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Good morning,

Markets are called to open higher this morning. This is what's happening today:

  • China’s stocks slumped as the data added to an unexpected slowdown in economic growth, reported last week, that prompted banks including Goldman Sachs Group Inc. to cut full-year forecasts. In Washington, central bank Governor Zhou Xiaochuan;
  • Credit Suisse Group AG will probably post higher profit than UBS AG for a fourth straight quarter when the largest Swiss banks report results over the next week;
  • Euro-zone PMIs show little change in the pace of contraction in European services and manufacturing, according to economists’ est. French business confidence declines, a survey shows;
  • Apple report results after the closing bell;
  • GDF Suez, Schneider Electric report 1Q sales.

China’s manufacturing is expanding at a slower pace this month on weakness in global and domestic demand, fueling concern that the world’s second-biggest economy is faltering. The preliminary reading of 50.5 for a Purchasing Managers’ Index released by HSBC Holdings Plc and Markit Economics compared with a final 51.6 for March. The number was also below the median 51.5 estimate in a Bloomberg News survey of 11 analysts. A reading above 50 indicates expansion.

Halliburton, the world’s largest provider of hydraulic-fracturing services, reported first-quarter results that beat analysts’ estimates as the company reduced costs in North America. Profit excluding discontinued operations and money set aside for oil-spill litigation was 67 cents a share, exceeding the 57-cent average of 34 analysts’ stimates compiled by Bloomberg. The results mark the 19th consecutive quarter Halliburton has beaten estimates. Sales climbed 1.5 percent to $6.97 billion.

Netflix, vanquishing Wall Street skepticism about its growth prospects, is poised to become the best-performing stock in the Standard & Poor’s 500 index after signing up more than 2 million new U.S. customers. Netflix soared more than 26 percent in extended trading yesterday after U.S. subscriber gains beat analysts’ estimates and the Los Gatos, California-based online video service added 1 million internationally. A similar jump today would bring the stock’s 2013 rise to 138 percent, tops among S&P companies.

Caterpillar, the largest maker of mining equipment, posted disappointing first-quarter earnings, cut its 2013 forecast and lowered “significantly” its outlook for demand from commodities producers. Profit in 2013 will be about $7 a share, compared with a January projection of $7 to $9, the Peoria, Illinois-based Caterpillar said today in a statement. Sales will be $57 billion to $61 billion, compared with an earlier forecast of $60 billion to $68 billion. The shares rose after Caterpillar said it will resume its stock buyback program and Chairman and Chief Executive Officer Doug Oberhelman said the worst in mining may almost be over.

Apple (Price $398.67, Price Target $575) – Results out after the closing bell

Deutsche Bank Research – We believe Apple can continue to drive strong earnings and cash flow growth as it capitalizes on the growth in smartphones, computing, digital music/video hardware and content. Further, we believe Apple will continue to drive share gains in the PC market due to the combination of a renewed enthusiasm for Apple's brand, cutting-edge designs, and the superior user experience of Apple's OS. Apple appears attractively priced in the context of its growth rate, returns and long-term potential to capitalize on the smartphone, digital media and Mac opportunities. Buy.

2 important facts to keep in mind about Apple:

1) Just how cheap has Apple become? Strip out the cash, and the shares fetch just 5.7 times 2013 profits, a discount to has-beens like Dell (DELL) and Microsoft (MSFT), which are struggling to increase profits, and less than half the valuation for the overall market.

2) Apple's enterprise value has fallen so far relative to its current revenue and five-year average gross margins that Sean Bonner, who manages the Carne Large Cap Value fund, says shares now trade as if revenue will shrink 12.5% annually over the next five years, an assumption he calls "simply ridiculous." It's also a far cry from the 18% year-over-year revenue growth Apple reported just last quarter.

For more information about Netflix, Apple, Caterpillar and Halliburton or other stocks and bonds we follow, contact our offices on 25688688.

Good day and happy trading!

Kristian Camenzuli