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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 10/28 0 comments
    Oct 28, 2013 11:01 AM | about stocks: AAPL, QSR, MRK, MCD, WBA, KSS, WPZ, JPM, FNMA, ROP, BIIB, L, EW, SCHW, PCL, HIG, STX, MAC, FMC, MAS

    BARCHART MORNING CALL

    Monday, October 28th, 2013View Older Reports

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    OVERNIGHT MARKETS AND NEWS

    December E-mini S&Ps are up +0.13% this morning as the market expects the FOMC at its meeting on Tue/Wed to maintain the size of its QE3 program. The Euro Stoxx 50 index this morning is down -0.37%. Asian stocks today closed mostly higher: Japan +2.19%, Hong Kong +0.48%, China CSI 300 -0.11%, Taiwan +0.73%, Australia +1.02%, Singapore +0.08%, South Korea +0.83%, India -0.55%, Turkey +0.37%. Chinese stocks fell mildly today on weak earnings reports. Commodity prices are down by -0.26% this morning. Dec crude oil is slightly lower by -0.04% while Dec gasoline is up +0.22%. Dec gold is down -0.08%. Agricultural prices are mostly lower. The dollar index is virtually unchanged this morning. EUR/USD is up +0.04% and USD/JPY is up +0.23%. Dec T-note prices are down -2.5 ticks.

    JPMorgan downgraded European automakers to neutral from overweight on expectations for earnings momentum to stall. European automaker stocks (BMW, Volkswagen, Fiat, PSA Peugeot Citroen) all fell more than 1% today.

    BOJ Deputy Governor Kikuo Iwata on Sunday said that the Bank of Japan remains committed to monetary easing, which provided support for industrial metals prices and undercut the yen. Mr. Iwata said that the BOJ will continue to buy bonds until its inflation target is reached.

    The Obamacare insurance exchange website was hit by an outage over the weekend when a data services hub run by Verizon unit Terremark temporarily lost connectivity due to downed networking equipment. The data services hub provides tax information to the national health care insurance website as well as the state exchanges.

    Britain today was hit by its worst storm in five years, which disrupted commuting and flights at major airports. Heathrow canceled about 20% of its flights.

    U.S. STOCK PREVIEW

    Today's Sep industrial production report is expected to show a solid increase of +0.4%, adding to the +0.4% increase seen in Aug. Sep manufacturing production is expected to show an increase of +0.3% after the sharp increase of +0.7% seen in August. Today's Sep pending home sales report is expected to be unchanged, stabilizing after the -1.6% m/m drop seen in August. There are 12 of the S&P 500 companies that report earnings today with notable reports including Biogen Idec, Merck, Hartford Financial, Seagate, and Apple.

    Equity conferences this week include: Citi Australian Investment Conference on Mon/Tue, European Manufacturing Strategies Summit 2013 on Mon/Tue, RSA Security Conference on Tue, The Buttonwood Gathering 2013 on Tue/Wed, Hart Energy Crude In Motion Conference on Wed, The 7th ICIS European Gas Conference on Wed, 7th Toronto Global Forum on Wed-Thu, and SelectUSA 2013 Investment Summit on Thu.

    Dec E-mini S&Ps this morning are trading mildly higher by +2.25 (+0.13%) as the market remains optimistic that the FOMC will maintain the $85 billion per month size of its QE3 program at its meeting on Tue/Wed. The S&P 500 index on Friday closed moderately higher and posted a new record high on support from positive earnings news from Amazon.com and Microsoft and on continued expectations that the FOMC will not start tapering QE3 until 2014. Closes: S&P 500 +0.44%, Dow Jones +0.39%, Nasdaq 100 +0.37%.

    OVERNIGHT U.S. STOCK MOVERS

    • Apple (AAPL -1.12%) is up +0.6% in European trading ahead of today's after-market earnings report.
    • Burger King (BKW +0.05%) this morning reported Q3 adjusted EPS at 23 cents, slightly above the consensus of 21 cents.
    • Merck (MRK +0.69%) this morning reported Q3 adjusted EPS at 92 cents, above the consensus of 88 cents.
    • McDonald's (MCD +0.11%) forward P/E ratio could continue to fall, according to a weekend article by Barron's.
    • Walgreens (WAG -0.10%) could rally to $70-80 in the next few years if the company's earnings forecasts are met, according to an article in Barron's.
    • Kohl's (KSS -0.33%) could rise 20% as merchandising improvements and inventory levels pay off, according to an article in Barron's.
    • Williams Partners (WPZ +0.78%) raised its quarterly cash distribution by 8.7% to 87.75 cents per unit.
    • JPMorgan (JPM +0.55%) late Friday announced $5.1 billion in settlements with Federal Housing Financing Authority, which is acting as the conservator for Fannie Mae (FNMA +13.40%) and Freddie Mac (FMCC +11.89%)

    MARKET COMMENTS

    Dec 10-year T-notes this morning are down 2.5 ticks on reduced safe-haven demand with the mildly higher trade in E-mini S&Ps this morning. Dec 10-year T-note prices on Friday closed mildly higher on the weak U.S. durable goods orders and consumer confidence index reports and on expectations that the Fed will maintain QE3 at its current size into 2014. Closes: TYZ3 +6.5, FVZ3 +4.25.

