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BARCHART MORNING CALL 9/20

|Includes: AA, AEE, AMD, AME, BAC, CTAS, Darden Restaurants, Inc. (DRI), FB, FFIC, GS, GT, HPQ, LDOS, MET, MTGE, NKE, PIR, SDRL, SEE, TIBX, V, VOLVY, VRTX

BARCHART MORNING CALL

Friday, September 20th, 2013View Older Reports

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OVERNIGHT MARKETS AND NEWS

December E-mini S&Ps (ESZ13 +0.03%) this morning are down -0.03% and European stocks are down -0.04%. Asian stocks closed weaker: Japan -0.16%, Australia -0.36%, Singapore -0.44%, India -1.85%. Markets in Hong Kong, China, Taiwan and South Korea were closed for holidays. U.S. and European stocks were slightly lower as the markets await speeches later today from several Federal Reserve policy makers. Stocks in India tumbled after the RBI unexpectedly hiked interest rates. Commodity prices are mixed. Oct crude oil (CLV13 -0.66%) is down -0.37% and Oct gasoline (RBV13 +0.32%) is up +0.39%. Dec gold (GCZ13 -0.81%) is down -0.74% and Dec copper (HGZ13 -0.16%) is up +0.16%. Agricultural prices are stronger and livestock prices are mostly lower. The dollar index (DXY00 -0.02%) is down -0.06%. EUR/USD (^EURUSD) is up +0.07% and USD/JPY (^USDJPY) is down -0.05%. December T-note prices (ZNZ13 +0.05%) are up +1.5 ticks.

Erkki Liikanen, ECB Council member and had of the Bank of Finland, said today that "there are soft signs of the economy improving" and that indicators measuring confidence among households and businesses are signaling the worst may be over for the Eurozone economy.

The Reserve Bank of India (RBI) unexpectedly hiked its benchmark interest rate by 25 bp to 7.50%, the first increase in 2 years, and scaled back measures put on by previous RBI Governor Subbarao to boost the rupee when they cut the marginal standing facility rate to 9.5% from 10.25%. Newly appointed RBI Governor Rajan said "We want to fight against inflation and we'll bring inflation down." He added the goal of the RBI is to slow wholesale-price inflation to below +5.0% y/y from the +6.1% y/y increase last month.

UK Aug public sector net borrowing rose +11.5 billion pounds, less than expectations of +11.9 billion pounds.

Japan Aug nationwide department store sales rose +2.7% y/y as they rebounded from the -2.5% y/y decline seen in July.

U.S. STOCK PREVIEW

There are three Fed officials that will speak today: Kansas City Fed President Esther George, St. Louis Fed President James Bullard, and Minneapolis Fed President Narayana Kocherlakota. There is one of the Russell 1000 companies that reports earnings today: Darden Restaurants (consensus $0.70).

OVERNIGHT U.S. STOCK MOVERS

Darden Restaurants (DRI -1.02%) reported Q1 EPS of 53 cents, well below consensus of 70 cents.

Facebook (FB +1.66%) was upgraded to "Outperform" from "Market Perform" at Cowen.

MetLife (MET -3.19%) was upgraded to "Conviction Buy" from "Buy" at Goldman.

Pier 1 Imports (PIR -13.86%) was upgraded to "Outperform" from "Neutral" at Credit Suisse.

Ameren (AEE -0.20%) was upgraded to "Overweight" from "Equal Weight" at Barclays.

Volvo (VOLVY +0.75%) was upgraded to "Buy" from "Hold" at Societe Generale.

Gabelli reported a 5.13% stake in Flushing Financial (FFIC -0.92%) .

American Capital Mortgage (MTGE -1.81%) cuts its dividend to 70 cents from 80 cents per share.

Cintas (CTAS -0.27%) reported Q1 EPS of 63 cents, right on consensus, although Q1 revenue of $1.12 billion was slightly better than consensus of $1.1 billion.

TIBCO (TIBX +2.64%) reported Q3 adjusted EPS of 28 cents, better than consensus of 22 cents.

MARKET COMMENTS

Dec E-mini S&Ps (ESZ13 +0.03%) this morning are little changed, down -0.50 of a point (-0.03%). The S&P 500 index on Thursday climbed to a record high early on carry-over support from the Fed's action Wednesday to maintain its stimulus. Stocks, however, erased their gains and closed mostly lower after stronger-than-expected U.S. economic data on Aug existing home sales, and Sep Philadelphia Fed manufacturing activity bolstered speculation the Fed may still taper QE by year-end. Closes: S&P 500 -0.18%, Dow Jones -0.26%, Nasdaq 100 +0.19%.

Dec 10-year T-notes (ZNZ13 +0.05%) this morning are up +1.5 ticks. Dec 10-year T-note prices on Thursday fell back from a 5-week high and closed lower on concern that strength in U.S. economic data may yet prompt the Fed to cut its bond purchases. The Sep Philadelphia Fed manufacturing index jumped to a 2-1/2 year high and Aug existing home sales unexpectedly rose to a 6-1/2 year high. Closes: TYZ3 -12.00, FVZ3 -6.25.

