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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 8/14 0 comments
    Aug 14, 2013 12:06 PM | about stocks: ARO, RIG, DE, AAL, UMC, SINA, TW, GT, JDSU, SEAS, CREE, PMT, BRCD, SCHW, M, NTAP, PGR, SRCL, XLNX
    Barchart Morning Call

    BC - Wed Aug 14, 6:45AM CDT

     

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    OVERNIGHT MARKETS AND NEWS

    September E-mini S&Ps (ESU13 -0.15%) this morning are down -0.13%, although European stocks are up +0.11% after Eurozone Q2 GDP expanded more than forecast and after UK July jobless claims fell more than expected. Asian stocks closed mixed: Japan +1.32%, Hong Kong closed because of Typhoon Utor, China -0.42%, Taiwan -0.44%, Australia -0.01%, Singapore +0.14%, South Korea +0.65%, India +0.72%. Commodity prices are mixed. Sep crude oil (CLU13 -0.74%) is down -0.65%, Sep gasoline (RBU13 -0.53%) is down -0.49%, Dec gold (GCZ13 +0.30%) is up +0.32%, and Sep copper (HGU13 +0.08%) is up +0.18%. Agricultural and livestock prices are mixed. The dollar index (DXY00 +0.04%) is little changed, up +0.01%. EUR/USD (^EURUSD) is down -0.11% and USD/JPY (^USDJPY) is down -0.02%. September T-note prices (ZNU13 +0.02%) are up +2 ticks.

    German Q2 GDP expanded at a +0.7% q/q and +0.5% y/y pace, stronger than expectations of +0.6% q/q and +0.2% y/y.

    Eurozone Q2 GDP grew +0.3% q/q and fell -0.7% y/y, better than expectations of +0.2% q/q and -0.8% y/y.

    Sovereign borrowing costs have fallen throughout the Eurozone as Italy's 10-year yield premium over benchmark German bunds shrank to 237 bp and Spain's 10-year yield premium over bunds shrank to 265 bp, both at their lowest levels in 2 years.

    UK July jobless claims fell -29,200, nearly double expectations of -15,000, while Jun was revised up to show a -29,400 decrease in jobless claims, the biggest decline in 3-years and more than the originally reported -21,200. The July claimant count rate unexpectedly fell -0.1 to 4.3%, the lowest in 4-1/3 years and better than expectations of unchanged at 4.4%.

    UK employment in the 3-months through Jun rose +69,000 to a record 29.8 million, while the unemployment rate in the 3-moths through June remained unchanged at 7.8%

    UK Jun average weekly earnings rose +2.1% 3-month/year-over-year, a bigger increase than expectations of +2.0% 3-month/year-over-year and the most in 1-3/4 years. Jun average earnings ex-bonus rose +1.1% 3-month/year=over=year, right on expectations.

    U.S. STOCK PREVIEW

    Today's July PPI report is expected to ease slightly to +2.4% y/y from +2.5% in June. Meanwhile, today's July core PPI is expected to fall to +1.3% y/y from +1.7% in June, illustrating continued disinflation pressures. There are 5 of the S&P 500 companies that report earnings today: Deere (consensus $2.18), Macy's (0.78), Agilent Technologies (0.62), Cisco Technologies (0.62), Cisco (0.51), NetApp (0.49).

    Conferences during the remainder of this week include: Jefferies Global Industrials Conference on Mon-Thu, EnerCom The Oil & Gas Conference on Mon-Wed, 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

    Aeropostale (ARO -0.53%) was downgraded to "Underweight" from "Hold" at KeyBanc.

    Transocean (RIG -0.21%) was downgraded to "Neutral" from "Strong Buy" at ISI Group.

    Deere & Co. (DE +0.64%) reported Q3 EPS of $2.56, stronger than consensus of $2.18.

    US Airways (LCC -13.07%) and Delta Air Lines (DAL) were both downgraded to "Neutral" from "Overweight" at JPMorgan.

    United Microelectronics (UMC +0.50%) was downgraded to "Sell" from "Neutral" at Goldman.

    Citigroup upgraded (SINA +3.17%) to "Buy" from "Sell" and raised its price target for the stock to $96 from $35.

    Towers Watson (TW +0.52%) reported Q4 adjusted EPS of $1.36, better than consensus of $1.27.

    CNBC said David Tepper added 7 million shares of Goodyear Tire (GT -0.88%) to his holdings, which now stand at 22 million shares, making Tepper the largest shareholder of Goodyear Tire.

    JDSU (JDSU unch) dropped over 1% in European trading after it lowered its Q1 revenue estimate to $410 million-$430 million, lower than consensus $432.79 million.

    SeaWorld (SEAS -0.41%) reported Q2 adjusted EPS of 41 cents, well below consensus of 51 cents, and cut its fiscal 2013 revenue estimate to 1.45 billion-$1.48 billion, below consensus $1.5 billion.

    Cree (CREE +1.35%) fell 15% in after-hours trading after it cut its Q1 revenue estimate to $380 million-$400 million, below consensus of $398.4 million, and said its sees Q1 EPS of 36 cents-41 cents, also below consensus of 43 cents.

    PennyMac (PMT -1.57%) files to sell 11.3 million shares of common stock.

