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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 6/12 0 comments
    Jun 12, 2014 9:43 AM | about stocks: STO, APA, DLAKY, LULU, HPQ, BTUUQ, IMGN, VALE, ACHN, RH, LE, GWW, CNX, THG, BIIB, OHI, VC, EQR, BCR, LNT, JAH, UPS, PENN, GPOR, TRIP

    BARCHART MORNING CALL

    Thursday, June 12th, 2014View Older Reports

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    OVERNIGHT MARKETS AND NEWS

    June E-mini S&Ps (ESM14 +0.08%) this morning are up +0.03% and European stocks are unchanged after China's money supply and new loans grew more than expected last month, a sign of economic growth. European stocks also received a boost after Eurozone Apr industrial production rose at the fastest pace in 5 months. Another positive for stocks was the action by the Kiel Institute to raise its German 2014 GDP growth forecast to 2.0% from a 1.9% estimate in Mar. Asian stocks closed mostly lower: Japan -0.64%, Hong Kong -0.35%, China -0.34%, Taiwan -0.27%, Australia -0.46%, Singapore +0.09%, South Korea -0.23%, India +0.40%. Commodity prices are mostly higher. July crude oil (CLN14 +1.48%) is up +1.48% at an 8-3/4 month high on supply concerns after Islamist militants extended control over northern areas of Iraq, the second-largest producer in OPEC. Iraqi forces, backed by air power, are attempting to check the rapid advance of militants known as the Islamic State of Iraq and the Levant (NASDAQ:ISIL) after the militants seized Mosul, the largest city in northern Iraq earlier this week. July gasoline (RBN14 +1.42%) is up +1.42% at a 1-1/2 month high. Aug gold (GCQ14 +0.35%) is up +0.38%. July copper (HGN14 +0.02%) is up +0.03%. Agriculture and livestock prices are mostly higher. The dollar index (DXY00 unch) is down -0.01%. EUR/USD (^EURUSD) is down -0.03%. USD/JPY (^USDJPY) is unchanged. Sep T-note prices (ZNU14 -0.06%) are down -3.5 ticks.

    China May new yuan loans were 870.8 billion yuan, more than expectations of 750.0 billion yuan. China M2 money supply, the broadest measure of money supply, rose +13.4% y/y, better than expectations of +13.1% y/y and the strongest pace of growth in 5 months.

    Eurozone Apr industrial production rose +0.8% m/m, better than expectations of +0.5% m/m and the fastest pace in 5 months. On an annual basis Apr industrial production climbed +1.4% y/y, better than expectations of +0.9% y/y.

    The German May wholesale price index fell -0.1% m/m and -0.9% y/y, the eleventh consecutive month that wholesale prices have declined on an annual basis.

    Japan Apr machine orders fell -9.1% m/m and rose +17.6% y/y, better than expectations of -10.8% m/m and +13.3% y/y.

    U.S. STOCK PREVIEW

    Today's weekly initial unemployment claims report is expected to show a small decline of -2,000 to 310,000, reversing part of last week's increase of +8,000 to 312,000. Meanwhile, continuing claims are expected to show a small increase of +2,000 to 2.605 million following last week's decline of -20,000 to 2.603 million. Today's May retail sales report is expected to show a solid increase of +0.6% and +0.4% ex-autos. Strength in May retail sales would follow the pause that consumers took in April when retail sales rose by only +0.1% overall and were unchanged ex-autos. The Treasury today will sell $13 billion of 30-year T-bonds, concluding this week's $62 billion coupon package.

    None of the Russell 1000 companies report earnings today. Equity conferences during the remainder of this week include: Goldman Sachs Global Healthcare Conference on Tue-Thu, William Blair Growth Stock Conference on Tue-Thu, 2nd Annual Mexico Capital Projects & Infrastructure Summit on Wed-Thu, Morgan Stanley Leveraged Finance Conference on Wed-Thu, Drexel Hamilton Aerospace and Defense Conference on Thu, and Robert W. Baird & Co. Inc. Utility & Infrastructure Symposium on Thu.

    OVERNIGHT U.S. STOCK MOVERS

    Statoil (STO -0.75%) was downgraded to 'Hold' from 'Buy' at Deutsche Bank.

    Argus kept a 'Buy' rating on Apache (APA +0.38%) and raised its price target on the stock to $118 from $103.

    Lufthansa (DLAKY -14.25%) was downgraded to 'Hold' from 'Buy' at Jefferies.

    Lululemon Athletica (LULU -2.59%) fell 7% in pre-market trading after the company lowered guidance on fiscal 2014 EPS to $1.71-$1.76 from $1.80-$1.90, below consensus of $1.89.

    Hewlett-Packard (HPQ -1.07%) rose 1.2% in pre-market trading after Goldman Sachs upgraded the stock to 'Neutral' from 'Sell.'

    Senator Investment Group reported a 5.5% passive stake in Peabody (BTU +0.37%) .

    ImmunoGen (IMGN -1.30%) was upgraded to 'Neutral' from 'Sell' at UBS.

    Vale (VALE -0.15%) was downgraded to 'Equal Weight' from 'Overweight' at Morgan Stanley.

    Achillion (ACHN -6.42%) was upgraded to 'Buy' from 'Neutral' at UBS.

    Restoration Hardware (RH +2.82%) jumped over 10% in after-hours trading after it reported Q1 adjusted EPS of 18 cents, well above consensus of 11 cents, and then raised guidance on fiscal 2014 EPS to $2.24-$2.30 from $2.14-$2.22, higher than consensus of $2.20.

