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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 3/27 0 comments
    Mar 27, 2013 11:53 AM | about stocks: GOOG, LDOS, LGF, LNDC, ADC, PSMI, FTI, GAS, PAYX, RHT, PVH, FCEL

    BARCHART MORNING CALL 3/27

    Wednesday, March 27th, 2013>>View Older Reports

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    OVERNIGHT MARKETS AND NEWS
    June E-mini S&Ps (ESM13 -0.47%) are down by -0.35% on a sharp -1.20% sell-off in the Euro Stoxx 50 index tied to increased Italian political uncertainty and a larger-than-expected drop in Eurozone confidence. Asian stocks today closed mostly higher with the Nikkei index up +0.18%, the Hang Seng up +0.69%, and China's CSI 300 index up +0.33%. Commodity prices are mildly lower by -0.19%. May crude oil (CLK13 -0.48%) is down -0.44%, May gasoline (RBK13 unch) is up +0.08%, April gold (GCJ13 -0.15%) is down -0.26%, May copper (HGK13 -0.38%) is down-0.32%, and agriculture prices are mostly higher. The dollar index (DXY00 +0.39%) is up +0.33% this morning on increased safe-haven demand while EUR/USD (^EURUSD) is down -0.50% on increased Italian political uncertainty and the weak Eurozone confidence index. USD/JPY (^USDJPY) is down -0.14%. June T-note prices (ZNM13 +0.30%) are up +12.5 ticks.
    The March Eurozone economic confidence index from the European Commission fell by -1.1 points to 90.0 from 91.1 in Feb and was weaker than market expectations for a -0.6 point drop to 90.5. The index posted a 10-month high of 91.1 in Feb but then fell back in March as the Eurozone recession continued and as Cyprus emerged as a major problem. Separately, the March Eurozone business climate index fell to -0.86from -0.73 and was weaker than market expectations of -0.79. The March Eurozone services confidence index was unchanged from Feb at -23.5, which was line with market expectations.
    The Italian 10-year bond yield today rose sharply by 15 bp to 4.72% after Democratic Party leader Bersani said there is no possibility of a broad coalition to resolve the political deadlock caused by the muddled Feb 24-25 general election. Another election may be necessary, which would likely result in the Euroskeptic Five Star Movement party gaining more votes. The Spanish bond yield today rose by 9 bp to 5.02%. Meanwhile, the German 10-year bund yield fell by 4 bp to 1.31% on increased safe-haven demand.
    Italy today sold 6.91 billion euros of 5 and 10-year bonds, close to the maximum target of 7 billion euros, but the auctions were on the weak side.
    Germany's Feb import price index of +0.3% m/m and -1.6% was close to market expectations and compared with the Jan report of +0.1% m/m and -0.8% y/y.
    The German April GfK consumer confidence index of 5.9 was unchanged from March and was in line with market expectations. The index has been moving basically sideways over the past year and is just mildly below the 5-year high of 6.1 posted in Oct 2012.
    The UK current account deficit of -14.0 billion pounds was wider than market expectations of -12.5 billion pounds but was slightly narrower than-15.1 billion pounds in Q3.
    The UK final Q4 GDP report was left unrevised at -0.3% q/q but was revised slightly lower on a year-on-year basis to +0.2% from +0.3%.

    U.S. STOCK PREVIEW
    Today's U.S. Feb pending homes sales report is expected to show a small decline of -0.4% m/m after the +4.5% m/m increase seen in Jan to the 2-2/3 year high of 105.9. Otherwise, the U.S. stock market will be watching European after today's sharp sell-off in European stocks and the rise in Italian bond yields on increased Italian political uncertainty. There are earnings reports today from Paychex (consensus $0.39), PVH Corp (1.50%), Forest City Enterprises (0.27%), and Red Hat (0.30).
    Conferences during the remainder of this week include: Bank of America Merrill Lynch New York Auto Summit on Wednesday, CIBC Retail & Consumer Conference on Thursday, and Photon's 8th Solar Electric Utility Conference on Thursday.

    June E-mini S&Ps (ESM13 -0.47%) this morning are down 5.50 points (-0.35%) on this morning's -1.20% sell-off in the Euro Stoxx 50 index. The S&P 500 index on Tuesday closed with a solid gain on optimism about the U.S. economy and the end of the Cyprus crisis, although most of Tuesday's U.S. economic reports were a bit weaker than expected. Closes: S&P 500 +0.78%, Dow Jones +0.77%, Nasdaq 100 +0.61%.

    OVERNIGHT U.S. STOCK MOVERS

    • Google's (GOOG +0.34%) price target was raised to $982 from $847 by Credit Suisse (Outperform reiterated) on Google's Enhanced Campaigns update, which Credit Suisse believes will increase advertisers' spending.
    • SAIC (SAI -0.54%) rallied 4% in after-hours trading after reporting Q4 EPS of 54 cents, above the consensus of 52 cents.
    • Lions Gate (LGF +2.67%) rallied 1% in after-hours trading after announcing a 50/50 partnership with CBS (CBS +0.64%) on TVGN and TVGuide.com.
    • Landec (LNDC +1.83%) fell 6% in after-hours trading after reporting disappointing earnings.
    • AdCare (ADC -1.14%) fell 7% after announcing that it is postponing its Q4 earnings release.
    • Peregine Semiconductor (PSMI +1.84%) filed a new patent infringement lawsuit against RF Micro Devices (RFMD +6.92%).
    • FMC Technologies (FTI +1.94%) announced a new subsea operations services agreement with Statoil (STO +0.58%).

