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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 7/23 0 comments
    Jul 23, 2014 8:42 AM | about stocks: WHR, PX, DOW, PEP, DAL, GD, AAPL, MSFT, AVGO, BLDP, XLNX, NOC, BA, R, TMO, FCX, TEL, SPG, APD, EMC, NSC, ACE, FTI, NBR, STZ, LLTC, APH, QCOM, GILD, CTXXF, FFIV, T, TRIP, TSCO, CA, ETFC, VAR, FB, CCI, FLS, TMK, EFX, MAC, AVB, AIZ

    BARCHART MORNING CALL

    Wednesday, July 23rd, 2014

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    OVERNIGHT MARKETS AND NEWS

    Sep E-mini S&Ps (ESU14 +0.18%) this morning are trading slightly higher by +0.18% on support from today's +0.63% rally in the Euro Stoxx 50 index and a further +0.2% upward rebound in Russian stocks. Asian stocks today closed mostly higher: Japan -0.10%, Hong Kong +0.80%, China +0.23%, Australia +0.60%, Singapore +0.72%, South Korea -0.11, India +0.47%, Turkey +0.38%. The dollar index (DXY00 -0.03%) is slightly lower by -0.03% this morning, while EUR/USD (^EURUSD) is up +0.03% and USD/JPY (^USDJPY) is down -0.05%. Sep T-note prices (ZNU14 +0.05%) are up 1 tick.

    Commodity prices are little changed on net this morning. Sep WTI crude oil (CLU14 +0.14%) is up +0.02% and Sep gasoline (RBU14 -0.05%) is down -0.09%. Aug gold (GCQ14 +0.11%) is up +0.16%, Sep silver (SIU14 -0.01%) is up +0.10%, and Sep copper (HGU14 +0.05%) is down -0.31%. Grain prices are steady to slightly higher this morning. Livestock and softs are mixed.

    The Russian Micex stock index today is up +0.2%, adding to Tuesday's gain of +1.55% for the second day of recovery after 6 straight losses totaling -7.7%. The EU is now waiting to see if Russia assists in an international investigation into last week's downing of the Malaysia Air passenger plane in deciding whether to launch sanctions that could include more limited access to the EU capital markets and restrictions on access to sensitive energy and defense technology. The markets were pleased with the EU's limited sanctions threat.

    The Bank of England at its July 9-10 policy meeting voted 9-0 to leave its base rate unchanged at 0.50%, according to the minutes released today. The minutes also said that some Monetary Policy Committee members have started to argue that there are reduced risks from a rate hike due to strengthening economic growth. However, other members said that "although the domestic economy was growing at or above longer-term average rates, there was little indication of inflation pressures building." The minutes added, "A premature tightening in monetary policy might leave the economy vulnerable to shocks." The MPC is waiting for the BOE's release next month of the quarterly Inflation Report, which will provide more data on the amount of slack in the UK economy.

    Spain's Q2 GDP improved slightly to +0.5% q/q from +0.4% q/q in Q1, which was slightly above market expectations of +0.4%. Spain's Q2 GDP on a year-on-year basis was up +1.0% y/y. Spain's GDP has now risen for four straight quarters, indicating that it was clearly emerged from the recession sparked by the global financial crisis and the Eurozone debt crisis. The Bank of Spain is forecasting that Spain's GDP growth rate will improve to +2.0% in 2015 from +1.3% in 2014, indicating expectations for lackluster economic growth in Spain.

    U.S. STOCK PREVIEW

    There are 37 of the S&P 500 companies that report earnings today with notable reports including: AT&T (consensus $0.63), Facebook (0.32), E-Trade (0.23), Boeing (1.98), Northrop Grumman (2.22), Dow Chemical (0.72), Delta Airlines (1.03), PepsiCo (1.23), Norfolk Southern (1.74), and Gilead Sciences (1.79). Equity conferences during the remainder of this week include: Wells Fargo Small Cell Symposium on Thu.

