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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 12/13 0 comments
    Dec 13, 2011 11:21 AM | about stocks: BBY, FDS, ABM, PTRY
    Barchart Morning Call
    Barchart.com - Tue Dec 13, 7:00AM CST
    Overnight Developments
    • Global stocks this morning are mixed with the Euro Stoxx 50 up +0.42% and Mar S&Ps up +6.90 points. Treasuries and the dollar fell while commodities rose after Spain sold more government debt than it planned and after German investor confidence unexpectedly improved. The euro rebounded from a 2-month low against the dollar when Spain sold 4.94 billion euros of 12-month and 18-month bills, compared with the maximum target of 4.25 billion euros the Treasury set for the sale. Stocks rallied after the Dec German ZEW survey of economic sentiment unexpectedly rose +1.4 to -53.8, stronger than expectations of -0.6 to -55.8 and its first increase in the past 10 months. Limiting gains in stocks was weakness in banking shares after Nomura Holdings downgraded European banking stocks to "neutral" from "bullish" and after Nov French CPI unexpectedly rose to +2.7% y/y, a 3-year high. Late yesterday, Fitch Ratings joined Moody's Investors Service in saying that last week's EU summit "did little" to ease pressure on Euro-Zone sovereign bond ratings.
    • Asian stocks today closed mostly lower with Japan down -1.17%, China -2.25%, Australia -1.40%, South Korea -2.04%, India +0.83%. Asian stocks declined led by losses in financial stocks on concern that bank earnings may be hurt as Europe's debt crisis spreads. Asian manufacturers of semiconductors and chip-making equipment also fell after Intel, the world's largest chipmaker, cut its sales and revenue forecasts because floods in Thailand caused a shortage of hard-disk drives that forced computer makers to cut production. China's Shanghai Stock Index sank to a fresh 2-1/2 year low as housing developers and home builders tumbled when China's biggest real-estate website reported housing transactions plunged more than 50% in 13 cities out of 35.
    Overnight U.S. Stock News
    • March S&Ps this morning are trading uo +6.90 points. The US stock market fell to 1-week lows yesterday and settled with sharp losses on concern that European leaders did not do enough to stem the region's debt crisis along with global economic concerns after China's export growth slowed: Dow Jones -1.34%, S&P 500 -1.49%, Nasdaq Composite -1.31%. Bearish factors included (1) weakness in financial stocks after Moody's Investors Service said it will review the credit ratings for all European Union countries after a summit last week failed to produce "decisive" measures to end the debt crisis, (2) concern the global economy be slowing after Nov China exports rose +13.8% y/y, the slowest pace of growth in nearly 2 years, and (3) a sell-off in technology stocks after Intel slumped when it downgraded its Q4 revenue forecast to $13.7 billion from $14.7 billion because of a shortage of hard-disk drive supply.
    • Bullish factors included (1) the smaller-than-expected Nov U.S. budget statement as stronger economic growth boosted tax receipts (-$137.3 billion versus expectations of -$140.0 billion) and (2) comments from Senate Minority Leader McConnell who said Congress will reach an agreement that extends the payroll tax cut, which is bullish for equities.
    • Alcoa (NYSE:AA) rose 1.8% in European trading after most industrial metals prices rallied.
    Today's Market Focus
    • March 10-year T-notes this morning are down -5 ticks. T-note prices yesterday finished stronger on concern European leaders haven't done enough to stem the region's debt crisis along with record demand for the Treasury's $32 billion 3-year T-note auction: TYH2 +11.5, FVH2 +3.2, EDM2 -3.0. Bullish factors included (1) increased safe-haven demand for Treasuries on concern the European debt crisis may worsen as stocks tumbled after Moody's Investors Service said it will review the credit ratings for all European Union countries after a summit last week failed to produce "decisive" measures to end the debt crisis and (2) the 3.62 bid-to-cover ratio for the Treasury's $32 billion auction of 3-year T-notes, higher than the 10-auction average of 3.24 and the highest since the Treasury began collecting the data in 1993, a sign of strong demand. Bearish factors included (1) short-term supply pressures ahead of the Treasury's $21 billion auction of 10-year T-notes on Tue and (2) intermediate-term supply pressures as the Treasury will auction $177 billion of notes and bonds over the next 2 weeks, the largest concentration of supply ever, according to JPMorgan Chase.
    • The dollar index this morning is lower with the dollar/yen -0.13 yen and the euro/dollar +0.12 cents. The dollar index yesterday rallied sharply to a 2-week high on increased safe-haven demand after Moody's Investors Service said it will review the ratings of European Union nations: Dollar Index +0.919, USDJPY +0.298, EURUSD -0.01979. Bullish factors for the dollar included (1) the slump in the euro to a 2-month low against the dollar when Moody's Investors Service said it will review the credit ratings of all Euro-Zone countries in Q1 following last week's debt summit, saying the summit failed to deliver "decisive policy measures" to end the debt crisis, and (2) increased safe-haven demand for the dollar after the S&P 500 declined to a 1-week low. Bullish factors included (1) comments from Bundesbank President and ECB member Weidmann who dampened speculation the ECB will increase its government bond purchases when he said that while last week's new accord represents "progress," the onus is on governments rather than the ECB to resolve the crisis and (2) Italy's bond auction of 7 billion euros of 1-year bills, the maximum for the auction, at 5.952%, lower than the 6.097% at a similar auction last month, which is euro supportive.
    • Jan crude oil prices this morning are up +64 cents a barrel and Jan gasoline is +2.55 cents per gallon. Crude oil and gasoline prices yesterday settled lower after the dollar rallied, China's export growth slowed and Moody's Investors Service said it will review the credit ratings of all EU countries: CLF12 -$1.64, RBF12 -3.25. Bearish factors included (1) the rally in the dollar index to a 2-week high, which discourages investment demand in commodities, (2) Nov China exports rising at their weakest pace in nearly 2 years, which fuels concern the global economy and energy demand is slowing, and (3) the warning from Moody's Investors Service that it will review the credit ratings of all Euro-Zone countries in Q1 following last week's debt summit, which raises concern the European debt crisis may worsen and slow economic growth and fuel demand. A bullish factor was the comments from Iranian Oil Minister Qasemi who said some OPEC members should reduce output to accommodate the return of production from Libya.
    Today's U.S. Earnings Reports

