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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 2/12 0 comments
    Feb 12, 2014 12:27 PM | about stocks: LO, VAL, DE, PKG, WLTW, PG, MEP, SWHC, SCI, FOSL, DVA, ANDE, TMH, WU, INTU, DPS, HSP, AMAT, NTAP, CSCO, CTL, EFX, WFM, MET, PGR

    BARCHART MORNING CALL

    Wednesday, February 12th, 2014View Older Reports

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    OVERNIGHT MARKETS AND NEWS

    March E-mini S&Ps (ESH14 +0.04%) this morning are down -0.01% and European stocks are ahead by +0.41% as emerging-markets rallied on signs of strength in China's economy after China Jan exports and imports accelerated. Asian stocks closed higher: Japan +0.56%, Hong Kong +1.47%, China +0.25%, Taiwan +0.95%, Australia +1.06%, Singapore +0.21%, South Korea +0.17%, India +0.42%. Reduced European sovereign-debt concerns also gave a boost to European stocks after Italy's 10-year bond yield fell to an 8-year low of 3.66%. Commodity prices are mixed. Mar crude oil (CLH14 +0.62%) is up +0.46% at a 1-1/2 month high after China Jan crude imports jumped +12% y/y to a record 28.15 MMT. Mar gasoline (RBH14 +0.76%) is up +0.48%, also at a 1-1/2 month high. Apr gold (GCJ14 +0.02%) is down -0.21%. March copper (HGH14 +0.92%) is up +0.86% after China Jan refined copper imports surged +21% m/m and +53% y/y to an all-time high 536,000 MT. Agriculture and livestock prices are mixed. The dollar index (DXY00 +0.14%) is up +0.09%. EUR/USD (^EURUSD) is down -0.40% after ECB Council member Coeure said the ECB is considering a negative deposit rate "very seriously." USD/JPY (^USDJPY) is down -0.34%. March T-note prices (ZNH14 -0.12%) are down -7 ticks.

    The China Jan trade balance was a +$31.86 billion surplus, wider than expectations of a +$23.45 billion surplus. Jan exports jumped +10.6% y/y, well above expectations of +0.1% y/y, and Jan imports rose +10.0% y/y, more than double expectations of +4.0% y/y

    Speaking yesterday evening, Dallas Fed President Fisher signaled he is for continued tapering of QE when he said there is little "efficacy derived from additional expansion of the Fed's balance sheet."

    Eurozone Dec industrial production fell -0.7% m/m and rose +0.5% y/y, weaker than expectations of -0.3% m/m and +1.8% y/y.

    Japan Dec machine orders plunged -15.7% m/m, a much bigger decline than expectations of -4.0% m/m and the largest fall since 1998. On an annual basis, Dec machine orders rose +6.7% y/y, a slower pace than expectations of +17.4% y/y.

    The Japan Dec tertiary industry index fell -0.4% m/m, a bigger decline than expectations of -0.3%, but Nov was revised upward to +0.8% m/m from the originally reported +0.6% m/m.

    U.S. STOCK PREVIEW

    The Treasury today will sell $24 billion of 10-year T-notes. The Treasury will then conclude this week's $70 billion coupon package by selling $16 billion of 30-year T-bonds on Thursday. There are 14 of the S&P 500 companies that report earnings today. Notable reports include Dr Pepper (consensus $0.84), Deere (1.53), CBS (0.76), NVIDIA (0.24), Applied Materials (0.22), Cisco (0.46), Equifax (0.91), Whole Foods (0.44), MetLife (1.29).

    Equity conferences during the remainder of this week include: Stifel Nicolaus Technology, Internet & Media Conference on Mon-Wed, Stifel Nicolaus Transportation and Logistics Conference on Tue-Wed, Goldman Sachs Technology & Internet Conference on Tue-Thu, Credit Suisse Global Energy Summit on Tue-Thu, Credit Suisse Financial Services Forum on Tue-Wed, E&P Information & Data Management on Wed, Cleantech Innovation Summit on Wed, Bank of America Merrill Lynch Insurance Conference on Wed-Thu, BB&T Capital Markets Transportation Services Conference on Wed-Thu, Leerink Swann Global Healthcare Conference on Wed-Thu, and Sterne Agee Financial Institutions Investor Conference on Thu.

