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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 11/1 0 comments
    Nov 1, 2013 12:57 PM | about stocks: FB, NFLX, WCG, MA, BEBE, PETM, GBX, MDU, ABX, ES, GSOL, RSG, NEM, MCF, FSLR, FLR, MHK, AIG, NEE, CVX, GHC, F, NYX, BRK.A, TMO, GM

    Friday, November 1st, 2013View Older Reports

    BARCHART MORNING CALL

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    OVERNIGHT MARKETS AND NEWS

    December E-mini S&Ps (ESZ13 +0.19%) this morning are up +0.10% and European stocks are down -0.38%. Asian stocks closed mixed: Japan -0.88%, Hong Kong +0.19%, China +0.47%, Taiwan -0.73%, Australia -0.26%, Singapore -0.29%, South Korea +0.64%, India +0.15%. Supporting stock prices today is strength in Chinese manufacturing activity which expanded last month at the fastest pace in 15-months. European stocks were undercut by a -3.1% decline in Royal Bank of Scotland after Britain's biggest publicly owned bank said it will write down as much as 4.5 billion pounds ($7.2 billion) in Q4, which will result in a "substantial" full-year loss. Also, Renault SA, France's second-biggest carmaker, dropped 3.5% after its partner Nissan Motor cut its full-year profit forecast by 15% due to weak sales in Europe and Asia. Japanese stocks were dragged lower by an 11% slump in Sony after the company lowered its full-year profit forecast by 40% on weak television and digital camera demand. Chinese stocks received a boost from a -0.41 point decline in China's 7-day repurchase rate to a 1-week low of 4.636% after the PBOC added a net 29.1 billion yuan ($4.8 billion) via money-market operations in the last 4 days. Commodity prices are mostly lower. Dec crude oil (CLZ13 -0.19%) is down -0.15%. Dec gasoline (RBZ13 +0.03%) is down -0.05%. Dec gold (GCZ13 -0.54%) is down -0.66% at a 1-week low and Dec copper (HGZ13 +0.50%) is up +0.48%. Agricultural and livestock prices are mixed. The dollar index (DXY00 +0.40%) is up +0.34% at a 2-week high. EUR/USD (^EURUSD) is down -0.37% at a 2-week low on speculation that slowing inflation and record unemployment in the Eurozone may prompt the ECB to lower interest rates as soon as its meeting next week. USD/JPY (^USDJPY) is down -0.08%. December T-note prices (ZNZ13 -0.27%) are down -8 ticks.

    The China Oct manufacturing PMI rose +0.3 to 51.4, better than expectations of +0.1 to 51.2 and the fastest pace of expansion in 1-1/2 years.

    UK Oct manufacturing PMI fell -0.3 from a downward revised 56.3 in Sep to 56.0, lower than expectations of -0.3 to 56.4.

    Japan Oct vehicle sales climbed +17.3% y/y, the most in 15-months.

    U.S. STOCK PREVIEW

    Today's Oct ISM manufacturing index is expected to show a -1.2 point decline to 55.0, more than reversing the +0.5 point increase to 56.2 seen in September. Today's Oct total vehicle sales report is expected to improve to 15.40 million units from 15.21 million units in September. There are 5 of the S&P 500 companies that report earnings today: NextEra (consensus $1.39), Chevron (2.70), Washington Post, Berkshire Hathaway (2402.90), and Life Technologies (0.96). There are no equity conferences today.

    OVERNIGHT U.S. STOCK MOVERS

    Facebook (FB +2.45%) was upgraded to 'Buy' from 'Hold' at Argus with a price target of $64.

    Netflix (NFLX +1.36%) was upgraded to 'Outperform' from 'Neutral' at RW Baird who raised their price target on the stock to $420 from $383.

    WellCare (WCG +0.68%) reported Q3 adjusted EPS of $1.56, better than consensus of $1.52, but then lowered guidance on fiscal 2013 EPS to $4.70-$4.80 from $4.70-$4.90, below consensus of $4.91.

    Citigroup reiterated its 'Buy' raing on Mastercard (MA -1.18%) and raised its price target oon the stock to $835 from $710.

    Bebe stores (BEBE +0.33%) was downgraded to 'Neutral' from 'Buy' at Janney Capital.

    PetSmart (PETM -0.07%) was downgraded to 'Neutral' from 'Buy' at BofA/Merrill.

    Greenbrier ({=GBX was upgraded to 'Buy' from 'Underperform' at BofA/Merrill.

    MDU Resources (MDU -0.17%) reported Q3 adjusted EPS of 49 cents, better than consensus of 46 cents, and then raised guidance on fiscal 2013 adjusted EPS view to $1.35-$1.45 from $1.30-$1.40.

    Barrick Gold (ABX -5.41%) filed to sell 163.5 million shares of common stock.

    Northeast Utilities (NU -0.53%) reported Q3 EPS of 66 cents, weaker than consensus of 73 cents.

    Gabelli reported a 5.05% stake in Global Sources (GSOL -3.48%) .

    Republic Services (RSG +0.36%) reported Q3 EPS of 55 cents, higher than consensus of 50 cents.

    Newmont Mining (NEM -2.78%) reported Q3 EPS of 46 cents, well ahead of consensus of 32 cents.

    Oaktree Capital reported a 6.8% stake in Contango Oil & Gas (MCF -2.08%) .

