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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 6/25 0 comments
    Jun 25, 2013 10:25 AM | about stocks: NFLX, WBA, LEN, MRVL, A, HPQ, DMD, SONC, CCL, RHT, YHOO, GME, CSCO, APOL, S, WMT

    BARCHART MORNING CALL

    Tuesday, June 25th, 2013>>View Older Reports

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    OVERNIGHT MARKETS AND NEWS
    September E-mini S&Ps (ESU13 +0.62%) this morning are up +0.40% and European stocks are up +1.01%. Asian stocks closed mostly lower: Japan -0.72%, Hong Kong +0.21%, China -0.27%, Taiwan -1.22%, Australia -0.28%, Singapore +0.51%, South Korea -0.74%, India +0.48%. U.S. and European stocks gained on dovish comments from ECB Executive Board member Coeure and a drop in Chinese money-market rates. European and U.S. stocks and government bonds rallied after ECB Executive Board member Coeure said the ECB will not withdraw stimulus anytime soon. China's Shanghai Stock index recovered from its worst levels when the China overnight repurchase rate dropped -47 bp to 6.0% after Ling Tao, deputy director of the PBOC's Shanghai branch, said that China will keep money-market rates at "reasonable" levels and seasonal forces that have driven them up will fade. Commodity prices are mostly higher. Aug WTI crude oil (CLQ13 +0.47%) is up +0.80%. Aug gasoline (RBQ13 +0.49%) is up +0.71%, Aug natural gas (NGQ13 +0.05%) is up +0.19%, Aug gold (GCQ13 +0.57%) is up +0.48% and July copper (HGN13 +1.26%) is up +1.09%. Agriculture prices are higher. The dollar index (DXY00 -0.18%) is down -0.13%. EUR/USD (^EURUSD) is up +0.09%. USD/JPY (^USDJPY) is down -0.36%. September 10-year T-note futures prices (ZNU13 +0.27%) this morning are up +7.5 ticks.
    ECB Executive Board member Coeure said "Economic growth is projected to remain weak this year and inflation is expected to remain clearly below 2% for the Eurozone as a whole," so "there should be no doubts that our 'exit' is distant and monetary policy is and will remain accommodative."
    Italian borrowing costs rose as the Italian Treasury sold 3.5 billion euros of a new 2015 zero-coupon bond at 2.403%, the highest in 9-months and up from 1.113% at a previous auction of similar-maturity debt last month.
    The UK May CBI retail sales volume survey rose to 1 from -11 in May and was stronger than expectations of -3.
    The Japan May corporate service price index rose +0.3% y/y, its biggest increase in 4-1/2 years.

    U.S. STOCK PREVIEW
    Today's is a very busy news day. Today's May new home sales report is expected to show a +1.3% increase to 460,000, adding to the +2.3% increase to 454,000 seen in April. Today's home price reports are both expected to show sharp gains. The April CaseShiller Composite-20 home price index is expected to show an increase of +1.2% m/m after the +1.1% gain seen in March. The April FHFA house price index is expected to show an increase of +1.1% m/m, adding to the +1.3% m/m increase seen in March. Today's June U.S. consumer confidence index from the Conference Board is expected to show a small -1.2 point decline to 75.0, reversing part of the sharp +7.2 point increase to the 5-1/4 year high of 76.2 seen in May. Today's May durable goods orders report is expected to show an increase of +3.0% on a headline basis, but is only expected to be unchanged excluding transportation. The Treasury today will sell $35 billion in 2-year T-notes, kicking off this week's $99 billion package of 2-year, 5-year and 7-year T-notes.
    There are four of the Russell 1000 companies that report earnings today: Carnival (consensus $0.07), Lennar (+0.33), Walgreen (0.91), Apollo Group (0.86). Conferences during the remainder of this week include: Mobile Commerce World on Mon-Tue, Mobile Pharma BizTech 2013 on Tue-Wed, 11th Product Complaints Congress for the Life Sciences on Tue-Wed, Global Hunter Securities Energy Conference on Tue-Wed, Oppenheimer Consumer Conference on Tue-Wed, Credit Suisse MLP and Energy Logistics Conference on Wed, and The UK Energy Summit 2013 on Thu.

    OVERNIGHT U.S. STOCK MOVERS
    Oppenheimer reduced its estimates for Apple's (AAPL -2.65%) June quarter based on "mixed demand" for Apple's iPhone 5.
    Netflix (NFLX -0.60%) was downgraded to "Underperform" from "Market Perform" at Bernstein.
    Walgreen (WAG -1.35%) reported Q3 adjusted EPS of 85 cents, well below consensus of 91 cents.
    Lennar (LEN -0.74%) reported Q2 EPS of 43 cents, better than consensus of 31 cents.
    Marvell (MRVL -1.61%) was upgraded to "Buy" from Hold at Brean Capital.
    Agilent (A -1.56%) was downgraded to "Neutral" from "Buy" at Goldman.
    Hewlett Packard (HPQ -2.98%) was awarded a $679.79 million modification to a previously awarded continuity of services contract for the Navy Marine Corps Intranet.
    Demand Media (DMD -1.68%) acquired Society6 for $94 million in cash and common stock.
    Sonic (SONC -0.77%) fell 4% in after-hours trading after it reported Q3 EPS of 26 cents, right on consensus, although Q3 revenue of $146.6 million was slightly below consensus of $147.54 million.

