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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 4/5 0 comments
    Apr 5, 2013 2:24 PM | about stocks: FB, BA, MED, CVC, CHTR, TWC, WDAY, FFIV, XRTX, WDFC, SABA, ABCO, LVS, BHI, CCF, AVID, CNH, NYX

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    OVERNIGHT MARKETS AND NEWS
    June E-mini S&Ps (ESM13 -0.60%) this morning are moderately lower by -0.51% as the market fears a weak U.S. payroll report today after the ADP report of +158,000 earlier this week and yesterday's +28,000 rise in initial unemployment claims suggested the labor market might be weakening. In addition, European stocks are down -1.40% this morning on a weak Eurozone retail sales report. Hong Kong stocks fell by -2.73%on fears about bird flu. Japan's Nikkei index today closed +1.58% on support from the BOJ's announcement on Thursday of a massive expansion of its QE program. Most other Asian stock markets fell today: Australia -0.45, Singapore -0.24%, South Korea -1.67%, India -0.32%, Turkey-0.54%. The mainland Chinese stock market was closed today for a holiday. Commodity prices are mildly lower this morning by -0.11%. May crude oil (CLK13 -0.33%) is down -0.40%, May gasoline (RBK13 +0.08%) is down -0.02%, June gold (GCM13 +0.12%) is up +0.12%, May copper (HGK13 -0.16%) is down -0.12%, and agriculture prices are trading mostly lower. The dollar index (DXY00 +0.05%) is slightly higher by +0.10% and EUR/USD (^EURUSD) is down -0.12%. USD/JPY (^USDJPY) is down -0.08% on some long liquidation pressure after yesterday's surge on the BOJ's QE program. June 10-year T-note prices (ZNM13 +0.01%) this morning are up 1 tick.
    Fed Vice Chairman Yellen said that reducing the jobless rate should take center stage for the Fed even if the inflation rate creeps slightly above 2%.
    The Chinese bird flu situation is getting worse as 6 people have now died and Shanghai began slaughtering chickens at a local market. However, the good news is that there has been no evidence as yet of human-to-human transmission of the virus. The bird flu outbreak hurt Hong Kong stocks today and has pushed soybean prices lower since feed demand will be reduced if there is a massive slaughter of birds. Airline stocks have also been hurt as the bird flu outbreak could hurt global air travel.
    There is no news as yet out of today's meeting in Kazakhstan between Iran and the world powers on Iran's nuclear program. The two sides remain far apart even though Iran's negotiator said that a "turning point" had been reached after the last meeting on Feb 27. Iran will hold presidential elections in June.
    Japan's Feb coincident index rose by +0.5 to 92.1 from 91.6 in Jan, which was stronger than market expectations for a +0.3 point increase to 91.9. The Feb leading index rose by +2.5 points to 97.5 from 95.0 in Jan and was stronger than market expectations for a 2.3 point increase to 97.3.
    The Eurozone Feb retail sales report of -0.3% m/m was slightly stronger than market expectations of -0.4% m/m, although Jan was revised lower to +0.9% m/m from +1.2% m/m. On a year-on-year basis, Feb retail sales strengthened to -1.4% y/y from a revised -1.9% y/y in Jan (prelim-1.9% y/y).
    German Feb factory orders rose by +2.3% m/m, which was stronger than market expectations of +1.1% and more than reversed the revised-1.6% m/m drop seen in Jan.

    U.S. STOCK PREVIEW
    The market has been expecting today's U.S. March unemployment report to be relatively strong with payroll growth of +195,000 and an unchanged unemployment rate from Feb's 4-year low of 7.7%. However, Wednesday's March ADP employment report of +158,000 was substantially weaker than market expectations of +200,000. Today's Feb U.S. trade deficit is expected to widen slightly -$44.6 billion from -$44.4 billion in January. There are no stocks in the Russell 1000 that are due to report earnings today. However, Q1 earnings season unofficially begins on Monday with Q1 earnings from Alcoa. Conferences today include the China Business Conference 2013 in NY, and the Women in the World Summit 2013.

    June E-mini S&Ps (ESM13 -0.60%) this morning are down -8.00 points (-0.51%) on fears about a weak payroll report this morning and on weak overseas stocks. The S&P 500 index on Thursday closed slightly higher. Stocks received a boost after the BOJ expanded its QE program to 7 trillion yen ($74 billion) per month, higher than market expectations of 5.2 trillion yen. Stocks fell back from their best levels when weekly initial jobless claims climbed +28,000 to a 4-1/4 month high of 385,000, higher than expectations of +4,000 of 353,000. Stocks were also undercut after European equities slid when ECB President Draghi said that "downside risks" to growth remain. Closes: S&P 500 +0.40%, Dow Jones +0.38%, Nasdaq 100 -0.01%.

