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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 3/19 0 comments
    Mar 19, 2013 9:54 AM | about stocks: DSW, FDS, EA, EQR, LULU, HPT, SWHC, BRCD, NVDA, ADBE, CTAS, WSM, LNT, RPM, UPS

    BARCHART MORNING CALL - Tuesday, March 19th, 2013>>View Older Reports

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    OVERNIGHT MARKETS AND NEWS
    June E-mini S&Ps (ESM13 +0.11%) this morning are little changed and have been able to shake off a further -0.70% loss today in the Euro Stoxx 50 index on the Cyprus depositor tax debacle. A small increase in Germany's Zew economic outlook index to a 3-year high provided some help to the markets overnight, except that the overall Eurozone Zew economic outlook index plunged by 9.0 points. Asian stock markets today closed mixed. The Nikkei index closed +2.03% and the China CSI 300 index closed +0.90%, but the Hang Seng index closed -0.19%. Commodity prices are slightly higher by +0.05% this morning. April crude oil (CLJ13 +0.27%) is up +0.10%, April gasoline (RBJ13 -0.55%) is down -0.81%, April gold (GCJ13-0.12%) is down -0.15%, May copper (HGK13 -0.23%) is down -0.20%, grains and softs are trading mostly higher, and livestock is trading lower. The dollar index (DXY00 +0.02%) this morning is virtually unchanged and EUR/USD (^EURUSD) is slightly lower by -0.09%. USD/JPY (^USDJPY) is up +0.13%. June 10-year T-notes (ZNM13 +0.13%) are up 6.5 ticks.
    The Cyprus parliament is due to vote later today on the one-time tax on depositors. Cyprus banks and the Cyprus stock market are closed through at least Thursday. The Cyprus parliament has no real choice but to approve the depositor tax totaling 5.8 billion euros since it is being required by the troika for a 10 billion euro bailout and because Cyprus banks will be quickly drained of nearly all their deposits and funding if they reopen without the tax being levied and removed from accounts. However, Cypriot President Anatasiades has warned that he may not be able to get parliament to approve the effective confiscation of depositor funds. If parliament does not approve the tax, then Cyprus will be in an even bigger mess with no Eurozone bailout and with banks that have severely impaired deposits and even larger funding liabilities. French Finance Minister Moscovici today summed up the lack of a coherent Eurozone plan on the Cyprus bailout approach by saying "I don't think about plan B's. We're in a Plan A. Everyone has to assume their responsibilities."
    Spain today successfully sold 4 billion euros of 3 and 9-month bills, hitting its maximum target. The 3-month bills were sold at an average 0.285%, down from 0.421% at the last 3-month auction on Feb 19. The 9-month bills were sold at an average 1.007%, down from 1.144% at the last auction. The bid cover ratios were 3.3 times for the 3-month bill and 2.45 times for the 9-month bills.
    The German March Zew economic sentiment index rose slightly by +0.3 points to a 3-year high of 48.5 from 48.2 in Feb and was stronger than market expectations for a -0.1 point dip to 48.1. The German Zew current situation index rose to 13.6 from 5.2 in Feb and was substantially stronger than market expectations of 6.0.
    The Eurozone Zew economic sentiment index fell sharply by -9.0 points to 33.4 from 42.4 in Feb.
    Japan's final-Jan leading index CI was revised lower to 95.0 from the preliminary report of 96.3. The final-Jan coincident index was revised lower to 91.6 from 92.0.
    Japan's Feb nationwide department store sales report of +0.3% y/y was slightly stronger than market expectations of +0.2% y/y. In addition, the Feb Tokyo department store sales report of +2.5% y/y was stronger than market expectations of +0.5% y/y.
    The UK Feb PPI output (nsa) price index rose +0.8% m/m and +2.3% y/y, which was stronger than market expectations of +0.4% m/m and +1.8% y/y, which was an unwelcome development by the BOE on the inflation front. The Feb core output PPI price index eased to +1.3% y/y from +1.4% y/y in Jan but did not fall to +1.1% y/y as expected.
    The UK Feb CPI report of +0.7% m/m and +2.8% was in line with market expectations and was up from -0.5% m/m and +2.7% y/y in Jan. The Feb core CPI was unchanged from Jan at +2.3% y/y, stronger than market expectations of +2.2% y/y.
    Power has been mostly restored at Japan's troubled Fukushima nuclear power plant after a brief outage. A power outage of more than four days could have caused stored fuel rods at the plant to start overheating. There were no reported radiation leaks from today's power outage.

