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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 3/18 0 comments


    Monday, March 18th, 2013>>View Older Reports

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    June E-mini S&Ps (ESM13 -0.79%) this morning are sharply lower by -0.95%after Eurozone officials with their Cyprus bailout agreement on Saturday managed to spark contagion concerns for other Eurozone countries with an ill-advised tax on bank deposits. The Euro Stoxx 50 index is down sharply by -1.90% today. The Euro Stoxx 600 Bank stock index this morning is down -2.21%. Asian stocks closed sharply lower across the board thanks to the Cyprus bank deposit tax plan. The Japanese Nikkei index closed -2.71% today, the Hong Kong Hang Seng closed -2.00%, and the Chinese CSI 300 index closed -1.47%. Global stocks are also reacting negatively to the strong Chinese property price report released on Sunday night, which is likely to attract further government measures to try to halt the rise in prices. Commodity prices are sharply lower by-0.80% on the sharp rally in the dollar index and fears about weaker economic growth and commodity demand. April crude oil (CLJ13 -1.02%) is down -1.22%, April gasoline (RBJ13 -1.38%) is down -1.88%, April gold (GCJ13 +0.62%) is up +0.43%, May copper (HGK13 -2.26%) is down -2.51%, and grain and softs prices are lower across the board. The dollar index (DXY00 +0.50%) is up +0.43% this morning, while EUR/USD (^EURUSD) is down -0.94% and USD/JPY (^USDJPY) is down -0.40%. June 10-year T-notes (ZNM13 +0.36%) are sharply higher by +17 ticks.
    The Cyprus parliament is due to vote today on a tax levy on bank deposits that would effectively confiscate part of depositor funds in banks to contribute toward the bailout that the Cyprus government and banking system needs to stay afloat. The tax will be 6.75% on deposits up to 100,000 billion euros and 9.9% on deposits in accounts with more than 100,000 euros. There is a report that the president of Cyprus is trying to get those tax rates reduced by Eurozone officials to make the plan more palatable to the Cyprus parliament. Eurozone officials made the deposit tax a condition of a 10 billion euro bailout package agreed upon on Saturday. Cypriot depositors lined up over the weekend at ATMs to try to withdraw cash from bank accounts before the tax takes effect. However, a bank holiday has been declared for today to allow time for the tax to be approved by the Cypriot parliament and for the tax to be withheld. There is no guarantee that the Cyprus parliament today will approve the tax. If the tax is not approved, then there will be an even bigger mess since there will be a huge bank run as soon as the banks reopen. The tax on depositors is the first time that a Eurozone bailout has forced depositors to contribute to a bank and government bailout that was caused, not by the depositors, but by the government and bank management. The deposit tax is likely to cause a continued slow bank run at other banks in the Eurozone such as in Italy and Spain as depositors fear that their cash might be next for a tax. Eurozone officials have once again shot themselves in the foot in trying to contain the Eurozone debt crisis as politics intrudes on sensible solutions.
    The bank deposit levy in Cyprus has caused the Italian 10-year bond yield today to rise by 9 bp to 4.68% and the Spanish 10-year bond yield to rise by 9 bp to 5.00%. Meanwhile, the German 10-year bond yield today fell by 6 bp to 1.39% on safe-haven demand.
    The Eurozone Jan trade balance (seasonally adjusted) of 9.0 billion euros was narrower than market expectations of 10.9 billion euros and was down from a revised 10.3 billion euros in Dec (prelim 12.0 bln euros).
    UK March Rightmove house prices rose by +1.7% m/m and +1.2% y/y, which was stronger than market expectations of +1.7% m/m and +1.1% y/y.
    China's Feb property price report, released Sunday night NY time, showed a further increase in Chinese property prices that is likely to cause the government to institute further controls to try to halt the surge in property prices. Prices on new residential apartments rose on a year-on-year basis in 62 of the 70 cities surveyed, up from 53 in Jan, 40 in Dec, 25 in Nov and 12 in Oct. Prices on existing residential prices rose in 49 of the 70 cities surveyed, up from 36 in Jan and 25 in Dec. On a month-on-month basis, prices in Feb rose in 66 of 70 cities surveyed on new residential apartments and in 66 of 70 cities surveyed on existing residential apartments.

    This week's main focus will be on (1) the Eurozone debt crisis with the weekend Cyprus bailout announcement, and (2) the 2-day FOMC meeting that concludes on Wednesday. The Senate and House this week need to iron out the continuing spending resolution that is necessary to keep the government operating past next Wednesday (March 27). Today's March NAHB housing market index is expected to show a +1 point increase to 47, reversing the -1 point dip to 46 seen in February. This is a light earnings week with only 14 of the S&P 500 companies scheduled to release earnings. Key reports include Adobe on Tuesday; Lennar, FedEx and Oracle on Wednesday; Nike, Ross stores, and Discover Financial Services on Thursday; and Darden Restaurants and Tiffany on Friday.
    Conferences this week include Barclays Select Series Insurance Forum on Monday, ROTH OC Growth Stock Conference on Mon, Consumer Analyst Group of Europe (CAGE) Conference on Mon-Wed, Howard Weil Energy Conference on Mon-Wed, ISI Group Retail Summit on Tue, Barclays Emerging Payments Forum on Tue-Wed, Bank of America Merrill Lynch Global Industrials & EU Autos Conference on Tue-Thu, Gabelli Asset Management Specialty Chemicals & Agriculture Conference on Wed, International Strategy & Investment Group (ISI) Retail Summit on Wed, BB&T Commercial & Industrial Conference on Wed-Thu, J.P. Morgan Insurance Conference on Thu, National Coffee Association Annual Conference on Thu, Nomura Global Chemical Industry Leaders Conference on Thu, and The Future of Utilities - 18th Annual Conference on Tue-Thu.

