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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 Moring Call 8/7 0 comments
    Aug 7, 2013 10:15 AM | about stocks: FOSL, MMC, DVN, TWX, MRO, LYV, CHRW, URS, FSLR, DIS, FOXA, CF, G, BID, AMGN, POM, DUK, MOLX, RL, TEG, EOG, MDLZ, PRU, FTR, CTL
    Barchart Morning Call

    BC - 2 hrs 23 mins ago

     

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    OVERNIGHT MARKETS AND NEWS

    September E-mini S&Ps (ESU13 -0.37%) this morning are down -0.32% and European stocks are down -0.08%. Asian stocks closed mostly lower: Japan -4.00%, Hong Kong -1.53%, China -0.57%, Taiwan -1.46%, Australia -1.85%, Singapore +0.16%, South Korea -1.64%, India -0.36%. Global stocks retreated on speculation the Fed may be nearer to tapering stimulus after hawkish comments Tuesday from Chicago Fed President Evans who said he "would not rule out" a decision to begin cutting bond purchases as soon as September. GBP/USD erased early losses and climbed to a 5-week high as the British pound rallied after the BOE hiked its UK growth projections for this year and next. Commodity prices are mixed. Sep crude oil (CLU13 -0.08%) is up +0.05%, Sep gasoline (RBU13 -0.16%) is down -0.10%, Dec gold (GCZ13 -0.48%) is down -0.51% at a 3-week low on speculation the Fed will soon begin to trim stimulus, and Sep copper (HGU13 -0.96%) is down -0.69%. Agricultural prices are mixed. The dollar index (DXY00 -0.04%) is down -0.05%. EUR/USD (^EURUSD) is down -0.06% and USD/JPY (^USDJPY) is down -0.45% at a 1-1/2 month low as the yen strengthens on speculation the BOJ probably won't expand stimulus measures at its 2-day meeting that ends tomorrow. September T-note prices (ZNU13 +0.05%) are up +2.5 ticks on weak stocks.

    The BOE in its monthly inflation report raised its UK 2013 and 2014 GDP estimates to 1.5% and 2.7% from 1.2% and 1.9% forecast in May. The BOE also said it sees inflation cooling gradually and reaching its 2% target in Q4 of 2015. BOE Governor Carney for the first time linked the monetary policy outlook to unemployment when he said that "while the unemployment rate remains above 7%, the Monetary Policy Committee (NYSE:MPC) stands ready to undertake further asset purchases if further stimulus is warranted. But until the unemployment threshold is reached the MPC intends not to reduce the stock of asset purchases from the current 375 billion pounds."

    The UK July Lloyds employment confidence climbed to -22 from -33 in June, its highest level in 5-3.4 years.

    German Jun industrial production rose +2.4% m/m and +2.0% y/y, much stronger than expectations of +0.3% m/m and -0.3% y/y, with the +2.4% m/m increases the biggest monthly gain in 23-months.

    U.S. STOCK PREVIEW

    The Treasury today will sell $24 billion in 10-year T-notes in a new issue as opposed to a reopening of an existing issue. The Treasury on Thursday will conclude this week's $72 billion Treasury coupon package by selling $16 billion in 30-year T-bonds. Today's 10-year T-note was trading at 2.65% in when-issued trading late yesterday afternoon. There are 11 of the S&P 500 companies that report earnings today: Devon Energy (consensus $0.95), Pepco Holdings (0.23), Time Warner (0.76), Duke Energy (0.93), Marsh & McLennan (0.67), Molex (0.35), Ralph Lauren (1.94), Mondelez (0.34), Prudential Financial (1.99), CenturyLink (0.66), and Frontier Communications (0.06).

    Conferences during the remainder of this week include the Mitsubishi Technology Tour on Mon-Thu, JP Morgan Oil & Gas Corporate Access on Wed, Goldman Sachs Power and Utility Conferenceon Thu, and Nasdaq Summer Analyst Conference on Fri.

    OVERNIGHT U.S. STOCK MOVERS

    Fossil (FOSL +17.81%) was downgraded to "Neutral" from "Buy" at Citigroup, although Citigroup raised its price target on the stock to $135 from $125.

    Marsh & McLennan (MMC -0.47%) reported Q2 EPS of 72 cents, better than consensus of 67 cents.

