Barchart Moring Call 7/22
Long Only, Momentum, Portfolio Strategy
Seeking Alpha Analyst Since 2009
Jim Van Meerten 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 attended post-baccalaureate and graduate courses in Business Administration, Quantitative Math, and Education at Florida Atlantic University, Georgia State University and University of North Carolina at Charlotte. In the past he has been an accountant, attorney, adjunct professor in Business Law, Accounting and Internal Auditing, financial advisor, supervisory principal, and compliance officer. He also passed the Georgia CPA Exam, the Certified Internal Auditor Exam, and the FINRA Series 7, 24 and 9/10 exams.He is presently also a contributor on MSN Top Stocks Blog, Motley Fool and is a member of the M100 on Marketocracy, an elete honor chosen by the editors of Marketocracy as being in the top 100 portfolio managers of over 100,000 portfoiios they review. He would enjoy hearing your comments at JimVanMeerten@gmail.com.
Monday, July 22nd, 2013
View Older Reports
Everything you need to know about the markets in one free daily newsletter.
E-mail: Submit
You will also receive a free subscription to the Barchart family of newsletters.
OVERNIGHT MARKETS AND NEWS
Sep E-mini S&Ps (ESU13 +0.03%) are trading slightly higher on continued optimism about earnings and on today's sharp 40 bp drop in Portugal's 10-year bond yield in a favorable development for the Eurozone debt crisis. The Euro Stoxx 50 index this morning is up +0.24%. Asian stocks today closed higher nearly across the board on support from last Friday's news that China is liberalizing bank deposit rates and Sunday's news that Japanese Prime Minister Abe's party won a decisive victory in Sunday's upper house elections: Japan Nikkei +0.47%, Hong Kong Hang Seng +0.25%, China CSI 300 index +0.53%, Taiwan +0.54%, Australia +0.60%, Singapore +0.66%, South Korea +0.48%, India +0.05%, and Turkey -0.12%. Commodity prices are higher by +0.44% this morning on improved global economic optimism. Sep WTI crude oil (CLU13+0.31%) is up +0.49%, Sep gasoline (RBU13 -0.40%) is up +0.03%, metals are higher (Aug gold (GCQ13 +1.86%) +1.83%, Sep copper (HGU13 +1.08%) +1.08%), and grains and softs are mixed. The dollar index (DXY00 -0.29%) is down -0.36% on reduced safe-haven demand and EUR/USD (^EURUSD) is up +0.30% on positive Portuguese political news. USD/JPY (^USDJPY) is down -0.71% with JPY seeing strength on the strong LDP victory in Sunday's upper house elections. Sep 10-year T-note prices (ZNU13 +0.10%) are up +4 ticks.
There was good political news in Portugal after Portugal's President Anibal Cavaco Silva in a speech on Sunday night ruled out early elections and said that, "The government has the support of an unequivocal majority in parliament." Portuguese 10-year bond yields fell sharply by 40 bp to 6.40% today, extending the sharp 3-session decline to about 80 bp. The government headed by Prime Minister Pedro Passos Coelho will now have the power to stick to Portugal's bailout plan.
Japanese Prime Minister Abe won a sweeping victory in Sunday's elections in the upper house of parliament, which gives him a strong grip on the government to continue to execute his stimulus program. The victory was in line with market expectations.
The statement from the 2-day G-20 meeting of finance ministers and central bank chiefs that concluded on Saturday contained little surprising news. The statement said that G-20 countries will pursue "carefully calibrated and clearly communicated" policy moves, which was a clear shot to the Fed after the recent surge in U.S. Treasury yields after Mr. Bernanke in mid-June laid out the Fed's plans for ending QE3. Emerging markets were hit with some serious collateral damage from the surge in U.S. Treasury yields, which caused them to urge Fed Chairman Bernanke to be more careful in discussing the end of QE3. The rest of the industrialize world also generally saw higher yields as well caused by the surge in U.S. Treasury yields.
Japan June supermarket sales rose +2.7% y/y, which was a substantial improvement from May's -1.2% y/y. Japan June convenience store sales rose +0.1% y/y, up from -1.2% y/y in May.
