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Global Markets Morning Brief
The latest market commentary, brought to you in conjunction with TRADING CENTRAL. All trading involves risk and losses can exceed deposits.
Wednesday, May 06, 2015
Indices Last %1D %YTD
Nasdaq 100 4,409.4 -1.63 4.09
FTSE 100 6,927.6 -0.84 5.51
Nikkei 225 19,531.6 0.06 11.92
S&P 500 2,089.5 -1.18 1.48
Dow Jones 17,928.2 -0.79 0.59
Dax 11,327.7 -2.51 15.52
Forex Last %1D %YTD
EUR-CHF 1.0392 0.28 -13.50
EUR-USD 1.1234 0.44 -7.14
GBP-USD 1.5212 0.20 -2.34
USD-JPY 119.85 -0.01 0.13
Commodities Last %1D %YTD
Crude Oil (WTI) 61.5 1.77 10.48
Gold spot 1,196.5 0.27 0.98
Cocoa (ICE) 2,943.0 2.37 1.13
Silver spot 16.6 0.25 5.66
Coffee (ICE) 133.7 0.56 -19.78
Market Comment
US indices dropped on Tuesday pressured by shares in the Household & Personal Products, Banks and Insurance sectors. The S&P 500 (2089.46) broke above its 20d moving average (2101 - positive slope) and its 50d moving average (2090.2 - flat slope).

European markets are expected to start on a positive note.
FX Comment
The US Dollar fell against most of its major counterparts on Tuesday. On the US economic data front, the trade deficit widened to $51.4B in March from $35.4B in February.

The Euro rose against most of its major counterparts with the exception of the CHF and AUD. In Europe, euro zone PPI index was up by 0.2% in March after a 0.6% increase in February (revised from +0.5%). Economists anticipated a 0.3% gain.

The Australian Dollar soared against most of its major counterparts.
Commodities Comment
After the close of Wall Street, WTI Crude Future (JUN 15) was up $1.5 to $60.41. The contract was above its 20D MA (@ $56.79) and above its 50D MA (@ $53.52).

Gold was up $4.6 to $1192.9. The precious metal was below its 20D MA (@ $1196) and above its 50D MA (@ $1191).

Copper Future (JUL 15) on Comex was about flat to 292.9c/lb. The contract was above its 20D MA (@ 277.33c) and above its 50D MA (@ 272.74c). In Europe, the London Metal Exchange reported its copper inventories increased 1700 tons to 343025 tons.
Calendar
EC 10:00: MAR Euro-Zone: Retail Trade (MoM): -0.7%
US 13:30: 4Q Nonfarm Productivity: -1.9%
US 13:30: 4Q Unit Labor Costs: 4.1%
US 15:30: W17 Crude Oil Inventories (WoW chg): NA
FR 08:50: MAY Markit Composite PMI: NA
FR 08:50: MAY Markit Services PMI: 50.8
EU 09:00: MAY Markit Services PMI: 53.7
EU 09:00: MAY Markit Composite PMI: 53.5
US 13:15: APR ADP Employement Report: 190
see detailed calendar
FTSE 100 (30 Mins)
Pivot: 6880

Our preference: Long positions above 6880 with targets @ 6955 & 7020 in extension.

Alternative scenario: Below 6880 look for further downside with 6830 & 6800 as targets.

Comment: A support base at 6880 has formed and has allowed for a temporary stabilisation.

EUR/USD (30 Mins)
Pivot: 1.112

Our preference: Long positions above 1.112 with targets @ 1.1295 & 1.138 in extension.

Alternative scenario: Below 1.112 look for further downside with 1.106 & 1.1015 as targets.

Comment: The pair remains on the upside and is approaching its previous top.

GOLD (30 Mins)
Pivot: 1190.5

Our preference: Long positions above 1190.5 with targets @ 1200 & 1207 in extension.

Alternative scenario: Below 1190.5 look for further downside with 1185 & 1177 as targets.

Comment: The RSI is mixed to bullish.

