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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 12/18 0 comments
    Dec 18, 2013 5:18 PM | about stocks: INTC, BP, AVP, SCCO, LEN, JCI, GIS, FDX, C, BAC, FB, RJN, JBL, PAY, CVS, AZO, F, LII, RJF, INVA, HCBK


    Wednesday, December 18th, 2013View Older Reports

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    March E-mini S&Ps (ESH14 +0.20%) this morning are up +0.23% ahead of the outcome of the FOMC meeting later today and European stocks are up +0.96% after the German Dec IFO business climate rose to the highest in 20-months and after the UK Oct ILO unemployment rate unexpectedly dropped to a 4-1/2 year low. Asian stocks closed mixed: Japan +2.02%, Hong Kong +0.32%, China +0.04%, Taiwan -0.05%, Australia -0.14%, Singapore -0.19%, South Korea +0.49%, India +1.20%. China's Shanghai stock Index closed little changed and erased most its gains on concern the government will implement additional measures to curb growth in the property market after China Nov home prices rose in 69 of 70 cities tracked by the government. Japan's Nikkei Stock Index climbed to a 1-week high after Japan Nov exports rose more than expected and India's Sensex Stock Index also rose to a 1-week high after the RBI unexpectedly kept interest rates unchanged. Commodity prices are mixed. Jan crude oil (CLF14 +0.02%) is up +0.07%. Jan gasoline (RBF14 +0.64%) is up +0.73%. Feb gold (GCG14 +0.13%) is up +0.20%. March copper (HGH14 -0.50%) is down -0.47%. Agriculture and livestock prices are mixed. The dollar index (DXY00 +0.07%) is up +0.05%. EUR/USD (^EURUSD) is down -0.14%. USD/JPY (^USDJPY) is up +0.28%. March T-note prices (ZNH14 -0.04%) are down -0.5 of a tick.

    The German Dec IFO business climate rose +0.2 from Nov to 109.5, right on expectations and the highest in 20-months. The Dec IFO current assessment unexpectedly fell -0.6 to 111.6, weaker than expectations of a +0.3 increase to 112.5, and the Dec IFO expectations rose +1.0 point from a revised 106.4 in Nov to 107.4, better than expectations of an increase to 106.5 and the highest in 2-3/4 years.

    UK Dec CBI reported sales surged to 34 from 1 in Nov, much better than expectations of an increase to 10 and matched September's increase as the most in 1-1/2 years.

    UK Nov jobless claims fell -36,700, more than expectations for a -35,000 decline. The Nov claimant count rate fell to 3.8%, right on expectations. The Oct ILO unemployment rate for 3-months dropped -0.2 to 7.4%, better than expectations of unch at 7.6% and the lowest in 4-1/2 years.

    Eurozone Oct construction output fell -1.2% m/m and -2.4% y/y, the eighth consecutive month output has fallen on an annual basis.

    The Japan Nov trade balance widened to a -1.293 trillion yen deficit, a little less than expectations of a -1.351 trillion yen deficit, but still the biggest deficit in 10-months. Nov exports rose +18.4% y/y, better than expectations of +18.0% y/y, while Nov imports climbed +21.1% y/y, less than expectations of +21.4% y/y.


    The 2-day FOMC meeting concludes today with the chance that the FOMC may announce the beginning of QE3 tapering. Today's Nov housing starts report is expected to show a sharp +8.0% increase to 954,000 from the August level, which was the last level that has been reported. The Sep and Oct housing starts reports will also be released today. The Treasury today will sell $35 billion of 5-year T-notes. The Treasury will then conclude this week's $112 billion coupon package on Thursday by selling $29 billion of 7-year T-notes and $16 billion of 5-year TIPS. There are 5 of the Russell 1000 companies that release earnings today: General Mills (consensus $0.87), Lennar (0.62), FedEx (1.64), Oracle (0.67), Paycheck (0.42). There are no equity conferences during the remainder of the week.


