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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 6/21 0 comments
    Jun 21, 2013 9:37 AM | about stocks: KMX, CAH, NEM, FB, DRI, FST, ENZ, NWSA, APOL, ICAD, TIBX, ORCL, STR, AWI

    BARCHART MORNING CALL

    Friday, June 21st, 2013>>View Older Reports

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    OVERNIGHT MARKETS AND NEWS
    September E-mini S&Ps (ESU13 +0.57%) this morning are up +0.77% and European stocks are up +0.63%. Asian stocks closed mostly lower: Japan +1.66%, Hong Kong -0.59%, China -0.18%, Taiwan -1.34%, Australia -0.41%, Singapore -0.28%, South Korea -1.54%, India +0.29%. U.S. and European stocks are recovering from this week's sell-off, while Chinese money-market rates fell back from records after the PBOC added funds to the banking system. Commodity prices are mostly higher. Aug WTI crude oil (CLQ13 +0.46%) is up +0.39%. Aug gasoline (RBQ13 +0.56%) is up +0.56%, Aug natural gas (NGQ13 +0.15%) is up +0.26%, Aug gold (GCQ13 +0.52%) is up +0.53% and July copper (HGN13 +0.38%) is up +0.44%. Agriculture prices are lower. The dollar index (DXY00 +0.03%) is down -0.07%. EUR/USD (^EURUSD) is down-0.05%. USD/JPY (^USDJPY) is up +0.38%. September 10-year T-note futures prices (ZNU13 -0.01%) this morning are up +2.5 ticks.
    St. Louis Fed President Bullard, who dissented in this week's FOMC decision to keep QE at present levels, said the Fed "inappropriately timed" its decision to lay out a plan to taper the pace of QE. Bullard said "a more prudent approach would be to wait for tangible signs the economy was strengthening and that inflation was on a path to return toward target before making such as announcement." He added that it was a mistake to make such an announcement the same day as the Fed marked down forecasts of economic growth and inflation for this year and that "policy action should be undertaken to meet policy objectives and not calendar objectives."
    The Eurozone May current account (sa) fell to a 19.5 billion euro surplus from a 25.9 billion euro surplus in April.
    UK May public sector net borrowing rose to 10.5 billion pounds from a revised 6.6 billion pounds in Apr, slower than expectations of 13.5 billion pounds.
    China's money-market rates tumbled from record highs after the PBOC injected funds into the banking system via reverse-repurchase agreements to alleviate a cash crunch. China's overnight repurchase rate dropped 442 bp to 8.43%, and the 7-day rate fell 227 bp to 8.50%. The PBOC had refrained from using open-market operations to add funds to the banking system since Feb in an attempt to regulate shadow banking and to direct more money toward growth rather than speculation.

    U.S. STOCK PREVIEW
    There are no economic reports today but the markets will continue to adjust to Fed Chairman Bernanke's announcement on Wednesday of the likely schedule for ending QE3. There are two of the Russell 1000 companies that report earnings today: Darden Restaurants (consensus $1.04), and CarMax (0.58). Equity conferences today include St. Petersburg International Economic Forum (SPIEF 2013) on Thu-Fri.

    OVERNIGHT U.S. STOCK MOVERS
    CarMax (KMX -6.11%) reported Q1 EPS of 64 cents, better than consensus of 58 cents.
    Cardinal Health (CAH -2.69%) was upgraded to "Outperform" from "Market Perform" at William Blair.
    Newmont Mining (NEM -6.74%) was downgraded to "Neutral" from "Buy" at UBS following a lowered gold price target at the firm.
    Facebook (FB -1.69%) was upgraded to "Buy" from "Neutral" at UBS who also raised their price target on the stock to $30 from $28.
    Darden Restaurants (DRI -2.64%) reported Q4 EPS of $1.02, weaker than consensus of $1.04.
    Forest Oil (FST -4.44%) will replace Enzo Biochem (ENZ -1.73%) in the S&P SmallCap 600 as of the June 28 close.
    News Corp. (NWSA -2.95%) will replace Apollo Group (APOL -0.75%) in the S&P 500 and Apollo Group will replace Forest Oil (FST -4.44%) in the S&P MidCap 400 as of the June 28 close.
    iCAD (ICAD -1.37%) announced approval by the U.S. Food and Drug Administration for use of the company's SecondLook mammography computer-aided detection system.
    TIBCO (TIBX -1.73%) reported Q2 adjusted EPS of 18 cents, right on consensus, and reported Q2 revenue of $245.8 million, slightly below consensus of $246.55 million.
    Oracle (ORCL -2.58%) slumped nearly 8% in after-hours trading after it reported Q4 adjusted EPS of 87 cents, right on consensus, and said Q4 adjusted revenue was $11.0 billion, slightly below consensus of $11.12 billion. Oracle also raised its quarterly dividend to 12 cents from 6 cents, announced a $12 billion share buyback program, and said it will list its stock on the NYSE.