    Brocade (BRCD +1.02%) jumped 15% in after-hours trading after it reported Q3 adjusted EPS of 19 cents, stronger than consensus of 12 cents.

    MARKET COMMENTS

    Sep E-mini S&Ps (ESU13 -0.15%) this morning are down -2.25 points (-0.13%). The S&P 500 index on Tuesday closed higher on positive factors including (1) carry-over support from a rally in European stocks after German Aug ZEW investor sentiment climbed +5.7 points to a 5-month high of 42.0, and (2) signs the economy is expanding moderately after U.S. July retail sales increased close to market estimates (0.2% and +0.5% ex autos, close to expectations of +0.3% and +0.4% ex autos). Gains remain limited on expectations the Fed will soon begin to taper its stimulus. Closes: S&P 500 +0.28%, Dow Jones +0.20%, Nasdaq 100 +0.48%.

    Sep 10-year T-notes (ZNU13 +0.02%) this morning are up +2 ticks. Sep 10-year T-note prices on Tuesday fell sharply to a 1-week low and closed lower after U.S. retail sales increased near expectations, which fueled speculation the economy is strong enough for the Fed to begin reducing its bond buying. Closes: TYU3 -29.5, FVU3 -14.75.

    The dollar index (DXY00 +0.04%) this morning is up +0.006 (+0.01%). EUR/USD (^EURUSD) is down -0.0015 (-0.11%) and USD/JPY (^USDJPY) is down -0.02 (-0.02%). The dollar index on Tuesday closed higher after U.S. July retail sales increased for a fourth month, which bolstered expectations that the Fed will soon taper its dollar-negative QE3 program. EUR/USD slipped to a 1-week low after Eurozone Jun industrial production rose +0.7% m/m, weaker than expectations of +1.0% m/m. Closes: Dollar index +0.435 (+0.53%), EUR/USD -0.00377 (-0.28%), USD/JPY +1.298 (+1.34%).

    Sep WTI crude oil (CLU13 -0.74%) this morning is down -0.69 (-0.65%) and Sep gasoline (RBU13 -0.53%) is down -0.0145 (-0.49%). Sep crude oil and gasoline prices on Tuesday closed higher as stronger-than-expected German Aug ZEW investor sentiment and expectations for weekly EIA crude inventories to decline on Wednesday offset the bearish factors of a stronger dollar and concern the Fed may be close to tapering QE3. Closes: CLU3 +0.72 (+0.68%), RBU3 +0.0337 (+1.16%).

    GLOBAL EVENT CALENDAR08/14/2013

    US0700 ETWeekly MBA mortgage applications, previous +0.2% with purchase sub-index +0.7% and refi sub-index -0.1%.
     0830 ETJuly PPI expected +0.3% m/m and +2.4% y/y, Jun +0.8% m/m and +2.5% y/y. July PPI ex food & energy expected +0.2% m/m and +1.3% y/y, Jun +0.2% m/m and +1.7% y/y.
     1030 ETEIA Weekly Petroleum Status Report.
     1320 ETSt. Louis Fed President James Bullard speaks at the Paducah Convention Center on Challenges with Monetary Policy in Paducah, Kentucky.
    GER0200 ETGerman Q2 GDP expected +0.6% q/q and +0.2% y/y, Q1 +0.1% q/q and -0.2% y/y.
    UK0430 ETMinutes of the July 31-Aug 1 BOE policy meeting.
     0430 ETUK July jobless claims change expected -15,000, Jun -21,200. July claimant count rate expected unch at 4.4%, Jun 4.4%.
     0430 ETUK Jun ILO unemployment rate expected 7.8% 3-months, May 7.8% 3-months.
     0430 ETUK Jun avg weekly earnings expected +2.0% 3-mo/year-over-year, May +1.7% 3-mo/year-over-year. Jun weekly earnings ex-bonus expected +1.1% 3-mo/year-over-year, May +1.0% 3-mo/year-over-year.
    EUR0500 ETEurozone Q2 GDP expected +0.2% q/q and -0.8% y/y, Q1 -0.2% q/q and -1.1% y/y.

    U.S. STOCK CALENDAR08/14/2013

    Company NameSymbolTimeEvent DescriptionPeriodEPS Est (US$)
    Charles Schwab Corp/TheSCHW USBef-mktJuly 2013 Sales and Revenue Release - Activity Report2013 
    Deere & CoDE USBef-mktQ3 2013 Earnings ReleaseQ3 20132.175
    Macy's IncM US8:00Q2 2014 Earnings ReleaseQ2 20140.782
    Deere & CoDE US10:00Q3 2013 Earnings CallQ3 2013 
    Macy's IncM US10:30Q2 2014 Earnings CallQ2 2014 
    NetApp IncNTAP USAft-mktQ1 2014 Earnings ReleaseQ1 20140.492
    Progressive Corp/ThePGR US July 2013 Sales and Revenue Release2013 
    Stericycle IncSRCL US Investor MeetingY 2013 
    Xilinx IncXLNX US Annual General Meeting  

    Stocks: ARO, RIG, DE, AAL, UMC, SINA, TW, GT, JDSU, SEAS, CREE, PMT, BRCD, SCHW, M, NTAP, PGR, SRCL, XLNX
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