    Sep E-mini S&Ps this morning are up +0.18% on support from today's +0.63% rally in the Europe Stoxx 50 index. The U.S. stock market on Tuesday rallied moderately with a new record high in the S&P 500 index: S&P 500 +0.50%, Dow Jones +0.36%, Nasdaq +0.71%. Bullish factors included (1) reduced concerns about the Russian-Ukraine situation after Russian separatists handed over the black boxes to Malaysian authorities and released the train with bodies of the victims, (2) the stronger than expected June existing home sales report of +2.6% to a new 8-month high, and (3) the stabilization of the June CPI report that took some tightening pressure off the Fed.

    OVERNIGHT U.S. STOCK MOVERS

    • Of the 13 of the S&P 500 companies that have reported earnings this morning, only two reported below-consensus EPS, i.e., Whirlpool (WHR +2.03%) (2.62 vs consensus of 2.91) and Praxair (PX +0.16%) (1.58 vs 1.59). Notable companies that have reported above-consensus earnings this morning include Dow Chemical (DOW +0.85%) (0.74 vs 0.72), PepsiCo (PEP -0.82%) (1.32 vs 1.23), Delta Airlines (DAL +1.43%) (1.04 vs 1.033), and General Dynamics (GD +0.17%) (1.88 vs 1.77).
    • Apple (AAPL +0.83%) fell late yesterday after after reporting third quarter results and fourth quarter guidance.
    • Microsoft (MSFT unch) recovered and rose more than 1% late yesterday after an initial dip on its earnings report. Microsoft's Q2 EPS of 55 cents was below the consensus of 60 cents due to expenses related to Microsoft's purchase of Nokia's mobile business in April.
    • Broadcom (BRCM +0.31%) (+3%) and Robert Half (RHI +0.73%) (+4%) rallied in after-hours trading yesterday after positive earnings results.
    • Ballard Power Systems (BLDP +0.24%) rallied near 3% late yesterday after news its received a purchase order from New Flyer Industries.
    • Xilinx (XLNX -0.37%) fell sharply by nearly 9% late yesterday after reporting earnings.
    • Deutsche Bank is down more than -2% today after news that the New York Fed in December sent a letter to the bank saying that regulators found that the bank's U.S. operations suffered from inadequate oversight.

    MARKET COMMENTS

    Sep 10-year T-notes this morning are up 1 tick. Sep 10-year T-note futures prices on Tuesday closed mildly higher due to ongoing safe-haven demand and technical buying. Closes: TYU4 +3.5, FVU4 +4.25.

    The dollar index this morning is slightly lower by -0.03 points (-0.03%) while EUR/USD is up +0.0004 (+0.03%) and USD/JPY is down -0.05 (-0.05%). The dollar index on Tuesday closed moderately higher as EUR saw weakness as the markets wait for the shoe to drop on the extent of new sanctions on Russia. The dollar index was also supported by the stronger-than-expected U.S. existing home sales report. Closes: Dollar index +0.22 (+0.27%), EUR/USD -0.0058 (-0.43), USD/JPY +0.06 (+0.06%).

    Sep WTI crude oil this morning is up +0.02 (+0.02%) and Sep gasoline is down -0.0027 (-0.09%). Aug crude and gasoline prices on Tuesday closed lower: CLU4 -0.47 (-0.46%), RBU4 -0.0107 (-0.37%). Bearish factors included expectations for a continued rise in gasoline inventories, bearish API figures, the rally in the dollar index, and long liquidation pressure after Monday's rally.

    GLOBAL EVENT CALENDAR07/23/2014

    US 0700 ET Weekly MBA mortgage applications, previous -3.6% with purchase sub-index -7.6% and refi sub-index -0.1%.
      1030 ET EIA Weekly Petroleum Status Report.
    UK 0430 ET Minutes of the Jul 9-10 BOE policy meeting.
      0600 ET UK Jul CBI reported sales expected +11 to 15, Jun 4.
    EUR 1000 ET Eurozone Jul consumer confidence expected unch at -7.5.
    JPN 1950 ET Japan Jun trade balance expected -665.3 billion yen, May -910.8 billion yen. Jun exports expected +1.0% y/y, May -2.7% y/y. Jun imports expected +8.4% y/y, May -3.5% y/y.
      2135 ET Japan Jul Markit/JMMA manufacturing PMI, Jun 51.5.
    CHI 2145 ET China Jul HSBC flash manufacturing PMI expected +0.3 to 51.0, Jun +1.3 to 50.7.

