[table=98%]
Americas : Market Intelligence – Morning Update
[hr]
by Chris Hussey
Published April 2, 2014

[table=98%]
[td=75%]微信公众平台 USOPTIONS
Wednesday

In fact, the market trend that appears to be emerging overnight may best be described as "back to the beginning." At the beginning of the year, 2014 was setting up to be one characterized by steadily rising US rates, a devaluing yen, weaker gold prices, and (hopefully) ever-higher stock prices against a backdrop of accelerating US growth as we lapped last year's payroll tax hike and sequestration. As is so often the case, however, none of those things materialized in the first quarter of the year. Rising geo-political risks, a sharp deterioration in China's growth trajectory, and outrageously bad weather in the US derailed the "accelerating growth trade" and led to lower rates, a stronger yen, gold back up close to $1,400/toz and a flat S&P 500.

Overnight, however, signs emerged of the beginning-of-the-year "playbook" re-emerging just in time for the start of the second quarter.

Yields on the 10-year Treasury have crawled back up to 2.77% (still below the 3.00% level at the start of the year but nearing their highest point since mid-January). See Francesco Garzarelli's "[url=https://360.gs.com/research/portal/?action=action.doc&d=16870863&authtoken=YT05MmM5NTFhNTRkMTI0MGZiODJiNmY2ZWFhYTFiNzYxOSZhdXRoY3JlYXRlZD0xMzk2NDM4NTQ2MTE2JmF1dGhkaWdlc3Q9bXU4cGdyajlpWWJhUk12ZVlCJTJCJTJGcTFLNiUyQkcwJTNEJmF1dGhrZXlpZD0yMDE0MDMxNyZhdXRocHJvdmlkZXJpZD0xJmF1dGh1c2VyPTgxN2ZiZGY4NzAyZDExZTA5ZjYzMDAyMTVhZDI2NTQ2JmQ9MTY4NzA4NjMmcG9saWN5PTImcG9saWN5PTMmdT0lM0ZhY3Rpb24lM0RhY3Rpb24uZG9jJTI2ZCUzRDE2ODcwODYz]Springtime, Bond Bears Awaken[/url]" for our bearish view on bonds around the globe.
The yen has quietly slipped back to ¥103.7/$ (a level also not seen since mid-January). See Naohiko Baba's March 28th "[url=https://360.gs.com/research/portal/?action=action.doc&d=16853272&authtoken=YT05MmM5NTFhNTRkMTI0MGZiODJiNmY2ZWFhYTFiNzYxOSZhdXRoY3JlYXRlZD0xMzk2NDM4NTQ2MTE2JmF1dGhkaWdlc3Q9U0JTTTZBcm9kYXV1JTJGNVBxNm0weWFmVXluR2MlM0QmYXV0aGtleWlkPTIwMTQwMzE3JmF1dGhwcm92aWRlcmlkPTEmYXV0aHVzZXI9ODE3ZmJkZjg3MDJkMTFlMDlmNjMwMDIxNWFkMjY1NDYmZD0xNjg1MzI3MiZwb2xpY3k9MiZwb2xpY3k9MyZ1PSUzRmFjdGlvbiUzRGFjdGlvbi5kb2MlMjZkJTNEMTY4NTMyNzI%3D]Japan Economics Analyst[/url]" for an insightful comparison of Japan's export exposure versus Germany. Gold prices are now about $100/toz. off their mid-March highs as traders react to a more hawkish FOMC. See Damien Courvalin's forecast of lower gold prices as US growth accelerates in the March 20th report, "[url=https://360.gs.com/research/portal/?action=action.doc&d=16806997&authtoken=YT05MmM5NTFhNTRkMTI0MGZiODJiNmY2ZWFhYTFiNzYxOSZhdXRoY3JlYXRlZD0xMzk2NDM4NTQ2MTE3JmF1dGhkaWdlc3Q9ZVNNVDBsYzJVZjRvelJ4TEFLSCUyQkhVMzJoZzQlM0QmYXV0aGtleWlkPTIwMTQwMzE3JmF1dGhwcm92aWRlcmlkPTEmYXV0aHVzZXI9ODE3ZmJkZjg3MDJkMTFlMDlmNjMwMDIxNWFkMjY1NDYmZD0xNjgwNjk5NyZwb2xpY3k9MiZwb2xpY3k9MyZ1PSUzRmFjdGlvbiUzRGFjdGlvbi5kb2MlMjZkJTNEMTY4MDY5OTc%3D]Cold, Crimea & China: Transient supports to gold prices[/url]." And The S&P 500 is now up 2.0% for the year - once again at an all-time high. Stuart Kaiser and David Kostin highlight the sharp rise in returns from US companies seen last year in last night's "[url=https://360.gs.com/research/portal/?action=action.doc&d=16881517&authtoken=YT05MmM5NTFhNTRkMTI0MGZiODJiNmY2ZWFhYTFiNzYxOSZhdXRoY3JlYXRlZD0xMzk2NDM4NTQ2MTE3JmF1dGhkaWdlc3Q9SWY1bTd3ZU43Z011RGtldXQlMkJmT25lV25TUjAlM0QmYXV0aGtleWlkPTIwMTQwMzE3JmF1dGhwcm92aWRlcmlkPTEmYXV0aHVzZXI9ODE3ZmJkZjg3MDJkMTFlMDlmNjMwMDIxNWFkMjY1NDYmZD0xNjg4MTUxNyZwb2xpY3k9MiZwb2xpY3k9MyZ1PSUzRmFjdGlvbiUzRGFjdGlvbi5kb2MlMjZkJTNEMTY4ODE1MTc%3D]US Thematic Views[/url]" as we rebalance our ROE Growth portfolio (Bloomberg ticker: <GSTHGROE>).