    U.S. STOCK PREVIEW
    Today's main focus will be on (1) the Eurozone debt crisis as the Cyprus parliament struggles to approve the depositor tax, and (2) the outcome of the 2-day FOMC meeting that begins today. Today's Feb U.S. housing starts report is expected to show a +2.8% increase to 915,000 units, recovering a bit after the -8.5% decline to 890,000 seen in January. Earnings report today include Factset Research (consensus $1.24), DSW (0.72), Adobe Systems (0.31), Cintas (0.62), and Williams-Sonoma (1.29).
    Conferences during the remainder of this week include 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 (ESM13 +0.11%) this morning are slightly lower by -0.25points (-0.02%). The stock market continues to see downward pressure from Europe with the -0.70% sell-off in the Euro Stoxx 50 index and the ongoing debacle with the tax on Cyprus bank depositors. The S&P 500 index on Monday closed with fairly sharp losses as the Eurozone debt crisis returned with the dangerous precedent set by Eurozone officials of forcing depositors to help pay for bailout packages. In addition, the strong Chinese property price report on Sunday night increased the chances for more hawkish Chinese government action on the property markets. Closes: S&P 500 -0.55%, Dow Jones -0.43%, Nasdaq -0.25%.

    OVERNIGHT U.S. STOCK MOVERS

    • DSW (DSW -0.83%) reported Q4 adjusted EPS of 69 cents, below the consensus of 72 cents.
    • FactSet (FDS -1.27%) reported Q2 adjusted EPS of $1.14, above the consensus of $1.11.
    • Electronic Arts (EA -0.90%) rallied 3% in after-hours trading after the company that it expects earnings and revenue in Q1 at the lower end or slightly below previous guidance of 57-72 cents (consensus 65 cents) and that the company's CEO John Riccitiello is leaving the company.
    • Fitch removed Equity Residential (EQR -0.89%) from rating watch negative and changed the outlook to stable.
    • Lululemon (LULU -3.77%) fell 6% in after-hours trading after the company cut its guidance for Q1 revenue to $333-$343 million from $350M-$355 million, versus the consensus of $353 million.
    • Hospitality Properties (HPT -0.11%) fell 4% in after-hours trading filing to sell 10 million shares of common stock.
    • Smith & Wesson (SWHC +1.74%) fileed a $250 million mixed securities shelf securities registration.

    MARKET COMMENTS
    June 10-year T-notes (ZNM13 +0.13%) this morning are up +6.5 ticks on continued safe-haven demand. June 10-year T-note prices on Monday continued to rally on the return of the Eurozone debt crisis and on the weaker-than-expected NAHB housing market index. Closes: TYM3 +10, FVM3 +3.75.
    The dollar index (DXY00 +0.02%) this morning is slightly higher by +0.03 points (+0.04%) and EUR/USD (^EURUSD) is slightly lower by -0.0012(-0.09%). USD/JPY (^USDJPY) is up +0.12 (+0.13%). The dollar index on Monday rallied sharply on increased safe-haven demand with the botched Cyprus bailout, which caused contagion to other nations and caused a sharp sell-off in global stocks. The Cyprus bailout, and the difficulty of getting the deposit tax passed by the Cyprus parliament caused a sharp sell-off in EUR/USD. Closes: Dollar index +0.43 (+0.53%), EUR/USD -0.0119(-0.91%), USD/JPY -0.07 (-0.07%).
    April WTI crude oil (CLJ13 +0.27%) this morning is up +0.09 (+0.10%) and April gasoline (RBJ13 -0.55%) is down -0.0254 (-0.81%). Crude oil and gasoline on Friday closed mixed on downward pressure from the sharp rally in the dollar index and concerns about fuel demand with the return of the Eurozone debt crisis. CLJ3 +0.29 (+0.31%), RBJ3 -0.0349 (-1.10%).

