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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 12/12 0 comments
    Dec 12, 2013 2:50 PM | about stocks: LULU, LUV, MRO, ORCL, MU, DHR, TLRD, UNS, ATHN, ADS, MHK, FB, GWW, SWK, CSCO, MET, IGT, NDSN, T, XLS, AET, XOM, GRN, ABC, KIM, ADBE, SAIC, UTX, MYGN, BMY, MRK, ASNA

    BARCHART MORNING CALL

    Thursday, December 12th, 2013View Older Reports

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    OVERNIGHT MARKETS AND NEWS

    December E-mini S&Ps (ESZ13 -0.04%) this morning are down -0.15% at a 3-week low and European stocks are down -0.51% at a 2-month low. Asian stocks closed lower: Japan -1.12%, Hong Kong -0.51%, China -0.11%, Taiwan -0.86%, Australia -0.92%, Singapore -0.06%, South Korea -0.58%, India -1.16%. U.S. stocks were undercut by concern the Fed may taper QE3 sooner than expected and European stocks fell after Eurozone industrial production unexpectedly fell in Oct. European bonds fell after ECB Council member Praet told the Financial Times that Eurozone banks may reduce purchases of sovereign debt to lower their risk profile. Commodity prices are mixed. Jan crude oil (CLF14 +0.24%) is up +0.32%. Jan gasoline (RBF14 +0.14%) is up +0.02%. Feb gold (GCG14 -1.76%) is down -1.52%. March copper (HGH14 -0.03%) is down -0.09%. Agricultural and livestock prices are weaker. The dollar index (DXY00 +0.03%) is up +0.02%. EUR/USD (^EURUSD) is up +0.01%. USD/JPY (^USDJPY) is up +0.29%. The Australian dollar fell to a 3-1/4 month low against the U.S. dollar after Australia's Nov unemployment rate matched a 4-1/3 year high, which fueled speculation of further rate cuts by the RBA. March T-note prices (ZNH14 -0.04%) are unchanged.

    Eurozone Oct industrial production unexpectedly fell -1.1% m/m, much weaker than expectations for a +0.3% m/m increase and the biggest monthly decline in 13-months. On a year-over-year basis, Oct industrial production rose +0.2% y/y, weaker than expectations of +1.1% y/y.

    ECB Council member Praet said "Treating banks' holdings of sovereign debt according to the risk that they pose to banks' capital makes it unlikely that the banks will use central bank liquidity to excessively increase their exposure to sovereign debt. This is because banks will be wary of the constraints placed on sovereign debt by the stress tests to which they are subject at the same time."

    The Australia Nov employment change rose +21,000, better than expectations of +10,000, while the Nov unemployment rate rose an as expected +0.1 to 5.8% and matched the Aug level as the highest in 4-1/3 years.

    U.S. STOCK PREVIEW

    Today's weekly initial unemployment claims report is expected to show an increase of +22,000 to 320,000, almost exactly reversing last week's decline of -23,000 to 298,000. Weekly continuing claims are expected to show an increase of +13,000 to 2.757 million, reversing more than one-half of last week's decline of -21,000 to 2.744 million. Today's Nov retail sales report is expected to show a strong increase of +0.6%, adding to the +0.4% increase seen in October. The Nov retail sales report is expected to show a smaller increase of +0.2%, however, excluding the strength in Nov vehicle sales, which rose sharply to a new 6-1/2 year high of 16.31 million units from 15.15 million units in October. The Treasury today will sell $13 billion in 30-year T-bonds, concluding this week's $64 billion coupon package.

    There are two of the Russell 1000 companies that report earnings today: Adobe (consensus $0.32), Science Applications (0.56). Equity conferences during the remainder of this week include: Capital One Southcoast Energy Conference on Wed-Thu, Barclays Information and IT Services Forum on Thu, Barclays Select Series Information and IT Series Forum Conference on Thu, and AHIP Exchange Conference 2013 on Thu.

    OVERNIGHT U.S. STOCK MOVERS

    lululemon (LULU -1.11%) dropped 10% in pre-market trading after it cut guidance on fiscal 2013 EPS to $1.94-$1.96, below consensus $1.96, and said it sees fiscal 2013 revenue of $1.605 billion-$1.61 billion, weaker than consensus of $1.64 billion.

