27 March 2014 AMC- Market ended flat as Financials lagged but energy led

27 March 2014 AMC- Market ended flat as Financials lagged but energy led

Market Summary 

European Markets Closing Prices

European markets are now closed; stock markets across Europe performed as follows:

·         UK's FTSE: -0.3%

·         Germany's DAX: 0.0%

·         France's CAC: -0.1%

·         Spain's IBEX: + 0.6%

·         Portugal's PSI: + 0.1%

·         Italy's MIB Index: + 0.3%

·         Irish Ovrl Index: -0.4%

·         Greece ATHEX Composite: -1.3%

Before Market Opens

S&P futures vs fair value: -3.10. Nasdaq futures vs fair value: -4.00.
The S&P 500 futures trade three points below fair value.

The major Asian bourses ended mixed. Stimulus talk continued in Japan, but there were some inconsistencies. A central bank source quoted by Nikkei said the BoJ is expecting a soft first quarter, but improvements in subsequent periods would keep the central bank on hold. Meanwhile, Economy Minister Akira Amari said the BoJ can maximize the impact of easing measures by surprising the markets. Elsewhere, Bangko Sentral ng Pilipinas held its key rate unchanged at 3.5%, as expected, while the Central Bank of the Republic of China (Taiwan) left its benchmark rate unchanged at 1.875%, also in line with expectations. 

·         Japan's Nikkei gained 1.0%, closing at its best level in two weeks. Toyota Motor added 2.0% after announcing a $3.5 billion share repurchase program. 

·         Hong Kong's Hang Seng slipped 0.2% with technology shares leading to the downside. Internet gaming company Tencent Holdings tumbled 5.9% following yesterday's disappointing debut by peer King Digital Entertainment. 

·         China's Shanghai Composite lost 0.8%, slipping back below the 50-day moving average. Financials outperformed as China Citic Bank gained 1.9% and Shanghai Pudong Development added 1.2%. 

Major European indices trade mostly lower with Great Britain's FTSE (-0.6%) displaying the largest loss. Participants received several data points. Eurozone M3 money supply expanded 1.3% year-over-year, as expected (prior 1.2%), while private loans declined 2.2% year-over-year (expected -2.1%, previous -2.3%). Great Britain's Retail Sales rose 1.7% month-over-month (consensus 0.5%, prior -2.0%) while the year-over-year reading increased 3.7% (expected 2.5%, previous 3.9%). Separately, Core Retail Sales increased 1.8% month-over-month (expected 0.3%, previous -2.0%) while the year-over-year reading jumped 4.2% (consensus 2.8%, prior 4.4%). French Consumer Confidence improved to 88 from 85 (consensus 85). Italy's Business Confidence ticked up to 99.2 from 99.1 (expected 99.5).

Among news of note, the International Monetary Fund came to a preliminary agreement that would provide Ukraine with $14-18 billion in emergency aid with the potential to increase the total package to $27 billion if Ukraine undertakes reforms required by the IMF. 

·         Spain's IBEX is lower by 0.1%. Construction names Acciona and Sacyr lead with gains close to 2.5% apiece.

·         Germany's DAX is lower by 0.4%. Producers of basic materials trade mixed with ThyssenKrupp and Lanxess sporting respective losses of 1.5% and 0.2% while K+S trades higher by 1.6%. 

·         In France, the CAC holds a loss of 0.5% with Alstom leading the retreat. The stock trades lower by 6.0% amid reports the company is facing an expanded corruption probe. On the upside, technology names outperform with Cap Gemini and Gemalto both up near 0.4%. 

·         Great Britain's FTSE trades down 0.6% with miners on the defensive. Antofagasta, Fresnillo, and Randgold Resources are down between 1.9% and 3.9%. Consumer names outperform with British Sky Broadcasting and Associated British Foods both up near 1.0%. 

