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Tuesday, March 18th, 2014

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June E-mini S&Ps (ESM14 -0.04%) this morning are down -0.09% and European stocks are down -0.17% after German investor confidence slid for a third month to its lowest in 7-months. Also, Russian President Putin ordered approval of an accord on Crimea's accession to Russia, which signals Russia won't back down from annexation of Ukraine's territory even after the U.S. and EU imposed sanctions on Russian officials and threatened further measures. Asian stocks closed mostly higher: Japan +0.94%, Hong Kong +0.51%, China -0.23%, Taiwan +0.37%, Australia +0.51%, Singapore +0.05%, South Korea +0.69%, India +0.10%. India's Sensex Stock Index climbed to a record high after Goldman Sachs raised its recommendation on India to 'Overweight' from 'Market weight.' Commodity prices are mixed. Apr crude oil (CLJ14 +0.18%) is up +0.06%. Apr gasoline (RBJ14 +0.28%) is up +0.30%. Apr gold (GCJ14 -0.90%) is down -0.74%. May copper (HGK14 unch) is unch. Agriculture and livestock prices are mixed with Apr hogs up +0.78% at an all-time high. The dollar index (DXY00 +0.02%) is up +0.04. EUR/USD (^EURUSD) is down -0.13%. USD/JPY (^USDJPY) is down -0.32%. June T-note prices (ZNM14 +0.13%) are up +6 ticks.

The German Mar ZEW survey expectations of economic growth fell -9.1 to 46.6, a bigger decline than expectations of -3.7 to 52.0 and the lowest in 7-months. The Mar ZEW survey current situation rose +1.3 to 51.3, less than expectations of +2.0 to 52.0, but still the highest in 2-1/2 years.

Eurozone Feb new car registrations rose +8.0% y/y to 861 million.

The German Feb wholesale price index fell -0.1% m/m and -1.8% y/y.

Japan Feb machine tool orders were revised up to +26.2% y/y from the previously reported +26.0% y/y.


The market is expecting the FOMC at its 2-day meeting that begins today to cut QE3 by another $10 billion to $55 per month. Today's Feb CPI is expected to fall to +1.2% y/y from +1.6% in January. Meanwhile, the Feb core CPI is expected to be unchanged from January at +1.6% y/y. Today's Feb housing starts report is expected to show a modest upward rebound of +3.5% to 911,000 following the -16.0% plunge to 880,000 seen in January. There are 7 of the Russell 1000 companies report earnings today: FactSet (consensus $1.22), Hertz (0.32), Oracle (0.70), SolarCity (-0.58), Adobe (0.25), Tech Data (1.93), and DSW (0.29).

Equity conferences during the remainder of this week include: Consumer Analyst Group of Europe (CAGE) Conference on Mon-Wed, Bank of America Merrill Lynch Global Industrials & EU Auto Conference on Tue-Thu, Goldman Sachs TMT Leveraged Finance Conference on Wed, International Strategy & Investment Retail Summit on Wed, ISI Retail Summit on Wed-Thu, Gabelli & Company Specialty Chemicals Conference on Thu, Bloomberg Mexico Economic Summit on Thu, and Capital Link Invest in International Shipping Forum on Thu.


Cisco (CSCO +0.75%) was downgraded to 'Equal Weight' from 'Overweight' at Barclays.

DSW (DSW +1.16%) reported Q4 adjusted EPS of 31 cents, better than consensus of 29 cents.

Starting Wednesday, March 26, Walmart (WMT +0.54%) said that customers will be able to trade in their video games and apply the value immediately towards the purchase of anything sold at Walmart and Sam's Club.

Universal Health (UHS -0.32%) was upgraded to 'Buy' from 'Hold' at KeyBanc.

Hewlett-Packard (HPQ +1.41%) was upgraded to 'Overweight' from 'Equal Weight' at Barclays.

Hertz (HTZ +4.77%) reported Q4 EPS of 26 cents, weaker than consensus of 32 cents, and then lowered guidance on fiscal 2014 adjusted EPS to $1.70-$2.00, below consensus of$2.07. The board of Hertz then announced plans to separate into two independent, publicly traded companies.

Prosensa Holding N.V. (RNA -0.59%) reported encouraging 48-week data from its U.S.-based, Phase 2 placebo-controlled study, DMD114876 or DEMAND V, of its lead compound, drisapersen, for the treatment of Duchenne Muscular Dystrophy.

The Verge reports that Microsoft (MSFT +0.93%) will introduce Microsoft Office for Apple's (AAPL +0.39%) iPad at a press event later this month.

Moody's Investors Service downgraded Argentina's government bond rating to Caa1 from B3, and changed the outlook to stable from negative.

Con-way Freight (CNW +0.79%) announced that it will institute a general rate increase of 5.4% applicable to non-contractual business, effective March 31.

Castle Creek reported a 9.45% passive stake in Guaranty Federal Bancshares (GFED +0.63%) .

Gabelli reported a 5.59% stake in Xyratex (XRTX +0.08%) .


June E-mini S&Ps (ESM14 -0.04%) this morning are down -1.75 points (-0.09%). The S&P 500 on Monday closed higher. Supportive factors included (1) speculation that there will be no escalation to the Ukraine crisis despite Crimea's referendum on Sunday to leave the Ukraine and join Russia, and (2) the +0.6% rise in U.S. Feb industrial production, triple expectations of +0.2% m/m, which bolstered optimism in the U.S. economic outlook. Closes: S&P 500 +0.96%, Dow Jones +1.13%, Nasdaq +0.95%.

