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Leigh Baldwin & Co.

112 Albany Street, Cazenovia, NY 13035 | Phone: (315) 655-2964 Toll Free: 1-800-659-8044

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Day Traders Diary

4/25/13

Equity futures point to solid gains at the open as global equity markets continue their advance. The market seems to be able to shrug off a growing number of revenue misses as top line numbers are still coming in ahead of expectations. Economic data out this morning showed both initial (339K actual v. 355K previous) and continuing (3000K actual v. 3093K previos) claims slip from their previous readings, and that has provided some support ahead of the open. Overnight, markets were mixed across Asia with Japan's Nikkei (+0.6%) gaining despite a stronger yen and China's Shanghai Composite (-0.9%) lagging. In Europe, markets are generally higher as Germany's DAX (+0.7%) leads the way. However, Britain's FTSE (+0.2%) holds a slim gain despite the stronger than expected Q1 Preliminary GDP (0.3% QoQ actual v. 0.1% QoQ expected). While only a preliminary reading, the number suggests the British economy will at least temporarily avoid an unprecedented triple-dip recession. Elsewhere, Spain's IBEX (-0.5%) lags after the country's unemployment rate jumped to 27.2% (26.5% expected, 26.0% previous). Bringing focus back to the U.S., AFL, DOW, FFIV, LUV, MMM, MO, QCOM, UPS, WDC, XOM, ZNGA are among the names in focus following their quarterly reports...The following are the most important factors influencing the market this morning:

Asia: Nikkei +0.6%, Hang Seng +1.0%, Shanghai -0.9%

Looking at regional economic data:

South Korea's GDP rose 0.9% quarter-over-quarter to follow the prior increase of 0.3% (+0.6% consensus). Meanwhile, the year-over-year reading climbed 1.5% against the expectations of a 1.4% uptick.

Hong Kong reported a trade deficit of HKD49.2 billion to follow the prior deficit of HKD34.0 billion (-HKD47.0 billion expected).

In news:

The South Korean Unification Ministry warned North Korea of potential "grave consequences" if the North shows an unwillingness to discuss the shutdown of the Kaesong Industrial Complex.

The Korean Chamber of Commerce said roughly half of South Korean companies operating in China saw a decline in their 2012 operating profits.

Europe: FTSE +0.2%, CAC +0.3%, DAX +0.7%, IBEX -0.5%, MIB +0.6%

Regional economic data was limited:

The United Kingdom's GDP rose 0.3% quarter-over-quarter to follow the prior decline of 0.3% (+0.1% consensus).

In Spain, the unemployment rate rose to 27.16% from the prior reading of 26.02% (26.50% consensus).

In news:

German Chancellor Angela Merkel once again voiced her opposition to eurozone deposit insurance. However Ms. Merkel did reiterate her country's support for region-wide banking supervision.

In Italy, representatives from the Northern League and the Left Ecology Freedom party said they will not join a government led by Enrico Letta.

Earnings/guidance of interest:

QCOM reports Q2 (Mar) earnings of $1.17 per share, excluding non-recurring items, in-line with the Capital IQ Consensus Estimate consensus of $1.17; revenues rose 23.9% year/year to $6.12 bln vs the $6.08 bln consensus. Co issues in-line guidance for Q3, sees EPS of $0.97-1.05, excluding non-recurring items, vs. $1.04 Capital IQ Consensus Estimate; sees Q3 revs of $5.8-6.3 bln vs. $5.88 bln Capital IQ Consensus Estimate. Co issues guidance for FY13, raises EPS to $4.40-4.55, excluding non-recurring items, from $4.25-4.45 vs. $4.53 Capital IQ Consensus Estimate; raises FY13 revs to $24.0-25.0 bln from $23.4-24.4 bln bln vs. $24.1 bln Capital IQ Consensus Estimate.

MMM reports Q1 (Mar) earnings of $1.61 per share, $0.04 worse than the Capital IQ Consensus Estimate of $1.65; revenues rose 2.0% year/year to $7.63 bln (an all-time first-quarter record) vs the $7.81 bln consensus. Organic local-currency sales grew 2.1% and acquisitions added 1.7 percent to sales. Currency impacts reduced sales by 1.8 percent year-on-year. Co issues downside guidance for FY13, lowers EPS to $6.60-6.85 from $6.70-6.95 vs. $6.82 Capital IQ Consensus. The co continues to forecast organic local-currency sales growth of 2 to 5% for the year. Foreign currency translation is expected to reduce full-year sales by ~1.5%. 3M previously anticipated no impact to 2013 sales from foreign currency translation.

UPS beats by $0.02, reports revs in-line; reaffirms FY13 EPS guidance

XOM beats by $0.07, misses on revs

ZNGA beats by $0.05, reports revs in-line; guides Q2 EPS below consensus, revs below consensus

WDC beats by $0.34, beats on revs; sees Q2 revs of $3.55-3.65 bln vs $3.58 bln Capital IQ Consensus Estimate; sees Q2 adjusted EPS of $1.65-1.80 vs $1.73 Capital IQ Consensus Estimate

AFL beats by $0.07, beats on revs; guides Q2 EPS below consensus; guides FY13 EPS in-line

LUV beats by $0.04, reports revs in-line

MO beats by $0.01, misses on revs; reaffirms FY13 EPS guidance

DOW beats by $0.07, misses on revs

PHM beats by $0.06, misses on revs

Select analyst actions of interest:

Upgrades: ASML initiated with an Overweight at HSBC, PG upgraded to Buy from Neutral at SunTrust, AAPL upgraded to Buy from Long-Term Buy at Hilliard Lyons

Downgrades: FSLR downgraded to Underperform from Mkt Perform at Raymond James, NOR downgraded to Neutral from Buy at BofA/Merrill, VMW downgraded to Underperform from Market Perform at Bernstein, HTS downgraded to Market Perform from Outperform at Keefe Bruyette.

Technical factors: The S&P extended its win streak to four but by just a fraction (+0.01) and formed a loss of momentum doji. By itself this is a neutral pattern but short term indicators are still holding on to a top heavy posture (hourly divergence). A sustained push back through initial barriers at 1579 and 1581 is needed in early trade or the door will remain open to further near term corrective action. First level support is at 1574/1573 with a minor barrier near 1570.

Looking ahead: Treasury will auction $29 bln 7-yr notes.
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