U.S. Equities

·         Equity futures suggest small losses at the open

·         Yesterday's sell off has left the S&P 500 (+0.2%) as the only major U.S. average still in the green for 2014

·         Financials will be in focus today following yesterday's release of the Fed's CCAR results 

·         Initial Claims (311K actual v. 330K expected)

·         Continuing Claims (2823K actual v. 2900K expected)

·         GDP - Third Estimate (2.6% actual v. 2.6% expected)

·         GDP Deflator - Third Estimate (1.6% actual v. 1.6% expected)

o    S&P Futures -1 @ 1841

o    Dow Futures -3 @ 16,176

o    Nasdaq Futures -3 @ 3570

Asia

·         The major Asian bourses ended mixed

·         Recent chatter has suggested the Bank of Japan will not need to increase its QE program; however, Japan's Econ Minister indicated the an increase to the central bank's asset purchases would be most effective if it surprised markets

·         Bangko Sentral ng Pilipinas held its key rate unchanged at 3.5%, as expected

·         The Central Bank of the Republic of China (Taiwan) left its benchmark rate unchanged at 1.875%, as expected

·         Japan's Nikkei (+1.0%) closed at its best level in two weeks

·         Hong Kong's Hang Seng (-0.2%) slipped as technology shares led to the downside

·         China's Shanghai Composite (-0.8%) fell back below the 50 dma

·         India's Sensex (+0.5%) climbed to a fresh record-high for a fourth straight day 

·         Australia's ASX (-0.5%) pared its losses into the close

Market Internals

Market Internals
The Nasdaq closed down 22 (-0.54%) at 4151, the S&P 500 closed down 4 (-0.19%) at 1849, and the Dow closed down 5 (-0.03%) at 16264. Action came on slightly above average volume (NYSE 778 mln vs. avg. of 734; NASDAQ 2123 mln vs. avg. of 2021), with mixed advancers/decliners (NYSE 1662/1459, NASDAQ 1039/1596) and mixed new highs/lows(NYSE 49/29, NASDAQ 20/51).

Relative Strength: 
Junior Gold Miners-GDXJ +3.51%, Sugar-SGG +3.41%, Latin America 40-ILF +3.32%, Columbia Index-GXG +3.04%, Natural Gas-UNG +2.66%, Livestock-COW +2.30%, Cotton-BAL +2.05%, BRICs-EEB +1.89%, Malaysia-EWM +1.70%, Brazilian Real-BZF +1.60%.

Relative Weakness: 
Egypt-EGPT -5.42%, Regional Banks-KRE -1.94%, Banks-KBE -1.57%, Social Media-SOCL -1.33%, Volatility-VXX -1.21%, Broker-Dealers-IAI -1.20%, Austria-EWO -0.71%, Eastern Europe-ESR -0.29%, Swiss Franc-FXF -0.27%, Indian Rupee-ICN -0.19%.

Leaders and Laggards

Technical Updates

Briefing's Commentaries 

Closing Market Summary: Nasdaq Leads Stocks Lower
The stock market finished the Thursday session on a lower note with the tech-heavy Nasdaq Composite (-0.5%) trailing the other indices once again. The Nasdaq widened its week-to-date loss to 3.6% while the S&P 500 settled lower by 0.2%, extending its weekly decline to 0.9%.

Equity indices began the trading day on a cautious note despite two upbeat economic data points crossing ahead of the open. Namely, fourth quarter GDP was revised up to 2.6% from 2.4% while weekly initial claims fell to 311,000 from 320,000.

The release of this morning's data coincided with session lows in Treasuries, which rallied into the afternoon. The 10-yr note added three ticks, pressuring its yield down to 2.68% after notching a morning high at 2.71%.

Meanwhile, the early weakness in equities was brought upon by continued volatility in the biotechnology space. The iShares Nasdaq Biotechnology ETF (IBB 236.14, +1.05) was down nearly 3.0% during the initial 30 minutes of action before returning to its flat line, where it traded for the remainder of the trading day.

