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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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Marketocracy Capital Management
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  • Barchart Morning Call 3/21 0 comments
    Mar 21, 2012 8:08 AM | about stocks: GIS, DFS, CLC, ATU, MFRM, FRED
    Barchart Morning Call

    Barchart.com - 4 mins ago

    Overnight Developments

    • Global stocks this morning are mostly higher with the Euro Stoxx 50 up +0.13% and Jun S&Ps up +2.90 points. The dollar index slipped to a 1-1/2 week low, Treasuries and bunds fell and stocks and commodities gained after Greek Prime Minister Papademos won parliamentary approval for a 130 billion-euro bailout. Oracle is 2% higher in European trading after the company late yesterday said that new software-license sales, an indicator of future revenue growth, rose 7% in fiscal Q3 to $2.37 billion, well ahead of analysts' estimates of 3% growth. Another positive for stocks was the action by Germany's RWI Economic Institute to raise its 2012 German GDP forecast to +1.0% from a December forecast of +0.6%. Gains in European stocks were limited after former ECB Council member Weber said "the European sovereign-debt crisis will continue for several rounds."
    • Asian stocks today closed mostly lower with Japan down -0.55%, China +0.13%, Australia -0.49%, South Korea -0.70%, India +1.65%. Most Asian stock markets weakened on concern a Chinese economic slowdown will curb demand for the region's exports. Asian carmakers fell after an official at the China Association of Automobile Manufacturers yesterday said auto sales will probably miss their 8% growth forecast this year amid rising fuel costs and a slowing economy. Asian commodity producers also finished lower after Australia, the largest exporter of iron ore and coal, cut its forecast for minerals and energy export earnings this fiscal year by 3.2% amid expectations of lower commodity prices. Japanese stocks and the yen were undercut after the Jan Japan all industry activity index fell -1.0% m/m, weaker than expectations of -0.7% m/m.
    Overnight U.S. Stock News
    • June S&Ps this morning are trading up +2.90 points. The U.S. stock market Tuesday declined on concern a slowdown in the Chinese economy will slow the global economy as well: Dow Jones -0.52%, S&P 500 -0.30%, Nasdaq Composite -0.14%. The Nasdaq posted a fresh 11-year high. Bearish factors Tuesday included (1) weakness in industrial companies and commodity producers over Chinese economic growth concerns after BHP Billiton, the world's largest mining company, said Chinese steel production was slowing, and after an official 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, (2) concern the Chinese economy may slow even further after China's refiners raised 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, and (3) long liquidation pressures as the S&P 500 has soared over +22% in the past 3-months to Monday's 3-3/4 year high.
    • Bullish factors Tuesday included (1) the larger-than expected increase in Feb U.S. building permits to their highest level in 3-1/3 years (+5.1% to 717,000 versus expectations of +0.4% to 685,000), which signals increased homebuilding in the months ahead, and (2) the slide in crude oil pries after Saudi Arabia promised to keep markets well-stocked with crude.
    • Oracle (ORCL) rose 2% in pre-market trading after the company late yesterday reported Q2 profit of 62 cents a share, better than analysts' estimates of 56 cents, and said new software-license sales, an indicator of future revenue growth, rose 7% in fiscal Q3 to $2.37 billion, well ahead of analysts' estimates of 3% growth.
    Today's Market Focus
    • June 10-year T-notes this morning are up +1.5 ticks. T-note prices Tuesday moved higher early on increased safe-haven demand after stocks fell over concern economic growth was slowing in China but then shed their gains and settled lower as stocks rebounded off of their lows: TYM2 -1.0, FVM2 -2.2, EDU2 -2.5. The 10-year T-note yield rose to a fresh 4-1/2 month high of 2.396%. Bearish factors included (1) the larger-than expected increase in Feb U.S. building permits to their highest level in 3-1/3 years (+5.1% to 717,000 versus expectations of +0.4% to 685,000) and (2) continued long liquidation of Treasuries on speculation the strengthening U.S. economy will reduce the safe-haven appeal of U.S. government debt. Bullish factors Tuesday included (1) early safe-haven demand for Treasuries as stocks opened lower on concern economic growth was slowing in China and (2) the Fed's purchase of $1.969 billion of Treasuries as part of its Operation Twist Program to replace $400 billion of short-term debt in its portfolio with longer-term Treasuries in an effort to keep borrowing costs down.
