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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 2/28 0 comments
    Feb 28, 2013 10:30 AM | about stocks: DPZ, MCP, PLL, LB, JCP, GRPN, BWC, JWN, WPX, CVC, RDC, IRM, KSS, COP, DUK, PGR, LUK, STT, ABC, CPST, CRM, TEG

    Barchart Morning Call

    BC - 2 hrs 13 mins ago

    OVERNIGHT MARKETS AND NEWS
    March E-mini S&Ps (ESH13 +0.10%) this morning are slightly higher by +0.18% on a +0.35% rally in European stocks sparked by assurances by ECB President Draghi that the ECB is not close to considering a liquidity exit. Chinese stocks rallied sharply by +3.03% today on economic optimism and a rally in property developers on favorable earnings news. Japanese stocks closed +2.71% and Hong Kong closed +1.96%. Commodity prices are slightly higher by +0.08% this morning. April crude oil (CLJ13 -0.10%) is down -0.08%, April gasoline (RBJ13 -0.22%) is down -0.09%, April gold (GCJ13 -0.28%) is down -0.34%, May copper (HGK13 +0.15%) is up +0.21%, grains are trading higher, and livestock and softs are mixed. The dollar index (DXY00 +0.02%) is unchanged while EUR/USD (^EURUSD) is down-0.16% and USD/JPY (^USDJPY) is down -0.08%. June 10-year T-notes (ZNM13 +0.18%) are up 6 ticks.
    ECB President Draghi today said that while the ECB's balance sheet is shrinking due to the early pay-off of LTRO loans by some banks, the ECB is "far" from considering a liquidity exit.
    The Italian bond yield is down 14 bp in the past two days as some optimism has emerged that Italy's political parties may be able to put aside their rivalries and produce a grand coalition.
    Japanese Prime Minister Abe last night officially appointed Asian Development Bank President Kuroda as the new BOJ chief, in line with the reports earlier this week.
    Japan's Jan industrial production report of +1.0% m/m and -5.1% y/y was weaker than market expectations of +1.5% m/m and -4.9% y/y.
    The UK Feb GfK consumer confidence index was unchanged from Jan at-26, which was in line with market expectations.
    Japan Jan housing starts rose +5.0% y/y to 863,000 units, which was a weaker outcome than market expectations for a +8.8% increase to 894,000 units.
    Germany's Feb unemployment fell by -3,000, which showed a slightly stronger labor market than market expectations of unchanged, although that was offset by the fact that Jan was revised to -14,000 from -16,000. The German Feb unemployment rate was unchanged from Jan's revised level of 6.9% (prelim 6.8%), which showed a little weaker labor market than market expectations for a report of 6.8%.
    The Eurozone Jan CPI of -1.0% m/m and +2.0% y/y was in line with market expectations. The Jan core CPI eased to +1.3% y/y from +1.5% y/y in Dec and showed a little weaker inflation than market expectations of +1.5% y/y.

    U.S. STOCK PREVIEW
    The markets today will be watching the gyrations in the Senate, which is expected to consider both a Democratic and a Republican version of a sequester replacement bill, although neither plan is expected to even advance to an up-or-down vote as Republicans filibuster the Democratic plan. Whatever happens in the Senate will only be for PR purposes since the sequester is now certain to go into effect on Friday. Today's unemployment claims report is expected to show a small -2,000 decline in initial claims and a small -8,000 decline in continuing claims. Today's Q4 GDP is expected to be revised higher to +0.6% from -0.1%, at least saving the U.S. from the negative psychology of having its first negative GDP report since the recession ended in June 2009. Today's Feb Chicago purchasing managers index is expected to show a decline of -1.6 to 54.0, reversing part of the sharp +5.6 point increase seen in January to a 9-month high of Jan 55.6.
    There are 8 of the S&P 500 companies that will report earnings today. Notable reports include Kohl's (consensus $1.63), The Gap (0.71), and Salesforce.com (0.40).

