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MORNING CALL 4/14

|Includes: AMAT, BAC, BATS Global Markets (BATS), BLK, CCL, CMG, DAL, DDC, DDD, EFX, FRC, GME, IDCC, INSY, PACW, PGR, PIR, PNC, RTN, SM, STX, WFC, WOOF, WYNN

MORNING CALL

Thursday, April 14th, 2016View Older Reports

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OVERNIGHT MARKETS AND NEWS

Jun E-mini S&Ps (ESM16 -0.04%) are down -0.05% as they consolidate after yesterday's sharp rally to a 4-month high. European stocks are up +0.01% at a 2-week high. Gains in European stocks were limited after German economic institutes cut their 2016 German GDP forecast to 1.6% from 1.8%. As expected, the BOE kept its benchmark rate unchanged at 0.50% and maintained its asset purchase target at 375 billion pounds following today's policy meeting. Asian stocks settled higher: Japan +3.23%, Hong Kong +0.85%, China +0.51%, Taiwan +0.18%, Australia +1.27%, Singapore +0.81%, South Korea +2.13%, India closed for holiday. Japan's Nikkei Stock Index rose to a 2-week high after USD/JPY gained for a second day, which boosted exporter stocks.

The dollar index (DXY00 +0.18%) is up +0.20% at a 2-week high. EUR/USD (^EURUSD) is down -0.08% at a 2-week low. USD/JPY (^USDJPY) is down -0.06%.

Jun T-note prices (ZNM16 -0.19%) are down -6 ticks.

The top German economic institutes that include Ifo, DIW, IWH and RWI cut their German 2016 growth estimate to 1.6% from 1.8%, citing a slump in global demand.

Singapore's central bank unexpectedly eased its monetary stance after the Monetary Authority of Singapore it moved to a neutral policy of zero percent appreciation in the local dollar, a policy last adopted during the 2008 global financial crisis.

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) weekly initial unemployment claims (expected +3,000 to 270,000, previous -9,000 to 267,000) and continuing claims (expected -8,000 to 2.183 million, previous +19,000 to 2.191 million), (2) Mar CPI (expected +0.2% m/m and +1.1% y/y, Feb -0.2% m/m and +1.0% y/y) and Mar core CPI (expected +0.2% m/m and +2.3% y/y, Feb +0.3% m/m and +2.3% y/y), (3) Fed Governor Jerome Powell's appearance before the Senate Banking Committee in a hearing on current trends and changes in the fixed-income markets, (4) Alanta Fed President Dennis Lockhart's speech to the ENGAGE International Investment Education Symposium, and (5) the Treasury's auction of $12 billion of 30-year T-bonds.

There are 6 of the S&P 500 companies that report earnings today: Bank of America (consensus $0.21), Wells Fargo (0.97), PNC Financial (1.70), Progressive (0.50), Blackrock (4.29), Delta Airlines (1.30).

U.S. IPO's scheduled to price today: Bats Global markets (BATS:BATS).

Equity conferences during the remainder of this week include: Goldman Sachs Cars Conference on Fri.

OVERNIGHT U.S. STOCK MOVERS

BlackRock (BLK +2.65%) reported Q1 EPS of $4.25, less than consensus of $4.30.

Bank of America (BAC +3.92%) reported Q1 EPS of 20 cents, below consensus of 21 cents.

3D Systems (DDD -0.18%) jumped 7% in pre-market trading after it was upgraded to 'Buy' from 'Underperform' by Bank of America/Merril Lynch.

Chipotle Mexican Grill (CMG +0.01%) climbed over 2% in pre-market trading after it ws upgraded to 'Overweight' from 'Neutral' at JPMorgan Chase.

Applied Materials (AMAT +1.82%) was upgraded to 'Buy' from 'Neutral' at UBS with a price target of $26.

A U.S. District judge ruled that Microsoft's allegations that InterDigital (IDCC +1.25%) engaged in anticompetitive conduct are "sufficient" for the antitrust suit against InterDigital to proceed.