Jun 10-year T-notes (ZNM14 +0.13%) this morning are up +6 ticks. Jun 10-year T-note futures prices on Monday closed lower on the stronger-than-expected U.S. Feb industrial production report of +0.6% and on reduced safe-haven demand for Treasuries as stocks rallied on speculation that Crimea's vote to leave the Ukraine and join Russia won't lead to further escalation of the Ukraine crisis. Closes: TYM4 -12.00, FVM4 -7.50.

The dollar index (DXY00 +0.02%) this morning is up +0.030 (+0.04%). EUR/USD (^EURUSD) is down -0.0018 (-0.13%). USD/JPY (^USDJPY) is down -0.33 (-0.32%). The dollar index on Monday closed lower after a rally in stocks reduced the safe-haven demand for the dollar. EUR/USD strengthened on speculation that the Crimea situation may not escalate further after Crimea's vote to leave Ukraine and join Russia. Dollar losses were limited after the Chinese yuan tumbled to an 11-month low against the dollar as the PBOC widened the yuan's daily trading band to trade as much as 2% on either side of the reference rate, compared with the previous limit of 1%. Closes: Dollar index -0.061 (-0.08%), EUR/USD +0.00182 (+0.13%), USD/JPY +0.423 (+0.42%).

Apr WTI crude oil (CLJ14 +0.18%) this morning is up +6 cents (+0.06%) and Apr gasoline (RBJ14 +0.28%) is up +0.0086 (+0.30%). Apr crude and gasoline prices on Monday closed lower with Apr gasoline at a 5-week low. Negative factors for crude included (1) speculation that Crimea's vote to leave Ukraine and join Russia is unlikely to disrupt global crude supplies, and (2) expectations for weekly EIA crude inventories on Wednesday to increase +1.983 million bbl, the ninth consecutive increase. Closes: CLJ4 -0.81 (-0.82%), RBJ4 -0.0786 (-2.66%).


US 0830 ET Feb CPI expected +0.1% m/m and +1.2% y/y, Jan +0.1% m/m and +1.6% y/y. Feb CPI ex food & energy expected +0.1% m/m and +1.6% y/y, Jan +0.1% m/m and +1.6% y/y.
  0830 ET Feb housing starts expected +3.5% to 911,000, Jan -16.0% to 880,000. Feb building permits expected +1.6% to 960,000, Jan -4.6% to 945,000.
  0930 ET FOMC begins 2-day meeting.
EUR 0300 ET Eurozone Feb new car registrations, Jan +5.5% y/y.
  0600 ET Eurozone Jan trade balance expected +13.9 billion euros (sa), Feb +13.7 billion euros (sa).
GER 0300 ET German Feb wholesale price index, Jan -0.1% m/m and -1.7% y/y.
  0600 ET German Mar ZEW survey expectations of economic growth expected -3.7 to 52.0, Feb 55.7. Mar ZEW survey current situation expected +2.0 to 52.0, Feb 50.0.
JPN 0200 ET Revised Japan Feb machine tool orders, previous +26.0% y/y.
  1950 ET Japan Feb trade balance expected -600.0 billion yen, Jan -2.791 trillion yen. Feb exports expected +12.5% y/y, Jan +9.5% y/y. Feb imports expected +7.2% y/y, Jan +25.1% y/y.


Company Name Ticker Time Event Description Period Estimate
FactSet Research Systems Inc FDS US Bef-mkt Q2 2014 Earnings Release Q2 2014 1.218
Hertz Global Holdings Inc HTZ US Bef-mkt Q4 2013 Earnings Release Q4 2013 0.32
DSW Inc DSW US 8:30 Q4 2014 Earnings Call Q4 2014  
Hertz Global Holdings Inc HTZ US 10:00 Q4 2013 Earnings Call Q4 2013  
FactSet Research Systems Inc FDS US 11:00 Q2 2014 Earnings Call Q2 2014  
MDU Resources Group Inc MDU US 11:45 Analyst Meeting Y 2014  
Walt Disney Co/The DIS US 13:00 Annual General Meeting Y 2014  
McGraw Hill Financial Inc MHFI US 13:00 Investor Day Y 2014  
Toro Co/The TTC US 14:30 Annual General Meeting Y 2014  
Adobe Systems Inc ADBE US 17:00 Q1 2014 Earnings Call Q1 2014  
Oracle Corp ORCL US 17:00 Q3 2014 Earnings Call Q3 2014  
SolarCity Corp SCTY US 17:00 Q4 2013 Earnings Call Q4 2013  
Oracle Corp ORCL US Aft-mkt Q3 2014 Earnings Release Q3 2014 0.7
SolarCity Corp SCTY US Aft-mkt Q4 2013 Earnings Release Q4 2013 -0.577
Adobe Systems Inc ADBE US   Q1 2014 Earnings Release Q1 2014 0.252
Tech Data Corp TECD US 23:59 Q4 2014 Earnings Release Q4 2014 1.933
DSW Inc DSW US   Q4 2014 Earnings Release Q4 2014 0.294