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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 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 5/3 0 comments
    May 3, 2013 3:07 PM | about stocks: NEWP, MCO, REGN, ADP, CBOE, BBRY, PBCT, WTW, GMCR, COF, TDC, DOLE, FLR, FBHS, ATHN, CBI, MHK, GILD, LNKD, KHC, NWL, POM, HST, SE, DUK, FAST, AIG, DNB, PNW, PBI, GHC, THC, AA, D, BRK.A, R, DIS, WBA, LUK

    BARCHART MORNING CALL

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    OVERNIGHT MARKETS AND NEWS
    June E-mini S&Ps (ESM13 -0.09%) this morning are down -0.08% ahead of this morning's U.S. April non-farm payrolls report. European stocks are up +0.03% as Eurozone government bond yields tumble. Spain's 10-year bond yield fell as low as 3.94%, a 3-year low, while Italy's 10-year yield declined to as low as 3.68%, the lowest in 7 years amid speculation the ECB will take further steps to stimulate growth. Eurozone bond yields climbed from their lowest levels today after ECB Governing Council member Nowotny told reporters in Bratislava that ECB President Draghi's comments yesterday were "over-interpreted" by financial markets. Asian stocks closed mixed: Japan closed for holiday, Hong Kong +0.10%, China +1.77%, Taiwan +0.08%, Australia -0.01%, Singapore -0.95%, South Korea +0.43%, India -0.81%. Commodity prices are mostly higher. June WTI crude oil (CLM13 +0.40%) is up +0.51%, June gasoline (RBM13 +0.13%) is up +0.25%, June natural gas (NGM13 -0.02%) is down -0.77%, June gold (GCM13 +0.84%) is up +0.96%, July copper (HGN13 +4.20%) is up +4.12%. Agriculture prices are stronger. The dollar index (DXY00 -0.31%) is down -0.29%. EUR/USD (^EURUSD) is up +0.38% on hawkish comments from ECB Governing Council member Nowotny. USD/JPY (^USDJPY) is up +0.12%. June 10-year T-note futures prices (ZNM13 -0.02%) are down -1.5 ticks.
    ECB Governing Council member Nowotny told reporters in Bratislava today that ECB President Draghi's comments yesterday were "over-interpreted" by financial markets and that policy makers have no plans to cut the deposit rate below zero.
    The European Commission cut its 2013 Eurozone GDP forecast to a contraction of -0.4% y/y from a Feb prediction of -0.3% y/y. This follows a-0.6% y/y contraction in 2012 and will be the first ever back-to-back years of negative output for the Eurozone. The EU report predicts 2013 Eurozone unemployment will climb to a record 12.3% from 11.4% in 2012 and that an "increasing labor-market mismatch" will keep the jobless rate high in the medium term and bodes poorly for those who have been out of work for extended periods.
    The Eurozone Mar PPI fell -0.2% m/m, right on expectations, and rose +0.7% y/y, slightly more than expectations of +0.6% y/y.
    The UK Apr PMI services unexpectedly expanded +0.5 of a point to an 8-month high of 52.9, stronger than expectations of no change at 52.4.
    The China Apr non-manufacturing PMI fell -1.1 points to 54.5 from 55.6 in Mar.
    India's central bank cut interest rates for the third straight meeting today after the RBI lowered the repurchase rate by -25 bp to 7.25% from 7.50%.

    U.S. STOCK PREVIEW
    Today's April payroll report is expected to improve to +148,000 from the poor report of +88,000 seen in March. Today's April unemployment rate is expected to be unchanged from March's 4-year low of 7.6%. Today's Apr ISM non-manufacturing index is expected to show a -0.4 point decline to 54.0, adding to the -1.6 point decline to 54.4 seen in March. Today's March factory orders report is expected to show a decline of-3.0% m/m, exactly offsetting the +3.0% increase seen in February. There are 13 of the S&P 500 companies that will report earnings today. Notable reports include Moody's Corp, Duke Energy, ADP, and Berkshire Hathaway.

