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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 2/27 0 comments
    Feb 27, 2014 10:35 AM | about stocks: CHS, WEN, KSS, BIDU, WIN, BBY, RIG, AWK, LB, PTR, GEF, CREE, ADSK, RNDY, WLL, MYL, WPX, RDC, CRM, MNST

    BARCHART MORNING CALL

    Thursday, February 27th, 2014View Older Reports

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    OVERNIGHT MARKETS AND NEWS

    March E-mini S&Ps (ESH14 -0.29%) this morning are down -0.31% and European stocks are down -1.13% as tensions escalated in Ukraine. Gunmen occupied parliament and the government building in Ukraine's Crimea region as lawmakers in Ukraine's capital met to approve a new cabinet and Russia put jet fighters on alert. This undercut Ukraine's currency, which fell to 11.2 per dollar, the lowest since it was introduced in 1996. Asian stocks closed mixed: Japan -0.32%, Hong Kong +1.74%, China -0.43%, Taiwan +0.45%, Australia -0.47%, Singapore +0.27%, South Korea +0.38%, India closed for holiday. European stocks shrugged off the unexpected increase in Eurozone Feb economic confidence to a 2-1/2 year high. The yield on the German 10-year bund tumbled to a 7-month low of 1.546% after inflation data from six German regions slowed this month, which fueled speculation the ECB will expand its stimulus measures when it meets next week. Commodity prices are mixed. Apr crude oil (CLJ14 -0.19%) is down -0.15%. Apr gasoline (RBJ14 -0.66%) is down -0.50%. Apr gold (GCJ14 +0.32%) is up +0.42%. March copper (HGH14 -0.09%) is down -0.09%. Agriculture and livestock prices are mixed, although nearest-futures Feb cattle soared to a record high of $1.5095 a pound. The dollar index (DXY00 +0.06%) is up +0.03% at a 2-week high as tension in Ukraine boosts the safe-haven demand for the dollar. EUR/USD (^EURUSD) is down -0.19% at a 2-week low as weak German inflation data bolsters speculation the ECB may expand its euro-negative stimulus measures. USD/JPY (^USDJPY) is down -0.47%. March T-note prices (ZNH14 +0.22%) are up +6.5 ticks at a 3-week high.

    Eurozone Feb economic confidence unexpectedly rose +0.2 to 101.2 from an upward revised 101.0 in Jan. That was better than expectations of -0.2 to 100.7 and the highest in 2-1/2 years. The Feb business climate indicator rose +0.12 to 0.37 from an upward revised 0.25 in Jan. That was better than expectations of +0.01 to 0.20 and the highest level in 2-1/2 years.

    The German Feb unemployment change fell -14,000, a bigger drop than expectations of -10,000. The Feb unemployment rate was unch at 6.8%, right on expectations and the lowest since data for a reunified Germany began in 1990.

    The German Jan import price index fell -0.1% m/m and -2.3% y/y, a slower pace of decline than expectations of -0.2% m/m and -2.4% y/y.

    U.S. STOCK PREVIEW

    Fed Chair Janet Yellen today will present the second day of her semi-annual testimony to the Senate Banking Committee that was postponed from Feb 13 due to a snowstorm. Today's weekly initial unemployment claims report is expected to show a decline of -1,000 to 335,000, adding to last week's decline of -3,000 to 336,000. Meanwhile, continuing claims are expected to show a small increase of +4,000 to 2.985 million after last week's increase of +37,000 to 2.981 million. Today's Jan durable goods orders report is expected to show a decline of -1.6% and -0.3% ex-transportation, adding to the declines of -4.2% and -1.3% ex transportation seen in December.

    There are 12 of the S&P 500 companies that report earnings today: Mylan (consensus $0.75), WPX Energy (-0.35), Rowan (0.41), Windstream Holdings (0.09), Kohl's (1.54), Best Buy (1.01), Pall Corp (0.80), Sempra Energy (0.97), Ross Stores (1.01), Gap (0.65), Salesforce.com (0.06), Monster Beverage (0.46). Equity conferences during the remainder of this week include: 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

    Chico's FAS (CHS +2.27%) reported Q4 EPS of 4 cents, well below consensus of 15 cents.

    Wendy's (WEN +0.39%) reported Q4 adjusted EPS of 11 cents, stronger than consensus of 9 cents.

    Kohl's (KSS +2.31%) reported Q4 EPS of $1.56, higher than consensus of $1.54.

    Baidu (BIDU +1.62%) was upgraded to 'Buy' from 'Hold' at Stifel.

    Windstream Holdings (WIN -0.75%) reported Q4 EPS of 20 cents, double consensus of 9 cents.

