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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 3/13 0 comments
    Mar 13, 2013 12:14 PM | about stocks: BG, HRB, KRO, BA, DOLE, SURG, IPAR, EGL, GCAP, SEAC, GNMK, HOT, PGR, LYB, ADI, TOL, REN, CNQR, FFIV, EMC, AAPL, VMW

    BARCHART MORNING CALL 3/13

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    Wednesday, March 13th, 2013>>View Older Reports

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    OVERNIGHT MARKETS AND NEWS
    June E-mini S&Ps (ESM13 -0.24%) are mildly lower by -0.13% on sell-offs in overseas stocks. European stocks are down -0.49% this morning on a weaker-than-expected Eurozone industrial production report and long liquidation pressure. Asian stocks closed lower today with a -0.61% sell-off in Japan, a -1.46% sell-off in Hong Kong, and a -1.10% sell-off in China's CSI 300 index. Chinese stocks were pressured by ongoing worries about property curbs and hawkish comments by China's central bank chief. Commodity prices are little changed on average this morning. April crude oil (CLJ13 +0.11%) is up +0.37%, April gasoline (RBJ13 +0.26%) is up +0.81%, April gold (GCJ13 +0.18%) is up +0.03%, May copper (HGK13-0.06%) is down -0.03%, and agriculture prices are mixed. The dollar index (DXY00 +0.06%) is unchanged, while EUR/USD (^EURUSD) is down -0.21%. USD/JPY (^USDJPY) is down -0.33% as the yen is seeing some additional strength as the ruling LDP party haggles with Japan's opposition parties over Prime Minister Abe's nominations for BOJ governor and his two deputies. June 10-year T-notes (ZNM13 +0.13%) are up 3 ticks.
    President Obama today is in the second day of his 3-day (Tue-Thu) stretch of visits to Capitol Hill. Mr. Obama met with Senate Democrats yesterday and he will meet with House Republicans today. Mr. Obama will then meet with Senate Republicans and House Democrats on Thursday. Meanwhile, Senate leaders this week are working on the continuing resolution that must be passed by March 27 to keep the government operating through the end of the fiscal year in September.
    Chinese property stocks fell today after a report that the city of Shenzhen banned developers from raising new home prices. The Chinese government recently told regions and cities in areas with strong home price increases to crack down on property speculation to slow the recent surge in home prices.
    China's PBOC central bank chief Zhou Xiaochuan said that China needs to be on "high alert" since the February inflation figures were stronger than expected.
    The Italian 10-year bond yield today rose by 7 bp to 4.68% after today's sale of 3-year bonds and 15-year bonds. The bid cover ratio for the 3-year of 1.28 was down from 1.37 at the Feb 13 auction and the yield rose to 2.48% from 2.30% at the Feb 13 auction. The 15-year bond carried a bid cover ratio of 1.28 and a yield of 4.90%.
    Today's sale by Ireland of 10-year bonds for the first time since its 2010 bailout was successful, which was an important step to show that Ireland is slowly regaining access to the global bond markets.
    Eurozone Jan industrial production fell -0.4% m/m, which was weaker than market expectations of -0.1% m/m. That followed a revised +0.9% m/m increase in December, up from the preliminary report of +0.7% m/m. On a year-on-year basis, Jan industrial production improved to -1.3% y/y from-1.7% y/y in Dec.

    U.S. STOCK PREVIEW
    Today's Feb retail sales report is expected to show a solid increase of +0.5% m/m both overall and excluding auto sales. That would follow the weak Jan report of +0.1% m/m and +0.2% m/m ex-autos. President Obama today will travel to Capitol Hill to meet with House Republicans. There are no earnings reports today from the Russell 1000 companies.
    Conferences during the remainder of this week include Credit Suisse Global Services Conference on Mon-Wed, Bank of America Merrill Lynch Consumer & Retail Conference on Tue-Wed, World Biofuels Markets 2013 on Tue-Wed, China Healthcare Investment Conference on Tue-Wed, FIA International Derivatives Conference on Tue-Thu, Piper Jaffray Technology Media and Telecommunications Conference on Tue-Wed, Barclays Capital Healthcare Conference on Tue-Thu, UBS Global Consumer Conference on Wed-Thu, and Susquehanna Chemical Conference on Thu.

    June E-mini S&Ps (ESM13 -0.24%) are down -2.00 points (-0.13%) on weak overseas stocks. The S&P 500 index on Tuesday fell back from a 5-1/3 year high and closed lower, although the Dow posted a record high and closed higher. Bearish factors included (1) stretched valuations after the S&P 500 rose to 15.3 times earnings, a 22-month high, and (2) weakness in technology stocks led by a slide in Apple after IDC predicted Apple will lose market share in the tablet market and after Jefferies cut its price target on Apple to $420 from $500. Closes: S&P 500 -0.24%, Dow Jones +0.02%, Nasdaq -0.39%.

