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Barchart Morning Call 8/29

|Includes: AMCX, CIM, CPB, CRM, DMND, GAME, GES, GLNG, LSTR, MHK, PLL, Signet Jewelers Limited (SIG), SPLK, TFM, UHAL
Barchart Morning Call

BC - Thu Aug 29, 6:44AM CDT

 

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OVERNIGHT MARKETS AND NEWS

September E-mini S&Ps (ESU13 +0.31%) this morning are up +0.11% and European stocks are little changed, down -0.02%. Asian stocks closed mostly higher: Japan +0.91%, Hong Kong +0.84%, China -0.42%, Taiwan +1.19%, Australia +0.10%, Singapore +1.13%, South Korea +1.30%, India +2.25%. Stocks received a lift and gold and crude oil prices fell after the prospects for imminent military strikes by the U.S. and its allies against Syria receded. The UK and France said that they favor waiting for the results of a UN investigation into alleged Syrian use of chemical weapons, while U.S. Defense Secretary Hagel said the U.S., which has evidence that the Syrian government was responsible for the chemical attacks, won't act without allies. Commodity prices are mostly lower. Oct crude oil (CLV13 -0.73%) is down -0.68% and Oct gasoline (RBV13 -0.81%) is down -0.25%. Dec gold (GCZ13 -0.50%) is down -0.49% and Sep copper (HGU13 -0.30%) is up +0.03%. Agricultural and livestock prices are mostly lower. The dollar index (DXY00 +0.50%) is up +0.53% at a 2-week high on expectations for U.S. Q2 GDP to be revised higher later this morning. EUR/USD (^EURUSD) is down -0.62% at a 2-week low after German unemployment unexpectedly increased. USD/JPY (^USDJPY) is up +0.51%. India's rupee rallied over 2% as it rebounded from a record low after the Reserve Bank of India said it will supply dollars to the country's top oil importers via foreign-exchange swaps in an attempt to cool demand for foreign exchange. The rupee fell to a record low against the dollar Wednesday on concern a surge in oil prices will worsen India's current account deficit at a time when the prospect of a cut in U.S. stimulus was already fueling capital outflows from India. September T-note prices (ZNU13 -0.06%) are little changed, up +0.5 of a tick.

German Aug unemployment unexpectedly rose by +7,000, the first increase in 3-months and worse than expectations of a -5,000 decline, while the Aug unemployment rate remained unchanged at 6.8%, right on expectations.

ECB Council member Nowotny, speaking at an event in Austria today, said that the fact that the Eurozone has returned to growth and that markets "are starting to work again" is no reason for the ECB to end its accommodative policy stance as "there are still very low growth rates and uncertainty is still high."

Japan July retail sales fell-1.8% m/m and -0.3% y/y, weaker than expectations of -1.0% m/m and +0.1% y/y, with the -1.8% m/m drop the biggest monthly decline in 2-years.

U.S. STOCK PREVIEW

Today's initial unemployment claims report is expected to show a decline of -4,000 to 332,000, reversing part of last week's increase of +13,000 to 336,000. Continuing claims are expected to fall -11,000 to 2.988 million, reversing part of last week's increase of +29,000 to 2.999 million. There are 7 of the Russell 1000 companies that report earnings today: Campbell Soup (consensus $0.42), Golar LNG (0.20), Signet Jewelers (0.83), Pall Corp (0.89), Salesforce.com (0.07), Splunk (-0.03), Chimera Investment Corp (0.09). Equity conferences during the remainder of this week include Simmons European Energy Conference on Wed-Thu, Robert W. Baird & Co. Consumer Corporate Access Day on Thu, and 6th International Financial and Capital Markets Conference on Thu.

OVERNIGHT U.S. STOCK MOVERS

Citigroup group keeps its "Buy" rating on Harley-Davidson (HOG +0.59%) and said the company's new motorcycles for 2014 should accelerate sales growth.

