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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's Morning Call/  0 comments
    Apr 8, 2013 10:25 AM | about stocks: GE, LUFK, AZZ, ISBC, TM, T, ASML, M, C, OTTR, ANGO, AA, SHLM, MG, WSBF

    BARCHART MORNING CALL

    Monday, April 8th, 2013>>View Older Reports

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    OVERNIGHT MARKETS AND NEWS
    June E-mini S&Ps (ESM13 +0.37%) this morning are trading mildly higher by +0.29% on a +0.66% rally in the Euro Stoxx 50 index and on a stronger-than-expected German industrial production report. Japan's Nikkei index today closed +2.80% and posted a new 4-1/2 year high as the market continues to see strength after the BOJ last week launched its very aggressive QE program. Other Asian stock markets today are trading mostly lower with the Hong Kong Hang Seng down -0.04%, China's CSI 300 down -0.45%, and Taiwan's TAIEX index down -2.39%. Commodity prices are up +0.54% this morning. May crude oil is up +0.94%, May gasoline is up +1.40%, June gold is up +0.04%, May copper is up +1.29%, and grains and softs are trading higher across the board. The dollar index this morning is slightly higher by +0.09%. EUR/USD is up +0.27% and USD/JPY is up +1.12% as the yen continues to see weakness on the BOJ's new QE program. June 10-year T-notes (ZNM13-0.13%) are trading slightly lower by -3 ticks.
    North Korea as early as this week may conduct another underground nuclear weapon test and carry another missile test, according to South Korean officials based on observations of preparations on the ground. North Korea said operations at the joint North-South business park at Gaeseong are being suspended indefinitely and that North Korean workers are being withdrawn from the zone. There are still 475 South Koreans in the zone. The South Korean markets continue to react modestly to the recent threats from North Korea, which are generally considered to be for domestic consumption. South Korea said it has still not seen any unusual troop movements in North Korea. The South Korean won today closed down -0.8% and the South Korean Kospi 200 stock index fell -0.15% to add to last week's decline of -3%.
    Portugal's government needs to find a new way to cut its budget after Portugal's Constitutional Court on Friday blocked part of the government's austerity measures, such as cuts to holiday bonuses for pensioners and public servants and reductions in sickness leave and unemployment benefits. The price of Portuguese credit default swaps today rose by 33 bp to a 3-month high of 429 bp.
    German Feb industrial production rose by +0.5% m/m, which was stronger than market expectations of +0.3%. On a year-on-year basis, Feb industrial production was down -1.8% y/y. The market consensus is that German GDP returned to growth in Q1 after a -0.6% q/q decline in Q4. On a year-on-year basis, German Q1 GDP is expected at +0.2% y/y after the +0.4% y/y increase seen in Q4.
    Japan's Feb adjusted current account of -100 million was narrower than expectations of -62 billion yen but was worse than the surplus of 365 billion yen seen in Jan. Japan's Feb trade balance of -677 billion was close to market expectations and was better than the -1.479 trillion yen deficit seen in Jan.
    Japan's March Eco Watchers current index improved to 57.3 from 53.2 in Feb, but the outlook index fell slightly by -0.2 points to 57.5 from 57.7 in Feb.
    The Eurozone April Sentix investor confidence index fell to -17.3 from -10.6 in March and was weaker than market expectations of -12.8.
    Copper is up +1.3% this morning after miners in Chile said that will announce a nationwide strike today.

    U.S. STOCK PREVIEW
    The market this week will focus on the U.S. economic data in the wake of last Friday's weak payroll report of +88,000 and the unofficial beginning of Q1 earnings season today with Alcoa's release of its Q1 earnings report. This week's U.S. economic calendar is relatively light with key reports including Wednesday's March 19-20 FOMC meeting and Friday's March retail sales report (expected unch m/m) and PPI (expected-0.2% m/m). There are numerous speaking engagements by Fed officials this week. The Treasury this week will sell $66 billion in 3-year, 10-year and 30-year securities.
    Conferences this week include Merrill Lynch Online Gaming Symposium on Tue, CESCO 2013 - XII World Copper Conference on Tue-Wed, RBC Capital Markets Iron Ore Conference on Wed, and Bio-IT World Conference & Expo 2013 on Wed-Thu.

