Seeking Alpha

Jim Van Meerten's  Instablog

Jim Van Meerten
Send Message
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
My company:
Marketocracy Capital Management
My blog:
Barchart Portfolio Blogs
  • Barchart's Morning Call 5/23 0 comments
    May 23, 2012 12:59 PM | about stocks: HPQ, NTAP, HRL, PVH, TOL
    Barchart Morning Call Wed, 23 May 2012 07:00:00 -0500

    Overnight Developments

    • E-mini S&Ps this morning are down 8.75 points (-0.67%), undercut by the 1.55% drop in European stocks. Commodity prices are mostly lower this morning with gold down 1.1%, copper down 1.6%, crude oil down 1%, and agricultural commodities mostly lower. The markets are worried that tensions may be building between France and Germany over French President Hollande's call for growth measures and joint euro bonds. The markets are also worried about weaker global growth with today's report that Japan's April exports showed an increase of only +7.9% y/y versus expectations of +11.8% y/y. The markets shook off comments by the Chinese government about new growth measures.
    • Asian stock markets fell across the board today: Japan -1.98%, Hong Kong -1.33%, China -0.41%, Taiwan -1.75%, Australia -1.31%, Singapore -1.53%, South Korea -1.20%, India -0.49%, Turkey -1.89%.
    • ECB council member Andres Lipstok today said that the ECB is not planning more stimulus at the moment despite the increased concern about Greece leaving the Eurozone. He said "we didn't discuss cutting rates below 1% in our meetings." His comments were in line with recent comments by other Eurozone members but nevertheless reiterated the ECB's message that the ECB at present does not plan to ride to the rescue of the politicians once again.
    • The markets are awaiting news on today's negotiating session in Baghdad between Iran and the P5+1 negotiators (i.e., the five permanent UN Security Council members plus Germany). Any reports of progress are likely to cause fresh weakness in crude oil prices since the chances of a military attack on Iran would become further delayed.
    • In a display of safe-haven demand for German securities, Germany today sold 4.56 billion euros of 2-year securities with a yield of 0.07%. The security carried a zero-percent coupon for the first time.
    • The minutes from the May 9-10 Bank of England Monetary Policy Committee meeting showed that the vote was 8-1 in favor of the decision to halt its quantitative easing program by holding steady its bond-purchase target at 325 billion pounds. That was supportive news for the British pound. However, the minutes also noted that the target could be raised again as conditions change.
    • The Eurozone March current account balance (seasonally adjusted) rose to a surplus of 9.1 billion euros from a revised 1.2 billion euro deficit in February, which was mildly supportive for the euro.
    • UK April retail sales ex-auto fuel fell by -1.0% m/m and -0.3% y/y, which was weaker than the consensus of -0.7% m/m and +0.7% y/y. The report was bearish for the British pound.
    • The markets are waiting today's informal EU Summit where the markets will be watching to see how much pressure French President Hollande applies to Germany for his goals of growth measures and joint euro bonds.
    • The Chinese government today made another statement in favor of stepped-up growth measures. The government posted a summary of its cabinet meeting and said, "We must proactively take policies and measures to expand demand and to create a favorable policy environment for stable and relatively fast economic growth." Separately the Chinese government said today that China will start a series of "key infrastructure projects that are vital to the overall economy and can facilitate growth" and speed up construction of existing railway, environmental protection and rural projects."
    • The Bank of Japan after its 2-day meeting announced that it left its monetary policy unchanged, which was in line with market expectations. The BOJ outcome was supportive for the yen.

    Overnight U.S. Stock News

    • June E-mini S&Ps this morning are trading are down -8.75 points (-0.67%), undercut by the sharp 1.6% sell-off in European stocks, concern about whether French-German conflict will break out at today's EU informal summit, and today's weaker-than-expected Japanese exports report. There are earnings reports today from HPQ-Hewlett Packard (consensus $0.91), NTAP-Netapp (0.63), HRL-Hormel (0.41), PVH-PVH Corp (1.26), TOL-Toll Brothers (0.03).
    • U.S. stocks on Tuesday closed narrowly mixed after fading late in the session: S&P 500 +0.05%, Dow Jones -0.01%, Nasdaq 100 -0.24%. The stock market on Tuesday started out with some carry-over optimism from Monday's session where the theme was the improved prospects for growth measures in Europe and China. Stocks on Tuesday also received an early boost from the favorable U.S. new home sales report of +3.4% and the report of an IAEA-Iran agreement on nuclear inspections. However, the bearish factors stacked up during the day to push the market lower. Bearish factors included (1) Fitch's downgrade of Japan's credit rating to A+ and the reminder that Japan could yet face a debt crisis considering that its total debt is more than twice the size of its GDP, (2) the OECD's various warnings about the world economy in its semi-annual outlook report, and (3) some nervousness ahead of today's informal EU summit where France and Germany seem destined to butt heads on issues including joint euro bonds and so-called growth measures.

