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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 3/13 0 comments
    Mar 13, 2012 10:38 AM | about stocks: VIP, WFT, FDS, FRAN, TLP
    Barchart Morning Call

    Barchart.com - 2 hrs 34 mins ago

    Overnight Developments

    • Global stocks this morning are higher with the Euro Stoxx 50 up +1.10% and Jun S&Ps up +8.10 points at a fresh contract high. The main bullish factor for stocks and commodities today is the larger than expected increase in March German investor confidence on signs the sovereign debt crisis was abating. The Mar German ZEW economic sentiment rose +16.9 to 22.3, stronger than expectations of +4.6 to 10.0 and its best level in 21 months. Another positive for stocks was the +2.5% y/y increase in Feb French CPI, smaller than expectations of +2.6% y/y as inflation pressures recede. The euro fell back against the dollar after European Commissioner Barroso said the situation in Europe "remains fragile as we are not yet out of the crisis," while the head of the Euro-Zone finance ministers, Jean-Claude Juncker, said Spanish Prime Minister Rajoy's goal of a deficit of 5.8% of GDP "is dead." European finance chiefs are calling on Spain to cut an additional 0.5% of deficit out of the 2012 budget, 10-days after Prime Minister Rajoy raised Spain's deficit target for the year. The dollar rose against most currencies on speculation today's Feb U.S. retail sales will be strong enough to keep the Fed from signaling additional dollar negative easing measures at its FOMC meeting today.
    • Asian stocks today closed higher with Japan up +0.09%, China +1.00%, Australia +1.21%, South Korea +1.20%, India +1.28%. Japanese stocks closed higher as exporters rallied when the yen tumbled to a 10-3/4 month low against the dollar, although stocks fell back from their best levels after the BOJ kept the benchmark rate unchanged at 0.00% to 0.10% and also maintained its asset purchase target at 30 trillion yen following its 2-day policy meeting. Chinese stocks received a boost and finished stronger after Deutsche Bank raised its GDP forecast for China this year to 8.6% from 8.3%, while Nomura hiked its China GDP estimate to 8.2% from 7.9%.
    Overnight U.S. Stock News
    • June S&Ps this morning are trading up +8.10 points at a fresh contract high. The U.S. stock market Monday settled mixed as global growth concerns were offset by improvement in the U.S. labor market: Dow Jones +0.29%, S&P 500 +0.02%, Nasdaq Composite -0.16%. Bearish factors Monday included (1) concerns over a slowdown in the global economy after Feb China exports rose less than expected (+18.4% y/y versus expectations of +31.1% y/y), (2) concern that Greece may still need additional international support after Moody's Investors Service said that Greece faces "significant challenges" in the coming years to achieve fiscal targets required to satisfy conditions for international support and may not regain market access when its second bailout expires, and (3) weakness in bank stocks after the cost of insuring against default on European sovereign bonds increased to a 1-3/4 month high.
    • Bullish factors Monday included (1) continued improvement in the U.S. labor market after the Feb Conference Board Employment Trends Index rose to 107.5, the highest in 3-1/2 years, (2) comments from the head of the Euro-Zone finance ministers, Jean-Claude Juncker, who said he had "no doubt" that a second bailout program for Greece would be approved, and (3) speculation that recent weak economic data from China will prompt the Chinese government into additional easing measures to spur economic growth.
    • Yahoo! (NASDAQ:YHOO) rose 1.8% in pre-market trading after it filed a complaint in federal court late yesterday seeking triple damages and an order barring Facebook from infringing on 10 of its patents.
    Today's Market Focus
    • June 10-year T-notes this morning are down -3.5 ticks. T-note prices Monday strengthened and settled higher on global economic growth concerns after Feb China exports rose less than expected along with concern Greece will need further international assistance after its debt swap: TYM2 +1.0, FVM2 -1.2, EDU2 unchanged. Bullish factors Monday included (1) the smaller-than-expected increase in Feb China exports, which signals a slowdown in global economic growth, (2) the statement from Moody's Investors Service that Greece faces "significant challenges" in the coming years to achieve fiscal targets required to satisfy conditions for international support and may not regain market access when its second bailout expires, (3) strong demand for U.S. government debt by U.S. banks after Fed data showed commercial lenders purchased $78.2 billion of Treasuries and securities of agencies in Jan and Feb of this year, compared with purchases of $62.6 billion for all of 2011, and (4) decent demand for the Treasury's $32 billion auction of 3-year T-notes that had a bid-to-cover ratio of 3.44, higher than the 12-auction average of 3.34. Bearish factors included (1) the increase in the Feb Conference Board Employment Trends Index to 107.5, the highest in 3-1/2 years and another sign of improvement in the U.S. labor market and (2) supply pressures ahead of the Treasury's $21 billion auction of 10-year T-notes on Tuesday.
    • The dollar index this morning is stronger with the dollar/yen +0.46 yen and the euro/dollar -0.44 cents. The dollar index Monday rallied up to a 1-1/2 month high early but then shed its advance and settled lower on reduced safe-haven demand as U.S. job prospects brightened in Feb: Dollar Index -0.151, USD/JPY -0.214, EUR/USD +0.00322. Bearish factors included (1) reduced safe-haven demand for the dollar after the Feb Conference Board Employment Trends Index rose 1.4% to 107.5, the highest in 3-1/2 years and another sign the labor market is gaining traction, and (2) strength in the yen against the dollar after Jan Japan machine orders rose more than expected. Bullish factors included (1) increased safe-haven demand for the dollar after the cost of insuring against default on European sovereign bonds increased as the Markit iTraxx SovX Western Europe Index of credit-default swaps on 15 governments rose 4 bp to 355, a 1-3/4 month high and (2) weakness in the Chinese yuan against the dollar after the Feb China trade deficit widened to -$31.48 billion, larger than expectations of -$5.35 billion and the widest in 22 years.
    • Apr crude oil prices this morning are up +45 cents a barrel and Apr gasoline is +1.43 cents per gallon. Crude oil and gasoline prices Monday closed lower after Chinese economic data signaled slower growth in the world's second-largest consumer of crude oil: CLJ12 -$1.06, RBJ -0.94. Bearish factors included (1) the smaller-than-expected increases in Feb China exports, which signals slower economic growth and energy demand, (2) the statement from the secretary-general of the IEA who said "even now the global oil market is well-supplied" and that new discoveries are enough to replace depleting oil fields, and (3) comments from UAE oil minister Mohamed Al-Hamli who tried to jawbone prices lower when he said crude prices are "on the high side," along with comments from Oman Oil Minister Al-Rumhy who said oil prices are "a bit high" and should be at $100 a barrel. Bullish factors included (1) the weaker dollar, which encourages investment demand in commodities and (2) the stronger than expected Jan Japan machine orders, which signals greater-than-expected fuel consumption in the world's third-largest oil consumer.
    Today's U.S. Earnings Reports

