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Jim Van Meerten is an advisor to Marketocracy Capital Management and writes on financial subjects here and on Barchart Portfolio Blogs and Seeking Alpha. He earned a BS in Accounting and Business Administration from Berry College; a Juris Doctorate from the Woodrow Wilson School of Law; and... More
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  • BARCHART MORNING CALL 11/25

    BARCHART MORNING CALL

    Tuesday, November 25th, 2014

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    OVERNIGHT MARKETS AND NEWS

    December E-mini S&Ps (ESZ14 +0.08%) this morning are up +0.08% and European stocks are up +0.79% at a 2-month high. European bank stocks gained and government bond yields dropped to record lows on the prospects for further easing by the ECB after the OECD said the ECB should expand its monetary support due to the weak Eurozone economy and risk of deflation. Asian stocks closed mixed: Japan +0.29%, Hong Kong -0.21%, China +1.37%, Taiwan -0.07%, Australia -0.50%, Singapore +0.13%, South Korea -0.25%, India -0.57%. Chinese stocks continue to find support from Friday's surprise interest rate cut by the PBOC as the Shanghai Stock Index posted a new 3-year high. Commodity prices are mostly higher. Jan crude oil (CLF15 +0.59%) is up +0.36% on speculation that OPEC may try to cut crude output at Thursday's cartel meeting after Iraqi Oil Minister Adel Abdul Mahdi said that action must be taken to boost prices because current levels are "unacceptable." Jan gasoline (RBF15 +0.93%) is up +0.77%. Dec gold (GCZ14 +0.30%) is up +0.34%. Dec copper (HGZ14 +0.22%) is up +0.15%. Agriculture prices are mixed. The dollar index (DXY00 unch) is unchanged. EUR/USD (^EURUSD) is down -0.06%. USD/JPY (^USDJPY) is down -0.20%. Dec T-note prices (ZNZ14 +0.09%) are up +3.5 ticks.

    The Organization for Economic Cooperation and Development (OECD) said that "given the weak Eurozone economy and risk of deflation, the ECB should expand its monetary support, including through asset purchases," or "quantitative easing." The OECD kept its 2014 Eurozone GDP estimate at +0.8% and its 2015 estimate at +1.1%, and kept its 2014 Eurozone inflation forecast at +0.5% and 2015 estimate at +0.6%.

    German Q3 GDP was left unrevised at +0.1% q/q and +1.2% y/y (nsa), although Q3 exports were revised upward to +1.9% q/q from +0.9% q/q, the most in 3-1/2 years, and Q3 imports were revised higher to +1.7% q/q from +1.6% q/q.

    Japan Oct PPI services rose +3.6% y/y, right on expectations and the fastest pace of increase in 23-3/4 years.

    U.S. STOCK PREVIEW

    Today's Q3 GDP report is expected to be revised lower to +3.3% (q/q annualized) from last estimate of +3.5%. The market is expecting U.S. home prices to show a moderate increase in September, thus giving a boost to household wealth and consumer confidence. The market consensus is for today's Sep FHFA house price index to show an increase of +0.4% m/m and for the CaseShiller Composite 20 house price index to show an increase of +0.25% m/m. Today's Nov U.S. consumer confidence index from the Conference Board is expected to show a +1.5 point increase to 96.0, adding to the +5.5 point increase to a new 7-year high of 94.5 seen in October. The Treasury today will sell $35 billion of 5-year T-notes and $13 billion of 2-year floating-rate notes.

    There are 13 of the Russell 1000 companies that report earnings today with notable reports including: HP (consensus $1.06), Tiffany ($0.77), DSW (0.52), Campbell Soup (0.72), Eaton Vance (0.64), Pall Corp (0.80), Hormel Foods (0.64). There are no equity conferences during the remainder of this week.

    OVERNIGHT U.S. STOCK MOVERS

    Valspar (VAL -0.11%) reported Q4 EPS of $1.38, well above consensus of $1.15.

    Campbell Soup (CPB -0.54%) reported Q1 EPS of 74 cents, stronger than consensus of 72 cents.

    Pall Corp. (PLL -0.40%) reported Q1 EPS of 89 cents, higher than consensus of 80 cents.

    Netflix (NFLX -1.06%) was downgraded to 'Hold' from 'Buy' at Stifel.

