BARCHART MORNING CALL
Monday, March 9th, 2015View Older Reports
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OVERNIGHT MARKETS AND NEWS
March E-mini S&Ps (ESH15 -0.12%) this morning are down -0.18% and European stocks are down -0.44% as Friday's stronger-than-expected U.S. Feb payrolls report increases anxiety about the timing of the first Fed interest rate hike. European stocks were also pressured on revived Greek debt concerns after European officials said Greece's latest proposals were "far" from complete and Greece probably won't receive an aid disbursement this month. Asian stocks closed mostly lower: Japan -0.95%, Hong Kong -0.17%, China +1.70%, Taiwan -0.86%, Australia -1.31%, Singapore -0.38%, South Korea -1.25%, India -2.05%. China's Shanghai Stock Index rebounded from a 3-week low and closed higher after Chinese bank stocks rallied when regulators said it may allow banks to enter the brokerage business. Chinese stocks had posted a 3-week low after China Feb imports fell more than expected and posted their biggest decline in 5-3/4 years. Commodity prices are mostly higher. Apr crude oil (CLJ15 +0.24%) is up +0.32%. Apr gasoline (RBJ15 -0.40%) is down -0.50%. Apr gold (GCJ15 +0.82%) is up +0.85%. May copper (HGK15 +0.69%) is up +0.79%. Agriculture prices are higher. The dollar index (DXY00 -0.17%) is down -0.26%. EUR/USD (^EURUSD) is up +0.31%. USD/JPY (^USDJPY) is up +0.04%. Jun T-note prices (ZNM15 +0.09%) are up +3.5 ticks.
The German Jan trade balance unexpectedly shrunk to a surplus of +15.9 billion euros, narrower than expectations of a +19.5 billion-euro surplus. Jan exports fell -2.1% m/m, weaker than expectations of -1.5% m/m and the biggest decline in 5 months. Jan imports unexpectedly fell for a second month as they dropped -0.3% m/m, weaker than expectations of +0.5% m/m.
Eurozone Mar Sentix investor confidence rose +6.2 to a 7-1/2 year high of 18.6, higher than expectations of +2.6 to 15.0.
The China Feb trade balance unexpectedly widened to a record surplus of +$60.62 billion, higher than expectations of +$6.00 billion. Feb exports surged +48.3% y/y, higher than expectations of +14.0% y/y and the most in 4-3/4 years. Feb exports fell -20.5% y/y, more than double expectations of -10.9% y/y and the biggest decline in 5-3/4 years.
Japan Q4 GDP was revised downward to 1.5% q/q annualized from the originally reported 2.2% q/q annualized.
The Japan Feb eco-watchers survey current rose +4.5 to 50.1, higher than expectations of +0.9 to 46.5 and the highest in 7 months. The Feb eco-watchers survey outlook rose +3.2 to 53.2, higher than expectations of +0.4 to 50.4.
U.S. STOCK PREVIEW
Minneapolis Fed President Narayana Kocherlakota and Cleveland Fed President Loretta Mester speak today. There is only one of the S&P 500 companies that report earnings today: Urban Outfitters (consensus $0.57).
Equity conferences this week include: BIO Europe Spring Conference on Mon, Deutsche Bank Media, Internet & Telecom Conference on Mon-Wed, 11th Annual Private Banking Asia 2015 on Mon-Wed, Citigroup Asset Manager, Broker Dealer & Exchanges Conference on Tue, KBW Cards, Payments & Financial Technology Conference on Tue, Mitsubishi UFJ Securities Oil & Gas Conference on Tue, ROTH Growth Stock Conference on Tue, Susquehanna Chemical Conference, Keefe Bruyette & Woods Cards Payments & Financial Technology Symposium on Tue, Piper Jaffray Technology, Media and Telecommunications Conference on Tue-Wed, RBC Capital Markets Financial Institutions Conference on Tue-Wed, Credit Agricole Global High Yield Conference on Wed, Goldman Sachs TMT Leveraged Finance Conference on Wed, Barclays Capital Health Care Conference on Tue-Thu, Deutsche Bank Regional Banks Summit on Thu, Nomura - Conference: US Software Conference - New York on Thu.
OVERNIGHT U.S. STOCK MOVERS
Amazon.com (AMZN -2.00%) was downgraded to 'Neutral' from 'Buy' at SunTrust.
VMware (VMW -1.62%) was upgraded to 'Neutral' from 'Underweight' at Piper Jaffray.
General Motors (GM -2.05%) said it will immediately begin a $5 billion share buyback program.
Alcoa (AA +0.70%) agrees to acquire RTI International (RTI -1.94%) in transaction valued at $1.5 billion.
Cantor keeps a $160 price target and 'Buy' rating on Apple (AAPL +0.15%) and predicts that the Apple Watch will be the best selling new product in the company's history, with sales of 20.6 million units in its first year of availability.
The Fresh Market (TFM +3.53%) was downgraded to 'Neutral' from 'Buy' at BofA/Merrill Lynch.
D.R. Horton (DHI -3.15%) , Ryland Group (RYL -3.38%) , and KB Home (KBH -2.75%) wera all upgraded to 'Outperform' from 'Market Perform' at JMP Securities.
