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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 2/25 0 comments
    Feb 25, 2014 3:18 PM | about stocks: HSBC, DPZ, VZ, TSLA, AMT, HD, PERY, EBAY, CHMT, EOG, MTX, BAGL, TPC, SF, FTR, FE, PWR, M, EIX, FSLR, QEP, RRC, LUK

    BARCHART MORNING CALL

    Tuesday, February 25th, 2014View Older Reports

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    OVERNIGHT MARKETS AND NEWS

    March E-mini S&Ps (ESH14 -0.23%) this morning are down -0.18% and European stocks are down -0.39% on emerging-market concerns after Ukraine's currency slumped after the country delayed a vote on selecting a government until Thursday. Ukraine is struggling to keep its currency, the hryvnia, from collapsing, which could force banks and companies into default that owe money in foreign currencies. Asian stocks closed mixed: Japan +1,44%, Hong Kong -0.32%, China -2.56%, Taiwan +0.18%, Australia -0.12%, Singapore -0.07%, South Korea +0.88%, India +0.20%. The Shanghai Stock Index fell to a 2-week low amid speculation a weaker property market and a falling currency will undercut corporate earnings. China's yuan dropped to a 6-month low of 6.1310 against the dollar, which boosts the cost of overseas borrowing by Chinese companies at the same time as lenders face tighter lending restrictions in China after China's Industrial Bank on Monday said it will delay loans for property projects until the end of March. Commodity prices are mostly lower. Apr crude oil (CLJ14 -0.89%) is down -0.89%. Apr gasoline (RBJ14 -0.15%) is down -0.18%. Apr gold (GCJ14 -0.26%) is down -0.22%. March copper (HGH14 -0.90%) is down -0.72%. Agriculture and livestock prices are mixed. The dollar index (DXY00 -0.12%) is down -0.08%. EUR/USD (^EURUSD)is up +0.10%. USD/JPY (^USDJPY) is down -0.17%. March T-note prices (ZNH14 +0.06%) are up +3.5 ticks.

    UK Feb CBI reported sales jumped to 37 from 14 in Dec, a much bigger increase than expectations of 15 and the highest in 1-1/2 years.

    German Q4 GDP was left unrevised at +0.4% q/q and +1.4% y/y. Q4 private consumption was unrevised at -0.1% q/q, but Q4 government spending was revised lower to unch from +0.2%. Q4 exports were revised upward to +2.6% q/q from +1.7% q/q and Q4 imports were revised lower to +0.6% from +1.3% q/q.

    The Japan Jan corporate service price index rose +0.8% y/y, a smaller increase than expectations of +1.2% y/y, while Dec was revised lower to +1.1% y/y from the originally reported +1.3% y/y.

    U.S. STOCK PREVIEW

    U.S. home prices are expected to continue climbing at a relatively strong pace. Today's Dec FHFA house price index is expected to show an increase of +0.3% m/m after Nov's report of +0.1%. Meanwhile, today's Dec S&P/CaseShiller composite-20 home price index is expected to show a strong increase of +0.6% m/m and +13.4% y/y after Nov's report of +0.9% m/m and +13.7% y/y. Today's Feb U.S. consumer confidence index from the Conference Board is expected to show a -0.7 point decline to 80.0, reversing part of the +3.2 point increase to 80.7 seen in January. Today's Feb Richmond Fed manufacturing index is expected to show a -7 point decline to 5, adding to the -1 point decline to 12 seen in January. The Treasury today will sell $32 billion in 2-year T-notes, kicking off this week's T-note package. The Treasury will then sell $35 billion in 5-year T-notes and $13 billion of 2-year floating rate notes on Wednesday, and $29 billion of 7-year T-notes on Thursday.

