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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 1/9 0 comments
    Jan 9, 2014 10:31 AM | about stocks: NETL, TMO, VAL, YUM, MCD, NVDA, PIR, S, PSA, M, GPN, BBBY, UAL, FDO, LB, AA, CVX, GMC, GPS, COST

    BARCHART MORNING CALL

    Thursday, January 9th, 2014View Older Reports

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    OVERNIGHT MARKETS AND NEWS

    March E-mini S&Ps (ESH14 +0.27%) this morning are up +0.26% and European stocks are up +0.51% on expectations the ECB will maintain it dovish monetary stance when it meets later today. Also helping to boost European stocks was the jump in Eurozone Dec economic confidence to the highest in 2-1/2 years and a bigger-than-expected rise in German Nov industrial production. As expected, the BOE kept its benchmark rate at a record low 0.50% and maintained its asset purchase target at 375 billion pounds. Asian stocks closed mostly lower: Japan -1.50%, Hong Kong -0.91%, China -0.88%, Taiwan -0.48%, Australia +0.16%, Singapore -0.17%, South Korea -0.83%, India -0.08%. China's Shanghai Stock index tumbled to a 6-month low after data showed consumer and producer prices rose less than expected last month, a sign that economic growth may be slowing. Commodity prices are mixed. Feb crude oil (CLG14 +0.60%) is up +0.35%. Feb gasoline (RBG14 +1.07%) is up +0.84%. Feb gold (GCG14 +0.26%) is up +0.21%. March copper (HGH14 -0.81%) is down -0.93% at a 2-week low on speculation the Fed will continue to cut stimulus after the Dec 17-18 FOMC meting minutes released Wednesday afternoon showed that Fed members saw diminishing economic benefits from Fed asset purchases. Agriculture and livestock prices are mixed. The dollar index (DXY00 -0.08%) is down -0.01%. EUR/USD (^EURUSD) is up +0.21%. USD/JPY (^USDJPY) is up +0.11%. March T-note prices (ZNH14 -0.03%) are up +2.5 ticks.

    Eurozone Dec economic confidence rose +1.6 to 100.0, higher than expectations of +0.6 to 99.1 and the strongest in nearly 2-1/2 years.

    The Eurozone Dec business climate indicator fell -0.04 to 0.27 from an upward revised 0.31 in Nov, which was a 2-1/2 year high.

    German Nov industrial production rose +1.9% m/m and +3.5% y/y, stronger than expectations of +1.5% m/m and +3.0% y/y, with the +3.5% y/y gain the biggest annual increase in 2-years.

    China Dec CPI climbed +2.5% y/y, a smaller increase than expectations of +2.7% y/y and the slowest pace of increase in 7-months. China Dec PPI fell -1.4% y/y, a bigger decline than expectations of -1.3% y/y.

    U.S. STOCK PREVIEW

    Today's weekly initial unemployment claims report is expected to show a small decline of -4,000 to 335,000, adding to last week's decline of -2,000 to 339,000. Meanwhile, today's continuing claims report is expected to show an increase of +17,000 to 2.850 million, reversing part of last week's -98,000 decline to 2.833 million. 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 S&P 500 companies that reports earnings today: Alcoa (consensus $0.06), and Family Dollar Stores (0.69). Equity conferences during the remainder of this week include: Goldman Sachs Global Energy Conference on Tue-Thu, and Deutsche Bank US Independent Refiners Conference on Thu.

    OVERNIGHT U.S. STOCK MOVERS

    Aetna (AET +1.02%) was upgraded to 'Outperform' from 'Neutral' at Credit Suisse.

    Cantor Fitzgerald named Thermo Fisher Scientific (TMO +1.54%) its top stock pick for 2014 and raised its price target for the stock to $128 from $112.

    Valspar (VAL +0.34%) was upgraded to 'Outperform' from 'Neutral' at RW Baird.

    Yum! Brands (YUM -0.04%) was downgraded to 'Equal Weight' from 'Overweight' at Morgan Stanley.

    McDonald's (MCD -1.01%) was upgraded to 'Overweight' from 'Equal Weight' at Morgan Stanley.

    NVIDIA (NVDA +1.36%) was downgraded to 'Hold' from 'Buy' at Canaccord due to valuation.

    Pier 1 Imports (PIR +0.82%) lowered guidance on fiscal year 2014 EPS to $1.07-$1.12 from $1.21-$1.27, well below consensus of $1.23.

    Sprint (S +1.11%) was downgraded to 'Hold' from 'Buy' at Deutsche Bank due to valuation.

    Jefferies upgraded Public Storage (PSA +0.18%) to 'Buy' from 'Hold' citing the recent pullback in shares and strong fundamentals.

    Macy's (M -0.65%) rallied 5% in after-hours trading after reiterating its fiscal-year EPS guidance and announcing cost-savings measures involving cutting 2,500 employees. The company's fiscal-2014 EPS guidance also beat estimates thanks to the cost-savings measures.

    Global Payments (GPN -0.74%) rallied 5% in after-hours trading after a positive earnings report.

    Bed Bath & Beyond (BBBY +0.59%) fell 8% in after-hours trading after missing earnings expectations.

    United Airlines (UAL +6.02%) reported that December traffic rose +4.1%.

    MARKET COMMENTS

    Mar E-mini S&Ps (ESH14 +0.27%) this morning are up +4.75 points (+0.26%). The S&P 500 on Wednesday closed mildly lower on concerns that the Fed will steadily taper QE3 after the strong ADP report and the FOMC minutes that showed that the Fed saw declining benefits from QE3. The Dec ADP report was strong at +238,000 and there were upward revisions totaling +36,000 for Oct and Nov. Closes: S&P 500 -0.02%, Dow Jones -0.41%, Nasdaq 100 +0.88%.

