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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 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 1/24 0 comments
    Jan 24, 2012 9:16 AM | about stocks: AAPL, JNJ, VZ, MCD, EMC, DD, KMB, NSC, TRV, BHI, SYK, YHOO, AP, COH, ALTR, BTU, HOG
    Barchart Morning Call Tue, 24 Jan 2012 07:00:00 -0600Overnight Developments
    • Global stocks this morning are mostly lower with the Euro Stoxx 50 down -0.73% and Mar S&Ps down -7.10 points. The dollar strengthened, Treasuries rose and most commodities fell amid a stalemate in Greek debt talks. European finance chiefs are seeking coupons on Greek debt below 3.5% to be serviced until 2020 and below 4% for Greek debt that will be serviced for 30 years, while the private creditors of Greek debt want an average 4% interest rate on the new Greek bonds. A decline in bank stocks led losses in European stocks as Societe Generale and Credit Agricole both fell more than 5% after they both had their ratings downgraded to A from A+ by Standard & Poor's. The euro rose to a 2-1/2 week high against the dollar after a report showed European services and manufacturing industries unexpectedly expanded this month. The Jan Euro-Zone PMI composite rose +2.1 to 50.4, stronger than expectations of +0.2 to 48.5 and its best level in 5 months. The euro also received a boost as Spain's borrowing costs declined after its government sold 2.51 billion euros of 3 and 6-month bills, meeting the maximum target for the sale.
    • Asian stocks today closed mostly higher with Japan up +0.22%, China and South Korea closed for holiday, Australia -0.92%, India +1.46%. Japan's Nikkei 225 Stock Index advanced to a 2-1/2 month high as the yen slid to a 3-week low against the dollar, which boosts the earnings prospects of exporters. Japanese stocks gained despite the action by the BOJ to cut its 2012 growth outlook to 2.0% from an Oct estimate of 2.2% on concern the European debt crisis will slow exports and keep the yen near a record high. The BOJ also kept the benchmark lending rate at 0.00 to 0.10% and maintained its asset-buying fund at 20 trillion yen ($230 billion) and its credit-lending program at 35 trillion yen. India's Sensex Stock Index rallied to a 2-1/4 month high after the RBI cut banks' cash reserve ratio to 5.5% from 6.0%, the first cut in the reserve ration since 2009.
    Overnight U.S. Stock News
    • March S&Ps this morning are trading down -7.10 points. The US stock market on Monday relinquished an early rally and settled mixed on profit taking: Dow Jones -0.09%, S&P 500 +0.05%, Nasdaq Composite -0.09%. The S&P 500 posted a 5-3/4 month high, the Dow rose to an 8-1/2 month high and the Nasdaq climbed to a 10-3/4 year high. Bearish factors on Monday included (1) concerns over global economic growth after Germany's Bundesbank said that economic growth in Germany may have come to a "standstill" in Q4 of 2011 because of the European debt crisis, (2) profit-taking in stocks as the S&P 500 has rallied over 14% in the past 2-months up to Monday's 5-3/4 month high, and (3) the increase in the 10-year T-note yield to a 1-1/2 month high of 2.09%.
    • Bullish factors included (1) speculation EU finance ministers will make progress in solving the region's sovereign-debt crisis after French Finance Minister Baroin said negotiations between Greece and its private creditors were making "tangible progress," (2) comments from IMF Managing Director Lagarde who said that efforts to secure additional IMF resources of $500 billion are "on the optimistic side," and (3) strength in energy and raw-material producers as a weaker dollar prompted a broad-based rally in most commodities and as crude oil gained when the EU said it agreed to adopt sanctions that will ban imports of crude and oil products from Iran starting Jul 1.
    Today's Market Focus
    • March 10-year T-notes this morning are up +5 ticks. T-note prices on Monday fell to a 3-1/2 week low and closed lower for a fourth day on speculation EU finance ministers will make progress in solving the region's sovereign-debt crisis and reduce the safe-haven demand for Treasuries: TYH2 -9.0, FVH2 -2.2, EDM2 +1.5. The 10-year T-note yield climbed to a 1-1/2 month high of 2.092%. Bearish factors included (1) reduced safe-haven demand for Treasuries on signs European officials are moving closer to resolving the region's debt crisis after French Finance Minister Baroin said negotiations between Greece and its private creditors were making "tangible progress," (2) technical selling after the 10-year T-note yield rose to a 1-1/2 month high, and (3) the action by JPMorgan to raise its Q1 estimate for the 10-year T-note yield to 2.25% from 1.7%, saying it has turned "mildly bearish" on Treasuries as funding conditions in Europe improve and cash flows out of U.S. government bond funds. Bullish factors included (1) global economic growth concerns after Germany's Bundesbank said that economic growth in Germany may have come to a "standstill" in Q4 of 2011 because of the European debt crisis and (2) the action by the Fed to purchase $1.745 billion of long-term Treasuries as part of its Operation Twist program to replace $400 billion of short-term debt in its portfolio with longer-term Treasuries in an effort to keep long-term rates low.
    • The dollar index this morning is higher with the dollar/yen +0.26 yen and the euro/dollar -0.03 cents. The dollar index on Monday fell to a 2-1/2 week low and settled lower after the euro rallied on speculation EU finance ministers will find a solution to the region's debt crisis: Dollar Index -0.440, USDJPY unchanged, EURUSD +0.00831. Bearish factors included (1) strength in the euro which rallied to a 2-1/2 week high against the dollar after French Finance Minister Baroin said negotiations between Greece and its private creditors were making "tangible progress," (2) the unexpected +0.7 point increase in Jan Euro-Zone consumer confidence, which is euro supportive, and (3) fuel for further short-covering in the euro after CFTC data showed that large traders and fund managers increased their net short positions in the euro to a record 160,030 contracts in the week ended Jan 17. Bearish factors included (1) the unexpected -3 point decline in Jan French business confidence to a 23-month low of 91, which is euro negative and (2) the statement from Germany's Bundesbank that economic growth in Germany may have come to a "standstill" in Q4 of 2011 because of the European debt crisis.
    • Mar crude oil prices this morning are down -37 cents a barrel and Mar gasoline is -0.56 of a cent per gallon. Crude oil and gasoline prices on Monday finished mixed as a weak dollar and a EU agreement to ban crude imports from Iran boosted crude, while economic growth concerns undercut gasoline: CLH12 +$1.25, RBH12 -0.47. Mar crude recovered from a 1-month low and closed higher. Bullish factors included (1) the slide in the dollar index to a 2-1/2 week low, which boosts investment demand in most commodities, (2) the action by the EU to agree to ban crude and crude products from Iran starting Jul 1 in an effort to pressure the country over its nuclear program, and (3) the statement from Iran's deputy head of foreign affairs and national security who said "If any disruption happens regarding the sale of Iranian oil, the Strait of Hormuz will definitely be closed." Bearish factors included (1) the unexpected decline in Jan French business confidence to a 23-month low, which may lead to reduced economic activity and energy demand and (2) the statement from Germany's Bundesbank that economic growth in Germany may have come to a "standstill" in Q4 of 2011 because of the European debt crisis, which signals reduced fuel demand and consumption.
    Today's U.S. Earnings Reports

