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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 3/5 0 comments
    Mar 5, 2014 11:34 AM | about stocks: FB, NAV, DDS, P, SPLS, BA, ABM, CTB, SYX, SWHC, MBTF, SNTA, PETM, FAST, BF.B, XOM, HOWWY, HAL, EVHC, HP, KMT, WAG

    BARCHART MORNING CALL

    Wednesday, March 5th, 2014View Older Reports

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    OVERNIGHT MARKETS AND NEWS

    March E-mini S&Ps (ESH14 +0.08%) this morning are up +0.03% and European stocks are down -0.23% ahead of the release of U.S. Feb ADP employment data later this morning. U.S. Secretary of State Kerry will meet Russian Foreign Minister Lavrov in Paris today to discuss the crisis in Ukraine. Asian stocks closed mostly higher following the sharp gains in U.S. and European bourses on Tuesday: Japan +1.20%, Hong Kong -0.34%, China -0.93%, Taiwan +0.92%, Australia +0.85%, Singapore +0.38%, South Korea +0.99%, India +0.32%. European government bonds strengthened as the yield on Spain's 10-year bond fell to 3.40%, the lowest in 8-years, and the yield on Italy's 10-year bond fell to 3.39%, the lowest in 8-1/3 years. Losses in European stocks were limited after Eurozone Jan retail sales rose more than expected and after the Eurozone Feb PMI composite was revised upward to its best level in 2-3/4 years. Commodity prices are mixed. Apr crude oil (CLJ14 -0.22%) is down -0.33%. Apr gasoline (RBJ14 -0.29%) is down -0.35%. Apr gold (GCJ14 -0.06%) is down -0.17%. May copper (HGK14 +0.06%) is up +0.08%. Agriculture and livestock prices are mixed with Apr hogs up +0.96% at an all-time high. The dollar index (DXY00 -0.01%) is up +0.03%. EUR/USD (^EURUSD) is down -0.09%. USD/JPY (^USDJPY) is up +0.19%. June T-note prices (ZNM14 -0.13%) are down -3 ticks.

    The Eurozone Feb PMI composite was revised upward to 53.3 from the originally reported 52.7, the fastest pace of expansion in 2-3/4 years.

    Eurozone Jan retail sales rose +1.6% m/m and +1.3% y/y, stronger than expectations of +0.8% m/m and -0.2% y/y.

    Eurozone Q4 GDP was left unrevised at +0.3% q/q and +0.5% y/y, as expected.

    European Commission President Barroso said the EU will offer Ukraine 1.6 billion euros in loans as part of a macro-financial assistance package that could total 11 billion euros, conditional on the Ukraine striking a deal with the IMF.

    German Feb PMI services were revised upward to 55.9 from the originally reported 55.4, the fastest pace of expansion in 2-3/4 years.

    UK Feb PMI services fell -0.1 to 58.2, a smaller decline than expectations of -0.3 to 58.0.

    U.S. STOCK PREVIEW

    Today's Feb ADP employment report is expected to show an increase of +155,000, fading from the +175,000 increase seen in January. Today's Feb ISM non-manufacturing index is expected to show a -0.5 point decline to 53.5, reversing half of the +1.0 point increase to 54.0 seen in January. The markets will be watching today's Beige Book report to try to get a better handle on whether all of the recent weak economic data has been caused by weather or whether there are underlying macroeconomic factors behind the weakness. There are 4 of the Russell 1000 companies that report earnings today: Navistar (consensus -$1.75), PetSmart (1.21), Brown-Forman (0.76), and Envision Healthcare (0.18).

    Equity conferences during the remainder of this week include: Morgan Stanley Technology, Media & Telecom Conference on Mon-Thu, Citi Global Property CEO Conference on Mon-Wed, Cowen & Co. Healthcare Conference on Mon-Wed, Raymond James Institutional Investor Conference on Mon-Wed, Morgan Stanley European Medtech & Services Conference on Tue-Wed, Canadian Energy Research Institure (CERI) National Gas Conference on Tue, Pacific Crest Emerging Tech Summit conference on Wed, ISI Enterprise Infrastructure Conference on Wed, Mitsubishi Seattle Consumer Conference on Wed, Seattle Consumer Conference on Wed, Bank of America Merrill Lynch Refining Conference on Thu, and Jefferies Industrial Leaders Day on Thu.