    Intel (INTC +0.86%) was added to the short-term 'Buy' list at Deutsche Bank.

    The WSJ reported that British Petroleum (BP -1.11%) will write off $1.08 billion in expenses relating to a failed Brazilian well which found no commercial quantities of oil or gas.

    Avon Products (AVP -0.35%) was downgraded to 'Neutral' from 'Buy' at BofA/Merrill.

    Southern Copper (SCCO +0.04%) was upgraded to 'Buy' from 'Neutral' at Citigroup.

    Lennar (LEN +0.57%) reported Q4 EPS of 75 cents, well above consensus of 62 cents.

    Johnson Controls (JCI +0.73%) lowered guidance on fiscal 2014 EPS to $3.15-$3.30, below consensus of $3.31.

    General Mills (GIS -0.66%) reported Q2 EPS of 83 cents, weaker than consensus of 87 cents.

    FedEx (FDX -0.54%) reported Q2 EPS of $1.57, below consensus of $1.64.

    Deutsche Bank downgraded the Semiconductor sector to 'Neutral' from 'Overweight' saying valuations in the sector are already pricing in a strong 2014 recovery.

    Reuters reports that Citigroup (C -0.41%) and Bank of America's (BAC -0.39%) Merrill Lynch unit will face civil fraud charges from the U.S. Department of Justice over the sale of mortgage securities ahead of the financial crisis.

    AllThingsD reported that Facebook (FB +1.95%) acquired SportStream. Terms of the deal were not disclosed.

    Raytheon (RTN +0.18%) was awarded a$172.68 mllion contract modification to manufacture and deliver the AN/TPY-2 Radar #12 with associated spares.

    Jabil Circuit (JBL +0.20%) slumped over 13% in after-hours trading after it said it sees Q2 EPS of 5 cents-15 cents, well below consensus of 52 cents, and said it sees Q2 revenue of $3.5 billion-$3.7 billion, below consensus of $4.28 billion.

    VeriFone (PAY +0.08%) slipped over 4% in after-hours trading after it lowered guidance on fiscal 2014 EPS to $1.35-$1.40, well below consensus of $1.56.


    Mar E-mini S&Ps (ESH14 +0.20%) this morning are up +4.00 points (+0.23%). The S&P 500 index on Tuesday closed lower. The Dec NAHB housing market index rose +4 to 58, better than expectations of +1 to 55 and matched the 8-year high from Aug, which bolstered expectations for Fed QE3 tapering. The Nov CPI of +1.2% y/y was slightly weaker than expectations of +1.3% y/y, which could delay a Fed tapering decision. Closes: S&P 500-0.31%, Dow Jones -0.06%, Nasdaq 100 -0.19%.

    Mar 10-year T-notes (ZNH14 -0.04%) this morning are down -0.5 of a tick. Mar T-notes on Tuesday closed higher on bullish factors that included (1) weak equities, and (2) benign inflation data after Nov CPI rose less than expected. Gains were muted ahead of the conclusion of the FOMC meeting on Tuesday and after the Dec NAHB housing market index rose more than expected to match an 8-year high. Closes: TYH4 +10.00, FVH4 +6.00.

    The dollar index (DXY00 +0.07%) this morning is up +0.042 (+0.05%). EUR/USD (^EURUSD) is down -0.0019 (-0.14%) and USD/JPY (^USDJPY) is up +0.29 (+0.28%). The dollar index on Tuesday closed little changed ahead of Wednesday's conclusion of the 2-day FOMC meeting. A bullish factor for the dollar was the U.S. Q3 account balance that shrank more-than-expected to a 4-year low of -$94.8 billion. Weakness in EUR/USD was limited after the German Dec ZEW survey of economic expectations rose more-than-expected to a 7-1/2 year high. Closes: Dollar index -0.013 (-0.02%), EUR/USD +0.00073 (+0.05%), USD/JPY -0.356 (-0.35%).