March US automobile sales impress. March Light vehicle sales came in better than expected at 16.4mn units on a SAAR basis writes Pat Archambault in "[url=https://360.gs.com/research/portal/?action=action.doc&d=16881059&authtoken=YT05MmM5NTFhNTRkMTI0MGZiODJiNmY2ZWFhYTFiNzYxOSZhdXRoY3JlYXRlZD0xMzk2NDM4NTQ2MTE3JmF1dGhkaWdlc3Q9OEFpMjJmdW42aFVYbXczUW81YlpVY1lVVklrJTNEJmF1dGhrZXlpZD0yMDE0MDMxNyZhdXRocHJvdmlkZXJpZD0xJmF1dGh1c2VyPTgxN2ZiZGY4NzAyZDExZTA5ZjYzMDAyMTVhZDI2NTQ2JmQ9MTY4ODEwNTkmcG9saWN5PTImcG9saWN5PTMmdT0lM0ZhY3Rpb24lM0RhY3Rpb24uZG9jJTI2ZCUzRDE2ODgxMDU5]March SAAR breaks through 16mn barrier[/url]." Better sales volumes support our contention that weather alone impacted Jan/Feb sales numbers. This also augurs well for April sales as we believe there might be even more room for weather-dampened pent-up demand to be realized. With 1Q14 sales now tracking at 15.7mn, our full-year SAAR estimate of 16.0mn remains on track. GM and Ford sales were up 8.1 % and 7.6 % yoy respectively.

Looking Ahead: Look for the March ADP Employment Survey and February Factory Orders today.

[table=270]
Performance of global indices
As of April 02, 2014

Source: Reuters

Today's Events:

08:15 am

US Morning Call for April02, 2014:

[url=https://360.gs.com/research/portal/?action=action.doc&d=16880843&authtoken=YT05MmM5NTFhNTRkMTI0MGZiODJiNmY2ZWFhYTFiNzYxOSZhdXRoY3JlYXRlZD0xMzk2NDM4NTQ2MTE3JmF1dGhkaWdlc3Q9OGwyeEV1c1M3U011YVhMaVpVOTMyb3Z4JTJGOW8lM0QmYXV0aGtleWlkPTIwMTQwMzE3JmF1dGhwcm92aWRlcmlkPTEmYXV0aHVzZXI9ODE3ZmJkZjg3MDJkMTFlMDlmNjMwMDIxNWFkMjY1NDYmZD0xNjg4MDg0MyZwb2xpY3k9MiZwb2xpY3k9MyZ1PSUzRmFjdGlvbiUzRGFjdGlvbi5kb2MlMjZkJTNEMTY4ODA4NDM%3D]Medical Technology, Ro/ Dubajova: Japan Red Cross contract win is positive for Hologic and Grifols.[/url]A $375m blood testing contract win with Japan’s Red Cross highlights the strong product platform at Grifols/HOLX. This contract should boost organic growth at Buy-rated HOLX and is modestly positive for CL-Buy Grifols (Spain-listed).