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UK Market News
Sainsbury posted FY results: "As a result of a £753M charge to items excluded from underlying results, loss before tax was £72M (2013/14: £898M profit). (...) Basic loss per share was 8.7p in 2014/15 (2013/14: 37.7p earnings per share), (...) Against the backdrop of a tough trading environment and food price deflation, Sainsbury's underlying Group sales (including VAT) declined by 0.9% to £26,122M (2013/14: £26,353M). Underlying profit before tax has declined by 14.7% to £681M (2013/14: £798M). (...) Underlying basic EPS decreased to 26.4p (2013/14: 32.8p ), a 19.5% decline YoY. (...) The Board has recommended a final dividend of 8.2p (2013/14: 12.3p), making a full-year dividend of 13.2p (2013/14: 17.3p), down 23.7% YoY."

Imperial Tobacco reported 1H operating profit down 2% YoY to £959M on revenue of £12.13B, down 4%, adding: "Reported EPS were 89.5p (2014: 38.1p) reflecting a £422M improvement in the reported net finance income/(costs) and a lower effective tax rate. (...) adjusted EPS grew by 7% to 93.3p. (...) Underlying tobacco volumes were down 5%, held back by Iraq, where the deteriorating political and security situation has significantly impacted industry volumes. Excluding Iraq our underlying volumes were down 3%, (...) The Board has declared an interim dividend of 42.8p per share, up 10% on a year ago in line with our published dividend policy."

Sage Group announced 1H results: "Statutory revenue grew by 7% to £699M (H1 2014: £657M). The growth reflects organic growth in the business and the contribution from two acquisitions, (...) Statutory operating profit increased to £183M (H1 2014: £174M). (...) Statutory basic EPS increased to 11.86p (H1 2014: 10.58p), (...) Underlying basic EPS increased by 16.4% to 12.66p (...) the Board is proposing an 8%increase in the interim ordinary dividend per share for the period to 4.45p per share (H1 2014: 4.12p per share)."

Legal & General Group issued an Interim Management Statement: "Operational cash generation for the Group is up 11% to £330M in the first three months of the year (Q1 2014: £297M). (...) New business strain of £4M (Q1 2014: surplus of £4M) primarily resulted from lower levels of bulk annuity transactions in the quarter. As a result net cash generation increased by 8% to £326M (Q1 2014: £301M)."

Direct Line Insurance Group said in its Interim Management Statement: "Overall for ongoing operations, gross written premium fell by 0.9% to £746.5M in comparison to the same period last year (first quarter 2014: £753.3M) (...) For 2015, the Group reiterates its expectation to achieve a combined operating ratio in the range of 94% to 96% for ongoing operations after normalising for claims from major weather events."

CRH Plc said: "In line with our expectations, Group sales from continuing operations for the first four months of 2015 increased by 2.5% compared with the same period last year."

GKN provided a trading update: "The Group's principal markets have performed in line with the expectations set out in our February results announcement. (...) Management sales for the three months ended 31 March 2015 were £1,943M (2014: £1,915M). This represented a 1% organic increase, with beneficial currency translation being broadly offset by disposals."

Glaxosmithkline: 1Q results expected.

DS Smith: Trading statement expected.

National Express Group: 1Q Interim Management Statement expected.

Stock/Benchmark ratio(s) 50D MA cross over: Fresnillo (+2.6% to 730.5p)

Stock/Benchmark ratio(s) 50D MA cross under: BT Group (-2.31% to 449.2p), Imperial Tobacco (-3.38% to 3120p), London Stock Exchange (-1.82% to 2477p).

