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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 7/22 0 comments
    Jul 23, 2013 1:25 PM | about stocks: APD, DD, TRV, UTX, SIAL, FRX, LMT, MO, RF, WHTGF, PNR, TXN, CSE, NFLX, VLO, R, BTUUQ, PCAR, ITW, AVY, RHI, TSS, ALTR, NSC, T, AVGO, BCR, EA, AAPL, JNPR, IGT, DFS, ACE, NBR, FTI, LLTC, PEG, ABBV

    BARCHART MORNING CALL

    Tuesday, July 23rd, 2013>>View Older Reports

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    OVERNIGHT MARKETS AND NEWS
    Sep E-mini S&Ps (ESU13 +0.19%) are trading mildly higher by +0.22% with support from a +0.51% rally in European stocks and increased optimism that China's government provide stimulus if the Chinese economy starts slipping. Asian stocks closed higher across the board: Japan Nikkei index +0.82%, Hong Kong +2.33, China CSI 300 index +2.89%, Taiwan +1.35%, Australia +0.30%, Singapore +0.60%, South Korea +1.42%, India +0.71%, Turkey +0.96%. Commodity prices are down by -0.29% this morning due to the slightly higher trade in the dollar index. Sep WTI crude (CLU13 -0.60%) is down -0.78%, Sep gasoline (RBU13 -0.51%) is down -0.56%, Sep natural gas (NGU13 +0.05%) is up +0.49%, Aug gold (GCQ13 -0.60%) is down -0.63%, Sep copper (HGU13 -0.33%) is down -0.28%, and agriculture prices are mixed. The dollar index (DXY00 +0.15%) is up +0.13%, EUR/USD (^EURUSD) is down -0.09%, and USD/JPY (^USDJPY) is up +0.31%. Sep 10-year T-note prices (ZNU13 -0.23%) are down 7.5 ticks.
    Chinese Premier Li Keqiang said that 7% is the "bottom line" GDP growth rate that the Chinese government will tolerate, according to a report by Beijing News. Chinese Q2 GDP was recently reported at +7.5% and the consensus is for growth near that level through the remainder of this year and into next year. However, the markets have been afraid that the government may not take action even if GDP growth starts to fade below 7.0% since the government is currently focused on trying to curb strong home prices and the shadow banking system. Finance Minister Lou Jiwei caused a stir on July 11 when he said that GDP growth as low as 6.5% might be tolerable in the future although he later adjusted his remarks to say that China can achieve this year's target growth rate of 7.5%.
    President Obama on Wednesday will deliver a speech on the economy and jobs at Knox College in Galesburg, IL. Mr. Obama in a series of speeches starting tomorrow will attempt to shift Washington's focus back to jobs and trying to put pressure on Republicans to compromise on a debt ceiling hike later this year. Washington must also approve a budget for the new fiscal year that starts on Oct 1 and address $109 billion in new automatic, across-the-board spending cuts that start October 1. Mr. Obama last night said that his remarks on Wednesday will contain some proposals that are new.
    French July business confidence rose to a 15-month high of 95 from 93 in June, which was slightly stronger than market expectations for a 1 point increase to 94. French Q2 GDP rose by +0.2% q/q after falling in Q4 and Q1.

    U.S. STOCK PREVIEW
    Today's May FHFA house price index is expected to show an increase of +0.8% m/m, adding to the +0.7% m/m increase seen in April. Today's July Richmond Fed manufacturing index is expected to show a +1 point increase to 9, adding to the sharp +10 point increase to 8 seen in June. The Treasury today will kick off this week's $99 billion T-note package by selling $35 billion in 2-year T-notes. There are 35 of the S&P 500 companies that report earnings today with notable reports including UPS (consensus $1.13), AT&T (0.68), Apple (7.30), and Discover (1.15). 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 S&Ps (ESU13 +0.19%) this morning are up +3.75 points (+0.22%) on the +0.51% rally in the Euro Stoxx 50 index and on increased hopes that Chinese officials will take action if necessary to support their economy. The S&P 500 index on Monday closed mildly higher on positive political news in Japan and Portugal and on expectations for continued decent earnings, although stocks were undercut by the weaker-than-expected U.S. June existing home sales report of -1.2% to 5.08 million units (versus expectations for an increase to 5.26 million units). Closes: S&P 500 +0.20%, Dow Jones +0.01%, Nasdaq 100 +0.34%.

