Morning Call 6/19

Barchart Morning Call

Barchart.com - Mon Jun 19, 6:40AM CDT

OVERNIGHT MARKETS AND NEWS

Sep E-mini S&Ps (ESU17 +0.31%) this morning are up +0.27% and European stocks are up +0.92%. Gains in French stocks are leading European bourses higher after Sunday's second-round of French elections showed French President Macron's party won about 350 seats in France's 577-member National Assembly, the largest majority in 15-years. Jul WTI crude oil (CLN17 +0.47%) is up +0.29% and is giving a boost to energy stocks after data from OPEC showed that compliance with OPEC crude production cuts was 110% in May. Asian stocks settled higher: Japan +0.62%, Hong Kong +1.16%, China +0.68%, Taiwan +0.92%, Australia +0.54%, Singapore +0.49%, South Korea +0.59%, India +0.82%. Japan's Nikkei Stock Index rose to a 1-week high on signs of strength in the Japanese economy after trade data showed Japan May exports rose at the fastest pace in 2-1/3 years and Japan May imports climbed at the fastest pace in 3-years. Hong Kong stocks rallied over 1% before a decision Tuesday on whether MSCI will include China shares in global indexes.

The dollar index (DXY00 -0.04%) is down -0.06%. EUR/USD (^EURUSD) is up +0.10%. USD/JPY (^USDJPY) is up +0.09%.

Sep 10-year T-note prices (ZNU17 +0.01%) are up +3 ticks.

China May new home prices rose in 56 of 70 cities tracked by the government, down from 58 cities that gained in April, due to the government's measures to tighten liquidity and cool the housing market.

The Japan May trade balance unexpectedly fell into deficit by -203.4 billion yen, when expectations were for a 43.3-billion-yen surplus. May exports rose +14.9% y/y, weaker than expectations of +16.0% y/y, but still the largest increase in 2-1/3 years. May imports rose +17.8% y/y, stronger than expectations of +14.5% y/y and the largest increase in 3 years.

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) New York Fed President William Dudley (voter) holds a business roundtable discussion with the North Country Chamber of Commerce and North Country Regional Economic Development Council in Plattsburgh, NY, (2) Chicago Fed President Charles Evans (voter) discusses current economic conditions and monetary policy at a Money Marketeers of New York University event, (3) weekly grain export inspections, (4) USDA crop conditions and planting progress.

Notable Russell 2000 earnings reports today include: none.

U.S. IPO's scheduled to price today: none.

Equity conferences this week: BIO International Convention on Mon, Goldman Sachs Leveraged Finance Conference on Tue, JMP Group Securities Life Sciences Conference on Tue, Macquarie Group Ltd Global Quantitative Research Conference on Tue, Jefferies Global Consumer Conference on Tue-Wed, Oppenheimer Consumer Conference on Tue-Wed, Tudor Picker & Holt Hotter N Hell Energy Conference on Tue-Thu, Wells Fargo Securities West Coast Energy Conference on Tue-Wed, SunTrust Robinson Utilities & Power Summit on Thu, Wells Fargo Securities 5G Forum on Thu.

OVERNIGHT U.S. STOCK MOVERS

Amazon.com (AMZN +2.44%) gained 1% in pre-market trading after a person familiar with the matter said Amazon plans to cut prices and jobs at Whole Foods Market to make the store competitive with Wal-Mart Stores.

Broadcom Ltd (AVGO -0.73%) fell 3% in pre-market trading after Nikkan Kogyo reported that Toshiba is in the final stages of selecting a rival bid of Broadcom’s for the sale of its semiconductor division.

Costco Wholesale (COST -7.19%) was downgraded to 'Neutral' from 'Buy' at Deutsche Bank.

Biogen (BIIB -1.29%) was upgraded to 'Neutral' from 'Sell' at UBS with a price target of $270.

Nucor (NUE +0.59%) was upgraded to 'Buy' from 'Neutral' at Longbow Research with a 12-month target price of $66.

U.S. Steel (X -1.03%) was upgraded to 'Buy' from 'Neutral' at Longbow Research with a 12-month target price of $30.

Kroger (KR -9.24%) was downgraded to 'Equal-Weight' from 'Overweight' at Morgan Stanley.

Travelers (TRV +0.33%) was downgraded to 'Neutral' from 'Buy' at Bank of America/Merrill Lynch.

Cisco's (CSCO +0.16%) senior vice president and chief of operations, Rebecca Jacoby, sold 92,840 shares of the company's stock at an average price of $31.71 on June 14.

Huntington Ingalls (HII -4.90%) received a $3.01 billion modification from the U.S. Department of Defense to a previously awarded contract for the procurement of the detail, design, and construction of Landing Helicopter Assault Replacement Flight 1 Amphibious Assault Ship (LHA-8).

