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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. He earned a BS in Accounting and Business Administration from Berry College; a Juris Doctorate from the Woodrow Wilson School of Law; and attended... More
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  • Barchart Morning Call 3/20 0 comments
    Mar 20, 2012 10:23 AM | about stocks: ORCL, TIF, JBL, CTAS, LDOS, JEF, DSW, AIR, KKD
    Barchart Morning Call

    Barchart.com - 2 hrs 5 mins ago

    Overnight Developments

    • Global stocks this morning are lower with the Euro Stoxx 50 down -0.91% and Jun S&Ps down -8.30 points. The dollar and Treasuries are higher and most commodities retreated on signs of an economic slowdown in China. European automakers are leading a decline in equities, with BMW AG and Daimler AG both down more than 3%; after a deputy to the secretary general of the China Association of Automobile Manufacturers' said total vehicle deliveries to China, forecast to grow 8% this year, may fail to increase by even 5% because of the "difficult" economy. Mining companies also sold-off with BHP Billiton, the world's biggest mining company, down 3% after it said China's steel production has slowed as it switches its focus toward consumers and away from large building projects. Limiting weakness in the euro was the +0.4% increase in Feb German producer prices, weaker than expectations of +0.5% m/m.
    • Asian stocks today closed mostly lower with Japan closed for holiday, China down -1.73%, Australia -0.37%, South Korea -0.22%, India +0.25%. Concerns over a slowdown in Chinese growth undercut Asian markets with energy and raw-material producers leading the declines. China's refiners are raising fuel prices for the second time in less than 6 weeks as they hiked their prices for gasoline and diesel by 7%, the biggest increase in more than 2 years, which may also slow Chinese economic output further. Chinese shipping companies also slumped after Morgan Stanley cut China's transportation industry to "underweight" due to rising oil prices. Concerns over company profits were another negative for Chinese stocks after data from China's Finance Ministry showed profits for state-owned companies fell -11% in the first 2 months of this year.
    Overnight U.S. Stock News
    • June S&Ps this morning are trading down -8.30 points on Chinese growth concerns. The U.S. stock market Monday shook off early losses and closed higher on increased optimism in the economic outlook: Dow Jones +0.05%, S&P 500 +0.40%, Nasdaq Composite +0.75%. The S&P 500 posted a 3-3/4 year high and the Nasdaq rose to an 11-year high. Bullish factors Monday included (1) increased optimism in the economic outlook after Apple posted a record high when it reinstated its dividend and said it plans to buy back $10 billion of its stock, (2) increased M&A activity after UPS agreed to buy TNT Express for $6.8 billion, and (3) reduced liquidity concerns for European banks after the cost to borrow in dollars declined to the lowest in 7-1/2 months as the 3-month cross-currency basis swap, the rate banks pay to convert euro interest payments into dollars, fell to 58 bp below the euro interbank offered rate, the lowest since Aug 4.
    • Bearish factors Monday included (1) the weaker-than-expected Mar NAHB housing market index (unchanged at 28 versus expectations if +1 to 30), (2) comments from New York Fed President Dudley who said the U.S. expansion is not yet "out of the woods" as signs the U.S. economy is improving don't dispel "meaningful" risks to growth, including higher gasoline prices, fiscal cutbacks and a weak housing market, and (3) renewed Greek debt concerns after the IMF said Greece remains "accident prone" and may require further debt restructuring or additional financing from Euro-Zone countries.
    • Walt Disney (DIS) fell nearly 1% in European trading after the company said that its film division will report a fiscal Q2 operating loss of $80 million to $120 million as a result of the movie "John Carter."
    Today's Market Focus
    • June 10-year T-notes this morning are up +11.5 ticks as global equities slide. T-note prices Monday relinquished early gains and slumped to a 4-1/2 month low and settled lower on reduced safe-haven demand after stocks rallied and after hawkish Fed speak from Dallas Fed President Fisher: TYM2 -21.0, FVM2 -11.0, EDU2 -0.5. The 10-year T-note yield climbed to a 4-1/2 month high of 2.388%. Bearish factors Monday included (1) reduced safe-haven demand for Treasuries as the S&P 500 posted a new 3-3/4 year high, and (2) hawkish comments from Dallas Fed President Fisher who said the U.S. economy does not need any further easing measures as "there is plenty of liquidity." Bullish factors included (1) the weaker-than-expected Mar NAHB housing market index (unchanged at 28 versus expectations if +1 to 30), (2) comments from New York Fed President Dudley who said the U.S. expansion is not yet "out of the woods" as signs the U.S. economy is improving don't dispel "meaningful" risks to growth, including higher gasoline prices, fiscal cutbacks and a weak housing market, (3) renewed European debt concerns that increased safe-haven demand for Treasuries after the IMF said Greece remains "accident prone" and may require further debt restructuring or additional financing from Euro-Zone countries, and (4) Treasury data that showed OPEC used the dollar proceeds from its crude sales to boost its holding of U.S. government debt by 20%, or $43.3 billion, to a record 258.8 billion in the 12-months ended Jan 31.
    • The dollar index this morning is higher with the dollar/yen +0.32 yen and the euro/dollar -0.29 cents. The dollar index Monday gave back early gains and slipped to a 1-week low and settled lower on reduced safe-haven demand after stocks rallied: Dollar Index -0.341, USD/JPY -0.108, EUR/USD +0.00669. Bearish factors included (1) dollar negative comments from New York Fed President Dudley who said the signs the U.S. economy is improving don't dispel "meaningful" risks to growth, including higher gasoline prices, fiscal cutbacks and a weak housing market, and (2) reduced safe-haven demand for the dollar after the S&P 500 posted a fresh 3-3/4 year high and on reduced liquidity concerns after the cost for European banks to borrow in dollars declined to the lowest in 7-1/2 months as the 3-month cross-currency basis swap, the rate banks pay to convert euro interest payments into dollars, fell to 58 bp below the euro interbank offered rate, the lowest since Aug 4. Bullish factors included (1) dollar supportive comments from Dallas Fed President Fisher who said the U.S. economy does not need any further easing measures as "there is plenty of liquidity," and (2) increased safe-haven demand for the dollar after IMF Managing Director Lagarde warned that high oil prices, debt levels, and the risk of slowing growth in emerging markets threaten global economic stability.
    • Apr crude oil prices this morning are down -75 cents a barrel and Apr gasoline is -2.10 cents per gallon. Crude oil and gasoline prices Monday rebounded from early losses and settled higher after the dollar weakened and equities rallied: CLJ12 +$1.03, RBJ +1.09. Apr crude posted a 1-week high and Apr gasoline climbed to a 2-week high. Bullish factors included (1) the fall in the dollar index to a 1-week low, which fuels investment demand in commodities and (2) the rally in the S&P 500 to a 3-3/4 year high, which boosts confidence in the economic outlook and energy demand. Bearish factors included (1) the statement from Saudi Arabia's cabinet that it will seek to guarantee sufficient oil supply and will work for return of a "fair" oil price for consumers and (2) concern the European debt crisis will drag on and curtail economic growth and fuel demand after the IMF warned that Greece remains "accident prone" and may require further debt restructuring or additional financing from Euro-Zone countries.
    Today's U.S. Earnings Reports