The early selling in biotechnology pressured the health care sector (-0.1%), but the influential group was able to erase the bulk of its early loss thanks in part to the 3.9% gain in the shares of Baxter (BAX 72.80, +2.72) after the company announced plans to split into two entities.

Even though health care settled in-line with the broader market, other top-weighted sectors were not as fortunate. Financials (-0.6%) ended at the bottom of the leaderboard while consumer discretionary (-0.5%) and technology (-0.6%) were not much stronger.

Notably, the financial sector lagged amid losses in some of its largest components. Citigroup (C 47.45, -2.71) slumped 5.4% after the Federal Reserve objected to the capital plan submitted by the bank.

Elsewhere, the discretionary sector was pressured by the likes of Amazon.com (AMZN 338.47, -4.94), eBay (EBAY 55.18, -0.42), and Netflix (NFLX 364.18, -8.10), while quick-service restaurants also finished mostly lower. Yum! Brands (YUM 73.20, -0.97) was a notable laggard, falling 1.3%.

Although most cyclical groups spent the bulk of the session in the red, that was not the case with the energy space (+0.9%), which outperformed throughout the day while crude oil rose 1.0% to $101.24/bbl.

On the countercyclical side, telecom services (+1.2%) and utilities (+0.8%) posted gains while consumer staples (-0.2%) ended in-line.

Despite the cautious disposition, participants did not show strong demand for volatility protection, sending the CBOE Volatility Index (VIX 14.56, -0.37) lower by 2.5%.

Trading volume was a bit above average as 778 million shares changed hands at the NYSE.

Today's economic data included the final revision to Q4 GDP, weekly initial claims, and the February Pending Home Sales report: 

·         Fourth quarter GDP was revised up to 2.6% in the third estimate from 2.4% in the second estimate. That matched the Briefing.com consensus estimate, but was down from a 4.1% gain in Q3 2013. Real final sales increased 2.7% in the fourth quarter. That was up from a 2.5% gain in Q3 2013 and above the previously reported 2.3% gain. It was also the strongest increase in real final sales since increasing 3.4% in Q2 2012. Looking at real final sales over the last four quarters (0.2%, 2.1%, 2.5%, and 2.7%), there is a definite upward moving trend. The year-over-year averages, however, put it below the 2.0% and 2.6% gains from 2011 and 2012. 

·         The initial claims level fell to 311,000 for the week ending March 22 from an upwardly revised 321,000 (from 320,000) for the week ending March 15. The Briefing.com consensus expected the initial claims level to increase to 330,000. Over the past several months, excluding some seasonal volatility, the initial claims have been bounded between 330,000 and 340,000. That trend seems to have shifted lower over the past four weeks, with the initial claims level consistently falling below 330,000 and in the range of 310,000--320,000. 

·         Pending home sales for February fell 0.8%, which was worse than the 0.2% decrease forecast by the Briefing.com consensus. Today's reading followed last month's revised decrease of 0.2% (from +0.1%). 

Tomorrow, February Personal Income (Briefing.com consensus +0.2%), Personal Spending (consensus +0.3%), and Core PCE Prices (consensus +0.1%) will be released at 8:30 ET while the final reading of the March Michigan Sentiment survey (consensus 80.0) will cross the wires at 9:55 ET. 

·         S&P 500 UNCH YTD 

·         Nasdaq Composite -0.6% YTD 

·         Russell 2000 -0.8% YTD 

·         Dow Jones Industrial Average -1.9% YTD

Commodities

Closing Commodities: Natural Gas Rose 3.2% Following Inventory Data

·         Precious metals traded lower today on pressure from upbeat economic data. Specifically, Q4 GDP was revised up to 2.6% from 2.4% and weekly initial claims fell to 311,000 to 320,000.

·         Apr gold fell below the $1300 level and brushed a session low of $1293.00 per ounce. It settled with a 0.7% loss at $1294.70 per ounce.

