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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 3/28 0 comments
    Mar 28, 2014 10:35 AM | about stocks: FINL, BBRY, AMGN, EPB, PCG, NSP, MAANF, CHMT, RH, RHT, DRI, CPWR

    BARCHART MORNING CALL

    Friday, March 28th, 2014View Older Reports

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    OVERNIGHT MARKETS AND NEWS

    June E-mini S&Ps (ESM14 +0.26%) this morning are up +0.27% and European stocks are up +0.84% on speculation that China may boost stimulus to promote economic growth after Chinese Premier Li Keqiang said that his country has policies in reserve to deal with any economic volatility this year and can't ignore "difficulties and risks" from a slowdown in the economy. Asian stocks closed mixed: Japan +0.50%, Hong Kong +1.06%, China -0.17%, Taiwan -0.06%, Australia +0.31%, Singapore +0.31%, South Korea +0.07%, India +0.57%. Also helping to boost European stocks was the larger-than-expected increase in Eurozone Mar economic confidence to the highest in 2-1/2 years. Commodity prices are mostly higher. May crude oil (CLK14 +0.39%) is up +0.51% at a 2-1/2 week high. May gasoline (RBK14 +0.01%) is up +0.04%. Apr gold (GCJ14 unch) is up +0.16%. May copper (HGK14 +1.24%) is up +1.39% at a 2-week high after weekly Shanghai copper inventories slipped to a 5-week low. Agriculture and livestock prices are mixed, although Apr hogs are up +0.94% at an all-time high. The dollar index (DXY00 +0.10%) is up +0.08%. EUR/USD (^EURUSD) is down -0.03% at a 1-month low. USD/JPY (^USDJPY) is up +0.19%. June T-note prices (ZNM14 -0.11%) are down -6.5 ticks.

    Chicago Fed President Evans said the Fed may wait until the second half of 2015 before raising interest rates as the "current 1% inflation situation calls for extended policy accommodation" and that he's "concerned that inflation will not pick up quickly enough." Evans comments contrast with Fed Chair Yellen's comments on Mar 19 that the Fed may start to raise rates in the first half of 2015.

    Eurozone Mar economic confidence rose +1.2 to 102.4, better than expectations of +0.2 to 101.4 and the highest in 2-1/2 years. The Mar business climate indicator rose +0.03 to 0.39, better than expectations of +0.01 to 0.38 and the highest in 2-1/2 years.

    UK Mar GfK consumer confidence rose 2 to -5, better than expectations of +1 to -6 and the highest in 6-1/2 years.

    The Japan Feb jobless rate unexpectedly fell -0.1 to 3.6%, better than expectations of no change at 3.7% and matched its lowest level in 16-years. The Feb job-to-applicant ratio rose +0.01 to 1.05, right on expectations and the highest in 6-1/2 years.

    Japan Feb national CPI rose +1.5% y/y. The Feb national CPI ex-fresh food rose +1.3% y/y and the Feb national CPI ex food & energy rose +0.8% y/y, all right on expectations.

    Japan Feb overall household spending unexpectedly fell -2.5% y/y, weaker than expectations of +0.1% y/y. It was also the first decline in 6-months and biggest drop in 2-1/4 years.

    Japan Feb retail sales rose +0.3% m/m and +3.6% y/y, better than expectations of -0.1% m/m and +3.5% y/y.

    U.S. STOCK PREVIEW

    Today's Feb personal income report is expected to show an increase of +0.3%, matching the +0.3% increase seen in January. Meanwhile, today's Feb personal spending report is expected to show an increase of +0.3%, slightly below Jan's report of +0.4%. Today's Feb PCE deflator is expected to ease to +0.9% y/y from +1.2% y/y in January. That would track with the decline seen in the headline Feb CPI to +1.1% from +1.6% in January. Meanwhile, the Feb PCE core deflator is expected to be unchanged from January at +1.1% y/y, matching the current 3-year low posted in January and in several prior months. Today's final-March U.S. consumer confidence index from the University of Michigan is expected to show a +0.6 point increase to 80.5 from the early-March level of 79.9. There are none of the Russell 1000 companies that report earnings today. There are no equity conferences today.

    OVERNIGHT U.S. STOCK MOVERS

    Finish Line (FINL -3.29%) reported Q4 EPS 87 cents ex-items, better than consensus of 85 cents.

    BlackBerry (BBRY -1.20%) rose nearly 5% in pre-market trading after it reported a Q4 adjusted EPS loss of -8 cents, a much smaller loss than consensus of -55 cents.

    Jefferies keeps its 'Buy' rating on Amgen (AMGN +1.82%) and raises its price target for the stock to $145 from $138.

    El Paso Pipeline (EPB +0.62%) was upgraded to 'Buy' from 'Neutral' at Citigroup.

    PG&E (PCG -1.45%) was downgraded to 'Hold' from 'Buy' at Deutsche Bank.

    Stadium Capital reported a 9.1% stake in Insperity (NSP +0.27%) .

    Alcoa (AA +6.16%) was upgraded to 'Neutral' from 'Underperform' at Macquarie.

