February 26, 2010 Americas Equity Morning Summary

AAPL.O, AAPL.O, ATHN.O, BAGL.O, BVN.N, BX.N, CM.TO, CPNO.O,
CSX.N, DRC.N, ESRX.O, ESV.N, EXM.N, FIRE.O, FTO.N, HNZ.N,
HOC.N, JPM.N, KSS.N, LAMR.O, ODP.N, RSH.N, SPW.N, SWN.N,
TGT.N, WEN.N

Agricultural Products: Highlights from MS Materials/Ag Conference
Key takeaways on fertilizer: Presenting companies were generally positive on nitrogen, noting
low gas costs and a significant US gas cost advantage, relatively tight supply, low urea and UAN
inventories, strong demand, and likely upward pricing pressure. Producers were also bullish on
phosphate given favorable supply/demand fundamentals, though there was a mixed view on the
potential for demand destruction given the significant run up in prices. Potash also remained a
key focus for investors, and companies noted that the demand environment has improved
dramatically (January was the best sales month in 15 years). Producers generally expect the
market to strengthen further over the next few months, bolstered by decreasing inventories,
further settlements with India and China, and robust demand from the US, Brazil, and SE Asia.

Consumer Price Index (January)
The headline was reasonably close to expectations but the outright decline in the core represented a significant surprise. The key driver was
an unusually large drop in the shelter category (-0.5%), which has a weighting of slightly more than 40% in the core CPI. The drop in shelter
reflected ongoing softness in owners equivalent rent (OER) and a steep decline in January hotel rates.

Consumer Confidence (February)
Very weak report. The overall Conference Board index plunged 10.5 points to 46.0, low since April. Much of the weakening was
in the expectations gauge, which dropped sharply to a seven-month low after having reached a more than two-year high in January.
This probably largely reflects a more temporary reaction to the deteriorating political climate and weaker financial markets. More
troubling was a drop in the current conditions index to a new cycle low, with substantial deterioration in views of the current labor
market pointing to upside risks to the unemployment rate in next week's employment report.

Durable Goods Orders (January)
Weaker than expected report. Overall orders surged 3.0% in January but only because of a spike in the volatile civilian aircraft
category (+126%) and a surge in the nearly as volatile defense capital goods grouping (+19%). Excluding aircraft and defense, orders
fell 1%, with bigger weakness in core orders. Core capital goods orders were very strong late last year but saw a partial correction in
January, with the swings driven by major volatility in machinery, which seems to have developed an increasingly pronounced problem
in the past year with seasonal adjustment around the ends of quarters. Capital goods shipments were also a lot weaker than expected in
January. Strength into December still points to a solid gain in business investment in Q1 but less so than we expected before this
report. With a partial positive offset from a flattening out in inventories, we now see Q1 GDP growth running at +2.2% instead of
+2.5%.

LINK full report    HERE