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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 4/2 0 comments
    Apr 2, 2014 11:09 AM | about stocks: YUM, GOOG, CRI, CTSH, CMA, DSW, URBN, MNKD, APOL, ENTA, MON, AN, SNPS

    BARCHART MORNING CALL

    Wednesday, April 2nd, 2014View Older Reports

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    OVERNIGHT MARKETS AND NEWS

    June E-mini S&Ps (ESM14 +0.09%) this morning are up +0.09% and European stocks are up +0.02% on optimism that today's U.S. data on Mar ADP employment will show job growth accelerated and data on Feb factory orders will show the U.S. economic recovery is gathering steam following the harsh winter. Asian stocks closed mostly higher: Japan +1.04%, Hong Kong +0.34%, China +0.81%, Taiwan +0.36%, Australia +0.26%, Singapore -0.18%, South Korea +0.29%, India +0.47%. Japan's Nikkei Stock index climbed to a 3-week high as exporters rallied after the yen fell to a 2-1/4 month low against the dollar, which boosts the earnings prospects for exporters. Commodity prices are mixed. May crude oil (CLK14 -0.50%) is down -0.46%. May gasoline (RBK14 -1.01%) is down -0.78%. Jun gold (GCM14 +0.30%) is up +0.30%. May copper (HGK14 +0.94%) is up +0.79% at a 3-week high on concern that an 8.2 magnitude earthquake in Chile, the world's biggest copper producer, may have damaged mining operations in the country. Agriculture and livestock prices are mixed. The dollar index (DXY00 +0.01%) is down -0.01%. EUR/USD (^EURUSD) is down -0.04%. USD/JPY (^USDJPY) is up +0.04% at a 2-1/4 month high. June T-note prices (ZNM14 -0.10%) are down -5 ticks.

    Eurozone Feb PPI fell -0.2% m/m and -1.7% y/y, a bigger decrease than expectations of unch m/m and -1.6% y/y, with the -1.7% y/y drop the biggest annual decline in 4-years.

    UK Mar nationwide house prices rose +0.4% m/m and +9.5% y/y, less than expectations of +0.8% m/m and +9.7% y/y, although the +9.5% y/y increase is the biggest annual gain in 3-3/4 years.

    U.S. STOCK PREVIEW

    Today's March ADP employment report is expected to show an improvement to +195,000 from +139,000 in February. Today's Feb factory orders report is expected to show an increase of +1.2%, more than recovering from the -0.7% decline seen in January. There is 1 of the Russell 1000 companies that reports earnings today: Monsanto (consensus $3.06). Equity conferences during the remainder of this week include: Pacific Crest Future Technology Investor Forum on Wed, Wolfe Research Power Gas Deep Dive Conference on Wed, Wells Fargo Tech Transformation Summit on Wed, Mitsubishi UFJ Securities Utilities Conference on Wed, Pacific Crest Future Technology Investor Forum on Wed, Wells Fargo Tech Transformation Summit on Wed-Thu, HSBC Real Estate Conference on Thu, and Wells Fargo Tech Transformation Summit on Thu.

    OVERNIGHT U.S. STOCK MOVERS

    Oppenheimer keeps an 'Outperform' rating on Yum! Brands (YUM +0.89%) as it raises its price target on the stock to $89 from $80.

    Bernstein says shares of Google (GOOG +1.83%) are undervalued at current levels as it keeps an 'Outperform' rating on the stock and a price target of $1,500.

    Carter's (CRI -0.99%) was upgraded to 'Overweight' from 'Neutral' at Piper Jaffray.

    Cognizant (CTSH +2.11%) was upgraded to 'Buy' from 'Neutral' at UBS.

    Comerica (CMA -0.29%) was upgraded to 'Market Perform' from 'Underperform' at Wells Fargo, which cites improved commercial lending activity.

    DSW (DSW +3.18%) was upgraded to 'Hold' from 'Sell' at Brean Capital due to valuation.

    Urban Outfitters (URBN +0.49%) reports that its Q1 Same-Store-Sales to date are low single-digit negative.

    MannKind (MNKD -16.77%) announced that a U.S. FDA advisory panel voted 13 to 1 to recommend that the Afrezza Inhalation Powder be granted FDA marketing approval to improve glycemic control in adults with type 1 diabetes.

    Apollo Education (APOL +2.69%) fell over 3% in after-hours trading after it reported Q2 EPS ex special items of 28 cents, better than consensus of 19 cents, although it reported Q2 revenue of $679.1 mllion, below consensus of $689.04 million.

    RA Capital reported a 8.0% passive stake in Enanta (ENTA -2.78%) .

