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BARCHART MORNING CALL 10/23

|Includes: AEP, AIQUF, ALB, ALXN, AMCR, BCR, CAKE, CAM, CAT, Coca-Cola European Partners plc (CCEP), CELG, CM, CMCSA, DGX, DO, DPS-OLD, EFX, EQT, LLY, LO, LRCX, LUV, MJN, MMM, ORLY, OXY, PCP, PHM, PLD, PLXS, RE, RTN, SIAL, SKX, T, TROW, TSCO, UAA, UNP, ZBH

BARCHART MORNING CALL

Thursday, October 23rd, 2014

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OVERNIGHT MARKETS AND NEWS

December E-mini S&Ps (ESZ14 +0.48%) this morning are up +0.23% and European stocks are down -0.21%. European stocks declined as disappointing earnings results from Unilever and Michelin outweighed positive economic data that showed Oct manufacturing activity in China and Europe unexpectedly expanded. Asian stocks closed mostly lower: Japan -0.37%, Hong Kong -0.30%, China -0.94%, Taiwan -0.20%, Australia -0.05%, Singapore +1.05%, South Korea -0.30%, India closed for holiday. China's Shanghai Stock Index fell to a 1-month low on concern a planned trading link between China and Hong Kong will be delayed after Reuters reported that major banks and money managers asked the Hong Kong securities regulator to delay the start of the trading link between the Hong Kong and Shanghai stock exchanges because of uncertainty over rules. Commodity prices are mixed. Dec crude oil(CLZ14 +0.24%) is up +0.29%. Dec gasoline (RBZ14 +0.20%) is up +0.23%. Dec gold (GCZ14 -0.72%) is down -0.52%. Dec copper (HGZ14 +0.36%) is up +0.46%. Agriculture and livestock prices are mostly higher. The dollar index (DXY00 unch) is down -0.04%. EUR/USD (^EURUSD) is up +0.15%. USD/JPY (^USDJPY) is up +0.33% at a 1-1/2 week high. Dec T-note prices (ZNZ14 -0.09%) are down -1.5 ticks.

The China Oct HSBC manufacturing PMI unexpectedly climbed +0.2 to 50.4, a faster pace of expansion than expectations of unchanged at 50.2.

The German Oct Markit/BME manufacturing PMI unexpectedly rose +1.9 to 51.8, a faster pace of expansion than expectations of -0.4 to 49.5.

The Eurozone Oct Markit manufacturing PMI unexpectedly rose +0.4 to 50.7, a faster pace of expansion than expectations of -0.4 to 49.9.

The Japan Markit/JMMA manufacturing PMI rose +1.1 to 52.8, better than expectations of unch at 51.7 and the fastest pace of expansion in 7 months.

UK Oct CBI trends total orders unexpectedly fell -2 to -6, weaker than expectations of +1 to -3 and the lowest in 15 months. Oct BI trends selling prices fell -4 to -3, a bigger decline than expectations of -1 to 0. Oct CBI business optimism fell -11 to 8, a bigger decline than expectations of -4 to 15 and the lowest in 15 months.

UK Sep retail sales ex autos unexpectedly fell -0.3% m/m and rose +3.1% y/y, weaker than expectations of unch m/m and +3.4% y/y. Sep retail sales including autos fell -0.3% m/m and rose +2.7% y/y, weaker than expectations of -0.1% m/m and +2.9% y/y.

U.S. STOCK PREVIEW

The markets are expecting a mixed report today with initial claims rising +17,000, reversing most of last week's -23,000 decline, and with continued claims falling -9,000 after last week's rise of +7,000. The market is expecting today's Aug FHFA house price index to show an increase of +0.3% m/m, adding to the +0.1% increase seen in July. The market is expecting today's Sep leading indicators report to show a sharp increase of +0.7%, adding to the +0.2% increase seen in August.

There are 45 of the S&P 500 companies that report earnings today with notable reports including: Microsoft (consensus $0.55), Amazon (-$0.75), GM (0.95), Caterpillar (1.34), PulteGroup (0.36), Coca-Cola Enterprises (0.88), Comcast (0.71), Raytheon (1.60), VeriSign (0.69). Equity conferences during the remainder of this week include: Latin Markets Private Wealth Latin America and the Caribbean Forum on Thu.

