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Jim Van Meerten
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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. He earned a BS in Accounting and Business Administration from Berry College; a Juris Doctorate from the Woodrow Wilson School of Law; and attended... More
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  • Barchart Morning Call 9/4 0 comments
    Sep 4, 2012 12:25 PM | about stocks: CPB, SFD, CIM, FCE.A, FRAN, GWRE, CUB, FNSR, NX

    Barchart Morning Call

    BC - Tue Sep 04, 7:00AM CDT

    Overnight Developments

    • Sep E-mini S&Ps this morning are slightly lower by -0.11% on lower European and Asian stocks and on nervousness heading into today's U.S. ISM manufacturing index, Thursday's ECB meeting, and Friday's U.S. unemployment report (Aug payrolls expected +125,000). Commodity prices this morning are up by an average +0.48% with Oct crude oil up +0.39%, Dec gold up +0.28%, Dec copper up +0.72%, and with agricultural prices trading mostly higher. The Euro Stoxx 50 index is down -0.20% today on Moody's cut in the EU rating outlook and on some long liquidation pressure after Monday's rally of +0.92%. The dollar index this morning is up +0.07% while EUR/USD is down -0.06%. Sep 10-year T-note prices are down -2.5 ticks.
    • Asian stocks today closed mostly lower: Japan -0.10%, Hong Kong -0.66%, China -1.08%, Taiwan +0.01%, Australia -0.60%, Singapore -0.19%, South Korea -0.27%, India +0.32%, Turkey +0.05%.
    • Moody's cut the outlook for the European Union's Aaa rating to negative from stable due to risks to Germany, France, and the Netherlands. Moody's said, "The creditworthiness of these member states is highly correlated, as they are all exposed, albeit to varying degrees, to the euro-area debt crisis."
    • The 10-year Italian bond yield today is down 5 bp at 5.72% on reports that ECB President Draghi told an EU committee on Monday that the ECB's plan is to buy bonds with maturities up to 3 years. The ECB on Thursday is widely expected to announce the details of its bond buying plan. French President Hollande is scheduled to meet today in Rome with Italian Prime Minister Monti.
    • The UK Aug PMI manufacturing index rose by 4.3 points to 49.5 from a revised 45.2 in July and was much stronger than market expectations for a report of 46.1.
    • On Monday, Germany's Aug final PMI manufacturing index was revised lower by 0.4 points to 44.7 from the preliminary report of 45.1. Eurozone's Aug final PMI manufacturing index was revised 0.2 points lower to 45.1 from the preliminary report of 45.3.
    • China's Aug manufacturing PMI report on Saturday from the China Federation of Logistics and Purchasing and the National Bureau of Statistics showed a sharp -0.9 point decline to 49.2, falling below the expansion-contraction level of 50.0 for the first time since November 2011. On Monday, China's manufacturing PMI from HSBC/Markit for August was revised 0.2 points lower to 47.6 from the flash report of 47.8. That put the PMI down sharply by 1.7 points from July. The manufacturing PMI reports were negative indicators for the Chinese economy but the markets took the reports to mean that Chinese government economic stimulus is more likely. Market Comments
      • Sep E-mini S&Ps this morning are trading -1.50 points (-0.11%) on this morning's -0.20% sell-off in the Euro Stoxx 50 and on general market concerns ahead of this week's key economic news that includes Thursday's ECB meeting and Friday's U.S. Aug unemployment report. E-mini S&Ps were also undercut by the weak Chinese manufacturing PMI reports that were released on Saturday and Monday, although those reports also boosted the chances that the Chinese government will launch new stimulus measures. The U.S. stock market on Friday whipsawed higher after Fed Chairman Bernanke's speech and finished with moderate gains: S&P 500 +0.51%, Dow Jones +0.69%, Nasdaq 100 +0.67%. Bullish factors included (1) Fed Chairman Bernanke's assertion that the Fed will ease again "if economic conditions warrant," (2) the unexpected increase in the final Aug U.S. University of Michigan consumer confidence, and (3) the stronger than expected +2.8% increase in July factory orders, the biggest gain in a year. Limiting gains in stocks was the bigger-than-expected decline in the Aug Chicago purchasing managers index (-0.7 to 53.0) and global growth concerns after Japan's July industrial production unexpectedly contracted by -1.2% m/m and German July retail sales unexpectedly weakened by -0.9% m/m.
      • Dec 10-year T-notes this morning are down 2.5 ticks. Dec 10-year T-note futures prices on Friday rebounded from early losses and posted a 1-month high and finished with moderate gains after Fed Chairman Bernanke wouldn't rule out additional bond purchases: TYZ2 +18.5, FVZ2 +10.2. Bearish factors included the stronger-than-expected economic data on July factory orders and Aug University of Michigan consumer confidence that helped fuel a rally in stocks.
      • The dollar index this morning is slightly higher by +0.05 (+0.07%), with EUR/USD down -0.0007 (-0.06%) and USD/JPY +0.12 (+0.15%). The dollar index on Friday slumped to a 3-1/4 month low and finished with moderate losses on concern Fed Chairman Bernanke may go ahead with additional dollar negative bond purchases in an effort to boost the economy: Dollar index -0.483 (-0.59%), EUR/USD +0.0075 (+0.60%), USD/JPY -0.24 (-0.31%).
      • Oct WTI crude oil prices this morning are up +0.38 points (+0.39%) a barrel and Oct gasoline is up +0.0245 (+0.82%) on hopes for additional central bank stimulus during September and on continued disruptions from Hurricane Isaac last week. As of Monday, 58% of oil production and 39% of natural gas production in the Gulf of Mexico was still closed down, according to the U.S. Bureau of Safety and Environmental Enforcement. Crude oil and gasoline prices on Friday rallied and closed higher after the dollar weakened when Fed Chairman Bernanke said he wouldn't rule out additional stimulus to stimulate the economy: CLV2 +1.01 (+1.07%), RBV2 +0.00648 (+2.23%). Other bullish factors included the stronger-than-expected U.S. economic data on July factory orders and Aug University of Michigan consumer confidence along with speculation that U.S. gasoline inventories will tighten after Hurricane Isaac shut down 13% of Gulf Coast refining capacity.
      • For the complete 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 http://www.barchart.com/register/crbfms_usmc.php Today's U.S. Earnings Reports