    OVERNIGHT U.S. STOCK MOVERS
    Newell Rubbermaid (NEW) reported Q1 EPS of 35 cents, better than consebsus of 32 cents.
    Moody's (MCO -0.41%) reported Q1 EPS of 97 cents, higher than consensus of 87 cents.
    Regeneron Pharmaceuticals (REGN +4.78%) reported Q1 EPS of $1.78, stronger than consensus of $1.46.
    Automatic Data Processing (ADP +0.85%) reported Q3 EPS of 99 cents, slightly higher than consensus of 98 cents.
    CBOE Holdings (CBOE +0.56%) reported Q1 adjusted EPS of 50 cents, higher than consensus of 47 cents.
    BlackBerry (BBRY -0.63%) announced that the U.S. Department of Defense has approved BlackBerry 10 smartphones and BlackBerry PlayBook tablets with BlackBerry Enterprise Service 10 to be used on Department of Defense networks.
    Pilgrim's Pride (PPC +1.75%) reported Q1 EPS of 21 cents, slightly better than consensus of 20 cents.
    Weight Watchers (WTW -0.17%) reported Q1 EPS of 87 cents, well ahead of consensus of 62 cents.
    Green Mountain Coffee Roasters (GMCR +0.46%) announced that its Keurig K150 Series Commercial Brewing System has been certified by the National Sanitation Foundation for foodservice use.
    Capital One (COF +1.45%) raiseed its quarterly dividend 20% from 25 cents to 30 cents per share.
    Teradata (TDC +3.35%) fell over 9% in after-hours trading after it reported Q1 EPS of 43 cents, weaker than consensus of 53 cents, and said it sees fiscal 2013 EPS at the lower end of its $3.05-$3.20 range, consensus is $3.08.
    Dole Food (DOLE +2.39%) reported Q1 EPS of 12 cents, lower than consensus of 14 cents.
    Fluor (FLR +2.32%) reported Q1 EPS of $1.02, better than consensus of 96 cents.
    Fortune Brands (FBHS +3.23%) reported Q1 adjusted EPS of 24 cents, much better than consensus of 16 cents, and raised guidance on fiscal 2013 EPS ex-items to $1.23-$1.33, higher than consensus of $1.23.
    Athenahealth (ATHN -0.90%) fell over 5% in after-hours trading after it lowered its guidance on fiscal 2013 to an EPS of $1.05-$1.15, weaker than consensus of $1.22.
    Chicago Bridge & Iron (CBI +2.56%) reported Q1 EPS of 82 cents, ahead of consensus of 74 cents.
    Mohawk (MHK +0.35%) reported Q1 EPS ex-charges of 87 cents, better than consensus of 85 cents, and raised guidance on Q2 EPS to $158-$1.67, stronger than consensus of $1.56.
    Gilead (GILD +4.07%) reported Q1 EPS of 48 cents, weaker than consensus of 50 cents.
    LinkedIn (LNKD +3.52%) plunged over 10% in after-hours trading after it reported Q1 adjusted EPS of 45 cents, better than consensus of 31 cents, but lowered guidance on Q2 revenue to $342-$347 million, below consensus of $359.24 million.
    Kraft Foods (KRFT -1.06%) reported Q1 EPS of 76 cents, well ahead of consensus of 64 cents.

    MARKET COMMENTS
    June E-mini S&Ps (ESM13 -0.09%) this morning are down -1.25 points (-0.08%). The S&P 500 index on Thursday posted a new record high and closed higher after weekly U.S. jobless claims fell to a 5-1/4 year low and after the ECB cut its benchmark interest rate to a record low and hinted at additional stimulus measures. U.S. weekly initial unemployment claims fell -18,000 to a 5-1/4 year low of 324,000, while the ECB said they "will remain accommodative for as long as needed." Another bullish factor was the U.S. Mar trade deficit that narrowed to -$38.8 billion, better than expectations of -$42.3 billion, which should lead to an upward revision of Q1 GDP. Closes: S&P 500 +0.94%, Dow Jones +0.89%, Nasdaq 100 +1.32%.
    June 10-year T-notes (ZNM13 -0.02%) this morning are down -1.5 ticks ahead of this morning's monthly payroll report. June 10-year T-note futures prices on Thursday settled slightly higher. Supportive factors included the action by the ECB to cut its benchmark rate to a record low with hints of additional stimulus measures, and trepidation ahead of Friday's monthly U.S. payrolls report. Bearish factors included stock market strength and the unexpected fall in weekly U.S. jobless claims to a 5-1/4 year low. Closes: TYM3 +1.0, FVM3 +0.75.
    The dollar index (DXY00 -0.31%) this morning is down -0.238 (-0.29%). EUR/USD (^EURUSD) is up +0.0050 (+0.38%) after ECB Governing Council member Nowotny said markets "over-interpreted" ECB President Draghi's comments Thursday that the ECB would consider a deposit rate below zero. USD/JPY (^USDJPY) is up +0.12 (+0.12%). The dollar index on Thursday closed higher after EUR/USD tumbled when ECB President Draghi hinted at additional stimulus measures from the ECB. Following the ECB meeting, in which the central bank cut its refinancing rate 25 bp as expected to a record low 0.50%, ECB President Draghi said policy makers had an open mind on a negative deposit rate and may start to charge banks to hold their excess reserves overnight at the ECB. Closes: Dollar index +0.751 (+0.92%), EUR/USD -0.01142 (-0.87%), USD/JPY +0.545 (+0.56%).
    June WTI crude oil (CLM13 +0.40%) this morning is up 48 cents a barrel (+0.51%) and June gasoline (RBM13 +0.13%) is up +0.0069 (+0.25%). June crude oil and gasoline on Thursday settled sharply higher. The main bullish factors were the action by the ECB to cut interest rates to a record low along with hints of further stimulus and after U.S. weekly jobless claims unexpectedly tumbled to a 5-1/4 year low. Closes: CLM3 +2.96 (+3.25%), RBM3 +0.0532 (+1.96%).