    OVERNIGHT U.S. STOCK MOVERS

    • Bunge (BG +0.49%) was reiterated as a top pick at Citigroup with a target of $105 after saying that every segment in Bunge's business is positioned to improve in 2013.
    • H&R Block (HRB +1.35%) improperly filed Form 8863, which is used to claim educational credits, on over 600,000 tax returns, which will delay refunds for those filings by up to six weeks, according to a MarketWatch report that cites comments from an IRS spokeswoman, who said the error impacts roughly 10% of the 6.6M returns containing Form 8863.
    • Kronos Worldwide (KRO +1.16%) reported a Q4 EPS loss of -16 cents, a bigger loss than consensus of -5 cents.
    • The Federal Aviation Administration approved the Boeing (BA +1.47%) certification plan for the redesigned 787 battery system, after thoroughly reviewing Boeing's proposed modifications and the company's plan to demonstrate that the system will meet FAA requirements.
    • Dole Food (DOLE +0.60%) reported a Q4 EPS loss of -59 cents, worse than consensus of -2 cents.
    • Synergetics (SURG +1.40%) reported a Q2 EPS loss of -5 cents, weaker than consensus of a 7 cent profit.
    • Inter Parfums (IPAR -0.64%) reported Q4 EPS of 21 cents, better than consensus of 18 cents.
    • Engility Holdings (EGL +1.14%) reported Q4 adjusted EPS of 77 cents, well ahead of consensus of 50 cents, and raised its guidance on fiscal year 2013 EPS to $3.25-$3.55, better than consensus of $2.60.
    • GAIN Capital (GCAP +3.35%) reported a Q4 adjusted EPS loss of -9cents, weaker than consensus of a 5 cent profit.
    • Acadia Healthcare (ACHC +0.04%) initiated with a Buy at Cantor.
    • GenMark (GNMK +0.09%) reported a Q4 EPS loss of -15 cents, better than consensus of a -21 cent loss.

    MARKET COMMENTS
    June 10-year T-notes (ZNM13 +0.13%) are up 3 ticks ahead of today's sale of 10-year T-notes. June 10-year T-note prices on Tuesday closed higher as a slide in equities prompted short-covering and fueled an increase in safe-haven demand for Treasuries. Closes: TYM3 +8.5, FVM3 +4.0.
    The dollar index (DXY00 +0.06%) is unchanged. EUR/USD (^EURUSD) is down -0.0028 (-0.21%) on the weak Eurozone industrial production report and a mildly disappointing Italian bond auction today. USD/JPY (^USDJPY) is down -0.32 (-0.33%) as the market frets about PM Abe's difficulty in pushing through his dovish BOJ nominations although he is expected to prevail in the end. The dollar index on Tuesday closed slightly higher as stock market weakness boosted safe-haven demand for the dollar. EUR/USD fell back after comments from ECB Council member Weidmann fueled speculation the ECB may maintain its easy monetary policy, which is euro negative. USD/JPY fell back from a 3-1/2 year high and closed lower on the possibility that one of Prime Minister Abe's choices for a BOJ deputy governor may not be confirmed, which boosted the yen. Closes: Dollar index +0.014 (+0.02%), EUR/USD -0.0015 (-0.12%), USD/JPY -0.199(-0.20%).
    April WTI crude oil (CLJ13 +0.11%) is up +0.34 (+0.37%) while April gasoline (RBJ13 +0.26%) is up +0.0255 (+0.81%). Crude oil and gasoline prices on Tuesday closed mixed. The main bullish factor was the narrowing of the WTI/Brent spread which fell for the fifth straight session to its lowest level in 5 weeks and boosted the April WTI crude futures contract. A bearish factor for crude was the action by the EIA to cut its global oil consumption forecast for this year to 90.13 million barrels a day from a forecast last month of 90.21 million barrels a day. Closes: CLJ3 +0.48 (+0.52%), RBJ3 -0.0022 (-0.07%). Expectations for Wednesday's weekly DOE inventory data are for crude stockpiles to grow by +2.35 million bbl, gasoline supplies to fall -1.25 million bbl, distillate inventories to decline-2.0 million bbl and the refinery utilization rate to slip -0.1 to 82.1%.

    GLOBAL EVENT CALENDAR03/13/2013

    US 0700 ET Weekly MBA mortgage applications, previous +14.8% with purchase sub-index +15.0% and refi sub-index +14.8%.
      0830 ET Feb import price index expected +0.5% m/m, Jan +0.6% m/m and -1.3% y/y.
      0830 ET Feb retail sales expected +0.5% m/m, Jan +0.1% m/m. Feb retail sales ex-autos expected +0.5% m/m, Jan +0.2% m/m. Feb retail sales ex-autos and ex-gas expected +0.3% m/m, Jan +0.2% m/m.
      1000 ET Jan business inventories expected +0.3%, Dec +0.1%.
      1030 ET DOE Weekly Petroleum Status Report.
      1300 ET Treasury auction of $21 billion in 10-year T-notes.
    EUR 0600 ET Eurozone Jan industrial production expected -0.1% m/m and -2.0% y/y, Dec +0.7% m/m and -2.3% y/y.

    U.S. STOCK CALENDAR03/13/2013

    Company Name Symbol Time Event Description Period EPS Est (US$)
    Starwood Hotels & Resorts Worldwide Inc HOT US 0:30 Investor and Analyst Day Y 2013  
    Progressive Corp/The PGR US Bef-mkt February 2013 Sales and Revenue Release 2013  
    LyondellBasell Industries NV LYB US 8:30 Investor Day Y 2013  
    Analog Devices Inc ADI US 9:00 Annual General Meeting Y 2013  
    Toll Brothers Inc TOL US 12:00 Annual General Meeting    
    Franklin Resources Inc BEN US 13:00 Annual General Meeting    
    Concur Technologies Inc CNQR US 14:00 Annual General Meeting Y 2013  
    F5 Networks Inc FFIV US 14:00 Annual General Meeting Y 2013  
    EMC Corp/MA EMC US   EMC and VMware Strategic Forum for Institutional Investors    
    Apple Inc AAPL US   Samsung Co. vs. Apple, Inc.-ITC Final Decision Due on Apple Patents    
    VMware Inc VMW US   EMC and VMware Strategic Forum for Institutional Investors    
    LyondellBasell Industries NV LYB US   Investor Day
    Stocks: BG, HRB, KRO, BA, DOLE, SURG, IPAR, EGL, GCAP, SEAC, GNMK, HOT, PGR, LYB, ADI, TOL, REN, CNQR, FFIV, EMC, AAPL, VMW
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