Insys Therapeutics (INSY +2.35%) was rated a new 'Buy' at Janney Montgomery with a 12-month price target of $22.

ECB Vice President Constancio said the ECB will do "whatever necessary" to bring Eurozone inflation close to objective.

Wynn Resorts Ltd. (WYNN +0.50%) rose over 2% in after-hours trading after founder Steve Wynn spent $7.2 million to buy an additional 72,851 shares on April 11, according to a Form 4 filing.

Pier 1 Imports (PIR +5.61%) climbed 4% in after-hours trading after it reported Q3 EPS of 23 cents, above a March 7 estimate of 18 cents-22 cents.

Seagate Technology (STX -3.17%) fell 7% in pre-market trading after it reported preliminary Q3 revenue of $2.6 billion, below consensus of $2.7 billion and said it sees gross margins of 23%, below estimates of 25.7%.

Raytheon (RTN -0.40%) received a $1.01 billion contract from the U.S. Navy for design, manufacture, integration, demonstration and test of 15 Next Generation Jammer (NGJ) systems that will replace the ALQ-99 jammer system on EA-18G aircraft.

Dominion Diamond (DDC -3.06%) gained almost 2% in after-hours trading after it reported Q4 revenue of $178.1 million, better than consensus of $178 million.

MARKET COMMENTS

June E-mini S&Ps (ESM16 -0.04%) this morning are down -1.00 point (-0.05%). Wednesday's closes: S&P 500 +1.00%, Dow Jones +1.06%, Nasdaq +1.31%. The S&P 500 on Wednesday climbed to a 4-month high and closed higher on reduced Chinese economic concerns after China Mar exports rose +11.5% y/y, stronger than expectations of +10.0% y/y and the biggest increase in 13 months. There was also a rally in bank stocks after JPMorgan Chase rose +4.2% on better-than-expected Q1 earnings results. The main bearish factor was that U.S. Mar retail sales unexpectedly fell -0.3%, weaker than expectations of +0.1%, and Mar retail sales ex-autos rose +0.2%, weaker than expectations of +0.4%.

June 10-year T-note prices (ZNM16 -0.19%) this morning are down -6 ticks. Wednesday's closes: TYM6 +2.50, FVM6 unch. Jun T-notes on Wednesday fell to a 1-week but recovered and closed higher on the unexpected declines in the U.S. Mar retail sales and Mar PPI reports and on strong demand for the Treasury's $20 billion 10-year auction that had a bid-to-cover ratio of 2.75, higher than the 12-auction average of 2.63. T-note prices were undercut by the rally in the S&P 500 to a 4-month high and by reduced global economic concerns after China Mar exports rose by the most in 13 months.

The dollar index (DXY00 +0.18%) this morning is up +0.185 (+0.20%) at a 2-week high. EUR/USD (^EURUSD) is down -0.009 (-0.08%) at a 2-week low. USD/JPY (^USDJPY) is down -0.07 (-0.06%). Wednesday's closes: Dollar Index +0.785 (+0.84%), EUR/USD -0.0112 (-0.98%), USD/JPY +0.80 (+0.74%). The dollar index on Wednesday closed higher on weakness in EUR/USD which slid to a 2-week low after Eurozone Feb industrial production fell -0.8% m/m, weaker than expectations of -0.7% m/m and the biggest decline in 1-1/2 years.

May WTI crude oil (CLK16 +0.17%) is unch. May gasoline (RBK16 +0.18%) is down -0.0042 (-0.27%). Wednesday's closes: CLK6 -0.62 (-1.47%), RBK6-0.0071 (-0.46%). May crude and gasoline on Wednesday closed lower on the stronger dollar and on the +6.63 million bbl surge in EIA crude inventories to a record high 536.5 million bbl, more than expectations of a +1.0 million bbl increase. Crude oil received some underlying support from the -0.3% drop in U.S. crude production in the week ended Apr 8 to a 17-month low of 8.977 million bpd and from the -4.24 million bbl decline in weekly EIA gasoline supplies, a bigger decline than expectations of -1.5 million bbl.

