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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 9/17 0 comments
    Sep 17, 2013 9:16 AM | about stocks: CAG, K, AAL, VZ, JPM, FITB, HUN, CHS, MD, P, OUTR, FDS, BMRN, LPI, CMI, RS, ADBE

    Barchart Morning Call

    Tuesday, September 17th, 2013View Older Reports

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    OVERNIGHT MARKETS AND NEWS

    December E-mini S&Ps (ESZ13 -0.10%) this morning are down -0.13% and European stocks are down -0.34%. Asian stocks closed mostly lower: Japan -0.65%, Hong Kong -0.31%, China -2.06%, Taiwan -0.07%, Australia +0.06%, Singapore +0.05%, South Korea -0.49%, India +0.31%. Asian stocks slid after foreign direct investment in China trailed estimates, while U.S. stocks fell back ahead of the start of the 2-day FOMC meeting later today. European stocks failed to garner much support from the jump in German investor confidence to a 3-1/3 year high. Commodity prices are mixed. Oct crude oil (CLV13 -0.20%) is down -0.39% at a 2-week low and Oct gasoline (RBV13 +0.04%) is down -0.10% at a 5-week low. Dec gold (GCZ13 +0.30%) is up +0.09% and Dec copper (HGZ13 unch) is down -0.02%. Agricultural prices are higher and livestock prices are lower. The dollar index (DXY00 -0.18%) is down -0.18%. EUR/USD (^EURUSD) is up +0.19% and USD/JPY (^USDJPY) is unch. December T-note prices (ZNZ13 +0.18%) are up +9 ticks.

    The German Sep ZEW survey of expectations of economic growth rose +7.0 from Aug to 49.6, stronger than expectations of +3.0 to 45.0 and the highest in 3-1/3 years. The Sep ZEW survey current situation rose +12.3 from Aug to 30.6, stronger than expectations of +1.7 to 20.0 and the highest in 15-months.

    UK Aug PPI input prices fell -0.2% m/m and rose +2.8% y/y, weaker than expectations of +0.2% m/m and +3.0% y/y. Aug PPI output prices rose +0.1% m/m and +1.6% y/y, smaller increases than expectations of +0.2% m/m and +1.8% y/y. Aug PPI output core prices were unchanged m/m and +1.0% y/y, weaker than expectations of +0.1% m/m and +1.1% y/y.

    UK Aug CPI rose +0.4% m/m and +2.7% y/y, close to expectations of +0.5% m/m and +2.7% y/y. Aug core CPI rose +2.0% y/y, a smaller increase than expectations of +2.1% y/y. The Aug RPI rose +0.5% m/m and +3.3% y/y, bigger increases than expectations of +0.4% m/m and +3.2% y/y. Aug RPI ex-mortgage interest payments rose +3.3% y/y, stronger than expectations of +3.2% y/y.

    China Aug foreign direct investment rose +0.6% y/y, much weaker than expectations of +12.5% y/y.

    U.S. STOCK PREVIEW

    The FOMC today begins its 2-day meeting. The FOMC will announce its decision tomorrow and Fed Chairman Bernanke will give a news conference tomorrow as well. The market consensus is that the FOMC tomorrow will announce a $10 billion cut in its $85 billion per month QE3 program to $75 billion. Today's Aug CPI report is expected to ease to +1.6% y/y from +2.0% y/y in July. Meanwhile, the Aug core CPI is expected to edge higher to +1.8% y/y from +1.7% in July. Today's Sep NAHB housing market index is expected to show a small -1 point decline to 58, reversing part of the +3 point increase to August's 7-3/4 year high of 59. There are two of the Russell 1000 companies that report earnings today: FactSet (consensus $1.19) and Adobe Systems (0.34).