    OVERNIGHT U.S. STOCK MOVERS

    • Facebook (FB +3.12%) was upgraded to Buy from Hold at Argus due to expectations that Facebook Home will help Facebook in the mobile market.
    • Boeing (BA +0.70%) may schedule a certification test flight for the 787 Dreamliner Friday with a 'revamped' battery system, according to a report by Reuters.
    • Medifast (MED +1.02%) announced the company has paid off the remaining value of its outstanding long term notes and is now completely debt free.
    • Cablevision (CVC +0.77%) was initiated with a "Neutral" at RW Baird with a target price of $16 a share.
    • Charter (CHTR +2.22%) was initiated with a "Neutral" at RW Baird with a target price of $108 a share.
    • Time Warner Cable (TWC +0.88%) was initiated with a "Neutral" at RW Baird with a target price of $102 a share.
    • Workday (WDAY -0.80%) was initiated with a "Buy" at Jefferies with a target price of $76 a share.
    • F5 Networks (FFIV -0.11%) tumbled 15% in after-hours trading after it lowered its guidance on Q2 EPS to $1.06-$1.07, lower than consensus of $1.23, citing a slowdown in North America.
    • Xyratex (XRTX +1.74%) reported a Q1 non-GAAP EPS loss of -13 cents, better than consensus of -18 cents.
    • WD-40 (WDFC +1.83%) reported Q2 EPS of 66 cents, better than consensus of 56 cents, and raised its guidance for fiscal year 2013 to $2.32 to $2.42, higher than consensus of $2.37.

    MARKET COMMENTS
    June 10-year T-notes (ZNM13 +0.01%) this morning are up 1 tick. June 10-year T-note prices on Thursday closed higher as the 10-year T-note yield fell to a 3-month low of 1.754%. Expectations for a weak March payrolls report on Friday boosted T-note prices when weekly jobless claims rose more than expected to a 4-1/4 month high. T-note prices also received support from the BOJ's QE program and comments from ECB President Draghi that "downside risks" to growth remain. Closes: TYM3 +14.0, FVM3 +5.0.
    The forex market is little changed this morning after yesterday's gyrations on the BOJ's QE announcement. The dollar index (DXY00 +0.05%) this morning is up +0.10%, EUR/USD (^EURUSD) is down -0.0015 (-0.12%), and USD/JPY (^USDJPY) is down -0.08 (-0.08%). The dollar index on Thursday posted an 8-month high but fell back and settled little changed. EUR/USD posted a 4-1/4 month low when ECB President Draghi said economic risks for the Eurozone remain to the downside and that inflation is "edging down well below" the ECB's 2% target, but prices recovered and closed higher. USD/JPY surged to a 3-week high as the yen plunged when the BOJ expanded its QE program to 7 trillion yen ($74 billion), higher than market expectations of 5.2 trillion yen. Closes: Dollar index -0.041 (-0.05%), EUR/USD +0.0086 (+0.67%), USD/JPY +3.297(+3.54%).
    May WTI crude oil (CLK13 -0.33%) is down -0.37 (-0.40%) and May gasoline (RBK13 +0.08%) is down -0.0007 (-0.02%). Crude oil and gasoline tumbled on Thursday for a third day. Bearish factors included (1) the rally in the dollar index to an 8-month high, (2) the rise in weekly U.S. jobless claims to their highest level in 4-1/4 months, and (3) comments from ECB President Draghi who said that the economic outlook for the Eurozone remains subject to "downside risks." Closes: CLK3 -1.06 (-1.12%), RBK3 -0.0153 (-0.53%).

    GLOBAL EVENT CALENDAR04/05/2013

    US0830 ETFeb U.S. trade deficit expected -$44.6 bln, Jan -$44.4 bln.
     0830 ETMarch payrolls expected +195,000, Feb +236,000. March private payrolls expected +200,000, Feb +246,000. March mfg payrolls expected +10,000, Feb +14,000. March unemployment rate expected unch at 7.7%, Feb was -0.2 to 7.7%.
     0830 ETMarch average hourly earnings expected +0.2% m/m and +2.0% y/y, Feb +0.2% m/m and +2.1% y/y. March average weekly hours expected unch at 34.5, Feb 34.5.
     1500 ETFeb consumer credit expected +$15.0 bln, Jan +$16.151 bln.
     n/aIran and world powers hold another round of nuclear talks in Kazakhstan.
    JPN0100 ETJapan Feb coincident index CI expected 91.9, Jan 91.6. Feb leading index CI expected 97.3, Jan 95.0.
     0100 ETBOJ April monthly report.
    EUR0500 ETEurozone Feb retail sales expected -0.4% m/m and -1.2% y/y, Jan +1.2% m/m and -1.3% y/y.
    GER0600 ETGerman Feb factory orders expected +1.1% m/m and -1.5% y/y, Jan -2.5% m/m and -2.5% y/y.
    UKn/aUK March new car registrations, Feb +7.9% y/y.
    CHn/aChinese markets are closed for a public holiday.

    U.S. STOCK CALENDAR04/05/2013

    Company NameSymbolTimeEvent DescriptionPeriodEPS Est (US$)
    Saba Software IncSABA US9:00Business Update Call  
    Advisory Board Co/TheABCO US10:30Advisory Board Conference Call sponsored by Avondale Partners  
    Las Vegas Sands CorpLVS US12:00Retrial Begins in Las Vegas Sands vs. Richard Suen Case  
    Baker Hughes IncBHI US March 2013 Sales and Revenue Release - Rig Counts2013 
    Chase CorpCCF US Q2 2013 Earnings ReleaseQ2 20130.21
    Avid Technology IncAVID US Q4 2012 Earnings ReleaseQ4 20120.12
    CNH Global NVCNH US Annual General MeetingY 2013 
    NYSE EuronextNYX US March 2013 Sales and Revenue Release - Trading Volumes2013

    Stocks: FB, BA, MED, CVC, CHTR, TWC, WDAY, FFIV, XRTX, WDFC, SABA, ABCO, LVS, BHI, CCF, AVID, CNH, NYX
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