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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 9/3 0 comments
    Sep 3, 2014 9:47 AM | about stocks: KSS, SSNLF, BAC, AMT, CNK, CHRW, TOL, HELE, ACHN, CNQR, ZNGA, CCI, NAV, F, HRB, PVH, HUM, LUK

    BARCHART MORNING CALL

    Wednesday, September 3rd, 2014

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    OVERNIGHT MARKETS AND NEWS

    September E-mini S&Ps (ESU14 +0.30%) this morning are up +0.41% at a fresh record high and European stocks are up +1,24% at a 1-3/4 month high after Russia and Ukraine discussed steps toward a cease fire. European stocks also gained on speculation the ECB may add to stimulus measures when it meets Thursday after Eurozone Jul retail sales and Aug services growth slowed more than expected. The ruble strengthened and Russia's Micex Stock Index surged over 2% after Ukraine President Poroshenko and Russian President Putin discussed the steps needed for an immediate cease-fire in the contested eastern Ukraine region of Donbass. Asian stocks closed mostly higher: Japan +0.38%, Hong Kong +2.30%, China +0.94%, Taiwan +0.54%, Australia -0.04%, Singapore +0.62%, South Korea -0.13%, India +0.45%. China's Shanghai Stock Index rose to a 1-1/4 year high after the China Aug non-manufacturing index showed growth picked up and Japan's Nikkei Stock Index advanced to a 7-1/4 month high led by a rally in exporters after the yen fell to a 7-3/4 month low against the dollar, which boosts the prospects for exporters' earnings. Commodity prices are mixed. Oct crude oil (CLV14 +1.09%) is up +0.93%. Oct gasoline (RBV14 +1.29%) is up +1.26%. Dec gold (GCZ14 +0.36%) is up +0.24%. Dec copper (HGZ14 -0.43%) is down -0.29% at a 2-week low on signs of increased global supplies after LME copper inventories jumped +7,000 MT to a 1-1/4 month high. Agriculture prices are lower with Dec corn down -0.62% at a 3-week low and Nov soybeans down -0.51% at a 1-week low after the weekly USDA Crop Progress report released late yesterday showed crop conditions improved over the past week. Livestock prices are higher. The dollar index (DXY00 -0.18%) is down -0.15%. EUR/USD (^EURUSD) is up +0.11%. USD/JPY (^USDJPY) is up +0.02% at a 7-3/4 month high. Dec T-note prices (ZNZ14 -0.25%) are down -10.5 ticks at a 3-week low.

    Eurozone Jul retail sales fell -0.4% m/m, weaker than expectations of -0.3% m/m and the largest decline in 7 months. On an annual basis, Jul retail sales rose +0.8% y/y, less than expectations of +0.9% y/y.

    The Eurozone Aug Markit composite PMI was revised lower to 52.5 from the previously reported 52.8, the slowest pace of expansion in 8 months.

    The German Aug Markit services PMI was revised lower to 54.9 from the originally reported 56.4.

    The UK Aug Markit/CIPS services PMI unexpectedly rose +1.4 to 60.5, better than expectations of -0.6 to 58.5 and the fastest pace of expansion in 10 months.

    The China Aug non-manufacturing PMI rose +0.2 to 54.4.

    U.S. STOCK PREVIEW

    The market is expecting today's Aug total vehicle sales report to edge higher to 16.50 million units from 16.40 million units in July. The market is expecting today's July factory orders report to show a sharp increase of +10.8%, adding to June's increase of +1.1%. The markets will be assessing today's Fed Beige Book to gauge the prospects for the U.S. economy going into autumn and winter. There are four of the Russell 1000 companies that report earings today: Navistar (consensus -$0.71), Toll Brothers (0.45), H&R Block (-0.39), PVH Corp (1.43).

