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Barchart Morning Call 7/10

|Includes: AMZN, CMI, CVX, EBAY, FAST, FDO, GOOG, HELE, MSM, SFD, Wells Fargo & Co. (WFC), YUM


Wednesday, July 10th, 2013>>View Older Reports

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September E-mini S&Ps (ESU13 -0.14%) this morning are down -0.17% and European stocks are down -0.62%. Asian stocks closed mixed: Japan -0.39%, Hong Kong +1.07%, China +2.84%, Taiwan +0.51%, Australia +0.40%, Singapore +0.30%, South Korea -0.30%, India -0.75%. U.S. and European stocks were undercut after China's exports and imports unexpectedly contracted in Jun, although China's Shanghai Stock index closed higher on speculation the government will take measures to support economic growth. Italian and Spanish government bonds declined after Standard & Poor's late yesterday cut Italy's credit rating to BBB, two levels above junk, citing weak economic prospects. Commodity prices are mostly higher. Aug crude oil (CLQ13 +1.64%) is up +1.35% at a 14-month high after weekly API inventory data released late yesterday showed crude inventories tumbled -9.0 million bbl. Aug gasoline (RBQ13 +1.60%) is up +1.27% at a 3-month high, Aug gold (GCQ13 +0.76%) is up +0.49%, and Sep copper (HGU13 +0.41%) is up +0.07%. Agricultural and livestock prices are higher. The dollar index (DXY00 -0.34%) is down -0.30%. EUR/USD (^EURUSD) is up +0.33% and USD/JPY (^USDJPY) is down -1.10%. September T-note prices (ZNU13 -0.01%) are down -1.5 ticks.
China's Jun trade balance widened to a +$27.12 billion surplus, the most in 5-months but slightly smaller than expectations of a +$27.80 billion, and wider than a revised +$20.42 billion surplus in May. Jun exports unexpectedly fell -3.1% y/y, weaker than expectations of a +3.7% increase and the biggest decline in 3-1/2 years. Jun imports unexpectedly fell for a second month by -0.7% y/y, mush weaker than expectations of +6.0% y/y.
The Japan Jun domestic CGPI rose +0.1% m/m and +1.2% y/y, close to expectations of unch m/m and +1.2% y/y.
Japan's May tertiary industry index rose +1.2% m/m, stronger than expectations of +0.7% m/m.
Japan Jun consumer confidence fell -1.4 to 44.3, weaker than expectations of -0.1 to 45.6.
Revised German Jun CPI (EU harmonized) was unchanged at +0.1% m/m and +1.9% y/y, right on expectations.

The Treasury today will sell $21 billion in 10-year T-notes, continuing this week's $66 billion package of 3-year, 10-year and 30-year securities. The markets will be watching today's June 18-19 FOMC meeting minutes for any hints of when the Fed may start tapering QE3. Fed Chairman Bernanke will deliver a speech this afternoon at 4:10 PM ET in Boston at the National Bureau of Economic Research on the topic of "The First 100 Years of the Federal Reserve: The Policy Record, Lessons Learned, and Prospects for the Future." Four of the Russell 1000 companies report earnings today: Fastenal (consensus $0.41), Family Dollar Stores (1.03), MSC Industrial Direct (0.97), Yum Brands (0.54).

Wells Fargo (WFC -0.30%) was downgraded to "Hold" from "Buy" at Sandler O'Neil.
Moody's Investors Service raised its outlook of the U.K. banking system to stable from negative, citing improving profitability and lower impairments.
The WSJ reports that investors pulled $13.5 billion from mutual funds that invest in municipal bonds in June, according to Lipper FMI, a retreat that is making it harder for several cities, states and towns to raise money.
Famiy Dollar Stores (FDO -0.48%) reported Q3 EPS of $1.05, better than expectations of $1.03, and raised guidance on fiscal 2013 EPS to $3.77-$3.82, higher than consensus of $3.77.
Cummins (CMI +1.62%) raised its quarterly dividend 25% to 62.5 cents per share from 50 cents per share.
Fastenal (FAST +2.46%) reported Q2 EPS of 41 cents, right on expectations, but then boosted its dividend by 5 cents to 25 cents per share. (AMZN +0.32%) was initiated with a "Buy" at Citigroup with a price target of $340.
eBay (EBAY +1.45%) was initiated with a "Buy" at Citigroup eith a price target of $65.
Google (GOOG +0.02%) was initiated with a "Buy" at Citigroup with a price target of $1100.
Helen of Troy (HELE +2.14%) gained over3% in after-hours trading after it reported Q1 EPS of 82 cents, well ahead of consensus of 71 cents, and raised its fiscal 2014 EPS view to $3.50-$3.60, better than consensus of $3.53.