OVERNIGHT U.S. STOCK MOVERS

Coca-Cola Enterprises (CCE -0.79%) reported Q3 EPS of 92 cents, better than consensus of 88 cents.

Celgene (CELG -0.22%) reported Q3 EPS of 97 cents, higher than consensus of 95 cents.

Precision Castparts (PCP -2.05%) reported Q2 EPS of $3.24, weaker than consensus of $3.32.

Eli Lilly (LLY unch) reported Q3 EPS of 66 cents, below consensus of 67 cents.

O'Reilly Automotive (ORLY -0.97%) gained over 3% in after-hours trading after it reported Q3 EPS of $2.06, stronger than consensus of $1.95, and then raised guidance on fiscal 2014 EPS to$7.19-$7.23, better than consensus of $7.15.

Cheesecake Factory (CAKE -0.34%) slid over 3% in after-hours trading after it reported Q3 EPS of 48 cents, less than consensus of 57 cents, and then lowered guidance on fiscal 2014 EPS to $2.07-$2.11, weaker than consensus of $2.21.

Lam Research (LRCX -1.82%) reported Q1 EPS of 96 cents, better than consensus of 93 cents.

Everest Re (RE +0.07%) reported Q3 EPS of $6.00, well above consensus of $4.79.

C.R. Bard (BCR -0.83%) reported Q3 adjusted EPS of $2.15, stronger than consensus of $2.10, and then raised guidance on fiscal 2014 EPS view to $8.34-$8.38 from $8.25-$8.35, better than consensus of $8.31.

Skechers (SKX +0.92%) reported Q3 EPS of $1.00, higher than consensus of 93 cents.

Plexus (PLXS -2.18%) reported Q4 EPS of 77 cents, below consensus of 78 cents.

Tractor Supply (TSCO -0.26%) jumped over 10% in after-hours trading after it reported Q3 EPS of 55 cents, better than consensus of 50 cents.

AT&T (T -0.35%) dropped 3% in after-hours trading after it reported Q3 adjusted EPS of 63 cents, less than consensus of 64 cents, and then lowered guidance on fiscal 2014 revenue growth view to 3%-4% from 5%.

Albemarle (ALB -2.28%) reported Q3 adjusted EPS of $1.14, higher than consensus of $1.02.

MARKET COMMENTS

Dec E-mini S&Ps (ESZ14 +0.48%) this morning are up +4.50 points (+0.23%). The S&P 500 index on Wednesday posted a 1-1/2 week high early but fell back and closed lower: S&P 500 -0.73%, Dow Jones -0.92%, Nasdaq -0.55%. Bearish factors included (1) terrorism concerns that fueled long liquidation in stocks after the Canadian Parliament was locked down when a Canadian soldier was shot at a war memorial in Ottawa and "multiple suspects" were reported loose inside the parliament building, and (2) a slide in energy producers after crude prices fell. The S&P 500 had posted a 1-1/2 week high on strong stock earnings results as 79% of reporting S&P 500 companies have exceeded estimates and 63% have also exceeded sales projections.

Dec 10-year T-notes (ZNZ14 -0.09%) this morning are down -1.5 ticks. Dec 10-year T-note futures prices on Wednesday slipped to a 1-week low and closed lower. Closes: TYZ4 -7.50, FVZ4 -5.00. Bearish factors included (1) the larger-than-expected increase in Sep U.S. CPI, which eases deflation concerns and dampens speculation the Fed will delay in raising interest rates, and (2) carry-over weakness from a slide in German bunds after comments from ECB Governing Council member Luc Coene dampened speculation the ECB will expand monetary easing when he said "it's too early to say if we'll adopt additional stimulus measures."

The dollar index (DXY00 unch) this morning is down -0.033 (-0.04%). EUR/USD (^EURUSD) is up +0.0019 (+0.15%). USD/JPY (^USDJPY) is up +0.35 (+0.33%) at a 1-1/2 week high. The dollar index on Wednesday closed higher on reduced deflation concerns after U.S Sep CPI rose more than expected, which bolsters the case for Fed interest rate hikes. Closes: Dollar index +0.438 (+0.51%), EUR/USD -0.0068 (-0.53%), USD/JPY +0.146 (+0.14%). EUR/USD remains under pressure on speculation that a slowdown in the Eurozone will prompt the ECB to expand stimulus measures.

