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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, BRCM, 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

    US0700 ETWeekly MBA mortgage applications, previous -3.6% with purchase sub-index -7.6% and refi sub-index -0.1%.
     1030 ETEIA Weekly Petroleum Status Report.
    UK0430 ETMinutes of the Jul 9-10 BOE policy meeting.
     0600 ETUK Jul CBI reported sales expected +11 to 15, Jun 4.
    EUR1000 ETEurozone Jul consumer confidence expected unch at -7.5.
    JPN1950 ETJapan 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 ETJapan Jul Markit/JMMA manufacturing PMI, Jun 51.5.
    CHI2145 ETChina Jul HSBC flash manufacturing PMI expected +0.3 to 51.0, Jun +1.3 to 50.7.

    U.S. STOCK CALENDAR07/23/2014

    Company NameTickerTimeEvent DescriptionPeriodEstimate
    Northrop Grumman CorpNOC USBef-mktQ2 2014 Earnings ReleaseQ2 20142.221
    Praxair IncPX USBef-mktQ2 2014 Earnings ReleaseQ2 20141.587
    Boeing Co/TheBA USBef-mktQ2 2014 Earnings ReleaseQ2 20141.982
    Ryder System IncR USBef-mktQ2 2014 Earnings ReleaseQ2 20141.393
    Thermo Fisher Scientific IncTMO USBef-mktQ2 2014 Earnings ReleaseQ2 20141.624
    Dow Chemical Co/TheDOW USBef-mktQ2 2014 Earnings ReleaseQ2 20140.715
    Biogen Idec IncBIIB USBef-mktQ2 2014 Earnings ReleaseQ2 20142.831
    Delta Air Lines IncDAL USBef-mktQ2 2014 Earnings ReleaseQ2 20141.031
    Freeport-McMoRan IncFCX USBef-mktQ2 2014 Earnings ReleaseQ2 20140.518
    General Dynamics CorpGD USBef-mktQ2 2014 Earnings ReleaseQ2 20141.77
    TE Connectivity LtdTEL USBef-mktQ3 2014 Earnings ReleaseQ3 20140.988
    Simon Property Group IncSPG USBef-mktQ2 2014 Earnings ReleaseQ2 20142.134
    Air Products & Chemicals IncAPD US6:00Q3 2014 Earnings ReleaseQ3 20141.448
    Whirlpool CorpWHR US6:00Q2 2014 Earnings ReleaseQ2 20142.913
    PepsiCo IncPEP US7:00Q2 2014 Earnings ReleaseQ2 20141.23
    EMC Corp/MAEMC US7:00Q2 2014 Earnings ReleaseQ2 20140.425
    Norfolk Southern CorpNSC US8:00Q2 2014 Earnings ReleaseQ2 20141.736
    PepsiCo IncPEP US8:00Q2 2014 Earnings CallQ2 2014 
    Thermo Fisher Scientific IncTMO US8:30Q2 2014 Earnings CallQ2 2014 
    ACE LtdACE US8:30Q2 2014 Earnings CallQ2 2014 
    EMC Corp/MAEMC US8:30Q2 2014 Earnings CallQ2 2014 
    TE Connectivity LtdTEL US8:30Q3 2014 Earnings CallQ3 2014 
    Norfolk Southern CorpNSC US8:45Q2 2014 Earnings CallQ2 2014 
    Dow Chemical Co/TheDOW US9:00Q2 2014 Earnings CallQ2 2014 
    Biogen Idec IncBIIB US9:00Q2 2014 Earnings CallQ2 2014 
    FMC Technologies IncFTI US9:00Q2 2014 Earnings CallC1 2014 
    General Dynamics CorpGD US9:00Q2 2014 Earnings CallQ2 2014 
    Air Products & Chemicals IncAPD US10:00Q3 2014 Earnings CallQ3 2014 
    Delta Air Lines IncDAL US10:00Q2 2014 Earnings CallQ2 2014 