·         May silver traded as low as $19.63 per ounce in early morning action. It brushed a session high of $19.77 per ounce and settled at $19.70 per ounce, or 0.4% lower. 

·         May crude oil traded above $101 per barrel and extended yesterday's gains. The energy component touched a session high of $101.70 per barrel and settled with a 1.0% gain at $101.24 per barrel.

·         Apr natural gas gained support from better-than-anticipated inventory data. According to the EIA, inventories for the week ending Mar 21 showed a draw of 57 bcf when a smaller draw of 52-54 was expected. Natural gas rose to a session high of $4.57 per MMBtu and settled with a 3.2% gain at $4.53 per MMBtu.

COMEX Metals Closing Prices

  Apr gold fell $8.70 to $1294.70/oz 

·         Gold fell below $1300 today on pressure from upbeat economic data. Specifically, Q4 GDP was revised up to 2.6% from 2.4% and weekly initial claims fell to 311,000 to 320,000. The yellow metal brushed a session low of $1293.00 and settled with a 0.7% loss. 

  May silver fell $0.07 to $19.70/oz 

·         Silver also chopped around in negative territory, trading as low as $19.63 in early morning action. It brushed a session high of $19.77 and settled with a 0.4% loss. 

  May copper rose 2 cents to $2.99/lbs

CBOT Agriculture and Ethanol/ICE Sugar Closing Prices

·         May corn rose 7 cents to $4.92/bushel 

·         May wheat rose 13 cents to $7.10/bushel 

·         May soybeans fell 3 cents to $14.97/bushel 

·         Apr ethanol rose 7 cents to $3.02/gallon 

·         May sugar (#16 (U.S.)) rose 0.04 of a penny to 22.12 cents/lbs

 

NYMEX Energy Closing Prices

  May crude oil rose $1.00 to $101.24/barrel 

·         Crude oil extended yesterday's gains as it traded above the $101 level. The energy component touched a session high of $101.70 and settled with a 1.0% gain. 

  May natural gas rose 14 cents to $4.53/MMBtu 

·         Natural gas rose today as it gained support from better-than-anticipated inventory data. According to the EIA, inventories for the week ending Mar 21 showed a draw of 57 bcf when a smaller draw of 52-54 was expected. Natural gas lifted from a session low of $4.38 set in morning floor action and peaked at $4.57 before settling with a 3.2% gain. 

  May heating oil rose 3 cents to $2.94/gallon 

  May RBOB rose 3 cents to $2.93/gallon

Treasuries

30y Closes at 3.510%, Nine-Month Low: 10-yr: +05/32..2.2672%..USD/JPY: 102.15..EUR/USD: 1.3743

·         Treasuries finished on their highs as the complex gained for the fourth time in five sessions. Click here to see an intraday yields chart.

·         Maturities hovered little changed throughout the overnight session and into early U.S. trade, seeing little reaction to the better than expected initial (311K actual v. 320K expected) and continuing (3823K actual v. 2900K expected) claims and in-line GDP - Third Estimate(2.6%). 

·         Some light selling emerged as the pending home sales (-0.8% actual v. -0.2% expected) miss crossed the wires, but buyers quickly came out of the woodwork and ran maturities to fresh highs. 

·         Trade would drift at those levels into the solid $29 bln 7y note auction. 

·         The auction drew 2.258% (WI 2.263%) and an in-line 2.59x bid/cover. A strong direct bid (32.6%) provided support as the indirect takedown (41.4%) was in-line with its 12-auction average. Primary dealers were left with just 26% of the supply. 

·         Post-auction buying ran maturities to their best levels, where they would hold for the remainder of the session.

·         Buying was paced at the long end with the 30y sliding -4.1bps to 3.510%. Today's bid dropped the 30y to its lowest level in nine months as action broke below the key 3.550% level. The ability to hold below 3.550% paves the way for a move into the 3.150% region. 