Stock(s) 50D MA cross over: Fresnillo (+2.6% to 730.5p)

Stock(s) 50D MA cross under: BT Group (-2.31% to 449.2p), Imperial Tobacco (-3.38% to 3120p), London Stock Exchange (-1.82% to 2477p), National Grid (-1.74% to 870.9p), Persimmon (-2.13% to 1655p).
German Market News
ECB: Governing Council of the ECB: non-monetary policy meeting in Frankfurt (9am CET)

Conference: Deutsche GRI; 1st International Conference Aircraft Inflight Icing Management; 1st International Conference Anti-icing for Wind Turbines

BMW posted 1Q net income up 4.0% YoY to E1.52B and profit before tax up 5.1% to E2.27B on revenue of E20.92B, up 14.7%. The Co added: "Automobile sales volume of the BMW Group climbed by 8.1% to 526,669 units (2014: 487,024 units), thus setting a new record for the period." It reaffirmed its FY15 targets saying: "We are aiming to achieve solid growth in 2015, and hence new record figures for sales volume and profit before tax (...) The BMW Group also predicts that it will remain the world's leading manufacturer of premium vehicles in 2015."

Hannover Re reported that 1Q net income rose 20.1% YoY to E280M, citing "the outstanding contribution from life and health reinsurance and another satisfactory underwriting result in property and casualty reinsurance". The Co added: "Based on constant exchange rates, the Co expects to book higher gross premium and net income after tax in the order of E875M for the full 2015 financial year."

Hugo Boss announced 1Q net income down 6% YoY to E76M and EBITDA before special items flat at E132M on sales of E668M, up 9% (+3% in local currencies). On the 2015 outlook the Co said: "The Co reconfirms its guidance that sales will grow at a mid-single-digit rate after currency adjustment in 2015. (...) EBITDA before special items is expected to rise by between 5% and 7% in the reporting currency."

QIAGEN posted 1Q adjusted net income down 4% YoY to $52M (adjusted diluted EPS at $0.24 at constant exchange rates CER vs $0.22 a year earlier) on adjusted net sales of $299M, down 6% (+2% at CER). On the 2015 outlook the Co said: "Adjusted net sales are expected to rise approximately 4% CER in 2015, (...) Adjusted diluted EPS are expected to be approximately $1.16-1.18 CER compared to $1.00 in 2014."

Brenntag, Evonik Industries Kuka: 1Q results expected.

Andritz: 1Q results expected.

DE - Stock/Benchmark ratio(s) 50D MA cross under: BASF (-3.71% to E85.93), E.ON (-3.76% to E13.58).

DE - Stock(s) 50D MA cross under: Dialog Semiconductor (-4.44% to E40.9), Deutsche Telekom (-3.15% to E16.45), Fresenius Medical Care (-3.68% to E74.24), Fuchs Petrolub (-1.74% to E38.15), Fresenius SE (-4.01% to E53.2), Kabel Deutschland (-1.83% to E120.75), Lanxess (-1.67% to E48.74), ProSiebenSat 1 Media (-2.47% to E45.8).
US Market News
Anadarko Petroleum (APC -4.71% to $89.32) reported a 1Q adjusted LPS of $0.72 vs EPS of $1.26 a year ago. Looking ahead, the Co increased midpoint of FY15 sales-volume guidance by 5M BOE.

EOG Resources (EOG -4.88% to $94.54) delivered 1Q EPS of $0.31 vs $1.21 in the prior year and adjusted EPS of $0.03 vs $1.40.

DaVita HealthCare Partners (DVA -1.01% to $81.51) posted 1Q adjusted EPS of $.86 vs 0.87 expected and swung to LPS of $0.52 from EPS of $0.85 a year earlier. The Co is updating FY15 consolidated operating income to now be in the range of $1.800B to $1.925B from $1.750B to $1.900B previously. Separately, the Co also said it is near the settlement of Atlanta-based private case regarding allegations of medication wastage.

Archer Daniels Midland (ADM +0.06% to $50.35) generated 1Q adjusted EPS up 40% YoY to $0.77.

Emerson Electric (EMR -1.83% to $58.4) released 2Q adjusted EPS down 16% YoY to $0.65 vs $0.76 expected on net sales of $5.4B, down 7%.

Zoetis (ZTS +0.64% to $45.69) reported 1Q adjusted EPS of $0.41, up 8% YoY on revenue of $1.1B, broadly flat. The Co expects FY15 adjusted EPS between $1.61 to $1.68 and
revenue of between $4.8B to $4.9B

Discovery Communications (DISCA -2.34% to $32.59) recorded 1Q adjusted EPS up 11% YoY to $0.42 on revenues up 9% to $1.54B.