    Equity conferences during the remainder of this week include: Citi Global Technology Conference on Tue-Thu, Barclays CEO Energy-Power Conference on Tue-Thu, Cowen Global Transportation & Aerospace Defense Conference on Wed, Barrington Research Fall Investment Conference on Wed, Brean Capital Global Tech Conference on Wed, FBR Inaugural Healthcare Conference on Wed, Goldman Sachs Global Retailing Conference on Wed, Drexel Hamilton Telecom, Media, and Technology Conference on Wed-Thu, KBW Insurance Conference on Wed-Thu, Robert W. Baird & Co Health Care Conference on Wed-Thu, Barclays Back to School Conference on Wed-Fri, Vertical Research Partners Industrial Conference on Wed-Fri, Mizuho Investment Conference on Thu, Bloomberg Sports Business Summit on Thu, Citi Biotech Conference on Thu, Nomura Digital Media Conference on Thu, Renewable Energy India Expo 2014 on Thu, and Scotia Capital, Inc Financial Summit on Thu.

    OVERNIGHT U.S. STOCK MOVERS

    Kohl's (KSS +0.54%) was upgraded to 'Buy' from 'Hold' at Maxim.

    According to DigiTimes, Samsung (SSNLF -1.67%) has offered price cuts for its 7 and 10-inch tablets while Lenovo (LNVGY +3.11%) has reduced the price for its 8 and 10-inch entry level tablets.

    Bank of America (BAC +1.12%) was downgraded to 'Neutral' from 'Buy' at Nomura.

    American Tower (AMT +0.18%) Was downgraded to 'Equal Weight' from 'Overweight' at Morgan Stanley.

    Cinemark (CNK +1.30%) was upgraded to 'Buy' from 'Hold' at Stifel.

    C.H. Robinson (CHRW +0.16%) was downgraded to 'Hold' from 'Buy' at Stifel.

    Toll Brothers (TOL +0.11%) reported Q3 EPS of 53 cents, higher than consensus of 45 cents.

    Helen of Troy (HELE +1.60%) fell over 9% in after-hours trading after it lowered guidance on its fiscal 2015 revenue estimate, ex-Healthy Directions, to $1.275 billion-$1.30 billion, below consensus of $1.39 billion.

    A Capital Management reported an 18.1% passive stake in Achillion (ACHN +6.05%) .

    Concur Technologies (CNQR +0.57%) jumped over 14% in after-hours trading after Bloomberg reported that the company has explored selling itself and is said to have approached SAP and Oracle to gauge interest.

    Eminence Capital reported a 5.1% passive stake in Zynga (ZNGA +4.15%) .

    Crown Castle International (CCI +0.03%) rose over 1% in after-hours trading after it announced that it received a favorable private letter from the Internal Revenue Service with respect to Crown Castle's real property and rents from real property, respectively, under the rules governing real estate investment trusts, or REITS.

    MARKET COMMENTS

    Sep E-mini S&Ps (ESU14 +0.30%) this morning are up +8.25 points (+0.41%) at a fresh record high. The S&P 500 Index on Tuesday fell back from a new record high and closed slightly lower: S&P 500 -0.05%, Dow Jones -0.18%, Nasdaq +0.32%. Bearish factors included (1) concern about slowing global economic growth after the Eurozone Aug Markit manufacturing PMI was revised slightly lower to 50.7 from 50.8, the slowest pace of expansion in 13 months, and after the China Aug manufacturing PMI fell -0.6 to 51.1, a larger decline than expectations of -0.5 to 51.2, and (2) concern that the unexpected +1.9 point increase in the Aug ISM manufacturing index to a 3-1/3 year high of 59.0 will prompt the Fed to raise interest rates sooner than expected.

    Dec 10-year T-notes (ZNZ14 -0.25%) this morning are down -10.5 ticks at a 3-week low. Dec 10-year T-note futures prices on Tuesday slipped to a 1-week low and closed lower. Negative factors included (1) speculation the Fed may be nearer to raising interest rates after the Aug ISM manufacturing index unexpectedly expanded at the fastest pace in 3-1/3 years, and (2) reduced safe-haven demand for T-notes after the S&P 500 posted a new record high. Closes: TYZ4 -17.50, FVZ4 -9.75.

