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		Story Stocks: Whirlpool (WHR) reports large EPS beat after several misses; co has been aggressive overseas Whirlpool (WHR) is rallying about 6% today following a very strong Q4 report this morning. You're probably familiar with Whirlpool, the largest major appliance manufacturer in the world with $20 billion in annual sales. However, a little additional color is always helpful. Its major brands include Whirlpool, KitchenAid, Maytag, Amana etc. Its sales breakdown is as follows: Washers/Dryers at 29% of revenue, Refrigerators/Freezers at 29%, Cooking Appliances at 18% and Other (dishwashers, mixers, compressors etc.) at 24%.  Turning to the Q4 results, non-GAAP EPS rose 19% YoY to $3.52 while revenue rose 17.9% YoY to $6.0 bln. Both results were better than expected, especially the EPS which usually means that margins came in stronger than expectations. WHR also guided in-line for FY15.  Of note, WHR was pretty active on the M&A front in 2014, especially targeting foreign appliance makers in order to boost sales in those regions. For example, Whirlpool bought a 51% stake in China's Hefei Sanyo for $551 mln in order to boost its sales in Asia. Asia had represented only about 5% of total sales before the deal but there are estimates that this acquisition will double sales to Asia. Whirlpool also bought a majority stake in Italy-based Indesit for $1 bln. It's one of Europe's largest manufacturers of major appliances. Acquisitions accounted contributed approximately $1 billion of sales in Q4.  We thought it was interesting on the call that, from a bigger picture perspective, Whirlpool outlined its long-term growth strategy. It has three main pillars. The first is geographical expansion. Whirlpool's recent acquisitions have the ability to truly transform and change its business position in both Europe and China. So more exposure overseas, while at the same time, WHR is benefitting from a recovering US market which the company expects will continue not only in 2015 but over a number of years ahead. This is helping offset sluggish growth in emerging markets such as Brazil, China, India, and Russia.  The second core pillar is product and brand innovation. WHR is continuing to accelerate its investments in those relevant technologies and new products which clearly benefit its end consumers. WHR is also continuing to focus on higher margin categories. And the third core pillar is to expand upon what the company believes is the best global cost structure in its industry.  In sum, this was a very nice quarter for Whirlpool. They had missed EPS expectations in each of the prior four quarters heading into Q4 so to report such a strong beat this time was nice for investors to see. It seems that margins came in much better than expected and the recent acquisitions added some nice growth to the top line.

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		Story Stocks: Littlefuse Trades Down Following Q4 and FY14 Results; Issues Q1, FY15 Outlook Littelfuse (LFUS 93.10, -8.05) has rebounded some off early morning losses following the company's Q4 (Dec) earnings. LFUS reported EPS of $1.02, which was worse than expected, and revenues of $206.6 million, which was better than expected. The company also issued downside guidance for Q1 EPS and revenues. If you're not familiar, LFUS designs, manufacturers, and sells a wide range of electronic, automotive, and industrial products throughout the world. It reports its business results in three segments: Electronics, Automotive, and Electrical. In terms of the results, LFUS reported electronics book-to-bill ratio of 1.06 for Q4. Operating income was negatively impacted be foreign currency effects, negatively impacting operating income by ~$2.1 million in Q4. Year-end true up of certain accruals affected income to the tune of $1.9 million. In addition, performance issues at some plants negatively impacted income by about $1.0 million.  Operating income for two of the three segments declined, Electronics and Electrical. Electronics (LFUS' largest business segment) declined 6% to $16.2 million, and Electrical declined 44% to $3.1 million (albeit Electrical is the smallest business segment). The bright spot was Automotive which improved 3% year-over-year to $9.9 million. Management noted that while it will continue to be impacted by currency headwinds for the foreseeable future, it will also be taking a number of corrective actions including selective price increases, more aggressive expense controls and, where possible, moving faster on our various restructuring efforts. In 2015, LFUS expects currency headwinds to impact earnings by about $30 million, or $0.40 per share compared to 2014. The company noted even with currency headwinds, it expects to achieve 2015 EPS above $5.00, which is below what is expected. In terms of guidance, the company noted it expects Q1 EPS of $1.10-1.14 (negatively affected by currency by $0.10 compared to the prior year), below what is expected. The company also sees Q1 revenues of $202-212 million, which is also below what is expected.  In spite of reporting better than expected revenues for Q4, it appears that investors are taking to heart the company's Q1 and FY15 guidance and problems with production. The stock has rebounded some off daily lows, and now sits about 8.0% lower on the day.

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EUR/USD HAS ESCAPE THE TIGHT RANGE.

EUR/USD has escaped the nice wedge it traded in, and chose the upside. The clear breakout above 1.14 sent the pair to the next resistance line.

What is behind the move? What are the next lines? Here are some answers:

3 reasons for the rise

1. Optimism about Greece: After just over a week in office, the new government seems to align itself with German demands about repaying its debt. While a step back from pre-election rhetoric was certainly expected, it provides a relief to the euro-zone. In addition, the compromise that might arise, a GDP-linked payback of debt, is well received in Greek markets. And while Merkel may drag her legs on a full solution for months, it seems likely that the danger of a Greek exit by PM Alexis Tsipras, or “Alexit”, is off the cards, at least for now.
2. Weak US data: The plunge in factory orders joined a disappointing ISM Manufacturing PMI that joined other underwhelming numbers. Together with yet another bad winter in the US that could slow growth, the prospects for a rate hike coming sooner rather than later seem to diminish.
3. Some positive European data: While the inflation measures show deeper deflation, other figures are beginning to move in the right direction: unemployment was stuck at 11.5% for a long time and it ticked down to 11.4%. Spain and Germany stand out in the improvements, even though the former has a longer way to go than the latter. Spain also posted strong GDP growth. Perhaps deflation is not too bad for growth? In any case, the ECB’s QE is already a done deal.