FNFV (FNFV -0.47% to $14.9) recorded 1Q adjusted EPS of $0.03 unchanged on total revenue of $478M vs $383M last year.

Avis Budget Group (CAR -3.68% to $53.71) released 1Q adjusted EPS up 6% YoY to $0.17 on revenue of $1.9B, up 4%. Looking ahead, the Co estimates FY15 adjusted EPS will increase 6% to 27% YoY, to $3.15 to $3.75.

Concho Resources (CXO -4.51% to $121.03) unveiled 1Q adjusted EPS of $0.36 vs $1.01 in the previous year.

Cimarex Energy (XEC -3.22% to $119.2) swung to 1Q adjusted LPS of $0.37 from EPS of $1.67 a year ago with total company production averaged 946.7M cubic feet equivalent per day, up 28% YoY. The Co estimates total production volumes for 2015 to average 920-950MMcfe per day, a midpoint increase of 8% over 2014 volumes.

UGI (UGI -2.82% to $34.4) generated 2Q adjusted EPS of $1.23 vs $1.27 last year. Looking forward, the Co increased its adjusted EPS guidance range to $2.00 to $2.10 from $1.88 to $1.98 for the fiscal year ending September 30, 2015.

Vulcan Materials (VMC -2.95% to $85.5) swung to 1Q LPS of $0.16 from EPS of $0.41 on sales of $631.3M, up 10% YoY.

Harris Corp (HRS -1.47% to $79.29) posted 3Q adjusted EPS of $1.20 vs $1.32 last year on revenue of $1.19B vs $1.27B.

Verisk Analytics (VRSK -2.46% to $74.51) announced it plans to commence an offering of $675M stock.

Sprint (S -3.11% to $4.99) reported a 4Q adjusted EBITDA down 5% YoY to $1.7B on sales down 7% to $8.3B. The Co expects FY15 adjusted EBITDA to be between $6.5B and $6.9B and accrued capital expenditures to be appx $5B.

Walt Disney (DIS -0.2% to $110.81): Excluding certain items, Co's 2Q EPS increased 11% YoY to $1.23.

DIRECTV Group (DTV -1.67% to $88.88) posted a 1Q EPS of $1.44 vs $1.63 a year ago on sales of $8.14B vs $7.86B.

Estee Lauder (EL +4.02% to $86.9) released a 3Q EPS up 12% YoY to $0.72 on sales up 1% to $2.58B. FY15 Net sales excluding the effect of the accelerated retailer orders are forecasted to grow between 6% and 7% in constant currency and EPS are projected to be between $2.92 to $2.97.

Sempra Energy (SRE -3.23% to $104.33) unveiled a 1Q EPS up to $1.74 from $0.99 a year ago.

Intercontinental Exchange (ICE +2.46% to $232.17) reported a 1Q adjusted EPS up 26% YoY to $3.06 and a 15% increase in quarterly cash dividend payment to $0.75 per share in 2Q15.

Kellogg (K -1.5% to $63.17) released a 1Q comparable EPS down 3% YoY to $0.98 on sales down 5% to $3.56B. FY15 currency-neutral comparable EPS are anticipated to be in a range between 2% lower and appx unchanged or $3.59-$3.67.

Noble Energy (NBL -2.35% to $49.79) posted a 1Q adjusted EPS of $0.03. The Co raised the lower end of its FY15 sales guidance to range between 300 and 315 MBoe/d from 295 and 315 MBoe/d. Total Company capital for 2015 remains $2.9B.

HCP Inc (HCP -2.94% to $39.55): 1Q adjusted FFO per share increased 5% YoY to $0.79. For FY15, the Co raised the lower end of its adjusted FFO per share guidance to $3.09-$3.15 from $3.06-$3.15.