Signet Jewelers (SIG +2.98%) reported Q2 EPS ex-items of 90 cents, better than consensus of 83 cents.

Mohawk (MHK -1.51%) was upgraded to "Strong Buy" from "Outperform" at Raymond James.

AMC Networks (AMCX -0.57%) was upgraded to "Buy" from "Neutral" at B. Riley.

Pall Corp. (PLL +0.55%) reported Q4 EPS of 90 cents, better than consensus of 89 cents.

Campbell Soup (CPB -0.80%) reported Q4 EPS of 45 cents, stronger than consensus of 42 cents.

Shanda Games (GAME +3.88%) reported Q2 adjusted EPS of 24 cents, better than consensus of 20 cents.

The Fresh Market (TFM -0.09%) reported Q2 EPS of 32 cents, right on consensus, but lowered guidance on fiscal 2013 EPS to $1.50-$1.55, below consensus of $1.59.

Guess (GES +0.29%) surged 17% in after-hours trading after it reported Q2 adjusted EPS of 52 cents, well ahead of consensus of 36 cents.

S.A.C. Capital reported a 5.1% passive stake in Diamond Foods (DMND +0.92%) .

MARKET COMMENTS

Sep E-mini S&Ps (ESU13 +0.31%) this morning are up +1.75 points (+0.11%). The S&P 500 index on Wednesday closed higher after a surge in crude oil to a 2-year high fueled a rally in energy companies. Stocks were undercut by an impending U.S.-led military strike against Syria and the weaker-than-expected -1.3% m/m drop in U.S. July pending home sales (vs expectations of unchanged). Closes: S&P 500 +0.27%, Dow Jones +0.33%, Nasdaq 100 +0.41%.

Sep 10-year T-notes (ZNU13 -0.06%) this morning are up +0.5 of a tick. Sep 10-year T-note prices on Wednesday closed lower as safe-haven demand from the Syrian crisis was offset by supply pressures from this week's $98 billion T-note auction package. Another negative factor for T-note prices was weak demand for the Treasury's $35 billion auction of 5-year T-notes, which had a bid-to-cover ratio of 2.38 that was well below the 12-auction average of 2.78. Closes: TYU3 -15.00, FVU3 -7.50.

The dollar index (DXY00 +0.50%) this morning is up +0.428 (+0.53%) at a 2-week high. EUR/USD (^EURUSD) is down -0.0083 (-0.62%) at a 2-week low and USD/JPY (^USDJPY) is up +0.50 (+0.51%). The dollar index on Wednesday closed higher as the prospects of U.S. military action against Syria boosted the safe-haven demand for the dollar. The dollar also received additional safe-haven demand from a plunge in emerging-market currencies after the Indian rupee and Turkish lira fell to record lows. Closes: Dollar index +0.265 (+0.33%), EUR/USD -0.00536 (-0.40%), USD/JPY +0.613 (+0.63%).

Oct WTI crude oil (CLV13 -0.73%) this morning is down -75 cents (-0.68%) and Oct gasoline (RBV13 -0.81%) is down -0.0074 (-0.25%). Oct crude oil and gasoline prices on Wednesday rallied sharply with Oct crude soaring to a 2-year high on concern the conflict in Syria will spread and threaten crude oil supplies from the Middle East. Crude prices came off of their best levels after weekly EIA crude stockpiles climbed +2.986 million bbl, well above expectations of +750,000 bbl, and after U.S. crude production rose +1.2% to 7.609 million barrels a day in the week ended Aug 23, a new 23-3/4 year high. Closes: CLV3 +1.09 (+1.00%), RBV3 +0.0489 (+1.68%).