    Mar 10-year T-notes (ZNH14 -0.03%) this morning are up +2.5 ticks. Dec 10-year T-note futures prices on Monday closed sharply lower on concern that QE3 tapering could be stepped up after the FOMC minutes showed the Fed has lost confidence in the benefits of QE3 and after the ADP report showed a strong report of +238,000. Closes: TYH4 -18.5, FVH4 -14.5.

    The dollar index (DXY00 -0.08%) this morning is down -0.010 (-0.01%). EUR/USD (^EURUSD) is up +0.0029 (+0.21%). USD/JPY (^USDJPY) is up +0.12 (+0.11%). The dollar index on Wednesday closed mildly higher on expectations for steady QE3 tapering and for stronger U.S. economic growth with the strong ADP report of +238,000. Closes: Dollar index +0.23 (+0.29%), EUR/USD -0.0040 (-0.29%), USD/JPY +0.26 (+0.25%).

    Feb WTI crude oil (CLG14 +0.60%) this morning is up +32 cents (+0.35%) and Feb gasoline (RBG14 +1.07%) is up +0.0223 (+0.84%). Feb crude oil prices and Feb gasoline prices on Wednesday closed sharply lower as the weekly EIA report showed a +0.3% increase in U.S. oil production to a new 25-1/3 year high of 8.145 million bpd and as product inventories rose sharply. Gasoline inventories rose by +6.243 million bbls and distillate inventories rose by +5.826 million bbls. Crude oil inventories fell by -2.675 million bbls for the sixth consecutive weekly drop and an overall decline of -33.52 million bbls (-8.6%) but that decline was due to an effort to minimize year-end taxes and not to any big increase in crude oil demand. Closes: CLG4 -1.34 (-1.43%), RBG4 -0.0223 (-0.83%).

    GLOBAL EVENT CALENDAR01/09/2014

    US0730 ETDec Challenger job cuts, Nov -20.6% y/y.
     0830 ETWeekly initial unemployment claims expected -4,000 to 335,000, previous -2,000 to 339,000. Weekly continuing claims expected +17,000 to 2.850 million, previous -98,000 to 2.833 million.
     0830 ETUSDA weekly Export Sales.
     1000 ETHouse Monetary Policy and Trade Subcommittee holds hearing on the effects of the Feds quantitative easing program on the international financial system.
     1300 ETTreasury auctions $13 billion in 30-year T-bonds.
     1330 ETKansas Fed President Ester George speaks on banking and the U.S. economy to the Wisconsin Bankers Association in Madison, WI.
     2000 ETMinneapolis Fed President Narayana Kocherlakota speaks at town hall meeting at the Minneapolis Fed.
    EUR0500 ETEurozone Dec economic confidence expected +0.6 to 99.1, Nov 98.5. Dec business climate indicator expected 0.22, Nov 0.18.
     0500 ETRevised Eurozone Dec consumer confidence, previous -13.6.
     0745 ETECB announces interest rate decision. Refinancing rate expected unchanged at 0.25%.
     0830 ETECB President Mario Draghi speaks at monthly press conference.
    GER0600 ETGerman Nov industrial production expected +1.5% m/m and +3.0% y/y, Oct -1.2% m/m and +1.0% y/y.
    UK0430 ETUK Nov visible trade balance expected -9.450 billion pounds, Oct -9.732 billion pounds. Nov non-EU trade balance expected -3.5 billion pounds, Oct -3.254 billion pounds. Nov trade balance expected -2.3 billion pounds, Oct -2.619 billion pounds.
     0700 ETBOE announces interest rate decision and asset purchase target (expected no change to the 0.50% benchmark rate or to the 375 billion pound asset purchase target).
     1901 ETUK Dec BRC sales like-for-like expected +0.8% y/y, Nov +0.6% y/y.
    JPN2100 ETDec Tokyo average office vacancies, Nov 7.52%.
    CHIn/aChina Dec new yuan loans expected 585.0 billion yuan, Nov 624.6 billion yuan.
     n/aChina Dec M0 expected +8.5% y/y, Nov +7.7% y/y. Dec M1 expected +9.0% y/y, Nov +9.4% y/y. M2 expected +13.9% y/y, Nov +14.2% y/y.

    U.S. STOCK CALENDAR01/09/2014

    Company NameTickerTimeEvent DescriptionPeriodEstimate
    Family Dollar Stores IncFDO USBef-mktQ1 2014 Earnings ReleaseQ1 20140.687
    L Brands IncLB US7:30December 2013 Sales and Revenue Call2013 
    Family Dollar Stores IncFDO US10:00Q1 2014 Earnings CallQ1 2014 
    Alcoa IncAA US17:00Q4 2013 Earnings CallQ4 2013 
    Chevron CorpCVX US17:00Q4 2013 Sales and Revenue ReleaseQ4 2013 
    Alcoa IncAA USAft-mktQ4 2013 Earnings ReleaseQ4 20130.06
    Omnicom Group IncOMC US European Commission Deadline on Publicis Groupe & Omnicom Group Merger Deal  
    Gap Inc/TheGPS US December 2013 Sales and Revenue Release2013 
    Costco Wholesale CorpCOST US December 2013 Sales and Revenue Release2013 
    L Brands IncLB US December 2013 Sales and Revenue Release2013 

    Stocks: NETL, TMO, VAL, YUM, MCD, NVDA, PIR, S, PSA, M, GPN, BBBY, UAL, FDO, LB, AA, CVX, GMC, GPS, COST
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