    Earnings reports (confirmed releases, sorted by mkt cap): BBY-Best Buy (BEST earnings consensus $0.51), FDS-Factset Research Systems (1.00), ABM-ABM Industries (0.36), PTRY-The Pantry (0.55).

    Global Financial Calendar

    Tuesday 12/13/11
    United States
    0745 ET ICSC (Int?l Council of Shopping Centers) weekly retailer sales.
    0830 ET Nov retail sales expected +0.5% and +0.4% less autos, Oct +0.5% and +0.6% less autos.
    0855 ET Redbook weekly retailer sales.
    0900 ET FOMC begins 1-day meeting.
    1000 ET Oct business inventories expected +0.8%, Sep unchanged.
    1000 ET Dec IBD/TIPP economic optimism expected +1.7 to 42.3, Nov +0.3 to 40.6.
    1130 ET Weekly 4-week and monthly 1-year T-bill auctions.
    1300 ET Treasury auctions $21 billion 10-year T-notes.
    1415 ET FOMC announces interest rate decision (expected no change to the 0.00% to 0.25% Fed funds rate).
    France
    0130 ET Nov French CPI (EU harmonized), Oct +0.3% m/m and +2.5% y/y.
    United Kingdom
    0430 ET Oct U.K. DCLG house prices, Sep -1.4% y/y.
    0430 ET Nov U.K. CPI expected +0.2% m/m and +4.8% y/y, Oct +0.1% m/m and +5.0% y/y.
    0430 ET Nov U.K. core CPI expected +3.3% y/y, Oct +3.4% y/y.
    0430 ET Nov U.K. RPI expected +0.2% m/m and +5.1% y/y, Oct unchanged m/m and +5.4% y/y.
    0430 ET Nov U.K. RPI ex-mortgage interest payments expected +5.3% y/y, Oct +5.6% y/y.
    Germany
    0500 ET Dec German ZEW survey of economic sentiment expected -0.6 to -55.8, Nov -6.9 to -55.2.
    0500 ET Dec German ZEW survey current situation expected -3.2 to 31.0, Nov -4.2 to 34.2.
    Euro-Zone
    0700 ET ECB Council member Yves Mersch speaks at an event in London.
    Japan
    2330 ET Revised Oct Japan industrial production, previous+2.4% m/m and +0.4% y/y. Revised Oct capacity utilization, previous -3.6% m/m.

     

    Barchart.com provides Financial Quotes, Charts and Technical Analysis for Stock and Commodity Traders.

    Stocks: BBY, FDS, ABM, PTRY
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