    Earnings reports (confirmed releases, sorted by mkt cap): ORCL-Oracle (BEST earnings consensus $0.56), TIF-Tiffany (1.41), JBL-Jabil Circuit (0.58), CTAS-Cintas (0.52), SAI-SAIC Inc. (0.34), JEF-Jeffries Group (0.29), DSW-DSW Inc. (0.50), AIR-AAR Corp. (0.49), KKD-Krispy Kreme Doughnuts (0.06).

    Global Financial Calendar

    Tuesday 3/29/12
    United States
    0745 ETICSC (Int?l Council of Shopping Centers) weekly retailer sales.
    0830 ETFeb housing starts expected +0.1% to 700,000, Jan +1.5% to 699,000. Feb building permits expected +0.6% to 686,000, Jan +1.6% to 682,000.
    0855 ETRedbook weekly retailer sales.
    1000 ETTreasury Secretary Timothy Geithner testifies before the House Financial Services Committee on the international finance system.
    1130 ETWeekly 4-week T-bill auction.
    1245 ETFed Chairman Ben Bernanke delivers a lecture (1 of 4) at George Washington University School of Business on ?The Federal Reserve and its Role in Today?s Economy.?
    1730 ETMinneapolis Fed President Narayana Kocherlakota speaks at the Hyman P. Minsky Lecture Series at Washington University in St. Louis.
    Germany
    0300 ETFeb German producer prices expected +0.5% m/m and +3.2% y/y, Jan +0.6% m/m and +3.4% y/y.
    United Kingdom
    0530 ETFeb U.K. CPI expected +0.5% m/m and +3.3% y/y, Jan -0.5% m/m and +3.6% y/y. Feb core CPI expected +2.3% y/y, Jan +2.6% y/y.
    0530 ETFeb U.K. RPI expected +0.6% m/m and +3.5% y/y, Jan -0.6% m/m and +3.9% y/y. Feb RPI ex-mortgage interest payments expected +3.6% y/y, Jan +4.0% y/y.
    0700 ETMar U.K. CBI trends total orders expected -5, Feb -3.
    Euro-Zone
    1000 ETECB Executive Board member Peter Praet delivers a speech at the University of Frankfurt on ?The Role of Central Banking in the New Institutional Framework.?
    Japan
    n/aJapanese markets closed for Vernal Equinox Day.

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

    Stocks: ORCL, TIF, JBL, CTAS, LDOS, JEF, DSW, AIR, KKD
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