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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 - 2/14 0 comments
    Feb 14, 2012 11:05 AM | about stocks: HST, MMC, HCP, OMC, FTI, ZNGA, BWA, AVP, ACT, WSH, KORS, FOSL, HSP, WTW, GT
    Barchart Morning Call

    Barchart.com - 2 hrs 58 mins ago

    Overnight Developments

    • Global stocks this morning are mostly higher with the Euro Stoxx 50 up +0.14% and Mar S&Ps up +1.90 points. Stocks and commodities moved higher, with Mar crude at a 3-week high, after German investor confidence unexpectedly jumped to a 10-month high and as Italian and Spanish borrowing costs fell, even after Moody's Investors Service downgraded the debt ratings of 6 European countries. The dollar index retreated from a 1-week high after the Feb German ZEW survey of economic sentiment surged +27.0 to 5.4, stronger than expectations of +9.6 to -12.0. Stocks had earlier declined after Moody's Investors Service Downgraded Spain's debt rating to A3 from A1, Italy to A3 from A2 and Portugal to Ba3 from Ba2, all with negative outlooks. Slovakia, Slovenia and Malta also had their ratings cut, while Moody's said it may also strip France and the U.K. of their top Aaa ratings, citing Europe's debt crisis. The euro recovered from early losses and moved higher after Italian and Spanish borrowing costs fell when Italy sold 6 billion euros of bonds, the maximum target, with the yield on the 2-year securities at 3.41%, down from a similar auction last month at 4.83% and the lowest in 11 months, while Spain sold 5.45 billion euros of bills with a yield on the 12-month debt at 1.899%, down from 2.049% at a similar auction in Jan and the lowest in 16 months.
    • Asian stocks today closed mixed with Japan up +0.59%, China -0.39%, Australia -0.99%, South Korea -0.14%, India +0.43%. Asian stocks had weakened after Moody's downgraded the debt ratings of 6 European nations but Japan's Nikkei 225 Stock Index shed its losses and rallied up to a 3-1/2 month high when the BOJ unexpectedly added 10 trillion yen ($128 billion) to an asset-purchase program and said it will target 1% inflation "for the time being." The BOJ boosted its bond-purchase program to 65 trillion yen ($835 billion) from 55 trillion yen and said in a statement that it aimed to "clarify its monetary policy stance" and wants to "overcome deflation and achieve sustainable growth with price stability." The yen fell to a 2-1/2 week low against the dollar following the BOJ's actions, which fueled gains in banks and exporters.
    Overnight U.S. Stock News
    • March S&Ps this morning are trading up +1.90 points. The US stock market on Monday settled higher on reduced European sovereign debt concerns after Greece approved austerity measures needed to secure bailout funds: Dow Jones +0.57%, S&P 500 +0.68%, Nasdaq Composite +0.95%. The Nasdaq posted a fresh 11-year high. Bullish factors included (1) carry-over strength from a rally in European stocks after Greece's parliament approved austerity measures needed to ensure that it receives a second bailout package to keep it from default, (2) reduced concerns of a European liquidity crisis after the Euribor-OIS spread, a measure of European banks' reluctance to lend, dropped to 71 bp, the lowest in 4 months, (3) speculation China may ease its monetary policies further to stimulate growth after Chinese Premier Wen Jiabao said the nation needs to start "fine-tuning" economic policies this quarter, and (4) a rally in commodity and energy producers as a weaker dollar helped spur gains in most commodities.
    • Bearish factors Monday included (1) concern that weak economic growth in Asia may slow the global economy after Q4 Japan GDP contracted -0.6% q/q and -2.3% annualized, weaker than expectations of -0.3% q/q and -1.3% annualized and (2) a joint 173-page letter from the Clearing House Association, American Bankers Association, Securities Industry and Financial Markets Association and the Financial Services Roundtable that said the proposed Volcker Rule to ban propriety trading would "severely limit banking entities' ability to hedge their own risk, thereby increasing rather than decreasing the risk to banking entities and the financial system."
    Today's Market Focus
    • March 10-year T-notes this morning are up +2.5 ticks. T-note prices on Monday settled lower but well off of their worst levels on concern that Greek approval of austerity steps taken to receive its second bailout will be insufficient in ending the country's debt crisis: TYH2 -8.5, FVH2 -5.7, EDM2 -1.5. Bearish factors Monday included (1) reduced safe-haven demand for Treasuries after global stocks rallied when Greece's parliament approved austerity measures needed to ensure that it receives a second bailout package to keep it from default and (2) reduced concerns of a European liquidity crisis, which also dented safe-haven demand for Treasuries, after the Euribor-OIS spread, the difference between the euro interbank offered rate and overnight indexed swaps and a measure of European banks' reluctance to lend, dropped to 71 bp, the lowest in 4 months. Bullish factors included (1) the Fed's action to purchase $1.813 billion of Treasuries as part of its Operation Twist program to replace $400 billion of short-term debt in its portfolio with longer-term Treasuries in an effort to keep borrowing costs low, (2) skepticism that Greece's action to approve austerity measures needed for a second bailout will be enough to end the country's sovereign-debt crisis, and (3) comments from San Francisco Fed President Williams who said "there may still be considerable scope" for the Fed's monetary policy to affect medium and longer-term interest rates, even when the target for overnight lending rates is near zero.
    • The dollar index this morning is lower with the dollar/yen +0.51 yen and the euro/dollar +0.08 cents. The dollar index on Monday settled lower but well off its worst levels on concern that Greek approval of austerity measures will still be insufficient to keep it from default: Dollar Index -0.168, USDJPY -0.062, EURUSD -0.00111. Bearish factors included (1) reduced safe-haven demand for the dollar after global stock markets rallied when Greece's parliament approved austerity measures needed to ensure that it receives a second bailout package to keep it from default, (2) the statement from EU Economic and Monetary Affairs Commissioner Rehn that he's "confident" that Greece has done enough to ensure it receives the bailout, and (3) the decline in Italian borrowing costs to their lowest in 8 months after Italy sold Treasury bills at the maximum target of 12 billion euros, which is euro supportive. Bullish factors Monday included (1) the weaker than expected Q4 Japan GDP, which is yen negative and (2) concern that Greek approval of austerity measures for financial aid will be insufficient to stem the Greek sovereign-debt crisis.
    • Mar crude oil prices this morning are up +59 cents a barrel at a 3-week high and Mar gasoline is cents per gallon. Crude oil and gasoline prices Monday moved higher after the Greek parliament approved an austerity plan to receive financial aid, which reduced European debt concerns, and also after shippers said they will stop loading crude cargoes from Iran, which may limit global crude supplies: CLH12 +$2.24, RBH +3.76. Mar crude posted a 1-1/2 week high and Mar gasoline climbed to a 5-1/2 month high. Bullish factors included (1) the weaker dollar, which encourages investment demand in commodities, (2) the action by Greece's parliament to approve austerity measures needed to ensure a 130-billion-euro aid package, which reduces concern Greek will default on its debt and undercut the global economy and energy demand, (3) the statement from the Overseas Shipholding Group, Frontline Ltd. and owners that control more than 100 supertankers, that because of the EU's upcoming ban on Iranian crude oil in July, they will stop loading crude cargoes from Iran, which may curtail global crude supplies, and (4) strength in gasoline on concern the closure of several East Coast refineries will limit gasoline supplies as DOE data showed the U.S. East Coast processed 903,000 barrels of oil a day in the week ended Feb 3, down from 1.11 million a year earlier. A bullish factor was the bigger-than-expected contraction in Q4 Japan GDP, which signals reduced energy demand in the world's third-largest crude oil consumer.
    Today's U.S. Earnings Reports