    There are 9 of the S&P 500 companies that report earnings today: American Tower (consensus $0.96), FirstEnergy (0.70), Home Depot (0.71), Macy's (2.17), Edison International (0.68), First Solar (1.02), QEP Resources (0.40), Range Resources (0.39), Leucadia National Corp. Equity conferences during the remainder of this week include: BMO Capital Markets Global Metals & Mining Conference on Mon-Tue, JP Morgan Emerging Markets Corporate Conference on Mon-Tue, HIMSS Conference on Mon-Tue, Morgan Stanley Houston Energy Summit on Tue, J. P. Morgan Global High Yield & Leveraged Finance Conference on Mon-Wed, RBC Capital Markets Healthcare Conference on Mon-Wed, 10th Regulatory and Compliance Congress on Tue-Wed, Robert W. Baird Business Solutions Conference Tue-Wed, Crude By Rail 2014 on Tue-Wed, Super Return International 2014 on Tue-Wed, Gabelli & Co Inc Industrial Flow & Infrastructure Conference on Wed, RBC Capital Markets Global Health Care Conference on Wed, Alembic Global Advisors Fourth Annual Global Chemical Conference on Wed, Keefe, Bruyette, & Woods Boston Bank Conference on Wed, KeyBanc Capital Markets Consumer Conference on Wed, Bank of America Merrill Lynch Global Agriculture Conference on Wed-Thu, Simmons Energy Conference on Thu, and Stifel Industrials Conference on Thu.

    OVERNIGHT U.S. STOCK MOVERS

    HSBC (HSBC -2.37%) was downgraded to 'Neutral' from 'Overweight' at JPMorgan.

    Domino's Pizza (DPZ +1.97%) reported Q4 EPS of 78 cents, better than consensus of 76 cents.

    Verizon (VZ -2.20%) was upgraded to 'Overweight' from 'Neutral' at JPMorgan.

    Morgan Stanley reiterates its 'Overweight' rating on Tesla (TSLA +3.84%) and raised its price target on the stock to $320 from $153.

    American Tower (AMT -1.27%) reported Q4 EPS of 83 cents, weaker than consensus of 96 cents.

    Home Depot (HD +0.17%) reported Q4 EPS of 73 cents, higher than consensus of 71 cents.

    Perry Ellis (PERY +2.69%) slumped 20% in after-hours trading after it lowered guidance on fiscal 2014 adjusted EPS to 34 cents-37 cents, well below consensus of 97 cents, and said earnings were undercut by inclement weather across major parts of the country and a challenging consumer spending environment.

    PayPal, a unit of eBay (EBAY +3.13%) , announced on a company blog that it will be the first global payments company to support the mobile fingerprint authentication technology on Samsung's (SSNLF unch) latest Samsung Galaxy S5.

    Chemtura (CHMT +0.36%) reported Q4 adjusted EPS of 16 cents, higher than consensus of 11 cents.

    EOG Resources (EOG +1.35%) reported Q4 adjusted EPS of $2.00, better than consensus of $1.94.

    Minerals Technologies (MTX -0.34%) increased its offer to acquire AMCOL ({=ACO to $42.50 per share.

    Einstein Noah Restaurant Group (BAGL -1.27%) announced that effective immediately, the Board of Directors has appointed Michael Arthur as Interim Chief Executive Officer and President following the resignation of Jeff O'Neill.

    Tutor Perini (TPC +2.36%) reported Q4 EPS of 68 cents, stronger than consensus of 61 cents.

    Stifel Financial (SF +1.52%) reported Q4 EPS of 79 cents, higher than consensus of 68 cents.

    Frontier Communications (FTR -0.86%) reported Q4 adjusted EPS of 7 cents, better than consensus of 6 cents.

    MARKET COMMENTS

    Mar E-mini S&Ps (ESH14 -0.23%) this morning are down -3.25 points (-0.18%). The S&P 500 on Monday rallied to a fresh all-time high and closed higher. Bullish factors for stocks included (1) positive carry-over from a rally in European equities after the German Feb IFO business climate unexpectedly rose +0.7 to a 2-1/2 year high of 111.3, higher than expectations of a -0.1 point decline to 110.5, and (2) a rally in health insurers after the U.S. Centers for Medicare & Medicaid Services said health insurers face a payment cut of only about 3.55% next year, less than industry expectations of 6% to 7%. Closes: S&P 500 +0.62%, Dow Jones +0.64%, Nasdaq 100 +0.63%.