    June E-mini S&Ps this morning are up 4.50 points (+0.29%) on the +0.66% rally in the Euro Stoxx 50 index this morning and on the stronger-than-expected German industrial production report. The S&P 500 index on Friday tumbled to a 2-week low and finished lower on concern that economic growth is slowing after Mar non-farm payrolls rose +88,000, less than half market expectations of +190,000 and the smallest increase in 9 months. Stocks failed to garner much support from an unexpected -0.1 point drop in the Mar unemployment rate to a 4-year low of 7.6% after discouraged job seekers quit looking for work as seen in the labor force participation rate that fell to 63.3%, the lowest since May 1979. Closes: S&P 500 -0.43%, Dow Jones -0.28%, Nasdaq 100 -0.83%.

    OVERNIGHT U.S. STOCK MOVERS

    • GE (GE -0.65%) announced today that it will buy Lufkin Industries (NASDAQ:LUFK) for $88.50 per share, which is a 38% premium to last Friday's close, which equates to about $38 billion. Lufkin Industries manufactures industrial gears and provides artificial lift technololgies for the oil and gas industry.
    • AZZ Inc (AZZ +0.09%) reported Q4 ex-items EPS at 50 cents, slightly above the consensus of 48 cents.
    • Investors Bancorp (ISBC unch), the holding company for Investors Bank, and Gateway Community Financial, the mid-tier holding company for GCF Bank, jointly announced the signing of a definitive merger agreement.
    • Toyota Motor Sales, U.S.A (TM +0.82%) announced that it has reached an agreement with the Orange County District Attorney in California to resolve civil claims brought in March 2010 related to the recall of certain Toyota vehicles in 2009 and 2010.
    • AT&T (T +0.29%) announced that employees represented by the Communications Workers of America have voted to ratify a four-year contract with AT&T Mobility. The contract covers more than 20,000 AT&T Mobility employees in 36 states and the District of Columbia.
    • ASML Holding NV (ASML +0.95%) and Cymer (CYMI +0.60%) announced that the Antitrust Division of the United States Department of Justice has cleared the previously announced merger between Cymer and affiliates of ASML.

    MARKET COMMENTS
    June 10-year T-notes (ZNM13 -0.13%) this morning are down -3 ticks on reduced safe-haven demand with the rally in U.S. and European stock indexes. June 10-year T-note prices soared on Friday as the 10-year T-note yield fell to a 3-3/4 month low of 1.679%. The main bullish factor was the weaker-than-expected Mar payroll report (+88,000 vs. expectations of +190,000), which will keep the Fed's QE program in place after last month's FOMC statement said the Fed will keep buying bonds until there's "substantial improvement" in the labor market. Closes: TYM3 +10.0, FVM3 +1.75.
    The dollar index (DXY00 +0.01%) this morning is slightly higher by +0.07 points (+0.09%). EUR/USD is up +0.0035 (+0.27%) on the stronger-than-expected German industrial production and has shaken off the adverse ruling by Portugal's Constitutional Court. USD/JPY is up +1.09 yen (+1.12%). The dollar index on Friday fell to a 1-1/2 week low and closed lower as the weak Mar payrolls report bolstered the prospects of the Fed maintaining its dollar-negative QE3 program. EUR/USD posted a 1-1/2 week high after German Feb factory orders rose +2.3% m/m, stronger than expectations of +1.1% m/m, although EUR/USD gave up its gains and closed little changed. USD/JPY surged to a 3-1/2 year high as the BOJ's aggressive QE program continued to punish the yen. Closes: Dollar index -0.181 (-0.22%), EUR/USD -0.0013 (-0.10%), USD/JPY +1.23 (+1.27%).
    May WTI crude oil (CLK13 +0.99%) this morning is up +0.87 (+0.94%) and May gasoline is up +0.0401 (+1.40%) on some short-covering after recent losses. In addition, Nigeria's main rebel group launched an attack in Nigeria's oil-producing region that killed 15 security personnel. Oil prices were also boosted as nuclear talks with Iran ended on Saturday with no progress and with no agreement for a date on a new round of talks. Crude oil and gasoline prices closed lower on Friday with May crude posting a 2-week low. The main bearish factor was the weaker-than-expected Mar non-farm payrolls report, which raised concern that economic growth won't be strong enough to support energy demand. Supportive factors for crude oil included the weaker dollar and the stronger-than-expected German Feb factory orders report. Closes: CLK3 -0.76(-0.81%), RBK3 -0.0351 (-1.21%).

