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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 8/12 0 comments
    Aug 12, 2014 10:16 AM | about stocks: DF, SYK, FSLR, WLFLO, ANF, CIE, MTZ, CVG, CZR, VTR, NUAN, KATE, VAL, CST, CRL, CIM, PCP, FOSL, MYGN, CREE, VIAV, URSZ, JKHY, THO

    BARCHART MORNING CALL

    Tuesday, August 12th, 2014View Older Reports

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    OVERNIGHT MARKETS AND NEWS

    September E-mini S&Ps (ESU14 +0.16%) this morning are up +0.19% on optimism that Q2 company earnings results will remain strong, while European stocks are down -0.17% after German investor confidence dropped for an eighth month. Asian stocks closed mixed: Japan +0.20%, Hong Kong +0.18%, China -0.35%, Taiwan -0.11%, Australia +1.34%, Singapore -0.09%, South Korea +0.01%, India +1.42%. Commodity prices are mixed. Sep crude oil (CLU14 -0.71%) is down -0.81% after the IEA reduced its estimates for 2014 global oil demand by -180,000 barrels a day and by -90,000 barrels a day for 2015. Sep gasoline (RBU14 -0.36%) is down -0.47%. Dec gold (GCZ14 +0.18%) is up +0.21%. Sep copper (HGU14 +0.22%) is up +0.30%. Agriculture and livestock prices are lower ahead of today's USDA Aug WASDE crop production report. The dollar index (DXY00 +0.21%) is up +0.24%. EUR/USD (^EURUSD) is down -0.33% after German Aug ZEW investor confidence fell to the lowest in 20 months. USD/JPY (^USDJPY) is up +0.10%. GBP/USD fell -0.03% to a 2-month low after a gauge of British retail sales fell for a second month. Sep T-note prices (ZNU14 -0.05%) are down -2 ticks.

    The German Aug ZEW survey expectations of economic growth slumped -18.5 to 8.6, a much bigger decline than expectations of -10.1 to 17.0 and the lowest in 20 months. The Aug ZEW survey current situation fell -17.5 to 44.3, a bigger drop than expectations of -7.8 to 54.0 and the lowest in 7 months.

    UK Jul BRC sales like-for-like unexpectedly fell for a second month as it slid -0.3% y/y, weaker than expectations of +0.9% y/y.

    Japan Jul PPI rose +0.3% m/m and +4.3% y/y, less than expectations of +0.4% m/m and +4.4% y/y.

    The Japan Jun industrial production was revised lower to -3.4% m/m and +3.1% y/y from the originally reported -3.3% m/m and +3.2% y/y. The -3.4% m/m drop is the largest monthly decline in 3-1/4 years. Jun capacity utilization fell -3.3% m/m, the biggest decline in 1-3/4 years.

    U.S. STOCK PREVIEW

    The Treasury today will sell $27 billion of 3-year T-notes. Today's July monthly budget statement is expected to show a deficit of -$96.0 billion in a turnaround from June's surplus of +$70.5 billion. There are 12 of the Russell 1000 companies that report earnings today with notable reports including Fossil Group (consensus $0.96), Valspar (1.16), Kate Spade (0.00), Cree (0.41), and JDS Uniphase (0.13).

    Equity conferences during the remainder of this week include: Pacific Crest Global Technology Leadership Forum on Mon-Tue, Jefferies Global Industrials Conference on Mon-Thu, Goldman Sachs Power, Utilities, MLP & Pipeline Conference on Tue, Wedbush Life Sciences Management Access Conference on Tue, 8/12/2014 on Tue-Wed, J.P. Morgan Auto Conference on Tue, Oppenheimer Technology, Internet & Communications Conference on Tue-Wed, JP Morgan Auto Conference on Wed, Canaccord Genuity Growth Conference on Wed-Thu, and Barclays Summer Utilities Conference on Thu.

    OVERNIGHT U.S. STOCK MOVERS

    Dean Foods (DF -3.86%) was upgraded to 'Outperform' from 'Neutral' at Credit Suisse.

    Stryker (SYK -0.33%) was upgraded to 'Buy' from 'Hold' at Needham.