[url=https://360.gs.com/research/portal/?action=action.doc&d=16880762&authtoken=YT05MmM5NTFhNTRkMTI0MGZiODJiNmY2ZWFhYTFiNzYxOSZhdXRoY3JlYXRlZD0xMzk2NDM4NTQ2MTE3JmF1dGhkaWdlc3Q9cmJxWVZYYnZrdlBMMTdnUWtJeTQ1RWxJY1VZJTNEJmF1dGhrZXlpZD0yMDE0MDMxNyZhdXRocHJvdmlkZXJpZD0xJmF1dGh1c2VyPTgxN2ZiZGY4NzAyZDExZTA5ZjYzMDAyMTVhZDI2NTQ2JmQ9MTY4ODA3NjImcG9saWN5PTImcG9saWN5PTMmdT0lM0ZhY3Rpb24lM0RhY3Rpb24uZG9jJTI2ZCUzRDE2ODgwNzYy]CarMax (KMX, Neutral), Fassler: In defense of the subprime opportunity; still Neutral on slower year.[/url]We remain Neutral rated on KMX as growth should moderate this year. But the negative market reaction to KMX’s decision to re-enter the subprime lending business is likely overdone. Subprime can be very profitable and KMX is well positioned to price the risk. 12-month target, $54.

[url=https://360.gs.com/research/portal/?action=action.doc&d=16880783&authtoken=YT05MmM5NTFhNTRkMTI0MGZiODJiNmY2ZWFhYTFiNzYxOSZhdXRoY3JlYXRlZD0xMzk2NDM4NTQ2MTE4JmF1dGhkaWdlc3Q9U3MxbTlESExVRjJ6UzZvU2hQdktwZEhsY0xFJTNEJmF1dGhrZXlpZD0yMDE0MDMxNyZhdXRocHJvdmlkZXJpZD0xJmF1dGh1c2VyPTgxN2ZiZGY4NzAyZDExZTA5ZjYzMDAyMTVhZDI2NTQ2JmQ9MTY4ODA3ODMmcG9saWN5PTImcG9saWN5PTMmdT0lM0ZhY3Rpb24lM0RhY3Rpb24uZG9jJTI2ZCUzRDE2ODgwNzgz]GT Advanced Technologies (GTAT, Buy), Lee: Not all about Apple - more value in the “core”; target up to $24; Buy.[/url]Raise out-year estimates and our price target by 20% (now $24) for Buy-rated GTAT as we have greater confidence that several of its new equipment technologies will achieve commercial success.

[url=https://360.gs.com/research/portal/?action=action.doc&d=16879381&authtoken=YT05MmM5NTFhNTRkMTI0MGZiODJiNmY2ZWFhYTFiNzYxOSZhdXRoY3JlYXRlZD0xMzk2NDM4NTQ2MTE4JmF1dGhkaWdlc3Q9YlZYRFFKMjJmUTdnZnYweUU3eG9rWHB3cTJzJTNEJmF1dGhrZXlpZD0yMDE0MDMxNyZhdXRocHJvdmlkZXJpZD0xJmF1dGh1c2VyPTgxN2ZiZGY4NzAyZDExZTA5ZjYzMDAyMTVhZDI2NTQ2JmQ9MTY4NzkzODEmcG9saWN5PTImcG9saWN5PTMmdT0lM0ZhY3Rpb24lM0RhY3Rpb24uZG9jJTI2ZCUzRDE2ODc5Mzgx]SunCoke Energy, Inc. (SXC, Buy), Mehta: Raising target after management meetings in Boston; stay Buy.[/url][url=https://360.gs.com/research/portal/?action=action.doc&d=16880435&authtoken=YT05MmM5NTFhNTRkMTI0MGZiODJiNmY2ZWFhYTFiNzYxOSZhdXRoY3JlYXRlZD0xMzk2NDM4NTQ2MTE4JmF1dGhkaWdlc3Q9UTdOTm55YmZ4U0dGcERwRyUyRnMycDFrcjJmcGclM0QmYXV0aGtleWlkPTIwMTQwMzE3JmF1dGhwcm92aWRlcmlkPTEmYXV0aHVzZXI9ODE3ZmJkZjg3MDJkMTFlMDlmNjMwMDIxNWFkMjY1NDYmZD0xNjg4MDQzNSZwb2xpY3k9MiZwb2xpY3k9MyZ1PSUzRmFjdGlvbiUzRGFjdGlvbi5kb2MlMjZkJTNEMTY4ODA0MzU%3D]Xcel Energy Inc. (XEL, Sell), Mehta: Regulatory concerns in focus in Minnesota and Colorado; stay Sell.[/url]Buy SXC and raise 6-month price target to $27, following management reaffirmation to exit the coal business, and growth optionality from tuck-in acquisitions and cash inflows from MLP drop downs. Separately, Sell XEL as rate uncertainty remains high in Minnesota and Colorado.