U.S. STOCK PREVIEW
This will be a busy week with a raft of U.S. economic reports, the peak Q2 earnings week, and the Treasury's auction of $99 billion in 2-year, 5-year and 7-year T-notes. The markets will also be looking ahead to next week's FOMC meeting (July 30-31) in which there is at least a small chance that the Fed might decide to start tapering QE3. Today's June existing home sales report is expected to show an increase of +1.4% to 5.25 million, adding to the +4.2% increase to 5.18 million seen in May. There are 8 of the S&P 500 companies that report earnings today: Gannett (consensus $0.58), Hasbro (0.34), Halliburton (0.72), Kimberly Clark (1.39), McDonalds (1.40), Netflix (0.40), Texas Instruments (0.41), Zions Bancorporation (0.41). Conferences this week include: Bio/Pharma Forcasting and Modeling on Tuesday, Fortune Brainstorm TECH 2013 on Tuesday, China Venture Capital & Private Equity Forum on Wed/Thu.
Sep E-mini (ESU13 +0.03%) S&Ps this morning are trading slightly higher by +0.75 points (+0.04%) on (1) general optimism about earnings going into this peak Q2 earnings week, and (2) this morning's sharp 40 bp drop in the Portugal 10-year bond yield on confirmation there will be no early elections that could threaten Portugal's bailout plan. The U.S. stock market on Friday closed mixed. Stocks had opened lower after technology stocks fell when Google and Microsoft reported disappointing Q2 earnings results, but stocks recovered, except for the Nasdaq, after China announced it had removed the floor on lending rates, which may boost bank lending and growth in China that may benefit the global economy. Closes: S&P 500 +0.16%, Dow Jones -0.03%, Nasdaq 100 -1.07%.
OVERNIGHT U.S. STOCK MOVERS
- Kimberly Clark (KMB +0.59%) reported Q2 adjusted EPS this morning of $1.41, slightly above the consensus of $1.39. The company also said it will realign cost structure and streamline European manufacturing.
- Halliburton (HAL +2.44%) reported Q2 EPS of 73 cents, 1 cent above the consensus of 72 cents.
- Facebook (FB -1.15%) will create a streamlined social network for simple phones, according to the NY Times.
- Apple (AAPL -1.58%) said its developers website was taken down because of a hacking attack.
- Hasbro (HAS -2.37%) reported Q2 adjusted EPS of 29 cents, below the consensus of 34 cents.
- Dick's Sporting (DKS -0.55%) was upgraded to Overweight from Equal Weight at Morgan Stanley.
MARKET COMMENTS
Sep 10-year T-notes (ZNU13 +0.10%) this morning are up 4 ticks. Sep 10-year T-note prices on Friday closed higher on carry-over support from Wednesday's and Thursday's comments from Fed Chairman Bernanke that a reduction in Fed bond buying wasn't imminent. A recovery in stocks limited gains in Treasuries. Closes: TYU3 +11.00, FVU3 +5.25.
The dollar index (DXY00 -0.29%) this morning is down -0.29 points (-0.36%) on reduced safe-haven demand with the general strength in global stocks today. EUR/USD (^EURUSD) is up +0.00039 (+0.30%) on Portugal's positive political news. USD/JPY (^USDJPY) is down -0.71 yen (-0.71%) with the yen seeing strength after Prime Minister Abe's LDP party won a decisive victory in upper house elections on Sunday. The dollar index on Friday closed lower on negative carry-over from Fed Chairman Bernanke's comments Thursday that it was "way too early to make any judgment" as to whether the Fed will start to taper its bond purchases. Another negative for the dollar was the recovery in stocks, which reduced the dollar's safe-haven demand. Closes: Dollar index -0.176 (-0.21%), EUR/USD +0.00303 (+0.23%), USD/JPY +0.205 (+0.20%).
Sep WTI (CLU13 +0.31%) crude oil this morning is up +0.53 (+0.49%) and Sep gasoline (RBU13 -0.40%) is up +0.0008 (+0.03%) on general economic optimism today. Crude oil and gasoline prices on Friday closed higher with crude prices rising to a 16-month high and gasoline prices climbing to a 4-month high. Bullish factors include (1) the action by the PBOC to remove the floor for lending rates in China, which may boost bank lending and economic growth, and (2) strength in gasoline on supply concerns after the Philadelphia Energy Solutions refinery and Canada's Irving Oil refinery were shut for repairs, which may limit gasoline supplies on the U.S. East Coast. Closes: CLU3 +0.06 (+0.06%), RBU3 +0.0132 (+0.43%).
