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Jim Van Meerten
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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 5/22 0 comments
    May 22, 2014 10:38 AM | about stocks: BBY, SIG, MPC, DLTR, GMCR, SHLD, PDCO, GSIT, LB, ANW, WSM, SPTN, RAI, SNPS, NTAP, AFL, BEN, KEY, HD, LNC, MCD, TIF, IPG, SEG, HAS, VNO, INTC, FB, WMB, ROST, GPS, GME, HPQ, CVC, PWR, RHI, CTXS, FLS, CBS, UNG, VRSN

    BARCHART MORNING CALL

    Thursday, May 22nd, 2014View Older Reports

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    OVERNIGHT MARKETS AND NEWS

    June E-mini S&Ps (ESM14 +0.03%) this morning are up +0.05% at a 1-week high and European stocks are down -0.18%. U.S. stocks found support on stronger-than-expected Chinese manufacturing data, while European stocks slipped after German manufacturing activity rose at its slowest pace in 6 months. Asian stocks closed mostly higher: Japan +2.11%, Hong Kong +0.51%, China -0.22%, Taiwan +1.21%, Australia +1.02%, Singapore +0.12%, South Korea +0.35%, India +0.31%. China's Shanghai Stock Index shed early gains and closed lower despite the larger-than-expected increase in the China May HSBC manufacturing PMI to a 5-month high, while India's Sensex Stock Index posted another record high as it continues its recent bull run. Commodity prices are mixed. July crude oil (CLN14 -0.09%) is down -0.11%. July gasoline (RBN14 unch) is unch. Jun gold (GCM14 +0.79%) is up +0.68%. July copper (HGN14 +0.72%) is up +0.94%. Agriculture and livestock prices are mostly higher. The dollar index (DXY00 +0.08%) is up +0.04%. EUR/USD (^EURUSD) is down -0.09%. USD/JPY (^USDJPY) is up +0.19%. June T-note prices (ZNM14 -0.10%) are down -2.5 ticks.

    The China May HSBC manufacturing PMI rose +1.6 to 49.7, better than expectations of +0.2 to 48.3 and the highest level in 5 months.

    The German May Markit/BME manufacturing PMI fell -1.2 to 52.9, a larger decline than expectations of -0.1 to 54.0 and the slowest pace of expansion in 6 months.

    The Eurozone May Markit composite PMI fell -0.1 to 53.9, right on expectations.

    UK May CBI trends total orders rose +1 to 0, less than expectations of +4 to 3. May CBI trends selling prices unexpectedly fell -5 to 4, weaker than expectations of +1 to 10.

    UK Apr public sector net borrowing rose +9.6 billion pounds, more than expectations of +3.4 billion pounds and the most in 5 months.

    UK Q1 GDP was left unrevised at +0.8% q/q and +3.1% y/y, right on expectations, although Q1 private consumption was revised upward to +0.8% q/q from the originally reported +0.6% q/q and Q1 government spending was revised downward to +0.1% q/q from the originally reported +0.2% q/q.

    The Japan May Markit/JMMA manufacturing PMI rose +0.5 to 49.9.

    U.S. STOCK PREVIEW

    Today's weekly initial unemployment claims report is expected to show an increase of +13,000 to 310,000, reversing part of last week's -24,000 decline to 297,000. Meanwhile, today's continuing claims report is expected to show an increase of +8,000 to 2.675 million, reversing most of last week's decline of -9,000 to 2.667 million. Today's April existing home sales report is expected to show an increase of +2.2% to 4.69 million, more than reversing the small -0.2% decline to 4.59 million seen in March. Today's April leading indicators report is expected to show an increase of +0.4%, adding to the sharp increase of +0.8% seen in March. The Treasury today will sell $13 billion of 10-year TIPS.

    There are 7 of the S&P 500 companies that report earnings today: HP (consensus $0.88), Dollar Tree (0.66), Patterson (0.66), Best Buy (0.19), Ross Stores (1.15), Gap (0.57), GameStop (0.57). Equity conferences this week include: UBS Global Oil and Gas conference on Mon-Thu, UBS Global Financial Services Conference on Tue-Thu, BMO Capital Markets Farm to Market Conference on Wed-Thu, Medical Devices & Diagnostics Business Review on Thu, St. Petersburg International Economic Forum (SPIEF) 2014 on Thu, and Bloomberg Industries & CME Group Precious Metals Forum on Fri.

    OVERNIGHT U.S. STOCK MOVERS

    Best Buy (BBY +2.80%) reported Q1 EPS of 33 cents, well ahead of consensus of 19 cents.

    Signet Jewelers (SIG +2.13%) reported Q1 adjusted EPS of $1.29, better than consensus of $1.27.

    Marathon Petroleum's Speedway (MPC -1.06%) will acquire Hess Retail (HES +1.44%) for $2.87 billion.

    Dollar Tree (DLTR -2.19%) reported Q1 EPS of 67 cents, higher than consensus of 66 cents.