    Equity conferences during the remainder of this week include: Morgan Stanley Industrials & Autos Conference on Mon-Wed, Capital Link Global Commodities Energy Freight Forum on Tue, Home Delivery World 2013 on Tue, Citi Global Industrials Conference on Tue-Wed, RBC Capital Markets Financial Institutions Conference on Tue-Wed, Credit Suisse Chemical & Ag Science Conference on Tue-Thu, BMO Capital Markets North American Real Estate Conference on Wed, Jefferies Advanced Analytics & Big Data Intelligence Summit on Wed, Mitsubishi UFJ Securities-Utility Corporate Access Day on Wed, 28th International Aluminum Conference on Wed-Thu, UBS Houston Energy Symposium on Wed-Thu, Credit Suisse Global Mining & Steel Conference on Thu, Mitsubishi UFJ Securities- Industrials Corporate Access Day on Thu.

    OVERNIGHT U.S. STOCK MOVERS

    ConAgra (CAG +0.66%) was downgraded to "Neutral" from "Overweight" at JPMorgan.

    Kellogg (K +0.56%) was downgraded to "Underweight" from "Neutral" at JPMorgan.

    US Airways (LCC +1.12%) and Delta Air Lines (DAL +3.03%) were both pgraded to "Overweight" from "Neutral" at JPMorgan.

    Verizon (VZ +1.13%) was upgraded to "Outperform" from "Sector Perform" at RBC Capital.

    The WSJ report that JPMorgan (JPM +1.05%) is expected to pay $800 million in 'London Whale' fines.

    Fifth Third Bancorp (FITB +0.60%) was downgraded to "Neutral" from "Buy" at Goldman.

    Huntsman (HUN -0.67%) will acquire Rockwood (ROC +0.94%) TiO2 business for $1.1 billion.

    Chico's FAS (CHS +1.98%) was upgraded to "Buy" from "Hold" at KeyBanc.

    Altria Group (MO +0.83%) raised guidance on fiscal 2013 EPS view to $2.57-$2.62 from $2.51-$2.56, well above consensus of $2.39.

    Pandora (P unch) filed to sell 14 million shares of common stock.

    Outerwall (OUTR -2.32%) plunged over 17% in after-hours trading after it lowered guidance on fiscal 2013 EPS view to $4.72-$5.12 from $5.76-$6.26, well below consensus of $5.91.

    MARKET COMMENTS

    Dec E-mini S&Ps (ESZ13 -0.10%) this morning are down -2.25 points (-0.13%). The S&P 500 index on Monday gapped up to a 1-1/4 month high and closed higher. Bullish factors included (1) former Treasury Secretary Summers' withdrawal from consideration as the next Fed Chairman, which bolstered speculation that Janet Yellen will get the job and she will maintain the Fed's easy monetary policies and be less aggressive in tapering QE3, and (2) reduced threats of an imminent U.S. military attack on Syria after U.S. Secretary of State Kerry and Russian Foreign Minister Lavrov agreed on a framework for locating and destroying Syria's stockpiles of chemical weapons. Closes: S&P 500 +0.57%, Dow Jones +0.77%, Nasdaq 100 -0.30%.

    Dec 10-year T-notes (ZNZ13 +0.18%) this morning are up +9 ticks. Dec 10-year T-note prices on Monday gapped up to a 1-month high and the 10-year T-note yield fell to a 2-week low on speculation that Fed Vice Chair Janet Yellen will be the next Fed chairman and will withdraw stimulus more slowly than former Treasury Secretary Summers would have done. Other bullish factors include (1) the unexpected decline in the Sep Empire manufacturing index (-1.9 to 6.3), and (2) the smaller-than-expected +0.4% in Aug industrial production (vs expectations of +0.5%). Closes: TYZ3 +13.50, FVZ3 +12.50.

    The dollar index (DXY00 -0.18%) this morning is down -0.144 (-0.18%). EUR/USD (^EURUSD) is up +0.0026 (+0.19%) and USD/JPY (^USDJPY) is unch. The dollar index on Monday dropped to a 2-week low and closed lower on former Treasury Secretary Summers' rejection of consideration of the Fed chairmanship. Mr. Summers famously questioned the efficacy of quantitative easing and probably would have ended QE3 faster than Fed Vice Chair Janet Yellen. Closes: Dollar index -0.157 (-0.19%), EUR/USD +.00356 (+0.27%), USD/JPY -0.319 (-0.32%).