    Freeport-McMoRan IncFCX US10:00Q2 2014 Earnings CallQ2 2014 
    Whirlpool CorpWHR US10:00Q2 2014 Earnings CallQ2 2014 
    Boeing Co/TheBA US10:30Q2 2014 Earnings CallQ2 2014 
    Praxair IncPX US11:00Q2 2014 Earnings CallQ2 2014 
    Ryder System IncR US11:00Q2 2014 Earnings CallQ2 2014 
    Nabors Industries LtdNBR US11:00Q2 2014 Earnings CallQ2 2014 
    Constellation Brands IncSTZ US11:00Annual General MeetingY 2014 
    Simon Property Group IncSPG US11:00Q2 2014 Earnings CallQ2 2014 
    Linear Technology CorpLLTC US11:30Q4 2014 Earnings CallQ4 2014 
    Northrop Grumman CorpNOC US12:00Q2 2014 Earnings CallQ2 2014 
    Amphenol CorpAPH US13:00Q2 2014 Earnings CallQ2 2014 
    QUALCOMM IncQCOM US16:00Q3 2014 Earnings ReleaseQ3 20141.213
    Gilead Sciences IncGILD US16:05Q2 2014 Earnings ReleaseQ2 20141.794
    Citrix Systems IncCTXS US16:05Q2 2014 Earnings ReleaseQ2 20140.607
    F5 Networks IncFFIV US16:05Q3 2014 Earnings ReleaseQ3 20141.35
    Gilead Sciences IncGILD US16:30Q2 2014 Earnings CallQ2 2014 
    F5 Networks IncFFIV US16:30Q3 2014 Earnings CallQ3 2014 
    AT&T IncT US16:30Q2 2014 Earnings CallQ2 2014 
    TripAdvisor IncTRIP US16:30Q2 2014 Earnings CallQ2 2014 
    Citrix Systems IncCTXS US16:45Q2 2014 Earnings CallQ2 2014 
    Tractor Supply CoTSCO US17:00Q2 2014 Earnings CallQ2 2014 
    CA IncCA US17:00Q1 2015 Earnings CallQ1 2015 
    E*TRADE Financial CorpETFC US17:00Q2 2014 Earnings CallQ2 2014 
    Varian Medical Systems IncVAR US17:00Q3 2014 Earnings CallQ3 2014 
    Facebook IncFB US17:00Q2 2014 Earnings CallQ2 2014 
    Tractor Supply CoTSCO USAft-mktQ2 2014 Earnings ReleaseQ2 20140.947
    Crown Castle International CorpCCI USAft-mktQ2 2014 Earnings ReleaseQ2 20140.858
    AT&T IncT USAft-mktQ2 2014 Earnings ReleaseQ2 20140.636
    CA IncCA USAft-mktQ1 2015 Earnings ReleaseQ1 20150.602
    Flowserve CorpFLS USAft-mktQ2 2014 Earnings ReleaseQ2 20140.924
    Torchmark CorpTMK USAft-mktQ2 2014 Earnings ReleaseQ2 20141.027
    Equifax IncEFX USAft-mktQ2 2014 Earnings ReleaseQ2 20140.943
    E*TRADE Financial CorpETFC USAft-mktQ2 2014 Earnings ReleaseQ2 20140.231
    Varian Medical Systems IncVAR USAft-mktQ3 2014 Earnings ReleaseQ3 20141.087
    Macerich Co/TheMAC USAft-mktQ2 2014 Earnings ReleaseQ2 20140.84
    TripAdvisor IncTRIP USAft-mktQ2 2014 Earnings ReleaseQ2 20140.605
    Facebook IncFB USAft-mktQ2 2014 Earnings ReleaseQ2 20140.321
    AvalonBay Communities IncAVB USAft-mktQ2 2014 Earnings ReleaseQ2 20141.664
    Assurant IncAIZ USAft-mktQ2 2014 Earnings ReleaseQ2 20141.544
    QUALCOMM IncQCOM US17:45Q3 2014 Earnings CallQ3 2014 
    Amphenol CorpAPH US Q2 2014 Earnings ReleaseQ2 20141.051

    Stocks: WHR, PX, DOW, PEP, DAL, GD, AAPL, MSFT, BRCM, 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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