    Citigroup added shares of First Solar (FSLR +1.98%) and Foot Locker (FT +0.55%) to its Focus List.

    Towers Watson (TW +1.65%) reported Q4 adjusted EPS of $1.34, higher than consensus of $1.25.

    Flowers Foods (FLO +0.35%) reported Q2 EPS of 21 cents, weaker than consensus of 24 cents, and then cut its fiscal 2014 EPS view to to 92 cents-98 cents from 98 cents-$1.05, below consensus of $1.02.

    Abercrombie & Fitch (ANF +0.39%) was upgraded to 'Buy' from 'Hold' at Stifel with a price target of $50.

    Paulson & Co. reported a 10.1% passive stake in Cobalt (CIE +2.46%) .

    MasTec (MTZ +4.50%) fell nearly 4% in after-hours trading after it reported Q2 adjusted EPS of 40 cents, right on consensus, but then lowered guidance on fiscal 2014 adjusted EPS to $1.55-$1.58, well below consensus of $1.82.

    Convergys (CVG +1.62%) reported Q2 adjusted EPS of 34 cents, better than consensus of 32 cents.

    Caesar's (CZR +2.32%) reported a Q2 EPS losss of -$3.24, over double consensus of a -$1.19 loss.

    Ventas (VTR +0.35%) reported Q2 normalized FFO of $1.12, higher than consensus of $1.09

    Nuance (NUAN +1.06%) tumbled 9% in after-hours trading after it reported Q3 EPS of 27 cents, right on consensus, but then lowered guidance on fiscal 2014 EPS to $1.03-$1.08, below consensus of $1.13.

    MARKET COMMENTS

    Sep E-mini S&Ps (ESU14 +0.16%) this morning are up +3.75 points (+0.19%). The S&P 500 index on Monday rallied to a 1-week high and closed higher: S&P 500 +0.28%, Dow Jones +0.10%, Nasdaq +0.58%. Bullish factors included (1) carry-over support from a rally in European stocks on reduced tensions in Ukraine after Russia said it had withdrawn troops from the Ukraine border, and (2) signs of optimism about the global economic outlook after Japan Jul consumer confidence climbed to an 8-month high and UK Jul Lloyds employment confidence rose to its highest level since the data series began in 2004.

    Sep 10-year T-notes (ZNU14 -0.05%) this morning are down -2 ticks. Sep 10-year T-note futures prices on Monday closed slightly lower. Bearish factors included (1) reduced safe-haven demand as global equity markets rallied after Russia said it had withdrawn troops from the Ukraine border, and (2) supply pressures as the Treasury prepares to auction $67 billion of T-notes and T-bonds this week in the Aug quarterly refunding that begins with Tuesday's $27 billion auction of 3-year T-notes. Closes: TYU4 -1.50, FVU4 -0.50.

    The dollar index (DXY00 +0.21%) this morning is up +0.197 (+0.24%). EUR/USD (^EURUSD) is down -0.0044 (-0.33%) and USD/JPY (^USDJPY) is up +0.10 (+0.10%). The dollar index on Monday closed higher. Bullish factors included (1) weakness in the yen as USD/JPY rallied after strength in global equity markets reduced the safe-haven demand for the yen, and (2) overall negative sentiment toward EUR/USD on speculation the Fed will tighten monetary policy before the ECB. Closes: Dollar index +0.077 (+0.09%), EUR/USD -0.00259 (-0.19%), USD/JPY +0.152 (+0.15%).

    Sep WTI crude oil (CLU14 -0.71%) this morning is down -79 cents (-0.81%) after the IEA cut its global oil demand forecasts for this year and next. Sep gasoline (RBU14 -0.36%) is down -0.0129 (-0.47%). Sep crude and gasoline prices on Monday closed higher: CLU4 +0.43 (+0.44%), RBU4 +0.0009 (+0.03%). Bullish factors included (1) a rally in global stock markets, which signals confidence in the economic outlook and energy demand, and (2) expectations that Wednesday's weekly EIA data will show crude stockpiles declined for the seventh consecutive week.