    MARKET COMMENTS

    June E-mini S&Ps (ESM14 +0.09%) this morning are up +1.75 points (+0.09%). The S&P 500 on Tuesday posted a record high and closed higher. Bullish factors included signs of strength in the global economy after (1) the Mar ISM manufacturing index rose +0.5 to 53.7, a smaller increase than expectations of +0.8 to 54.0, although the Mar ISM new orders sub-index rose +0.6 to a 3-month high of 55.1, (2) the German Mar unemployment fell by a more-than-expected -12,000 with the German Mar unemployment rate unchanged at 6.7% (the lowest since data for a reunified Germany began in 1991), and (3) the China Mar manufacturing PMI rose +0.1 to 50.3, slightly better than expectations of -0.1 to 50.1. Closes: S&P 500 +0.70, Dow Jones +0.46%, Nasdaq +1.74%.

    Jun 10-year T-notes (ZNM14 -0.10%) this morning are down -5 ticks. Jun 10-year T-note futures prices on Tuesday closed lower. Negative factors included (1) the rally in the S&P 500 to a record high, and (2) reduced geopolitical risks after Russian President Putin told German Chancellor Merkel that he ordered a partial withdrawal of Russian troops from the Ukraine border although that pull-back has yet to be seen. T-notes found support on the weaker-than-expected Mar ISM manufacturing index and the decline in the Mar ISM employment sub-index to a 9-month low. Closes: TYM4 -4.50, FVM4 -1.75.

    The dollar index (DXY00 +0.01%) this morning is down -0.009 (-0.01%). EUR/USD (^EURUSD) is down -0.0006 (-0.04%). USD/JPY (^USDJPY) is up +0.04 (+0.04%) at a 2-1/4 month high. The dollar index on Tuesday closed slightly lower after a rally in the S&P 500 to a record high curbed safe-haven demand for the dollar. EUR/USD rose after German Mar unemployment fell by a larger than expected -12,000 and the German Mar unemployment rate remained at a record low 6.7%. USD/JPY posted a 3-week high on reduced safe-haven demand for the yen as stocks rallied. Closes: Dollar index -0.006 (-0.01%), EUR/USD +0.00236 (+0.17%), USD/JPY +0.425 (+0.41%).

    May WTI crude oil (CLK14 -0.50%) this morning is down -46 cents (-0.46%) and May gasoline (RBK14 -1.01%) is down -0.0223 (-0.78%). May crude and gasoline prices on Tuesday closed lower. Bearish factors included (1) the smaller-than-expected increase in the Mar ISM manufacturing index, a sign of reduced energy demand, and (2) expectations for Wednesday's weekly EIA crude supplies to increase by +2.5 million bbl, the eleventh consecutive increase. Closes: CLK4 -1.84 (-1.81%). RBK4 -0.0482 (-1.65%).

    GLOBAL EVENT CALENDAR04/02/2014

    US0700 ETWeekly MBA mortgage applications, previous -3.5% with purchase sub-index +2.8% and refi sub-index -7.7%.
     0815 ETMar ADP employment change expected +195,000, Feb +139,000.
     0945 ETMar ISM New York, Feb 57.0.
     1000 ETFeb factory orders expected +1.2%, Jan -0.7%.
     1030 ETEIA Weekly Petroleum Status Report.
     1255 ETAtlanta Fed President Dennis Lockhart speaks on the economic outlook to the Greater Miami Chamber of Commerce.
     1600 ETSt. Louis Fed President James Bullard takes questions from reporters prior to a lecture in St. Louis, MO.
    UK0200 ETUK Mar nationwide house prices expected +0.8% m/m and +9.7% y/y, Fen +0.6% m/m and +9.4% y/y.
    EUR0500 ETEurozone Feb PPI expected unch m/m and -1.6% y/y, Jan -0.4% m/m and -1.4% y/y.
    JPN1915 ETJapan Mar manufacturing & services composite PMI.
    CHI2100 ETChina Mar non-manufacturing PMI, Feb +1.6 to 55.0.

    U.S. STOCK CALENDAR04/02/2014

    Company NameTickerTimeEvent DescriptionPeriodEstimate
    Monsanto CoMON USBef-mktQ2 2014 Earnings ReleaseQ2 20143.064
    Monsanto CoMON US9:30Q2 2014 Earnings CallQ2 2014 
    AutoNation IncAN US March 2014 Sales and Revenue Release2014 
    Synopsys IncSNPS US Annual General Meeting

    Stocks: YUM, GOOG, CRI, CTSH, CMA, DSW, URBN, MNKD, APOL, ENTA, MON, AN, SNPS
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