    The dollar index (DXY00 -0.18%) this morning is down -0.123 (-0.15%). EUR/USD (^EURUSD) is up +0.0015 (+0.11%) and USD/JPY (^USDJPY) is up +0.02 (+0.02%) at a 7-3/4 month high. The dollar index on Tuesday jumped to a 13-1/2 month high and closed higher. Bullish factors included (1)optimism in the U.S. economic outlook after the Aug ISM manufacturing index unexpectedly expanded at the fastest pace in 3-1/3 years, (2) weakness in EUR/USD which slumped to an 11-3/4 month low on speculation the ECB will expand easing measures at Thursday's policy meeting, and (3) weakness in the yen after USD/JPY surged to a 7-1/2 month high on speculation that Japan's Government Pension Investment Fund, the world's largest pool of retirement savings, will reduce holdings of Japanese assets in favor of foreign holdings. Closes: Dollar index +0.244 (+0.33%), EUR/USD unch, USD/JPY +1.084 (+1.04%).

    Oct WTI crude oil (CLV14 +1.09%) this morning is up +86 cents (+0.93%) and Oct gasoline (RBV14 +1.29%) is up +0.321 (+1.26%). Oct crude and gasoline prices on Tuesday closed sharply lower with Oct crude at a 1-week low and Oct gasoline at a 10-month nearest-futures low: CLV4 -3.08 (-3.21%), RBV4 -0.0711 (-2.71%). Bearish factors included (1) the rally in the dollar index to a 13-1/2 month high, (2) the larger-than-expected decline in the China Aug manufacturing PMI, which signals reduced energy demand in China, the world' second-largest crude consumer, and (3) the increase in OPEC Aug crude oil production to 31.033 million bpd, the most in a year.

    GLOBAL EVENT CALENDAR09/03/2014

    US 0700 ET Weekly MBA mortgage applications, previous +2.8% with purchase sub-index +2.6% and refi sub-index +2.8%.
      0945 ET Aug New York ISM, Jul +7.6 to 68.1.
      1000 ET Jul factory orders expected +11.0%, Jun +1.1%.
      1400 ET Fed Beige Book.
      n/a Aug total vehicle sales expected 16.60 million, Jul 16.40 million. Aug domestic vehicle sales expected 13.20 million, Jul 12.95 million.
    GER 0355 ET Revised German Aug Markit services PMI, previous 56.4.
    EUR 0400 ET Revised Eurozone Aug composite PMI, previous -1.0 to 52.8.
      0500 ET Eurozone Jul retail sales expected -0.3% m/m and +0.9% y/y, Jun +0.4% m/m and +2.4% y/y.
      0500 ET Revised Eurozone Q2 GDP, previous unch q/q and +0.7% y/y.
    UK 0430 ET UK Aug Markit/CIPS services PMI, Jul 59.1.

    U.S. STOCK CALENDAR09/03/2014

    Company Name Ticker Time Event Description Period Estimate
    Navistar International Corp NAV US Bef-mkt Q3 2014 Earnings Release Q3 2014 -0.714
    Toll Brothers Inc TOL US Bef-mkt Q3 2014 Earnings Release Q3 2014 0.453
    Navistar International Corp NAV US 9:00 Q3 2014 Earnings Call Q3 2014  
    Ford Motor Co F US 9:30 August 2014 Sales and Revenue Release 2014  
    Ford Motor Co F US 10:00 August 2014 Sales and Revenue Call 2014  
    Toll Brothers Inc TOL US 14:00 Q3 2014 Earnings Call Q3 2014  
    H&R Block Inc HRB US 16:30 Q1 2015 Earnings Call Q1 2015  
    H&R Block Inc HRB US Aft-mkt Q1 2015 Earnings Release Q1 2015 -0.387
    PVH Corp PVH US Aft-mkt Q2 2015 Earnings Release Q2 2015 1.428
    Humana Inc HUM US   Investor Meeting - Day 1 Y 2014  
    Leucadia National Corp LUK US   Investor Day Y 2014
    Stocks: KSS, SSNLF, BAC, AMT, CNK, CHRW, TOL, HELE, ACHN, CNQR, ZNGA, CCI, NAV, F, HRB, PVH, HUM, LUK
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