    Southwest (LUV -3.28%) was upgraded to 'Buy' from 'Neutral' at BofA/Merrill.

    Marathon Oil (MRO -1.14%) and Apache (APA -1.66%) were both downgraded to 'Neutral' from 'Buy' at Citigroup.

    Oracle (ORCL -0.69%) was downgraded to 'Sector Perform' from 'Outperform' at RBC Capital.

    Micron (MU -2.77%) was upgraded to 'Buy' from 'Neutral' at Nomura.

    Danaher (DHR -1.62%) lowered guidance on fiscal 2014 EPS to $3.60-$3.75, below consensus of $3.81.

    Moody's Investors Service has placed on review for downgrade the general obligation rating of the Commonwealth of Puerto Rico.

    Men's Wearhouse (MW -1.92%) reported Q3 adjusted EPS of 90 cents, higher than consensus of 86 cents.

    UNS Energy (UNS -0.99%) soared 30% in after-hours trading after it announced that it will be acquired by Fortis for $60.25 per share.

    Athenahealth (ATHN -2.15%) slumped over 12% in after-hours trading after it lowered guidance on fiscal 2014 EPS to 98 cents-$1.10, well below consensus of $1.38.

    Alliance Data Systems (ADS -1.45%) rose 3% in after-hours trading after it was announced that it will replace Abercrombie & Fitch (ANF -0.98%) in the S&P 500 after the market close on December 20.

    Mohawk Industries (MHK -1.06%) climbed 2.5% in after-hours trading after it was announced that it will replace (JDSU -1.14%) in the S&P 500 after the market close on December 20.

    Facebook (FB -1.71%) gained over 4% in after-hours trading after it was announced that it will replace Teradyne (TER -1.12%) in the S&P 500 after the market close on December 20.

    MARKET COMMENTS

    Dec E-mini S&Ps (ESZ13 -0.04%) this morning aredown -2.75 points (-0.15%) at a 3-week low . The S&P 500 index on Wednesday closed lower after a Congressional budget accord boosted speculation that the Fed may start to taper QE3 sooner than expected. Another negative for stocks was year-end profit-taking with the S&P 500 up nearly 24% for the year. Closes: S&P 500 -1.13%, Dow Jones -0.81%, Nasdaq 100 -1.29%.

    Mar 10-year T-notes (ZNH14 -0.04%) this morning are unchanged. Mar T-notes on Wednesday closed lower on expectations that U.S. lawmakers will pass a budget agreement that averts a government shutdown and gives the Fed the green light to begin tapering bond purchases. Another negative for T-note prices was weak demand for the Treasury's $21 billion auction of 10-year T-notes, which had a 2.61 bid-to-cover ratio, below the 12-auction average of 2.74. Closes: TYH4 -11.50, FVH4 -6.00.

    The dollar index (DXY00 +0.03%) this morning is up +0.017 (+0.02%). EUR/USD (^EURUSD) is up +0.0002 (+0.01%) and USD/JPY (^USDJPY) is up +0.30 (+0.29%). The dollar index on Wednesday posted a 5-week low. EUR/USD rallied to a 6-week high on reduced Eurozone sovereign debt concerns after the yield on Spain's 5-year bonds tumbled to an 8-year low of 2.52%. Closes: Dollar index -0.072 (-0.09%), EUR/USD +0.00248 (+0.18%), USD/JPY -0.414 (-0.40%).

    Jan WTI crude oil (CLF14 +0.24%) this morning is up +31 cents (+0.32%) and Jan gasoline (RBF14 +0.14%) is up +0.0004 (+0.02%). Jan crude oil and gasoline prices on Wednesday closed lower. Jan crude fell back from a 6-week high and Jan gasoline dropped to a 2-week low on bearish factors that included (1) weekly EIA data that showed U.S. crude oil production in the week ended Dec 6 rose +0.8% to a 25-year high of 8.075 million barrels a day, (2) U.S. distillate fuel production for the week ended Dec 6 of 5.26 million barrels a day, a 27-year high, (3) the larger-than-expected +6.717 million bbl increase in weekly gasoline stockpiles to a 2-month high of 219.15 million bbl, and (4) the +625,000 bbl increase in crude supplies at Cushing, OK, the delivery point for WTI futures, to a 4-1/2 month high of 41.223 million bbl. Closes: CLF4 -1.07 (-1.09%), RBF4 -0.0218 (-0.81%).

