Live Index – Tue, 13 May 2014 Premarket

June E-mini S&Ps (ESM14 +0.20%) this morning are up +0.13% at a new record high and European stocks are up +0.16% after a report from the WSJ said the Bundesbank is willing to back ECB measures for additional stimulus if ECB staff forecasts next month show a lower 2016 inflation outlook. Limiting strength in stocks is concern over Chinese economic growth after China Apr factory output and retail sales rose less than expected. Asian stocks closed mostly higher: Japan +1.95%, Hong Kong +0.41%, China -0.24%, Taiwan +0.11%, Australia +0.91%, Singapore closed for holiday, South Korea +1.02%, India +1.36%. Commodity prices are mixed. Jun crude oil (CLM14 +0.59%) is up +0.62% at a 2-week high on expectations that weekly EIA data on Wednesday will show crude supplies at Cushing, OK, the delivery point for WTI futures, fell for the 14th time in 15 weeks. Jun gasoline (RBM14 +0.47%) is up +0.53%. Jun gold (GCM14 -0.39%) is down -0.17%. July copper (HGN14 -0.59%) is down -0.33%. Agriculture and livestock prices are mixed. The dollar index (DXY00 +0.22%) is up +0.22% at a 1-month high. EUR/USD (^EURUSD) is down -0.36% at a 5-week low after German investor confidence fell for a fifth month along with a report from the WSJ that the Bundesbank may back ECB measures for additional stimulus. USD/JPY (^USDJPY) is up +0.19% at a 1-week high. June T-note prices (ZNM14 unch) are up +2 ticks.

China Apr industrial production rose +8.7% y/y, less than expectations of +8.9% y/y and the slowest pace of increase in 5 years. China Apr retail sales climbed at a +11.9% y/y pace, less than expectations of +12.2% y/y and the slowest pace of increase in 5 years.

China Apr fixed assets investment (excluding rural households) rose +17.3% year-to-date, less than expectations of +17.7% year-to-date and the smallest increase in 12-1/3 years.

The German May ZEW survey of expectations for economic growth fell -10.1 to 33.1, a much bigger decline than expectations of -3.2 to 40.0 and the lowest in 16 months. The May ZEW survey current situation rise +2.6 to 62.1, better than expectations of +1.0 to 60.5 and the highest in 2-3/4 years.

The German Apr wholesale price index rose +0.2% m/m, the first increase in 4 months, while on a year-over-year basis wholesale prices fell -1.3% y/y, the tenth consecutive month that prices have fallen on an annual basis.

Today’s April retail sales report is expected to show another strong increase of +0.4% m/m, adding to the increases of +0.8% in February and +1.2% in March. Meanwhile, April retail sales ex-autos are expected to increase by +0.6% m/m adding to the increases of +0.4% seen in February and +0.7% in March. Today’s April import price index is expected to show an increase of +0.3% m/m, adding to the +0.6% increase seen in March. On a year-on-year basis, April import prices are expected to strengthen to +0.3% y/y from -0.6% in March. There are 3 of the Russell 1000 companies that report earnings today: CST Brands (consensus 0.19), URS Corp (0.68), and Fossil Group (1.17).

Equity conferences during the remainder of this week include: BMO Capital Markets IT Services Day on Tue, Goldman Sachs Global Staples Summit on Tue, Macquarie Extreme Services Conference on Tue, Nomura Global Gaming, Lodging & Leisure Conference on Tue, Nomura Inaugural Global Gaming, Lodging & Leisure Conference on Tue, Wedbush Transformational Technologies Management Access Conference on Tue, Bank of America Merrill Lynch Global Metals, Mining & Steel Conference on Tue, Barclays Americas Select Franchise Conference on Tue-Wed, Citi Global Energy & Utilities Conference on Tue-Wed, Oppenheimer Industrial Growth Summit on Tue-Wed, Credit Suisse Industrial & Environmental Services Conference on Tue-Wed, BMO Technology Conference on Wed, ISI Bermuda Energy Conference on Wed, J.P. Morgan Homebuilding & Building Products Conference on Wed, Embedded Systems Expo & Conference (ESEC) on Wed, Credit Suisse Disruptive Technology Conference on Wed, Sanford C Bernstein & Co Inaugural Thematic Financials Conference on Wed, Bank of America Merrill Lynch Healthcare Conference on Tue-Thu, RBC Capital Markets Aerospace and Defense Investor Day on Wed-Thu, JP Morgan Cazenove Business Service Conference on Thu, JP Morgan Homebuilding & Building Products Conference on Thu, JP Morgan Homebuilding & Building Products Conference on Thu, and Janney Spring Growth Conference on Fri.

