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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 9/9 0 comments
    Sep 9, 2013 4:02 PM | about stocks: EOG, PSX, MU, BRCD, FITB, EL, T, DAL, BMC, YUM, JW.A, NTRS, JNJ, PVH, PANW, PDCO
    Barchart Morning Call

    BC - Mon Sep 09, 6:49AM CDT

     

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    OVERNIGHT MARKETS AND NEWS

    September E-mini S&Ps (ESU13 +0.24%) this morning are up +0.27%, although European stocks are down -0.37%. Asian stocks closed higher: Japan +2.48%, Hong Kong +0.57%, China +3.51%, Taiwan +0.34%, Australia +0.71%, Singapore +1.31%, South Korea +1.12%, India closed for holiday. U.S. and Asian stocks advanced after stronger-than-expected China Aug exports boosted global economic prospects, while European stocks fell over uncertainty about the U.S. vote this week on possible air strikes against Syria. Japanese stocks also received a boost after Japan Q2 GDP was revised higher and after Tokyo was selected to host the 2020 Olympics. Commodity prices are mixed. Oct crude oil (CLV13 -0.62%) is down -0.44% and Oct gasoline (RBV13 -1.09%) is down -0.97%. Dec gold (GCZ13 -0.07%) is down -0.04% and Dec copper (HGZ13 +0.81%) is up +0.83%. Agricultural prices are mixed. The dollar index (DXY00 -0.07%) is down -0.05%. EUR/USD (^EURUSD) is up +0.12% and USD/JPY (^USDJPY) is up +0.43%. December T-note prices (ZNZ13 +0.23%) are up +8.5 ticks.

    China's Aug trade balance was in surplus by +$28.52 billion, a larger surplus than expectations of +$20.00 billion and the most in 8 months. Aug exports climbed +7.2% y/y, stronger than expectations of +5.5% y/y and Aug imports rose +7.0% y/y, a smaller increase than expectations of +11.2% y/y.

    China's Aug CPI rose +2.6% y/y, right on expectations, and Aug PPI fell -1.6% y/y, a slightly smaller decline than expectations of -1.7% y/y.

    Japan Q2 GP was revised higher to +0.9% q/q and +3.8% annualized from the originally reported +0.6% q/q and +2.6% annualized, slightly weaker than expectations of +1.0% q/q and +3.9% annualized. Q2 GDP business spending was revised higher to show a +1.3% q/q increase from the originally reports decline of -0.1% q/q, stronger than expectations of +1.1% q/q and the most since Q4 2011.

    Japan Aug consumer confidence unexpectedly fell -0.6 from July to 43.0, weaker than expectations of a +0.4 increase to 44.0 and its lowest in 8 months.

    Japan Aug eco watchers survey current unexpectedly fell -1.1 points from July to 51.2, weaker than expectations of an increase of +1.2 to 53.5 and its lowest in 8 months. The Aug eco watchers survey outlook fell to 51.2 from 53.6 in July, the lowest in 8 months.

    The Eurozone Sep Sentix investor confidence rose +11.4 points from Aug to 6.5, stronger than expectations of +1.4 to -3.5 and its best level in 28 months.

    U.S. STOCK PREVIEW

    This week's news will be dominated by Syria as President Obama on Tuesday addresses the nation about why the U.S. should launch a military strike on Syria. The Senate is expected to vote this week on an authorization for a U.S. military strike on Syria, but a House vote may not occur until next week. The markets this week will also focus on whether the FOMC at its meeting next Tuesday/Wednesday (Sep 17-18) will taper QE3. The U.S. economic calendar is light until late this week. There are three of the Russell 1000 companies that report earnings today: John Wiley (consensus $0.43), PVH Corp (1.37), and Palo Alto Networks (0.06).

