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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 3/17 0 comments
    Mar 17, 2014 10:41 AM | about stocks: ADBE, FB, JASO, GNC, SAPEGY, TCP, AMGN, GMCR, LEI, YRCW, UPS, EJ, F, COO, LVIAB

    BARCHART MORNING CALL

    Monday, March 17th, 2014View Older Reports

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    OVERNIGHT MARKETS AND NEWS

    June E-mini S&Ps (ESM14 +0.53%) this morning are up +0.52% as they rebound from a 3-week low, and European stocks are up +0.78% on increased M&A activity after Vodaphone Group Plc, the world's second-biggest carrier, agreed to buy Spanish cable operator Grupo Corporativo Ono SA for 7.2 billion euros ($10 billion), and after Allianz SE, Europe's biggest insurer, agreed to spend 440 million euros buying assets from Unipol Gruppo Finanziario SpA. European stock rose despite Sunday's referendum vote In Crimea where 97% of voters opted to secede from Ukraine. The EU said "the referendum is illegal and illegitimate and its outcome will not be recognized." Russia has deployed about 60,000 troops along the Ukrainian border according to the Ukrainian government, which also said it closed border crossings to Russia and will mobilize as many as 15,000 volunteers in the next 2-weeks to defend the nation. Russia's Micex Stock Index rose 2.3% on reduced concern that the Crimean vote to leave Ukraine will not lead to an immediate increase in tensions between Russia and the West. Asian stocks closed mixed: Japan -0.35%, Hong Kong -0.30%, China +0.95%, Taiwan +0.14%, Australia -0.22%, Singapore +0.60%, South Korea +0.45%, India closed for holiday. Commodity prices are mixed. Apr crude oil (CLJ14 -0.20%) is down -0.23%. Apr gasoline (RBJ14 -0.55%) is down -0.46%. Apr gold (GCJ14 -0.08%) is up +0.10% at a 6-1/4 month high after the referendum in Crimea to leave Ukraine and join Russia boosted safe-haven demand for precious metals. May copper (HGK14 +0.83%) is up +0.58%. Agriculture prices are weaker. The dollar index (DXY00 +0.09%) is up +0.06%. EUR/USD (^EURUSD) is down -0.11% after Eurozone Feb CI was revised lower, which may keep the pressure on the ECB to provide additional stimulus to fight deflation risks. USD/JPY (^USDJPY) is up +0.41%. June T-note prices (ZNM14 -0.23%) are down -8 ticks.

    Eurozone Feb CPI rose +0.3% m/m, less than expectations of +0.4% m/m, while on an annual basis Feb CPI was revised unexpectedly lower to +0.7% y/y from the originally reported +0.8% y/y and matched the Oct 2013 gain as the smallest year-over-year increase in 4-1/4 years. Feb core CPI was left unrevised at +1.0% y/y.

    China's yuan fell to 6.1818 per dollar, the weakest in 11-months, after the PBOC widened the yuan's daily trading band to trade as much as 2% on either side of the reference rate, compared with the previous limit of 1%.

    U.S. STOCK PREVIEW

    The main item on this week's agenda will be whether Russia starts to annex Crimea and makes any further military moves in Ukraine and the sanctions response from the U.S. and Europe. Today's Feb industrial production report is expected to show an increase of +0.2%, reversing most of the -0.3% decline seen in January. Today's March Empire manufacturing index is expected to show a +2.5 point increase to 7.0, rebounding somewhat after the sharp -8.0 point drop to 4.5 seen in February. Today's March NAHB housing market index is expected to show an upward rebound of +4 points to 50 after the -10 point plunge to 46 seen in February.

    None of the Russell 1000 companies report earnings today. Equity conferences this week include: Consumer Analyst Group of Europe (CAGE) Conference on Mon-Wed, Bank of America Merrill Lynch Global Industrials & EU Auto Conference on Tue-Thu, Goldman Sachs TMT Leveraged Finance Conference on Wed, International Strategy & Investment Retail Summit on Wed, ISI Retail Summit on Wed-Thu, Gabelli & Company Specialty Chemicals Conference on Thu, Bloomberg Mexico Economic Summit on Thu, and Capital Link Invest in International Shipping Forum on Thu.

    OVERNIGHT U.S. STOCK MOVERS

    RBC Capital kept its 'Outperform' rating on Adobe (ADBE +0.16%) and increased its price target on the stock to $75 from $63.

    Facebook (FB -1.61%) was downgraded to 'Hold' from 'Buy' at Argus.

    JA Solar (JASO +8.25%) reported Q4 EPS of 16 cents, well above consensus of 1 cent.

    GNC Holdings (GNC -0.41%) was downgraded to 'Neutral' from 'Outperform' at Credit Suisse.

    SAP (SAP +0.61%) was upgraded to 'Buy' from 'Neutral' at Citigroup.

    Siemens (SI +2.00%) was upgraded to 'Buy' from 'Neutral' at BofA/Merrill.

