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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 7/9 0 comments
    Jul 9, 2014 12:20 PM | about stocks: AXP, SLB, LPX, BNPQY, DB, POT, MRVL, AVGO, BP, JASMY, HCSG, BOBE, AA, IP, MSM, SLXP, HTA

    BARCHART MORNING CALL

    Wednesday, July 9th, 2014View Older Reports

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    OVERNIGHT MARKETS AND NEWS

    September E-mini S&Ps (ESU14 +0.06%) this morning are unchanged and European stocks are up +0.14% ahead of the minutes of the Jun 17-18 FOMC meeting. A slide in Portuguese bank stocks is limiting gains in European stocks with Banco Espirito Santo SA, Portugal's second-biggest bank by market value, down nearly 8% and Espirito Santo Financial Group down 11% after payments were missed on some corporate notes. Banque Privee Espirito Santo, a unit of Espirito Santo Financial Group SA, said Tuesday that there was a delay in payments on some short-term debt securities issued by Espirito Santo International. Tuesday's fall in the S&P 500 to a 1-week low undercut Asian stocks that closed lower with Japan's Nikkei Stock Index and China's Shanghai Stock Index at 1-week lows: Japan -0.08%, Hong Kong -1.55%, China -1.46%, Taiwan -0.43%, Australia -1.06%, Singapore -0.24%, South Korea -0.41%, India -0.54%. Commodity prices are mixed. Aug crude oil (CLQ14 -0.11%) is down -0.11%. Aug gasoline (RBQ14 -0.50%) is down -0.49% at a 4-week low. Aug gold (GCQ14 +0.70%) is up +0.73%. Sep copper (HGU14 +0.34%) is up +0.45%. Agriculture and livestock prices are mixed with Dec corn down -0.49% at a contract low and Nov soybeans down -0.56% at a fresh 5-month low. The dollar index (DXY00 +0.03%) is down -0.01%. EUR/USD (^EURUSD) is down -0.02%. USD/JPY (^USDJPY) is up +0.08%. Sep T-note prices (ZNU14 -0.01%) are up +1 tick.

    China Jun CPI rose +2.3% y/y, less than expectations of +2.4% y/y. Jun PPI fell -1.1% y/y, slightly more than expectations of -1.0% y/y, but still the slowest pace of decline in 2 years.

    UK Jun Halifax house prices fell -0.6% m/m and rose +8.8% 3-months/year-over-year, weaker than expectations of -0.3% m/m and +8.9% 3-months/year-over-year.

    The UK Jun BRC shop price index fell -1.8% y/y, a bigger slide than the -1.4% y/y drop in May and the fastest pace of decline since the data series began in 2006.

    Japan Jun machine tool orders surged +34.2% y/y, a larger increase than May's +24.1% y/y gain.

    U.S. STOCK PREVIEW

    The FOMC today will release the minutes from its last meeting on June 17-18. The Treasury today will sell $21 billion of 10-year T-notes. There is one Russell 1000 company that reports earnings today: MSC Industrial (consensus $1.07). Equity conferences during the remainder of this week include: Europe 2020 a Driver to Global Growth? on Tue-Wed.

    OVERNIGHT U.S. STOCK MOVERS

    American Express (AXP -0.87%) was upgraded to 'Buy' from 'Neutral' at Guggenheim.

    Schlumberger (SLB -0.58%) was upgraded to 'Overweight' from 'Neutral' at HSBC.

    Louisiana-Pacific (LPX -2.65%) was downgraded to 'Sector Perform' from 'Outperform' at RBC Capital.

    BNP Paribas (BNPQY -2.04%) was downgraded to 'Neutral' from 'Overweight' at JPMorgan Chase.

    Deutsche Bank (DB -1.78%) was upgraded to 'Overweight' from 'Neutral' at JPMorgan Chase.

    Potash (POT -0.72%) was downgraded to 'Neutral' from 'Overweight' at JPMorgan Chase.

    Marvell (MRVL +0.76%) was downgraded to 'Underperform' from 'Perform' at Oppenheimer.

    Broadcom (BRCM +0.05%) was upgraded to 'Outperform' from 'Perform' at Oppenheimer.

    British Petroleum (BP -0.46%) was downgraded to 'Hold from 'Buy at Deutsche Bank.

    Davidson Kempner Partners reported a 7.89% passive stake in Jason Industries (JASN -0.19%) .

    Healthcare Services (HCSG -0.76%) reported Q2 EPS of 20 cents, weaker than consensus of 22 cents.

    Bob Evans (BOBE -0.70%) reported Q4 EPS of 48 cents, better than consensus of 41 cents.

    Alcoa (AA +0.75%) rose nearly 2% in pre-market trading after it reported Q2 adjusted EPS of 18 cents, well above consensus of 12 cents.