    Today's Market Focus

    • June 10-year T-notes this morning are up 12 ticks on the lower trade in global stocks and the increased concern about the European debt crisis. The Treasury today sells $35 billion in 5-year T-notes. T-note prices on Tuesday closed higher: TYM2 +4, FVM2 +0.75. T-notes on Tuesday received a boost late in the session when the stock market fell fairly sharply and lost the day's gains. Earlier, T-notes saw some downward pressure from the U.S. new home sales report of +3.4% and supply overhang in the midst of this week's $99 billion T-note auction package.
    • The dollar index this morning is up 0.21 (+0.26) on increased safe-haven demand with the sharply lower trade in European and Asian stocks. EUR/USD is down 0.0028 (-0.22%). USD/JPY is down -0.60 (-0.75%) with the yen seeing support from the BOJ's unchanged policy today and its decision not to raise its asset purchase target. The dollar index on Tuesday closed moderately higher after edging to a new 4-month high: Dollar Index +0.41, EUR/USD -0.0134, USD/JPY +0.65. The dollar index was boosted by concern ahead of today's EU informal summit and by Tuesday's downgrade of Japan's credit rating, which put a dent in the yen. French and German officials have been trying to put a good face on their early meetings, but things may get a bit more tense today as French President Hollande puts more pressure than the markets had expected on Germany about joint euro bonds and the adoption of growth measures. French President Hollande has said France will not ratify Chancellor Merkel's prized fiscal pact until it gets the growth measures it wants.
    • July WTI crude oil prices this morning are down -0.87 (-0.95%) and July gasoline is down 0.0209 (-0.73%). Bearish factors this morning include lower global stocks, expectations for an oil-bearish DOE report today, and indications that today's Iran negotiating session will at least produce another round of talks if not any breakthroughs. Crude oil and gasoline prices on Tuesday closed lower: CLN12 -1.01 (-1.09%), RBN2 -0.0054 (-0.19%). Crude oil prices were pressured by the lackluster Chinese leading economic indicator, the Japanese credit rating downgrade, the report of an IAEA-Iran agreement on nuclear inspections, and expectations for today's DOE report to show a fresh 21-3/4 year high in U.S. crude oil inventories. The International Atomic Energy Agency said on Tuesday that Iran had verbally agreed to conclude and sign an agreement "quite soon" allowing broader IAEA inspections, including the inspection of the Parchin military complex where Iran is suspected to have tested a nuclear weapons trigger. Israel dismissed yesterday's agreement to sign an agreement as a stalling tactic ahead of today's second round of negotiations between Iran and the P5+1 (the five permanent UN Security Council members plus Germany).
    • The market consensus for today's weekly DOE report is for a further 1.5 million barrel rise in crude oil inventories to another new 21-3/4 year high. Today's report is for the week ended May 18, which is prior to the reversal of the Seaway pipeline on May 19. The reversal in the Seaway pipeline should result in a slow drawn-down in oil inventories at the Cushing hub, which reached another new record high of 45.1 million barrels last week. However, the Seaway reversal won't necessarily have an impact on overall U.S. inventories since the oil will simply be flowing from Cushing to the Gulf coast and be stored in facilities at the Gulf, thus have little net impact on overall U.S. crude oil inventories. The DOE report is expected to show a 500,000 increase in gasoline inventories and a 500,000 barrel decline in distillate inventories. The consensus is for the refinery utilization rate to rise 0.4 points to 88.7%, adding to last week's sharp 1.9 point rise to 88.3%. Inventories are running 2.0 points above the 5-year seasonal average of 86.3%.

    Today's U.S. Earnings Reports

    Earnings reports (sorted by mkt cap): HPQ-Hewlett Packard (consensus $0.91), NTAP-Netapp (0.63), HRL-Hormel (0.41), PVH-PVH Corp (1.26), TOL-Toll Brothers (0.03).

    Global Financial Calendar

    Wednesday 5/23/12
    United States
    0700 ETWeekly MBA mortgage applications, previous +9.2%, purchase sub-index -2.4%, refi sub-index +13.0%.
    1000 ETMar FHFA U.S. house price index expected +0.3%, Feb +0.3% m/m. FHFA Q1 house price index expected +0.1%, Q4 -0.1% q/q.
    1000 ETApr new home sales expected +2.1% to 335,000, Mar -7.1% to 328,000.
    1030 ETDOE Weekly Petroleum Status Report.
    1300 ETTreasury auction of $35 billion in 5-year T-notes.
    1400 ETMinneapolis Fed President Narayana Kocherlakota speaks in Rapid City, SD.
    Japan
    n/a2-day BOJ meeting concludes with policy expected unchanged.
    Euro-Zone
    0400 ETEurozone Mar current account (sa), Feb -1.3 billion euros.
    1300 ETEU informal summit in Brussels.
    United Kingdom
    0430 ETBank of England minutes from May 9-10 meeting when MPC voted to hold its asset purchase program at 325 billion pounds.
    0430 ETUK Apr retail sales with auto fuel expected -0.8% m/m and +1.0% y/y, Mar +1.8% m/m and +3.3% y/y. Apr retail sales ex-auto fuel expected -0.7% m/m, +0.7% y/y, Mar +1.5% m/m and +2.8% y/y.
    0600 ETUK May CBI trends total orders expected -11, Apr -8. May CBI trends selling prices expected 5, Apr 7.
    CHI
    2230 ETChina May HSBC flash manufacturing PMI, Apr 49.3.

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

    Stocks: HPQ, NTAP, HRL, PVH, TOL
Back To Jim Van Meerten's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (0)
Track new comments
Be the first to comment
Full index of posts »
Latest Followers

StockTalks

More »

Latest Comments


Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.