Dec WTI crude oil (CLZ14 +0.24%) this morning is up +23 cents (+0.29%) and Dec gasoline (RBZ14 +0.20%) is up +0.0049 (+0.23%). Dec crude and Dec gasoline on Wednesday closed lower. Closes: CLZ4 -1.97 (-2.39%), RBZ4 -0.0469 (-2.18%). Bearish factors included (1) a rally in the dollar index, (2) the +7.1 million bbl surge in weekly EIA inventories to a 3-month high of 377.7 million bbl, over double expectations of a +3.0 million bbl build, and (3) the +953,000 bbl increase in crude supplies at Cushing, OK, the delivery point of WTI futures.

GLOBAL EVENT CALENDAR10/23/2014

US 0830 ET Weekly initial unemployment claims expected +17,000 to 281,000, previous -23,000 to 264,000. Weekly continuing claims expected -9,000 to 2.380 million, previous +7,000 to 2.389 million.
  0830 ET Sep Chicago Fed national activity index expected +0.36 to 0.15, Aug -0.21.
  0830 ET USDA weekly Export Sales.
  0900 ET Aug FHFA house price index expected +0.3% m/m, Jul +0.1% m/m.
  0945 ET Preliminary Oct Markit manufacturing PMI expected -0.5 to 57.0, Sep -0.4 to 57.5.
  1000 ET Sep leading indicators expected +0.7%, Aug +0.2%.
  1100 ET Oct Kansas City Fed manufacturing activity index expected unchanged at 6, Sep +3 to 6.
  1100 ET Treasury announces amount of 2-year T-notes (previous $29 billion), 2-year floating-rate notes (previous $13 billion), 5-year T-notes (previous $35 billion) and 7-year T-notes (previous $29 billion) to be auctioned Oct 28-30.
  1300 ET Treasury auctions $7 billion 30-year TIPS.
GER 0330 ET German Oct Markit/BME manufacturing PMI expected -0.4 to 49.5, Sep 49.9.
EUR 0400 ET Eurozone Oct Markit composite PMI expected -0.5 to 51.5, Sep 52.0.
  1000 ET Eurozone Oct consumer confidence expected -0.6 to -12.0, Sep -11.4.
UK 0430 ET UK Sep retail sales ex autos expected unch m/m and +3.4% y/y, Aug +0.2% m/m and +4.5% y/y.
  0430 ET UK Sep retail sales including autos expected -0.1% and +2.9% y/y, Aug +0.4% m/m and +3.9% y/y.
  0600 ET UK Oct CBI trends total orders expected +1 to -3, Sep -4. Oct CBI trends selling prices expected +1 to 0, Sep 1.
  0600 ET UK Oct CBI business optimism expected -4 to 15, Sep 19.
CHI 2130 ET China Sep property prices.