    Earnings reports (confirmed releases, sorted by mkt cap): VIP-VimpelCom Ltd. (BEST earnings consensus $0.17), WFT-Weatherford International Ltd. (0.32), FDS-Factset Research Systems (1.12), FRAN-Francesca's Holdings (0.17), TLP-Transmontaigne Partners LP (0.55).

    Global Financial Calendar

    Tuesday 3/13/12
    United States
    0745 ETICSC (Int?l Council of Shopping Centers) weekly retailer sales.
    0830 ETFeb retail sales expected +1.1% and +0.7% less autos, Jan +0.4% and +0.7% less autos.
    0855 ETRedbook weekly retailer sales.
    0900 ETFOMC begins 1-day policy meeting.
    1000 ETMar IBD/TIPP economic optimism expected +0.6 to 50.0, Feb +1.9 to 49.4.
    1000 ETJan business inventories expected +0.5%, Dec +0.4%.
    1130 ETWeekly 4-week T-bill auction.
    1300 ETTreasury auctions $21 billion 10-year T-notes.
    1415 ETFOMC announces interest rate decision (no change expected to the federal funds rate target range of zero to 0.25%).
    France
    0230 ETFeb France CPI (EU harmonized) expected +0.5% m/m and +2.6% y/y, Jan -0.4% m/m and +2.6% y/y.
    United Kingdom
    0530 ETJan U.K. DCLG house prices, Dec +0.1% y/y.
    Germany
    0600 ETMar German ZEW economic sentiment expected +4.6 to 10.0, Feb +27.0 to 5.4. Mar ZEW current situation expected +1.2 to 41.5, Feb +11.9 to 40.3.
    Euro-Zone
    0730 ETECB President Mario Draghi speaks at an event in Paris.
    Japan
    1950 ETQ1 Japan BSI all industry, Q4 -2.5 q/q. Q1 BSI large manufacturing, Q4 -6.1 q/q.

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

    Stocks: VIP, WFT, FDS, FRAN, TLP
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