -0.5% y/y (nsa).
Eurozone July Sentix investor confidence unexpectedly slipped -1.0 point to -12.6, weaker than expectations of a +0.2 increase to -11.4.
Japan Jun eco watchers survey current fell to 53.0 from 55.7 in May, weaker than expectations of 55.5, and the eco watchers survey outlook dropped to 53.6 from 56.2 in May, weaker than expectations of 55.7.

With this week's light U.S. economic calendar, the markets will continue to adjust to last Friday's stronger-than-expected employment report, which increased the odds that the FOMC might taper QE3 as early as its September meeting. Key reports include Wednesday's June 18-19FOMC minutes, Thursday's initial unemployment claims report (expected -4,000 to 339,000), Friday's June PPI (expected +2.1% y/y from May's +1.7%; core PPI expected +1.6% vs May's +1.7%), and Friday's early-July U.S. consumer confidence index from the University of Michigan (expected +0.9 to 85.0). Fed Chairman Bernanke will deliver a speech at the NBER in Boston on Wednesday and the markets will be listening for any hints on the timing of QE3 tapering. The Treasury this week sells $66 billion in 3-year, 10-year and 30-year securities.
Q2 earnings season unofficially begins today with Alcoa's Q2 earnings report (consensus $0.06). Conferences this week include: Infectious Disease World Summit on Monday, JMP Securities Healthcare Conference on Tuesday, Semiconductor Equipment & Materials International West Conference on Tuesday, 2013 Washington DC Health Care Conference on Wednesday, and Bloomberg's Mexico Conference on Wednesday.

PetroChina (PTR +0.29%) was upgraded to "Outperform" from "Market Perform" at Bernstein.
Phillips 66 (PSX -0.76%) was upgraded to "Outperform" from "Market Perform" at Wells Fargo.
Lazard Capital predicts that a slowdown in hysterectomies will drive Intuitive Surgical's (ISRG +0.86%) procedure growth in Q2 to miss the consensus estimate of 18.4%.
BP (BP -0.02%) was downgraded to "Neutral" from "Buy" at ISI Group which said the final Macondo settlement remains "elusive" and the investment case continues to be pushed out.
TD Ameritrade (AMTD +2.54%) was upgraded to "Buy" from "Neutral" at Citigroup who raised their price target on the stock to $29 from $25.
VeriFone (PAY +0.96%) was downgraded to "Equal Weight" from "Overweight" at Barclays who lowered their price target on the stock to $18 from $22.
Intel (INTC +1.26%) was downgraded to "Underweight" from "Equal Weight" at Evercore.
UnitedHealth (UNH +0.96%) received a favorable mention in Barron's, which said that UnitedHealth could jump 40% over two years since the insurer with its size can focus on boosting its profit margin rather than gaining market share.
AT&T (T +0.59%) and Chernin Group submitted a joint bid for Hulu, according to Bloomberg.

Sep E-mini S&Ps (ESU13 +0.49%) this morning are up +8.50 points (+0.52%) at a fresh 2-week high. The U.S. stock market on Friday rallied sharply on the stronger-than-expected payroll report and was able to shake-off the negative effective of Friday's sharp rise in Treasury yields. Closes: S&P 500 +1.02%, Dow Jones +0.98%, Nasdaq 100 +0.74%.
Sep 10-year T-notes (ZNU13 +0.03%) this morning are up +6 ticks as they recover from a new contract low overnight. Sep 10-year T-note prices on Friday fell very sharply on the strong June payroll report, which accelerated expectations for Fed QE3 tapering to as early as September. The 10-year T-note yield rose to a 2-year high of 2.74%, up by roughly 1 full percentage point from the 1.75% level seen as recently as two months ago. Closes: TYU3 -1-225, FVU3 -28.

The dollar index (DXY00 -0.02%) this morning is down -0.093 (-0.11%) as it falls back slightly from a fresh 3-year high. EUR/USD (^EURUSD) is up +0.0024 (+0.19%). USD/JPY (^USDJPY) is down -0.06 (-0.06%) The dollar index on Friday rallied sharply on the strong June payroll report, which improved U.S. investment prospects and boosted the U.S. dollar's interest rate differential outlook. The dollar index edged to a new 3-year high. Closes: Dollar index +1.22 (+1.46%), EUR/USD -0.0085 (-0.66%), USD/JPY +1.16 (+1.16%).
Aug WTI crude oil (CLQ13 -0.49%) this morning is down -22 cents (-0.21%) as prices fall back from a fresh 14-month high of $104.12 a barrel posted in overnight trade. Aug gasoline (RBQ13 -0.42%) is down -0.0097 (-0.33%). Crude oil and gasoline prices rallied sharply on Friday thanks to the stronger-than-expected U.S. payroll report, which boosted expectations for U.S. fuel demand. Closes: CLQ3 +1.98 (+1.96%), RBQ3 +0.0586 (+2.06%).


US 1100 ET USDA weekly grain export inspections.
  1500 ET May consumer credit expected +$12.5 billion, Apr +$11.058 billion.
  1600 ET USDA Crop Progress.
JPN 0030 ET Japan Jun bankruptcies, May -9.0% y/y.
  0100 ET Japan Jun Eco Watchers current index expected 55.5, May 55.7. Jun outlook index expected 55.7, May 56.2.
  1950 ET Japan Jun M2 expected +3.4% y/y, May +3.4% y/y. Jun M3 expected +2.9% y/y, May +2.8% y/y.
GER 0200 ET German May trade balance expected 17.8 bln euros, Apr +18.1 bln euros. May exports expected +0.1% m/m, Apr +1.7% m/m. May imports expected unch m/m, Apr +2.2% m/m. May current account balance expected 14.8 bln euros, April 17.6 bln euros.
  0600 ET German May industrial production expected -0.5% m/m and -0.5% y/y, Apr +1.8% m/m (sa) and +1.0% y/y (nsa).
EUR 0430 ET Eurozone July Sentix investor confidence expected -11.4, June -11.6.
UK 1901 ET UK Jun BRC sales like-for-like expected +1.9% y/y, May +1.8% y/y.
CHI 2130 ET China Jun CPI expected +2.5% y/y, May +2.1% y/y.
  2130 ET China Jun PPI expected -2.6% y/y, May -2.9% y/y.


Company Name Symbol Time Event Description Period EPS Est (US$)
Applied Materials Inc AMAT US 16:00 Analyst Meeting Y 2013  
Alcoa Inc AA US 17:00 Q2 2013 Earnings Call Q2 2013  
Alcoa Inc AA US Aft-mkt Q2 2013 Earnings Release Q2 2013 0.06

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