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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 2/29 0 comments
    Feb 29, 2012 3:18 PM | about stocks: COST, EIX, SPLS, JOY, CNP, PETM, MDR, BWXT, EVEP, BID, PCP, CRI, ACHI, GEF, MDVN

    Barchart Morning Call

    Barchart.com - Wed Feb 29, 7:00AM CST

    Overnight Developments

    • Global stocks this morning are mostly higher with the Euro Stoxx 50 up +0.37% and Mar S&Ps up +2.60 points. Treasuries and the euro declined, while stocks rallied after the ECB allotted 529.5 billion euros in 3-year funds, more than estimates of 470 billion euros. Euro-Zone inflation unexpectedly slowed in Jan as the Jan Euro-Zone CPI rose +2.6% y/y, weaker than expectations of +2.7% y/y, while Jan core CPI climbed +1.5% y/y, weaker than expectations of +1.7% y/y. Stock gains were limited though, after Jan French consumer spending unexpectedly declined for a second month, -0.4% m/m versus expectations of +0.2% m/m, as the rise in French jobless claims to a 12-year high in Jan restrained household confidence. The British pound rose to a 3-1/2 month high against the dollar after Jan U.K. mortgage approvals climbed +58,728, more than expectations of +54,000 and the highest in 2-1/2 years as first-time buyers rushed to take advantage of a property tax exemption before it ends next month.
    • Asian stocks today closed mostly higher with Japan up +0.01%, China -1.06%, Australia +0.84%, South Korea +1.40%, India +0.12%. Asian stocks closed mostly higher after Feb U.S. consumer confidence beat expectations and factory output in Japan and South Korea gained, which bolstered optimism for global demand. Japan's Nikkei 225 Stock Index posted a 6-3/4 month high after Jan Japan industrial production rose +2.0% m/m, stronger than expectations of +1.5% m/m, while South Korea's Kospi Stock Index also posted a 6-3/4 month high after Jan South Korean industrial production unexpectedly surged +3.3% m/m, when expectations were for a decline of -0.5% m/m. China's Shanghai Stock Index finished lower as property developers and builders declined on concern the government will retain curbs to keep housing prices down this year.
    Overnight U.S. Stock News
    • March S&Ps this morning are trading up +2.60 points. The U.S. stock market Tuesday settled higher on carry-over strength from European stocks on optimism that Wednesday's liquidity injection by the ECB will help spur growth along with the larger-than-expected increase in Feb U.S. consumer confidence: Dow Jones +0.18%, S&P 500 +0.34%, Nasdaq Composite +0.69%. The S&P 500 posted a 3-3/4 year high and the Nasdaq posted an 11-year high. Bullish factors Tuesday included (1) optimism the European economy can overcome the negative effects of its debt crisis after Feb Euro-Zone economic confidence rose more than expected along with expectations the ECB's second round of unlimited 3-year loans to European banks on Wednesday will stimulate economic growth, (2) the larger-than-expected increase in Feb U.S. consumer confidence that rose to its best level in a year (+9.3 to 70.8, stronger than expectations of +1.9 to 63.0), and (3) the stronger-than-expected Feb Richmond Fed manufacturing index which climbed to its best level in a year (+8 to 20, better than expectations of +1 to 13).
    • Bearish factors included (1) the action by Standard & Poor's late Monday cut Greece's credit ratings to "selective default," (2) the larger-than-expected decrease in Jan U.S. durable good orders which had their biggest decline in 3 years (-4.0% -3.2% ex transportation, weaker than expectations of -1.0% and unchanged ex transportations, and (3) concern the U.S. housing crisis has yet to hit bottom after the greater-than-expected decline in Dec S&P/CaseShiller composite-20 home prices (-0.5% m/m and -4.0% y/y, weaker than expectations of -0.4% m/m and -3.6% y/y).
    Today's Market Focus
    • March 10-year T-notes this morning are down -1.5 ticks. T-note prices Tuesday climbed to a 3-week high and settled higher for a second day on increased safe-haven demand on concern the European sovereign-debt crisis has yet to be contained along with a plunge in Jan U.S. durable good orders: TYH2 +1.5, FVH2 +2.0, EDU2 +2.0. Bullish factors Tuesday included (1) increased safe-haven demand for Treasuries after Standard & Poor's late Monday cut Greece's credit ratings to "selective default," (2) the larger-than-expected decrease in Jan U.S. durable good orders which had their biggest decline in 3 years (-4.0% -3.2% ex transportation, weaker than expectations of -1.0% and unchanged ex transportation, (3) the greater-than-expected decline in Dec S&P/CaseShiller composite-20 home prices (-0.5% m/m and -4.0% y/y, weaker than expectations of -0.4% m/m and -3.6% y/y), and (4) the Fed's purchase of $4.952 billion of long-term Treasuries as part of its Operation Twist program to replace $400 billion of shorter-maturity Treasuries in its holdings with longer-term debt to cap borrowing costs. Bearish factors included (1) the larger-than-expected increase in Feb U.S. consumer confidence that rose to its best level in a year (+9.3 to 70.8, stronger than expectations of +1.9 to 63.0), (2) the stronger-than-expected Feb Richmond Fed manufacturing index which climbed to its best level in a year (+8 to 20, better than expectations of +1 to 13), and (3) reduced safe-haven demand for Treasuries as the equity market strengthened.
    • The dollar index this morning is higher with the dollar/yen -0.03 yen and the euro/dollar -0.08 cents. The dollar index Tuesday sank to a 2-1/2 month low settled lower on reduced safe-haven demand after the stock market rallied along with strength in the euro after Italian borrowing costs fell: Dollar Index -0.295, USDJPY -0.148, EURUSD +0.00601. Bearish factors included (1) reduced safe-haven demand for the dollar after the S&P 500 posted a 3-3/4 year high and (2) strength in the euro after Italy sold 3.75 billion euros of 10-year bonds, its maximum target, at a yield of 5.5%, down from 6.08% at a similar auction last month and the lowest yield in 5-months. Bullish factors included (1) the larger-than-expected increase in Feb U.S. consumer confidence to its best level in a year and (2) increased safe-haven demand for the dollar after the action by Standard & Poor's late Monday to cut Greece's credit ratings to "selective default" after Greece negotiated the biggest sovereign-debt restructuring in history.
    • Apr crude oil prices this morning are up +45 cents a barrel and Apr gasoline is +2.38 cents per gallon. Crude oil and gasoline prices Tuesday settled lower for a second day after Jan U.S. durable goods orders plunged and Dec U.S. home prices weakened more than expected, which may signal slower growth and fuel demand: CLJ12 -$2.01, RBJ -6.80. Bearish factors included (1) concern over economic growth and energy demand after Jan US durable good orders fell by the most in 3 years, and (2) the larger-than-expected decline in Dec S&P/CaseShiller U.S. home prices, which indicates the housing slump continues and may keep fuel demand constrained. Bullish factors included (1) the fall in the dollar index to a 2-1/2 month low, which benefits the prices of most commodities and (2) the larger than expected increase in Feb U.S. consumer confidence to its best level in a year, which may lead to an increase in consumer spending and fuel demand. Expectations for Wednesday's weekly inventory report from the DOE are for crude oil supplies to climb +1.1 million bbl, gasoline stockpiles to fall -350,000 bbl, distillate inventories to decline -500,000 bbl and the refinery utilization rate to climb +0.3 to 85.8% of capacity.
    Today's U.S. Earnings Reports