[url=https://360.gs.com/research/portal/?action=action.doc&d=16882364&authtoken=YT05MmM5NTFhNTRkMTI0MGZiODJiNmY2ZWFhYTFiNzYxOSZhdXRoY3JlYXRlZD0xMzk2NDM4NTQ2MTE4JmF1dGhkaWdlc3Q9SEEyV2s2ZjUlMkJRaWttaCUyQkpzbWdoYkNmcnVhQSUzRCZhdXRoa2V5aWQ9MjAxNDAzMTcmYXV0aHByb3ZpZGVyaWQ9MSZhdXRodXNlcj04MTdmYmRmODcwMmQxMWUwOWY2MzAwMjE1YWQyNjU0NiZkPTE2ODgyMzY0JnBvbGljeT0yJnBvbGljeT0zJnU9JTNGYWN0aW9uJTNEYWN0aW9uLmRvYyUyNmQlM0QxNjg4MjM2NA%3D%3D]1H2014 P&C Pricing Survey, Nannizzi: Slowing rate and accelerating competition – will discipline endure?[/url]Highlights from our 1H2014 P&C Insurance Pricing Survey: commercial pricing is slowing but still positive; competition in large accounts is increasing; and homeowners insurance rates are holding up on capacity constraints.

[url=https://360.gs.com/research/portal/?action=action.doc&d=16882102&authtoken=YT05MmM5NTFhNTRkMTI0MGZiODJiNmY2ZWFhYTFiNzYxOSZhdXRoY3JlYXRlZD0xMzk2NDM4NTQ2MTE5JmF1dGhkaWdlc3Q9cGpSa0pnQjM1SG9QJTJCZnNmOVJDcHpWb2dwNDAlM0QmYXV0aGtleWlkPTIwMTQwMzE3JmF1dGhwcm92aWRlcmlkPTEmYXV0aHVzZXI9ODE3ZmJkZjg3MDJkMTFlMDlmNjMwMDIxNWFkMjY1NDYmZD0xNjg4MjEwMiZwb2xpY3k9MiZwb2xpY3k9MyZ1PSUzRmFjdGlvbiUzRGFjdGlvbi5kb2MlMjZkJTNEMTY4ODIxMDI%3D]Essex Property Trust, Inc. (ESS, Neutral), Rosivach: Powerful, but priced-in two-year trajectory – downgrade to Neutral.[/url]Downgrade ESS to Neutral even as we raise our 12-month target to $177 as we believe the market adequately discounts the upside from its acquisition of BRE (closed last night).

Notable Research not on the call:

Macro

[url=https://360.gs.com/research/portal/?action=action.doc&d=16882053&authtoken=YT05MmM5NTFhNTRkMTI0MGZiODJiNmY2ZWFhYTFiNzYxOSZhdXRoY3JlYXRlZD0xMzk2NDM4NTQ2MTE5JmF1dGhkaWdlc3Q9TEwyWE9GVE9yMkNuUkdJdEMlMkJhS0dUYVhtRUklM0QmYXV0aGtleWlkPTIwMTQwMzE3JmF1dGhwcm92aWRlcmlkPTEmYXV0aHVzZXI9ODE3ZmJkZjg3MDJkMTFlMDlmNjMwMDIxNWFkMjY1NDYmZD0xNjg4MjA1MyZwb2xpY3k9MiZwb2xpY3k9MyZ1PSUzRmFjdGlvbiUzRGFjdGlvbi5kb2MlMjZkJTNEMTY4ODIwNTM%3D]Weekly Options Watch: Trades: HUM, BEAV, LO, COF[/url]
[url=https://360.gs.com/research/portal/?action=action.doc&d=16881517&authtoken=YT05MmM5NTFhNTRkMTI0MGZiODJiNmY2ZWFhYTFiNzYxOSZhdXRoY3JlYXRlZD0xMzk2NDM4NTQ2MTE5JmF1dGhkaWdlc3Q9d2Q5d3djWTc4Tzk4S2JySXlqYThHQkJBMWNRJTNEJmF1dGhrZXlpZD0yMDE0MDMxNyZhdXRocHJvdmlkZXJpZD0xJmF1dGh1c2VyPTgxN2ZiZGY4NzAyZDExZTA5ZjYzMDAyMTVhZDI2NTQ2JmQ9MTY4ODE1MTcmcG9saWN5PTImcG9saWN5PTMmdT0lM0ZhY3Rpb24lM0RhY3Rpb24uZG9jJTI2ZCUzRDE2ODgxNTE3]US Thematic Views: S&P 500 4Q 2013 ROE update: Substantial improvement to 16.3%[/url] [url=https://360.gs.com/research/portal/?action=action.doc&d=16880838&authtoken=YT05MmM5NTFhNTRkMTI0MGZiODJiNmY2ZWFhYTFiNzYxOSZhdXRoY3JlYXRlZD0xMzk2NDM4NTQ2MTE5JmF1dGhkaWdlc3Q9M0xEelNzb0ttUCUyQkszVWN0bkxINm1ZU1VrS3MlM0QmYXV0aGtleWlkPTIwMTQwMzE3JmF1dGhwcm92aWRlcmlkPTEmYXV0aHVzZXI9ODE3ZmJkZjg3MDJkMTFlMDlmNjMwMDIxNWFkMjY1NDYmZD0xNjg4MDgzOCZwb2xpY3k9MiZwb2xpY3k9MyZ1PSUzRmFjdGlvbiUzRGFjdGlvbi5kb2MlMjZkJTNEMTY4ODA4Mzg%3D]US Daily: The Affordable Care Act: Taking Stock As Enrollment Closes (Phillips)[/url] [url=https://360.gs.com/research/portal/?action=action.doc&d=16879878&authtoken=YT05MmM5NTFhNTRkMTI0MGZiODJiNmY2ZWFhYTFiNzYxOSZhdXRoY3JlYXRlZD0xMzk2NDM4NTQ2MTIwJmF1dGhkaWdlc3Q9eU9wTjN2NGElMkZDeEdPTmduRlRxdWFXbDdaYlUlM0QmYXV0aGtleWlkPTIwMTQwMzE3JmF1dGhwcm92aWRlcmlkPTEmYXV0aHVzZXI9ODE3ZmJkZjg3MDJkMTFlMDlmNjMwMDIxNWFkMjY1NDYmZD0xNjg3OTg3OCZwb2xpY3k9MiZwb2xpY3k9MyZ1PSUzRmFjdGlvbiUzRGFjdGlvbi5kb2MlMjZkJTNEMTY4Nzk4Nzg%3D]USA: March Auto Sales Rise More than Expected[/url]

Consumer

[url=https://360.gs.com/research/portal/?action=action.doc&d=16881059&authtoken=YT05MmM5NTFhNTRkMTI0MGZiODJiNmY2ZWFhYTFiNzYxOSZhdXRoY3JlYXRlZD0xMzk2NDM4NTQ2MTIwJmF1dGhkaWdlc3Q9d0RLaFJWcTJkVDFSN3BQT1dGSXJUdVVnWGZjJTNEJmF1dGhrZXlpZD0yMDE0MDMxNyZhdXRocHJvdmlkZXJpZD0xJmF1dGh1c2VyPTgxN2ZiZGY4NzAyZDExZTA5ZjYzMDAyMTVhZDI2NTQ2JmQ9MTY4ODEwNTkmcG9saWN5PTImcG9saWN5PTMmdT0lM0ZhY3Rpb24lM0RhY3Rpb24uZG9jJTI2ZCUzRDE2ODgxMDU5]Automobiles: March SAAR breaks through 16mn barrier as weather abates[/url]