    Tiffany & Co. (TIF +1.06%) reported Q3 EPS of 76 cents, weaker than consensus of 77 cents.

    Hormel Foods (HRL -0.37%) reported Q4 EPS of 63 cents, below consensus of 64 cents.

    According to the Wall Street Journal, Honda (HMC -0.19%) said that over an an 11-year period beginning in 2003, it did not report 1,729 death and injury incidents to U.S. regulators.

    Post Holdings (POST +0.87%) reported Q4 adjusted EPS of 13 cents, nearly double consensus of 7 cents.

    Dycom (DY +0.92%) jumped over 5% in after-hours trading after it reported Q1 EPS of 59 cents, well above consensus of 50 cents.

    Ceridian reported an 8.3% stake in FleetCor (FLT +0.04%) .

    Aegean Marine (ANW -0.43%) reported Q3 EPS of 20 cents, less than consensus of 21 cents.

    Casey's General Stores (CASY +0.75%) announced that it will revise its financial statements for fiscal years 2012, 2013 and 2014 and Q1 of fiscal 2015 for an accounting error and pay the I.R.S. $30.4 million in taxes due as well as $1.1 million in interest to resolve this matter.

    Brocade (BRCD +1.65%) reported Q4 EPS of 24 cents, higher than consensus of 23 cents.

    Nuance (NUAN +0.53%) rose over 4% in pre-market trading after it reported Q4 EPS of 33 cents, better than consensus of 27 cents.

    MARKET COMMENTS

    Dec E-mini S&Ps (ESZ14 +0.08%) this morning are up +1.75 points (+0.08%). The S&P 500 index on Monday closed higher: S&P 500 +0.29%, Dow Jones +0.04%, Nasdaq +0.78%. Bullish factors included (1) carry-over support from a rally in European stocks after the German Nov IFO business climate index unexpectedly rose +1.5 to 104.7, the first increase in the last 7 months, and (2) a rally in retailers and consumer discretionary stocks on optimism for a robust holiday-shopping season after the national Retail Federation predicted that U.S. retail sales will rise +4.1% y/y this holiday season, stronger than the +2.9% average of the past 10 years.

    Dec 10-year T-notes (ZNZ14 +0.09%) this morning are up +3.5 ticks. Dec 10-year T-note futures prices on Monday erased early losses and closed higher: TYZ4 +3.00, FVZ4 +2.00. The main bullish factor Monday was exceptional demand for the Treasury's $28 billion auction of 2-year T-notes that produced a bid-to-cover ratio of 3.71, higher than the 12-auction average of 3.41. Bearish factors included (1) supply pressures as the Treasury auctions $105 billion of T-notes during this holiday-shortened week, and (2) reduced safe-haven demand for T-notes as global stock markets rallied.

    The dollar index (DXY00 unch) this morning is unchanged. EUR/USD (^EURUSD) is down -0.0007 (-0.06%). USD/JPY (^USDJPY) is down -0.24 (-0.20%). The dollar index on Monday retreated from a 4-1/3 year high and closed lower. Closes: Dollar index -0.159 (-0.18%), EUR/USD +0.00528 (+0.43%), USD/JPY +0.44 (+0.37%). Negative factors included (1) a rebound in EUR/USD which recovered from a 2-week low after the German Nov IFO business climate index unexpectedly rose for the first time in 7 months, and (2) a rally in global equity markets, which curbed the safe-haven demand for the dollar.

    Jan WTI crude oil (CLF15 +0.59%) this morning is up +27 cents (+0.36%) and Jan gasoline (RBF15 +0.93%) is up +0.0156 (+0.77%). Jan crude and Dec gasoline on Monday closed lower. Closes: CLF5 -0.73 (-0.95%), RBF5 -0.0258 (-1.26%). Bearish factors included (1) speculation that OPEC will fail to agree on production cuts at Thursday's cartel meeting in Vienna, and (2) a forecasted snowstorm for the U.S. northeast later this week that may reduce travel and fuel demand. Losses were muted due to a weak dollar and a rally in stocks.