    OVERNIGHT U.S. STOCK MOVERS

    • There are 11 of the S&P 500 companies that have reported earnings this morning. Above-consensus reports include Air Products (APD+0.92%) ($1.36 vs $1.385), Du Pont (DD +0.05%) (1.28 vs 1.27), Travelers (TRV +0.91%) (2.13 vs 1.59), United Technologies (UTX -0.36%) (1.70 vs 1.58), Sigma-Aldrich (SIAL -0.57%) (1.05 vs 1.035), Forest Labs (FRX -0.02%) (0.28 vs 0.08), and Lockheed Martin (LMT +0.09%) (2.64 vs 2.20). Below-consensus reports include Altria (MO -0.73%) (0.62 vs 0.629), Regions Financial (RF +1.86%) (0.20 vs 0.21), Waters Corp (WAT +0.64%) (1.08 vs 1.21), and Pentair (PNR -0.51%) (0.85 vs 0.90).
    • Texas Instruments (TXN +0.43%) rallied 2.6% in after-hours trading after reporting Q2 EPS with items of 58 cents, well above the consensus of 41 cents.
    • CapitalSource (CSE +1.44%) rallied 12% in after-hours trading after the announcement that PacWest (PACW +0.50%) will buy the company for $2.3 billion. PacWest shares rallied slightly by 0.3% following the announcement.
    • Netflix (NFLX -0.99%) fell 4% in after-hours trading on disappointing earnings news.

    MARKET COMMENTS
    Sep 10-year T-notes (ZNU13 -0.23%) this morning are down 7.5 ticks on increased optimism about the global economy after China's premier promised action if the Chinese economy starts sliding. Sep 10-year T-note prices on Monday closed little changed as the market found support from the weaker-than-expected U.S. existing home sales report (-1.2%) but was undercut by reduced safe-haven demand with the slightly higher close in the S&P 500 index and with reduced Eurozone debt crisis concerns with the sharp drop in Portugal's bond yield. Closes: TYU3 +0.5, FVU3 -1.
    The dollar index (DXY00 +0.15%) this morning is up +0.11 points (+0.13%) on some short-covering after yesterday's losses. EUR/USD (^EURUSD) is down -$0.0012 (-0.09%) and USD/JPY (^USDJPY) is up +0.31 yen (+0.31%). The dollar index closed moderately lower on reduced safe-haven demand and on technical weakness with the decisive new 1-month low. EUR/USD saw support from the sharp -41 bp drop in Portugal's 10-year bond yield and reduced Eurozone debt crisis concerns about Portugal's president affirmed the current government and ruled out early elections. USD/JPY fell sharply by -0.97% as the yen was supported by Prime Minister Abe's decisive victory in the upper house of parliament, which was a vote of confidence by the Japanese public for Mr. Abe's aggressive stimulus program. Closes: Dollar index -0.39(-0.47%), EUR/USD +0.0043 (+0.33%), USD/JPY -0.98 (-0.97%).
    Sep WTI crude oil (CLU13 -0.60%) this morning is down -0.83 (-0.78%) and Sep gasoline (RBU13 -0.51%) is down -0.0168 (-0.56%). Sep crude oil and gasoline prices on Monday closed with fairly sharp losses mainly due to long liquidation pressure after the sharp 3-week rally. Gasoline prices were also pressure by expectations for a continued increase in gasoline inventories as recent refinery outages are fixed. Closes: CLU3-0.93 (-0.86%), RBU3 -0.0399 (-1.30%).

    GLOBAL EVENT CALENDAR07/23/2013

    US 0900 ET May FHFA house price purchase only index expected +0.8% m/m, Apr +0.7% m/m.
      1000 ET July Richmond Fed manufacturing index expected +1 to 9, Jun +10 to 8.
      1300 ET Treasury auctions $35 billion 2-year T-notes.
      1630 ET API weekly U.S. oil statistics.
    EUR 1000 ET Eurozone July consumer confidence expected +0.5 to -18.3, Jun -18.8.
    JPN 1950 ET Japan Jun merchandise trade balance expected -150.0 billion yen, May -996.4 billion yen. Jun exports expected +10.0% y/y, May +10.1% y/y. Jun imports expected +13.6% y/y, May +10.1% y/y.
    CHI 2145 ET China July HSBC flash manufacturing PMI expected +0.3 to 48.5, Jun -1.0 to 48.2.