    International Paper (IP -0.83%) announced its board has authorized an additional $1.5 billion share buyback program to supplement the $1.5 billion share repurchase program authorized in September 2013.

    MARKET COMMENTS

    Sep E-mini S&Ps (ESU14 +0.06%) this morning are unch. The S&P 500 index on Tuesday fell to a 1-week low and closed lower. Bearish factors for stocks included (1) negative carry-over from a slide in European stocks to a 1-1/2 month low on European economic concerns after German May exports fell more than expected and after UK manufacturing unexpectedly contracted by the most in 16 months, and (2) valuation concerns with stocks in the S&P 500 trading at 16.5 times projected earnings, above the 5-yr average of 14.3. Closes: S&P 500 -0.70%, Dow Jones -0.69%, Nasdaq -1.19%.

    Sep 10-year T-notes (ZNU14 -0.01%) this morning are up +1 tick. Sep 10-year T-note futures prices on Tuesday closed higher. The main bullish factor Tuesday was the slide in stocks which prompted short-covering in Treasuries on increased safe-haven demand for U.S. government debt. Closes: TYU4 +11.50, FVU4 +5.75.

    The dollar index (DXY00 +0.03%) this morning is down -0.005 (-0.01%). EUR/USD (^EURUSD) is down -0.0003 (-0.02%). USD/JPY (^USDJPY) is up +0.08 (+0.08%). The dollar index on Tuesday closed lower. Negative factors included (1) weakness in USD/JPY as the fall in the S&P 500 to a 1-week low boosted safe-haven demand for the yen, and (2) the drop in the 10-year T-note yield which reduces the dollar's interest rate differentials. Strength in EUR/USD was limited on European economic concerns after German May exports fell more than expected. Closes: Dollar index -0.039 (-0.05%), EUR/USD +0.0007 (+0.05%). USD/JPY -0.29 (-0.28%).

    Aug WTI crude oil (CLQ14 -0.11%) this morning is down -11 cents (-0.11%). Aug gasoline (RBQ14 -0.50%) is down -0.0146 (-0.49%) at a 4-week low. Aug crude and gasoline prices on Tuesday posted 3-week lows and closed lower. Bearish factors included (1) the slide in stocks, which reduces confidence in the economic outlook and energy demand, and (2) a lack of disruption to oil exports in Iraq, OPEC's second-largest producer, as militants have so far failed to extend their insurgency to southern Iraq, where 75% of the country's oil output is located. Losses were limited on expectations that weekly EIA inventory data on Wed will show crude stockpiles fell -2.5 mln bbl. Closes: CLQ4 -0.13 (-0.13%) RBQ4 -0.0181 (-0.61%).

    GLOBAL EVENT CALENDAR07/09/2014

    US 0700 ET Weekly MBA mortgage applications, previous -0.2% with purchase sub-index -0.7% and refi sub-index +0.1%.
      1030 ET EIA Weekly Petroleum Status Report.
      1300 ET Treasury auctions $21 billion 10-year T-notes.
      1400 ET Jun 17-18 FOMC meeting minutes.
    UK 0300 ET UK Jun Halifax house prices expected -0.3% m/m and +8.9% y/y 3-mo/year-over-year, May +3.9% m/m and +8.7% 3-mo/year-over-year.
      1901 ET UK Jun RICS house price balance expected 55%, May 57%.
    JPN 1950 ET Japan Jun PPI expected +0.1% m/m and +4.5% y/y, May +0.3% m/m and +4.4% y/y.
      1950 ET Japan May tertiary industry index expected +178% m/m, Apr -5.4% m/m.
      1950 ET Japan May machine orders expected +0.7% m/m and +10.1% y/y, Apr -9.1% m/m and +17.6% y/y.
    CHI n/a China Jun new yuan loans expected 955.0 billion yuan, May 870.8 billion yuan.
      n/a China Jun trade balance expected +$36.95 billion, May +$35.92 billion. Jun exports expected +10.4% y/y, May +7.0% y/y. Jun imports expected +6.0% y/y, May -1.6% y/y.

    U.S. STOCK CALENDAR07/09/2014

    Company Name Ticker Time Event Description Period Estimate
    MSC Industrial Direct Co Inc MSM US Bef-mkt Q3 2014 Earnings Release Q3 2014 1.066
    MSC Industrial Direct Co Inc MSM US 8:30 Q3 2014 Earnings Call Q3 2014  
    Salix Pharmaceuticals Ltd SLXP US 10:00 Investor Day Y 2014  
    Healthcare Trust of America Inc HTA US   Annual General Meeting
    Stocks: AXP, SLB, LPX, BNPQY, DB, POT, MRVL, AVGO, BP, JASMY, HCSG, BOBE, AA, IP, MSM, SLXP, HTA
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