    MARKET COMMENTS
    September E-mini S&Ps (ESU13 +0.57%) this morning are up +12.25 points (+0.77%). The S&P 500 index on Thursday slumped to 1-1/2-month low and closed lower. Bearish factors included (1) the surge in the 10-year T-note yield to a 1-3/4 year high of 2.47% on Fed Chairman Bernanke's timetable for ending QE3, and (2) concern about the Chinese economy after the China Jun HSBC flash manufacturing PMI fell to a 9-month low of 48.3 from 49.2 in May. Stocks ignored the rise in the Jun Philadelphia Fed manufacturing index to a 2-year high and the rise in May existing home sales to a 3-1/3 year high. Closes: S&P 500 -2.50%, Dow Jones -2.34%, Nasdaq 100 -2.34%.
    September 10-year T-notes (ZNU13 -0.01%) this morning are up +2.5 ticks. Sep 10-year T-note futures prices on Thursday plummeted to a contract low. The 10-year T-note yield catapulted up to a 1-3/4 year high of 2.47% on carry-over bearishness from Wednesday's comments from Fed Chairman Bernanke who said that the Fed will likely trim QE3 later this year. T-notes failed to garner much support from either the larger-than-expected increase in weekly jobless claims or the plunge in stocks. Closes: TYU3 -26.00, FVU3 -13.25.

    The dollar index (DXY00 +0.03%) this morning is down -0.054 (-0.07%). EUR/USD (^EURUSD) is down -0.0006 (-0.05%) and USD/JPY (^USDJPY) is up +0.37 (+0.38%). The dollar index on Thursday climbed to a 2-week high and closed higher. The dollar strengthened on (1) carry-over support from Wednesday's comments from Fed Chairman Bernanke who signaled the Fed is getting closer to reducing its dollar-negative QE3 program, and (2) stronger-than-expected May existing home sales and Jun Philadelphia Fed manufacturing reports. Closes: Dollar index +0.487 (+0.60%), EUR/USD -0.00754 (-0.57%), USD/JPY +0.832 (+0.86%).
    Aug WTI crude oil (CLQ13 +0.46%) this morning is up +37 cents (+0.39%) and Aug gasoline (RBQ13 +0.56%) is up +0.0155 (+0.56%). Aug crude oil and gasoline prices on Thursday fell to 1-week lows and closed sharply lower. Bearish factors include (1) dollar strength on expectations for the Fed to start reducing QE3, and (2) concerns about an economic slowdown in China after the China Jun HSBC flash manufacturing PMI fell to a 9-month low of 48.3. Closes: CLQ3 -3.34 (-3.39%), RBQ3 -0.0999 (-3.46%).

    GLOBAL EVENT CALENDAR06/21/2013

    US1500 ETMay Cattle on Feed.
     1500 ETMay Cold Storage.
    EUR0400 ETEurozone Apr current account, Mar 24.8 billion euros and 25.9 billion euros (sa).
    UK0430 ETUK May public sector net borrowing expected +13.5 billion pounds, Apr +8.0 billion pounds.

    U.S. STOCK CALENDAR06/21/2013

    Company NameSymbolTimeEvent DescriptionPeriodEPS Est (US$)
    Darden Restaurants IncDRI USBef-mktQ4 2013 Earnings ReleaseQ4 20131.04
    CarMax IncKMX USBef-mktQ1 2014 Earnings ReleaseQ1 20140.582
    Darden Restaurants IncDRI US8:30Q4 2013 Earnings CallQ4 2013 
    CarMax IncKMX US9:00Q1 2014 Earnings CallQ1 2014 
    Walt Disney Co/TheDIS US U.S. Box Office Release of Movie Monsters University""  
    Questar CorpSTR US Roadshow - Europe - Day 5Y 2013 
    Armstrong World Industries IncAWI US Annua

    Stocks: KMX, CAH, NEM, FB, DRI, FST, ENZ, NWSA, APOL, ICAD, TIBX, ORCL, STR, AWI
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