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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 Moring Call 7/22 0 comments
    Jul 22, 2013 2:21 PM | about stocks: KMB, HAL, FB, AAPL, HAS, DKS, GCI, NVR, RPM, LII, MCD, SIX, BOH, NFLX, TXN, WRB, ZION, CR, HXL, IEX

    BARCHART MORNING CALL

    Monday, July 22nd, 2013>>View Older Reports

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    OVERNIGHT MARKETS AND NEWS
    Sep E-mini S&Ps (ESU13 +0.03%) are trading slightly higher on continued optimism about earnings and on today's sharp 40 bp drop in Portugal's 10-year bond yield in a favorable development for the Eurozone debt crisis. The Euro Stoxx 50 index this morning is up +0.24%. Asian stocks today closed higher nearly across the board on support from last Friday's news that China is liberalizing bank deposit rates and Sunday's news that Japanese Prime Minister Abe's party won a decisive victory in Sunday's upper house elections: Japan Nikkei +0.47%, Hong Kong Hang Seng +0.25%, China CSI 300 index +0.53%, Taiwan +0.54%, Australia +0.60%, Singapore +0.66%, South Korea +0.48%, India +0.05%, and Turkey -0.12%. Commodity prices are higher by +0.44% this morning on improved global economic optimism. Sep WTI crude oil (CLU13+0.31%) is up +0.49%, Sep gasoline (RBU13 -0.40%) is up +0.03%, metals are higher (Aug gold (GCQ13 +1.86%) +1.83%, Sep copper (HGU13 +1.08%) +1.08%), and grains and softs are mixed. The dollar index (DXY00 -0.29%) is down -0.36% on reduced safe-haven demand and EUR/USD (^EURUSD) is up +0.30% on positive Portuguese political news. USD/JPY (^USDJPY) is down -0.71% with JPY seeing strength on the strong LDP victory in Sunday's upper house elections. Sep 10-year T-note prices (ZNU13 +0.10%) are up +4 ticks.
    There was good political news in Portugal after Portugal's President Anibal Cavaco Silva in a speech on Sunday night ruled out early elections and said that, "The government has the support of an unequivocal majority in parliament." Portuguese 10-year bond yields fell sharply by 40 bp to 6.40% today, extending the sharp 3-session decline to about 80 bp. The government headed by Prime Minister Pedro Passos Coelho will now have the power to stick to Portugal's bailout plan.
    Japanese Prime Minister Abe won a sweeping victory in Sunday's elections in the upper house of parliament, which gives him a strong grip on the government to continue to execute his stimulus program. The victory was in line with market expectations.
    The statement from the 2-day G-20 meeting of finance ministers and central bank chiefs that concluded on Saturday contained little surprising news. The statement said that G-20 countries will pursue "carefully calibrated and clearly communicated" policy moves, which was a clear shot to the Fed after the recent surge in U.S. Treasury yields after Mr. Bernanke in mid-June laid out the Fed's plans for ending QE3. Emerging markets were hit with some serious collateral damage from the surge in U.S. Treasury yields, which caused them to urge Fed Chairman Bernanke to be more careful in discussing the end of QE3. The rest of the industrialize world also generally saw higher yields as well caused by the surge in U.S. Treasury yields.
    Japan June supermarket sales rose +2.7% y/y, which was a substantial improvement from May's -1.2% y/y. Japan June convenience store sales rose +0.1% y/y, up from -1.2% y/y in May.