    • The dollar index this morning is weaker and at a 1-1/2 week low with the dollar/yen +0.36 yen and the euro/dollar +0.19 cents. The dollar index Tuesday settled higher on increased safe-haven demand as stocks weakened early along with a slide in commodity currencies against the dollar on concern China's economy was slowing: Dollar Index +0.118, USD/JPY +0.359, EUR/USD -0.00132. Bullish factors included (1) increased safe-haven demand for the dollar as global equities slumped, and (2) weakness in commodity currencies such as the Canadian dollar and Australian dollar against the U.S. dollar after BHP Billiton, the world's largest mining company, said Chinese steel production is slowing, which raises concern the Chinese economy and the global economy as well will slow. Bearish factors included (1) the smaller-than-expected increase in Feb German producer prices, which is euro supportive and (2) euro positive comments from ECB Council member Makuch who said rumors of division within the ECB are "wrong" and that ECB President Draghi will detail the bank's strategy to exit from non-standard policy measures when the time is right.
    • May crude oil prices this morning are up +57 cents a barrel and May gasoline is +0.20 of a cent per gallon. Crude oil and gasoline prices Tuesday settled lower on signs economic growth is slowing in China along with promises from Saudi Arabia to keep markets well-stocked with crude: CLK12 -$2.49, RBK -1.05. Bearish factors included (1) the stronger dollar, (2) the action by China to raise fuel prices by the most in 2 years, which may reduce domestic fuel demand, along with concern its economy is slowing 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, (3) comments from the Saudi Arabian Oil Minister Ali al-Naimi who said his country aims "to provide adequate supplies of petroleum, stabilize oil markets and return prices to fair levels for producers, consumers" and the oil industry and that it can increase crude output by as much as 25% immediately if needed, and (4) the outlook for Wednesday's weekly DOE crude supplies to increase for a fifth week to a 6-month high. Bullish factors included (1) the larger-than-expected increase in Feb U.S. building permits to a 3-1/3 year high, which signals further strength in hole building and is positive for economic growth and fuel demand and (2) the statement from the U.S. EIA that if Sunoco fails to find a buyer for its Philadelphia refinery by July that forces it to shut production at the refiner, prices will "likely rise" and lead to gasoline shortages in the U.S. Northeast. Expectations for Wednesday's weekly inventory report from the DOE are for crude oil supplies to increase 2.35 million bbl, gasoline stockpiles to decrease 2.0 million bbl, distillate inventories to fall 1.5 million bbl and the refinery utilization rate to remain unchanged at 82.7% of capacity.
    Today's U.S. Earnings Reports

    Earnings reports (confirmed releases, sorted by mkt cap): GIS-General Mills (BEST earnings consensus $0.55), DFS-Discover Financial Services (0.92), CLC-CLARCOR (0.47), ATU-Actuant (0.38), MFRM-Mattress Firm Holding (0.22), FRED-Fred's Inc. (0.24).

    Global Financial Calendar

    Wednesday 3/21/12
    United States
    0700 ETWeekly MBA mortgage applications, previous -2.4% with purchase mortgage sub-index +4.4% and refinancing sub-index -4.1%.
    1000 ETFeb existing home sales expected +0.9% to 4.61 million, Jan +4.3% to 4.57 million.
    Japan
    0030 ETJan Japan all industry activity index expected -0.7% m/m, Dec +1.3% m/m.
    United Kingdom
    0530 ETMinutes of the Mar 7-8 BOE monetary policy meeting.
    0530 ETFeb U.K. pubic sector net borrowing expected +5.0 billion pounds, Jan -10.7 billion pounds.
    Canada
    0830 ETFeb Canada leading indicators expected +0.6%, Jan +0.7%.

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

    Stocks: GIS, DFS, CLC, ATU, MFRM, FRED
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