    GLOBAL EVENT CALENDAR11/25/2014

    US0830 ETQ3 GDP expected revised to +3.3% (q/q annualized) from last +3.5%. Q3 personal consumption expected +1.9% vs +1.8%. Q3 GDP price index expected unrevised at +1.3%. Q3 core PCE expected unrevised at +1.4%.
     0900 ETSep FHFA house price index expected +0.4% m/m, Aug +0.5% m/m. Q3 house price purchase index, Q2 +0.81%.
     0900 ETSep S&P/CaseShiller composite-20 home price index expected +0.30% m/m and +4.60% y/y, Aug -0.15% m/m and +5.57% y/y.
     1000 ETNov U.S. consumer confidence (Conference Board) expected +1.5 to 96.0, Oct +5.5 to 94.5.
     1000 ETNov Richmond Fed manufacturing index expected -4 to 16, Oct +6 to 20.
     1130 ETTreasury auctions $13 billion of 2-year floating-rate notes.
     1300 ETTreasury auctions $35 billion of 5-year T-notes.
    GER0200 ETRevised German Q3 GDP, previous +0.1% q/q and +1.2% y/y (nsa).
    EUR0500 ETOECD economic outlook for the Eurozone.

    U.S. STOCK CALENDAR11/25/2014

    Company NameTickerTimeEvent DescriptionPeriodEstimate
    Hormel Foods CorpHRL USBef-mktQ4 2014 Earnings ReleaseQ4 20140.636
    Tech Data CorpTECD USBef-mktQ3 2015 Earnings ReleaseQ3 20151.018
    Valspar Corp/TheVAL USBef-mktQ4 2014 Earnings ReleaseQ4 20141.149
    Pall CorpPLL US7:00Q1 2015 Earnings ReleaseQ1 20150.804
    Signet Jewelers LtdSIG US7:00Q3 2015 Earnings ReleaseQ3 20150.177
    Jacobs Engineering Group IncJEC US8:00Q4 2015 Guidance CallQ4 2015 
    Chico's FAS IncCHS US8:00Q3 2015 Earnings ReleaseQ3 20150.172
    Campbell Soup CoCPB US8:30Q1 2015 Earnings CallQ1 2015 
    Tiffany & CoTIF US8:30Q3 2015 Earnings CallQ3 2015 
    Pall CorpPLL US8:30Q1 2015 Earnings CallQ1 2015 
    Signet Jewelers LtdSIG US8:30Q3 2015 Earnings CallQ3 2015 
    Chico's FAS IncCHS US8:30Q3 2015 Earnings CallQ3 2015 
    DSW IncDSW US8:30Q3 2015 Earnings CallQ3 2015 
    Eaton Vance CorpEV US9:00Q4 2014 Earnings ReleaseQ4 20140.643
    Tech Data CorpTECD US9:00Q3 2015 Earnings CallQ3 2015 
    Hormel Foods CorpHRL US9:30Q4 2014 Earnings CallQ4 2014 
    Eaton Vance CorpEV US11:00Q4 2014 Earnings CallQ4 2014 
    Valspar Corp/TheVAL US11:00Q4 2014 Earnings CallQ4 2014 
    Copart IncCPRT US11:00Q1 2015 Earnings CallQ1 2015 
    Veeva Systems IncVEEV US16:30Q3 2015 Earnings CallQ3 2015 
    Analog Devices IncADI USAft-mktQ4 2014 Earnings ReleaseQ4 20140.68
    Hewlett-Packard CoHPQ USAft-mktQ4 2014 Earnings ReleaseQ4 20141.056
    Veeva Systems IncVEEV USAft-mktQ3 2015 Earnings ReleaseQ3 20150.08
    Campbell Soup CoCPB US Q1 2015 Earnings ReleaseQ1 20150.721
    Tiffany & CoTIF US Q3 2015 Earnings ReleaseQ3 20150.772
    DSW IncDSW US Q3 2015 Earnings ReleaseQ3 20150.521

    Tags: VAL, CPB, PLL, NFLX, TIF, HRL, HMC, POST, DY, FLT, ANW, CASY, BRCD, NUAN, TECD, SIG, JEC, CHS, DSW, EV, CPRT, VEEV, ADI, HPQ
    Nov 25 10:44 AM | Link | Comment!
  • Airgas - Barchart's Chart Of The Day

    The Chart of the Day belongs to Airgas (NYSE:ARG). I found the stock by sorting the All Time High List for the stocks with the most frequent new highs In the last month then used the Flipchart feature to review the charts. Since the Trend Spotter signaled a buy on 10/21 the stock gained 2.85%.