    June E-mini S&Ps this morning are sharply lower by -14.75 points (-0.95%) on the flare-up in the Eurozone debt crisis thanks to the Eurozone bailout for Cyprus that requires a tax on bank deposits. The S&P 500 index on Friday closed slightly lower. The S&P 500 eked out a fresh 5-1/3 year high early after Feb U.S. industrial production rose +0.7% m/m, better than expectations of +0.4%, but stocks fell back and closed lower after an unexpected drop in Mar U.S. University of Michigan consumer confidence to a 15-month low (-4.8 to 71.8 versus expectations of +0.4 to 78.0) led to profit taking. Limiting declines was the larger-than-expected increase in Feb capacity utilization to its best level in 4-3/4 years (+0.4 to 79.6% versus expectations of +0.3 to 79.4%). Closes: S&P 500 -0.16%, Dow Jones-0.17%, Nasdaq -0.28%.


    • Siemens (SI -0.06%) was upgraded to Buy from Neutral at BofA/Merrill.
    • Nike's (NKE +0.16%) price target was raised by BoA/Merrill to $68 from $60 and a Buy was reiterated on positive pricing and sales trends.
    • Krispy Kreme (KKD -2.74%) issued FY2014 guidance of an adjusted EPS 53-57 cents, below the consensus of 58 cents.
    • Toyota (TM +0.38%) is recalling 209,000 FJ Cruiser SUVs, according to a report in the Detroit News.
    • Airbus (EADSY +1.47%) won a $20 billion order from Lion Air, according to a report by Reuters.
    • Amerseco (AMRC -0.52%) reported Q4 EPS of 11 cents, below the consensus of 14 cents.
    • Quicksilver Resources (KWK +1.09%) disclosed in a regulatory filing that on Friday that it will restate its quarterly reports for 2012 due to non-cash related errors to derivative accounting treatment. The restatement is expected to produce an overall increase to net income of $133 million.
    • Crimson Exploration (CXPO +1.59%) reported a Q4 EPS loss ex-charges of -8 cents, worse than consensus of -4 cents.
    • Boeing (BA +2.14%) was awarded a $99.9 million government contract for production assets, spares, repairs and sustainment for the joint direct attack munitions system. Work is expected to be completed by Jan. 31, 2016.
    • Lockheed Martin (LMT +0.22%) is being awarded a $105.87 million government contract for contractor logistics support, legacy sustainment and combined task force support for the Space Based Infrared Systems. Work is expected to be completed by Sept. 30, 2016.
    • Vascular Solutions (VASC -2.28%) issued a nationwide recall of Guardian II hemostasis valves used in catheterization procedures due to a defect in certain lots that pose a slightly increased risk of air leakage that may lead to an air embolism, which could result in serious injury or death. No injuries have been reported in association with this issue.

    June 10-year T-notes this morning are trading sharply higher by 17 ticks on increased safe-haven demand with the sharp sell-off in stocks and flare-up in the Eurozone debt crisis. June 10-year T-note prices on Friday climbed to a 1-week high and closed higher. Bullish factors included (1) the unexpected decline in Mar U.S. University of Michigan consumer confidence to a 15-month low, which undercut stocks and boosted the safe-haven demand for Treasuries, and (2) Treasury data that showed China, the world's biggest holder of U.S. debt, increased its U.S. debt holdings in Jan by $44.1 billion, the biggest increase in 1-1/2 years. Closes: TYM3 +13.0, FVM3 +7.0.
    The dollar index this morning is up +0.36 points (+0.43%) on the Eurozone debt ceiling flare-up while EUR/USD is down -0.0123 (-0.94%. USD/JPY is down -0.38 yen (-0.40%). The dollar index on Friday slipped to a 1-week low and closed lower as an unexpected drop in the March U.S. University of Michigan consumer confidence fueled speculation the Fed will keep its dollar negative easy monetary policies in place. EUR/USD received a boost after EU members endorsed an easing of austerity terms for France and several other countries. Closes: Dollar index -0.333 (-0.40%), EUR/USD +0.00706 (+0.54%), USD/JPY -0.839 (-0.87%).
    April WTI crude oil this morning is down -1.14 (-1.22%) while April gasoline is down -0.0595 (-1.88%). Crude oil and gasoline prices on Friday closed higher. The slide in the dollar index to a 1-week low helped propel April crude to a 2-1/2 week high, while the stronger-than-expected U.S. Feb industrial production bolstered the economic outlook and the prospects for energy demand. Closes: CLJ3 +0.42 (+0.45%), RBJ3 +0.0225 (+0.72%).