    MARKET COMMENTS

    June E-mini S&Ps (ESM14 +0.08%) this morning are up +0.50 of a point (+0.03%). The S&P 500 index on Wednesday closed lower. Bearish factors included (1) global economic concerns that fueled long liquidation pressure in stocks after the World Bank lowered its 2014 global growth forecast to 2.8% from a Jan estimate of 3.2%, and (2) concern about increased gridlock in Washington D.C. after U.S. House Majority leader Cantor lost his primary election to a Tea Party-backed candidate in Virginia. Closes: S&P 500 -0.35%, Dow Jones -0.60%, Nasdaq -0.08%.

    Sep 10-year T-notes (ZNU14 -0.06%) this morning are down -3.5 ticks. Sep 10-year T-note futures prices on Wednesday recovered from a 4-week low and closed higher on (1) increased safe-haven demand with the slide in stocks, and (2) the World Bank's cut in its global 2014 economic growth forecast. Closes: TYU4 +2.00, FVU4 +2.25.

    The dollar index (DXY00 unch) this morning is down -0.005 (-0.01%). EUR/USD (^EURUSD) is down -0.0004 (-0.03%). USD/JPY (^USDJPY) is unch. The dollar index on Wednesday closed lower. Bearish factors included (1) the World Bank's cut in its U.S. 2014 GDP forecast to 2.1% from Jan's estimate of 2.8%, and (2) strength in the yen as USD/JPY fell to a 1-week low on speculation the BOJ will refrain from expanding stimulus measures when it meets on Thursday. Closes: Dollar Index -0.032 (-0.04%), EUR/USD -0.0016 (-0.12%), USD/JPY -0.276 (-0.27%).

    July WTI crude oil (CLN14 +1.48%) this morning is up +$1.54 a barrel (+0.148%) at an 8-3/4 month high. July gasoline (RBN14 +1.42%) is up +0.0425 (+1.42%) at a 1-1/2 month high. July crude and gasoline prices on Wednesday closed higher with July gasoline at a 1-1/2 week high. Bullish factors included (1) the -198,000 bbl slide in inventories at Cushing, OK, the delivery point for WTI futures, to a 5-1/2 yr low of 21.17 million bbl, and (2) the -2.596 bbl decline in EIA crude inventories to a 2-month low of 386.93 million bbl, more than expectations of -2.0 million bbl. Crude prices fell back from their best levels on demand concerns after U.S. fuel consumption in the week ended Jun 6 fell -3.0% w/w to 18.025 million bpd, the lowest in a year. Closes: CLN4 +0.05 (+0.05%) RBN4 +0.0275 (+0.92%).

    GLOBAL EVENT CALENDAR06/12/2014

    US 0830 ET Weekly initial unemployment claims expected -2,000 to 310,000, previous +8,000 to 312,000. Weekly continuing claims expected +2,000 to 2.605 million, previous -20,000 to 2.603 million.
      0830 ET May retail sales expected +0.6% and +0.4% ex autos, Apr +0.1% and unch ex autos.
      0830 ET May import prices expected +0.2% m/m and +0.5% y/y, Apr -0.4% m/m and -0.3% y/y.
      0830 ET USDA weekly Export Sales.
      1000 ET Apr business inventories expected +0.4%, Mar +0.4%.
      1100 ET Treasury announces amount of 30-year TIPS to be auctioned Jun 19.
      1300 ET Treasury auctions $13 billion 30-year T-bonds.
    GER 0200 ET German May wholesale price index, Apr +0.2% m/m and -1.3% y/y.
    EUR 0400 ET ECB publishes monthly report.
      0500 ET Eurozone Apr industrial production expected +0.5% m/m and +0.9% y/y, Mar -0.3% m/m and -0.1% y/y.

    U.S. STOCK CALENDAR06/12/2014

    Company Name Ticker Time Event Description Period Estimate
    Lands' End Inc LE US Bef-mkt Q1 2015 Earnings Release Q1 2015  
    WW Grainger Inc GWW US 8:00 May 2014 Sales and Revenue Call 2014  
    WW Grainger Inc GWW US 8:00 May 2014 Sales and Revenue Release 2014  
    CONSOL Energy Inc CNX US 8:00 Analyst Day Y 2014  
    Hanover Insurance Group Inc/The THG US 8:30 Investor Meeting Y 2014  
    Biogen Idec Inc BIIB US 9:00 Annual General Meeting Y 2014  
    Omega Healthcare Investors Inc OHI US 10:00 Annual General Meeting Y 2014  
    Visteon Corp VC US 11:00 Annual General Meeting Y 2014  
    Equity Residential EQR US 14:00 Annual General Meeting Y 2014  
    CR Bard Inc BCR US   FDA Adcomm, Lutonix 035 Drug Coated Balloon (PTA) Catheter    
    Alliant Energy Corp LNT US   Roadshow-Day 3 Y 2014  
    Jarden Corp JAH US   Annual General Meeting    
    United Parcel Service Inc UPS US   Roadshow - Paris Y 2014  
    Penn National Gaming Inc PENN US   Annual General Meeting    
    Gulfport Energy Corp GPOR US   Annual General Meeting    
    TripAdvisor Inc TRIP US   Annual General Meeting    
    Stocks: STO, APA, DLAKY, LULU, HPQ, BTUUQ, IMGN, VALE, ACHN, RH, LE, GWW, CNX, THG, BIIB, OHI, VC, EQR, BCR, LNT, JAH, UPS, PENN, GPOR, TRIP
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