    U.S. STOCK PREVIEW
    This will be a busy week with a raft of U.S. economic reports, the peak Q2 earnings week, and the Treasury's auction of $99 billion in 2-year, 5-year and 7-year T-notes. The markets will also be looking ahead to next week's FOMC meeting (July 30-31) in which there is at least a small chance that the Fed might decide to start tapering QE3. Today's June existing home sales report is expected to show an increase of +1.4% to 5.25 million, adding to the +4.2% increase to 5.18 million seen in May. There are 8 of the S&P 500 companies that report earnings today: Gannett (consensus $0.58), Hasbro (0.34), Halliburton (0.72), Kimberly Clark (1.39), McDonalds (1.40), Netflix (0.40), Texas Instruments (0.41), Zions Bancorporation (0.41). Conferences this week include: Bio/Pharma Forcasting and Modeling on Tuesday, Fortune Brainstorm TECH 2013 on Tuesday, China Venture Capital & Private Equity Forum on Wed/Thu.
    Sep E-mini (ESU13 +0.03%) S&Ps this morning are trading slightly higher by +0.75 points (+0.04%) on (1) general optimism about earnings going into this peak Q2 earnings week, and (2) this morning's sharp 40 bp drop in the Portugal 10-year bond yield on confirmation there will be no early elections that could threaten Portugal's bailout plan. The U.S. stock market on Friday closed mixed. Stocks had opened lower after technology stocks fell when Google and Microsoft reported disappointing Q2 earnings results, but stocks recovered, except for the Nasdaq, after China announced it had removed the floor on lending rates, which may boost bank lending and growth in China that may benefit the global economy. Closes: S&P 500 +0.16%, Dow Jones -0.03%, Nasdaq 100 -1.07%.

    OVERNIGHT U.S. STOCK MOVERS

    • Kimberly Clark (KMB +0.59%) reported Q2 adjusted EPS this morning of $1.41, slightly above the consensus of $1.39. The company also said it will realign cost structure and streamline European manufacturing.
    • Halliburton (HAL +2.44%) reported Q2 EPS of 73 cents, 1 cent above the consensus of 72 cents.
    • Facebook (FB -1.15%) will create a streamlined social network for simple phones, according to the NY Times.
    • Apple (AAPL -1.58%) said its developers website was taken down because of a hacking attack.
    • Hasbro (HAS -2.37%) reported Q2 adjusted EPS of 29 cents, below the consensus of 34 cents.
    • Dick's Sporting (DKS -0.55%) was upgraded to Overweight from Equal Weight at Morgan Stanley.

    MARKET COMMENTS
    Sep 10-year T-notes (ZNU13 +0.10%) this morning are up 4 ticks. Sep 10-year T-note prices on Friday closed higher on carry-over support from Wednesday's and Thursday's comments from Fed Chairman Bernanke that a reduction in Fed bond buying wasn't imminent. A recovery in stocks limited gains in Treasuries. Closes: TYU3 +11.00, FVU3 +5.25.
    The dollar index (DXY00 -0.29%) this morning is down -0.29 points (-0.36%) on reduced safe-haven demand with the general strength in global stocks today. EUR/USD (^EURUSD) is up +0.00039 (+0.30%) on Portugal's positive political news. USD/JPY (^USDJPY) is down -0.71 yen (-0.71%) with the yen seeing strength after Prime Minister Abe's LDP party won a decisive victory in upper house elections on Sunday. The dollar index on Friday closed lower on negative carry-over from Fed Chairman Bernanke's comments Thursday that it was "way too early to make any judgment" as to whether the Fed will start to taper its bond purchases. Another negative for the dollar was the recovery in stocks, which reduced the dollar's safe-haven demand. Closes: Dollar index -0.176 (-0.21%), EUR/USD +0.00303 (+0.23%), USD/JPY +0.205 (+0.20%).
    Sep WTI (CLU13 +0.31%) crude oil this morning is up +0.53 (+0.49%) and Sep gasoline (RBU13 -0.40%) is up +0.0008 (+0.03%) on general economic optimism today. Crude oil and gasoline prices on Friday closed higher with crude prices rising to a 16-month high and gasoline prices climbing to a 4-month high. Bullish factors include (1) the action by the PBOC to remove the floor for lending rates in China, which may boost bank lending and economic growth, and (2) strength in gasoline on supply concerns after the Philadelphia Energy Solutions refinery and Canada's Irving Oil refinery were shut for repairs, which may limit gasoline supplies on the U.S. East Coast. Closes: CLU3 +0.06 (+0.06%), RBU3 +0.0132 (+0.43%).