    U.S. STOCK CALENDAR07/23/2013

    Company Name Symbol Time Event Description Period EPS Est (US$)
    Pentair Ltd PNR US Bef-mkt Q2 2013 Earnings Release Q2 2013 0.9
    Air Products & Chemicals Inc APD US Bef-mkt Q3 2013 Earnings Release Q3 2013 1.358
    Valero Energy Corp VLO US Bef-mkt Q2 2013 Earnings Release Q2 2013 1.026
    Lockheed Martin Corp LMT US Bef-mkt Q2 2013 Earnings Release Q2 2013 2.203
    Regions Financial Corp RF US Bef-mkt Q2 2013 Earnings Release Q2 2013 0.211
    Ryder System Inc R US Bef-mkt Q2 2013 Earnings Release Q2 2013 1.229
    Travelers Cos Inc/The TRV US Bef-mkt Q2 2013 Earnings Release Q2 2013 1.596
    EI du Pont de Nemours & Co DD US Bef-mkt Q2 2013 Earnings Release Q2 2013 1.272
    United Technologies Corp UTX US Bef-mkt Q2 2013 Earnings Release Q2 2013 1.576
    Waters Corp WAT US Bef-mkt Q2 2013 Earnings Release Q2 2013 1.214
    Freeport-McMoRan Copper & Gold Inc FCX US Bef-mkt Q2 2013 Earnings Release Q2 2013 0.45
    Peabody Energy Corp BTU US Bef-mkt Q2 2013 Earnings Release Q2 2013 -0.05
    PACCAR Inc PCAR US Bef-mkt Q2 2013 Earnings Release Q2 2013 0.745
    Sigma-Aldrich Corp SIAL US Bef-mkt Q2 2013 Earnings Release Q2 2013 1.035
    Forest Laboratories Inc FRX US Bef-mkt Q1 2014 Earnings Release Q1 2014 0.079
    Altria Group Inc MO US 7:00 Q2 2013 Earnings Release Q2 2013 0.629
    United Parcel Service Inc UPS US 7:45 Q2 2013 Earnings Release Q2 2013 1.13
    Illinois Tool Works Inc ITW US 8:00 Q2 2013 Earnings Release Q2 2013 1.095
    Avery Dennison Corp AVY US 8:30 Q2 2013 Earnings Release Q2 2013 0.703
    Waters Corp WAT US 8:30 Q2 2013 Earnings Call Q2 2013  
    United Parcel Service Inc UPS US 8:30 Q2 2013 Earnings Call Q2 2013  
    Pentair Ltd PNR US 9:00 Q2 2013 Earnings Call Q2 2013  
    Altria Group Inc MO US 9:00 Q2 2013 Earnings Call Q2 2013  
    Travelers Cos Inc/The TRV US 9:00 Q2 2013 Earnings Call Q2 2013  
    EI du Pont de Nemours & Co DD US 9:00 Q2 2013 Earnings Call Q2 2013  
    United Technologies Corp UTX US 9:00 Q2 2013 Earnings Call Q2 2013  
    Air Products & Chemicals Inc APD US 10:00 Q3 2013 Earnings Call Q3 2013  
    Freeport-McMoRan Copper & Gold Inc FCX US 10:00 Q2 2013 Earnings Call Q2 2013  
    Illinois Tool Works Inc ITW US 10:00 Q2 2013 Earnings Call Q2 2013  
    Legg Mason Inc LM US 10:00 Annual General Meeting Y 2013  
    Forest Laboratories Inc FRX US 10:00 Q1 2014 Earnings Call Q1 2014  
    Valero Energy Corp VLO US 11:00 Q2 2013 Earnings Call Q2 2013  
    Lockheed Martin Corp LMT US 11:00 Q2 2013 Earnings Call Q2 2013  
    Regions Financial Corp RF US 11:00 Q2 2013 Earnings Call Q2 2013  
    Ryder System Inc R US 11:00 Q2 2013 Earnings Call Q2 2013  