    OVERNIGHT U.S. STOCK MOVERS

    Stifel keeps a 'Buy' rating on Facebook (FB +2.06%) after it raised its price target on the stock to $82 from $72.

    Navistar (NAV +0.19%) reported a Q1 EPS loss of -$3.05, a much larger loss than consensus of -$1.77.

    Dillard's (DDS -0.75%) was downgraded to 'Neutral' from 'Outperform' at Credit Suisse.

    Pandora (P +3.41%) was upgraded to 'Neutral' from 'Sell' at MKM Partners.

    Staples (SPLS +0.07%) was downgraded to 'Neutral' from 'Buy' at B. Riley.

    Boeing (BA +1.57%) was awarded a $1.16 billion government contract modification for full rate production of the AH-64E Apache helicopter, seventy-two remanufactured helicopter systems, ten new helicopter systems, and for and integrated logistics and support.

    ABM Industries (ABM +4.25%) reported Q1 adjusted EPS of 25 cents, right on consensus, although Q1 revenue of $1.23 billion was below consensus of $1.24 billion.

    Fairpointe Capital reported a 13.25% passive stake in Cooper Tire (CTB -0.65%) .

    Systemax (SYX +4.19%) reported Q4 non-GAAP EPS of 15 cents, over double expectatios of 7 cents.

    Smith & Wesson (SWHC +1.55%) jumped 10% in after-hours trading after it reported Q3 EPS of 36 cents, well above consensus of 29 cents, and then raised guidance on 2014 EPS to $1.39-$1.42 from $1.30-$1.35, higher than consensus of $1.33.

    Castle Creek Capital reported a 7.75% passive stake in MBT Financial (MBTF -0.41%) .

    Bob Evans (BOBE +1.55%) fell 5% in after-hours trading after it reported Q3 EPS of 30 cents, well below consensus of 57 cents, and then lowered guidance on fiscal 2014 EPS $1.60-$1.75, below consensus of $2.26, citing adverse winter weather that impacted restaurant sales.

    Synta Pharmaceuticals (SNTA +4.88%) cancels out of conferences after the company announced that its CEO Safi Bahcall had resigned, effective immediately.

    MARKET COMMENTS

    Mar E-mini S&Ps (ESH14 +0.08%) this morning are up +0.50 of a point (+0.03%). The S&P 500 on Tuesday surged to a record high and finished sharply higher. Geopolitical concerns eased after Russian President Putin signaled the Ukraine crisis won't immediately escalate when he said he would only send troops to Ukraine in an extreme case. Another positive for stocks was former Fed Chairman Bernanke's comment that the U.S. economy is seeing signs of progress and that there is "good reason to think U.S. GDP will grow around 3% this year." Closes: S&P 500 +1.53%, Dow Jones +1.41%, Nasdaq 100 +1.41%.

    Jun 10-year T-notes (ZNM14 -0.13%) this morning are down -3 ticks. Jun 10-year T-note futures prices on Tuesday tumbled on reduced safe-haven demand as global stocks surged on Russian President Putin's comment that there is no immediate need to send troops into Ukraine. Closes: TYM4 -21.00, FVM4 -10.00.

    The dollar index (DXY00 -0.01%) this morning is up +0.022 (+0.03%). EUR/USD (^EURUSD) is down -0.0013 (-0.09%). USD/JPY (^USDJPY) is up +0.19 (+0.19%). The dollar index on Tuesday closed higher. USD/JPY rose as the yen weakened on reduced safe-haven demand on reduced geopolitical tensions after Russian President Putin said he'd only send troops into Ukraine in an extreme case. Gains in EUR/USD were limited on speculation the ECB may add to stimulus to reduce deflation risks after the Eurozone Jan PPI fell -1.4% y/y, more than expectations of -1.3% y/y and the biggest annual decline in 4 years. Closes: Dollar index +0.091 (+0.11%), EUR/USD +0.0008 (+0.06%), USD/JPY +0.764 (+0.75%).

