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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 10/23 0 comments
    Oct 23, 2013 1:49 PM | about stocks: LLY, NOC, GD, NDAQ, NFLX, UIS, JPM, APOL, BCR, GLW, BRCM, JNPR, AMGN, FTI, DPS, NLSN, PLD, LO, HCBK, ANTM, TMO, WYN, AEP, MSI, ATI, ARG, BA, BMY, CAT, MOLX, NSC, ACE, PL, C, EFX, VAR, LEG, LSI, SYMC, AVB, AIZ, FFIV

    BARCHART MORNING CALL

    Wednesday, October 23rd, 2013View Older Reports

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    OVERNIGHT MARKETS AND NEWS

    December E-mini S&Ps (ESZ13 -0.54%) this morning are down -0.54% and European stocks are down -1.07% as global stocks fall back from their recent rally. Asian stocks closed lower: Japan -1.95%, Hong Kong -1.36%, China -1.12%, Taiwan -0.29%, Australia -0.32%, Singapore -0.17%, South Korea -1.14%, India -0.47%. Global stocks retreated on signs the PBOC may be leaning toward tighter monetary policy as borrowing costs rose. China's 7-day repurchase rate surged 47 bp to 4.05% as the PBOC has refrained from selling reverse-repurchase contracts, which adds funds to the financial system, since Oct 17. European stocks were also dragged lower by a 5% drop in Orange SA after France's largest telecommunications company reported decreased earnings. Also, technology stocks took a hit as STMicroelectronics tumbled over 6% after Europe's biggest semiconductor maker reported a net loss. Commodity prices are mixed. Dec crude oil (CLZ13 -1.33%) is down -1.55% at a new 3-1/2 month low on expectations that today's EIA inventory report will show a 3 million bbl increase in crude supplies. Dec gasoline (RBZ13 -0.39%) is down -0.36% at a 2-week low. Dec gold (GCZ13 -0.79%) is down -0.89% and Dec copper (HGZ13 -1.47%) is down -0.91%. Agricultural and livestock prices are mostly higher. The dollar index (DXY00 +0.14%) is up +0.16%. EUR/USD (^EURUSD) is down -0.27% and USD/JPY (^USDJPY) is down -0.83% at a 2-week low on increased demand for the yen as global stocks slide. December T-note prices (ZNZ13 +0.09%) are up +3 ticks as the 10-year T-note yield slipped to a 3-month low of 2.48% on carry-over support from Tuesday's weaker-than-expected Sep payrolls report that bolstered the outlook for the Fed to maintain QE3.

    The minutes of the Oct 9-10 BOE meeting showed that members voted unanimously to keep policy unchanged as economic data pointed to a "robust" recovery. The minutes stated that "The news on the month had continued to suggest a robust recovery in activity," with confidence rising and surveys pointing to growth of about 2% over the second half of the year. "Market rates had fallen back over the month and output appeared to be expanding at least as fast as expected" in August. "All members therefore agreed that there was currently little case for increasing the degree of monetary stimulus further."

    U.S. STOCK PREVIEW
    Today's Aug FHFA house price index is expected to show another strong increase of +0.8% m/m, adding to July's +1.0% m/m increase to a new 5-year high of 205.5. There are 39 of the S&P 500 companies that report earnings today with notable reports including WellPoint, Eli Lilly, AEP, Northrop Grumman, General Dynamics, Motorola Solutions, Nasdaq, Boeing, Bristol-Myers Squibb, Caterpillar, AT&T, and Symantec. Equity conferences this week include: 4th Annual Manufacturing Strategies on Tue-Wed, Oil Council 2013 North America Assembly on Tue-Wed.

    OVERNIGHT U.S. STOCK MOVERS

    Eli Lilly (LLY +1.01%) reported Q3 EPS of $1.11, better than consensus of $1.04.

    Northrop Grumman (NOC +1.26%) reported Q3 EPS of $2.14, stronger than consensus of $1.82.

