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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 12/23 0 comments
    Dec 23, 2013 1:26 PM | about stocks: AAPL, TIF, KBH, XLNX, TGT, MU, FIVE, CIT, TYC, UTX, LMT, PF, ENT, PBF, KINS, UTHR, CAMP, PBYI, HAIN, GPRE

    BARCHART MORNING CALL

    Monday, December 23rd, 2013View Older Reports

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    OVERNIGHT MARKETS AND NEWS

    March E-mini S&Ps (ESH14 +0.39%) this morning are up +0.37% at a new record high and European stocks are up +0.05% after IMF Managing Director Lagarde, who spoke on NBC's "Meet the Press" Sunday, said the IMF sees a "stronger" U.S. economic outlook in 2014 as a budget deal in Washington and the Fed's plan to taper its bond buying will allow for a higher growth estimate. Asian stocks closed higher: Japan is closed for holiday, Hong Kong +0.48%, China +0.28%, Taiwan +0.57%, Australia +0.51%, Singapore +0.70%, South Korea +0.75%, India +0.10%. Another positive for U.S. Stocks that also helped China's Shanghai Stock Index rebound from a 3-3/4 month low and close higher was the deal that Apple struck with China Mobile to sell the iPhone in China. After 6-years of negotiations, China Mobile said it will sell the iPhone in its retail stores starting Jan 17. China's Shanghai Stock Index had posted a 3-3/4 month low on concerns of a liquidity squeeze after China's 7-day repurchase rate, a gauge of funding availability in the banking system, jumped +124 bp to 8.84% the highest in 6-months. Commodity prices are mixed. Feb crude oil (CLG14 -0.35%) is down -0.40%. Feb gasoline (RBG14 -0.33%) is down -0.31%. Feb gold (GCG14 -0.49%) is down -0.73%. March copper (HGH14 -0.12%) is up +0.03%. Agriculture prices are mixed. The dollar index (DXY00 -0.25%) is down -0.17%. EUR/USD (^EURUSD) is up +0.08%. USD/JPY (^USDJPY) is down -0.23%. March T-note prices (ZNH14 -0.08%) are down -4.5 ticks.

    ECB Executive Board member Praet said in an interview in the Italian newspaper La Stampa that the ECB is monitoring an expected increase in investment in the Eurozone and "is ready to act" if credit contracts and threatens the recovery.

    The German Nov import price index rose +0.1% and fell -2.9% y/y, stronger than expectations of -0.1% m/m and -3.1% y/y.

    Eurozone Dec consumer confidence strengthened +1.8 points -13.6, better than expectations of a +0.4 point increase to -15.0 and the highest in 2-1/3 years.

    The Chinese yuan closed at 6.0702 per dollar, according to China Foreign Exchange System prices, the strongest since the government unified the market and official exchange rates at the end of 1993 after the PBOC boosted the daily fixing rate for the yuan by +0.06% to 6.1161 per dollar.

    U.S. STOCK PREVIEW
    The U.S. economic schedule is heavy today and tomorrow before Wednesday's Christmas holiday. Today's Nov personal income report is expected to show a strong increase of +0.5%, improving after the -0.1% decline seen in Oct. Nov personal spending is expected to show a strong increase of +0.5%, adding to the +0.3% increase seen in October. Today's Nov PCE deflator is to strengthen slightly to +0.9% y/y from +0.7% y/y in October. Meanwhile, the Fed's preferred inflation measure, Nov core PCE deflator is expected to strengthen slightly to +1.2% y/y from +1.1% y/y in October. Today's final-Dec U.S. consumer confidence index from the University of Michigan is expected to be revised higher by +0.5 points from early-Dec to 83.0l, which would produce a sharp overall gain of +7.9 from November. There are no major earnings reports today. There are no equity conferences this week.

    OVERNIGHT U.S. STOCK MOVERS

    Apple (AAPL +0.84%) rose nearly 4% in pre-market trading after it announced after 6-years of negotiations with China Mobile that it will be allowed to sell its iPhone in China starting next month. The deal may bring 12 million new iPhone sales for Apple in 2014, according to an analyst from Morgan Stanley.

    Tiffany (TIF +0.21%) fell 3.5% in pre-market trading after Swatch Group AG won an arbitration award of 402 million francs ($449 million) from Tiffany.

    KB Home (KBH +2.67%) was upgraded to 'Neutral' from 'Sell' at Citigroup.

    Xilinx (XLNX +0.90%) was upgraded to 'Buy' from 'Hold' at Drexel Hamilton.

    The WSJ reported that Target (TGT +0.55%) said on Friday that it has received "very few" reports of credit card fraud following a massive data breach that compromised 40 million and debit card accounts.

    Micron (MU +2.54%) was downgraded to 'Underperform' from 'Neutral' at BofA/Merrill.

    Five Below (FIVE +1.09%) was upgraded to 'Outperform' from 'Neutral' at Credit Suisse.

    CIT Group (CIT +0.61%) disclosed in a regulatory filing that it reached an agreement with Tyco International (TYC +1.77%) in which CIT will pay $60 million to settle claims asserted by Tyco related to a Tax Agreement that CIT and Tyco entered into in 2002 in connection with CIT's separation from Tyco.

    United Technologies (UTX +1.06%) was awarded a $231.47 million government contract modification for sustainment of F119-PW-100 Engines.