Coca-Cola (KO -0.12%) increased its stake in Keurig Green Mountain Coffee Roasters (GMCR +2.07%) to 16%.

Brookdale Senior Living (BKD +0.36%) was added to short-term ‘Buy’ list at Deutsche Bank.

UBS kept its ‘Buy’ ratinng on McDonald’s (MCD -0.07%) and raised its prices target on the stock to $ 120 from $ 107.

CST Brands (CST +1.62%) reported Q1 EPS of 14 cents, below consensus of 19 cents.

QIAGEN (QGEN +0.81%) was upgraded to ‘Neutral’ from ‘Underweight’ at HSBC.

Concho Resources (CXO -3.38%) was downgraded to ‘Hold’ from ‘Buy’ at Wunderlich.

Elbit Systems (ESLT +2.71%) reported Q1 EPS of $ 1.22, higher than consensus of $ 1.0.7

DirectTV (DTV -0.97%) rose over 8% in after-hours trading after Bloomberg reported that AT&T (T +0.36%) is in talks to buy DirecTV for approximately $ 100 per share.

Babcock & Wilcox (BWC +0.49%) reported Q1 adjusted EPS of 42 cents, right on consensus, but reported Q1 revenue of $ 662 million, below consensus of $ 704.81 million.

Convergys (CVG +1.95%) reported Q1 adjusted EPS of 32 cents, higher than consensus of 29 cents.

McKesson (MCK +1.89%) advanced over 2% higher in after-hours trading after it reported Q4 EPS of $ 2.55, better than consensus of $ 2.40.

June E-mini S&Ps (ESM14 +0.20%) this morning are up +2.50 points (+0.13%) at a new record high. The S&P 500 index on Monday rose to a fresh all-time high and closed higher: S&P 500 +0.97%, Dow Jones +0.68%, Nasdaq +1.60%. Bullish factors included (1) carry-over support from a rally in Chinese stocks on speculation China will boost measures to stimulate growth when Chinese President Xi Jinping said the government must prevent risks and take “timely counter-measures to reduce potential negative effects” of faltering growth, and (2) increased M&A activity after Hillshire Foods agreed to buy Pinnacle Foods in a $ 6.6 billion dollar deal and after British Sky Broadcasting Group Plc said it was in talks to buy European pay TV assets from 21st Century Fox in a deal that could be worth $ 14 billion.

Jun 10-year T-notes (ZNM14 unch) this morning are up +2 ticks. Jun 10-year T-note futures prices on Monday closed lower: TYM4 -8.50, FVM4 -4.50. Negative factors included (1) the rally in stocks that reduced safe-haven demand for Treasuries, and (2) expectations that U.S. Apr retail sales data on Tue may be strong, which may prompt the Fed to keep tapering QE3 and eventually lead to a hike in interest rates.

The dollar index (DXY00 +0.22%) this morning is up +0.179 (+0.22%) at a 1-month high. EUR/USD (^EURUSD) is down -0.0049 (-0.36%) at a 5-week low. USD/JPY (^USDJPY) is up +0.19 (+0.19%) at a 1-week high. The dollar index on Monday closed slightly lower as strength in stocks reduced the safe-haven demand for the dollar: Dollar index -0.002 (-0.01%), EUR/USD -0.00057 (-0.04%), USD/JPY +0.305(+0.30%). EUR/USD fell back after ECB Vice President Constancio said the ECB is keeping an eye on the euro, which bolstered speculation the ECB may adopt new stimulus measures to curb strength in EUR/USD.

Jun WTI crude oil (CLM14 +0.59%) this morning is up +62 cents (+0.62%) at a 2-week high. Jun gasoline (RBM14 +0.47%) is up +0.0155 (+0.53%). Jun crude and gasoline prices on Monday closed higher. Bullish factors included (1) the rally in the S&P 500 to a record high, which bolstered confidence in the economic outlook and energy demand, and (2) expectations for crude supplies at Cushing, OK, the delivery point for WTI futures, to decline for the 14th time in 15 weeks when weekly EIA data is reported on Wed. Closes: CLM4 +0.60 (+0.60%). RBM4 +0.0186 (+0.64%).