    General Dynamics (GD +0.18%) reported Q3 EPS of $1.84, well ahead of consensus of $1.68.

    NASDAQ OMX Group (NDAQ -0.33%) reported Q3 EPS of 66 cents, better than consensus of 62 cents.

    Netflix (NFLX -9.15%) fell over 2% in after-hours trading after billionare investor Carl Icahn reported a sale of 2.99 million shares of Netflix.

    Unisys (UIS +1.75%) reported Q3 adjusted EPS of 25 cents, weaker than consensus of 40 cents.

    Reuters reported that JPMorgan Chase's (JPM -1.20%) $13 billion settlement with the U.S. could cost the bank closer to $9 billion, as most of the deal is expected to be tax deductible.

    Apollo Group (APOL +0.10%) jumped over 12% in after-hours tradng after it reported Q4 EPS ex-items of 55 cents, more than double consensus of 25 cents.

    C.R. Bard (BCR +0.67%) reported Q3 EPS of $1.50, well ahead of consensus of $1.40.

    Corning (GLW +1.72%) soared over 20% in pre-market trading after it reported preliminary Q3 EPS of 33 cents, better than consensus of 32 cents, and said it approved a $2 billion stock buyback and agreed to purchase full ownership of Samsung Electronics' 43% stake in Samsung Corning Precision Materials Co., which makes glass for liquid crystal displays in South Korea.

    Broadcom (BRCM -0.66%) fell over 6% in after-hours trading after it reported Q3 adjusted EPS of 76 cents, better than consensus of 69 cents, but then announced it will cut 1,150 jobs as part of a restructuring,

    Juniper (JNPR -2.35%) reported preliminary Q3 EPS of 33 cents, better than consensus of 31 cents.

    Amgen (AMGN +2.26%) reported Q3 EPS of $1.94, stronger than consensus of $1.77, and then raised guidance on fiscal 2013 EPS to $7.35 to $7.45, better than consensus of $7.32.

    FMC Technologies (FTI -0.45%) reported Q3 EPS of 49 cents, well below consensus of 59 cents.

    MARKET COMMENTS

    Dec E-mini S&Ps (ESZ13 -0.54%) this morning are down -9.50 points (-0.54%). The S&P 500 index on Tuesday surged to yet another record high and closed higher. Stocks rallied on bullish factors that included (1) the +148,000 increase in Sep non-farm payrolls, less than expectations of +180,000, which nearly assures that the Fed will not taper QE3 until at least next year, (2) the +0.6% increase in Aug construction spending, better than expectations of +0.4%, and (3) strong Q3 earnings results thus far as 73% of the 131 S&P 500 companies that have released earnings have beaten estimates. Closes: S&P 500 +0.57%, Dow Jones +0.49%, Nasdaq 100 +0.17%.

    Dec 10-year T-notes (ZNZ13 +0.09%) this morning are up +3 ticks and the 10-year T-note yield fell below 2.50% for the first time in 3 months. Dec 10-year T-note prices on Tuesday closed higher and the 10-year T-note field fell to a 3-month low of 2.51%. The main bullish factor for T-note prices was the smaller-than-expected increase in Sep non-farm payrolls that bolstered speculation the Fed will maintain its $85 billion a month of bond purchases. Closes: TYZ3 +24, FVZ3 +11.25.

    The dollar index (DXY00 +0.14%) this morning is up +0.128 (+0.16%). EUR/USD (^EURUSD) is down -0.0037 (-0.27%) and USD/JPY (^USDJPY) is down -0.81 (-0.83%) at a 2-week low. The dollar index on Tuesday tumbled to an 8-1/2 month low and closed lower after the smaller-than-expected increase in Sep non-farm payrolls boosted speculation the Fed will refrain from tapering QE3. EUR/USD posted a 1-3/4 year high as prices surged on technical buying after the euro accelerated above 1.37 per dollar. Closes: Dollar index -0.465 (-0.58%), EUR/USD +0.0100 (+0.73%), USD/JPY -0.054 (-0.05%).

