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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 11/25 0 comments
    Nov 25, 2013 8:20 AM | about stocks: FLRC, DVA, BRCD, CAT, RRD, CPB, CLX, AA, AGN, JCP, GSK, WLSDRL, PANW, NUAN, WDAY, CPRT, ELS

    BARCHART MORNING CALL

    Monday, November 25th, 2013View Older Reports

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    OVERNIGHT MARKETS AND NEWS

    December E-mini S&Ps (ESZ13 +0.31%) this morning are up +0.36% at a record high and European stocks are up +0.64% after Iran agreed to limit its nuclear program. Asian stocks closed mostly higher: Japan +1.54%, Hong Kong -0.05%, China -0.39%, Taiwan +0.87%, Australia +0.32%, Singapore +0.25%, South Korea +0.51%, India +1.92%. Japanese exporters rallied and help propel the Nikkei Stock Index up to a 6-month high after the yen tumbled to a 5-3/4 month low against the dollar. Commodity prices are mixed. Jan crude oil (CLF14 -1.52%) is down -1.32% and Jan gasoline (RBF14 -1.54%) is down -1.46% after Iran agreed to curtail its nuclear activities. Dec gold (GCZ13 -1.03%) is down -1.05% at a 4-1/2 month low as the accord between Iran and world powers reduces the safe-haven demand for gold. Dec copper (HGZ13 -0.14%) is up +0.08% at a 1-1/2 week high after LME copper inventories slumped to a 9-month low. Agricultural prices are mixed. The dollar index (DXY00 +0.26%) is up +0.21%. EUR/USD (^EURUSD) is down -0.26% after ECB Council member Hansson said the ECB stands ready to cut interest rates further. USD/JPY (^USDJPY) is up +0.51% at a 5-3/4 month high as the rally in global stocks undercuts the safe-haven demand for the yen. December T-note prices (ZNZ13 +0.07%) are up +1 tick.

    ECB Governing Council member Hansson said the ECB stands ready to cut interest rates further and is prepared to make the deposit rate negative when he said "the options on rate cuts are still not fully exhausted and there are all kinds of other measures that are still on the table." He added "we are technically ready" to reduce the deposit rate.

    Iran agreed to limit its nuclear program in exchange for as much as $7 billion in relief from economic sanctions over six months. In a deal brokered in Geneva with five nations over the past five days, Iran won an easing of sanctions on oil, auto parts, gold and precious metals for six months after it agreed to curtail its nuclear activities. The deal, which is reversible, allows Iran to repatriate $4.2 billion in frozen oil assets and allows it to export 1 million barrels a day of crude under sanctions that remain in force. U.S. Secretary of State Kerry said both sides will now work to conclude a comprehensive accord within six months.

    U.S. STOCK PREVIEW
    Today's Oct pending home sales index is expected to show an increase of +1.1% m/m, recovering part of the sharp -5.6% m/m decline seen in September. The Treasury today will sell $32 billion in 2-year T-notes. There are 5 of the Russell 1000 companies that report earnings today: Workday (consensus -$0.17), Seadrill (0.66), Copart (0.34), Nuance Communications (0.29), Palo Alto Devices (0.07). Equity conferences this week include the 12th Annual World Drug Manufacturing Summit 2013 on Tue-Wed.

    OVERNIGHT U.S. STOCK MOVERS

    FBR Capital reiterated its 'Outpeform' rating on Flour (FLR +0.81%) and raised its price target on the stock to $97 from $90.

    Time Warner Cable (TWC +9.98%) was downgraded to 'Hold' from 'Buy' at Argus.

    Piper Jaffray kept its 'Overweight' rating on DaVita (DVA -0.62%) and raised its price target on the stock to $73 from $63.

    Brocade (BRCD +0.45%) was downgraded to 'Neutral' from 'Buy' at ISI Group.

    Caterpillar (CAT +0.93%) was upgraded to 'Buy' from 'Neutral' at BofA/Merrill.

    R.R. Donnelley (RRD +0.12%) was upgraded to 'Buy' from 'Hold' at Benchmark Co.

    Campbell Soup (CPB +1.23%) was downgraded to 'Neutral' from 'Buy' at Goldman.

    Clorox (CLX -0.22%) was downgraded to 'Sell' from 'Neutral' at Goldman.

    Alcoa (AA +1.32%) was upgraded to 'Buy' from 'Neutral' at Goldman.

    Allegion (ALLE) will replace J.C. Penney (JCP -3.27%) in the S&P 500 Index as of the 11/29 close.

    Bloomberg reports that the FDA approved the Influenza A Virus Monovalent Vaccine made by a unit of GlaxoSmithKline (GSK +0.26%) for the prevention of H5N1 influenza, commonly known as avian or bird flu.

