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Jim Van Meerten
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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. He earned a BS in Accounting and Business Administration from Berry College; a Juris Doctorate from the Woodrow Wilson School of Law; and attended... 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, THRX, HCBK

    BARCHART MORNING CALL

    Wednesday, December 18th, 2013View Older Reports

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    OVERNIGHT MARKETS AND NEWS

    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.

    U.S. STOCK PREVIEW

    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.

    OVERNIGHT U.S. STOCK MOVERS

    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.

    MARKET COMMENTS

    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%).

    GLOBAL EVENT CALENDAR12/18/2013

    US0700 ETWeekly MBA mortgage applications, previous +1.0% with purchase sub-index +0.9% and refi sub-index +2.1%.
     0830 ETNov 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 ETEIA Weekly Petroleum Status Report.
     1300 ETTreasury auctions $35 billion 5-year T-notes.
     1400 ETFOMC announces interest rate decision and pace of asset purchases.
     1400 ETFed releases summary of economic projections.
     1430 ETFed Chairman Ben Bernanke holds press conference following FOMC meeting.
    GER0400 ETGerman 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.
    UK0430 ETMinutes of the Dec 4-5 BOE meeting.
     0430 ETUK Nov jobless claims change expected -35,000, Oct -41,700. Nov claimant count rate expected -0.1 to 3.8%, Oct 3.9%.
     0430 ETUK 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 ETUK Dec CBI reported sales expected +9 to 10, Nov 1.
    EUR0500 ETEurozone Oct construction output, Sep -1.3% m/m and -0.2% y/y.
    JPN2330 ETJapan Oct all-industry activity index expected -0.3%, Sep +0.4% m/m.

    U.S. STOCK CALENDAR12/18/2013

    Company NameTickerTimeEvent DescriptionPeriodEstimate
    General Mills IncGIS USBef-mktQ2 2014 Earnings ReleaseQ2 20140.874
    Lennar CorpLEN US6:00Q4 2013 Earnings ReleaseQ4 20130.624
    FedEx CorpFDX US7:30Q2 2014 Earnings ReleaseQ2 20141.642
    Johnson Controls IncJCI US8:00Analyst MeetingY 2013 
    CVS Caremark CorpCVS US8:00Analyst DayY 2013 
    FedEx CorpFDX US8:30Q2 2014 Earnings CallQ2 2014 
    General Mills IncGIS US8:30Q2 2014 Earnings CallQ2 2014 
    AutoZone IncAZO US9:00Annual General MeetingY 2013 
    Ford Motor CoF US9:00Business Update Call  
    Lennox International IncLII US9:00Investor MeetingY 2013 
    Lennar CorpLEN US11:00Q4 2013 Earnings CallQ4 2013 
    Raymond James Financial IncRJF US November 2013 Sales and Revenue Release - Operating Data Results2013 
    Theravance IncTHRX US PDUFA, Anoro Ellipta (LAMA/LABA), chronic obstructive pulmonary disease  
    Hudson City Bancorp IncHCBK US Annual General MeetingY 2013

    Stocks: INTC, BP, AVP, SCCO, LEN, JCI, GIS, FDX, C, BAC, FB, RJN, JBL, PAY, CVS, AZO, F, LII, RJF, THRX, HCBK
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