Mallinckrodt (MNK +4.58% to $120.27): 2Q adjusted was up 81.1% YoY to $1.72 on sales up 63.1% to $910M. Looking forward, the Co raised its FY15 adjusted EPS guidance to $7.10-$7.50 from $6.70-$7.20 and sales guidance to $3.75B-$3.85B from $3.65B-$3.75B.

Wisconsin Energy (WEC -3.73% to $47.99) reported a 1Q adjusted EPS of $0.90 vs $0.91 the prior year.

Microsoft (MSFT -1.33% to $47.6) said it is considering a bid for Salesforce (CRM +1.61% to $72.75).

Stock 50D MA cross over: Intercontinental Exchange (ICE +2.46% to $232.17).

Stocks 50D MA cross under: AGL Resources (GAS -3.86% to $48.63), Aimco (AIV -3.16% to $37.43), American Electric Power (AEP -2.55% to $55.9), Amgen (AMGN -1.65% to $159.44), Apple (AAPL -2.25% to $125.8), AutoZone (AZO -1.73% to $672.91), Becton Dickinson (BDX -1.35% to $142), Boston Scientific (BSX -2.85% to $17.37), Centerpoint Energy (CNP -1.94% to $20.7), CenturyLink (CTL -1.42% to $35.51), Cerner (CERN -1.34% to $72.08), CF Industries (CF -1.22% to $290.21), Cognizant Tech Solutions (CTSH -2.84% to $61), Comcast (CMCSA -1.36% to $57.98), Consolidated Edison (ED -2.06% to $60.82), CR Bard (BCR -1.64% to $168.14), Delta Air Lines (DAL -3.07% to $43.9), Discover Financial Services (DFS -1.2% to $58.61), Dominion Resources (D -1.31% to $70.82), Duke Energy (DUK -2.19% to $76.25), eBay (EBAY -1.99% to $57.935), Eli Lilly (LLY -1.56% to $71.91), EMC Corp (EMC -2.61% to $26.48), Entergy (ETR -2.92% to $75.55), Express Scripts (ESRX -3.19% to $84.61), Fedex (FDX -1.46% to $169.81), FirstEnergy (FE -3.66% to $35.31), FMC Corp (FMC -1.71% to $59.34), HCA (HCA -2.43% to $73.61), Henry Schein (HSIC -2.63% to $138.33), Integrys Energy (TEG -2.86% to $71.9), Johnson Controls (JCI -1.72% to $50.18), Kellogg (K -1.48% to $63.18), Lam Research (LRCX -1.68% to $75.6), Micron Technology (MU -2.2% to $28.04), Nisource (NI -2.31% to $43.12), Nvidia (NVDA -2.57% to $22.03), PGE Corp (PCG -2.46% to $52.35), Pioneer Natural Resources (PXD -3.14% to $163.05), Pitney Bowes (PBI -1.9% to $22.68), Roper Industries (ROP -1.27% to $168.24), Scripps Networks Interactive (SNI -1.61% to $70.73), Skyworks Solutions (SWKS -4.52% to $94.63), Southern Co (SO -1.58% to $44.27), Tenet Healthcare (THC -3.23% to $47.89), Time Warner (TWX -1.7% to $84.45), Tractor Supply (TSCO -1.65% to $85.89), Twenty-First Century Fox (FOXA -1.6% to $33.92), Universal Health Services-B (UHS -2.61% to $116.27), Vertex Pharmaceuticals (VRTX -3.29% to $122.15), Viacom (VIAB -1.36% to $68.88), Western Digital (WDC -2.73% to $96.79), Williams (WMB -2.73% to $49.5), Wisconsin Energy (WEC -3.77% to $47.97).

Stock/S&P500 ratio 50D MA cross over: Intercontinental Exchange (ICE +2.46% to $232.17).

