Jim Van Meerten's  Instablog

Barchart Morning Call

BC - 1 hr 43 mins ago

Overnight Developments

• June E-mini S&Ps this morning are little changed with some underlying support from reports that German Chancellor Merkel may be open to the idea of creating a joint debt redemption fund to help pay down Eurozone debt. EUR/USD is up 0.44 cents (+0.35%) on the report and the dollar index is down 0.23 points (-0.29%). June 10-year T-notes are down 1 tick. Commodity prices are mostly higher this morning with crude oil up 0.29%, gold up 0.24%, copper up 0.54%, and agricultural commodities trading mostly higher.
• The Euro Stoxx 50 index this morning is down -0.23%. Asian stocks today closed mixed: Japan +0.20%, Hong Kong +0.25%, China -0.85%, Taiwan -0.75%, Australia -0.66%, Singapore -0.24%, South Korea +0.45%, India -0.03%, Turkey -0.06%.
• German Chancellor Merkel today made a concession to the German opposition parties to reconsider a proposal on common liability for sovereign debt and discuss that plan further on June 13. Specifically, Ms. Merkel agreed to reconsider a plan published by her council of economic advisors that would create a European debt redemption fund that would help governments pay down their outstanding debt below 60% in return for constitutional commitments on economic reform. The redemption fund would be limited to 25 years, would be worth 2.3 trillion euros, and would be backed by Eurozone country gold reserves. Ms. Merkel at Wednesday's EU summit refused to consider joint euro bonds, but she is apparently becoming a bit more flexible on similar ways to help pay down Eurozone debt given her isolation. Italian Prime Minister Monti yesterday said that the majority of Eurozone leaders favor joint euro bonds and that he thought Ms. Merkel could be persuaded. A 2.3 trillion euro debt redemption fund backed by gold, should it ever come into existence, would be a huge step forward in containing the European debt crisis.
• Chinese stocks fell 0.85% today due in part to yesterday's reports that China's biggest banks will fall short of loan targets for the first time in 7 years due to reduced demand for credit. Loan demand weakened in April and May and loan demand for the year may reach only 7 trillion yuan ($1.1 trillion), below the government's apparent goal of 8.0-8.5 trillion yuan. China's March new bank loans fell by 33% m/m to 682 billion yuan, well below the market consensus for the report of 780 billion yuan. Recent data strongly indicates that the Chinese economy did not bottom out in Q1 as market participants had earlier expected. A recent survey by Bloomberg News found a consensus for +7.9% Chinese GDP growth in Q2 down from earlier estimates of +8.3% and down from +8.1% growth in Q1.
• China's central bank today in its annual report said that China's economy faces downward pressure and that officials will fine-tune policies as needed to address that slower growth.
• Japan's April CPI rose +0.2% y/y, which remained well below the BOJ's inflation target of +1.0% and indicated that Japan continues to face a serious deflation problem. Today's CPI report will keep the pressure on the BOJ to further expand its asset purchase target, possibly in July since the BOJ just recently boosted the target. Market Comments
  • June E-mini S&Ps this morning are little changed. The market remains worried about Chinese economic growth and the Eurozone debt crisis, but today's news was encouraging that Ms. Merkel will at least consider a big debt redemption fund to pay down Eurozone debt.
  • U.S. stocks on Thursday closed mixed: S&P 500 +0.14%, Dow Jones +0.27%, Nasdaq 100 -0.62%. The stock market on Thursday continued to see some short-covering after the plunge seen in stock prices in the first three weeks of May to a 4-month low last Friday. The stock market on Thursday managed to close mixed despite several bearish factors including the weaker-than-expected April durable goods orders report ex-transportation of -0.6%, the weak Eurozone manufacturing PMI report of -0.9 to 45.0, the decline in the German IFO confidence indexes, the 0.5 point decline to 48.7 in China's May HSBC/Markit May flash manufacturing purchasing managers index, and news that China's major banks will fall short of lending targets because of weak long demand. In addition, a poll was released showing that the Greek Radical Left Syriza party picked up another 2 percentage points of support in the polls to 30% and is now 4 points ahead of the pro-bailout New Democracy Party. If the anti-bailout Syriza party wins most seats in Parliament in the Greek election on June 17, the chances are higher than Greece will overplay its hand on repudiating the bailout agreement and end up leaving the Eurozone. Supportive factors on Thursday included (1) a 3.5% rally in HP on positive earnings results and cost-cutting, (2) Italy Prime Minister Monti's comment that the majority of Eurozone leaders favor joint euro bonds and that Germany can eventually be persuaded to agree to joint euro bonds, and (3) the fact there will be a third round of nuclear talks with Iran on June 18-19 and that military action is still not imminent.
  • June 10-year T-notes this morning are down 1 tick as the market treads water ahead of the holiday weekend. T-note prices on Thursday closed lower: TYM2 -10.5, FVM2 -6. T-note prices on Thursday ran into some long liquidation pressure on the mostly stable close in U.S. stock prices. The 10-year T-note yield closed the day at 1.77%, which was 11 bp above the record low of 1.67% posted last September. T-notes are consolidating near the top of their rally on (1) support from safe-haven demand tied to the European debt crisis, and (2) concerns about slowing growth in Europe and China.
  • The dollar index this morning is down 0.24 (-0.29%) and EUR/USD is up 0.0044 (+0.35%) on this morning's report that Ms. Merkel will consider a debt redemption fund. USD/JPY is down -0.07 yen (-0.09%) this morning. The dollar index on Thursday closed higher while EUR/USD fell by 0.40%: Dollar Index +0.16 (+0.19%), EUR/USD -0.0050 (-0.40%), USD/JPY +0.03 (-0.03). The dollar index on Thursday posted another new 1-2/3 year high on technical buying and ongoing concern about the European debt crisis. The euro showed further weakness as global investors dumped European investments and got out of the euro altogether due to the risks of Greece leaving the Eurozone after its June 17 election if the anti-bailout parties get control of the government.
  • July WTI crude oil prices this morning are up 0.26 (+0.29%) and July gasoline is up 0.58 (+0.21%) on some help from the lower dollar and some short-covering going into the holiday weekend. Crude oil and gasoline prices on Thursday closed moderately higher: CLN12 +1.08 (+1.20%), RBN2 +0.0220 (+0.79%). July crude oil prices were able to rally on short-covering and reduced downward pressure on the commodity complex with stocks remaining stable for the last two sessions. There was no progress to speak of at the 2-day talks with Iran on its nuclear program. A third round of talks was set for June 18-19. Iran effectively refused to make any significant concessions unless sanctions were eased, although that was a non-starter for the U.S. and Europe. If Iran cannot get sanctions eased, then its main goal is likely to drag out the talks as long as it can to defer possible military action and to build up even bigger stocks of enriched uranium.
  • For the full subscription version of this daily report (plus a 13-page big-picture weekly report), along with the earliest possible delivery in the morning, please visit <a href="www.barchart.com/register/crbfms_usmc.ph...;>CRB _fcksavedurl="www.barchart.com/register/crbfms_usmc.ph...;>CRB Fundamental Market Service trial</a> Today's U.S. Earnings Reports