    Peabody Energy Corp BTU US 11:00 Q2 2013 Earnings Call Q2 2013  
    Sigma-Aldrich Corp SIAL US 11:00 Q2 2013 Earnings Call Q2 2013  
    Avery Dennison Corp AVY US 12:00 Q2 2013 Earnings Call Q2 2013  
    PACCAR Inc PCAR US 12:00 Q2 2013 Earnings Call Q2 2013  
    Robert Half International Inc RHI US 16:00 Q2 2013 Earnings Release Q2 2013 0.433
    Total System Services Inc TSS US 16:00 Q2 2013 Earnings Release Q2 2013 0.331
    Altera Corp ALTR US 16:15 Q2 2013 Earnings Release Q2 2013 0.308
    Norfolk Southern Corp NSC US 16:30 Q2 2013 Earnings Call Q2 2013  
    AT&T Inc T US 16:30 Q2 2013 Earnings Call Q2 2013  
    Altera Corp ALTR US 16:45 Q2 2013 Earnings Call Q2 2013  
    Broadcom Corp BRCM US 16:45 Q2 2013 Earnings Call Q2 2013  
    CR Bard Inc BCR US 17:00 Q2 2013 Earnings Call Q2 2013  
    Robert Half International Inc RHI US 17:00 Q2 2013 Earnings Call Q2 2013  
    Total System Services Inc TSS US 17:00 Q2 2013 Earnings Call Q2 2013  
    Electronic Arts Inc EA US 17:00 Q1 2014 Earnings Call C2 2014  
    Apple Inc AAPL US 17:00 Q3 2013 Earnings Call Q3 2013  
    Juniper Networks Inc JNPR US 17:00 Q2 2013 Earnings Call Q2 2013  
    International Game Technology IGT US 17:00 Q3 2013 Earnings Call Q3 2013  
    Discover Financial Services DFS US 17:00 Q2 2013 Earnings Call Q2 2013  
    Broadcom Corp BRCM US Aft-mkt Q2 2013 Earnings Release Q2 2013 0.694
    Norfolk Southern Corp NSC US Aft-mkt Q2 2013 Earnings Release Q2 2013 1.494
    CR Bard Inc BCR US Aft-mkt Q2 2013 Earnings Release Q2 2013 1.38
    AT&T Inc T US Aft-mkt Q2 2013 Earnings Release Q2 2013 0.683
    ACE Ltd ACE US Aft-mkt Q2 2013 Earnings Release Q2 2013 1.941
    Nabors Industries Ltd NBR US Aft-mkt Q2 2013 Earnings Release Q2 2013 0.088
    FMC Technologies Inc FTI US Aft-mkt Q2 2013 Earnings Release Q2 2013 0.471
    Electronic Arts Inc EA US Aft-mkt Q1 2014 Earnings Release Q1 2014 -0.595
    Apple Inc AAPL US Aft-mkt Q3 2013 Earnings Release Q3 2013 7.305
    Juniper Networks Inc JNPR US Aft-mkt Q2 2013 Earnings Release Q2 2013 0.251
    International Game Technology IGT US Aft-mkt Q3 2013 Earnings Release Q3 2013 0.309
    Discover Financial Services DFS US Aft-mkt Q2 2013 Earnings Release Q2 2013 1.153
    Linear Technology Corp LLTC US Aft-mkt Q4 2013 Earnings Release Q4 2013 0.419
    Public Service Enterprise Group Inc PEG US   Investor Meeting - Day 2 Y 2013  
    AbbVie Inc ABBV US   FDA Adcomm, Humira, axial spondyloarthritis
    Stocks: APD, DD, TRV, UTX, SIAL, FRX, LMT, MO, RF, WHTGF, PNR, TXN, CSE, NFLX, VLO, R, BTUUQ, PCAR, ITW, AVY, RHI, TSS, ALTR, NSC, T, AVGO, BCR, EA, AAPL, JNPR, IGT, DFS, ACE, NBR, FTI, LLTC, PEG, ABBV
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