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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 11/14 0 comments
    Nov 14, 2013 10:20 AM | about stocks: WMT, KSS, VIAB, HP, SBH, CAH, KGC, TTEK, BWA, SEAS, CSCO, NTAP, DDS, TDG, FFIV, MNK, PGR, JWN, AMAT, BMY, STR, TRI

    BARCHART MORNING CALL

    Thursday, November 14th, 2013View Older Reports

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    OVERNIGHT MARKETS AND NEWS

    December E-mini S&Ps (ESZ13 +0.11%) this morning are up +0.15% at a record high and European stocks are up +0.40%. Asian stocks closed higher: Japan +2.12%, Hong Kong +0.82%, China +0.72%, Taiwan +0.38%, Australia +0.68%, Singapore +0.77%, South Korea +0.16%, India +1.02%. Dovish comments Wednesday evening from outgoing Fed Chair Bernanke and incoming Fed Chair Yellen lifted global stocks on signs the Fed will maintain its pace of asset purchases. Japan's Nikkei Stock Index climbed to a 5-1/2 month high on speculation the BOJ will increase its stimulus measures after Japan Q3 GDP slowed from Q2. Commodity prices are mixed. Dec crude oil (CLZ13 -0.35%) is down -0.22%. Dec gasoline (RBZ13 +0.88%) is up +0.85 at a 3-week high. Dec gold (GCZ13 +1.02%) is up +1.17% and Dec copper (HGZ13 -0.22%) is down -0.47% at a 3-1/4 month low. Agricultural and livestock prices are mixed. The dollar index (DXY00 +0.23%) is up +0.26%. EUR/USD (^EURUSD) is down -0.38%. USD/JPY (^USDJPY) is up +0.73% at a 2-month high as the slowdown in Japan Q3 GDP undercut the yen and bolstered speculation the BOJ will increase its asset purchases to stimulate growth. December T-note prices (ZNZ13 +0.15%) are up +7 ticks.

    In prepared remarks released Wednesday afternoon after U.S. markets closed, Fed Chair nominee Yellen signaled the Fed will maintain QE3 at current levels when she said "supporting the recovery today is the surest path to returning to a more normal approach to monetary policy."

    Speaking at a town hall meeting Wednesday evening, Fed Chairman Bernanke said the Fed is falling short on its dual mandate to ensure price stability and full employment and that "we need a stronger, more rapidly moving economy."

    UK Oct retail sales ex autos fell -0.6% m/m and rose +2.3% y/y, weaker than expectations of -0.1% m/m and +3.1% y/y. Oct retail sales including autos fell -0.7% m/m and rose +1.8% y/y, also weaker than expectations of unch m/m and +3.1% y/y.

    Eurozone Q3 GDP rose +0.1% q/q and fell -0.4% y/y, slightly less than expectations of +0.1% q/q and -0.3% y/y.

    German Q3 GDP rose +0.3% q/q and +0.6% y/y, right on expectations.

    Japan Q3 GDP rose +1.9% q/q annualized, better than expectations of +1.7% q/q annualized, but slower than the +3.8% q/q annualized in Q2. The Q3 GDP deflator fell -0.3% y/y, less than expectations of -0.5% y/y. Q3 GDP consumer spending rose +0.1% q/q, less than expectations of +0.2% and Q3 GDP business spending rose +0.2% q/q, also less than expectations of +1.0% q/q.

    Japan Sep industrial production was revised down to +1.3% m/m and +5.1% y/y from the originally reported +1.5% m/m and +5.4% y/y.

    U.S. STOCK PREVIEW

    Today's weekly initial unemployment claims report is expected to show a decline of -6,000 to 330,000, adding to last week's decline of -9,000 to 336,000. Meanwhile, today's continuing claims series is expected to show a small increase of +2,000 to 2.870 million, adding to last week's increase of +4,000 to 2.868 million. Today's Sep trade deficit report is expected to widen slightly to -$39.0 billion from -$38.8 billion in August. The Treasury today will sell $16 billion in 30-year T-bonds, concluding this week's $70 billion refunding operation. There are 8 of the S&P 500 companies that report earnings today: Viacom (consensus $1.44), Tyco (0.52), Wal-Mart (1.13), Helmerich & Payne (1.40), Kohl's (0.86), Agilent Technologies (0.76), Applied Materials (0.18), and Nordstrom (0.67).