    GLOBAL EVENT CALENDAR12/12/2013

    US 0830 ET Weekly initial unemployment claims expected +22,000 to 320,000, previous -23,000 to 298,000. Weekly continuing claims expected +13,000 to 2.757 million, previous -21,000 to 2.744 million.
      0830 ET Nov retail sales expected +0.6% and +0.2% ex autos, Oct +0.4% and +0.2% ex autos.
      0830 ET Nov import price index expected -0.7% m/m and -1.7% y/y, Oct -0.7% m/m and -2.0% y/y.
      0830 ET USDA weekly Export Sales.
      1000 ET Oct business inventories expected +0.3%, Sep +0.6%.
      1100 ET Treasury announces amount of 2-year T-notes (previous $32 billion), 5-year T-notes (previous $35 billion), 7-year T-notes (previous $29 billion) and 5-year TIPS (previous $16 billion) to be auctioned Dec 17-19.
      1300 ET Treasury auctions $13 billion 30-year T-bonds.
    EUR 0300 ET ECB President Mario Draghi speaks in the EU Parliament on ECB policy.
      0400 ET ECB publishes monthly report for December.
      0500 ET Eurozone Oct industrial production expected +0.3% m/m and +1.1% y/y, Sep -0.5% m/m and +1.1% y/y.
    JPN 2330 ET Revised Japan Oct industrial production, previous +0.5% m/m and +4.7% y/y. Oct capacity utilization, Sep +1.2% m/m.

    U.S. STOCK CALENDAR12/12/2013

     

     

    Company Name Ticker Time Event Description Period Estimate
    WW Grainger Inc GWW US 8:00 November 2013 Sales and Revenue Call 2013  
    WW Grainger Inc GWW US 8:00 November 2013 Sales and Revenue Release 2013  
    Stanley Black & Decker Inc SWK US 8:00 Business Update Call    
    Cisco Systems Inc CSCO US 8:00 Financial Analyst Conference Y 2013  
    MetLife Inc MET US 8:00 Investor Conference Y 2013  
    International Game Technology IGT US 8:30 Analyst Day Y 2013  
    Nordson Corp NDSN US 8:30 Q4 2013 Earnings Call Q4 2013  
    DIRECTV DTV US 8:30 Investor Day Y 2013  
    Exelis Inc XLS US 8:30 Business Update Call    
    Aetna Inc AET US 9:00 Investor Conference Y 2013  
    Exxon Mobil Corp XOM US 10:00 FY 2014 Guidance Call Y 2014  
    WR Grace & Co GRA US 11:00 Business Update Call    
    Danaher Corp DHR US 12:30 Investor and Analyst Meeting Y 2013  
    AmerisourceBergen Corp ABC US 12:45 Investor Day Y 2013  
    Kimco Realty Corp KIM US 13:00 Investor Day Y 2013  
    Nielsen Holdings NV NLSN US 13:00 Investor Day Y 2013  
    Adobe Systems Inc ADBE US 17:00 Q4 2013 Earnings Call Q4 2013  
    Science Applications International Corp SAIC US 17:00 Q3 2014 Earnings Call Q3 2014  
    United Technologies Corp UTX US 17:30 Analyst and Investor Meeting Y 2013  
    Adobe Systems Inc ADBE US Aft-mkt Q4 2013 Earnings Release Q4 2013 0.319
    Science Applications International Corp SAIC US Aft-mkt Q3 2014 Earnings Release Q3 2014 0.555
    Myriad Genetics Inc MYGN US 20:30 Analyst and Investor Day Y 2013  
    Bristol-Myers Squibb Co BMY US   FDA Adcomm, dapagliflozin (Forxiga), type II diabetes    
    Merck & Co Inc MRK US   FDA Adcomm, Grastek, Timothy grass pollen allergy, immunotherapy tablet    
    Ascena Retail Group Inc ASNA US   Annual General Meeting
    Stocks: LULU, LUV, MRO, ORCL, MU, DHR, TLRD, UNS, ATHN, ADS, MHK, FB, GWW, SWK, CSCO, MET, IGT, NDSN, T, XLS, AET, XOM, GRN, ABC, KIM, ADBE, SAIC, UTX, MYGN, BMY, MRK, ASNA
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