    Dec WTI crude oil (CLZ13 -1.33%) this morning is down -$1.52 (-1.55%) at a 3-1/2 month low and Dec gasoline (RBZ13 -0.39%) is down -0.0094 (-0.36%) at a 2-week low. Dec crude oil and gasoline prices on Tuesday erased an early rally and closed lower. Dec crude prices fell to a 3-1/2 month low on bearish factors that included (1) negative carry-over from Monday's EIA inventory report that showed a +4.0 million bbl increase in EIA crude inventories to a 3-1/2 month high, (2) concern about U.S. energy demand after Sep non-farm payrolls rose less than expected, and (3) expectations that Wednesday's EIA inventory data will show crude oil stockpiles rose for a fifth week. Closes: CLZ3 -1.38 (-1.38%), RBZ3 -0.0333 (-1.26%).

    GLOBAL EVENT CALENDAR10/23/2013

    US0700 ETWeekly MBA mortgage applications, previous +0.3% with purchase sub-index -4.8% and refi sub-index +3.3%.
     0830 ETSep import prices expected +0.2% m/m and -1.0% y/y, Aug unch m/m and -0.4% y/y.
     0900 ETAug FHFA house price index purchase-only expected +0.8% m/m, July +1.0% m/m.
     1030 ETEIA Weekly Petroleum Status Report.
    UK0430 ETMinutes of the Oct 9-10 BOE policy meeting.
    EUR1000 ETEurozone Oct consumer confidence expected +0.4 to -14.5, Sep -14.9.
    CHI2145 ETChina Oct HSBC/Markit flash manufacturing PMI expected +0.2 to 50.4, Sep +0.1 to 50.2.