Stock/S&P500 ratios 50D MA cross under: AGL Resources (GAS -3.86% to $48.63), American Electric Power (AEP -2.55% to $55.9), AutoZone (AZO -1.73% to $672.91), Boston Scientific (BSX -2.85% to $17.37), Cognizant Tech Solutions (CTSH -2.84% to $61), eBay (EBAY -1.99% to $57.935), Eli Lilly (LLY -1.56% to $71.91), EMC Corp (EMC -2.61% to $26.48), Express Scripts (ESRX -3.19% to $84.61), FirstEnergy (FE -3.66% to $35.31), Henry Schein (HSIC -2.63% to $138.33), Integrys Energy (TEG -2.86% to $71.9), Johnson Controls (JCI -1.72% to $50.18), Nisource (NI -2.31% to $43.12), Nvidia (NVDA -2.57% to $22.03), PGE Corp (PCG -2.46% to $52.35), Pioneer Natural Resources (PXD -3.14% to $163.05), Scripps Networks Interactive (SNI -1.61% to $70.73), Skyworks Solutions (SWKS -4.52% to $94.63), Time Warner (TWX -1.7% to $84.45), Universal Health Services-B (UHS -2.61% to $116.27), Vertex Pharmaceuticals (VRTX -3.29% to $122.15), Williams (WMB -2.73% to $49.5).
After Hours
Herbalife (HLF) released 1Q adjusted EPS up 24% YoY to $1.29 on sales (excluding currency impact) of $1.11B, up 4%. The Co raised its FY15 adjusted EPS guidance to $4.30-4.60.

Mylan (MYL) reported 1Q adjusted EPS up 6% YoY to $0.70 on sales up 15% to $1.87B. Looking forward, the Co reaffirmed its FY18 EPS target of at least $6.

Allstate (ALL) posted 1Q operating EPS up 12.3% YoY to $1.46 on sales up 3.1% to $8.95B.

CenturyLink (CTL) unveiled 1Q adjusted EPS of $0.67 vs $0.66 last year on operating revenue of $4.45B vs $4.54B. The Co said it expects 2Q operating revenues to be $4.41-4.46B and adjusted EPS $0.59-0.64.

Fiserv (FISV) delivered 1Q adjusted EPS up 9% YoY to $0.89 on adjusted revenue of $1.19B vs $1.15B in the previous year. The Co said it still expects FY15 adjusted EPS to be $3.73-3.83, which represents growth of 11-14% YoY over $3.37 in 2014.

Electronic Arts (EA) generated 4Q adjusted EPS of $0.39 vs $0.48 in the prior year on adjusted total net revenue of $896M vs $914M. The Co projected FY16 adjusted EPS at appx $2.75.

News (NWSA) unveiled 3Q adjusted EPS of $0.05 vs $0.11 in the prior year on revenues of $2.06B vs $2.08B.

Frontier Communications (FTR) recorded 1Q adjusted EPS of $0.02 v s $0.05 last year on revenue of $1.37B vs $1.15B.

Fossil Inc (FOSL) posted 1Q EPS of $0.75 vs $1.22 in the previous year on worldwide net sales down 7% YoY or $51.4M. The Co forecast FY15 EPS at $7.00-7.60.

Devon Energy (DVN) swung to 1Q LPS of $8.88 from EPS of $0.8 a year earlier.
Expect Today
Twenty-First Century Fox (FOX): 3Q EPS seen at $0.39 ($0.47 a year ago), after mkt.

Occidental Petroleum (OXY): 1Q EPS seen at $0.04 ($1.75 a year ago), before mkt.

Metlife (MET): 1Q EPS seen at $1.41 ($1.37 a year ago), after mkt.

Liberty Global (LBTYA): 1Q EPS seen at $0.49 (LPS of $0.37 a year ago).

Other Cos expected to report their results: Tesla Motors (TSLA), Spectra Energy (SE), Marathon Oil (MRO), Keurig Green Mountain (GMCR), Whole Foods Market (WFM), Activision Blizzard (ATVI), Essex Property Trust (ESS), CF Industries (CF), Motorola Solutions (MSI), TripAdvisor (TRIP), Chesapeake Energy (CHK), Kimco Realty (KIM), Expeditors International of Washington (EXPD), Dentsply International (XRAY), Transocean (RIG)
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