Six Flags Entertainment (SIX -0.20%) filed an 8.5 million share shelf for holder H Partners Management LLC.

Bandera Partners boosted its stake in Famous Dave's of America (DAVE -1.41%) to 15.6% from 12% reported in March.

MARKET COMMENTS

Sep E-mini S&Ps (ESU17 +0.31%) this morning are up +6.50 points (+0.27%). Friday's closes: S&P 500 +0.03%, Dow Jones +0.11%, Nasdaq -0.34%. The S&P 500 on Friday closed slightly higher. Stocks prices were boosted by strength in energy stocks as crude oil rallied +0.63% and by reduced inflation expectations that may keep the Fed from additional rate hikes after the 10-year T-note breakeven inflation rate dropped to a 7-1/2 month low. Stocks were undercut by the unexpected -5.5% fall in U.S. May housing starts to an 8-month low of 1.092 million (weaker than expectations of +4.1% to 1.22 million) and by a sell-off in food retailers after Amazon.com bought Whole Foods Markets for $13.7 billion, which raises concern that other food retailers will have to cut prices to compete with Amazon, which will hurt their earnings.

Sep 10-year T-notes (ZNU17 +0.01%) this morning are up +3 ticks. Friday's closes: TYU7 +3.50, FVU7 +3.50. Sep 10-year T-notes on Friday closed higher: T-note prices were boosted by the unexpected decline in U.S. May housing starts to an 8-month low and the fall in May building permits to a 13-month low. T-note prices were also boosted by the larger-than-expected decline in the June University of Michigan U.S. consumer sentiment index to a 7-month low and by reduced inflation expectations after the 10-year T-note breakeven inflation rate dropped to a 7-1/2 month low.

The dollar index (DXY00 -0.04%) this morning is down -0.061 (-0.06%). EUR/USD (^EURUSD) is up +0.11 (+0.10%) and USD/JPY (^USDJPY) is up +0.10 (+0.09%). Friday's closes: Dollar index -0.29 (-0.30%), EUR/USD +0.0053 (+0.48%), USD/JPY -0.05 (-0.05%). The dollar index on Friday closed lower on the weaker-than-expected U.S. May housing starts and building permits, which bolsters the case for the Fed to refrain from further tightening, and the slide in stocks, which boosted the safe-haven demand for the yen.

Jul WTI crude oil prices (CLN17 +0.47%) this morning are up +13 cents (+0.29%) and July gasoline (RBN17 +0.69%) is +0.0047 (+0.32%). Friday's closes: Jul crude +0.28 (+0.63%), Jul gasoline +0.0191 (+1.33%). Jul crude oil and gasoline on Friday closed higher on a weaker dollar and on the increase in the crack spread to a 4-session high, which may boost refinery demand for crude oil to refine into gasoline.

GLOBAL EVENT CALENDAR06/19/2017

		Monday, June 19
US	0800 ET	New York Fed President William Dudley (voter) holds a business roundtable discussion with the North Country Chamber of Commerce and North Country Regional Economic Development Council in Plattsburgh, NY.
	1100 ET	USDA weekly grain export inspections.
	1600 ET	USDA crop conditions and planting progress.
	1900 ET	Chicago Fed President Charles Evans (voter) discusses current economic conditions and monetary policy at a Money Marketeers of New York University event.
		Tuesday, June 20
US	0315 ET	Fed Vice Chair Stanley Fischer is keynote speaker at a macroprudential conference in Amsterdam jointly hosted by the Dutch and Swedish central banks.
	0745 ET	Boston Fed President Eric Rosengren (non-voter) speaks at a macroprudential conference in Amsterdam jointly hosted by the Dutch and Swedish central banks.
	0830 ET	Q1 current account balance expected -$123.6 billion, Q4 -$112.4 billion
	1500 ET	Dallas Fed President Robert Kaplan (voter) discusses current economic conditions and monetary policy with the Commonwealth Club in San Francisco.

U.S. STOCK CALENDAR06/19/2017

Company	Ticker	Time	Event Description	Period	Estimate
United Technologies Corp	UTX US	6/19/2017		02:30	SM
Monster Beverage Corp	MNST US	6/19/2017		17:20	SM