    March E-mini S&Ps (ESH13 +0.10%) this morning are mildly higher by +2.75 points (+0.18%) on the +0.35% rally in European stocks that was prompted by ECB President Draghi's statement that the ECB is "far" from considering a liquidity exit. The S&P 500 index on Wednesday rallied sharply on another positive housing market report with the +4.5% gain in pending home sales along with continued optimism about Fed Chairman Bernanke's strong defense of QE3 in his Tue/Wed testimony to Congressional panels. U.S. stocks also received a boost from a sharp +1.61% rally in European stocks on a successful Italian 5 and 10-year bond auction and stronger-than-expected European confidence indexes. Closes: S&P 500 +1.27%, Dow Jones +1.27%, Nasdaq +1.04%.

    OVERNIGHT U.S. STOCK MOVERS

    • Domino's Pizza (DPZ +1.80%) reported Q4 EPS of 64 cents, above the consensus of 60 cents.
    • Molycorp (MCP -0.95%) is down 7% after delaying is Q4 earnings report to consider a charge for goodwill impairment.
    • Pall Corp (PLL +1.59%) reported Q2 pro forma EPS of 73 cnets, higher than the consensus of 67 cents.
    • Limited (LTD +1.99%) reported Q4 EPS of $1.76, above the consensus of $1.74.
    • J.C. Penney (JCP +0.67%) fell 14% in after-hours trading after reporting a Q4 adjusted EPS loss of $1.95 versus the consensus for an 18 cent loss. JC Penny also reported that Q4 same-store sales fell 31.7%.
    • Groupon (GRPN +7.75%) plunged 22% in after-hours trading after reporting a Q4 EPS loss of 12 cents versus expectations for a 3 cent profit.
    • Babcock & Wilcox (BWC +2.72%) rallied 9% in after-hours trading.
    • Nordstrom (JWN +2.61%) rallied 1.3% in after-hours trading after announcing an $800M share repurchase program and increasing its dividend 11% to 30 cents per share.

    MARKET COMMENTS
    June 10-year T-notes (ZNM13 +0.18%) this morning are up 6 ticks as safe-haven demand continues ahead of Friday's sequester date. June 10-year T-note prices on Wednesday closed slightly lower on reduced safe-haven demand with the sharp 2-day rally in stocks. Closes: TYM3 -3, FVM3 unch.
    The dollar index (DXY00 +0.02%) this morning is unchanged. EUR/USD (^EURUSD) down -0.0021 (-0.16%). USD/JPY (^USDJPY) is down -0.07(-0.08%) and has shown little reaction to the official appointment of Mr. Kuroda as the new BOJ chief. The dollar index on Wednesday closed lower on reduced safe-haven demand with the sharp rally in U.S. stocks, while EUR/USD received support from the successful Italian bond auction and the stronger-than-expected Eurozone confidence indexes. Closes: Dollar index -0.27 (-0.33%), EUR/USD +0.0078 (+0.60%), USD/JPY +0.26 (+0.28%).
    April WTI crude oil (CLJ13 -0.10%) this morning is down -0.07 (-0.08%) and April gasoline (RBJ13 -0.22%) is down -0.0027 (-0.09%). Crude oil closed slightly higher as U.S. crude oil inventories rose +1.13 mln bbls, less than expectations of +2.5 mln bbls. However, gasoline prices plunged on heavy technical selling and news that the U.S. refinery utilization rate rose sharply by +2.2 points to 85.1%, indicating that refineries are trying to get facilities back on line as soon as possible to capture profitable crack margins. Gasoline inventories fell -1.857 mln bbls, outpacing expectations of -1.5 mln bbls. Closes: CLJ3 +0.13 (+0.14%), RBJ3 -0.0925 (-2.89%).