    US1000 ETMar NAHB housing market index expected +1 to 47, Feb -1to 46.
     1100 ETUSDA weekly grain export inspections.
     n/aIran expert-level nuclear talks with world powers in Istanbul.
    EUR0600 ETEurozone Jan trade balance (sa) expected +10.9 bln euros, Dec +12.0 bln euros. Jan trade balance expected -3.5 bln euros, Dec +11.7 bln euros.
    CHI2200 ETChina Feb leading economic index from Conference Board.

    U.S. STOCK CALENDAR03/18/2013

    Company NameSymbolTimeEvent DescriptionPeriodEPS Est (US$) 
    Numerex CorpNMRX USBef-mktQ4 2012 Earnings ReleaseQ4 20120.125 
    Pernix Therapeutics HoldingsPTX USBef-mktQ4 2012 Earnings ReleaseQ4 20120.021 
    Ameresco IncAMRC USBef-mktQ4 2012 Earnings ReleaseQ4 20120.135 
    KiOR IncKIOR USBef-mktQ4 2012 Earnings ReleaseQ4 2012-0.322 
    Sterling Construction Co IncSTRL US6:00Q4 2012 Earnings ReleaseQ4 20120.036 
    Horizon Pharma IncHZNP US8:00Q4 2012 Earnings CallQ4 2012  
    Ameresco IncAMRC US8:30Q4 2012 Earnings CallQ4 2012  
    Numerex CorpNMRX US9:00Q4 2012 Earnings CallQ4 2012  
    Pernix Therapeutics HoldingsPTX US9:00Q4 2012 Earnings CallQ4 2012  
    Cumulus Media IncCMLS US9:00Q4 2012 Earnings ReleaseQ4 20120.06 
    KCAP Financial IncKCAP US9:00Q4 2012 Earnings CallQ4 2012  
    MDC Holdings IncMDC US10:00Annual General Meeting   
    Sterling Construction Co IncSTRL US10:00Q4 2012 Earnings CallQ4 2012  
    Miller Energy Resources IncMILL US10:00Annual General Meeting   
    KiOR IncKIOR US10:00Q4 2012 Earnings CallQ4 2012  
    Crimson Exploration IncCXPO US10:30Q4 2012 Earnings CallQ4 2012  
    Vantage Drilling CoVTG US10:30Extraordinary Shareholders Meeting   
    Cumulus Media IncCMLS US11:00Q4 2012 Earnings CallQ4 2012  
    Houston Wire & Cable CoHWCC US11:00Q4 2012 Earnings CallQ4 2012  
    West Coast Bancorp/ORWCBO US11:30Extraordinary Shareholders Meeting   
    Greatbatch IncGB US13:00Investor DayY 2013  
    Parkervision IncPRKR US16:30Q4 2012 Earnings CallQ4 2012  
    FalconStor Software IncFALC US16:30Q4 2012 Earnings CallQ4 2012  
    Rockwell Medical Technologies IncRMTI US16:30Q4 2012 Earnings CallQ4 2012  
    Intersections IncINTX US17:00Q4 2012 Earnings CallQ4 2012  
    Towerstream CorpTWER US17:00Q4 2012 Earnings CallQ4 2012  
    Acorn Energy IncACFN USAft-mktQ4 2012 Earnings ReleaseQ4 2012-0.22 
    Parkervision IncPRKR USAft-mktQ4 2012 Earnings ReleaseQ4 2012  
    FalconStor Software IncFALC USAft-mktQ4 2012 Earnings ReleaseQ4 2012  
    Rockwell Medical Technologies IncRMTI USAft-mktQ4 2012 Earnings ReleaseQ4 2012-0.657 
    Intersections IncINTX USAft-mktQ4 2012 Earnings ReleaseQ4 2012  
    FutureFuel CorpFF USAft-mktQ4 2012 Earnings ReleaseQ4 20120.19 
    Towerstream CorpTWER USAft-mktQ4 2012 Earnings ReleaseQ4 2012-0.107 
    CH Energy Group IncCHG US Q4 2012 Earnings ReleaseQ4 20120.82 
    Maxwell Technologies IncMXWL US Q4 2012 Earnings ReleaseQ4 20120.077 
    Central European Distribution CorpCEDC US Q4 2012 Earnings ReleaseQ4 2012  
    Cross Country Healthcare IncCCRN US Q4 2012 Earnings ReleaseQ4 2012-0.021 
    Gold Resource CorpGORO US Q4 2012 Earnings ReleaseQ4 20120.22 
    Houston Wire & Cable CoHWCC US Q4 2012 Earnings ReleaseQ4 20120.208 
    Employers Holdings IncEIG US Investor Meeting -Day2Y 2013  
    Horizon Pharma IncHZNP US Q4 2012 Earnings ReleaseQ4 2012-0.467

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