    Netflix (NFLX -2.18%) fell 3% in after-hours trading after the WSJ reported that Amazon will offer a free streaming media service in the coming months.

    Gabelli reported a 5.28% stake in Chemtura (CHMT -3.04%) .

    Restoration Hardware (RH +0.55%) reported Q4 adjusted EPS of 83 cents, right on consensus, although Q4 revenue of $471.7 milion was below consensus of $493.09 million.

    Red Hat (RHT +0.27%) reported Q4 EPS of 39 cents, higher than consensus of 37 cents.

    MARKET COMMENTS

    June E-mini S&Ps (ESM14 +0.26%) this morning are up +5.00 points (+0.27%). The S&P 500 on Thursday slipped to a 1-1/2 week low and closed lower. Negatives for stocks included (1) the smaller-than-expected upward revision to U.S. Q4 GDP to +2.6% from +2.4%, below expectations of +2.7%, and (2) the unexpected -0.8% m/m decline in U.S. Feb pending homes sales, weaker than expectations of a +0.2% m/m increase and the eighth straight monthly decline. A supportive factor was the -10,000 decline in U.S. weekly initial unemployment claims to a 3-3/4 month low. Closes: S&P 500 -0.19%, Dow Jones -0.03%, Nasdaq -0.55%.

    Jun 10-year T-notes (ZNM14 -0.11%) this morning are down -6.5 ticks. Jun 10-year T-note futures prices on Thursday closed slightly higher. T-notes were undercut as weekly initial unemployment claims unexpectedly fell to a 3-3/4 month low, but prices bounced back on increased safe-haven demand after stocks faltered. Closes: TYM4 +2.00, FVM4 -0.25.

    The dollar index (DXY00 +0.10%) this morning is up +0.068 (+0.08%). EUR/USD (^EURUSD) is down -0.0004 (-0.03%) at a 1-month low. USD/JPY (^USDJPY) is up +0.19 (+0.19%). The dollar index on Thursday closed slightly higher. EUR/USD fell to a 3-week low on concern the recent rally earlier this month in EUR/USD to a 2-1/3 year high will prod the ECB at next week's policy meeting into additional stimulus measures to weaken the euro. Closes: Dollar index +0.079 (+0.10%), EUR/USD -0.00407 (-0.30%), USD/JPY +0.145 (+0.14%).

    May WTI crude oil (CLK14 +0.39%) this morning is up +52 cents (+0.51%) at a 2-1/2 week high and May gasoline (RBK14 +0.01%) is up +0.0013 (+0.04%). May crude and gasoline prices on Thursday closed higher with May crude at a 2-week high and May gasoline at a 1-week high. Bullish factors included (1) the unexpected fall in U.S. weekly jobless claims to a 3-3/4 month low, and (2) positive carry-over from Wednesday's EIA data that showed crude oil stockpiles at Cushing, OK, the delivery point for WTI futures, fell for an eighth week to a 2-yr low. Closes: CLK4 +1.02 (+1.02%). RBK4 +0.0331 (+1.14%).

    GLOBAL EVENT CALENDAR03/28/2014

    US 0830 ET Feb personal spending expected +0.3%, Jan +0.4%. Feb personal income expected +0.3%, Jan +0.3%. Feb PCE deflator expected +0.1% m/m and +0.9% y/y, Jan +0.1% m/m and +1.2% y/y. Feb PCE core deflator expected +0.1% m/m and +1.1% y/y, Jan +0.1% m/m and +1.1% y/y.
      0955 ET Final-Mar University of Michigan U.S. consumer confidence expected +0.6 to 80.5, previous -1.7 to 79.9.
      1245 ET Kansas City Fed President Esther George speaks about the U.S. economic outlook and monetary policy at an event in Kansas City, MO.
      1500 ET USDA Q1 Hogs & Pigs inventory.
      2130 ET Chicago Fed President Charles Evans speaks on monetary policy at an Asian Investment Conference in Hong Kong.
    GER 0300 ET German Feb import price index expected +0.2% m/m and -2.4% y/y, Jan -0.1% m/m and -2.3% y/y
      0900 ET German Mar CPI (EU harmonized) expected +0.4% m/m and +0.9% y/y, Feb +0.5% m/m and +1.0% y/y.
    UK 0530 ET Revised UK Q4 GDP, previous +0.7% q/q and +2.7% y/y.
      0530 ET Revised UK Q4 total business investment, previous +2.4% q/q and +8.5% y/y.
      0530 ET UK Q4 current account balance, Q3 -20.7 billion pounds.
    EUR 0600 ET Eurozone Mar economic confidence expected +0.2 to 101.4, Feb 101.2. Mar business climate indicator expected +0.01 to +0.38, Feb +0.37.
      0600 ET Revised Eurozone Mar consumer confidence, previous +3.4 to -9.3.

    U.S. STOCK CALENDAR03/28/2014

    Company Name Ticker Time Event Description Period Estimate
    Darden Restaurants Inc DRI US 8:30 Analyst & Investor Conference Y 2014  
    Compuware Corp CPWR US   Annual General Meeting
    Stocks: FINL, BBRY, AMGN, EPB, PCG, NSP, MAANF, CHMT, RH, RHT, DRI, CPWR
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