    Earnings reports (sorted by mkt cap): MENT-Mentor Graphics (consensus $0.25), BRLI-Bio-Refer Labs (0.32).

    Global Financial Calendar

    Friday 5/25/12
    United States
    0530 ET	Fed's Plosser speaks in Eltville, Germany.
    0955 ET	Final-May University of Michigan U.S. consumer confidence index expected unch at 77.8, early-May +1.4 to 77.8.
    Germany
    0200 ET	German Jun GfK consumer confidence survey expected unch at 5.6, May 5.6.

    Barchart.com provides Financial Quotes, Charts and Technical Analysis for Stock and Commodity Traders.

Barchart.coms Chart of the Day - Bob Evans Farms (BOBE)

Barchart Research Team - BC - Thu May 24, 5:30PM CDT

Related Stocks
BOBE - Bob Evans Farms

The "Chart of the Day" is Bob Evans Farms (BOBE), which showed up on Thursday's Barchart "All-Time High" list. Bob Evans on Thursday posted a new all-time high of $40.74 and closed up +0.74%. TrendSpotter has been long since April 27 at $38.67. In recent news on the stock, the company on March 8 affirmed FY12 EPS guidance of $2.38-2.44 versus the consensus of $2.44 and said it is targeting 7-10% long-term growth. Bob Evans Farms, with a market cap of $1.1 billion, owns and operates restaurants, including Bob Evans Restaurants, Owens Family Restaurants, Bob Evans `small-town` Restaurants, and Cantina Del Rio Mexicanrestaurants. They also produce fresh and fully-cooked sausage products and fresh, deli-style salads which are distributed primarily to grocery stores in the Midwest, Southwest and Southeast.

(click to enlarge)

How we found the Chart of the Day:

We found the "Chart of the Day" by scanning the Barchart "52-week Highs" page. That page shows all the stocks that have posted new 52-week highs, which is a popular sign of strong upside momentum.

The status of Barchart's Opinion trading systems are listed below. Please note that the Barchart Opinion indicators are updated live during the session every 10 minutes and can therefore change during the day as the market fluctuates. The indicator numbers shown below therefore may not match what you see live on the Barchart.com web site when you read this report.

• TrendSpotter: Buy
• Short-Term Indicators: 100% Buy
• Medium-Term Indicators: 100% Buy
• Long-Term Indicators: 100% Buy
• Overall Average 100% Buy

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The market still needs help but this morning I used Barchart to screen the NASDAQ 100 Index stocks to see what was still moving up and found BMC Software (BMC), Bed, Bath & Beyond (BBBY), andMonster Beverage (MNST)

BMC Software (BMC)

Barchart technical indicators:

• 96% Barchart technical buy signal
• Trend Spotter buy signal
• Above its 20, 50 and 100 day moving averages
• 4 new highs and up 4.28% in the last month
• Relative Strength Index 60.78%
• Barchart computes a technical support level at 41.47
• Recently traded at 43.39 with a 50 day moving average of 40.47

Bed, Bath & Beyond (BBBY)

Barchart technical indicators:

• 72% Barchart technical buy signal
• Trend Spotter buy signal
• Above its 20, 50 and 100 day moving averages
• 8 new highs and up 4.30% in the last month
• Relative Strength Index 56.37%
• Barchart computes a technical support level at 69.48
• Recently traded at 71.01 with a 50 day moving average of 68.65

Monster Beverage (MNST)

Barchart technical indicators:

• 64% Barchart technical buy signal
• Trend Spotter buy signal
• Above its 20, 50 and 100 day moving averages
• 5 new highs and up 10.93% in the last month
• Relative Strength Index 59.95%
• Barchart computes a technical support level at 68.42
• Recently traded at 70.01 with a 50 day moving average of 64.65