    Keurig Green Mountain (GMCR -0.01%) was downgraded to 'Neutral' from 'Buy' at Roth Capital.

    Sears (SHLD -3.66%) reported a Q1 EPS loss of -$3.79, over double consensus for a -$1.87 loss.

    Patterson Companies (PDCO +0.91%) reported Q4 EPS of 61 cents, below consensus of 66 cents.

    Raging Capital reported a 11.1% passive stake in GSI Technology (GSIT +1.09%) .

    L Brands (LB +0.65%) reported Q1 EPS of 53 cents, higher than consensus of 52 cents.

    Aegean Marine (ANW +2.53%) reported Q1 EPS of 11 cents, below consensus of 17 cents.

    Williams-Sonoma (WSM +0.52%) climbed over 4% in after-hours trading after it reported Q1 EPS of 48 cents, higher than consensus of 44 cents.

    Spartan Stores (SPTN +0.74%) reported Q1 EPS of 40 cents, better than consensus of 38 cents.

    According to Reuters, Reynolds American (RAI +4.38%) is in advanced negotiations to acquire Lorillard (LO +10.40%) .

    Synopsys (SNPS +0.76%) reported Q2 EPS of 65 cents, higher than consensus of 59 cents.

    NetApp (NTAP +1.59%) reported Q4 EPS of 84 cents, stronger than consensus of 79 cents.

    MARKET COMMENTS

    June E-mini S&Ps (ESM14 +0.03%) this morning are up +1.00 point (+0.05%) at a 1-week high. The S&P 500 index on Wednesday closed higher. Bullish factors for stock included (1) upbeat Q1 company earnings results as Bloomberg data shows 75% of the S&P 500 companies that have reported earnings results beat estimates and that 53% of the companies exceeded sales projections, and (2) the Apr 29-30 FOMC minutes that stated Fed members saw little risk of inflation from continued stimulus. Closes: S&P 500 +0.81%, Dow Jones +0.97%, Nasdaq +0.98%.

    Jun 10-year T-notes (ZNM14 -0.10%) this morning are down -2.5 ticks. Jun 10-year T-note futures prices on Wednesday closed lower as a rally in stocks reduced the safe-haven demand for Treasuries: TYM4 -6.00, FVM4 -2.75. T-notes recovered from their worst levels after the minutes of the Apr 29-30 FOMC meeting stated that policy makers said continued stimulus to push unemployment lower doesn't risk sparking an undesirable jump in the inflation rate.

    The dollar index (DXY00 +0.08%) this morning is up +0.032 (+0.04%). EUR/USD (^EURUSD) is down -0.0012 (-0.09%). USD/JPY (^USDJPY) is up +0.19 (+0.19%). The dollar index on Wednesday closed higher: Dollar index +0.054 (+0.07%), EUR/USD -0.00148 (-0.11%), USD/JPY +0.036 (+0.04%). Bullish factors for the dollar included (1) the Apr 29-30 FOMC meeting minutes that stated policy makers saw little risk of inflation from continued stimulus to push the unemployment rate lower, and (2) weakness in EUR/USD which fell to a 3-1/4 month low on divergent monetary policies between the Fed, which is tapering stimulus, and the ECB which is expected to add to stimulus. This boosts the interest rate differentials in favor of the dollar over the euro.

    July WTI crude oil (CLN14 -0.09%) this morning is down -11 cents (-0.11%). July gasoline (RBN14 unch) is unch. July crude and gasoline prices on Wednesday closed higher with July crude at a 1-month high: CLN4 +1.74 (+1.70%) RBN4 +0.0291 (+0.99%). Bullish factors included (1) the -7.226 million bbl plunge in weekly EIA crude inventories, a larger decline than expectations of unch, and (2) the -225,000 bbl drop in crude supplies at Cushing, OK, the delivery point for WTI futures, to a fresh 5-1/3 year low.