BARCHART MORNING CALL 6/24

BARCHART MORNING CALL

Tuesday, June 24th, 2014View Older Reports

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OVERNIGHT MARKETS AND NEWS

September E-mini S&Ps (ESU14 -0.18%) this morning are down -0.18% and European stocks are little changed, up +0.01%, after the German Jun IFO business conditions fell more than expected to a 6-month low, a sign that the European economy may be slowing. Losses in European stocks were limited on a possible short-term truce to the hostilities in Ukraine. The ruble strengthened against the dollar and the Russian Micex Stock Index rallied over 1% after pro-Russian forces in Ukraine called for a cease-fire, matching a truce made earlier by Ukraine President Poroshenko. Russian President Putin also asked the Russian house of parliament to cancel approval granted Mar 1 to use force in Ukraine. Asian stocks closed mostly higher: Japan +0.05%, Hong Kong +0.33%, China +0.50%, Taiwan +0.19%, Australia -0.38%, Singapore +0.14%, South Korea +1.16%, India +1.35%. Commodity prices are mixed. Aug crude oil (CLQ14 +0.13%) is up +0.07%. Aug gasoline (RBQ14 +0.14%) is up +0.07%. Aug gold (GCQ14 +0.52%) is up +0.52% at a 2-1/4 month high. July copper (HGN14 +0.03%) is up +0.13%. Agriculture and livestock prices are mixed with grains lower as U.S. crop conditions continue to be favorable, while livestock prices are higher after the USDA's Cold Storage report, released after the markets closed Monday, signaled lower beef and pork supplies. The dollar index (DXY00 -0.06%) is down -0.06%. EUR/USD (^EURUSD) is up +0.11%. USD/JPY (^USDJPY) is down -0.04%. Sep T-note prices (ZNU14 +0.14%) are up +6.5 ticks.
The German Jun IFO business climate fell -0.7 to 109.7, a bigger decline than expectations of -0.1 to 110.3 and the lowest in 6 months. The Jun IFO current assessment was unchanged at 114.8, weaker than expectations of +0.2 to 115.0. The Jun IFO expectations fell -1.4 to 104.8, a bigger decline than expectations of -0.2 to 106.0 and the lowest in 8 months.

U.S. STOCK PREVIEW

Today’s April FHFA home price index is expected to show a solid gain of +0.5% m/m, adding to the +0.7% increase seen in March. Meanwhile, today’s April Case-Shiller composite-20 home price index is expected to show an increase of +0.80% m/m, adding to March’s sharp increase of +1.24% m/m. Today’s May new home sales report is expected to show an increase of +1.6% to 440,000, adding to the +6.4% increase to 433,000 seen in April. Today’s June U.S. consumer confidence index from the Conference Board is expected to show an increase of +0.5 points to 83.5, adding to the +1.3 point increase to 83.0 seen in May. Today’s June Richmond Fed manufacturing index is expected to show a -1 point decline to 6 following the May report of unchanged at 7.
There are two of the Russell 1000 companies that report earnings today: Walgreen (consensus $0.94), Carnival (0.02). Equity conferences this week include: Smart Grid World Conference 2014 on Tue, Global Hunter Securities LLC Energy Conference on Tue-Wed, Oppenheimer Consumer Conference on Tue-Wed, Mobile Pharma Biztech 2014 on Wed-Thu.

OVERNIGHT U.S. STOCK MOVERS

Walgreen (WAG -1.09%) reported Q3 EPS of 91 cents, below consensus of 94 cents.
IDEXX (IDXX +0.52%) was upgraded to 'Buy' from 'Hold' at Canaccord.
O'Reilly Automotive (ORLY -0.77%) was initiated with an 'Overweight' at Morgan Stanley with a price target of $175.
Dr Pepper Snapple (DPS -1.18%) was downgraded to 'Neutral' from 'Buy' at Citigroup.
ITG (ITG -3.05%) was downgraded to 'Neutral' from 'Overweight' at JPMorgan Chase.
National Retail Properties (NNN -0.85%) was downgraded to 'Neutral' from 'Buy' at BofA/Merrill Lynch.
Wells Fargo downgraded IntercontinentalExchange (ICE +1.71%) to 'Market Perform' from 'Outperform.'
Aviva (AV -0.23%) was downgraded to 'Neutral' from 'Buy' at UBS.
Cray (CRAY -0.39%) announced that it has been awarded a $54 million contract to provide the Korea Meteorological Administration with supercomputers.
Dean Foods (DF -0.17%) fell over 7% in after-hours trading after Dow Jones reported that the company received subpoenas from federal authorities in an insider trading probe involving activist investor Carl Icahn.
SAB Capital Advisors reported a 9.4% passive stake in Famous Dave's (DAVE -2.80%) .
Priceline reported a 5.1% stake in OpenTable (OPEN +0.35%) .
Micron (MU -1.85%) reported Q3 EPS of 79 cents, well above consensus of 70 cents.