    This week's equity conferences includes the following: Morgan Stanley Latin America Conference on Mon, Barclays Global Financial Services Conference on Mon-Wed, Morgan Stanley Healthcare Conference on Mon-Wed, Vertical Research Partners Industrial Conference on Mon-Wed, 2013 dbAccess Aviation and Transportation Conference on Tue, Raymond James European Investors North American Equities Conference on Tue, Asia Pacific Petroleum Conference on Tue, Deutsche Bank dbAccess Aviation and Transportation Conference on Tue, Clinical Trial Supply USA on Tue-Wed, Rodman & Renshaw Health Care Conference on Tue-Wed, DA Davidson & Co Engineering & Construction Conference on Tue-Wed, Robert W Baird and Co Health Care Conference on Tue-Wed, KeyBanc Capital Markets Basic Materials & Packaging Conference on Tue-Wed, Goldman Sachs Global Retailing Conference on Tue-Wed, Deutsche Bank Access Technology Conference on Tue-Wed, RBC Capital Markets Global Industrials Conference on Tue-Wed, Stifel Nicolaus & Co Health Care Conference on Tue-Thu, Biofuels International 2013 Conference on Wed, Credit Suisse Asian Technology Conference on Wed, UBS Global Paper & Forest Products Conference on Thu, UBS Best of Americas Conference on Thu-Fri, Bank of America Merrill Lynch Global Real Estate Conference on Wed-Fri, Bank of America Merrill Lynch Healthcare Conference on Wed-Thu, Goldman Sachs Global Commodities Conference on Wed-Thu, Bank of America Merrill Lynch Media, Communications & Entertainment Conference on Wed-Thu, Barclays Capital CEO Energy - Power Conference on Wed-Thu, Barclays CEO Energy Power Conference on Wed-Thu, CL King & Associates Inc Best Ideas Conference on Wed-Thu, Bank of America Merrill Lynch Canada Mining Conference on Thu, and Bloomberg Canadian Fixed Income Conference on Thu.

    OVERNIGHT U.S. STOCK MOVERS

    EOG Resources (EOG +0.18%) was upgraded to "Overweight" from "Equal Weight" at Morgan Stanley.

    Phillips 66 (PSX -0.66%) was downgraded to "Hold" from "Buy" at Argus due to valuation.

    Micron (MU +0.59%) was upgraded to "Neutral" from "Negative" at Susquehanna.

    Brocade (BRCD -2.61%) was upgraded to "Outperform" from "Sector Perform" at RBC Capital.

    Fifth Third Bancorp (FITB -0.32%) was downgraded to "Market Perform" from "Outperform" at Raymond James.

    Estee Lauder (EL +0.31%) was upgraded to "Buy" from "Neutral" at Citigroup who raised their price target on the stock to $78 from $75.

    The WSJ reported that AT&T (T +0.21%) has gotten tentative approval from the U.S. Department of Labor to contribute up to $9.5 billion of preferred stock to its pension plan, which would make the company's plan nearly fully funded.

    Delta Air Lines (DAL -1.78%) rose 4% in after-hours trading Friday when it was announced that it replace BMC Software (BMC +0.46%) in S&P 500 as of the close on Sep 10.

    Yum! Brands (YUM -0.33%) reported that its August same-store sales declined an estimated 10% for the China Division.

    MARKET COMMENTS

    Sep E-mini S&Ps (ESU13 +0.24%) this morning are up +4.50 points (+0.27%). The S&P 500 index on Friday posted a 1-1/2 week high early but then fell back and closed little changed. Stocks rallied early after the smaller-than-expected increase in Aug non-farm payrolls boosted speculation the Fed will limit or delay any tapering of stimulus. Aug non-farm payrolls rose +169,000, weaker than expectations of +180,000, and July was revised lower to an increase of +104,000 from the previously reported +162,000. Gains in stocks were muted on concern the crisis in Syria may escalate after Russian President Putin said that Russia will assist Syria if it's attacked. Closes: S&P 500 +0.01%, Dow Jones -0.10%, Nasdaq 100 +0.11%.