    Mar 10-year T-notes (ZNH14 +0.06%) this morning are up +3.5 ticks. Mar 10-year T-note futures prices on Monday closed lower on negative carry-over from a drop in German bunds after the German Feb IFO business climate unexpectedly rose to a 2-1/2 year high. T-notes also moved lower on reduced safe-haven demand after the S&P 500 climbed to a record high. Closes: TYH4 -4.50, FVH4 -2.00.

    The dollar index (DXY00 -0.12%) this morning is down -0.066 (-0.08%). EUR/USD (^EURUSD) is up +0.0014 (+0.10%). USD/JPY (^USDJPY) is down -0.17 (-0.17%). The dollar index on Monday closed lower on reduced safe haven demand after the S&P 500 rose to a record high. EUR/USD moved higher after the German Feb IFO business climate unexpectedly rose +0.7 to a 2-1/2 year high of 111.3, but fell back after ECB President Draghi reiterated the ECB is ready to add to stimulus if the outlook for prices deteriorates and after ECB Executive Board member Praet said that "weakness in price development is extending to the medium term." Closes: Dollar index -0.038 (-0.05%), EUR/USD -0.00014 (-0.01%), USD/JPY unch.

    Apr WTI crude oil (CLJ14 -0.89%) this morning is down -91 cents (-0.89%) and Apr gasoline (RBJ14 -0.15%) is down -0.0053 (-0.18%). Apr crude and gasoline prices Monday settled higher. Bullish factors for crude included (1) weakness in the dollar, (2) the unexpected increase in German Feb IFO business confidence to a 2-1/2 year high, which is positive for the global economic outlook and energy demand, and (3) expectations for crude supplies to fall for a fourth week at Cushing, OK, the delivery point for WTI futures, when weekly EIA inventory data is released on Wed. Closes: CLJ4 +0.62 (+0.61%), RBJ4 +0.0055 (+0.18%).

    GLOBAL EVENT CALENDAR02/25/2014

    US0900 ETDec FHFA house price index expected +0.3% m/m, Nov +0.1% m/m. Q4 house price purchase index expected +1.00% q/q, Q3 +1.96% q/q.
     0900 ETDec S&P/CaseShiller composite-20 home price index expected +0.6% m/m and +13.40% y/y, Nov +0.88% m/m and +13.71% y/y. Q4 home price index, Q3 +11.18% y/y.
     1000 ETU.S. Feb consumer confidence (Conference Board) expected -0.7 to 80.0, Jan +3.2 to 80.7.
     1000 ETFeb Richmond Fed manufacturing index expected -7 to 5, Jan -1 to 12.
     1010 ETFed Governor Daniel Tarullo speaks at the annual NABE conference on a panel titled A View from the Fed.
     1300 ETTreasury auctions $32 billion 2-year T-notes.
    GER0200 ETRevised German Q4 GDP, previous +0.4% q/q and +1.4% y/y.
    UK0600 ETUK Feb CBI reported sales expected +1 to 15, Jan 14.

    U.S. STOCK CALENDAR02/25/2014

    Company NameTickerTimeEvent DescriptionPeriodEstimate
    American Tower CorpAMT USBef-mktQ4 2013 Earnings ReleaseQ4 20130.962
    FirstEnergy CorpFE USBef-mktQ4 2013 Earnings ReleaseQ4 20130.696
    Home Depot Inc/TheHD US6:00Q4 2014 Earnings ReleaseQ4 20140.713
    Quanta Services IncPWR US8:00Investor DayY 2014 
    Macy's IncM US8:00Q4 2014 Earnings ReleaseQ4 20142.172
    Edison InternationalEIX USAft-mktQ4 2013 Earnings ReleaseQ4 20130.678
    First Solar IncFSLR USAft-mktQ4 2013 Earnings ReleaseQ4 20131.021
    QEP Resources IncQEP USAft-mktQ4 2013 Earnings ReleaseQ4 20130.404
    Range Resources CorpRRC USAft-mktQ4 2013 Earnings ReleaseQ4 20130.388
    Leucadia National CorpLUK US Q4 2013 Earnings ReleaseQ4 2013

    Stocks: HSBC, DPZ, VZ, TSLA, AMT, HD, PERY, EBAY, CHMT, EOG, MTX, BAGL, TPC, SF, FTR, FE, PWR, M, EIX, FSLR, QEP, RRC, LUK
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