    GLOBAL EVENT CALENDAR02/28/2013

    US0830 ETWeekly initial unemployment claims expected -2,000 to 360,000, previous +20,000 to 362,000. Weekly continuing claims expected -8,000 to 3.140 mln, previous +11,000 to 3.148 mln.
     0830 ETRevised Q4 GDP expected +0.6%, prelim -0.1% q/q annualized. Revised Q4 personal consumption expected unrevised at +2.2% q/q annualized. Final Q4 price index expected unrevised at +0.6% . Final core PCE expected unrevised at +0.9%.
     0830 ETUSDA weekly Export Sales.
     0900 ETFeb Milwaukee PMI, Jan 51.3.
     0945 ETFeb Chicago purchasing managers index expected -1.6 to 54.0, Jan +5.6 to 55.6.
     1100 ETKansas City Feb manufacturing index, Jan -2.
     2000 ETChicago Fed President Charles Evans speaks to the CFA Society of Iowa?s Annual Investment Strategy dinner.
    JPN0000 ETJapan Jan housing starts expected +8.8% to 894,000, Dec +10% y/y to 880,000.
     0000 ETJapan Jan construction orders, Dec +4.8% y/y.
     1830 ETJapan Jan jobless rate, Dec 4.2%. Jan job-to-applicant ratio, Dec 0.82.
     1830 ETJapan Jan overall household spending, Dec -0.7% y/y.
     1830 ETJapan Jan national CPI, Dec -0.1% y/y. Jan national CPI ex-fresh food, Dec -0.2% y/y. Jan national CPI ex food & energy, Dec -0.6% y/y.
     1830 ETJapan Feb Tokyo CPI, Jan -0.6% y/y. Feb Tokyo CPI ex-fresh food, Jan -0.5% y/y. Feb Tokyo CPI ex food & energy, Jan -0.9% y/y.
     1850 ETJapan Q4 capital spending, Q3 +2.2%. Q4 capital spending excluding software, Q3 +2.4%
    CHI2000 ETChina Feb manufacturing PMI (National Bureau of Statistics) expected +0.1 to 50.5, -0.2 to Jan 50.4.
     2045 ETChina Feb HSBC manufacturing PMI, Feb flash report was released on Sunday.
    GER0355 ETGerman Feb unemployment change expected unchanged, Jan -16,000. Feb unemployment rate expected unch at 6.8%, Jan 6.8%.
     0800 ETGerman Feb CPI (EU harmonized).
    EUR0500 ETEurozone CPI expected -1.0% m/m and +2.0% y/y, Jan +0.4% m/m and +2.0% y/y. Feb core CPI, Jan +1.5% y/y.

    U.S. STOCK CALENDAR02/28/2013

     

     

    Company NameSymbolTimeEvent DescriptionPeriodEPS Est (US$)
    WPX Energy IncWPXBef-mktQ4 2012 Earnings ReleaseQ4 2012-0.079
    Cablevision Systems CorpCVCBef-mktQ4 2012 Earnings ReleaseQ4 20120.094
    Rowan Cos PlcRDCBef-mktQ4 2012 Earnings ReleaseQ4 20120.479
    Iron Mountain IncIRM6:00Q4 2012 Earnings ReleaseQ4 20120.253
    Kohl's CorpKSS7:00Q4 2013 Earnings ReleaseQ4 20131.625
    ConocoPhillipsCOP8:30Analyst MeetingY 2013 
    Iron Mountain IncIRM8:30Q4 2012 Earnings CallQ4 2012 
    Duke Energy CorpDUK8:30Investor and Analyst MeetingY 2013 
    Kohl's CorpKSS8:30Q4 2013 Earnings CallQ4 2013 
    Pall CorpPLL8:30Q2 2013 Earnings CallQ2 2013 
    Progressive Corp/ThePGR9:00Investor Relations Conferece Call  
    Leucadia National CorpLUK9:00Extraordinary Shareholders MeetingY 2013 
    Ltd Brands IncLTD9:00Q4 2013 Earnings CallQ4 2013 
    WPX Energy IncWPX10:00Q4 2012 Earnings CallQ4 2012 
    Cablevision Systems CorpCVC10:00Q4 2012 Earnings CallQ4 2012 
    Rowan Cos PlcRDC11:00Q4 2012 Earnings CallQ4 2012 
    State Street CorpSTT12:30Investor & Analyst MeetingY 2013 
    AmerisourceBergen CorpABC14:00Annual General MeetingY 2013 
    Gap Inc/TheGPS16:00Q4 2013 Earnings ReleaseQ4 20130.709
    Salesforce.com IncCRM17:00Q4 2013 Earnings CallQ4 2013 
    Gap Inc/TheGPS17:00Q4 2013 Earnings CallQ4 2013 
    Salesforce.com IncCRMAft-mktQ4 2013 Earnings ReleaseQ4 20130.397
    Integrys Energy Group IncTEGAft-mktQ4 2012 Earnings ReleaseQ4 20120.946

    Stocks: DPZ, MCP, PLL, LB, JCP, GRPN, BWC, JWN, WPX, CVC, RDC, IRM, KSS, COP, DUK, PGR, LUK, STT, ABC, CPST, CRM, TEG
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