GLOBAL EVENT CALENDAR08/29/2013

US 0830 ET Weekly initial unemployment claims expected -4,000 to 332,000, previous +13,000 to 336,000. Weekly continuing claims expected -11,000 to 2.988 million, previous +29,000 to 2.999 million.
  0830 ET Revised Q2 GDP expected +2.2% (q/q annualized), previous +1.7%. Q2 personal consumption expected +1.7%, previous +1.8%. Q2 GDP price index expected unrevised at +0.7%. Q2 core PCE expected unrevised at +0.8%.
  0830 ET USDA weekly Export Sales.
  0850 ET St. Louis Fed President James Bullard delivers welcoming remarks at the Leadership Memphis 2014 event.
  1300 ET Treasury auctions $29 billion 7-year T-notes.
  1400 ET Richmond Fed President Jeffrey Lacker speaks at Christopher Newport University on A Look Back at the History of the Federal Reserve.
  1945 ET St. Louis Fed President James Bullard will speak on the U.S. economy and monetary policy at the Community Development Foundation Center in Tupelo, MS.
GER 0355 ET German Aug unemployment change expected -5,000, July -7,000. Aug unemployment rate expected unch at 6.8%, July 6.8%.
  0800 ET German Aug CPI (EU harmonized) expected +0.1% m/m and +1.7% y/y, July +0.4% m/m and +1.9% y/y.
UK 0430 ET UK Aug Lloyds business barometer, July 41.
  1905 ET UK Aug GfK consumer confidence expected +2 to -14, July -16.
JPN 1915 ET Japan Aug Markit/JMMA manufacturing PMI, July 50.7.
  1930 ET Japan July overall household spending expected +0.3% y/y, Jun -0.4% y/y.
  1930 ET Japan July jobless rate expected unch at 3.9%, Jun 3.9%. July job-to-applicant ratio expected +0.01 to 0.93, Jun 0.92.
  1930 ET Japan July national CPI expected +0.7% y/y, Jun +0.2% y/y. July national CPI ex fresh food expected +0.6% y/y, Jun +0.4% y/y. July national CPI ex food & energy expected -0.2% y/y, Jun -0.2% y/y.
  1930 ET Japan Aug Tokyo CPI expected +0.5% y/y, July +0.4% y/y. Aug Tokyo CPI ex fresh food expected +0.4% y/y, July +0.3% y/y. Aug Tokyo CPI ex food & energy expected -0.3% y/y, July -0.4% y/y.
  1950 ET Japan July industrial production expected +3.6% m/m and +1.8% y/y, Jun -3.1% m/m and -4.6% y/y.

U.S. STOCK CALENDAR08/29/2013

Company Name Ticker Time Event Description Period Estimate
Campbell Soup Co CPB US Bef-mkt Q4 2013 Earnings Release Q4 2013 0.418
Golar LNG Ltd GLNG US Bef-mkt Q2 2013 Earnings Release Q2 2013 0.201
Signet Jewelers Ltd SIG US 6:30 Q2 2014 Earnings Release Q2 2014 0.828
Pall Corp PLL US 7:00 Q4 2013 Earnings Release Q4 2013 0.886
Pall Corp PLL US 8:30 Q4 2013 Earnings Call Q4 2013  
Signet Jewelers Ltd SIG US 8:30 Q2 2014 Earnings Call Q2 2014  
Campbell Soup Co CPB US 10:00 Q4 2013 Earnings Call Q4 2013  
Golar LNG Ltd GLNG US 10:00 Q2 2013 Earnings Call Q2 2013  
Landstar System Inc LSTR US 14:00 Q3 2013 Guidance Call Q3 2013  
AMERCO UHAL US 14:00 Analyst and Investor Meeting Y 2013  
Splunk Inc SPLK US 16:30 Q2 2014 Earnings Call Q2 2014  
Salesforce.com Inc CRM US 17:00 Q2 2014 Earnings Call Q2 2014  
Salesforce.com Inc CRM US Aft-mkt Q2 2014 Earnings Release Q2 2014 0.069
Splunk Inc SPLK US Aft-mkt Q2 2014 Earnings Release Q2 2014 -0.028
AMERCO UHAL US   Annual General Meeting    
Chimera Investment Corp CIM US   Q2 2012 Earnings Release Q2 2012 0.093