The dollar index (DXY00 -0.02%) this morning is down -0.052 (-0.06%). EUR/USD (^EURUSD) is up +0.0010 (+0.07%) and USD/JPY (^USDJPY) is down -0.05 (-0.05%). The dollar index on Thursday closed higher after stronger-than-expected U.S. economic data fueled speculation the Fed may yet cut QE by year-end. EUR/USD posted a 7-1/4 month high after the Fed's inaction to taper QE fueled a drop in global money market rates that may ease pressure on the ECB to provide additional stimulus. Closes: Dollar index +0.135 (+0.17%), EUR/USD +0.0007 (+0.06%), USD/JPY +1.528 (+1.56%).

Oct WTI crude oil (CLV13 -0.66%) this morning is down -39 cents (-0.37%) and Oct gasoline (RBV13 +0.32%) is up +0.0105 (+0.39%). Oct crude oil and gasoline prices on Thursday gave up early gains and closed lower. Bearish factors included (1) the rebound in the dollar, and (2) increased oil supplies after Libya's oil minister said that its crude production will climb to 700,000-800,000 barrels a day from the current 200,000 barrels a day as it reopened its El Feel and Shahara oil fields that were shut after worker protests. Closes: CLV3 -1.68 (-1.55%), RBV3 -0.0449 (-1.64%).

GLOBAL EVENT CALENDAR09/20/2013

US 1230 ET Kansas City Fed President Esther George speaks on the economy at the Manhattan Institute for Policy Research.
  1255 ET St. Louis Fed President James Bullard speaks on the U.S. economy and monetary policy at the New York Association for Business Economics luncheon.
  1345 ET Minneapolis Fed President Narayana Kocherlakota delivers a speech at the Conference on Extracting and Understanding the Risk Neutral Probability Density from Options Prices.
  1500 ET Aug Cattle on Feed.
JPN 0130 ET Japan Aug nationwide department store sales, July -2.5% y/y.
UK 0430 ET UK Aug public sector net borrowing expected +11.9 billion pounds, July -1.6 billion pounds.
EUR 1000 ET Eurozone Sep consumer confidence expected +1.1 to -14.5, Aug -15.6.

U.S. STOCK CALENDAR09/20/2013

Company Name Ticker Time Event Description Period Estimate
Darden Restaurants Inc DRI US Bef-mkt Q1 2014 Earnings Release Q1 2014 0.703
Sealed Air Corp SEE US 8:00 Analyst Day Y 2013  
Darden Restaurants Inc DRI US 8:30 Q1 2014 Earnings Call Q1 2014  
Seadrill Ltd SDRL NO 8:30 Annual General Meeting Y 2013  
Goodyear Tire & Rubber Co/The GT US 9:00 Investor Meeting Y 2013  
Towers Watson & Co TW US 9:30 Analyst Day Y 2013  
Golar LNG Ltd GLNG US 10:10 Annual General Meeting Y 2013  
Advanced Micro Devices Inc AMD US Aft-mkt Vertex Pharm. & Ametek Inc. Replace Advanced Micro Devices & SAIC in S&P 500    
Advanced Micro Devices Inc AMD US Aft-mkt Advanced Micro Devices & SAIC Replace Vertex Pharm. & Ametek in S&P MidCap 400    
Alcoa Inc AA US Aft-mkt Nike Inc. Will Replace Alcoa Inc. in DJIA    
Hewlett-Packard Co HPQ US Aft-mkt Visa Inc. Will Replace Hewlett-Packard Co. in DJIA    
Bank of America Corp BAC US Aft-mkt Goldman Sachs Group Will Replace Bank of America Corp in DJIA    
NIKE Inc NKE US Aft-mkt Nike Inc. Will Replace Alcoa Inc. in DJIA    
Vertex Pharmaceuticals Inc VRTX US Aft-mkt Vertex Pharm. & Ametek Inc. Replace Advanced Micro Devices & SAIC in S&P 500    
Vertex Pharmaceuticals Inc VRTX US Aft-mkt Advanced Micro Devices & SAIC Replace Vertex Pharm. & Ametek in S&P MidCap 400    
AMETEK Inc AME US Aft-mkt Vertex Pharm. & Ametek Inc. Replace Advanced Micro Devices & SAIC in S&P 500    
AMETEK Inc AME US Aft-mkt Advanced Micro Devices & SAIC Replace Vertex Pharm. & Ametek in S&P MidCap 400    
Goldman Sachs Group Inc/The GS US Aft-mkt Goldman Sachs Group Will Replace Bank of America Corp in DJIA    
SAIC Inc SAI US Aft-mkt Vertex Pharm. & Ametek Inc. Replace Advanced Micro Devices & SAIC in S&P 500    
SAIC Inc SAI US Aft-mkt Advanced Micro Devices & SAIC Replace Vertex Pharm. & Ametek in S&P MidCap 400    
Visa Inc V US Aft-mkt Visa Inc. Will Replace Hewlett-Packard Co. in DJIA