GLOBAL EVENT CALENDAR04/14/2016

US 0830 ET Weekly initial unemployment claims expected +3,000 to 270,000, previous -9,000 to 267,000. Weekly continuing claims expected-8,000 to 2.183 million, previous +19,000 to 2.191 million.
  0830 ET Mar CPI expected +0.2% m/m and +1.1% y/y, Feb -0.2% m/m and +1.0% y/y. Mar CPI ex-food & energy expected +0.2% m/m and +2.3% y/y, Feb +0.3% m/m and +2.3% y/y.
  0830 ET USDA weekly Export Sales.
  1000 ET Fed Governor Jerome Powell appears before the Senate Banking Committee in a hearing on current trends and changes in the fixed-income markets.
  1000 ET Atlanta Fed President Dennis Lockhart speaks to the ENGAGE International Investment Education Symposium.
  1100 ET Treasury announces amount of 5-year TIPS (previous $16 billion) to be auctioned on Apr 21.
  1300 ET Treasury auctions $12 billion of 30-year T-bonds.
EUR 0500 ET Revised Eurozone Mar CPI, preliminary -0.1% y/y. Revised Mar core CPI, preliminary +1.0% y/y
UK 0700 ET BOE announces interest rate decision and asset purchase target, expected no change to the 0.50% benchmark rate or to the 375-billion-pound asset purchase target.
CHI 2200 ET China Mar industrial production expected +5.5% year-to-date y/y, Feb +5.4% year-to-date- y/y.
  2200 ET China Q1 GDP expected +1.5% q/q and +6.7% y/y, Q4 +1.6% q/q and +6.8% y/y.
  2200 ET China Mar retail sales expected +10.2% year-to-date y/y, Feb +10.2% year-to-date y/y.

U.S. STOCK CALENDAR04/14/2016

Company Ticker Time Event Description Period Estimate
PNC Financial Services Group Inc/The PNC US Bef-mkt Q1 2016 Earnings Release Q1 2016 1.701
Progressive Corp/The PGR US Bef-mkt Q1 2016 Earnings Release Q1 2016 0.5
BlackRock Inc BLK US Bef-mkt Q1 2016 Earnings Release Q1 2016 4.294
Delta Air Lines Inc DAL US Bef-mkt Q1 2016 Earnings Release Q1 2016 1.295
First Republic Bank/CA FRC US Bef-mkt Q1 2016 Earnings Release Q1 2016 0.803
Bank of America Corp BAC US 6:45 Q1 2016 Earnings Release Q1 2016 0.205
Wells Fargo & Co WFC US 8:00 Q1 2016 Earnings Release Q1 2016 0.974
Carnival Corp CCL US 8:30 Annual General Meeting Y 2016  
Bank of America Corp BAC US 8:30 Q1 2016 Earnings Call Q1 2016  
BlackRock Inc BLK US 8:30 Q1 2016 Earnings Call Q1 2016  
Wells Fargo & Co WFC US 10:00 Q1 2016 Earnings Call Q1 2016  
Delta Air Lines Inc DAL US 10:00 Q1 2016 Earnings Call Q1 2016  
First Republic Bank/CA FRC US 10:00 Q1 2016 Earnings Call Q1 2016  
PNC Financial Services Group Inc/The PNC US 10:30 Q1 2016 Earnings Call Q1 2016  
Wynn Resorts Ltd WYNN US 12:00 Annual General Meeting Y 2016  
GameStop Corp GME US 13:30 Investor Day Y 2016  
Equifax Inc EFX US   Investor Meeting - Melbourne Y 2016  
Progressive Corp/The PGR US   Q1 2016 Earnings Release - March Sales Q1 2016 0.5
SM Energy Co SM US   Q1 2016 Earnings Release Q1 2016 -0.761
PacWest Bancorp PACW US   Q1 2016 Earnings Release Q1 2016 0.69
VCA Inc WOOF US   Annual General Meeting