    TC PipeLines (TCP +0.82%) and Martin Midstream Partners (MMLP +0.47%) were both upgraded to 'Buy' from 'Neutral' at UBS.

    Amgen's (AMGN -1.15%) talimogene laherparepvec drug reduced the size of tumors in a Phase 3 study.

    Keurig Green Mountain (GMCR +6.68%) rose over 1% in European trading after it was announced that it will replace WPX Energy (WPX -0.11%) in S&P 500 as of the 3/21 close.

    Long Focus Capital reported a 8.933% passive stake in Lucas Energy (LEI -8.00%) .

    Solus Alternative Asset reported a 8.91% passive stake in YRC Worldwide (YRCW +1.70%) .

    UPS Freight (UPS -0.85%) announced a general rate increase of 4.4%, effective March 31.

    Kylin reported a 5.9% passive stake in E-House (EJ +0.63%) .

    MARKET COMMENTS

    June E-mini S&Ps (ESM14 +0.53%) this morning are up +9.50 points (+0.52%). The S&P 500 on Friday fell to a 1-1/2-week low and closed lower. Bearish factors included (1) concern the referendum vote Sunday in Crimea may lead to escalation of the Ukraine crisis, and (2) the U.S. Mar University of Michigan consumer confidence that unexpectedly fell -1.7 to 79.9, weaker than expectations of +0.4 to 82.0 and the lowest in 4-months. Stocks recovered their losses briefly late morning after Russian Foreign Minister Lavrov said Russia had no plans to invade eastern Ukraine and would respect the will of the Crimean people. Closes: S&P 500 -0.28%, Dow Jones -0.27%, Nasdaq -0.65%.

    Jun 10-year T-notes (ZNM14 -0.23%) this morning are down -8 ticks. Jun 10-year T-note futures prices on Friday fell back from a 1-week high and closed little changed. T-notes moved higher on increased safe-haven demand from the Ukraine crisis and also after U.S. Mar University of Michigan consumer confidence unexpectedly fell to a 4-month low. T-notes relinquished most of their gains when Russia's foreign minister said his country has no plans to intervene in eastern Ukraine. Closes: TYM4 +1.00, FVM4 unch.

    The dollar index (DXY00 +0.09%) this morning is up +0.048 (+0.06%). EUR/USD (^EURUSD) is down -0.0015 (-0.11%). USD/JPY (^USDJPY) is up +0.42 (+0.41%). The dollar index on Friday closed lower after U.S. Mar University of Michigan consumer confidence unexpected declined to a 4-month low. Another negative for the dollar was the drop in USD/JPY fell to a 2-week low as the yen strengthened on increased safe-haven demand over concern tensions in Ukraine may increase after Sunday's referendum that may lead Russia to annex Crimea. Closes: Dollar index -0.174 (-0.22%), EUR/USD +0.00363 (+0.26%), USD/JPY -0.494 (-0.49%).

    Apr WTI crude oil (CLJ14 -0.20%) this morning is down -23 cents (-0.23%) and Apr gasoline (RBJ14 -0.55%) is down -0.0137 (-0.46%). Apr crude and gasoline prices on Friday closed higher. Bullish factors included (1) a weaker dollar, (2) the action by the IEA to raise their 2014 global crude consumption estimate to a record 92.7 million bbl a day, up +95,000 bbl from a forecast last month, and (3) concern that an escalation of Ukraine crisis could lead to a disruption of global energy supplies. Closes: CLJ4 +0.69 (+0.70%), RBJ4 +0.0268 (+0.91%).

    GLOBAL EVENT CALENDAR03/17/2014

    US 0830 ET Mar Empire manufacturing index expected +2.52 to 7.00, Feb -8.03 to 4.48.
      0915 ET Feb industrial production expected +0.2%, Jan -0.3%. Feb capacity utilization expected +0.1 to 78.6%, Jan -0.4 to 78.5%.
      1000 ET Mar NAHB housing market index expected +4 to 50, Feb -10 to 46.
      1100 ET USDA weekly grain export inspections.
    EUR 0600 ET Revised Eurozone Feb CPI, previous +0.8% y/y. Revised Feb core CPI, previous +1.0% y/y.
    CHI 2130 ET China Feb property prices.

    U.S. STOCK CALENDAR03/17/2014

    Company Name Ticker Time Event Description Period Estimate
    Ford Motor Co F US 9:00 Ford University Call Y 2014  
    Cooper Cos Inc/The COO US   Annual General Meeting Y 2014  
    LSI Corp LSI US   ITC Due to Release Findings in Realtek vs. LSI Patent-Infringement Case    
    Viacom Inc VIAB US   Annual General Meeting
    Stocks: ADBE, FB, JASO, GNC, SAPEGY, TCP, AMGN, GMCR, LEI, YRCW, UPS, EJ, F, COO, LVIAB
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