    Devon Energy (DVN -0.36%) reported Q2 EPS of $1.21, well ahead of consensus of 95 cents.

    Time Warner (TWX -0.60%) reported Q2 EPS of 83 cents, stronger than consensus of 76 cents.

    Marathon Oil (MRO -2.51%) reported Q2 adjusted EPS of 67 cents, lower than consensus of 71 cents.

    Live Nation (LYV -1.86%) reported Q2 EPS of 30 cents, well ahead of consensus of 10 cents.

    C.H. Robinson (CHRW -0.13%) reported Q2 EPS of 70 cents, weaker than consensus of 74 cents.

    URS Corporation (URS -3.95%) reported Q2 non-GAAP EPS of $1.16, better than consensus of 96 cents.

    First Solar (FSLR -2.32%) fell over 9% in after-hours trading after it reported Q2 EPS of 39 cents, weaker than consensus of 52 cents, and lowered guidance on its fiscal 2013 EPS outlook to $3.75-$4.25 from $4.00-$4.50.

    Disney (DIS +1.56%) reported Q3 EPS ex-items of $1.03, better than consensus of $1.01.

    21st Century Fox (FOXA -0.41%) reported Q4 adjusted EPS of 31 cents, lower than consensus of 34 cents.

    CF Industries (CF -1.84%) reported Q2 EPS of $8.38, better than consensus of $7.64.

    Genpact (G -0.14%) reported Q2 adjusted EPS of 32 cents, well ahead of consensus of 25 cents, but then said it sees fiscal 2013 revenue at the lower half of $2.15 billion-$2.2 billion, below consensus of $2.19 billion.

    Sotheby's (BID -0.51%) reported Q2 EPS of $1.33, weaker than consensus of $1.37.

    According to Bloomberg, Amgen (AMGN -2.06%) is set to boost its bid for Onyx (ONXX -1.03%) to $130 per share.

    MARKET COMMENTS

    Sep E-mini S&Ps (ESU13 -0.37%) this morning are down -5.50 points (-0.32%). The S&P 500 index on Tuesday closed lower, led by a decline in retailers, after a Janney Montgomery analyst downgraded the retail softline sector to "underweight" from "neutral." Stocks failed to garner much support from the smaller-than-expected U.S. Jun trade deficit of -$34.2 billion, the lowest in 3-1/2 years, which should lead to an upward revision of Q2 GDP. Closes: S&P 500 -0.57%, Dow Jones -0.60%, Nasdaq 100 -0.67%.

    Sep 10-year T-notes (ZNU13 +0.05%) this morning are up +2.5 ticks. Sep 10-year T-note prices on Tuesday closed little changed as increased demand for Treasuries because of a slide in stocks was offset by comments from Chicago Fed President Evans who said he would "clearly not rule out" a tapering of stimulus in September. Closes: TYU3 +0.50, FVU3 +0.25.

    The dollar index (DXY00 -0.04%) this morning is down -0.042 (-0.05%). EUR/USD (^EURUSD) is down -0.0008 (-0.06%) and USD/JPY
    (^USDJPY)is down -0.44 (-0.45%). The dollar index on Tuesday closed lower. EUR/USD strengthened after German Jun factory orders jumped +3.8% m/m, the biggest increase in 8 months. USD/JPY slipped to a 6-week low as the yen strengthened on increased safe-haven demand as stocks faltered. Closes: Dollar index -0.272 (-0.33%), EUR/USD +0.00468(+0.35%), USD/JPY -0.555 (-0.56%).

    Sep WTI crude oil (CLU13 -0.08%) this morning is up +5 cents a barrel (+0.05%) and Sep gasoline (RBU13 -0.16%) is down -0.0029 (-0.10%). Sep crude oil and gasoline prices on Tuesday closed lower. Crude prices fell as stocks weakened and after the EIA in its Short-Term Energy Outlook raised its U.S. crude production forecast to 7.4 million barrels a day in 2013 and 8.2 million in 2014, 100,000 barrels a day higher than last month's forecast. Gasoline prices tumbled to a 4-week low after the value for 2013 Renewable Identification Numbers, or RINS, slumped to a 2-month low. Refiners must buy the RINs in lieu of blending ethanol into gasoline to meet federal requirements for biofuel use. Closes: CLU3 -1.26 (-1.18%), RBU3 -0.0355 (-1.20%).