    Lockheed Martin (LMT +0.85%) was awarded a $561.96 million government contract modification for nine months of sustainment activities for the F-22 air vehicle.

    Levin Capital Strategies reported a 5.5% passive stake in Pinnacle Foods (PF +0.49%) .

    Abrams reported a 5.99% passive stake in Global Eagle (ENT +3.24%) .

    Blue Ridge Capital reported a 7.82% passive stake in PBF Energy (PBF +1.52%) .

    Ronin Capital reported a 7.9% passive stake in Kingstone Companies (KINS +2.40%) .

    MARKET COMMENTS

    Mar E-mini S&Ps (ESH14 +0.39%) this morning are up +6.75 points (+0.37%) at a new all-time high. The S&P 500 on Friday rallied to a new record high after U.S. Q3 GDP was revised higher to +4.1% from +3.6% and Q3 personal consumption was revised higher to +2.0% from +1.4%. U.S. stocks also found carry-over support from a rally in European bourses after German Jan GfK consumer confidence unexpectedly rose +0.2 to a 6-1/3 year high of 7.6. Closes: S&P 500 +0.48%, Dow Jones +0.26%, Nasdaq 100 +0.93%.

    Mar 10-year T-notes (ZNH14 -0.08%) this morning are down -4.5 ticks. Mar 10-year T-note prices on Friday fell to a 3-1/4 month low after U.S. Q3 GDP was revised higher-than-expected. However, T-notes recovered as the Treasury curve flattened when losing steepener trades were unwound as the Fed's action to taper QE3 Wednesday instead of waiting until next year forced traders to unwind the trades and sell the shorter-end of the Treasury curve (i.e., 2-year and 5-year T-notes) and buy the longer-end of the curve, (i.e., 10-year T-notes and 30-year T-bonds). Closes: TYH4 +2.50, FVH4 -4.25.

    The dollar index (DXY00 -0.25%) this morning is down -0.137 (-0.17%). EUR/USD (^EURUSD) is up +0.0011 (+0.08%) and USD/JPY (^USDJPY) is down -0.24 (-0.23%). The dollar index on Friday fell back from a 2-week high after a rally in the S&P 500 to a record high reduced safe-haven demand for the dollar. EUR/USD closed higher after it recovered from a 2-week low after S&P downgraded the credit rating of the European Union and USD/JPY posted a fresh 5-year high after the BOJ said they will maintain stimulus until annual inflation is stable at 2%. Closes: Dollar index -0.055 (-0.07%), EUR/USD +0.00109 (+0.08%), USD/JPY -0.166 (-0.16%).

    Feb WTI crude oil (CLG14 -0.35%) this morning is down -40 cents (-0.40%) and Feb gasoline (RBG14 -0.33%) is down -0.0087 (-0.31%). Feb crude oil and gasoline prices on Friday closed higher with Feb gasoline at a 3-month high. Bullish factors included (1) the larger-than-expected upward revision in U.S. Q3 GDP to a 1-3/4 year high of +4.1%, which was supportive for energy consumption and demand, and (2) the rally in the S&P 500 to a record high, which signals confidence in the economic outlook. Closes: CLG4 +0.28 (+0.28%), RBG4 +0.0379 (+1.38%).

    GLOBAL EVENT CALENDAR12/23/2013

    US 0830 ET Nov Chicago Fed national activity index, Oct -0.18.
      0830 ET Nov personal spending expected +0.5%, Oct +0.3%. Nov personal income expected +0.5%, Oct -0.1%. Nov PCE deflator expected +0.1% m/m and +0.9% y/y, Oct unch m/m and +0.7% y/y. Nov PCE core deflator expected +0.1% m/m and +1.2% y/y, Oct +0.1% m/m and +1.1% y/y.
      0955 ET Final U.S. Dec University of Michigan consumer confidence expected +0.5 to 83.0, previous +7.4 to 82.5.
      1100 ET USDA weekly grain export inspections.
      1500 ET Nov USDA Cold Storage.
    GER 0200 ET German Nov import price index expected -0.1% m/m and -3.1% y/y, Oct -0.7% m/m and -3.0% y/y.
    JPN n/a Japanese markets closed for Emperors Birthday.

    U.S. STOCK CALENDAR12/23/2013

    Company Name Ticker Time Event Description Period Estimate
    United Therapeutics Corp UTHR US 9:00 Business Update Call    
    CalAmp Corp CAMP US 16:30 Q3 2014 Earnings Call Q3 2014  
    Puma Biotechnology Inc PBYI US 16:30 PB272 (Neratinib) Update Call    
    CalAmp Corp CAMP US Aft-mkt Q3 2014 Earnings Release Q3 2014 0.213
    Hain Celestial Group Inc/The HAIN US Aft-mkt Green Plains Renewable Energy Replaces Hain Celestial Group in S&P SmallCap 600    
    Hain Celestial Group Inc/The HAIN US Aft-mkt Hain Celestial Group Replaces NV Energy Inc. in S&P MidCap 400    
    Green Plains Renewable Energy Inc GPRE US Aft-mkt Green Plains Renewable Energy Replaces Hain Celestial Group in S&P SmallCap 600
    Stocks: AAPL, TIF, KBH, XLNX, TGT, MU, FIVE, CIT, TYC, UTX, LMT, PF, ENT, PBF, KINS, UTHR, CAMP, PBYI, HAIN, GPRE
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