    Best Buy (BBY +2.02%) reported Q4 EPS of $1.24, better than consensus of $1.01.

    Transocean (RIG -0.94%) reported Q4 adjusted EPS of 73 cents, right on consensus, but reported Q4 revenue of $2.332 billion, below consensus of $2.36 billion.

    American Water (AWK -0.18%) reported Q4 EPS of 33 cents, well below consensus of 45 cents.

    Senator Investment reported a 5.0% passive stake in Brookdale Senior Living (BKD +5.62%) .

    L Brands (LB +4.01%) reported Q4 EPS of $1.65, higher than consensus of $1.61.

    PetroChina (PTR +1.24%) was upgraded to 'Buy' from 'Neutral' at Goldman.

    Greif (GEF +1.97%) reported Q1 EPS with items of 51 cents, below consensus of 55 cents.

    Cree (CREE +2.95%) was downgraded to 'Neutral' from 'Overweight' at Piper Jaffray.

    Autodesk (ADSK +0.11%) reported Q4 adjusted EPS of 40 cents, better than consensus of 34 cents.

    Roundy's (RNDY -0.15%) reported Q4 adjsuted EPS of 25 cents, above consensus of 17 cents.

    Whiting Petroleum (WLL -1.69%) reported Q4 EPS of 88 cents, right on expectations, but reported Q4 revenue of $720.5 million, better than consensus of $683.45 million.

    MARKET COMMENTS

    Mar E-mini S&Ps (ESH14 -0.29%) this morning are down -5.75 points (-0.31%). The S&P 500 on Wednesday erased early gains and finished little changed. Stocks found support on the U.S. Jan new home sales that unexpectedly rose +9.6% to a 5-1/2 year high of 468,000, better than expectations of a -3.4% decline to 400,000, which bolsters optimism in the economy. Closes: S&P 500 unch, Dow Jones +0.12%, Nasdaq 100 -0.07%.

    Mar 10-year T-notes (ZNH14 +0.22%) this morning are up +6.5 ticks at a 3-week high. Mar 10-year T-note futures prices on Wednesday closed higher. Bullish factors included (1) increased safe-haven demand on concern Ukraine may default on its debt and after Russian President Putin put Russian troops on alert in Western Russia due to the civil unrest in Ukraine and Crimea, and (2) strong demand for the Treasury's $35 billion auction of 5-year T-notes that had a bid-to-cover ratio of 2.98, above the 12-auction average of 2.62 and the highest in 1-1/2 years. Gains were limited after U.S. Jan new home sales unexpectedly rose to a 5-1/2 year high. Closes: TYH4 +8.00, FVH4 +5.00.

    The dollar index (DXY00 +0.06%) this morning is up +0.026 (+0,03%) at a 2-week high. EUR/USD (^EURUSD) is down -0.0026 (-0.19%) at a 2-week low. USD/JPY (^USDJPY) is down -0.48 (-0.48%). The dollar index on Wednesday rallied to a 2-week high and closed higher after the unexpected increase in U.S. Jan new home sales to a 5-1/2 year high bolstered the outlook for the Fed to continue to taper QE3. EUR/USD fell to a 2-week low as Ukraine's interim administration struggles to secure as much as $35 billion in financial aid to stave off a possible default, which would be euro-negative. Closes: Dollar index +0.292 (+0.36%), EUR/USD -0.00588 (-0.43%), USD/JPY +0.119 (+0.12%).

    Apr WTI crude oil (CLJ14 -0.19%) this morning is down -15 cents (-0.15%) and Apr gasoline (RBJ14 -0.66%) is down -0.0148 (-0.50%). Apr crude and gasoline prices Wednesday closed higher. Bullish factors included (1) -1.08 million bbl drop in crude supplies at Cushing, OK, the delivery point for WTI futures, to a 4-month low of 34.79 million bbl, (2) the -2.807 million bbl drop in weekly EIA gasoline supplies, more than expectations of -760,000 bbl, and (3) the +68,000 bbl increase in weekly EIA crude inventories, less than expectations of +1.150 mln bbl. Gains in crude were limited after the dollar index rose to a 2-week high and as weekly EIA distillate stockpiles unexpectedly rose +338,000 bbl, higher than expectations for a -1.16 million bbl draw. Closes: CLJ4 +0.76 (+0.75%), RBJ4 +0.0141 (+0.47%).