    Apr WTI crude oil (CLJ14 -0.22%) this morning is down -34 cents (-0.33%) and Apr gasoline (RBJ14 -0.29%) is down -0.0103 (-0.35%). Apr crude and gasoline prices Tuesday sold off on reduced tensions between Ukraine and Russia after Russian President Putin said there's no immediate need for his country to invade Ukraine. Other negatives for crude included (1) a stronger dollar, and (2) expectations for weekly EIA crude inventories to climb +1.3 million bbl when they are reported Wed, the seventh consecutive increase. Closes: CLJ4 -1.59 (-1.52%), RBJ4 -0.0350 (-1.16%).

    GLOBAL EVENT CALENDAR03/05/2014

    US0700 ETWeekly MBA mortgage applications, previous -8.5% with purchase sub-index -3.5% and refi sub-index -11.4%.
     0815 ETFeb ADP employment change expected +155,000, Jan +175,000.
     1000 ETFeb ISM non-manufacturing index expected -0.5 to 53.5, Jan +1.0 to 54.0.
     1030 ETEIA Weekly Petroleum Status Report.
     1030 ETU.S. Treasury Secretary Lew testifies before the Senate Finance Panel.
     1400 ETFed Beige Book.
     1900 ETDallas Fed President Richard Fisher speaks to the Mexican Bankers Association in Mexico City.
     2030 ETSan Francisco Fed President John Williams speaks on the economy at Seattle University.
    GER0355 ETRevised German PMI services, previous 55.4.
    EUR0400 ETRevised Eurozone Feb PMI composite, previous 52.7.
     0500 ETEurozone Jan retail sales expected +0.8% m/m and -0.2% y/y, Dec -1.6% m/m and -1.0% y/y.
     0500 ETRevised Eurozone Q4 GDP, previous +0.3% q/q and +0.5% y/y.
    UK0430 ETUK Feb PMI services, Jan 58.3.

    U.S. STOCK CALENDAR03/05/2014

    Company NameTickerTimeEvent DescriptionPeriodEstimate
    Navistar International CorpNAV USBef-mktQ1 2014 Earnings ReleaseQ1 2014-1.754
    PetSmart IncPETM USBef-mktQ4 2014 Earnings ReleaseQ4 20141.209
    Fastenal CoFAST US7:00February 2014 Sales and Revenue Release2014 
    Brown-Forman CorpBF/B US8:00Q3 2014 Earnings ReleaseQ3 20140.763
    Exxon Mobil CorpXOM US9:00Analyst MeetingY 2014 
    Navistar International CorpNAV US9:00Q1 2014 Earnings CallQ1 2014 
    Honeywell International IncHON US10:00Investor DayY 2014 
    Brown-Forman CorpBF/B US10:00Q3 2014 Earnings CallQ3 2014 
    Halliburton CoHAL US10:00U.S. Supreme Court Hears Arguments on Securities Lawsuits  
    PetSmart IncPETM US10:00Q4 2014 Earnings CallQ4 2014 
    Envision Healthcare Holdings IncEVHC US17:00Q4 2013 Earnings CallQ4 2013 
    Envision Healthcare Holdings IncEVHC USAft-mktQ4 2013 Earnings ReleaseQ4 20130.176
    Helmerich & Payne IncHP US Annual General MeetingY 2014 
    Kennametal IncKMT US Financial Community Meeting - Las VegasY 2014 
    Walgreen CoWAG US February 2014 Sales and Revenue Release2014 

    Stocks: FB, NAV, DDS, P, SPLS, BA, ABM, CTB, SYX, SWHC, MBTF, SNTA, PETM, FAST, BF.B, XOM, HOWWY, HAL, EVHC, HP, KMT, WAG
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