    Equity conferences during the remainder of this week include: Goldman Sachs Industrials Conference on Wed-Thu, Morgan Stanley Global Chemicals and Agriculture Conference on Wed-Thu, UBS Building and Building Products CEO Conference on Thu, Barclays Software Defined Data Center Forum on Thu, SunTrust Robinson Humphrey Financial Technology, Business and Government Servic on Thu, Morgan Stanley Asia Pacific Summit on Thu, and Mexico Investors Forum 2013 on Fri.

    OVERNIGHT U.S. STOCK MOVERS

    Wal-Mart (WMT +0.24%) reported Q3 EPS of $1.14, higher than consensus of $1.13.

    Kohl's (KSS +1.15%) reported Q3 EPS of 81 cents, weaker than consensus of 86 cents, and then lowered guidance on fiscal 2013 EPS view to $4.08-$4.23 from $4.15-$4.35, less than consensus of $4.23.

    Viacom (VIAB +1.23%) reported Q4 EPS of $1.55, well ahead of consensus of $1.44.

    Helmerich & Payne (HP +0.31%) reported Q4 EPS of $1.47, better than consensus of$1.40.

    Sally Beauty (SBH +1.02%) reported Q4 EPS of 38 cents, less than consensus of 39 cents.

    Cardinal Health (CAH +1.48%) was awarded a maximum $1.02 billion government contract modification for prime vendor medical and surgical supplies.

    Kinross Gold (KGC +1.63%) reported Q3 adjusted EPS of 5 cents, higher than consensus of 4 cents.

    Tetra Tech (TTEK -0.30%) reported Q4 EPS of 39 cents, better than consensus of 36 cents.

    BorgWarner (BWA +0.46%) announced a two-for-one stock split to all shareholders of record as of the close of business on December 2.

    SeaWorld (SEAS +2.82%) reported Q3 EPS of $1.33, mauch better than consensus of $1.21.

    Cisco (CSCO +1.14%) tumbled 11% in after-hours trading after it reported Q1 adjusted EPS of 53 cents, higher than consensus of 51 cents, but then lowered guidance on fiscal 2014 adjusted EPS to $1.95-$2.05, below consensus of $2.10.

    NetApp (NTAP +2.71%) fell 3% in after-hours trading after it reported Q2 EPS of 66 cents, better than consensus of 63 cents, but reported Q2 revenue of $1.55 billion, below consensus of $1.6 billion.

    MARKET COMMENTS

    Dec E-mini S&Ps (ESZ13 +0.11%) this morning are up +2.75 points (+0.15%). The S&P 500 index on Wednesday shook off early losses and rallied to a new all-time high. Bullish factors included (1) comments from Janet Yellen, the next Fed Chair, who said the economy and labor markets are performing "far short of their potential" and must improve before the Fed can begin cutting monetary stimulus, and (2) strength in retail stocks after Macy's surged 9% on better-than-expected earnings and fueled optimism about the holiday shopping season. Closes: S&P 500 +0.81%, Dow Jones +0.45%, Nasdaq 100 +1.20%.

    Dec 10-year T-notes (ZNZ13 +0.15%) this morning are up +7 ticks. Dec 10-year T-note prices on Wednesday closed higher. The major supportive factor was the dovish statement from Janet Yellen that fueled speculation the Fed will maintain the current pace of bond buying when she said the economy must improve before the Fed can begin tapering bond purchases. Closes: TYZ3 +14.50, FVZ3 +8.75.

    The dollar index (DXY00 +0.23%) this morning is up +0.209 (+0.26%). EUR/USD (^EURUSD) is down -0.0051 (-0.38%). USD/JPY (^USDJPY) is up +0.72 (+0.73%) at a 2-month high. The dollar index on Wednesday closed lower on speculation that Fed will maintain QE3 into next year on dovish comments from Janet Yellen, the next Fed Chair. Gains in EUR/USD were limited after ECB Executive Board member Praet said the ECB is prepared to take additional steps to prevent the Eurozone from slipping into deflation. Closes: Dollar index -0.266 (-0.33%), EUR/USD +0.00509 (+0.38%), USD/JPY -0.396 (-0.40%).