    GLOBAL EVENT CALENDAR05/03/2013

    US 0830 ET Apr non-farm payrolls expected +148,000, Mar +88,000. Apr private payrolls expected +160,000, Mar +95,000. Apr mfg payrolls expected +5,000, Mar -3,000. Apr unemployment rate expected unch at 7.6%. Mar -0.1 to 7.6%.
      0830 ET Apr avg hourly earnings expected +0.2% m/m and +1.9% y/y, Mar unch m/m and +1.8% y/y. Apr avg weekly hours expected unch at 34.6, Mar +0.1 to 34.6.
      1000 ET Mar factory orders expected -3.0%, Feb +3.0%.
      1000 ET Apr ISM non-manufacturing index expected -0.4 to 54.0, Mar -1.6 to 54.4.
      1230 ET Fed Governor Daniel Tarullo speaks on "Evaluating Progress in Regulatory Reforms to Promote Financial Stability" at a conference in Washington D.C.
      1245 ET Richmond Fed President Jeffrey Lacker speaks on the economic outlook at a meeting of the Risk Management Association of Richmond.
    UK 0430 ET UK Apr PMI services expected -0.1 to 52.3, Mar 52.4.
    EUR 0500 ET Eurozone Mar PPI expected -0.2% m/m and +0.6% y/y, Feb +0.2% m/m and +1.3% y/y.
      0500 ET European Commission releases economic growth forecasts.

    U.S. STOCK CALENDAR05/03/2013

    Company Name Symbol Time Event Description Period EPS Est (US$)
    Newell Rubbermaid Inc NWL US Bef-mkt Q1 2013 Earnings Release Q1 2013 0.315
    Moody's Corp MCO US Bef-mkt Q1 2013 Earnings Release Q1 2013 0.874
    Pepco Holdings Inc POM US Bef-mkt Q1 2013 Earnings Release Q1 2013 0.237
    Host Hotels & Resorts Inc HST US 6:00 Q1 2013 Earnings Release Q1 2013 0.234
    Regeneron Pharmaceuticals Inc REGN US 6:30 Q1 2013 Earnings Release Q1 2013 1.459
    Spectra Energy Corp SE US 6:30 Q1 2013 Earnings Release Q1 2013 0.481
    Duke Energy Corp DUK US 7:00 Q1 2013 Earnings Release Q1 2013 1.033
    Fastenal Co FAST US 7:00 April 2013 Sales and Revenue Release 2013  
    Automatic Data Processing Inc ADP US 7:30 Q3 2013 Earnings Release Q3 2013 0.982
    American International Group Inc AIG US 8:00 Q1 2013 Earnings Call Q1 2013  
    Dun & Bradstreet Corp/The DNB US 8:00 Q1 2013 Earnings Call Q1 2013  
    Pinnacle West Capital Corp PNW US 8:00 Q1 2013 Earnings Release Q1 2013 0.105
    Pitney Bowes Inc PBI US 8:00 Investor Meeting Y 2013  
    Newell Rubbermaid Inc NWL US 8:30 Q1 2013 Earnings Call Q1 2013  
    Automatic Data Processing Inc ADP US 8:30 Q3 2013 Earnings Call Q3 2013  
    Regeneron Pharmaceuticals Inc REGN US 8:30 Q1 2013 Earnings Call Q1 2013  
    Washington Post Co/The WPO US 8:30 Q1 2013 Earnings Release Q1 2013  
    Tenet Healthcare Corp THC US 9:00 Annual General Meeting    
    Spectra Energy Corp SE US 9:00 Q1 2013 Earnings Call Q1 2013  
    Alcoa Inc AA US 9:30 Annual General Meeting Y 2013  
    Dominion Resources Inc/VA D US 9:30 Annual General Meeting Y 2013  
    Berkshire Hathaway Inc BRK/A US Aft-mkt Q1 2013 Earnings Release Q1 2013 1995.5
    Ryder System Inc R US   Annual General Meeting Y 2013  
    Walt Disney Co/The DIS US   U.S. Box Office Release of Movie Iron Man 3""    
    Walgreen Co WAG US   April 2013 Sales and Revenue Release 2013  
    Leucadia National Corp LUK US   Q1 2013 Earnings Release
    Stocks: NEWP, MCO, REGN, ADP, CBOE, BBRY, PBCT, WTW, GMCR, COF, TDC, DOLE, FLR, FBHS, ATHN, CBI, MHK, GILD, LNKD, KHC, NWL, POM, HST, SE, DUK, FAST, AIG, DNB, PNW, PBI, GHC, THC, AA, D, BRK.A, R, DIS, WBA, LUK
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