    U.S. STOCK CALENDAR07/23/2014

    Company Name Ticker Time Event Description Period Estimate
    Northrop Grumman Corp NOC US Bef-mkt Q2 2014 Earnings Release Q2 2014 2.221
    Praxair Inc PX US Bef-mkt Q2 2014 Earnings Release Q2 2014 1.587
    Boeing Co/The BA US Bef-mkt Q2 2014 Earnings Release Q2 2014 1.982
    Ryder System Inc R US Bef-mkt Q2 2014 Earnings Release Q2 2014 1.393
    Thermo Fisher Scientific Inc TMO US Bef-mkt Q2 2014 Earnings Release Q2 2014 1.624
    Dow Chemical Co/The DOW US Bef-mkt Q2 2014 Earnings Release Q2 2014 0.715
    Biogen Idec Inc BIIB US Bef-mkt Q2 2014 Earnings Release Q2 2014 2.831
    Delta Air Lines Inc DAL US Bef-mkt Q2 2014 Earnings Release Q2 2014 1.031
    Freeport-McMoRan Inc FCX US Bef-mkt Q2 2014 Earnings Release Q2 2014 0.518
    General Dynamics Corp GD US Bef-mkt Q2 2014 Earnings Release Q2 2014 1.77
    TE Connectivity Ltd TEL US Bef-mkt Q3 2014 Earnings Release Q3 2014 0.988
    Simon Property Group Inc SPG US Bef-mkt Q2 2014 Earnings Release Q2 2014 2.134
    Air Products & Chemicals Inc APD US 6:00 Q3 2014 Earnings Release Q3 2014 1.448
    Whirlpool Corp WHR US 6:00 Q2 2014 Earnings Release Q2 2014 2.913
    PepsiCo Inc PEP US 7:00 Q2 2014 Earnings Release Q2 2014 1.23
    EMC Corp/MA EMC US 7:00 Q2 2014 Earnings Release Q2 2014 0.425
    Norfolk Southern Corp NSC US 8:00 Q2 2014 Earnings Release Q2 2014 1.736
    PepsiCo Inc PEP US 8:00 Q2 2014 Earnings Call Q2 2014  
    Thermo Fisher Scientific Inc TMO US 8:30 Q2 2014 Earnings Call Q2 2014  
    ACE Ltd ACE US 8:30 Q2 2014 Earnings Call Q2 2014  
    EMC Corp/MA EMC US 8:30 Q2 2014 Earnings Call Q2 2014  
    TE Connectivity Ltd TEL US 8:30 Q3 2014 Earnings Call Q3 2014  
    Norfolk Southern Corp NSC US 8:45 Q2 2014 Earnings Call Q2 2014  
    Dow Chemical Co/The DOW US 9:00 Q2 2014 Earnings Call Q2 2014  
    Biogen Idec Inc BIIB US 9:00 Q2 2014 Earnings Call Q2 2014  
    FMC Technologies Inc FTI US 9:00 Q2 2014 Earnings Call C1 2014  
    General Dynamics Corp GD US 9:00 Q2 2014 Earnings Call Q2 2014  
    Air Products & Chemicals Inc APD US 10:00 Q3 2014 Earnings Call Q3 2014  
    Delta Air Lines Inc DAL US 10:00 Q2 2014 Earnings Call Q2 2014  
    Freeport-McMoRan Inc FCX US 10:00 Q2 2014 Earnings Call Q2 2014  
    Whirlpool Corp WHR US 10:00 Q2 2014 Earnings Call Q2 2014  
    Boeing Co/The BA US 10:30 Q2 2014 Earnings Call Q2 2014  
    Praxair Inc PX US 11:00 Q2 2014 Earnings Call Q2 2014  
    Ryder System Inc R US 11:00 Q2 2014 Earnings Call Q2 2014  
    Nabors Industries Ltd NBR US 11:00 Q2 2014 Earnings Call Q2 2014  
    Constellation Brands Inc STZ US 11:00 Annual General Meeting Y 2014  