·         The 10y shed -2.9bps to close @ 2.672%. The benchmark yield pushed below its 200 dma amid today's buying, causing many to shift their focus onto the 2.600% level. 

·         Today's action in the 5y was overlooked as yesterday's issuance became the on-the-run maturity. 

·         A flatter curve took hold as the 2-10-yr spread narrowed to 223bps. 

·         Precious metals saw losses as gold fell -$11 to $1292 and silver slipped -$0.09 to $19.69. 

·         Data: Personal income and spending, PCE Prices - Core (8:30), and Michigan Sentiment - Final (9:55). 

·         Fed Speak: KC's George talks the U.S. economy (12:15).

Next Day In View 

Economic Commentary

Economic Summary: Q4 GDP revised higher to 2.6% from 2.4%; Jobless Claims fall
Economic Data Summary:

·         Weekly Initial Claims 311K vs Briefing.com consensus of 330K; Last Week was revised to 321K from 320K

·         Weekly Continuing Claims 2.823 M vs Briefing.com consensus of 2.9 M ; Last Week was revised to 2.876 M from 2.889 M

o    Over the past several months, excluding some seasonal volatility, the initial claims has been bounded between 330,000 and 340,000. That trend seems to have shifted lower over the past four weeks, with the initial claims level consistently falling below 330,000 and in the range of 310,000 -- 320,000. Under normal labor market conditions, these layoff levels would suggest an acceleration in payroll growth. 

·         Fourth Quarter GDP- Third Estimate 2.6% vs Briefing.com consensus of 2.6%; Third Quarter was revised to 2.4% from 2.4%

·         Fourth Quarter GDP Deflator - Third Estimate 1.6% vs Briefing.com consensus of 1.6%; Third Quarter was revised to 1.6% from 1.6%

o     Looking at real final sales over the last four quarters (0.2%, 2.1%, 2.5%, and 2.7%), there is a definite upward moving trend. The year-over-year averages, however, put it below the 2.0% and 2.6% gains from 2011 and 2012. The Census Bureau released the fourth quarter Quarterly Services Report, which showed stronger services growth than what was reported in the second GDP estimate. That translated into a upward revision to consumption (3.3% from 2.6%). The services component was revised up to show a 3.5% gain, up from an originally reported 2.2% increase. Goods consumption was revised down from 3.2% to 2.9%. That same services report also showed a smaller-than-reported increase in intellectual property investments. 

·         February Pending Home Sales -0.8% vs Briefing.com consensus of -0.2%; January was revised to -0.2% from 0.1%

Fed/Treasury Events Summary:

·         Cleveland Fed President Sandra Pianalto (non-voter, dovish) made the following comments:

o    "The FOMC has also indicated its intent to keep the target federal funds rate exceptionally low in order to continue to make progress on both maximum employment and inflation. The Committee will take into account a wide range of information in determining how long to keep the target federal funds rate low. We will be watching labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial developments. It is a complicated world out there, and no single data point will determine our next move."

o    With appropriate monetary policy, I see the economy expanding at a slightly stronger rate this year than last. I expect GDP growth this year to be around 3 percent. I expect the unemployment rate to fall to 6.2 percent by the end of the year. And I project that accommodative monetary policy, a strengthening economy, and stable inflation expectations will bring inflation back to our 2 percent objective over time, but I expect that progress to be slow.