    GLOBAL EVENT CALENDAR08/07/2013

    US0700 ETWeekly MBA mortgage applications, previous -3.7% with purchase sub-index -3.4% and refi sub-index -3.8%.
     1030 ETEIA Weekly Petroleum Status Report.
     1230 ETPhiladelphia Fed President Charles Plosser speaks on the economic outlook at an event in Washington D.C.
     1300 ETTreasury auctions $24 billion 10-year T-notes.
     1340 ETCleveland Fed President Sandra Pianalto speaks on monetary policy and the economic outlook at an event in Cleveland.
     1500 ETJun consumer credit expected $15.00 billion, May $19.615 billion.
    UK0430 ETUK July Lloyds employment confidence, Jun -33.
     0530 ETBOE releases monthly inflation report.
    GER0600 ETGerman Jun industrial production expected +0.3% m/m (s/a) and -0.3% y/y, May -1.0% m/m (sa) and -1.0% y/y.
    JPN1950 ETJapan Jun trade balance balance-of-payment basis expected -128.7 billion yen, May -906.7 billion yen.
    CHIn/aChina July trade balance expected +$26.45 billion, Jun +$27.12 billion. July exports expected +2.0% y/y, Jun 3.1% y/y. July imports expected +1.0% y/y, Jun -0.7% y/y.

    U.S. STOCK CALENDAR08/07/2013

    Company NameSymbolTimeEvent DescriptionPeriodEPS Est (US$)
    Devon Energy CorpDVN USBef-mktQ2 2013 Earnings ReleaseQ2 20130.95
    Pepco Holdings IncPOM USBef-mktQ2 2013 Earnings ReleaseQ2 20130.233
    Time Warner IncTWX US7:00Q2 2013 Earnings ReleaseQ2 20130.759
    Duke Energy CorpDUK US7:00Q2 2013 Earnings ReleaseQ2 20130.93
    Marsh & McLennan Cos IncMMC US7:00Q2 2013 Earnings ReleaseQ2 20130.673
    Molex IncMOLX US7:30Q4 2013 Earnings ReleaseQ4 20130.346
    Ralph Lauren CorpRL US8:00Q1 2014 Earnings ReleaseQ1 20141.944
    Marathon Oil CorpMRO US8:00Q2 2013 Earnings CallQ2 2013 
    Integrys Energy Group IncTEG US8:00Analyst DayY 2013 
    Marsh & McLennan Cos IncMMC US8:30Q2 2013 Earnings CallQ2 2013 
    Ralph Lauren CorpRL US9:00Q1 2014 Earnings CallQ1 2014 
    EOG Resources IncEOG US9:00Q2 2013 Earnings CallQ2 2013 
    Molex IncMOLX US9:30Q4 2013 Earnings CallQ4 2013 
    Duke Energy CorpDUK US10:00Q2 2013 Earnings CallQ2 2013 
    CF Industries Holdings IncCF US10:00Q2 2013 Earnings CallQ2 2013 
    Pepco Holdings IncPOM US10:00Q2 2013 Earnings CallQ2 2013 
    Time Warner IncTWX US10:30Q2 2013 Earnings CallQ2 2013 
    Devon Energy CorpDVN US11:00Q2 2013 Earnings CallQ2 2013 
    Mondelez International IncMDLZ US16:00Q2 2013 Earnings ReleaseQ2 20130.341
    Prudential Financial IncPRU US16:07Q2 2013 Earnings ReleaseQ2 20131.992
    Frontier Communications CorpFTR US16:30Q2 2013 Earnings CallQ2 2013 
    Mondelez International IncMDLZ US17:00Q2 2013 Earnings CallQ2 2013 
    CenturyLink IncCTL US17:00Q2 2013 Earnings CallQ2 2013 
    CenturyLink IncCTL USAft-mktQ2 2013 Earnings ReleaseQ2 20130.664
    Frontier Communications CorpFTR USAft-mktQ2 2013 Earnings ReleaseQ2 20130.059

    Stocks: FOSL, MMC, DVN, TWX, MRO, LYV, CHRW, URS, FSLR, DIS, FOXA, CF, G, BID, AMGN, POM, DUK, MOLX, RL, TEG, EOG, MDLZ, PRU, FTR, CTL
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