    Earnings reports (confirmed releases, sorted by mkt cap): AAPL-Apple (BEST earnings consensus $10.11), JNJ-Johnson & Johnson (1.09), VZ-Verizon Communications (0.53), MCD-McDonolds (1.30), EMC-EMC Corp. (0.46), DD-EI du Pont de Nemours & Co. (0.33), KMB-Kimberly-Clark (1.30), NSC-Norfolk Southern (1.40), TRV-Travelers Cos. (1.52), BHI-Baker Hughes (1.32), SYK-Stryker (1.02), YHOO-Yahoo! (0.24), APD-Air Products & Chemicals (1.36), COH-Coach (1.15), ALTR-Altera (0.42), BTU-Peabody Energy (1.31), HOG-Harley-Davidson (0.22).

    Global Financial Calendar

    Tuesday 1/24/12
    United States
    0745 ETICSC (IntÂ’l Council of Shopping Centers) weekly retailer sales.
    0855 ETRedbook weekly retailer sales.
    0930 ETFOMC begins 2-day policy meeting.
    1000 ETJan Richmond Fed manufacturing index expected +4 to 7, Dec +3 to 3.
    1130 ETWeekly 4-week T-bill auction.
    1300 ETTreasury auctions $35 billion 2-year T-notes.
    2100 ET2012 State of the Union Address.
    France
    0300 ETJan French PMI manufacturing expected -0.3 to 48.6, Dec +1.6 to 48.9.
    0300 ETJan French PMI services expected -0.3 to 50.0, Dec +0.7 to 50.3.
    Germany
    0330 ETJan German PMI manufacturing expected +0.6 to 49.0, Dec +0.5 to 48.4.
    0330 ETJan German PMI services expected unchanged at 52.4, Dec +2.1 to 52.4.
    Euro-Zone
    0400 ETJan Euro-Zone PMI composite expected +0.2 to 48.5, Dec +1.3 to 48.3.
    0500 ETNov Euro-Zone industrial new orders expected -2.2% m/m and -2.7% y/y, Oct +1.8% m/m and +1.6% y/y.
    0905 ETECB Executive Board member Jose Manuel Gonzalez-Paramo speaks at an event in New York.
    United Kingdom
    0430 ETDec U.K. public sector net borrowing expected +12.1 billion pounds, Nov +15.2 billion pounds.
    Canada
    0830 ETNov Canada retail sales expected +0.2% and +0.1% less autos, Oct +1.0% and +0.7% less autos.
    Japan
    1850 ETDec Japan merchandise trade balance expected -154.9 billion yen, Nov -687.6 billion yen. Dec exports expected -7.4% y/y, Nov -4.5% y/y. Dec imports expected +8.0% y/y, Nov +11.4% y/y.

    Barchart.com provides Financial Quotes, Charts and Technical Analysis for Stock and Commodity Traders.

    Stocks: AAPL, JNJ, VZ, MCD, EMC, DD, KMB, NSC, TRV, BHI, SYK, YHOO, AP, COH, ALTR, BTU, HOG
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