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BARCHART MORNING CALL 9/23

|Includes: AXL, BB, FDX, GOOG, JCP, LMT, LUV, MSFT, PVAC, RHT, SHW, UPS, Walgreens Boots Alliance, Inc. (WBA)

BARCHART MORNING CALL

Monday, September 23rd, 2013View Older Reports

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OVERNIGHT MARKETS AND NEWS

December E-mini S&Ps (ESZ13 -0.07%) this morning are up +0.13% and European stocks are little changed, down -0.01%. Asian stocks closed mixed: Japan closed for holiday, Hong Kong -0.56%, China +1.64%, Taiwan +1.02%, Australia -0.46%, Singapore -0.72%, South Korea +0.18%, India -1.79%. Stocks received a boost on signs of strength in the global economy after a Chinese manufacturing index climbed to a 6-month high and Eurozone services and manufacturing growth accelerated to the fastest pace in 2-1/4 years this month. The markets await speeches from several Fed Presidents along with a speech from ECB President Draghi before the European Parliament later today. Commodity prices are mixed. Nov crude oil (CLX13 +0.07%) is up +0.21% and Nov gasoline (RBX13 +0.14%) is up +0.13%. Dec gold (GCZ13 -0.77%) is down -0.67% and Dec copper (HGZ13 -1.01%) is down -0.71%. Agricultural prices are mixed. The dollar index (DXY00 -0.03%) is down -0.02%. EUR/USD (^EURUSD) is down -0.07% and USD/JPY (^USDJPY) is down -0.46%. December T-note prices (ZNZ13 -0.07%) are down -2.5 ticks.

The China Sep HSBC/Markit flash manufacturing PMI rose +1.1 from Aug to 51.2, stronger than expectations of +0.8 to 50.9 and the fastest pace of expansion in 6 months.

The German Sep manufacturing PMI unexpectedly fell -0.5 from Aug to 51.3, weaker than expectations of a +0.4 point increase to 52.2. The German Sep PMI services index jumped +1.6 from Aug to 54.4, better than expectations of +0.2 to 53.0 and the fastest pace of expansion in 7 months.

The Eurozone Sep PMI composite rose +0.6 from Aug to 52.1, better than expectations of +0.3 to 51.8 and the fastest pace of expansion in 2-1/4 years.

U.S. STOCK PREVIEW

There are two appearances by Fed officials today: Atlanta Fed President Dennis Lockhart speaks at the Bluin Creative Leadership Summit at the Metropolitan Club in New York, and New York Fed President William Dudley speaks to the Fordham Wall Street Council at the Fordham University Graduate School of Business Administration. There is one of the Russell 1000 companies that reports earnings today: Red Hat (consensus $0.33).

CRT Capital One-On-One Investor Conference on Mon, 12th Annual Biological Production Forum 2013 on Mon-Wed, Bank of America Merrill Lynch Banking & Insurance CEO Conference on Tue, Bank of America Merrill Lynch Power & Gas Leaders Conference on Tue, Credit Lyonnais Securities Asia Ltd Investors Forum on Tue, Denver Gold Forum on Tue, Deutsche Bank dbAccess Energy Conference on Tue, Wolfe Research Power and Gas Leaders Conference on Tue, Goldman Sachs Communacopia Conference on Tue-Thu, Global AgInvesting Asia 2013 on Wed, PSA The Pharmaceutical Strategy Conference on Wed, UBS Chemicals Conference on Wed, Keefe Bruyette & Woods Insurance Conference on Wed-Thu, and Capital Link International Shipping & Marine Services Forum on Thu.

OVERNIGHT U.S. STOCK MOVERS

Walgreens (WAG -0.84%) was upgraded to "Overweight" from "Equal Weight" at Morgan Stanley.

FedEx (FDX unch) was downgraded to "Hold" from "Buy" at Stifel.

Southwest (LUV -0.89%) was upgraded to "Neutral" from "Underperform" at BofA/Merrill.

Towers Watson (TW +2.90%) was downgraded to "Neutral" from "Overweight" at JPMorgan.

Citigroup kept its "Buy" rating on Nike (NKE -0.19%) and raised its price target on the stock to $81 from $72.

Sherwin-Williams (SHW -0.81%) was upgraded to "Outperform" from "Neutral" at Credit Suisse.

BlackBerry (BBRY -17.02%) was downgraded to "Hold" from "Buy" at Jefferies.

Lockheed Martin (LMT -1.83%) was awarded a $3.92 billion contract modification to a previously awarded contract for production of both U.S. government and exportable Foreign Military Sales Terminal High Altitude Area Defense Interceptors plus associated equipment to the United Arab Emirates.