    MARKET COMMENTS
    September E-mini S&Ps (ESU13 +0.62%) this morning are up +6.25 points (+0.40%). The S&P 500 index on Monday plunged to a 2-month low and closed lower. Concern the Fed will soon taper its stimulus sent the 10-year T-note yield up to a 1-3/4 year high of 2.66% and undercut stocks along with the action by Goldman Sachs to cut its 2013 China GDP forecast to 7.4% from 7.8%. Prices recovered from their worst levels after Minneapolis Fed President Kocherlakota said the Fed should continue its asset purchases as long as inflation remains low. Closes: S&P 500 -1.21%, Dow Jones -0.94%, Nasdaq 100 -1.03%.
    September 10-year T-notes (ZNU13 +0.27%) this morning are up +7.5 ticks. Sep 10-year T-note futures prices on Monday tumbled to a fresh contract low. The 10-year T-note yield surged to a 1-3/4 year high of 2.66% on speculation the Fed will soon reduce its bond buying. Prices rose from their worst levels on dovish comments from Minneapolis Fed President Kocherlakota who said the Fed should continue its asset purchases as long as inflation remains low. Closes: TYU3 -10.00, FVU3 -5.25.

    The dollar index (DXY00 -0.18%) this morning is down -0.104 (-0.13%). EUR/USD (^EURUSD) is up +0.0012 (+0.09%) and USD/JPY (^USDJPY) is down -0.35 (-0.36%). The dollar index on Monday climbed to a 2-week high and closed higher as a slump in global stocks fueled safe-haven demand for the dollar. Another bullish factor was the rise in the 10-year T-note yield to a 1-3/4 year high of 2.66%, which fuels dollar demand as foreign investors purchase dollars to buy Treasuries. Closes: Dollar index +0.107 (+0.13%), EUR/USD -0.00041 (-0.03%), USD/JPY -0.163(-0.17%).
    Aug WTI crude oil (CLQ13 +0.47%) this morning is up +76 cents a barrel (+0.80%) and Aug gasoline (RBQ13 +0.49%) is up +1.94 cents per gallon(+0.71%). Aug crude oil and gasoline prices on Monday settled mixed. Aug crude posted a 2-week low and Aug gasoline fell to a 1-1/2 month low after the dollar rallied on expectations for Fed tapering of QE3 by year-end and on Chinese economic growth concerns after Goldman Sachs cut its 2013 China GDP forecast to 7.4% from 7.8%. Crude oil erased its losses and closed higher, though, on supply concerns after three pipelines in Canada, the biggest source of U.S. crude imports, were closed because of flooding. Closes: CLQ3 +1.49 (+1.59%), RBQ3-0.0196 (-0.71%).

    GLOBAL EVENT CALENDAR06/25/2013

    US0830 ETMay durable goods orders expected +3.0% and unch ex transportation, Apr +3.5% and +1.5% ex transportation.
     0900 ETApr S&P/CaseShiller composite-20 home price index expected +1.20% m/m and +10.60% y/y, Mar +1.12% m/m and +10.87% y/y.
     0900 ETApr FHFA house price index purchase-only expected +1.1% m/m, Mar +1.3% m/m.
     1000 ETJun Richmond Fed manufacturing index expected +4 to 2, May +4 to -2.
     1000 ETJun consumer confidence (Conference Board) expected -1.2 to 75.0, May +7.2 to 76.2.
     1000 ETMay new home sales expected +1.3% to 460,000, Apr +2.3% to 454,000.
     1300 ETTreasury auctions $35 billion 2-year T-notes.
     1630 ETAPI weekly U.S. oil statistics.

    U.S. STOCK CALENDAR06/25/2013

    Company NameSymbolTimeEvent DescriptionPeriodEPS Est (US$)
    Carnival CorpCCL USBef-mktQ2 2013 Earnings ReleaseQ2 20130.065
    Lennar CorpLEN US6:00Q2 2013 Earnings ReleaseQ2 20130.329
    Walgreen CoWAG US7:30Q3 2013 Earnings ReleaseQ3 20130.906
    Walgreen CoWAG US8:30Q3 2013 Earnings CallQ3 2013 
    Red Hat IncRHT US8:50Analyst MeetingY 2013 
    Carnival CorpCCL US10:00Q2 2013 Earnings CallQ2 2013 
    Lennar CorpLEN US11:00Q2 2013 Earnings CallQ2 2013 
    Yahoo! IncYHOO US11:00Annual General MeetingY 2013 
    GameStop CorpGME US14:00Annual General MeetingY 2013 
    Cisco Systems IncCSCO US15:30Investor Day - Day 1Y 2013 
    Apollo Group IncAPOL US17:00Q3 2013 Earnings CallQ3 2013 
    Apollo Group IncAPOL USAft-mktQ3 2013 Earnings ReleaseQ3 20130.857
    Sprint Nextel CorpS US Extraordinary Shareholders Meeting2013 
    Wal-Mart Stores IncWMT US Investor Meeting - Day 1Y 2013

    Stocks: NFLX, WBA, LEN, MRVL, A, HPQ, DMD, SONC, CCL, RHT, YHOO, GME, CSCO, APOL, S, WMT
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