    GLOBAL EVENT CALENDAR05/22/2014

    US0830 ETWeekly initial unemployment claims expected +13,000 to 310,000, previous -24,000 to 297,000. Weekly continuing claims expected +8,000 to 2.675 million, previous -9,000 to 2.667 million.
     0830 ETChicago Fed Apr national activity index expected -0.20 to 0.00, Mar 0.20.
     0830 ETUSDA weekly Export Sales.
     0945 ETPreliminary U.S. Markit May manufacturing PMI expected +0.1 to 55.5, Apr 55.4.
     1000 ETApr existing home sales expected +2.2% to 4.69 million, Mar -0.2% to 4.59 million.
     1000 ETApr leading indicators expected +0.4%, Mar +0.8%
     1100 ETMay Kansas City Fed manufacturing index expected unch at 7, Apr 7.
     1100 ETTreasury announces amount of 2-year T-notes (previous $32 billion), 2-year floating-rate notes (previous $15 billion), 5-year T-notes (previous $35 billion), and 7-year T-notes (previous $29 billion) to be auctioned May 27-29.
     1300 ETTreasury auctions $13 billion of 10-year TIPS.
     1500 ETUSDA Apr Cold Storage.
    GER0330 ETGerman May Markit/BME manufacturing PMI expected -0.1 to 54.0, Apr 54.1. May Market services PMI expected -0.2 to 54.5, Apr 54.7.
    EUR0400 ETEurozone May Markit composite PMI expected -0.1 to 53.9, Apr 54.0.
    UK0430 ETUK Apr public sector net borrowing expected +3.4 billion pounds, Mar +4.9 billion pounds.
     0430 ETRevised UK Q1 GDP, previous +0.8% q/q and +3.1% y/y. Q1 private consumption expected +0.6% q/q, Q4 +0.4% q/q. Q1 government spending expected +0.2% q/q, Q4 unch q/q.
     0430 ETUK Q1 total business investment expected +2.2% q/q, Q4 +2.4% q/q and +8.7% y/y.
     0600 ETUK May CBI trends total orders expected 3, Apr -1. May CBI trends selling prices expected 10, Apr 9.

    U.S. STOCK CALENDAR05/22/2014

    Company NameTickerTimeEvent DescriptionPeriodEstimate
    Dollar Tree IncDLTR USBef-mktQ1 2015 Earnings ReleaseQ1 20150.664
    Patterson Cos IncPDCO USBef-mktQ4 2014 Earnings ReleaseQ4 20140.657
    Best Buy Co IncBBY US7:00Q1 2015 Earnings ReleaseQ1 20150.194
    Aflac IncAFL US8:00Analyst BriefingY 2014 
    Best Buy Co IncBBY US8:00Q1 2015 Earnings CallQ1 2015 
    Franklin Resources IncBEN US8:30Investor DayY 2014 
    KeyCorpKEY US8:30Annual General MeetingY 2014 
    L Brands IncLB US8:30Annual General MeetingY 2014 
    Dollar Tree IncDLTR US9:00Q1 2015 Earnings CallC1 2015 
    Dollar Tree IncDLTR US9:00Q1 2015 Earnings CallQ1 2015 
    Home Depot Inc/TheHD US9:00Annual General MeetingY 2014 
    Lincoln National CorpLNC US9:00Annual General MeetingY 2014 
    McDonald's CorpMCD US9:00Annual General MeetingY 2014 
    L Brands IncLB US9:15Q1 2015 Earnings CallC1 2015 
    L Brands IncLB US9:15Q1 2015 Earnings CallQ1 2015 
    Tiffany & CoTIF US9:30Annual General Meeting  
    Interpublic Group of Cos Inc/TheIPG US9:30Annual General MeetingY 2014 
    Sealed Air CorpSEE US10:00Annual General MeetingY 2014 
    Patterson Cos IncPDCO US10:00Q4 2014 Earnings CallQ4 2014 
    Hasbro IncHAS US11:00Annual General MeetingY 2014 
    Vornado Realty TrustVNO US11:30Annual General MeetingY 2014 
    Intel CorpINTC US11:30Annual General MeetingY 2014 
    NextEra Energy IncNEE US14:00Annual General MeetingY 2014 
    Facebook IncFB US14:00Annual General MeetingY 2014 
    Williams Cos Inc/TheWMB US15:00Annual General Meeting  
    Ross Stores IncROST US16:00Q1 2015 Earnings ReleaseQ1 20151.153
    Gap Inc/TheGPS US16:00Q1 2015 Earnings ReleaseQ1 20150.569
    Ross Stores IncROST US16:15Q1 2015 Earnings CallQ1 2015 
    GameStop CorpGME US17:00Q1 2015 Earnings CallQ1 2015 
    Gap Inc/TheGPS US17:00Q1 2015 Earnings CallQ1 2015 
    Hewlett-Packard CoHPQ US17:00Q2 2014 Earnings CallQ2 2014 
    GameStop CorpGME USAft-mktQ1 2015 Earnings ReleaseQ1 20150.571
    Hewlett-Packard CoHPQ USAft-mktQ2 2014 Earnings ReleaseQ2 20140.879
    Cablevision Systems CorpCVC US Annual General Meeting  
    Quanta Services IncPWR US Annual General Meeting  
    Robert Half International IncRHI US Annual General Meeting  
    Citrix Systems IncCTXS US Annual General Meeting  
    Flowserve CorpFLS US Annual General Meeting  
    CBS CorpCBS US Annual General Meeting  
    United Parcel Service IncUPS US Roadshow - TorontoY 2014

    Stocks: BBY, SIG, MPC, DLTR, GMCR, SHLD, PDCO, GSIT, LB, ANW, WSM, SPTN, RAI, SNPS, NTAP, AFL, BEN, KEY, HD, LNC, MCD, TIF, IPG, SEG, HAS, VNO, INTC, FB, WMB, ROST, GPS, GME, HPQ, CVC, PWR, RHI, CTXS, FLS, CBS, UNG, VRSN
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