Billionare investor George Soros reported a 9.57% passive stake in Penn Virginia (PVA +3.47%) .

Moody's Investors Service upgraded its outlook on the Ba1 government bond rating of the Government of Ireland to stable from negative.

Sandra Dauch reports 9.94% passive stake in American Axle (AXL -0.74%) .

Bloomberg reported that J. C. Penney (JCP -1.37%) is in talks to raise additional funds.

MARKET COMMENTS

Dec E-mini S&Ps (ESZ13 -0.07%) this morning are up +2.25 points (+0.13%). The S&P 500 index on Friday fell back from Thursday's record high and closed lower. Bearish factors included (1) the ongoing political wrangling in Washington over the upcoming deadlines for an Oct 1 continuing resolution to fund the government and a mid-Oct debt ceiling hike, and (2) hawkish comments from St. Louis Fed President Bullard who said a small tapering of bond buying is possible next month. Closes: S&P 500 -0.72%, Dow Jones -1.19%, Nasdaq 100 -0.40%.

Dec 10-year T-notes (ZNZ13 -0.07%) this morning are down -2.5 ticks. Dec 10-year T-note prices on Friday closed higher on increased safe-haven demand as stocks sold off. T-notes fell back from their best levels after St. Louis Fed President Bullard said a "small" tapering of stimulus was possible at next month's FOMC meeting. Closes: TYZ3 +3.00, FVZ3 unch.

The dollar index (DXY00 -0.03%) this morning is down -0.020 (-0.02%). EUR/USD (^EURUSD) is down -0.0010 (-0.07%) and USD/JPY (^USDJPY) is down -0.46 (-0.46%). The dollar index on Friday closed higher on comments from St. Louis Fed President Bullard who said a "small" QE3 tapering is possible at next month's FOMC meeting. Declines in EUR/USD were limited after Eurozone Sep consumer confidence rose +0.7 to a 2-year high of -14.9. Closes: Dollar index +0.059 (+0.07%), EUR/USD -0.00025 (-0.02%), USD/JPY -0.133 (-0.13%).

Nov WTI crude oil (CLX13 +0.07%) this morning is up +22 cents (+0.21%) and Nov gasoline (RBX13 +0.14%) is up +0.0036 (+0.13%). Nov crude oil and gasoline prices on Friday closed lower. Bearish factors included (1) the stronger dollar, and (2) continued hopes that the U.S. will not launch a military strike against Syria with the current diplomatic efforts on Syria's chemical weapons. Closes: CLX3 -1.11 (-1.05%), RBX3 -0.0122 (-0.46%).

GLOBAL EVENT CALENDAR09/23/2013

US 0830 ET Aug Chicago Fed National Activity Index expected +0.10 to -0.05, July -0.15.
  0920 ET Atlanta Fed President Dennis Lockhart speaks at the Bluin Creative Leadership Summit at the Metropolitan Club in New York.
  0930 ET New York Fed President William Dudley speaks to the Fordham Wall Street Council at the Fordham University Graduate School of Business Administration.
  1100 ET USDA weekly grain export inspections.
  1330 ET Dallas Fed President Richard Fisher speaks at the Independent Bankers Association of Texas Annual Convention on banking conditions in Texas and the U.S. and comments on Too Big to Fail.
  1500 ET USDA Aug Cold Storage.
  1600 ET USDA Crop Progress.
GER 0330 ET German Sep PMI manufacturing expected +0.4 to 52.2, Aug 51.8. Sep PMI services expected +0.2 to 53.0, Aug 52.8
EUR 0400 ET Eurozone Sep PMI composite expected +0.3 to 51.8, Aug 51.5.
  0900 ET ECB President Mario Draghi speaks at the European Parliament to the Committee on Economic and Monetary Affairs.
JPN n/a Japanese markets closed for Autumnal Equinox Day.

U.S. STOCK CALENDAR09/23/2013

Company Name Ticker Time Event Description Period Estimate
FedEx Corp FDX US 9:00 Annual General Meeting Y 2013  
Microsoft Corp MSFT US 10:30 Microsoft Media Event    
Google Inc GOOG US 14:30 Google Bid to End Author Guild Lawsuit    
Red Hat Inc RHT US 17:00 Q2 2014 Earnings Call Q2 2014  
Red Hat Inc RHT US Aft-mkt Q2 2014 Earnings Release Q2 2014 0.327
United Parcel Service Inc UPS US   Roadshow - Day 1 Y 2013