Juniper (JNPR +1.81%) was upgraded to 'Buy' from 'Neutral' at Goldman Sachs.
BlackBerry (BBRY -2.02%) was downgraded to 'Sell' from 'Neutral' at Goldman Sachs.
Interstate Properties reported a 7.1% stake in Vornado (VNO -4.12%) .
Kingsway Financial Services (KFS -1.97%) reported a 19.9% stake in 1347 Property Insurance (PIH -1.45%) .
MARKET COMMENTS
Mar E-mini S&Ps (ESH15 -0.12%) this morning are down -3.75 points (-0.18%). The S&P 500 index on Friday tumbled to a 3-week low and closed lower: S&P 500 -1.42%, Dow Jones -1.54%, Nasdaq -1.19%. The main bearish factor was the U.S. Feb non-farm payrolls report that bolstered speculation the Fed is closer to raising interest rates. U.S. Feb non-farm payrolls climbed +295,000, stronger than expectations of +235,000, and the unemployment rate fell -0.2 points to a 6-3/4 year low of 5.5%.
Jun 10-year T-notes (ZNM15 +0.09%) this morning are up +3.5 ticks. Jun 10-year T-note futures prices on Friday sold off to a 2-1/4 month low and closed sharply lower. Closes: TYM5 -1-00/32 point, FVM5 -20.00. Bearish factors included (1) the stronger-than-expected U.S. Feb payrolls report, which bolsters the outlook for the Fed to raise interest rates sooner rather than later, and (2) hawkish comments from San Francisco Fed President Williams who said mid-year may be time for a “serious discussion” about raising interest rates as the labor market nears full employment and inflation rebounds.
The dollar index (DXY00 -0.17%) this morning is down -0.258 (-0.26%). EUR/USD (^EURUSD) is up +0.0034 (+0.31%). USD/JPY (^USDJPY) is up +0.05 (+0.04%). The dollar index on Friday soared to an 11-1/2 year high and closed higher: Dollar index +1.237 (+1.28%), EUR/USD -0.01885 (-1.71%), USD/JPY +0.674 (+0.56%). Bullish factors included (1) the stronger-than-expected U.S. Feb payrolls report, which bolsters the case for the Fed to raise interest rates sooner rather than later, and (2) weakness in EUR/USD which plunged to a 11-1/2 year low as the ECB will begin buying sovereign debt on Mar 9.
Apr WTI crude oil (CLJ15 +0.24%) this morning is up +16 cents (+0.32%) and Apr gasoline (RBJ15 -0.40%) is down -0.0094 (-0.50%). Apr crude oil and gasoline prices on Friday closed lower: CLJ5 -1.15 (-2.27%), RBJ5 -0.0050 (-0.26%). Bearish factors included (1) a rally in the dollar index to an 11-1/2 year high, and (2) the slide in the S&P 500 to a 3-week low, which undercut optimism about the economic outlook and energy demand.
GLOBAL EVENT CALENDAR03/09/2015
US
1100 ET
USDA weekly grain export inspections.
1305 ET
Minneapolis Fed President Narayana Kocherlakota speaks to an internal meeting with Ninth District Bankers in Minneapolis, MN.
1425 ET
Cleveland Fed President Loretta Mester speaks on the economic outlook and monetary policy to the annual NABE Economic Policy Conference.
JPN
0030 ET
Japan Feb bankruptcies, Jan -16.55% y/y.
0100 ET
Japan Feb eco-watchers survey current expected +0.9 to 46.5, Jan 45.6. Feb eco-watchers survey outlook expected +0.2 to 50.2, Jan 50.0.
GER
0300 ET
German Jan trade balance expected +19.8 billion euros, Dec +18.9 billion euros. Jan exports expected -1.5% m/m, Dec +3.4% m/m. Jan imports expected +0.5% m/m, Dec -0.7% m/m.
EUR
0530 ET
Eurozone Mar Sentix investor confidence expected +2.6 to 15.0, Feb 12.4.
UK
2001 ET
UK Feb BRC sales like-for-like expected +0.5% y/y, Jan +0.2% y/y.
CHI
2130 ET
China Feb CPI expected +1.0% y/y, Jan +0.8% y/y. Feb PPI expected -4.3% y/y, Jan -4.3% y/y.
n/a
China Feb new yuan loans expected 750.0 billion yuan, Jan 1.47 trillion yuan
U.S. STOCK CALENDAR03/09/2015
Company
Ticker
Time
Event Description
Period
Estimate
Allegion PLC
ALLE US
11:30
Analyst Meeting
Y 2015
Apple Inc
AAPL US
13:00
Special Media Event
QUALCOMM Inc
QCOM US
17:00
Annual General Meeting
Y 2015
Urban Outfitters Inc
URBN US
17:00
Q4 2015 Earnings Call
Q4 2015
United Continental Holdings Inc
UAL US
17:00
February 2015 Sales and Revenue Release - Operational Performance
2015
Urban Outfitters Inc
URBN US
Aft-mkt
Q4 2015 Earnings Release
Q4 2015
0.571
American Airlines Group Inc
AAL US
February 2015 Sales and Revenue Release - Traffic Results
2015
McDonald's Corp
MCD US
February 2015 Sales and Revenue Release
2015