    GLOBAL EVENT CALENDAR07/22/2013

    US0830 ETJun Chicago Fed national activity index, May -0.30.
     1000 ETJun existing home sales expected +1.4% to 5.25 million, May +4.2% to 5.18 million.
     1100 ETUSDA weekly grain export inspections.
     1500 ETUSDA Jun Cold Storage.
     1600 ETUSDA Crop Progress.

    U.S. STOCK CALENDAR07/22/2013

    Company NameSymbolTimeEvent DescriptionPeriodEPS Est (US$)
    Gannett Co IncGCI USBef-mktQ2 2013 Earnings ReleaseQ2 20130.584
    Halliburton CoHAL USBef-mktQ2 2013 Earnings ReleaseQ2 20130.721
    Kimberly-Clark CorpKMB USBef-mktQ2 2013 Earnings ReleaseQ2 20131.389
    Hasbro IncHAS USBef-mktQ2 2013 Earnings ReleaseQ2 20130.343
    NVR IncNVR USBef-mktQ2 2013 Earnings ReleaseQ2 201311.962
    RPM International IncRPM USBef-mktQ4 2013 Earnings ReleaseQ4 20130.669
    Lennox International IncLII USBef-mktQ2 2013 Earnings ReleaseQ2 20131.191
    McDonald's CorpMCD US7:58Q2 2013 Earnings ReleaseQ2 20131.404
    Six Flags Entertainment CorpSIX US8:00Q2 2013 Earnings ReleaseQ2 20130.742
    Hasbro IncHAS US8:30Q2 2013 Earnings CallQ2 2013 
    Halliburton CoHAL US9:00Q2 2013 Earnings CallQ2 2013 
    Six Flags Entertainment CorpSIX US9:00Q2 2013 Earnings CallQ2 2013 
    Lennox International IncLII US9:30Q2 2013 Earnings CallQ2 2013 
    Gannett Co IncGCI US10:00Q2 2013 Earnings CallQ2 2013 
    Kimberly-Clark CorpKMB US10:00Q2 2013 Earnings CallQ2 2013 
    RPM International IncRPM US10:00Q4 2013 Earnings CallQ4 2013 
    McDonald's CorpMCD US11:00Q2 2013 Earnings CallQ2 2013 
    Bank of Hawaii CorpBOH US14:00Q2 2013 Earnings CallQ2 2013 
    Netflix IncNFLX US16:05Q2 2013 Earnings ReleaseQ2 20130.396
    Texas Instruments IncTXN US16:30Q2 2013 Earnings ReleaseQ2 20130.412
    WR Berkley CorpWRB US17:00Q2 2013 Earnings CallQ2 2013 
    Texas Instruments IncTXN US17:30Q2 2013 Earnings CallQ2 2013 
    Zions BancorporationZION US17:30Q2 2013 Earnings CallQ2 2013 
    Netflix IncNFLX US18:00Q2 2013 Earnings CallQ2 2013 
    Crane CoCR USAft-mktQ2 2013 Earnings ReleaseQ2 20131.036
    Hexcel CorpHXL USAft-mktQ2 2013 Earnings ReleaseQ2 20130.468
    IDEX CorpIEX USAft-mktQ2 2013 Earnings ReleaseQ2 20130.742
    WR Berkley CorpWRB USAft-mktQ2 2013 Earnings ReleaseQ2 20130.677
    Zions BancorporationZION USAft-mktQ2 2013 Earnings ReleaseQ2 20130.414
    Bank of Hawaii CorpBOH US Q2 2013 Earnings ReleaseQ2 20130.83

    Stocks: KMB, HAL, FB, AAPL, HAS, DKS, GCI, NVR, RPM, LII, MCD, SIX, BOH, NFLX, TXN, WRB, ZION, CR, HXL, IEX
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