    GLOBAL EVENT CALENDAR02/27/2014

    US0830 ETWeekly initial unemployment claims expected -1,000 to 335,000, previous -3,000 to 336,000. Weekly continuing claims expected +4,000 to 2.985 million, previous +37,000 to 2.981 million.
     0830 ETJan durable goods orders expected -1.6% and -0.3% ex transportation, Dec -4.2% and -1.3% ex transportation.
     0830 ETUSDA weekly Export Sales.
     1000 ETFed Chair Janet Yellen testifies on monetary policy before the Senate Banking Committee (rescheduled from Feb 13 due to a snowstorm).
     1030 ETDallas Fed President Richard Fisher speaks on a panel in Frankfurt on A Broader Role for Central Banks Following the Crisis: Imperial Overstretch or a Better Paradigm.
     1300 ETTreasury auctions $29 billion 7-year T-notes.
     1515 ETAtlanta Fed President Dennis Lockhart and Kansas City Fed President Esther George speak at the 2014 Atlanta Fed Banking Outlook Conference on Bankings Next Chapter: Challenge, Opportunity & Risk.
    GER0200 ETGerman Jan import price index expected -0.2% m/m and -2.4% y/y, Dec unch m/m and -2.3% y/y.
     0355 ETGerman Feb unemployment change expected -10,000, Jan -28,000. Feb unemployment rate expected unch at 6.8%, Jan 6.8%.
     0800 ETGerman Feb CPI (EU harmonized) expected +0.7% m/m and +1.1% y/y, Jan -0.7% m/m and +1.2% y/y.
    EUR0400 ETEurozone Jan M3 money supply expected +1.1% y/y and +1.2% 3-month avg, Dec +1.0% y/y and +1.3% 3-month avg.
     0500 ETEurozone Feb economic confidence expected -0.2 to 100.7, Jan 100.9. Feb business climate indicator expected +0.01 to 0.20, Jan 0.19.
     0500 ETRevised Eurozone Feb consumer confidence, previous -12.7.
     1330 ETECB President Mario Draghi speaks at the Bundesbanks Symposium on Financial Stability and the Role of Central Banks.
    UK0430 ETUK Feb Lloyds business barometer, Jan 63.
     1905 ETUK Feb GfK consumer confidence expected unch at -7, Jan -7.
    JPN1815 ETJapan Feb Markit/JMMA manufacturing PMI, Jan 56.6.
     1830 ETJapan Jan overall household spending expected +0.5% y/y, Dec +0.7% y/y.
     1830 ETJapan Jan jobless rate expected unch at 3.7%, Dec 3.7%. Jan job-to-applicant ratio expected +0.01 to 1.04, Dec 1.03.
     1830 ETJapan Jan national CPI expected +1.3% y/y, Dec +1.6% y/y. Jan national CPI ex fresh food expected +1.3% y/y, Dec +1.3% y/y. Jan national CPI ex food & energy expected +0.7% y/y, Dec +0.7% y/y.
     1830 ETJapan Feb Tokyo CPI expected +1.0% y/y, Jan +0.7% y/y. Feb Tokyo CPI ex-fresh food expected +0.8% y/y, Jan +0.7% y/y. Feb Tokyo CPI ex food & energy expected +0.4% y/y, Jan +0.3% y/y.
     1850 ETJapan Jan industrial production expected +2.8% m/m and +9.4% y/y, Dec +1.1% m/m and +7.3% y/y.
     1850 ETJapan Jan retail sales expected +1.3% m/m and +3.8% y/y, Dec -1.2% m/m and +2.5% y/y.
     2300 ETJapan Jan vehicle production, Dec +12.2% y/y.

    U.S. STOCK CALENDAR02/27/2014

    Company NameTickerTimeEvent DescriptionPeriodEstimate
    Mylan Inc/PAMYL USBef-mktQ4 2013 Earnings ReleaseQ4 20130.752
    WPX Energy IncWPX USBef-mktQ4 2013 Earnings ReleaseQ4 2013-0.349
    Rowan Cos PlcRDC USBef-mktQ4 2013 Earnings ReleaseQ4 20130.411
    Windstream Holdings IncWIN USBef-mktQ4 2013 Earnings ReleaseQ4 20130.091
    Kohl's CorpKSS USBef-mktQ4 2014 Earnings ReleaseQ4 20141.537
    Best Buy Co IncBBY US7:00Q4 2014 Earnings ReleaseQ4 20141.008
    Pall CorpPLL US7:00Q2 2014 Earnings ReleaseQ2 20140.801
    Best Buy Co IncBBY US8:00Q4 2014 Earnings CallQ4 2014 
    Salesforce.com IncCRM USAft-mktQ4 2014 Earnings ReleaseQ4 20140.06
    Monster Beverage CorpMNST USAft-mktQ4 2013 Earnings ReleaseQ4 20130.462

    Stocks: CHS, WEN, KSS, BIDU, WIN, BBY, RIG, AWK, LB, PTR, GEF, CREE, ADSK, RNDY, WLL, MYL, WPX, RDC, CRM, MNST
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