    Earnings reports (confirmed releases, sorted by mkt cap): MET-MetLife (BEST earnings consensus $1.24), MMC-Marsh & McLennan (0.45), HCP-HCP Inc. (0.46), OMC-Omnicom Group (0.94), FTI-FMC Technologies (0.84), HST-Host Hotels & Resorts (0.03), ZNGA-Zynga (0.03), BWA-BorgWarner (1.17), AVP-Avon Products (0.53), WPI-Watson Pharmaceuticals (1.76), WSH-Willis Group Holdings PLC (0.48), KORS-Michael Kors Holdings Ltd. (0.06), FOSL-Fossil (1.77), HSP-Hospira (0.47), WTW-Weight Watchers International (0.86), GT-Goodyear Tire & Rubber (0.21).

    Global Financial Calendar

    Tuesday 2/14/12
    United States
    0745 ETICSC (Int?l Council of Shopping Centers) weekly retailer sales.
    0830 ETJan import price index expected +0.3% m/m and +7.2% y/y, Dec -0.1% m/m and +8.5% y/y.
    0830 ETJan retail sales expected +0.8% and +0.5% less autos, Dec +0.1% and -0.2% less autos.
    0845 ETPhiladelphia Fed President Charles Plosser speaks on the economic outlook at an event in Newark, DE.
    0855 ETRedbook weekly retailer sales.
    1000 ETDec business inventories expected +0.4%, Nov +0.3%.
    1000 ETTreasury Secretary Timothy Geithner testifies before the Senate Finance Committee on the president?s budget for fiscal 2013.
    1130 ETWeekly 4-week T-bill auction.
    1740 ETAtlanta Fed President Dennis Lockhart speaks on the economic outlook to the Global Independence Center in Sarasota, FL.
    France
    0245 ETQ4 French non-farm payrolls expected -0.3% q/q, Q3 unchanged q/q. Q4 French wages, Q3 +0.3% q/q.
    United Kingdom
    0430 ETDec U.K. DCLG house prices, Nov -0.3% y/y.
    0430 ETJan U.K. CPI expected -0.5% m/m and +3.6% y/y, Dec +0.4% m/m and +4.2% y/y.
    0430 ETJan U.K. core CPI expected +2.6% y/y, Dec +3.0% y/y.
    0430 ETJan U.K. RPI expected -0.4% m/m and +4.1% y/y, Dec +0.4% m/m and +4.8% y/y.
    0430 ETJan U.K. RPI ex-mortgage interest payments expected +4.2% y/y, Dec +5.0% y/y.
    Germany
    0500 ETFeb German ZEW survey economic sentiment expected +9.6 to -12.0, Jan +32.2 to -21.6. Feb ZEW survey current situation expected +2.1 to 30.5, Jan +1.6 to 28.4.
    Euro-Zone
    0500 ETDec Euro-Zone industrial production expected -1.2% m/m and -1.2% y/y, Nov -0.1% m/m and +0.1% y/y.

    Barchart.com provides Financial Quotes, Charts and Technical Analysis for Stock and Commodity Traders.

    Stocks: HST, MMC, HCP, OMC, FTI, ZNGA, BWA, AVP, ACT, WSH, KORS, FOSL, HSP, WTW, GT
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