    Dec WTI crude oil (CLZ13 -0.35%) this morning is down -21 cents (-0.22%) and Dec gasoline (RBZ13 +0.88%) is up +2.23 cents (+0.85%) at a 3-week high. Dec crude oil and gasoline prices on Wednesday closed higher on (1) ongoing worker protests in Libya that have disrupted the country's oil exports, which plunged to 250,000 barrels a day on Nov 10, well below the average of 1.28 million bpd in the first six months of this year, and (2) strength in gasoline which climbed to a 3-week high on speculation that refiners will use more crude to process gasoline after the crack spread, the profit from processing 3 barrels of crude into 2 gasoline and 2 of heating oil, rose to a 3-1/4 month high of $19.94 a barrel. Closes: CLZ3 +0.84 (+0.90%), RBZ3 +0.0416 (+1.61%).

    GLOBAL EVENT CALENDAR11/14/2013

    US 0830 ET Weekly initial unemployment claims expected -6,000 to 330,000, previous -9,000 to 336,000. Weekly continuing claims expected +2,000 to 2.870 million, previous +4,000 to 2.868 million.
      0830 ET Sep trade balance expected -$39.0 billion, Aug -$38.8 billion.
      0830 ET Q3 non-farm productivity expected +2.2%, Q2 +2.3%. Q3 unit labor costs expected -0.1%, Q2 unch.
      0900 ET Philadelphia Fed President Charles Plosser speaks on monetary policy at the Cato Institute.
      1000 ET Fed Vice-Chairman Janet Yellen testifies before the Senate Banking Committee regarding her nomination to become the next Fed chair.
      1100 ET EIA Weekly Petroleum Status Report.
      1100 ET Treasury announces amount of 10-year TIPS to be auctioned Nov 21.
      1300 ET Treasury auctions $16 billion 30-year T-bonds.
    GER 0200 ET German Q3 GDP expected +0.3% q/q and +0.6% y/y, Q2 +0.7% q/q and +0.5% y/y.
    UK 0430 ET UK Oct retail sales ex autos expected -0.1% m/m and +3.1% y/y, Sep +0.7% m/m and +2.8% y/y
      0430 ET UK Oct retail sales including autos expected unch m/m and +3.1% y/y, Sep +0.6% m/m and +2.2% y/y.
    EUR 0500 ET Eurozone Q3 GDP expected +0.1% q/q and -0.3% y/y, Q2 +0.3% q/q and -0.5% y/y.

    U.S. STOCK CALENDAR11/14/2013

    Company Name Ticker Time Event Description Period Estimate
    Dillard's Inc DDS US Bef-mkt Q3 2014 Earnings Release Q3 2014 1.05
    Helmerich & Payne Inc HP US Bef-mkt Q4 2013 Earnings Release Q4 2013 1.404
    Kohl's Corp KSS US Bef-mkt Q3 2014 Earnings Release Q3 2014 0.855
    Wal-Mart Stores Inc WMT US Bef-mkt Q3 2014 Earnings Release Q3 2014 1.127
    Viacom Inc VIAB US Bef-mkt Q4 2013 Earnings Release Q4 2013 1.438
    TransDigm Group Inc TDG US Bef-mkt Q4 2013 Earnings Release Q4 2013 1.705
    Sally Beauty Holdings Inc SBH US Bef-mkt Q4 2013 Earnings Release Q4 2013 0.392
    Wal-Mart Stores Inc WMT US 7:00 Q3 2014 Earnings Call Q3 2014  
    F5 Networks Inc FFIV US 8:00 Analyst and Investor Meeting Y 2013  
    Kohl's Corp KSS US 8:30 Q3 2014 Earnings Call Q3 2014  
    Viacom Inc VIAB US 8:30 Q4 2013 Earnings Call Q4 2013  
    Mallinckrodt PLC MNK US 8:30 Investor Briefing Y 2013  
    Progressive Corp/The PGR US 9:00 Investor Relations Conferece Call    
    Nordstrom Inc JWN US Aft-mkt Q3 2014 Earnings Release Q3 2014 0.665
    Applied Materials Inc AMAT US Aft-mkt Q4 2013 Earnings Release Q4 2013 0.181
    Bristol-Myers Squibb Co BMY US   FDA Adcomm, tasimelteon, Non-24-Hour Disorder in the totally blind    
    Questar Corp STR US   Roadshow - West Coast - Day 1 Y 2013  
    Western Digital Corp WDC US   Annual General Meeting    
    Thomson Reuters Corp TRI CN   Annual General Meeting Y 2013  
    Stocks: WMT, KSS, VIAB, HP, SBH, CAH, KGC, TTEK, BWA, SEAS, CSCO, NTAP, DDS, TDG, FFIV, MNK, PGR, JWN, AMAT, BMY, STR, TRI
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