    OVERNIGHT U.S. STOCK MOVERS

    Lorillard (LO +1.01%) reported Q4 EPS of 82 cents, below consensus of 85 cents.

    Valspar (VAL -0.21%) reported Q1 adjusted EPS of 70 cents, better than consensus of 66 cents.

    Deere (DE +0.11%) reported Q1 EPS of $1.81, well above consensus of $1.53.

    Packaging (PKG +0.06%) reported Q4 ex-items EPS of $1.04, stronger than consensus of 89 cents.

    Willis Group (WSH +1.26%) reported Q4 adjusted EPS of 42 cents, weaker than consensus of 49 cents.

    Procter & Gamble (PG +1.04%) said it expects an 8 cent-10 cent a share charge due to the devaluation of Venezuela's currency.

    Midcoast Energy (MEP +1.01%) reported Q4 EPS of 6 cents, well below consensus of 16 cents.

    Senior Housing (SNH -1.09%) was downgraded to 'Sell' from 'Neutral' at UBS.

    Service (SCI +0.34%) reported Q4 EPS ex-items of 27 cents, higher than consensus of 24 cents.

    Fossil (FOSL +1.70%) jumped 6% in after-hours trading after it reported Q4 EPS of $2.68, stronger than consensus of $2.43.

    DaVita (DVA +0.77%) reported Q4 adjusted EPS of $1.10, above consensus of 98 cents.

    Andersons (ANDE +0.97%) reported Q4 EPS of $1.08, well below consensus of $1.61 as Q4 revenue was $1.6 billion, lower than consensus of $1.74 billion.

    Team Health (TMH -1.73%) reported Q4 adjusted EPS of 46 cents, better than consensus of 44 cents.

    Western Union (WU +1.53%) fell 3% in after-hours trading after it reported Q4 EPS of 31 cents, below consensus of 32 cents.

    Intuit (INTU +1.78%) fell 2% in after-hours trading after it lowered guidance on Q2 EPS to 1 cent-2 cents, well below consensus of 26 cents.

    MARKET COMMENTS

    Mar E-mini S&Ps (ESH14 +0.04%) this morning are little changed, down -0.25 of a point (-0.01%). The S&P 500 on Tuesday climbed to a 2-week high and closed higher after comments from Fed Chair Yellen bolstered optimism in the U.S. economy when she said economic growth has strengthened and there is "broad improvement" in the labor market. Yellen added that while growth has picked up, "the recovery in the labor market is far from complete" and that the FOMC is likely to continue to taper QE in "measured steps." Her comments boosted speculation the U.S. economy is strong enough to handle further cuts in stimulus. Closes: S&P 500 +1.11%, Dow Jones +1.22%, Nasdaq 100 +1.11%.

    Mar 10-year T-notes (ZNH14 -0.12%) this morning are down -7 ticks. Mar 10-year T-note futures prices on Tuesday fell back after Fed Chair Yellen said that that the FOMC is likely to continue to taper QE in "measured steps," which was less dovish than market expectations. T-notes were also undercut on supply pressures with the Treasury auctioning $70 billion of T-notes and T-bonds in this week's Feb quarterly refunding. Closes: TYH4 -11.50, FVH4 -7.50.

    The dollar index (DXY00 +0.14%) this morning is up +0.075 (+0.09%). EUR/USD (^EURUSD) is down -0.0055 (-0.40%). USD/JPY (^USDJPY) is down -0.35 (-0.34%). The dollar index Tuesday fell to a 1-1/2 week low and closed slightly lower. Negative factors included (1) reduced safe-haven demand for the dollar after the S&P 500 rallied up to a 2-week high, and (2) comments from Fed Chair Yellen who said the labor market recovery is "far from complete," which boosted speculation that the Fed will be slow to remove its overly easy monetary policies. Closes: Dollar index -0.004 (-0.01%), EUR/USD -0.0008 (-0.06%), USD/JPY +0.371 (+0.36%).