EUR/USD

As the chart below shows, we have a clear breakout above the wedge and a move above 1.1373. The pair fell short of the next resistance line at 1.1460 which was a low line in January.

Beyond this line, we have some resistance at 1.1540 followed by 1.1650. To the downside, support is found at 1.1290, followed by 1.12 and 1.111.

The big question remains: is this a correction before the next fall or the big turnaround?

More: Is EUR/USD Recovery A Game-Change?: Levels & Targets – JP Morgan

Here is the chart:

EUR/USD GAME RECOVERY IN A TUNNEL?

The stabilization of EUR/USD is raising the question: is this a temporary correction or a big change?

The team at JP Morgan examines the charts and sets targets in both directions:

Here is their view, courtesy of eFXnews:

A projected C-wave target for the multi-year double-zigzag consolidation pattern in EUR/USD at 1.1091 finally managed to provide a base for the ongoing recovery, notes JP Morgan.

The big question in this context however is, how far this recovery can extend and where would we get indications for a game change?

“That said, we see pivotal resistance at 1.1460 as crucial, which if taken out, would open the way for a broader recovery to 1.1660/79 (minor 38.2 %/pivot). Only above the latter we’d see the EUR bears in trouble as the next 38.2 % Fib.-retracement on higher scale would only cut in at 1.2092,” JPM argues.

“Particularly below 1.1460 though, 1.1091 remains at risk. Once taken out, there would only 1.0765 and 1.0503 (pivots) left on the way towards 1.0072 (76.4 %), if not to 0.9298 (wave 3 projection),” JPM adds.

Weekly outlook

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NZD/USD

The NZD/USD pair initially tried to rally during the course of the week, but found enough trouble at the 0.75 level to turn things back around and fall rather drastically. This of course was because the Royal Bank of New Zealand mentioned that a rate cut wasn’t impossible at this point in time, and that of course has the markets worrying about potential actions coming out of Wellington. With that being the case, I feel that this market heads down to the 0.70 level given enough time.

EUR/USD

The EUR/USD pair initially broke higher during the course of the week as the market trying to reach for the 1.15 handle. That’s an area that should be resistive though, and the fact that we pulled back and formed a shooting star only confirms this. That means that we should continue to see bearish pressure, and that should of course send this market lower. I believe that the Euro should continue to weaken at this point in time, as we should then head down to the 1.10 level.

GBP/USD

The GBP/USD pair initially tried to rally during the course of the week, but sold off rather drastically. The shooting star that sits at the 1.50 level looks as if it is a sign that the market is going to continue to go lower, but I see a significant amount of noise only down to the 1.48 level that should be somewhat supportive. With that, I believe that this market does go lower, but it might be a bit choppy. All rallies will be sold by me.

EUR/CHF

The EUR/CHF pair broke much higher during the course of the week, slamming into the 1.05 level. However, that is a large, round, psychologically significant number and we did of course form a shooting star at that region on Friday. That suggests to me that the market should sell off relatively soon, but if we break above the 1.05 level, I am more than willing to sell resistive candles at higher levels as well. I have no interest whatsoever in selling this market after the shenanigans out of the Swiss National Bank.

Euro outlook

Scotiabank noted the rally in the euro on 

Key Quotes:

"The flash headline estimate dropped –0.6% y/y (consensus was for –0.5%y/y) and core fell to 0.6%y/y, a fresh record low—see chart. EUR’s reaction, rallying from 1.1320 to 1.1360, suggests some positive inflows into EUR and a hesitancy to short EUR from here."

"The bar for further ECB action is likely fairly high; while the risks to the USD side of the equation are increasing. The technical picture has also shifted to a more mixed outlook (the MACD is flirting with a buy signal), it should be seen as a warning of a temporary period of stability in EUR. However, we expect the trend in EUR to still downward throughout 2015."

"EUR/USD short‐term technicals: bearish—but shifting towards neutral. The chart warns of a short period of range trading between the recent low of 1.1098 and high of 1.1423, these levels can serve as support and resistance and a break would warn of further upside or downside pressure."

EURUSD OUTLOOK

Currency pair: EUR/USD
Sentiment: Bearish
Trend Index : 0
Market Focus:on thursday trade set up i  focussed on selling opportunities on the EUR/USD.
Fundamentals: The Fed came across more hawkish than investors had thought as the FOMC Statement was released yesterday showing the US is the only developed nation central bank that is considering raising rates this year. The Fed had a positive view of the economy as a whole saying oil prices would have a positive impact on households however they would take into account international developments as an uncertain global outlook remains.
Technicals: I am still looking for selling opportunities on any decent rallies by monday, with a decent resistance area eyed out at 1.1342.

US GDP slows down in Q4 2014

As per the preliminary data released by the Bureau of Economic Analysis, the real gross domestic product (GDP) increased at an annual rate of 2.6% in Q4 2014, missing the expectation of 3.0%, and down from the Q3 growth rate of 5.00%. 

The economy witnessed positive contributions from from personal consumption, which rose 4.3%, beating the expected rise of 4.0%. Other major contributors were private inventory investment, exports. On the other hand, the growth rate was pressurized by an upturn in imports, a downturn in federal government spending, and decelerations in nonresidential fixed investment. 

Meanwhile, the GDP price index, decreased 0.3% in the fourth quarter, in contrast to an increase of 1.4 % in the third.