    Oct WTI crude oil (CLV13 -0.20%) this morning is down -42 cents (-0.39%) at a 2-week low and Oct gasoline (RBV13 +0.04%) is down -0.0026 (-0.10%) at a 5-week low. Oct crude oil and gasoline prices on Monday closed lower with Oct crude at a 2-week low. The main bearish factor for crude prices was the reduced threat of an imminent U.S. attack on Syria after U.S. Secretary of State Kerry and Russian Foreign Minister Lavrov over the weekend agreed on a framework for locating and destroying Syria's stockpiles of chemical weapons by mid-2014. Crude prices climbed from their worst levels after the dollar index fell to a 2-week low and the S&P 500 rallied to a 1-1/4 month high. Closes: CLV3 -1.62 (-1.50%), RBV3 -0.0530 (-1.91%).

    GLOBAL EVENT CALENDAR09/17/2013

    US 0815 ET U.S. Treasury Secretary Jacob Lew speaks at the Economic Club of Washington on The state of the U.S. economy and the need for Washington to avoid self-inflicted wounds that could impede economic growth.
      0830 ET Aug CPI expected +0.2% m/m and +1.6% y/y, July +0.2% m/m and +2.0% y/y. Aug CPI ex food & energy expected +0.1% m/m and +1.8% y/y, July +0.2% m/m and +1.7% y/y.
      1000 ET Sep NAHB housing market index expected -1 to 58, Aug +3 to 59.
      1000 ET CBO releases federal budget outlook.
      1030 ET FOMC begins 2-day meeting.
      1630 ET API weekly U.S. oil statistics.
    EUR 0200 ET Eurozone Aug new car registrations, July -5.6%.
      0500 ET Eurozone July trade balance expected +15.0 billion euros, Jun +14.9 billion euros.
    UK 0430 ET UK Aug PPI input prices expected +0.2% m/m and +3.0% y/y, July +1.1% m/m and +5.0% y/y. Aug PPI output prices expected +0.2% m/m and +1.8% y/y, July +0.2% m/m and +2.1% y/y. Aug PPI core output prices expected +0.1% m/m and +1.1% y/y, July +0.1% m/m and +1.1% y/y.
      0430 ET UK Aug CPI expected +0.5% m/m and +2.7% y/y, July unch m/m and +2.8% y/y. Aug core CPI expected +2.1% y/y, July +2.0% y/y.
      0430 ET UK Aug RPI expected +0.4% m/m and +3.2% y/y, July unch m/m and +3.1% y/y. Aug RPI ex-mortgage interest payments expected +3.2% y/y, July +3.2% y/y.
    GER 0500 ET German Sep ZEW survey expectations of economic growth expected +3.0 to 45.0, Aug 42.0. Sep ZEW survey current situation expected +1.7 to 20.0. Aug 18.3.
    CHI 2130 ET China Aug property prices.

    U.S. STOCK CALENDAR09/17/2013

    Company Name Ticker Time Event Description Period Estimate
    FactSet Research Systems Inc FDS US Bef-mkt Q4 2013 Earnings Release Q4 2013 1.19
    BioMarin Pharmaceutical Inc BMRN US 8:00 Research and Development Day Y 2013  
    Laredo Petroleum Holdings Inc LPI US 8:30 Investor Meeting Y 2013  
    Cummins Inc CMI US 9:00 Analyst Day Y 2013  
    Reliance Steel & Aluminum Co RS US 9:30 Analyst & Investor Day Y 2013  
    Adobe Systems Inc ADBE US Aft-mkt Q3 2013 Earnings Release Q3 2013 0.337
    Stocks: CAG, K, AAL, VZ, JPM, FITB, HUN, CHS, MD, P, OUTR, FDS, BMRN, LPI, CMI, RS, ADBE
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