    Mar WTI crude oil (CLH14 +0.62%) this morning is up +46 cents (+0.46%) and Mar gasoline (RBH14 +0.76%) is up +0.0131 (+0.48%), both at 1-1/2 month highs. Mar crude and gasoline prices Tuesday settled mixed. Bullish factors included (1) the slide in the dollar index to a 1-1/2 week low, (2) expectations for weekly EIA distillate supplies to fall 2.25 million bbl on Wed due to increased demand for heating fuels, and (3) strength in gasoline on supply concerns after researcher Energy Aspects Ltd. said that an average of 1.6 million bpd of U.S. refining capacity will be offline this month due to seasonal maintenance and unplanned shutdowns. Crude prices erased gains and closed lower after Fed Chair Yellen said the Fed will continue to taper QE3. Closes: CLH4 -0.12 (-0.12%), RBH4 +0.0278 (+1.02%).

    GLOBAL EVENT CALENDAR02/12/2014

    US 0700 ET Weekly MBA mortgage applications, previous +0.4% with purchase sub-index -3.8% and refi sub-index +2.9%.
      0845 ET St. Louis Fed President James Bullard speaks on a panel discussion about Economic and Monetary Policy Challenges Facing the U.S. and the Eurozone in 2014.
      1030 ET EIA Weekly Petroleum Status Report.
      1300 ET Treasury auctions $24 billion 10-year T-notes.
      1400 ET Jan monthly budget statement expected -$28.5 billion, Dec +$53.220 billion.
    JPN 0100 ET Japan Jan machine tool orders, Dec +28.1% y/y.
      1850 ET Japan Jan domestic CGPI expected +0.1% m/m and +2.4% y/y, Dec +0.3% m/m and +2.5% y/y.
    EUR 0500 ET Eurozone Dec industrial production expected -0.3% m/m and +1.8% y/y, Nov +1.8% m/m and +3.0% y/y.
      1030 ET ECB President Mario Draghi delivers keynote address at a conference in Brussels titled Progress Through Crisis.
    UK 0530 ET BOE releases quarterly inflation report.
      1901 ET UK Jan RICS house price balance expected 58%, Dec 56%.

    U.S. STOCK CALENDAR02/12/2014

    Company Name Ticker Time Event Description Period Estimate
    Dr Pepper Snapple Group Inc DPS US Bef-mkt Q4 2013 Earnings Release Q4 2013 0.841
    Hospira Inc HSP US Bef-mkt Q4 2013 Earnings Release Q4 2013 0.498
    Lorillard Inc LO US Bef-mkt Q4 2013 Earnings Release Q4 2013 0.851
    Deere & Co DE US Bef-mkt Q1 2014 Earnings Release Q1 2014 1.53
    Hospira Inc HSP US 9:00 Q4 2013 Earnings Call Q4 2013  
    Lorillard Inc LO US 9:00 Q4 2013 Earnings Call Q4 2013  
    Applied Materials Inc AMAT US Aft-mkt Q1 2014 Earnings Release Q1 2014 0.224
    NetApp Inc NTAP US Aft-mkt Q3 2014 Earnings Release Q3 2014 0.71
    Cisco Systems Inc CSCO US Aft-mkt Q2 2014 Earnings Release Q2 2014 0.458
    CenturyLink Inc CTL US Aft-mkt Q4 2013 Earnings Release Q4 2013 0.589
    Equifax Inc EFX US Aft-mkt Q4 2013 Earnings Release Q4 2013 0.911
    Whole Foods Market Inc WFM US Aft-mkt Q1 2014 Earnings Release Q1 2014 0.44
    MetLife Inc MET US Aft-mkt Q4 2013 Earnings Release Q4 2013 1.294
    Progressive Corp/The PGR US   January 2014 Sales and Revenue Release 2014
    Stocks: LO, VAL, DE, PKG, WLTW, PG, MEP, SWHC, SCI, FOSL, DVA, ANDE, TMH, WU, INTU, DPS, HSP, AMAT, NTAP, CSCO, CTL, EFX, WFM, MET, PGR
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