    GLOBAL EVENT CALENDAR08/12/2014

    US 1200 ET Aug WASDE crop production.
      1300 ET Treasury auctions $27 billion 3-year T-notes.
      1400 ET Jul monthly budget statement expected -$96.0 billion, Jun +$70.5 billion.
    JPN 0030 ET Revised Japan Jun industrial production, previous -3.3% m/m and +3.2% y/y.
      0030 ET Japan Jun capacity utilization, May -0.7% m/m
      1950 ET Japan Q2 GDP expected -7.0% q/q annualized, Q1 +6.7% q/q annualized. Q2 deflator expected +1.6% y/y, Q1 0.1% y/y. Q2 consumer spending expected -3.7% q/q, Q1 +2.2% q/q. Q2 business spending expected -3.0% q/q, Q1 +7.6% q/q.
    GER 0500 ET German Aug ZEW survey expectations of economic growth expected -10.1 to 17.0, Jul 27.1. Aug ZEW survey current situation expected -7.8 to 54.0, Jul 61.8.

    U.S. STOCK CALENDAR08/12/2014

    Company Name Ticker Time Event Description Period Estimate
    Kate Spade & Co KATE US Bef-mkt Q2 2014 Earnings Release Q2 2014 -0.003
    Valspar Corp/The VAL US Bef-mkt Q3 2014 Earnings Release Q3 2014 1.159
    Flowers Foods Inc FLO US Bef-mkt Q2 2014 Earnings Release Q2 2014 0.235
    CST Brands Inc CST US Bef-mkt Q2 2014 Earnings Release Q2 2014 0.487
    Towers Watson & Co TW US 6:00 Q4 2014 Earnings Release Q4 2014 1.252
    Charles River Laboratories International Inc CRL US 8:30 Investor Meeting Y 2014  
    Flowers Foods Inc FLO US 8:30 Q2 2014 Earnings Call Q2 2014  
    Ventas Inc VTR US 9:00 Q2 2014 Earnings Call Q2 2014  
    Towers Watson & Co TW US 9:00 Q4 2014 Earnings Call Q4 2014  
    CST Brands Inc CST US 9:00 Q2 2014 Earnings Call Q2 2014  
    Kate Spade & Co KATE US 10:00 Q2 2014 Earnings Call Q2 2014  
    Chimera Investment Corp CIM US 10:00 Q2 2014 Earnings Call Q2 2014  
    Valspar Corp/The VAL US 11:00 Q3 2014 Earnings Call Q3 2014  
    Precision Castparts Corp PCP US 16:00 Annual General Meeting    
    Fossil Group Inc FOSL US 16:30 Q2 2014 Earnings Call Q2 2014  
    Myriad Genetics Inc MYGN US 16:30 Q4 2014 Earnings Call Q4 2014  
    Cree Inc CREE US 17:00 Q4 2014 Earnings Call Q4 2014  
    JDS Uniphase Corp JDSU US 17:00 Q4 2014 Earnings Call Q4 2014  
    URS Corp URS US Aft-mkt Q2 2014 Earnings Release Q2 2014 0.74
    Fossil Group Inc FOSL US Aft-mkt Q2 2014 Earnings Release Q2 2014 0.964
    Jack Henry & Associates Inc JKHY US Aft-mkt Q4 2014 Earnings Release Q4 2014 0.595
    Cree Inc CREE US Aft-mkt Q4 2014 Earnings Release Q4 2014 0.409
    JDS Uniphase Corp JDSU US Aft-mkt Q4 2014 Earnings Release Q4 2014 0.13
    Myriad Genetics Inc MYGN US Aft-mkt Q4 2014 Earnings Release Q4 2014 0.464
    Tahoe Resources Inc THO CN Aft-mkt Q2 2014 Earnings Release Q2 2014
    Stocks: DF, SYK, FSLR, WLFLO, ANF, CIE, MTZ, CVG, CZR, VTR, NUAN, KATE, VAL, CST, CRL, CIM, PCP, FOSL, MYGN, CREE, VIAV, URSZ, JKHY, THO
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