    Simon Property Group Inc SPG US 11:00 Q2 2014 Earnings Call Q2 2014  
    Linear Technology Corp LLTC US 11:30 Q4 2014 Earnings Call Q4 2014  
    Northrop Grumman Corp NOC US 12:00 Q2 2014 Earnings Call Q2 2014  
    Amphenol Corp APH US 13:00 Q2 2014 Earnings Call Q2 2014  
    QUALCOMM Inc QCOM US 16:00 Q3 2014 Earnings Release Q3 2014 1.213
    Gilead Sciences Inc GILD US 16:05 Q2 2014 Earnings Release Q2 2014 1.794
    Citrix Systems Inc CTXS US 16:05 Q2 2014 Earnings Release Q2 2014 0.607
    F5 Networks Inc FFIV US 16:05 Q3 2014 Earnings Release Q3 2014 1.35
    Gilead Sciences Inc GILD US 16:30 Q2 2014 Earnings Call Q2 2014  
    F5 Networks Inc FFIV US 16:30 Q3 2014 Earnings Call Q3 2014  
    AT&T Inc T US 16:30 Q2 2014 Earnings Call Q2 2014  
    TripAdvisor Inc TRIP US 16:30 Q2 2014 Earnings Call Q2 2014  
    Citrix Systems Inc CTXS US 16:45 Q2 2014 Earnings Call Q2 2014  
    Tractor Supply Co TSCO US 17:00 Q2 2014 Earnings Call Q2 2014  
    CA Inc CA US 17:00 Q1 2015 Earnings Call Q1 2015  
    E*TRADE Financial Corp ETFC US 17:00 Q2 2014 Earnings Call Q2 2014  
    Varian Medical Systems Inc VAR US 17:00 Q3 2014 Earnings Call Q3 2014  
    Facebook Inc FB US 17:00 Q2 2014 Earnings Call Q2 2014  
    Tractor Supply Co TSCO US Aft-mkt Q2 2014 Earnings Release Q2 2014 0.947
    Crown Castle International Corp CCI US Aft-mkt Q2 2014 Earnings Release Q2 2014 0.858
    AT&T Inc T US Aft-mkt Q2 2014 Earnings Release Q2 2014 0.636
    CA Inc CA US Aft-mkt Q1 2015 Earnings Release Q1 2015 0.602
    Flowserve Corp FLS US Aft-mkt Q2 2014 Earnings Release Q2 2014 0.924
    Torchmark Corp TMK US Aft-mkt Q2 2014 Earnings Release Q2 2014 1.027
    Equifax Inc EFX US Aft-mkt Q2 2014 Earnings Release Q2 2014 0.943
    E*TRADE Financial Corp ETFC US Aft-mkt Q2 2014 Earnings Release Q2 2014 0.231
    Varian Medical Systems Inc VAR US Aft-mkt Q3 2014 Earnings Release Q3 2014 1.087
    Macerich Co/The MAC US Aft-mkt Q2 2014 Earnings Release Q2 2014 0.84
    TripAdvisor Inc TRIP US Aft-mkt Q2 2014 Earnings Release Q2 2014 0.605
    Facebook Inc FB US Aft-mkt Q2 2014 Earnings Release Q2 2014 0.321
    AvalonBay Communities Inc AVB US Aft-mkt Q2 2014 Earnings Release Q2 2014 1.664
    Assurant Inc AIZ US Aft-mkt Q2 2014 Earnings Release Q2 2014 1.544
    QUALCOMM Inc QCOM US 17:45 Q3 2014 Earnings Call Q3 2014  
    Amphenol Corp APH US   Q2 2014 Earnings Release Q2 2014 1.051
    Stocks: WHR, PX, DOW, PEP, DAL, GD, AAPL, MSFT, AVGO, BLDP, XLNX, NOC, BA, R, TMO, FCX, TEL, SPG, APD, EMC, NSC, ACE, FTI, NBR, STZ, LLTC, APH, QCOM, GILD, CTXXF, FFIV, T, TRIP, TSCO, CA, ETFC, VAR, FB, CCI, FLS, TMK, EFX, MAC, AVB, AIZ
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