Upcoming Economic Data:

·         February Personal Income due out Friday at 8:30 (Briefing.com consensus of 0.2%; January was 0.3%)

·         February Personal Spending due out Friday at 8:30 (Briefing.com consensus of 0.3%; January was 0.4%)

·         February PCE Prices -- CORE due out Friday at 8:30 (Briefing.com consensus of 0.1%; January was 0.1%)

·         March Michigan Sentiment - Final due out Friday at 9:55 (Briefing.com consensus of 80.0; February was 79.9)

Upcoming Fed/Treasury Events:

·         Saint Louis Fed President James Bullard (not a voting FOMC member, dovish) to speak today at 20;20

·         Chicago Fed President Charlie Evans (not a voting FOMC member, dovish) to speak today at 21:30

·         Kansas City Fed President Esther George (not a voting FOMC member, hawk) to speak tomorrow at 13:15

Other International Events of Interest

·         Recent chatter has suggested the Bank of Japan will not need to increase its QE program; however, Japan's Econ Minister indicated the an increase to the central bank's asset purchases would be most effective if it surprised markets

On other news.... 

CCAR Capital Plan Recap- C, FITB, GS, JPM, HBAN, KEY
Citigroup (C)  

·         2014 Capital Plan- Fed rejected original plan of $6.4 bln share repurchase and increase to dividend from $0.05 from $0.01; Will continue its current plan of buying back $1.2 bln shares through 1Q15 and a penny dividend. 

·         2013 CCAR- Repurchased $1.2 bln in shares, maintained its penny dividend. 

·         2014 Prior CCAR Comments- Goal is to increase capital return. 

Fifth Third Bank (FITB)  

·         2014 Capital Plan- Will increase divisdend to $0.13; authorizes repurchase of $669 mln of common. Will purchase more after it sees after taxc gains of sale of Vantiv. 

·         2013 CCAR- Co increased its dividend 10% to $0.11. Board also increased share repurchase authorization to 100 mln shares. 

·         2014 Prior CCAR Comments- Expectations are that it will manage capital return at current levels. Will limit growth in capital from share repurchases and target a dividend consistent with the Fed's 30% payout ratio guidance.

Goldman Sachs (GS)

·         2014 Capital Plans- Does not provide details as it did last year. 

·         2013 CCAR- GS was one of two (JPM) that saw conditional approval of its plan. 

·         2014 Prior CCAR Comments- GS has said it would return capital if that was the best use for it. Says it will not force returns if it feels that is not the most prudent use. Continues to work with the Fed on capital levels. 

Huntington Bancshares (HBAN)  

·         2014 Capital Plan- 20% increase to its divisdend to $0.06 starting in 4Q14; Potential for $250 mln share repurchase 

·         2013 CCAR Plan- $0.05 dividend and $227 mln share repurchase. 

J.P. Morgan (JPM)  

·         2014 Capital Plans- Increases dividend to $0.40 from $0.38; authorizes $6.5 bln share repurchase can repurchase shares to offset equity-based compensation plans.

·         2013 CCAR- Another conditional approval. JPM raised its dividend to $0.38 from $0.30 and authorized a $6 bln share repurchase in September. This was well below the original expectations (Recall the FT article that foreshadowed this last year). 

·         2014 Prior CCAR Comments- Has commented that it took into the account the large litigation settlements that were announced in 2H13. Says it would like to have the flexibility to raise its dividends and share repurchase program 

Key Corp (KEY)  

·         2014 Capital Action- Authorizes share repurchase of $542 mln; raises dividend to $0.065 from $0.055. 

·         2013 CCAR- $426 mln share repurchase and raised its dividend to $0.055 from $0.05. 

·         2014 Prior CCAR Comments- Has been relatively quiet but has said it is working with the Fed and is looking to increase returns.

Morgan Stanley (MS)  

·         2014 Capital Plan- Authorizes $1 bln share repurchase program; doubles dividend to $0.10 from $0.05 a share. 

·         2013 CCAR- Firm used its capital to purchase the remaining piece of its wealth management JV with Citigroup. A 35% interest valued at $4.7 bln. 

·         2014 Prior CCAR Comments- Has been upbeat in comments and believes it is the right time to increase its share repurchase and dividends. 

Northern Trust (NTRS) 

·         2014 Capital Plan- Will increase dividend to $0.33 from $0.31; will repurchase $425 mln of common stock 

PNC Financial (PNC) 

·         2014 Capital Plan- Authorizes repurchase of $1.5 bln starting in Q2; includes repurchase of up to $200 mln in equity-based compensation. 