U.S. STOCK CALENDAR10/23/2014

Company Name Ticker Time Event Description Period Estimate
Precision Castparts Corp PCP US 3:01 Q2 2015 Earnings Release Q2 2015 3.321
Airgas Inc ARG US Bef-mkt Q2 2015 Earnings Release Q2 2015 1.295
Mead Johnson Nutrition Co MJN US Bef-mkt Q3 2014 Earnings Release Q3 2014 0.904
American Electric Power Co Inc AEP US Bef-mkt Q3 2014 Earnings Release Q3 2014 1.009
Dr Pepper Snapple Group Inc DPS US Bef-mkt Q3 2014 Earnings Release Q3 2014 0.877
Diamond Offshore Drilling Inc DO US Bef-mkt Q3 2014 Earnings Release Q3 2014 0.788
Nielsen NV NLSN US Bef-mkt Q3 2014 Earnings Release Q3 2014 0.652
PulteGroup Inc PHM US Bef-mkt Q3 2014 Earnings Release Q3 2014 0.364
Bemis Co Inc BMS US Bef-mkt Q3 2014 Earnings Release Q3 2014 0.673
T Rowe Price Group Inc TROW US Bef-mkt Q3 2014 Earnings Release Q3 2014 1.146
Alexion Pharmaceuticals Inc ALXN US Bef-mkt Q3 2014 Earnings Release Q3 2014 1.161
Southwest Airlines Co LUV US Bef-mkt Q3 2014 Earnings Release Q3 2014 0.531
Coca-Cola Enterprises Inc CCE US Bef-mkt Q3 2014 Earnings Release Q3 2014 0.883
Prologis Inc PLD US Bef-mkt Q3 2014 Earnings Release Q3 2014 0.461
Lorillard Inc LO US Bef-mkt Q3 2014 Earnings Release Q3 2014 0.892
Quest Diagnostics Inc DGX US Bef-mkt Q3 2014 Earnings Release Q3 2014 1.075
Union Pacific Corp UNP US Bef-mkt Q3 2014 Earnings Release Q3 2014 1.51
EQT Corp EQT US Bef-mkt Q3 2014 Earnings Release Q3 2014 0.501
Sigma-Aldrich Corp SIAL US Bef-mkt Q3 2014 Earnings Release Q3 2014 1.058
Celgene Corp CELG US Bef-mkt Q3 2014 Earnings Release Q3 2014 0.947
General Motors Co GM US Bef-mkt Q3 2014 Earnings Release Q3 2014 0.952
Eli Lilly & Co LLY US Bef-mkt Q3 2014 Earnings Release Q3 2014 0.665
Zimmer Holdings Inc ZMH US 7:00 Q3 2014 Earnings Release Q3 2014 1.301
Occidental Petroleum Corp OXY US 7:00 Q3 2014 Earnings Release Q3 2014 1.586
Raytheon Co RTN US 7:00 Q3 2014 Earnings Release Q3 2014 1.6
Comcast Corp CMCSA US 7:00 Q3 2014 Earnings Release Q3 2014 0.707
Under Armour Inc UA US 7:00 Q3 2014 Earnings Release Q3 2014 0.399
3M Co MMM US 7:30 Q3 2014 Earnings Release Q3 2014 1.961
Caterpillar Inc CAT US 7:30 Q3 2014 Earnings Release Q3 2014 1.34
Cameron International Corp CAM US 7:30 Q3 2014 Earnings Release Q3 2014 1.09
Zimmer Holdings Inc ZMH US 8:00 Q3 2014 Earnings Call Q3 2014  
CMS Energy Corp CMS US 8:00 Q3 2014 Earnings Release Q3 2014 0.385
Nielsen NV NLSN US 8:30 Q3 2014 Earnings Call Q3 2014  
PulteGroup Inc PHM US 8:30 Q3 2014 Earnings Call Q3 2014  
CMS Energy Corp CMS US 8:30 Q3 2014 Earnings Call Q3 2014  
Quest Diagnostics Inc DGX US 8:30 Q3 2014 Earnings Call Q3 2014  
Equifax Inc EFX US 8:30 Q3 2014 Earnings Call Q3 2014  
Comcast Corp CMCSA US 8:30 Q3 2014 Earnings Call Q3 2014  
Under Armour Inc UA US 8:30 Q3 2014 Earnings Call Q3 2014  
Union Pacific Corp UNP US 8:45 Q3 2014 Earnings Call Q3 2014  
3M Co MMM US 9:00 Q3 2014 Earnings Call Q3 2014  
American Electric Power Co Inc AEP US 9:00 Q3 2014 Earnings Call Q3 2014  
Nucor Corp NUE US 9:00 Q3 2014 Earnings Release Q3 2014 0.754
