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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 9/5 0 comments
    Sep 5, 2013 10:03 AM | about stocks: SHW, LMT, NEM, VIAB, JOSB, RIG, POZN, SNY, GEF, SR-OLD, SBUX, FAST, INVA, SYK, FCE.A, PAY, GPS, LB, WBA, COST, AN
    Barchart Morning Call

    BC - 2 hrs 7 mins ago

     

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    OVERNIGHT MARKETS AND NEWS

    September E-mini S&Ps (ESU13 -0.05%) this morning are down -0.2%, although European stocks are up +0.30%. Asian stocks closed mixed: Japan +0.08%, Hong Kong +1.22%, China -0.38%, Taiwan +1.06%, Australia -0.37%, Singapore +0.80%, South Korea +0.98%, India +2.22%. Stocks fluctuated over Syrian concerns, while the 10-year German bund yield rose to a 17-month high of 2.00% before today's ECB interest rate decision. Commodity prices are mixed. Oct crude oil (CLV13 +0.48%) is up +0.50% and Oct gasoline (RBV13 -0.17%) is down -0.23%. Dec gold (GCZ13 +0.40%) is up +0.40% and Dec copper (HGZ13 +0.19%) is up +0.48%. Agricultural and livestock prices are mostly lower. The dollar index (DXY00 +0.05%) is unchanged. EUR/USD (^EURUSD) is up +0.04% and USD/JPY (^USDJPY) is up +0.14% at a 6-week high as the yen weakened after BOJ Governor Kuroda said the central bank will act if a proposed tax increase undercuts the economy. December T-note prices (ZNZ13 -0.47%) are down -12 ticks as they followed German bunds lower, with the 10-year T-note yield climbing to a new 2-year high of 2.94%.

    As expected, the BOE maintained its benchmark rate at 0.50% and kept its asset purchase target at 375 billion pounds.

    German July factory orders fell -2.7% m/m and rose +2.0% y/y, weaker than expectations of -1.0% m/m and +2.9% y/y, although Jun factory orders were revised up to +5.0% m/m and +5.6% y/y from the originally reported +3.8% m/m and +4.3% y/y.

    Minneapolis Fed President Kocherlakota, who spoke at an event late Wednesday, hinted that he does not favor cutting stimulus when he said the FOMC's "own forecasts suggest that it should be providing more stimulus to the economy, not less."

    The BOJ maintained its current extraordinary monetary policy measures following a 2-day meeting today and upgraded its economic outlook when it said a "moderate recovery" is under way. BOJ Governor Kuroda hinted that the BOJ will act if a proposed sales-tax increase slows the economy when he said if the tax move has a big effect on the economy, "fiscal policy can respond and if downside risks materialize to the 2% inflation target, we will of course take appropriate steps."

    In an attempt to lower long-term interest rates and strengthen the rupee, new RBI Governor Rajan announced a plan to provide concessional swaps for banks' foreign-currency deposits, a move that could potentially boost the dollar reserves of the RBI, while India's lower house of parliament tried to stem the outflow of capital from the country after it passed a bill that allows international holdings in the country's pension funds.

    U.S. STOCK PREVIEW

    Today's Aug ADP employment report is expected to show an increase of +180,000, down from +200,000 in July. Today's initial unemployment claims report is expected to show a slight decline of -1,000 to 330,000, adding to last week's -6,000 decline to 331,000. Today's July factory orders report is expected to show a decline of -3.4%, more than reversing the +1.5% increase seen in June. Today's Aug ISM non-manufacturing index is expected to ease by -1.0 points to 55.0, reversing part of the +3.8 point increase to 56.0 seen in July.

    There are 3 of the Russell 1000 companies that report earnings today: Cooper Companies (consensus $1.72), Forest City Enterprises (-0.02), VeriFone Systems (0.20). Conferences this week include: 18th Handelsblatt Annual Conference - Banks in Upheaval on Thu, and Scotiabank Financials Conference 2013 on Thu.

    OVERNIGHT U.S. STOCK MOVERS

    Sherwin-Williams (SHW +0.74%) was upgraded to "Buy" from "Neutral" at Longbow.

    The NY Times reports that President Obama prefers to nominate Larry Summers as the next Fed chairman.

    Lockheed Martin (LMT +0.52%) was downgraded to "Sector Perform" from "Outperform" at RBC Capital.

    Newmont Mining (NEM +0.48%) was downgraded to "Equal Weight" from "Overweight" due to valuation at Barclays.

    Viacom (VIAB +0.24%) was downgraded to "Neutral" from "Buy" at B. Riley.

    JoS. A. Bank (JOSB +0.33%) reported Q2 EPS of 51 cents, lower than consensus of 52 cents.

    Transocean (RIG +0.15%) was upgraded to "Outperform" from "Neutral" at Credit Suisse.

    POZEN (POZN +1.34%) jumped jumped 13% in after-hours trading after it announced it had signed a commercialization agreement with Sanofi (SNY +0.63%) .

    Greif (GEF +3.27%) reported Q3 EPS of 80 cents, below consensus of 89 cents.

    Raging Capital reported a 12.5% passive stake in Standard Register (SR +17.27%) .

    Starbucks (SBUX +0.75%) was initiated with an "Outperform" at Wedbush with a price target of $80.