    Airgas, Inc., through its subsidiaries, is the largest U.S. distributor of industrial, medical, and specialty gases, and hardgoods, such as welding equipment and supplies. Airgas is also the third-largest U.S. distributor of safety products, the largest U.S. producer of nitrous oxide and dry ice, the largest liquid carbon dioxide producer in the Southeast, and a leading distributor of process chemicals, refrigerants, and ammonia products. More than eleven thousand employees work in about nine hundred locations including branches, retail stores, gas fill plants, specialty gas labs, production facilities and distribution centers. Airgas also distributes its products and services through eBusiness, catalog and telesales channels. Its national scale and strong local presence offer a competitive edge to its diversified customer base.

    (click to enlarge)

    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.

    Barchart technical indicators:

    • 96% Barchart technical buy signals
    • Trend Spotter buy signal
    • Above its 20, 50 and 100 day moving averages
    • 17 new highs and up 6.43% in the last month
    • Relative Strength Index 68.24%
    • Barchat computes a technical support level at 115.74
    • Recently traded at 117.09 with a 50 day moving average of 111.28


    Fundamental factors:

     

    • Market Cap $8.73 billion
    • P/E 24.23
    • Dividend yield 1.89%
    • Revenue expected to grow 5.30% this year and another 6.60% next year
    • Earnings estimated to increase 7.00% this year, an additional 13.50% next year and continue to compound at an annual rate of 11.27% over the next 5 years
    • Wall Street analysts issued 5 strong buy, 2 buy, 9 hold and 2 under perform recommendations on the stock.


    There really hasn't been a good technical trading strategy on this stock so I'd recommend a moving stop loss at 10% below its recent high.

    Tags: ARG
    Nov 24 4:57 PM | Link | Comment!
  • The 5 Best Large Caps

    Today I wanted to find the 5 large cap stocks that had the most consistent upward momentum this past month. I used Barchart to sort theS&P 500 Large Cap stock index to find the stocks that had the most frequent new highs in the last month.

    The stocks making the cut are: Sherwin-Williams (NYSE:SHW), Lowe's (NYSE:LOW), Omnicom Group (NYSE:OMC), Red Hat (NYSE:RHT) and Archer Daniels Midland(NYSE:ADM):

    Sherwin-Williams (SHW)

    Barchart technical indicators:

     

    • 96% Barchart technical buy signals
    • Trend Spotter buy signal
    • Above its 20, 50 and 100 day moving averages
    • 18 new highs and up 5.79% in the last month
    • Relative Strength Index 73.31%
    • Barchart computes a technical support level at 238.34
    • Recently traded at 242.05 with a 50 day moving average of 224.54


    Lowe's (LOW)

    Barchart technical indicators:

     

    • 100% Barchart technical buy signals
    • Trend Spotter buy signal
    • Above its 20, 50 and 100 day moving averages
    • 18 new highs and up 15.13% in the last month
    • Relative Strength Index 85.76%
    • Barchatt computes a technical support level at 62.00
    • Recently traded at 63.62 with a 50 day moving average of 55.53


    Omnicom Group (OMC)

    Barchart technical indicators:

     

    • 80% Barchart technical buy signals
    • Trend Spotter buy signal
    • Above its 20, 50 and 100 day moving averages
    • 18 new highs and up 8.29% in the last month
    • Relative Strength Index 76.35%
    • Barchart computes a technical support level at 74.49
    • Recently traded at 76.13 with a 50 day moving average of 70.12


    Red Hat (RHT)

    Barchart technical indicators:

     

    • 48% Barchart technical buy signals
    • Trend Spotter buy signal
    • Above its 20, 50 and 100 day moving averages
    • 17 new highs and up 11.19% in the last month
    • Relative Strength Index 64.55%
    • Barchart computes a technical support level at 60.76
    • Recently traded at 62.30 with a 50 day moving average of 58.35


    Archer Daniels Midland (ADM)

    Barchart technical indicators:

     

    • 96% Barchart technical buy signals
    • Trend Spotter buy signal
    • Above its 20, 50 and 100 day moving averages
    • 17 new highs and up 16.50% in the last month
    • Barchart computes a technical support level at 51.76
    • Recently traded at 53.06 with a 50 day moving average of 49.01
    Tags: SHW, LOW, OMC, RHT, ADM
    Nov 24 3:58 PM | Link | Comment!
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