    U.S. STOCK CALENDAR10/23/2013

    Company NameTickerTimeEvent DescriptionPeriodEstimate
    Dr Pepper Snapple Group IncDPS USBef-mktQ3 2013 Earnings ReleaseQ3 20130.834
    Nielsen Holdings NVNLSN USBef-mktQ3 2013 Earnings ReleaseQ3 20130.482
    Prologis IncPLD USBef-mktQ3 2013 Earnings ReleaseQ3 20130.412
    Lorillard IncLO USBef-mktQ3 2013 Earnings ReleaseQ3 20130.807
    Hudson City Bancorp IncHCBK USBef-mktQ3 2013 Earnings ReleaseQ3 20130.082
    WellPoint IncWLP US6:00Q3 2013 Earnings ReleaseQ3 20131.818
    Thermo Fisher Scientific IncTMO US6:00Q3 2013 Earnings ReleaseQ3 20131.282
    Wyndham Worldwide CorpWYN US6:30Q3 2013 Earnings ReleaseQ3 20131.362
    Eli Lilly & CoLLY US6:30Q3 2013 Earnings ReleaseQ3 20131.038
    American Electric Power Co IncAEP US6:57Q3 2013 Earnings ReleaseQ3 20131.082
    Motorola Solutions IncMSI US7:00Q3 2013 Earnings ReleaseQ3 20131.019
    Northrop Grumman CorpNOC US7:00Q3 2013 Earnings ReleaseQ3 20131.817
    Allegheny Technologies IncATI US7:00Q3 2013 Earnings ReleaseQ3 2013-0.279
    General Dynamics CorpGD US7:00Q3 2013 Earnings ReleaseQ3 20131.678
    NASDAQ OMX Group Inc/TheNDAQ US7:00Q3 2013 Earnings ReleaseQ3 20130.622
    Airgas IncARG US7:30Q2 2014 Earnings ReleaseQ2 20141.232
    Boeing Co/TheBA US7:30Q3 2013 Earnings ReleaseQ3 20131.515
    Bristol-Myers Squibb CoBMY US7:30Q3 2013 Earnings ReleaseQ3 20130.442
    Caterpillar IncCAT US7:30Q3 2013 Earnings ReleaseQ3 20131.674
    Molex IncMOLX US7:30Q1 2014 Earnings ReleaseQ1 20140.373
    Motorola Solutions IncMSI US8:00Q3 2013 Earnings CallQ3 2013 
    Norfolk Southern CorpNSC US8:00Q3 2013 Earnings ReleaseQ3 20131.388
    NASDAQ OMX Group Inc/TheNDAQ US8:00Q3 2013 Earnings CallQ3 2013 
    WellPoint IncWLP US8:30Q3 2013 Earnings CallQ3 2013 
    Nielsen Holdings NVNLSN US8:30Q3 2013 Earnings CallQ3 2013 
    Allegheny Technologies IncATI US8:30Q3 2013 Earnings CallQ3 2013 
    Wyndham Worldwide CorpWYN US8:30Q3 2013 Earnings CallQ3 2013 
    Thermo Fisher Scientific IncTMO US8:30Q3 2013 Earnings CallQ3 2013 
    ACE LtdACE US8:30Q3 2013 Earnings CallQ3 2013 
    Norfolk Southern CorpNSC US8:45Q3 2013 Earnings CallQ3 2013 
    American Electric Power Co IncAEP US9:00Q3 2013 Earnings CallQ3 2013 
    Parker Hannifin CorpPH US9:00Annual General MeetingY 2013 
    Lorillard IncLO US9:00Q3 2013 Earnings CallQ3 2013 
    FMC Technologies IncFTI US9:00Q3 2013 Earnings CallQ3 2013 
    General Dynamics CorpGD US9:00Q3 2013 Earnings CallQ3 2013 
    Eli Lilly & CoLLY US9:00Q3 2013 Earnings CallQ3 2013 
    Molex IncMOLX US9:30Q1 2014 Earnings CallQ1 2014 
    Airgas IncARG US10:00Q2 2014 Earnings CallQ2 2014 
    Citigroup IncC US10:00Q3 2013 Earnings Call - Fixed IncomeC3 2013 
    Bristol-Myers Squibb CoBMY US10:00Q3 2013 Earnings CallQ3 2013 
    Boeing Co/TheBA US10:30Q3 2013 Earnings CallQ3 2013 
    Dr Pepper Snapple Group IncDPS US11:00Q3 2013 Earnings CallQ3 2013 
    Caterpillar IncCAT US11:00Q3 2013 Earnings CallQ3 2013 
    Nabors Industries LtdNBR US11:00Q3 2013 Earnings CallQ3 2013 
    Equifax IncEFX USAft-mktQ3 2013 Earnings ReleaseQ3 20130.884
    Varian Medical Systems IncVAR USAft-mktQ4 2013 Earnings ReleaseQ4 20131.113
    Leggett & Platt IncLEG USAft-mktQ3 2013 Earnings ReleaseQ3 20130.437
    LSI CorpLSI USAft-mktQ3 2013 Earnings ReleaseQ3 20130.161
    Symantec CorpSYMC USAft-mktQ2 2014 Earnings ReleaseQ2 20140.437
    AvalonBay Communities IncAVB USAft-mktQ3 2013 Earnings ReleaseQ3 20131.175
    Assurant IncAIZ USAft-mktQ3 2013 Earnings ReleaseQ3 20131.504
    F5 Networks IncFFIV US Q4 2013 Earnings ReleaseQ4 20131.187

    Stocks: LLY, NOC, GD, NDAQ, NFLX, UIS, JPM, APOL, BCR, GLW, BRCM, JNPR, AMGN, FTI, DPS, NLSN, PLD, LO, HCBK, ANTM, TMO, WYN, AEP, MSI, ATI, ARG, BA, BMY, CAT, MOLX, NSC, ACE, PL, C, EFX, VAR, LEG, LSI, SYMC, AVB, AIZ, FFIV
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