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Friday, May 24th, 2013
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OVERNIGHT MARKETS AND NEWS
June E-mini S&Ps (ESM13 -0.59%) this morning are down -0.47% and European stocks are down -0.24%. Asian stocks closed mixed: Japan up +0.89%, Hong Kong -0.23%, China +0.56%, Taiwan -0.34%, Australia -1.56%, South Korea +0.26%, India +0.15%. European and U.S. stocks failed to garner support from the stronger-than-expected German May IFO business climate index, which rose for the first time in 3 months, and to an unexpected increase in the German June GfK consumer confidence that unexpectedly rose to a 5-1/2 year high. Commodity prices are mostly lower. July WTI crude oil (CLN13 -0.67%) is down -0.74%, July gasoline (RBN13 -0.29%) is down -0.41%, July natural gas (NGN13 -0.28%) is down -0.09%, June gold (GCM13 -0.41%) is down -0.35% and July copper (HGN13 -0.20%) is up +0.05%. Agriculture prices are mixed. The dollar index (DXY00 -0.33%) is down -0.29% at a 1-week low. EUR/USD (^EURUSD) is up +0.21% on the stronger-than-expected German May IFO business climate. USD/JPY (^USDJPY) is down -0.57% after the yen strengthened when BOJ Governor Kuroda said the BOJ had announced "sufficient" monetary easing and has done enough to stimulate the economy. June 10-year T-note futures prices (ZNM13 +0.14%) are up +2 ticks. The German May IFO business climate climbed +1.3 points to 105.7, better than expectations of unch at 104.4. The May IFO current assessment rose +2.7 to 110.0, stronger than expectations of unch, while the May IFO expectations was 101.6, right on expectations. The German June GfK consumer confidence survey unexpectedly increased +0.3 to 6.5, stronger than expectations of unch at 6.2 and its highest level in 5-1/2 years. German Q1 GDP was left unrevised at +0.1% q/q and -0.2% y/y. However, Q1 exports were revised lower to -1.8% from -0.6%, Q1 exports were revised down to -2.1% from -0.9% and Q1 capital investment was revised down -1.5% from -0.7%. U.S. STOCK PREVIEW
Today’s April durable goods orders report is expected to show an increase of +1.5%, recovering a bit after the sharp -6.9% decline seen in March. Excluding transportation, today’s April durable goods orders report is expected to show an increase of +0.5% after the -2.9% drop seen in March. There are only 3 of the Russell 1000 stocks that report earnings today: Foot Locker (consensus $0.88), Abercrombie & Fitch (-0.05), and HJ Heinz (0.82).
OVERNIGHT U.S. STOCK MOVERS
Abercrombie & Fitch (ANF +0.48%) reported a Q1 EPS loss of -9 cents, weaker than consensus of a -5 cent loss, and lowered guidance on fiscal 2013 to EPS of $3.15-$3.25, lower than consensus of $3.49. Foot Locker (FL -0.42%) reported Q1 adjusted EPS of 91 cents, better than consensus of 88 cents. Sherwin-Williams (SHW -0.56%) was upgraded to "Outperform" from "Neutral" at RW Baird who rasied their price target on the stock to $205 from $180. Procter & Gamble (PG -0.15%) was upgraded to "Buy" from "Neutral" at UBS who raised their price target on the stock to $95 from $75. Intuitive Surgical (ISRG +1.74%) climbed 5% in after-hours trading after Bloomberg reported that it won a jury verdict in a trial that alleged the company was negligent in training a doctor who performed robot-assisted surgery on a patient that died. The WSJ said that AT&T's (T +0.33%) new 61 cent per month administrative fee to the bills of all of its contract wireless lines may add a half-billion dollars in yearly revenue. Bunge (BG -0.88%) raised its quarterly dividend to 30 cents from 27 cents per share. Sears Holdings (SHLD -0.34%) slumped over 11% in after-hours trading after it reported a Q1 adjusted EPS loss of -$1.29, much wider than consensus of a -60 cent losss, and said Q1 same-store-sales were down -3.6%. Williams-Sonoma (WSM +3.03%) reported Q1 adjusted EPS of 41 cents, better than consensus of 37 cents, and raised guidance on fiscal 2013 adjusted EPS to $2.67-$2.77 from $2.65-$2.75. Marvell (MRVL -0.44%) climbed over 7% in after-hours trading after it reported Q1 EPS of 19 cents, stronger than consensus of 14 cents. Salesforce.com (CRM -0.20%) reported Q1 EPS of 10 cents, right on consensus, although Q1 revenue of $893 million was better than consensus of $887.08 million. Aeropostale (ARO -1.02%) reported a Q1 EPS loss of -16 cents, smaller than consensus of a -17 cent loss, with Q1 revenue of $452.3 million, better than consensus of $444.26 million. Ross Stores (ROST -0.18%) reported Q1 EPS of $1.07, right on consensus, although Q1 revenue of $2.54 billion was slightly better than consensus of $2.52 billion. Gap (GPS +0.78%) reported Q1 EPS of 71 cents, better than consensus of 69 cents. MARKET COMMENTS
June E-mini S&Ps (ESM13 -0.59%) this morning are down -7.75 points (-0.47%). The S&P 500 index on Thursday opened lower after an unexpected contraction in the China May HSBC flash manufacturing PMI to its lowest level in 7 months (-0.8 to 49.6). Prices recovered from their worst levels, though, and closed modestly lower after U.S. weekly initial jobless claims fell -23,000 to 340,000, a bigger fall than expectations of -15,000 to 345,000, and after Apr new home sales rose +2.3% to 454,000, stronger than expectations of +1.9% to 425,000. Closes: S&P 500 -0.29%, Dow Jones -0.08%, Nasdaq 100 -0.26%. June 10-year T-notes (ZNM13 +0.14%) this morning are up +2 ticks. June 10-year T-note futures prices on Thursday recovered from a 2-1/2 month low and closed higher. Bearish factors included (1) carry-over weakness from Wednesday’s slide after Fed Chairman Bernanke said the Fed may cut its bond purchases, (2) the larger-than-expected decline in weekly jobless claims, and (3) stronger than expected U.S. Apr new home sales. T-notes recovered due to an increase in safe-haven demand after global stock markets tumbled on the unexpected contraction in Chinese manufacturing activity. Closes: TYM3 +2.5, FVM3 -0.25. The dollar index (DXY00 -0.33%) this morning is down -0.240 (-0.29%) at a 1-week low. EUR/USD (^EURUSD) is up +0.0027 (+0.21%) and USD/JPY (^USDJPY) is down -0.58 (-0.57%). The dollar index on Thursday fell back from a 2-3/4 year high and closed lower. EUR/USD rallied after the Eurozone PMI composite rose more than expected (+0.8 to 47.7 vs. expectations of +0.3 to 47.2). USD/JPY fell to a 1-1/2 week low as the yen gained on increased safe-haven demand when global equity markets tumbled. Closes: Dollar index -0.602 (-0.71%), EUR/USD +0.00748 (+0.58%), USD/JPY -1.128 (-1.09%). July WTI crude oil (CLN13 -0.67%) this morning is down -70 cents (-0.74%) a barrel and July gasoline (RBN13 -0.29%) is down -1.15 cents (-0.41%) per gallon. July crude oil and gasoline on Thursday finished mixed. July crude posted a 3-week low and July gasoline fell to a 1-week low after Chinese May HSBC flash manufacturing PMI unexpected fell to a 7-month low, which raised demand concerns in China, the world’s second largest crude consumer. Prices recovered with July gasoline closing at a slight gain as the dollar weakened and stocks rose from their worst levels. Closes: CLN3 -0.03 (-0.03%), RBN3 +0.0107 (+0.38%). GLOBAL EVENT CALENDAR05/24/2013
U.S. STOCK CALENDAR05/24/2013
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