    GLOBAL EVENT CALENDAR03/19/2013

    US0830 ETFeb housing starts expected +2.8% to 915,000, Jan -8.5%to 890,000. Feb building permits expected +2.1% to 923,000, Jan -0.6% to 904,000.
     0900 ETFOMC begins 2-day policy meeting.
     1630 ETAPI weekly U.S. oil statistics.
     n/aU.S. Treasury Secretary Jack Lew begins 2-day visit to China.
    JPN0100 ETJapan final-Jan leading index CI, prelim 96.3. Final-Jan coincident index CI, prelim 92.0.
     0130 ETJapan Feb nationwide department store sales, Jan +0.2% y/y. Feb Tokyo department store sales, Jan +0.5% y/y.
     n/aHaruhiko Kuroda takes over as BOJ Governor from outgoing Masaaki Shirakawa.
    EUR0300 ETEU27 Feb new car registrations, Jan -8.7% y/y.
     0600 ETEurozone Jan construction output, Dec -1.7% m/m and-4.8% y/y.
     0600 ETEurozone March Zew economic sentiment index, Feb 42.4.
    GER0600 ETGerman March Zew current situation index expected 6.0, Feb 5.2. March Zew economic sentiment expected 48.1, Feb 48.2.
    UK0530 ETUK Feb PPI input nsa expected +1.5% m/m and +0.8% y/y, Jan +1.3% m/m and +1.8% y/y. UK Feb PPI output nsa expected +0.4% m/m and +1.8% y/y, Jan +0.2% m/m and +2.0% y/y. Feb PPI output core nsa expected +0.3% m/m and +1.1% y/y, Jan +0.2% m/m and +1.4% y/y.
     0530 ETUK Feb CPI expected +0.7% m/m and +2.8% y/y, Jan -0.5%m/m and +2.7% y/y. Feb core CPI expected +2.2% y/y, Jan +2.3% y/y.
     0530 ETFeb RPI expected +0.8% m/m and +3.3% y/y, Jan -0.4%m/m and +3.3% y/y. Feb RPI ex-mortgage interest payments expected +3.2% y/y, Jan +3.3% y/y.
     0530 ETUK Jan ONS house price index expected +2.4% y/y, Dec +3.3% y/y.

    U.S. STOCK CALENDAR03/19/2013

    Company NameSymbolTimeEvent DescriptionPeriodEPS Est (US$)
    FactSet Research Systems IncFDS USBef-mktQ2 2013 Earnings ReleaseQ2 20131.238
    DSW IncDSW US7:00Q4 2013 Earnings ReleaseQ4 20130.716
    DSW IncDSW US8:30Q4 2013 Earnings CallQ4 2013 
    FactSet Research Systems IncFDS US11:00Q2 2013 Earnings CallQ2 2013 
    Brocade Communications Systems IncBRCD US13:00Roadshow - IrvineY 2013 
    NVIDIA CorpNVDA US14:30Financial Analyst PresentationY 2013 
    Adobe Systems IncADBE US17:00Q1 2013 Earnings CallQ1 2013 
    Cintas CorpCTAS US17:00Q3 2013 Earnings CallQ3 2013 
    Williams-Sonoma IncWSM US17:00Q4 2013 Earnings CallQ4 2013 
    Adobe Systems IncADBE USAft-mktQ1 2013 Earnings ReleaseQ1 20130.311
    Cintas CorpCTAS USAft-mktQ3 2013 Earnings ReleaseQ3 20130.618
    Williams-Sonoma IncWSM USAft-mktQ4 2013 Earnings ReleaseQ4 20131.293
    Alliant Energy CorpLNT US Investor Meeting - ChicagoY 2013 
    RPM International IncRPM US Roadshow - Califonia Day 2Y 2013 
    United Parcel Service IncUPS US Roadshow - Day 2Y 2013 
          

    Stocks: DSW, FDS, EA, EQR, LULU, HPT, SWHC, BRCD, NVDA, ADBE, CTAS, WSM, LNT, RPM, UPS
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