    MRC Global (MRC -0.78%) reported Q3 adjusted EPS of 40 cents, weaker than consensus of 45 cents.

    First Solar (FSLR -2.12%) climbed 8% in pre-market trading after it reported Q3 EPS ex-charges of $2.28, more than double consensus of $1.00, and then raised guidance on fiscal 2013 EPS view to $4.25-$4.50 from $3.75-$4.25, well above consensus of $3.77.

    Fluor (FLR -2.35%) reported Q3 EPS of $1.05, better than consensus of $1.04.

    Mohawk (MHK -0.38%) reported Q3 EPS ex-items of $2.02, well above consensus of $1.90.

    AIG (AIG -0.62%) reported Q3 EPS of 96 cents, higher than consensus of 95 cents.

    MARKET COMMENTS

    Dec E-mini S&Ps (ESZ13 +0.19%) this morning are up +1.75 points (+0.10%). The S&P 500 index on Thursday closed lower. Strong Q3 earnings results gave stocks an early lift as 76% of the 356 reporting S&P 500 companies have beaten estimates. Stocks fell back, though, on concern the Fed may start to taper QE3 as soon as next month after the Chicago Oct PMI unexpectedly jumped +10.2 to 65.9, stronger than expectations of a -0.7 point decline to a 2-1/2 year high of 55.0. Closes: S&P 500 -0.38%, Dow Jones -0.47%, Nasdaq 100 -0.23%.

    Dec 10-year T-notes (ZNZ13 -0.27%) this morning are down -8 ticks. Dec 10-year T-note prices on Thursday dropped to a 1-week low and closed lower. The surge in the Chicago Oct PMI to its fastest pace of expansion in 2-1/2 years undercut T-note prices as it bolstered speculation the Fed may taper QE3 as soon as next month. Closes: TYZ3 -5.0, FVZ3 +0.25.

    The dollar index (DXY00 +0.40%) this morning is up +0.272 (+0.34%) at a 2-week high. EUR/USD (^EURUSD) is down -0.0050 (-0.37%) at a 2-week low. USD/JPY (^USDJPY) is down -0.08 (-0.08%). The dollar index on Thursday rallied sharply to a 2-week high and closed higher. An unexpected increase in the Chicago Oct PMI to its fastest pace of expansion in 2-1/2 years boosted the dollar as it bolstered speculation the Fed may start to taper QE3 as soon as the Dec 17-18 FOMC meeting. EUR/USD tumbled to a 2-week low on speculation the ECB may cut interest rates further after the Eurozone Oct CPI eased to a 3-3/4 year low of +0.7% y/y, weaker than expectations of +1.1% y/y. Closes: Dollar index +0.418 (+0.52%), EUR/USD -0.01521 (-1.11%), USD/JPY -0.154 (-0.16%).

    Dec WTI crude oil (CLZ13 -0.19%) this morning is down -14 cents (-0.15%) and Dec gasoline (RBZ13 +0.03%) is down -0.0012 (-0.05%). Dec crude oil and gasoline prices on Thursday closed lower. Negative factors included (1) the rally in the dollar index to a 2-week high, and (2) negative carry-over from Wednesday's EIA report that showed weekly crude stockpiles climbed +4.09 million bbls to a 4-month high of 383.9 million bbls. Closes: CLZ3 -0.39 (-0.40%), RBZ3 -0.0286 (-1.09%).

    GLOBAL EVENT CALENDAR11/01/2013

    US0910 ETSt. Louis Fed President James Bullard speaks to the St. Louis Regional Chambers Financial Forum about U.S. monetary policy and the economy.
     1000 ETOct ISM manufacturing expected -1.2 to 55.0, Sep +0.5 to 56.2. Oct ISM prices paid expected -1.5 to 55.0, Sep +2.5 to 56.5.
     1200 ETRichmond Fed President Jeffrey Lacker speaks to the Global Independence Center in Philadelphia, PA.
     1700 ETOct total vehicle sales expected 15.43 million, Sep 15.21 million. Oct domestic vehicle sales expected 11.90 million, Sep 11.66 million.
    JPN0100 ETJapan Oct vehicle sales, Sep +12.4% y/y.
    UK0530 ETUK Oct PMI manufacturing expected -0.3 to 56.4, Sep 56.7.

    U.S. STOCK CALENDAR11/01/2013

    Company NameTickerTimeEvent DescriptionPeriodEstimate
    NextEra Energy IncNEE USBef-mkt Q3 20131.394
    American International Group IncAIG US8:00 Q3 2013 
    Chevron CorpCVX US8:30 Q3 20132.698
    Washington Post Co/TheWPO US8:30 Q3 2013 
    Northeast UtilitiesNU US9:00 Q3 2013 
    NextEra Energy IncNEE US9:00 Q3 2013 
    Ford Motor CoF US9:30 2013 
    NYSE EuronextNYX USAft-mkt   
    Netflix IncNFLX US    
    Berkshire Hathaway IncBRK/A US  Q3 20132402.9
    Life Technologies CorpLIFE US  Q3 20130.962
    General Motors CoGM US  2013 

    Stocks: FB, NFLX, WCG, MA, BEBE, PETM, GBX, MDU, ABX, ES, GSOL, RSG, NEM, MCF, FSLR, FLR, MHK, AIG, NEE, CVX, GHC, F, NYX, BRK.A, TMO, GM
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