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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 Morning Call 8/12 0 comments
    Aug 12, 2013 11:44 AM | about stocks: TSLA, CVC, LOW, AVGO, JNPR, NOC, DVA, KKD, AAP, AAPL, MRK, HMA, SYY, GWW, YUM
    Barchart Morning Call

    BC - Mon Aug 12, 6:46AM CDT

     

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    OVERNIGHT MARKETS AND NEWS

    September E-mini S&Ps (ESU13 -0.39%) this morning are down -0.49% at a 2-week low and European stocks are down -0.52%. Asian stocks closed mostly higher: Japan -0.70%, Hong Kong +2.13%, China +2.92%, Taiwan +0.60%, Australia +1.06%, Singapore +0.07%, South Korea +0.27%, India +0.84%. Japanese stocks fell and U.S. and European shares slipped on weaker-than-expected Japan Q2 GDP, while China's Shanghai Stock Index rose to its best level in 1-1/2 months after China's securities regulator said it will make decisions on financing for real estate projects based on the examination of companies and land ministry assessments, which boosted speculation that property developers will gain access to equity funding. Commodity prices are mixed. Sep crude oil (CLU13 +0.03%) is up +0.23%, Sep gasoline (RBU13 +0.04%) is down -0.01%, Dec gold (GCZ13 +1.01%) is up +1.04% at a 1-week high, and Sep copper (HGU13 -0.02%) is down -0.06%. Agricultural prices are mixed. The dollar index (DXY00 +0.34%) is up +0.32%. EUR/USD (^EURUSD) is down -0.32% and USD/JPY (^USDJPY) is up +0.51%. September T-note prices (ZNU13 -0.09%) are down -4 ticks.

    Japan Q2 GDP rose +0.6% q/q and +2.6% annualized, weaker than expectations of +0.9% q/q and +3.6% annualized, while Q1 GDP was revised lower to +0.9% q/q and +3.8% annualized from the previously reported +1.0% q/q and +4.1% annualized.

    Japan Q2 GDP deflator fell -0.3% y/y, a smaller decline than expectations of -0.7% y/y. Q2 GDP consumer spending slowed to an +0.8% q/q increase from +0.9% q/q in Q1, while Q2 GDP business spending unexpectedly contracted -0.1% q/q, weaker than expectations of a +0.6% q/q increase and the sixth straight quarter that business spending has contracted.

    Japan Jun industrial production was revised up to -3.1% m/m and -4.6% y/y from the originally reported -3.3% m/m and -4.8% y/y.

    Japan July machine tool orders fell -12.1% y/y from a -12.4% y/y decrease in June and have now contracted on a year-over-year basis for fifteen consecutive months.

    Japan July domestic CGPI rose +0.5% m/m and +2.2% y/y, a larger increase than expectations of +0.2% m/m and +1.9% y/y.

    Greece Q2 GDP shrank -4.6% y/y from -5.6% y/y in Q1 and has now contracted for twenty consecutive quarters.

    U.S. STOCK PREVIEW

    This week's U.S. economic schedule is fairly busy with key reports including Tuesday's July retail sales report (expected +0.3% overall and +0.4% ex-autos), Thursday's initial unemployment claims report (expected +2,000 after last week's +5,000 report), Thursday's July CPI report (expected +2.0% y/y vs +1.8% in June), Friday's July housing starts (expected +8.3%), and Friday's early-Aug U.S. consumer confidence report (expected +0.2 to 85.3). Only one S&P 500 company reports earnings today: Sysco (consensus $0.54).

    Conferences this week include: Jefferies Healthcare Summit on Mon, Piper Jaffray Semiconductor Summit on Mon, Pacific Crest Global Technology Leadership Forum on Mon-Tue, Jefferies Global Industrials Conference on Mon-Thu, EnerCom The Oil & Gas Conference on Mon-Wed, Needham Advanced Industrial Technologies Conference on Tue, UBS Metals & Materials Mini Conference on Tue, Wedbush Life Sciences Management Access Conference on Tue, Oppenheimer Technology, Internet & Communications Conference on Tue-Wed, JP Morgan Auto Conference on Tue-Wed, J.P. Morgan Auto Conference on Tue-Wed, Jefferies Global Clean Technology Conference on Tue-Wed, Avondale 2013 Healthcare Conference on Wed, and Canaccord Genuity Growth Conference on Wed.

    OVERNIGHT U.S. STOCK MOVERS

    Tesla (TSLA -0.31%) was downgraded to "Neutral" from "Buy" at Lazard Capital.

    Cablevision (CVC +0.67%) was upgraded to "Buy" from "Neutral" at Guggenheim.

    Lowe's (LOW -1.04%) was upgraded to "Hold" from "Sell" at Canaccord who also raised their price target on the stock to $48 from $28.

    Broadcom (BRCM -0.91%) was downgraded to "Neutral" from "Buy" at Goldman.

    Juniper (JNPR -5.60%) was downgraded to "Sector Perform" from "Outperform" at RBC Capital.