Sep E-mini S&Ps (ESU13 -0.14%) this morning are down -2.75 points (-0.17%). The U.S. stock market on Tuesday shook off the IMF's cut to its global 2013 GDP estimate and moved higher on speculation the economy is strong enough to withstand any Fed QE3 tapering. Another bullish factor for stocks is optimism that stocks will beat their Q2 earnings estimates, which, according to Bloomberg estimates, have been sharply lowered to +1.8% earnings growth from expectations of +8.3% growth 6 months ago. Closes: S&P 500 +0.72%, Dow Jones +0.50%, Nasdaq 100 +0.61%.
Sep 10-year T-notes (ZNU13 -0.01%) this morning are down -1.5 ticks. Sep 10-year T-note prices on Tuesday closed higher after the IMF cut its 2013 global GDP forecast for a fifth consecutive time, which may prompt global central banks to delay cutting their stimulus measures. Closes: TYU3 +5.0, FVU3 +2.0.

The dollar index (DXY00 -0.34%) this morning is down -0.257 (-0.30%). EUR/USD (^EURUSD) is up +0.0042 (+0.33%). USD/JPY (^USDJPY) is down -1.11 (-1.10%). The dollar index on Tuesday rose to a 3-year high and closed higher. EUR/USD slumped to a 3-month low on dovish comments from ECB Executive Board member Asmussen who said ECB policymakers' forward guidance, which is that interest rates will stay low for an extended period, "goes beyond 12 months." Closes: Dollar index +0.424 (+0.50%), EUR/USD -0.00894 (-0.69%), USD/JPY +0.185 (+0.18%).
Aug WTI crude oil (CLQ13 +1.64%) this morning is up +$1.40 a barrel (+1.35%) at a fresh 14-month high and Aug gasoline (RBQ13 +1.60%) is up +3.73 cents per gallon (+1.27%) at a 3-month high. Crude oil and gasoline prices on Tuesday shook off the rally in the dollar index to 3-year high and closed higher. Crude was supported by the rally in the stock market and by expectations that Wednesday's weekly EIA data will show crude inventories fell -3.1 million bbl to a 4-month low. Gasoline gained on concern that Irving Oil's 298,800-barrel-a-day refinery in New Brunswick, Canada may slow output and reduce gasoline supplies to the U.S. East coast after a train derailment there closed the track. Closes: CLQ3 +0.86 (+0.83%), RBQ3 +0.0458 (+1.59%).


US 0700 ET Weekly MBA mortgage applications, previous -11.7%, purchase sub-index -3.1% and refi sub-index -15.6%.
  1000 ET May wholesale inventories expected +0.3% m/m, Apr +0.2% m/m.
  1030 ET EIA Weekly Petroleum Status Report.
  1300 ET Treasury auctions $21 billion in 10-year T-notes.
  1400 ET FOMC minutes from Jun 18-19 meeting.
  1610 ET Fed Chairman Ben Bernanke speaks at a National Bureau of Economic Research Conference in Boston on The First 100 Years of the Federal Reserve: The Policy Record, Lessons Learned, and Prospects for the Future.
JPN 0100 ET Japan Jun consumer confidence expected -0.1 to 45.6, May 45.7.
  1950 ET Japan May machine orders expected +1.9% m/m and +3.3% y/y, Apr -8.8% m/m and -1.1% y/y.
  2200 ET Tokyo Jun average office vacancies, May 8.33%.
GER 0200 ET German final-Jun CPI (EU harmonized) expected unrevised from prelim +0.1% m/m and +1.9% y/y.


Company Name Symbol Time Event Description Period EPS Est (US$)
Fastenal Co FAST US 6:50 Q2 2013 Earnings Release Q2 2013 0.405
Family Dollar Stores Inc FDO US 7:00 Q3 2013 Earnings Release Q3 2013 1.026
MSC Industrial Direct Co Inc MSM US 7:30 Q3 2013 Earnings Release Q3 2013 0.973
Family Dollar Stores Inc FDO US 10:00 Q3 2013 Earnings Call Q3 2013  
Fastenal Co FAST US 10:00 Q2 2013 Earnings Call Q2 2013  
MSC Industrial Direct Co Inc MSM US 11:00 Q3 2013 Earnings Call Q3 2013  
Smithfield Foods Inc SFD US 14:30 Hearing Smithfield and Beyond:Examining Foreign Purchases of Amer. Food Cos.""    
Chevron Corp CVX US 17:00 Q2 2013 Sales and Revenue Release - Interim Update Q2 2013  
Yum! Brands Inc YUM US Aft-mkt Q2 2013 Earnings Release Q2 2013 0.54