        Earnings reports (ranked by market cap): CPB-Campbell Soup (Consensus $0.38), SFD-Smithfield Foods (0.45), CIM-Chimera Investment (0.10), FCE-Forest City Enterprises (0.06), FRAN-Francesca's Holdings (0.24), GWRE-Guidewire Software (0.04), CUB-Cubic Corp. (0.77), FNSR-Finisar (0.14), NX-Quanex Building Products (0.22).

        Global Financial Calendar

        Tuesday 9/4/12
        United States
        1000 ETAug ISM manufacturing expected +0.2 to 50.0, July +0.1 to 49.8. Aug ISM prices paid expected +7.0 to 46.5, July +2.5 to 39.5.
        1000 ETJuly construction spending expected +0.4%, Jun +0.4%.
        1100 ETUSDA weekly grain export inspections.
        1130 ETWeekly 3-mo and 6-mo T-bill auctions.
        1600 ETUSDA Crop Progress
        1700 ETAug total vehicle sales expected 14.17 million, July 14.05 million. Aug domestic vehicle sales expected 11.00 million, July 11.00 million.
        United Kingdom
        0430 ETUK Aug construction PMI expected-0.9 to 50.0, July 50.9.
        Euro-Zone
        0500 ETEurozone July PPI expected +0.2% m/m and +1.6% y/y, June -0.5% m/m and +1.8% y/y.
        0630 ETEU President Herman Von Rompuy meets German Chancellor Merkel in Berlin.
        CHI
        2230 ETChina Aug HSBC services PMI, previous 53.1.

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

    Stocks: CPB, SFD, CIM, FCE.A, FRAN, GWRE, CUB, FNSR, NX
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