    Earnings reports (confirmed releases, sorted by mkt cap): COST-Costco Wholesale (BEST earnings consensus $0.87), EIX-Edison International (0.46), SPLS-Staples (0.41), JOY-Joy Global (1.36), CNP-CenterPoint Energy (0.19), PETM-PetSmart (0.90), MDR-McDermott International (0.19), BWC-Babcock & Wilcox (0.41), EVEP-EV Energy Partner LP (0.58), BID-Sotheby's (1.25), TIE-Titanium Metals (0.16), CRI-Carter's (0.44), AH-Accretive Health (0.16), GEF-Greif (0.59), MDVN-Medivation (-0.30).

    Global Financial Calendar

    Wednesday 2/29/12
    United States
    0700 ET Weekly MBA mortgage applications, previous -4.5% with purchase mortgage sub-index -2.9% and refinancing sub-index -4.8%.
    0830 ET Revised Q4 U.S. GDP expected +2.8% annualized, previous +2.8% annualized. Q4 personal consumption, previous +2.0%. Q4 GDP price index, previous +0.4%. Q4 core PCE, previous +1.1% q/q.
    0930 ET Dallas Fed President Richard Fisher speaks at the Mexican Stock Exchange on the U.S. economy.
    0945 ET Feb Chicago PMI expected +0.8 to 61.0, Jan -2.0 to 60.2.
    1000 ET Fed Chairman Ben Bernanke delivers semi-annual monetary policy report to the House Financial Services Committee.
    1025 ET Dallas Fed President Richard Fisher speaks on fiscal reforms at an event in Mexico City.
    1300 ET Philadelphia Fed President Charles Plosser speaks to economists at the Cornell Club in New York.
    1400 ET Fed?s Beige Book.
    Japan
    0000 ET Jan Japan construction orders, Dec +1.5% y/y.
    0000 ET Jan Japan housing starts expected -3.3% y/y to 808,000. Dec -7.3% y/y to 783,000.
    1850 ET Q4 Japan capital spending excluding software expected -7.4% y/y, Q3 -11.0% y/y Q4 capital spending expected -6.5% y/y, Q3 -9.8% y/y.
    Germany
    0200 ET Jan German import price index expected +0.7% m/m and +3.0% y/y, Dec +0.3% m/m and +3.9% y/y.
    0355 ET Feb German unemployment change expected -5,000, Jan -34,000. Feb unemployment rate expected unchanged at 6.7%, Jan -0.1 to 6.7%.
    France
    0245 ET Jan French consumer spending expected +0.2% m/m and -2.1% y/y, Dec -0.7% m/m and -3.1% y/y.
    United Kingdom
    0430 ET Jan U.K. net consumer credit expected +0.3 billion pounds, Dec -0.4 billion pounds.
    0430 ET Jan U.K. mortgage approvals expected +54,000, Dec +52,900.
    0430 ET Jan U.K. M4 money supply, Dec -1.4% m/m and -2.5% y/y.
    Euro-Zone
    0500 ET Jan Euro-Zone CPI expected-0.8% m/m and +2.7% y/y, Dec +0.3% m/m and +2.7% y/y. Jan core CPI expected +1.7% y/y, Dec +1.6% y/y.
    1100 ET Jean-Claude Juncker, leader of the Euro-Zone finance ministers, speaks to the European Parliament?s economic and monetary affairs committee and holds a press conference afterward.
    Canada
    0900 ET Dec Canada Teranet/National Bank HPI, Nov -0.2% m/m and +7.1% y/y.
    CHI
    2000 ET Feb China manufacturing PMI expected +0.3 to 50.8, Jan +0.2 to 50.5.

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

    Stocks: COST, EIX, SPLS, JOY, CNP, PETM, MDR, BWXT, EVEP, BID, PCP, CRI, ACHI, GEF, MDVN
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