    MARKET COMMENTS
    June 10-year T-notes (ZNM13 +0.30%) are up +12.5 ticks on increased safe-haven demand with the increased worries about Italy's political situation. June 10-year T-note prices on Tuesday closed mildly higher on the generally weaker-than-expected U.S. economic data such as the-8.3 point drop in U.S. consumer confidence. T-notes were able to shake off the weak 2-year T-note auction results. Closes: TYM3 +4, FVM3 +2.5.
    The dollar index (DXY00 +0.39%) this morning is up +0.28 points (+0.33%) on increased safe-haven demand with the sell-off in U.S. and European stocks. EUR/USD (^EURUSD) is down -0.0064 (-0.50%) on increased Italian political uncertainty. USD/JPY (^USDJPY) is down -0.13yen (-0.14%). The dollar index and EUR/USD on Tuesday closed little changed. The dollar was able to hold its ground despite reduced safe-haven demand with Sunday's Cyprus bailout and with the weaker-than-expected U.S. economic data. Closes: Dollar index +0.05 (+0.06%), EUR/USD +0.0008 (+0.06%), USD/JPY +0.27 (+0.29%).
    May WTI crude oil (CLK13 -0.48%) this morning is down -0.42 (-0.44%) while May gasoline (RBK13 unch) is up +0.0026 (+0.08%). Crude oil and gasoline prices on Tuesday closed higher on carry-over from the rally in the U.S. stock market and on bullish API inventory report for gasoline and distillates. Closes: CLK3 +1.53 (+1.61%), RBK3 +0.0483 (+1.58%).

    GLOBAL EVENT CALENDAR03/27/2013

    US 0700 ET Weekly MBA mortgage applications, previous -7.1% with purchase sub-index -3.9% and refi sub-index -8.0%.
      1000 ET Feb pending homes sales expected -0.4% m/m and +8.7% y/y, Jan +4.5% m/m and +10.4% y/y.
      1030 ET DOE Weekly Petroleum Status Report.
      1130 ET Boston Fed President Eric Rosengren speaks on the economic outlook at the New Hampshire Institute of Politics and Political Library at Saint Anselm's College.
      1215 ET Cleveland Fed President Sandra Pianalto speaks on "Managing Information, Uncertainty and Risks in Monetary Policy" to CFA Society Cleveland luncheon.
      1300 ET Treasury sells $35 billion in 5-year T-notes.
      1300 ET Minneapolis Fed President Narayana Kocherlakota speaks on "Improving the Outlook with Better Monetary Policy" in Edina, Minnesota, at Bloomington, Edina, and Richmond Chambers of Commerce.
    JPN 1950 ET Japan Feb retail trade expected +0.8% m/m and -1.3% y/y, Jan +2.3% m/m and -1.1% y/y. Feb large retailer sales expected-1.5% y/y, Jan -3.5% y/y.
    UK 0530 ET UK Q4 current account expected -12.5 bln pounds, Q3 -12.8 bln pounds.
      0530 ET UK final Q4 expected unrevised from prelim -0.3% q/q and +0.3% y/y.
      2001 ET UK March Gfk consumer confidence survey expected -27, Feb -26.
    GER 0300 ET German Feb import price index expected +0.2% m/m and -1.6% y/y, Jan +0.1% m/m and -0.8% y/y.
      0300 ET German Apr GfK consumer confidence survey expected 5.9, March 5.9.
    EUR 0600 ET Eurozone March CPI, Feb +1.8% y/y.
      0600 ET Eurozone March economic confidence expected 90.5, Feb 91.1. Mar business climate indicator expected -0.79, Feb -0.73. Mar industrial confidence expected -12.0, Feb -11.2. Mar services confidence index expected -6.5, Feb -5.4.
    CH 2130 ET China Feb industrial profits, Jan 5.3% year-to-date y/y.

    U.S. STOCK CALENDAR03/27/2013

    Company Name Symbol Time Event Description Period EPS Est (US$)
    AGL Resources Inc GAS US 8:30 Analyst Day Y 2013  
    Paychex Inc PAYX US 16:01 Q3 2013 Earnings Release Q3 2013 0.39
    Red Hat Inc RHT US 17:00 Q4 2013 Earnings Call Q4 2013  
    PVH Corp PVH US Aft-mkt Q4 2013 Earnings Release Q4 2013 1.497
    Forest City Enterprises Inc FCE/A US Aft-mkt Q4 2013 Earnings Release Q4 2013 0.27
    Red Hat Inc RHT US Aft-mkt Q4 2013 Earnings Release Q4 2013 0.299
    Public Service Enterprise Group Inc PEG US   Investor Meeting - Columbus Y 2013
    Stocks: GOOG, LDOS, LGF, LNDC, ADC, PSMI, FTI, GAS, PAYX, RHT, PVH, FCEL
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