    MARKET COMMENTS

    Sep E-mini S&Ps (ESU13 -0.05%) this morning are little changed, down -0.25 of a point (-0.02%). The S&P 500 index on Wednesday climbed to a 1-week high and closed higher. Stocks opened higher on signs that there will be no immediate U.S. military attack on Syria after Russian President Putin said he will only support a UN resolution for military strikes against Syria if there's conclusive proof that the Syrian government used chemical weapons on its own people. Stocks moved even higher after the Fed's Beige Book stated that the economy maintained a "modest to moderate" pace of growth. Closes: S&P 500 +0.81%, Dow Jones +0.65%, Nasdaq 100 +1.06%.

    Dec 10-year T-notes (ZNZ13 -0.47%) this morning are down -12 ticks as the 10-year T-note yield overnight rose to a new 2-year high of 2.94%. Dec 10-year T-note prices on Wednesday closed lower on reduced safe-haven demand as stocks rallied and on the likelihood that the Fed will start to taper QE later this month after the Beige Book said that spending on cars and housing helped the economy maintain a "modest to moderate" pace of expansion from early July through late August, and that manufacturing expanded "modestly" and hiring "held steady or increased modestly." Closes: TYZ3 -15.00, FVZ3 -12.00.

    The dollar index (DXY00 +0.05%) this morning is unch. EUR/USD (^EURUSD) is up +0.0005 (+0.04%) and USD/JPY (^USDJPY) is up +0.14 (+0.14%) at a 6-week high. The dollar index on Wednesday closed lower on reduced safe-haven demand as stocks rallied as the prospects of an immediate U.S. attack on Syria dwindled. The dollar was also undercut after the U.S trade balance widened to a deficit of -$39.1 billion, a bigger deficit than expectations of -$38.6 billion. Closes: Dollar index -0.192 (-0.23%), EUR/USD +0.00365 (+0.28%), USD/JPY +0.185 (+0.19%).

    Oct WTI crude oil (CLV13 +0.48%) this morning is up +54 cents (+0.50%) and Oct gasoline (RBV13 -0.17%) is down -0.0065 (-0.23%). Oct crude oil and gasoline prices on Wednesday closed lower on signs that there will be no immediate U.S. military attack on Syria. Russian President Putin said he will only support a UN resolution for military strikes against Syria if there's conclusive proof that the Syrian government used chemical weapons on its own people. Another negative for crude prices in growing speculation the Fed will begin tapering QE later this month, which may slow economic growth and demand for commodities. Closes: CLV3 -1.31 (-1.21%), RBV3 -0.0003 (-0.01%).

    GLOBAL EVENT CALENDAR09/05/2013

    US 0815 ET Aug ADP employment change expected +180,000, July +200,000.
      0830 ET Weekly initial unemployment claims expected -1,000 to 330,000, previous -6,000 to 331,000. Weekly continuing claims expected -5,000 to 2.984 million, previous -14,000 to 2.989 million.
      0830 ET Revised Q2 non-farm productivity expected +1.6%, previous +0.9%. Revised Q2 unit labor costs expected +0.9%, previous +1.4%.
      0900 ET Minneapolis Fed President Narayana Kocherlakota speaks at the Economic Indicator Breakfast at the University of Wisconsin Lacrosse.
      1000 ET July factory orders expected -3.4%, Jun +1.5%.
      1000 ET Aug ISM non-manufacturing index expected -1.0 to 55.0, July +3.8 to 56.0.
      1100 ET EIA Weekly Petroleum Status Report.
      1100 ET Treasury announces amounts of 3-year T-notes (previous $32 billion), 10-year T-notes (previous $24 billion), and 30-year T-bonds (previous $16 billion) to be auctioned Sep 10-12.
      n/a G-20 leaders begin a 2-day summit in St. Petersburg, Russia.
    UK 0430 ET UK Lloyds Aug employment confidence, July -22.
      0700 ET BOE announces interest rate decision and asset purchase target (expected no change to 0.50% benchmark rate or to the 375 billion pound asset target).
    GER 0600 ET German July factory orders expected -1.0% m/m and +2.9% y/y, Jun +3.6% m/m and +4.3% y/y.
    EUR 0745 ET ECB announces interest rate decision (expected no change to the 0.50% 2-week refinancing rate).
      0830 ET ECB President Draghi holds press conference following ECB meeting.
    JPN n/a BOJ announces interest rate decision following 2-day meeting.

    U.S. STOCK CALENDAR09/05/2013

    Company Name Ticker Time Event Description Period Estimate
    Fastenal Co FAST US 7:00 August 2013 Sales and Revenue Release 2013  
    L Brands Inc LTD US 7:30 August 2013 Sales and Revenue Call 2013  
    Theravance Inc THRX US 8:30 TD-4208 Phase 2b study Results Call    
    Stryker Corp SYK US 9:00 Analysts Meeting Y 2013  
    Greif Inc GEF US 10:00 Q3 2013 Earnings Call Q3 2013  
    Forest City Enterprises Inc FCE/A US Aft-mkt Q2 2014 Earnings Release Q2 2014 -0.015
    VeriFone Systems Inc PAY US Aft-mkt Q3 2013 Earnings Release Q3 2013 0.204
    Gap Inc/The GPS US   August 2013 Sales and Revenue Release 2013  
    L Brands Inc LTD US   August 2013 Sales and Revenue Release 2013  
    Walgreen Co WAG US   August 2013 Sales and Revenue Release 2013  
    Costco Wholesale Corp COST US   August 2013 Sales and Revenue Release 2013  
    AutoNation Inc AN US   August 2013 Sales and Revenue Release 2013
    Stocks: SHW, LMT, NEM, VIAB, JOSB, RIG, POZN, SNY, GEF, SR-OLD, SBUX, FAST, INVA, SYK, FCE.A, PAY, GPS, LB, WBA, COST, AN
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