·         2013 CCAR- Did not do any share repurchases due to an acquisition. It did raise its dividend 10% to $0.44 in its April board meeting. 

·         2014 Prior CCAR Comments- Bank has been upbeat on its capital level and ability to return to shareholders. Has not provide in-depth color on the make up of the return.

Regions Financial (RF)  

·         2014 Capital Plan- Raises its dividend to $0.05 from $0.03; will repurchase $350 mln of common once approved by board. 

·         2013 CCAR- There were no objections to the plan. The company requested an increased quarterly dividend to $0.03/share and a plan to repurchase $350 mln in common stock and redeem up to $500 mln in trust preferred securities. 

·         2014 Prior CCAR Comments- The company acknowledged that it would like its dividend to be closer to where its peers are. 

State Street (STT)  

·         2014 Capital Plan- Authorizes $1.7 bln share repurchase. 

·         2013 CCAR- There were no objections to the plan. The Company requested repurchases authorization for up to $2.1 billion of common stock. The Company already increased dividend to $0.26/share from 0.24/share.

·         2014 Prior CCAR Comments- The Company included a capital distribution plan consisting of dividends and common stock repurchase plans. 

SunTrust Bank (STI)  

·         2014 Capital Plan- Doubles dividend to $0.20 from $0.10 a share; approves $450 mln share repurchase. 

·         2013 CCAR- There were no objections to the plan ($200 mln stock buyback program). 

·         2014 Prior CCAR Comments- The Company indicated it will announce plans for 2014 following the release of the stress test results.

US Bancorp (USB)  

·         2014 Capital Plan- Expects to increase dividend to $0.245 a share from $0.23; will repurchase $2.3 bln common shares. 

·         2013 CCAR- There were no objections to the plan. The company recommended Board increase quarterly dividend to $23/share, an 18% increase. A one year repurchase authority was approved up to $2.25 bln, 20% higher than 2012. 

·         2014 Prior CCAR Comments- The Company will seek dividend increase & approval to continue repurchasing stock. 

Wells Fargo (WFC)  

·         2014 Capital Plan- Will increase dividend to $0.35 from $0.30; will repurchase approx. 350 mln shares of common (approx. $17 bln at current stock price) 

·         2013 CCAR- There were no objections to the plan. The Company confirmed proposed dividend rate for Q2 is 30 cents a share.

·         2014 Prior CCAR Comments- The Company requested to raise dividend & repurchase more stock. 

American Express (AXP)

·         2014 CCAR Actual- Will increase dividend 13% to $0.26 in Q2; Will repurchase additional $4.4 bln of shares in 2014 and another $1 bln in 1Q15. 

·         2013 CCAR- Co was forced to send in an adjusted CCAR plan. It increased its dividend to $0.23 from $0.20 and said itr would buyback $4 bln in common stock in 2013. It was forced to lower its initial plan as the Fed said that plan would have dropped the co's capital under its minimum requirements.

·         2014 Prior CCAR Comments- Has said it would return 50% of capital in the form of a share repurchase and use the other 50% for growth initiatives and acquisitions. 

Bank of America (BAC)

·         2014 Capital Plan- Will increase dividend to $0.05 from $0.01; Authorizes $4 bln share repurchase (covers common and warrants); Announces $9.5 bln settlement with FHFA and NY AG.

·         2013 CCAR- Authorized a $5 bln share repurchase and redemption of approx. $5.5 bln in preferred stock 

·         2014 Prior CCAR Comments- Has been quiet on the subject but has stated it feels good about its current capital levels and that it is working with the Fed in its stress test results.

Bank of New York Mellon (BK)  

·         2014 Capital Plan- Will repurchase $1.74 bln of common and increase its dividend 13%. 