Diamond Offshore Drilling Inc DO US 9:00 Q3 2014 Earnings Call Q3 2014  
Raytheon Co RTN US 9:00 Q3 2014 Earnings Call Q3 2014  
Celgene Corp CELG US 9:00 Q3 2014 Earnings Call Q3 2014  
Leggett & Platt Inc LEG US 9:00 Q3 2014 Earnings Call Q3 2014  
Eli Lilly & Co LLY US 9:00 Q3 2014 Earnings Call Q3 2014  
Mead Johnson Nutrition Co MJN US 9:30 Q3 2014 Earnings Call Q3 2014  
Cameron International Corp CAM US 9:30 Q3 2014 Earnings Call Q3 2014  
Airgas Inc ARG US 10:00 Q2 2015 Earnings Call Q2 2015  
Occidental Petroleum Corp OXY US 10:00 Q3 2014 Earnings Call Q3 2014  
Precision Castparts Corp PCP US 10:00 Q2 2015 Earnings Call Q2 2015  
Alexion Pharmaceuticals Inc ALXN US 10:00 Q3 2014 Earnings Call Q3 2014  
Coca-Cola Enterprises Inc CCE US 10:00 Q3 2014 Earnings Call Q3 2014  
General Motors Co GM US 10:00 Q3 2014 Earnings Call Q3 2014  
EQT Corp EQT US 10:30 Q3 2014 Earnings Call Q3 2014  
Dr Pepper Snapple Group Inc DPS US 11:00 Q3 2014 Earnings Call Q3 2014  
Bemis Co Inc BMS US 11:00 Q3 2014 Earnings Call Q3 2014  
Caterpillar Inc CAT US 11:00 Q3 2014 Earnings Call Q3 2014  
Torchmark Corp TMK US 11:00 Q3 2014 Earnings Call Q3 2014  
O'Reilly Automotive Inc ORLY US 11:00 Q3 2014 Earnings Call Q3 2014  
Prologis Inc PLD US 12:00 Q3 2014 Earnings Call Q3 2014  
Southwest Airlines Co LUV US 12:30 Q3 2014 Earnings Call Q3 2014  
Nucor Corp NUE US 14:00 Q3 2014 Earnings Call Q3 2014  
Edwards Lifesciences Corp EW US 16:00 Q3 2014 Earnings Release Q3 2014 0.717
Principal Financial Group Inc PFG US 16:00 Q3 2014 Earnings Release Q3 2014 1.058
Stericycle Inc SRCL US 16:02 Q3 2014 Earnings Release Q3 2014 1.058
VeriSign Inc VRSN US 16:05 Q3 2014 Earnings Release Q3 2014 0.688
Altera Corp ALTR US 16:15 Q3 2014 Earnings Release Q3 2014 0.372
KLA-Tencor Corp KLAC US 16:15 Q1 2015 Earnings Release Q1 2015 0.463
Cerner Corp CERN US 16:30 Q3 2014 Earnings Call Q3 2014  
VeriSign Inc VRSN US 16:30 Q3 2014 Earnings Call Q3 2014  
Altera Corp ALTR US 16:45 Q3 2014 Earnings Call Q3 2014  
Chubb Corp/The CB US 17:00 Q3 2014 Earnings Call Q3 2014  
Amazon.com Inc AMZN US 17:00 Q3 2014 Earnings Call Q3 2014  
Stericycle Inc SRCL US 17:00 Q3 2014 Earnings Call Q3 2014  
Edwards Lifesciences Corp EW US 17:00 Q3 2014 Earnings Call Q3 2014  
Juniper Networks Inc JNPR US 17:00 Q3 2014 Earnings Call Q3 2014  
KLA-Tencor Corp KLAC US 17:00 Q1 2015 Earnings Call Q1 2015  
Chubb Corp/The CB US Aft-mkt Q3 2014 Earnings Release Q3 2014 1.949
Southwestern Energy Co SWN US Aft-mkt Q3 2014 Earnings Release Q3 2014 0.521
Flowserve Corp FLS US Aft-mkt Q3 2014 Earnings Release Q3 2014 0.993
Amazon.com Inc AMZN US Aft-mkt Q3 2014 Earnings Release Q3 2014 -0.747
Juniper Networks Inc JNPR US Aft-mkt Q3 2014 Earnings Release Q3 2014 0.355
Microsoft Corp MSFT US Aft-mkt Q1 2015 Earnings Release Q1 2015 0.551
Cerner Corp CERN US Aft-mkt Q3 2014 Earnings Release Q3 2014 0.422
Microsoft Corp MSFT US 17:30 Q1 2015 Earnings Call Q1 2015  
Regeneron Pharmaceuticals Inc REGN US   PDUFA, Eylea, branch retinal vein occlusion (OTC:BRVO)