GLOBAL EVENT CALENDAR07/22/2013
| US | 0830 ET | Jun Chicago Fed national activity index, May -0.30. |
| 1000 ET | Jun existing home sales expected +1.4% to 5.25 million, May +4.2% to 5.18 million. | |
| 1100 ET | USDA weekly grain export inspections. | |
| 1500 ET | USDA Jun Cold Storage. | |
| 1600 ET | USDA Crop Progress. |
U.S. STOCK CALENDAR07/22/2013
| Company Name | Symbol | Time | Event Description | Period | EPS Est (US$) |
|---|---|---|---|---|---|
| Gannett Co Inc | GCI US | Bef-mkt | Q2 2013 Earnings Release | Q2 2013 | 0.584 |
| Halliburton Co | HAL US | Bef-mkt | Q2 2013 Earnings Release | Q2 2013 | 0.721 |
| Kimberly-Clark Corp | KMB US | Bef-mkt | Q2 2013 Earnings Release | Q2 2013 | 1.389 |
| Hasbro Inc | HAS US | Bef-mkt | Q2 2013 Earnings Release | Q2 2013 | 0.343 |
| NVR Inc | NVR US | Bef-mkt | Q2 2013 Earnings Release | Q2 2013 | 11.962 |
| RPM International Inc | RPM US | Bef-mkt | Q4 2013 Earnings Release | Q4 2013 | 0.669 |
| Lennox International Inc | LII US | Bef-mkt | Q2 2013 Earnings Release | Q2 2013 | 1.191 |
| McDonald's Corp | MCD US | 7:58 | Q2 2013 Earnings Release | Q2 2013 | 1.404 |
| Six Flags Entertainment Corp | SIX US | 8:00 | Q2 2013 Earnings Release | Q2 2013 | 0.742 |
| Hasbro Inc | HAS US | 8:30 | Q2 2013 Earnings Call | Q2 2013 | |
| Halliburton Co | HAL US | 9:00 | Q2 2013 Earnings Call | Q2 2013 | |
| Six Flags Entertainment Corp | SIX US | 9:00 | Q2 2013 Earnings Call | Q2 2013 | |
| Lennox International Inc | LII US | 9:30 | Q2 2013 Earnings Call | Q2 2013 | |
| Gannett Co Inc | GCI US | 10:00 | Q2 2013 Earnings Call | Q2 2013 | |
| Kimberly-Clark Corp | KMB US | 10:00 | Q2 2013 Earnings Call | Q2 2013 | |
| RPM International Inc | RPM US | 10:00 | Q4 2013 Earnings Call | Q4 2013 | |
| McDonald's Corp | MCD US | 11:00 | Q2 2013 Earnings Call | Q2 2013 | |
| Bank of Hawaii Corp | BOH US | 14:00 | Q2 2013 Earnings Call | Q2 2013 | |
| Netflix Inc | NFLX US | 16:05 | Q2 2013 Earnings Release | Q2 2013 | 0.396 |
| Texas Instruments Inc | TXN US | 16:30 | Q2 2013 Earnings Release | Q2 2013 | 0.412 |
| WR Berkley Corp | WRB US | 17:00 | Q2 2013 Earnings Call | Q2 2013 | |
| Texas Instruments Inc | TXN US | 17:30 | Q2 2013 Earnings Call | Q2 2013 | |
| Zions Bancorporation | ZION US | 17:30 | Q2 2013 Earnings Call | Q2 2013 | |
| Netflix Inc | NFLX US | 18:00 | Q2 2013 Earnings Call | Q2 2013 | |
| Crane Co | CR US | Aft-mkt | Q2 2013 Earnings Release | Q2 2013 | 1.036 |
| Hexcel Corp | HXL US | Aft-mkt | Q2 2013 Earnings Release | Q2 2013 | 0.468 |
| IDEX Corp | IEX US | Aft-mkt | Q2 2013 Earnings Release | Q2 2013 | 0.742 |
| WR Berkley Corp | WRB US | Aft-mkt | Q2 2013 Earnings Release | Q2 2013 | 0.677 |
| Zions Bancorporation | ZION US | Aft-mkt | Q2 2013 Earnings Release | Q2 2013 | 0.414 |
| Bank of Hawaii Corp | BOH US | Q2 2013 Earnings Release | Q2 2013 | 0.83 |
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.