    The dollar index this morning is little changed. EUR/USD is slightly higher by +0.0006 (+0.04%) and USD/JPY is up +0.22 yen (+0.23%). The dollar index on Friday slipped to a new 9-month low but then recovered and closed little changed. The dollar index on Friday was undercut by the weak U.S. durable goods orders and U.S. consumer confidence reports and by expectations that the Fed will not taper its dollar-bearish QE3 program until early 2014. Closes: Dollar index +0.009 (+0.01%), EUR/USD +0.0001 (+0.01%), USD/JPY +0.34 (+0.35%).

    Dec WTI crude oil this morning is slightly lower by -0.04 (-0.04%) but Dec gasoline is up +0.0057 (+0.22%). Dec crude oil and gasoline prices on rebounded higher from Thursday's 3-3/4 month lows and closed mixed. The main bullish factor was short-covering from Thursday's lows while bearish factors included the net bearish durable goods and U.S. consumer confidence reports. Closes: CLZ3 +0.74 (+0.76%), RBZ3 -0.0050 (-0.19%).

    GLOBAL EVENT CALENDAR10/28/2013

    US 0915 ET Sep industrial production expected +0.4%, Aug +0.4%. Sep manufacturing production expected +0.3%, Aug +0.7%. Sep capacity utilization expected +0.2 to 78.0%, Aug 77.8%.
      1000 ET Sep pending home sales expected unch m/m and +3.5% y/y, Aug -1.6% m/m and +2.9% y/y
      1100 ET USDA weekly grain export inspections.
      1145 ET Former Fed Governor Frederic Mishkin speaks at the Columbia University Graduate School of Business on Unwinding QE: Broad Financial Market and Economic Impact.
      1300 ET Treasury auctions $32 billion of 2-year T-notes.
      1600 ET USDA Crop Progress.
    UK 0700 ET UK Oct CBI reported sales expected 33, Sep 34.
    JPN 1930 ET Japan Sep overall household spending expected +0.5% y/y, Aug -1.6% y/y.
      1930 ET Japan Sep jobless rate expected -0.1 to 4.0%, Aug 4.1%. Sep job-to-applicant ratio expected +0.1 to 0.96, Aug 0.95.
      1950 ET Japan Sep retail sales expected +0.4% m/m and +1.9% y/y, Aug +0.9% m/m and +1.1% y/y

    U.S. STOCK CALENDAR10/28/2013

    Company Name Ticker Time Event Description Period Estimate
    Roper Industries Inc ROP US Bef-mkt Q3 2013 Earnings Release Q3 2013 1.454
    Biogen Idec Inc BIIB US Bef-mkt Q3 2013 Earnings Release Q3 2013 2.088
    Loews Corp L US Bef-mkt Q3 2013 Earnings Release Q3 2013 0.77
    Merck & Co Inc MRK US Bef-mkt Q3 2013 Earnings Release Q3 2013 0.874
    Merck & Co Inc MRK US 8:00 Q3 2013 Earnings Call Q3 2013  
    Roper Industries Inc ROP US 8:30 Q3 2013 Earnings Call Q3 2013  
    Biogen Idec Inc BIIB US 9:00 Q3 2013 Earnings Call Q3 2013  
    Edwards Lifesciences Corp EW US 9:00 Q3 2013 Earnings Release Q3 2013 0.659
    Edwards Lifesciences Corp EW US 10:00 Q3 2013 Earnings Call Q3 2013  
    Charles Schwab Corp/The SCHW US 11:00 Analyst Meeting    
    Loews Corp L US 11:00 Q3 2013 Earnings Call Q3 2013  
    Plum Creek Timber Co Inc PCL US Aft-mkt Q3 2013 Earnings Release Q3 2013 0.417
    Hartford Financial Services Group Inc HIG US Aft-mkt Q3 2013 Earnings Release Q3 2013 0.835
    Seagate Technology PLC STX US Aft-mkt Q1 2014 Earnings Release Q1 2014 1.305
    Macerich Co/The MAC US Aft-mkt Q3 2013 Earnings Release Q3 2013 0.829
    FMC Corp FMC US Aft-mkt Q3 2013 Earnings Release Q3 2013 0.836
    Apple Inc AAPL US Aft-mkt Q4 2013 Earnings Release Q4 2013 7.916
    Masco Corp MAS US Aft-mkt Q3 2013 Earnings Release Q3 2013 0.249
    Stocks: AAPL, QSR, MRK, MCD, WBA, KSS, WPZ, JPM, FNMA, ROP, BIIB, L, EW, SCHW, PCL, HIG, STX, MAC, FMC, MAS
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