    GLOBAL EVENT CALENDAR04/08/2013

    US 0530 ET U.S. Treasury Secretary Jack Lew meets with ECB President Draghi and European Council President Van Rompuy.
      0830 ET Cleveland Fed President Sandra Pianalto speaks in West Palm Beach, FL on "The Federal Reserve's Role in Supporting the U.S. Economy" at the International Economic Forum of the Americas.
      1100 ET USDA weekly grain export inspections.
      1600 ET USDA Crop Progress.
      1915 ET Fed Chairman Ben Bernanke delivers keynote address entitled "Maintaining Financial Stability: Holding a Tiger by the Tail" to the Atlanta Fed's 2013 Financial Markets Conference.
    JPN 0030 ET Japan March bankruptcies, Feb -11.8% y/y.
      0100 ET Japan March Eco watchers current index, Feb 53.2. March Eco watchers outlook index, Feb 57.7.
    EUR 0430 ET Eurozone Apr Sentix investor confidence expected -12.8, Mar -10.6.
    GER 0600 ET German Feb industrial production expected +0.3% m/m and -0.9% y/y, Jan unch m/m and -1.3% y/y.
    UK 1901 ET UK March BRC sales like-for-like expected +1.0% y/y, Feb +2.7% y/y.
      1901 ET UK March RICS house price balance expected -5%, Feb -6%.
    CH 2130 ET China March CPI expected +2.5% y/y, Feb +3.2% y/y.
      2130 ET China March PPI expected -1.8% y/y, Feb -1.6% y/y.

    U.S. STOCK CALENDAR04/08/2013

    Company Name Symbol Time Event Description Period EPS Est (US$)
    AZZ Inc AZZ US Bef-mkt Q4 2013 Earnings Release Q4 2013 0.487
    Macy's Inc M US 9:30 Macy's vs JcPenney Notification Deadline on the Settlement Outcome    
    Citigroup Inc C US 10:00 Citigroup Class Action Lawsuit: Settlement Approval    
    AZZ Inc AZZ US 11:00 Q4 2013 Earnings Call Q4 2013  
    Otter Tail Corp OTTR US 11:00 Annual General Meeting Y 2013  
    Investors Bancorp Inc ISBC US 11:00 Investors Bancorp, Inc. and Gateway Community Financial Corporation Merger Call    
    AngioDynamics Inc ANGO US 16:30 Q3 2013 Earnings Call Q3 2013  
    Alcoa Inc AA US 17:00 Q1 2013 Earnings Call Q1 2013  
    Alcoa Inc AA US Aft-mkt Q1 2013 Earnings Release Q1 2013 0.08
    A Schulman Inc SHLM US Aft-mkt Q2 2013 Earnings Release Q2 2013 0.395
    AngioDynamics Inc ANGO US Aft-mkt Q3 2013 Earnings Release Q3 2013 0.046
    Mistras Group Inc MG US Aft-mkt Q3 2013 Earnings Release Q3 2013 0.173
    Waterstone Financial Inc WSBF US   Q4 2012 Earnings Release Q4 2012
    Stocks: GE, LUFK, AZZ, ISBC, TM, T, ASML, M, C, OTTR, ANGO, AA, SHLM, MG, WSBF
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