Energy

[url=https://360.gs.com/research/portal/?action=action.doc&d=16881029&authtoken=YT05MmM5NTFhNTRkMTI0MGZiODJiNmY2ZWFhYTFiNzYxOSZhdXRoY3JlYXRlZD0xMzk2NDM4NTQ2MTIwJmF1dGhkaWdlc3Q9SWIxJTJCQkhmUkt4NHFqVSUyQnhCUTRiRzFSeTdrdyUzRCZhdXRoa2V5aWQ9MjAxNDAzMTcmYXV0aHByb3ZpZGVyaWQ9MSZhdXRodXNlcj04MTdmYmRmODcwMmQxMWUwOWY2MzAwMjE1YWQyNjU0NiZkPTE2ODgxMDI5JnBvbGljeT0yJnBvbGljeT0zJnU9JTNGYWN0aW9uJTNEYWN0aW9uLmRvYyUyNmQlM0QxNjg4MTAyOQ%3D%3D]Clean Energy: The Pricing Picture – March 2014[/url]

TMT

[url=https://360.gs.com/research/portal/?action=action.doc&d=16879399&authtoken=YT05MmM5NTFhNTRkMTI0MGZiODJiNmY2ZWFhYTFiNzYxOSZhdXRoY3JlYXRlZD0xMzk2NDM4NTQ2MTIwJmF1dGhkaWdlc3Q9NlV0b1pmRFgzUm1JWXlqMk9GQnZrMmFTbmJZJTNEJmF1dGhrZXlpZD0yMDE0MDMxNyZhdXRocHJvdmlkZXJpZD0xJmF1dGh1c2VyPTgxN2ZiZGY4NzAyZDExZTA5ZjYzMDAyMTVhZDI2NTQ2JmQ9MTY4NzkzOTkmcG9saWN5PTImcG9saWN5PTMmdT0lM0ZhY3Rpb24lM0RhY3Rpb24uZG9jJTI2ZCUzRDE2ODc5Mzk5]Entertainment: TV Pilot Season: FOX leads shift to more straight-to-series orders[/url]
[url=https://360.gs.com/research/portal/?action=action.doc&d=16881591&authtoken=YT05MmM5NTFhNTRkMTI0MGZiODJiNmY2ZWFhYTFiNzYxOSZhdXRoY3JlYXRlZD0xMzk2NDM4NTQ2MTIwJmF1dGhkaWdlc3Q9dkVQUndIM3MxYWRYWkxwMmFxekwwQ2V6OGxFJTNEJmF1dGhrZXlpZD0yMDE0MDMxNyZhdXRocHJvdmlkZXJpZD0xJmF1dGh1c2VyPTgxN2ZiZGY4NzAyZDExZTA5ZjYzMDAyMTVhZDI2NTQ2JmQ9MTY4ODE1OTEmcG9saWN5PTImcG9saWN5PTMmdT0lM0ZhY3Rpb24lM0RhY3Rpb24uZG9jJTI2ZCUzRDE2ODgxNTkx]Palo Alto Networks Inc. (PANW): Positive impressions from Ignite; Buy PANW[/url]

Conference Calls & Conferences:

April 3 @ 10 AM EDT – GS Research Industrials Thursday Conf Call Series: “Outlook for the global OCC market (recycled boxes)” with Bill Moore, President of Moore & Associates; hosted by Alex Ovshey; Dial-in: [url=tel:973-528-0056]973-528-0056[/url]; passcode: 135012; webcast link: [url=http://www.visualwebcaster.com/event.asp?id=98720]http://www.visualwebcaster.com/event.asp?id=98720[/url].
April 4 @ 11 AM EDT – GS Research Energy Friday Conf Call Series: “Haynesville Shale: Defining the geologic and financial opportunity” with EXCO Resources’ Mark F. Mulhern (CFO), Harold H. Jameson (VP of Asset Management) and Marcia R. Simpson (VP of Engineering); hosted by Brian Singer; Dial-in: [url=tel:973-528-0056]973-528-0056[/url]; passcode: 624831.