    The U.S. Navy has awarded Northrop Grumman (NOC -0.13%) a $617 million contract for five full-rate production Lot 1 E-2D Advanced Hawkeye aircraft.

    DaVita (DVA +0.62%) declares a two-for-one split of its common stock for stockholders of record on August 23.

    Krispy Kreme (KKD +1.71%) upgraded to "Buy" from "Neutral" at Janney Capital.

    Lazard reported a 5.22% passive stake in Advance Auto Parts (AAP +1.86%) .

    Bloomberg reported that Apple (AAPL -1.42%) won a patent infringement suit against Samsung (SSNLF -3.25%) , with the U.S. International Trade Commission saying Samsung violated Apple's patent rights and would be blocked from importing Samsung smartphones into the U.S. However, the ban is subject to a review by President Barack Obama on public policy grounds, which will allow Samsung to import phones during the review.

    Cubist CBST reported a 27.5% stake in Trius Therapeutics (TSRX -0.29%) .

    Health Management (HMA -0.15%) reported Q2 adjusted EPS of 7 cents, well below consensus of 16 cents.

    MARKET COMMENTS

    Sep E-mini S&Ps (ESU13 -0.39%) this morning are down -8.25 points (-0.49%) at a 2-week low. The S&P 500 index on Friday closed lower as profit-taking and long liquidation set in on expectations the Fed will soon begin to taper QE3. Declines were limited on signs that the Chinese economy may be stabilizing after China July industrial production rose +9.7% y/y, stronger than expectations of +8.9% y/y and its fastest pace in 5-months, and after China July new yuan loans climbed 699.9 billion yuan, more than expectations of 640.0 billion yuan. Closes: S&P 500 -0.36%, Dow Jones -0.47%, Nasdaq 100 -0.37%.

    Sep 10-year T-notes (ZNU13 -0.09%) this morning are down -4 ticks. Sep 10-year T-note prices on Friday closed unchanged as weak stocks offset expectations the Fed may soon taper its bond buying. Another negative for T-notes was the stronger-than-expected Chinese economic data on industrial production and new loans, which signals strength in China's economy that benefits the global economic outlook and reduces the safe-haven demand for Treasuries. Closes: TYU3 unch, FVU3 unch.

    The dollar index (DXY00 +0.34%) this morning is up +0.259 (+0.32%). EUR/USD (^EURUSD) is down -0.0043 (-0.32%) and USD/JPY (^USDJPY) is up +0.49 (+0.51%). The dollar index on Friday closed higher on weak stocks, which boosted the safe-haven demand for the dollar, along with expectations the Fed will curb its stimulus measures before other global central banks do, which may boost the dollar's interest rate differentials against other world currencies. Closes: Dollar index +0.149 (+0.18%), EUR/USD -0.0041 (-0.31%), USD/JPY -0.491 (-0.51%).

    Sep WTI crude oil (CLU13 +0.03%) this morning is up +24 cents (+0.23%) and Sep gasoline (RBU13 +0.04%) is down -0.0002 (-0.01%). Sep crude oil and gasoline prices on Friday closed sharply higher on signs that China's economy is stabilizing after China July industrial production rose a more than expected +9.7% y/y, the most in 5-months. Another positive for crude was increased demand from China, the world's second-biggest crude consumer, after China July crude imports rose to a record 25.9 MMT, up +13% m/m. Closes: CLU3 +2.63 (+2.54%), RBU3 +0.0512 (+1.79%).

    GLOBAL EVENT CALENDAR08/12/2013

    US 1100 ET USDA weekly grain export inspections.
      1200 ET Aug WASDE crop production report.
      1400 ET July monthly budget statement expected -$90.0 billion, Jun +$116.5 billion.
      1600 ET USDA Crop Progress.
    JPN 0030 ET Revised Japan Jun industrial production, previous -3.3% m/m and -4.8% y/y. Revised Jun capacity utilization, previous +2.3% m/m.
      1950 ET Japan Jun machine orders expected -7.0% m/m and +2.6% y/y, May +10.5% m/m and +16.5% y/y.
    UK 1901 ET UK July RICS house price balance expected 25%, Jun +21%.

    U.S. STOCK CALENDAR08/12/2013

    Company Name Symbol Time Event Description Period EPS Est (US$)
    Sysco Corp SYY US Bef-mkt Q4 2013 Earnings Release Q4 2013 0.543
    WW Grainger Inc GWW US 8:00 July 2013 Sales and Revenue Call 2013  
    WW Grainger Inc GWW US 8:00 July 2013 Sales and Revenue Release 2013  
    Sysco Corp SYY US 10:00 Q4 2013 Earnings Call Q4 2013  
    Yum! Brands Inc YUM US Aft-mkt July 2013 Sales and Revenue Release 2013  
    Stocks: TSLA, CVC, LOW, AVGO, JNPR, NOC, DVA, KKD, AAP, AAPL, MRK, HMA, SYY, GWW, YUM
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