    Jan WTI crude oil (CLF14 +0.02%) this morning is up +7 cents (+0.07%) and Jan gasoline (RBF14 +0.64%) is up +0.0193 (+0.73%). Jan crude oil and gasoline prices on Tuesday settled mixed. Crude prices were pressured by concern the Fed is close to tapering stimulus, while the jump in the German Dec ZEW survey of economic expectations to a 7-1/2 year high buoyed crude prices along with expectations for a -3.0 million bbl draw in Wednesday's EIA weekly crude inventory report. Closes: CLF4 -0.26 (-0.27%), RBF4 +0.0035 (+0.13%).


    US 0700 ET Weekly MBA mortgage applications, previous +1.0% with purchase sub-index +0.9% and refi sub-index +2.1%.
      0830 ET Nov housing starts expected 954,000, +8.0% from Augs level of 883,000 (Sep and Oct housing starts have yet to be released). Nov building permits expected -4.7% to 990,000, Oct +6.7% to 1.039 million.
      1030 ET EIA Weekly Petroleum Status Report.
      1300 ET Treasury auctions $35 billion 5-year T-notes.
      1400 ET FOMC announces interest rate decision and pace of asset purchases.
      1400 ET Fed releases summary of economic projections.
      1430 ET Fed Chairman Ben Bernanke holds press conference following FOMC meeting.
    GER 0400 ET German Dec IFO business climate expected +0.2 to 109.5, Nov 109.3. Dec IFO current assessment expected +0.3 to 112.5, Nov 112.2. Dec IFO expectations expected +0.2 to 106.5, Nov 106.3.
    UK 0430 ET Minutes of the Dec 4-5 BOE meeting.
      0430 ET UK Nov jobless claims change expected -35,000, Oct -41,700. Nov claimant count rate expected -0.1 to 3.8%, Oct 3.9%.
      0430 ET UK Oct ILO unemployment rate expected unch at 7.6% 3-months, Sep 7.6% 3-months. Oct avg weekly earnings expected +0.8% 3-mon avg year-over-year, Sep +0.7% 3-mon avg year-over-year. Oct avg weekly earnings ex-bonus expected +0.8% 3-mon avg year-over-year, Sep +0.8% 3-mon avg year-over-year.
      0600 ET UK Dec CBI reported sales expected +9 to 10, Nov 1.
    EUR 0500 ET Eurozone Oct construction output, Sep -1.3% m/m and -0.2% y/y.
    JPN 2330 ET Japan Oct all-industry activity index expected -0.3%, Sep +0.4% m/m.

    U.S. STOCK CALENDAR12/18/2013

    Company Name Ticker Time Event Description Period Estimate
    General Mills Inc GIS US Bef-mkt Q2 2014 Earnings Release Q2 2014 0.874
    Lennar Corp LEN US 6:00 Q4 2013 Earnings Release Q4 2013 0.624
    FedEx Corp FDX US 7:30 Q2 2014 Earnings Release Q2 2014 1.642
    Johnson Controls Inc JCI US 8:00 Analyst Meeting Y 2013  
    CVS Caremark Corp CVS US 8:00 Analyst Day Y 2013  
    FedEx Corp FDX US 8:30 Q2 2014 Earnings Call Q2 2014  
    General Mills Inc GIS US 8:30 Q2 2014 Earnings Call Q2 2014  
    AutoZone Inc AZO US 9:00 Annual General Meeting Y 2013  
    Ford Motor Co F US 9:00 Business Update Call    
    Lennox International Inc LII US 9:00 Investor Meeting Y 2013  
    Lennar Corp LEN US 11:00 Q4 2013 Earnings Call Q4 2013  
    Raymond James Financial Inc RJF US   November 2013 Sales and Revenue Release - Operating Data Results 2013  
    Theravance Inc THRX US   PDUFA, Anoro Ellipta (LAMA/LABA), chronic obstructive pulmonary disease    
    Hudson City Bancorp Inc HCBK US   Annual General Meeting Y 2013
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