·         2013 CCAR- Repurchase of $1.35 bln through 1Q14; increased dividend 15% to approx. $0.15 per share. 

·         2014 Prior CCAR Comments- Co has been downgraded in the G-Sifi which eases its capital requirements. Has said it has pretty good financial flexibility which it believes will be beneficial to 2014 CCAR results and plans.

BB&T Corp (BBT)  

·         2014 Capital Plan- Has not announced exact plan but said would do a conservative increase to its dividend. 

·         2013 CCAR- Fed objected to companies plan (them and Ally Financial were the only two) Fed did not object to the current dividend of $0.23. 

·         2014 Prior CCAR Comments- Says it has worked closely with the Fed. Plans on being more conservative with regards to 2014 requests. 

Capital One (COF)  

·         2014 Capital Plan- Maintains its quarterly dividend; Authorizes $2.5 bln repurchase plan. 

·         2013 CCAR- Increased dividend to $0.30 from $0.05. 

·         2014 Prior CCAR Comments- Says it requested a repurchase that would result in a total payout ratio well above 2013 which was an industry norm 50%.

Currencies 

Dollar Ticks Higher in Quiet Trade: 10-yr: +09/32..2.662%..USD/JPY: 102.13..EUR/USD: 1.3746

·         The Dollar Index clings to small gains amid a rather uneventful trade. Click here to see a daily Dollar Index chart.

·         Today's session has seen a 20 cent range as trade has been locked between 80.00/80.20. 

·         The recent sideways action has failed to put a damper on the bull case as trade appears to be consolidating for a test of key resistance in the 80.50 area.

·         EURUSD is -40 pips @ 1.3745 as action continues to probe support in the area that has held up since the middle of February. Many are looking for action to check up in this area ahead of next week's European Central Bank rate decision as support at the 1.3700 level is helped by both the 50 and 100 dma. Eurozone data out tomorrow includes French consumer spending and German preliminary CPI.

·         GBPUSD is +40 pips @ 1.6615 as trade looks likely to put in a fourth day of gains. Sterling has benefited from today's better than expected retail sales data, which gives further credence to the belief (of some) the Bank of England will be the first major Western central bank to hike rates. A push through current levels puts the February/March highs near 1.6750 in jeopardy. Britain's current account and Final GDP readings will be released. 

·         USDCHF is +15 pips @ .8865 as trade ticks higher for a third session. Resistance at current levels remains in focus as the level has seen several tests over the past week, but has been unable to breakout. 

·         USDJPY is +5 pips @ 102.10 as another uneventful session nears the close. Action over the past six sessions has produced several tests of the 102.50 area, but sellers remain steadfast as they continue to hold their ground in defense of the level that is helped by both the 50 and 100 dma. Japanese data finally begins to flow as household spending, retail sales, and Tokyo Core CPI are due out tonight. 

·         AUDUSD is +40 pips @ .9255 as trade readies to put in a sixth day of gains. The current win streak has run the hard currency above its 200 dma, and comes despite ongoing concerns over the health of the Chinese economy. Resistance in the .9300/.9350 area sets up as a near-term target. 

·         USDCAD is -45 pips @ 1.1050 as sellers remain in charge for a fifth day. Today's weakness has dropped the pair below its 50 dma, and has action probing support in the 1.1050/1.1100 area. A breakdown of that level sets up another test of the key 1.0950 region.

Jason's Commentaries


Despite having Citi dragging down the entire Financial sector, the energy sector was being boosted by the oil prices as oil prices went above $100. Volumes were exceptionally high at 791.4m shares traded on the NYSE. While the rest of the sectors besides Tech and Financials are flat. Internals were suggesting that the market were more flat as UVOL outpaced the DVOL. That's some weird divergence.While on the Nasdaq and the Russells, they have already broken their trendlines and I believe we might be heading down a little more. Judging by the fact that we're nearing April, we're unlikely to head down more...

Market Call: FLAT

Date: 28 March 2014