    MARKET COMMENTS

    Dec E-mini S&Ps (ESZ13 +0.31%) this morning are up +6.50 points (+0.36%) at a fresh record high. The S&P 500 index on Friday rose to a fresh record high and closed higher. Bullish factors for stocks included (1) carry-over support from a rally in European stocks after the German Nov IFO business climate rose +2.1 to 109.3, a bigger increase than expectations of +0.3 to a 19-month high of 107.7, and (2) improved U.S. economic data that has bolstered the economic outlook and offset concerns that the Fed will soon taper stimulus. Closes: S&P 500 +0.50%, Dow Jones +0.34%, Nasdaq 100 +0.57%.

    Dec 10-year T-notes (ZNZ13 +0.07%) this morning are up +1 tick. Dec T-notes Friday closed higher on speculation the Fed will maintain its pace of bond buying into next year. Gains were limited after stocks rose, which reduced safe-haven demand for T-notes, along with negative carry-over from a fall in German bunds after the German Nov IFO business climate rose to a 19-month high. Closes: TYZ3 +7.00, FVZ3 +1.25.

    The dollar index (DXY00 +0.26%) this morning is up +0.170 (+0.21%). EUR/USD (^EURUSD) is down -0.0035 (-0.26%) on dovish comments from ECB Council member Hansson and USD/JPY (^USDJPY) is up +0.52 (+0.51%) at a 5-3/4 month high on reduced safe-haven demand for the yen. The dollar index on Friday closed lower on reduced safe-haven demand as the S&P 500 rallied to a fresh record high. EUR/USD moved higher after the German Nov IFO business climate rose to a 19-month high and USD/JPY posted a 4-1/2 month high after BOJ Governor Kuroda said that the yen isn't "excessively weak." Closes: Dollar index -0.365 (-0.45%), EUR/USD +0.0076 (+0.56%), USD/JPY +0.121 (+0.12%).

    Jan WTI crude oil (CLF14 -1.52%) this morning is down -$1.25 (-1.32%) and Jan gasoline (RBF14 -1.54%) is down -0.0395 (-1.46%) after Iran agreed to curb its nuclear activities. Jan crude oil and gasoline prices on Friday closed lower. Negative factors included (1) ample supplies with EIA crude inventories at a 4-1/2 month high and U.S crude production at a 24-3/4 year high, and (2) reduced concern over gasoline supplies after Phillips 66 restarted its 238,000 barrel-a-day Bayway refinery in New Jersey that was closed for maintenance. Closes: CLF4 -0.60 (-0.63%), RBF4 -0.0080 (-0.29%).

    GLOBAL EVENT CALENDAR11/25/2013

    US 1000 ET Oct pending home sales expected +1.1% m/m and -1.0% y/y, Sep -5.6% m/m and +1.1% y/y.
      1100 ET USDA weekly grain export inspections.
      1300 ET Treasury auctions $32 billion 2-year T-notes.
    JPN 1850 ET Japan Oct corporate service price index expected +0.9% y/y, Sep +0.7% y/y.
    UK n/a UK Nov nationwide house prices expected +0.6% m/m and +6.2% y/y, Oct +1.0% m/m and +5.8% y/y.

    U.S. STOCK CALENDAR11/25/2013

    Company Name Ticker Time Event Description Period Estimate
    Towers Watson & Co TW US 10:00 Acquisition of Liazon Corporation by Towers Watson & Co Call    
    Seadrill Ltd SDRL NO 11:00 Q3 2013 Earnings Call Q3 2013  
    Palo Alto Networks Inc PANW US 16:30 Q1 2014 Earnings Call Q1 2014  
    Nuance Communications Inc NUAN US 17:00 Q4 2013 Earnings Call Q4 2013  
    Workday Inc WDAY US 17:00 Q3 2014 Earnings Release Q3 2014 -0.174
    Workday Inc WDAY US 17:00 Q3 2014 Earnings Call Q3 2014  
    Seadrill Ltd SDRL NO   Q3 2013 Earnings Release Q3 2013 0.657
    Copart Inc CPRT US Aft-mkt Q1 2014 Earnings Release Q1 2014 0.342
    Nuance Communications Inc NUAN US Aft-mkt Q4 2013 Earnings Release Q4 2013 0.293
    Palo Alto Networks Inc PANW US Aft-mkt Q1 2014 Earnings Release Q1 2014 0.073
    Equity Lifestyle Properties Inc ELS US   Special Meeting
    Stocks: FLRC, DVA, BRCD, CAT, RRD, CPB, CLX, AA, AGN, JCP, GSK, WLSDRL, PANW, NUAN, WDAY, CPRT, ELS
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