    Dec 10-year T-notes (ZNZ13 +0.23%) this morning are up +8.5 ticks. Dec 10-year T-note prices on Friday closed higher after the smaller-than-expected increase in Aug non-farm payrolls boosted speculation that the economy may not be strong enough to allow the Fed to taper its bond purchases. T-notes also rose on dovish comments from Chicago Fed President Evans who said the Fed shouldn't taper its QE3 program until "inflation and economic growth pick up." Closes: TYZ3 +17.00, FVZ3 +11.75.

    The dollar index (DXY00 -0.07%) this morning is down -0.043 (-0.05%). EUR/USD (^EURUSD) is up +0.0016 (+0.12%) and USD/JPY (^USDJPY) is up +0.43 (+0.43%). The dollar index on Friday closed lower after the smaller-than-expected increase U.S. Aug payrolls dampened speculation that the Fed will taper QE3 when it meets in 2-weeks. Closes: Dollar index -0.487 (-0.59%), EUR/USD +0.00579 (+0.44%), USD/JPY -0.999 (-1.00%).

    Oct WTI crude oil (CLV13 -0.62%) this morning is down -49 cents (-0.44%) and Oct gasoline (RBV13 -1.09%) is down -0.0277 (-0.97%). Oct crude oil and gasoline prices on Friday closed higher with Oct crude at a 1-week high. Bullish factors included (1) the smaller-than-expected increase in Aug non-farm payrolls that weakened the dollar and bolstered speculation the Fed will limit or delay any tapering of stimulus, and (2) comments from Russian President Putin who said that Russia will assist Syria if it's attacked, which fueled concern the crisis in Syria may escalate and threaten Middle Eastern crude oil exports. Closes: CLV3 +2.16 (+1.99%), RBV3 +0.0177 (+0.62%).

    GLOBAL EVENT CALENDAR09/09/2013

    US 1100 ET San Francisco Fed President John Williams delivers the keynote speech at the NABE annual meeting in San Francisco, CA.
      1100 ET USDA weekly grain export inspections.
      1500 ET July consumer credit expected +$12.3 billion, Jun +$13.818 billion.
      1600 ET USDA Crop Progress.
    JPN 0030 ET Japan Aug bankruptcies, July -0.09% y/y.
      0100 ET Japan Aug consumer confidence index expected +0.4 to 44.0, July 43.6.
      0200 ET Japan Aug eco watchers survey current expected 53.5, July 52.3. Aug eco watchers survey outlook, July 53.6.
      1950 ET Japan July tertiary industry index expected -0.5% m/m, Jun -0.3% m/m.
    EUR 0430 ET Eurozone Sep Sentix investor confidence expected +0.9 to -4.0, Aug -4.9.
    UK 1901 ET UK Aug RICS house price balance expected 39%, July 36%.

    U.S. STOCK CALENDAR09/09/2013

    Company Name Ticker Time Event Description Period Estimate
    John Wiley & Sons Inc JW/A US Bef-mkt Q1 2014 Earnings Release Q1 2014 0.425
    Northern Trust Corp NTRS US 6:30 Annual General Meeting Y 2013  
    Johnson & Johnson JNJ US 9:00 J&J Hip Implant Trial Begins (J&J DePuy Inc. Unit)    
    John Wiley & Sons Inc JW/A US 10:00 Q1 2014 Earnings Call Q1 2014  
    PVH Corp PVH US Aft-mkt Q2 2014 Earnings Release Q2 2014 1.368
    Palo Alto Networks Inc PANW US Aft-mkt Q4 2013 Earnings Release Q4 2013 0.061
    Patterson Cos Inc PDCO US   Annual General Meeting    
    Yum! Brands Inc YUM US   Investor & Analyst Conference -Shanghai-Day1 Y 2013  
    Stocks: EOG, PSX, MU, BRCD, FITB, EL, T, DAL, BMC, YUM, JW.A, NTRS, JNJ, PVH, PANW, PDCO
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