MARKET COMMENTS

Sep E-mini S&Ps (ESU14 -0.18%) this morning are down -3.50 points (-0.18%). The S&P 500 index on Monday closed little changed as the ongoing crisis in Iraq prompted long liquidation pressure. Losses were muted on bullish factors that included (1) reduced Chinese economic concerns after the Jun China HSBC flash manufacturing PMI rose +1.4 to 50.8, stronger than expectations of +0.3 to 49.7 and the fastest rate of expansion in 7 months, and (2) the +4.9% increase in U.S. May existing home sales to 4.89 million, better than expectations of +1.9% to 4.74 million and the highest level in 7 months. Closes: S&P 500 +0.17%, Dow Jones +0.15%, Nasdaq +0.05%.
Sep 10-year T-notes (ZNU14 +0.14%) this morning are up +6.5 ticks. Sep 10-year T-note futures prices on Monday closed little changed. A supportive factor for T-notes was carry-over support from a rally in German bunds after ECB President Draghi signaled that interest rates will probably remain low for at least another 2-1/2 years when he said “We have prolonged banks’ access to unlimited liquidity up to the end of 2016. That is a signal.” T-notes fell back from their best levels after May existing home sales rose more than expected to the highest level in 7 months. Closes: TYU4 -2.50, FVU4 -1.75.
The dollar index (DXY00 -0.06%) this morning is down -0.047 (-0.06%). EUR/USD (^EURUSD) is up +0.0015 (+0.11%). USD/JPY (^USDJPY) is down -0.04 (-0.04%). The dollar index on Monday closed lower on carry-over bearish sentiment toward the dollar after Fed Chair Yellen last Wednesday reiterated that the Fed remains committed to low interest rates for a “considerable time.” EUR/USD fell back after ECB President Draghi said that the recovery “is still weak and unevenly distributed across the Eurozone” and that broad-based asset purchases will be “the answer” if the inflation outlook weakens further. Closes: Dollar Index -0.100 (-0.12%), EUR/USD +0.0004 (+0.03%), USD/JPY -0.107 (-0.10%).
Aug WTI crude oil (CLQ14 +0.13%) this morning is up +7 cents (+0.07%). Aug gasoline (RBQ14 +0.14%) is up +0.0022 (+0.07%). Aug crude and gasoline prices on Monday closed lower. The main bearish factor for oil prices was reduced concerns that Iraqi militants will take over the oil-producing regions of Iraq after government forces regained Iraq’s border crossings with Jordan and Syria. Losses were limited on signs of economic strength in China, the world’s second-largest crude oil consumer, after a gauge of Chinese manufacturing activity expanded at the fastest pace in 7 months. Closes: CLQ4 -0.71 (-0.66%) RBQ4 -0.0152 (-0.49%).

GLOBAL EVENT CALENDAR06/24/2014

US	0805 ET	Philadelphia Fed President Charles Plosser speaks to the Economic Club of New York on the economic outlook and monetary policy.
	0900 ET	Apr FHFA house price index expected +0.5% m/m, Mar +0.7% m/m.
	0900 ET	Apr S&P/CaseShiller composite-20 home price index expected +0.80% m/m and +11.50% y/y, Mar +1.24% m/m and +12.37% y/y.
	1000 ET	U.S. Jun consumer confidence (Conference Board) expected +0.5 to 83.5, May +1.3 to 83.0.
	1000 ET	Jun Richmond Fed manufacturing index expected unch at 7, May unch at 7.
	1000 ET	May new home sales expected +1.4% to 440,000, Apr +6.4% to 433,000.
	1130 ET	Treasury auctions $13 billion 2-year floating rate notes.
	1300 ET	Treasury auctions $30 billion 2-year T-notes.
GER	0400 ET	German Jun IFO business climate expected -0.1 to 110.3, May 110.4. Jun IFO current assessment expected +0.2 to 115.0, May 114.8. Jun IFO expectations expected -0.2 to 106.0, May 106.2.
JPN	1950 ET	Japan May corporate service price index expected +3.3% y/y, Apr +3.4% y/y.

U.S. STOCK CALENDAR06/24/2014

Company Name	Ticker	Time	Event Description	Period	Estimate
Aon PLC	AON US	3:00	Annual General Meeting	Y 2014
Walgreen Co	WAG US	7:30	Q3 2014 Earnings Release	Q3 2014	0.935
Walgreen Co	WAG US	8:30	Q3 2014 Earnings Call	Q3 2014
NetApp Inc	NTAP US	8:30	Analyst Day	Y 2014
Validus Holdings Ltd	VR US	8:30	Acquisition of Western World Insurance Group, Inc by Validus Holdings Ltd Call
Carnival Corp	CCL US	10:00	Q2 2014 Earnings Call	Q2 2014
Carnival Corp	CCL US		Q2 2014 Earnings Release	Q2 2014	0.023
Kennametal Inc	KMT US		Financial Community Meeting - Day 2	Y 2014
Questar Corp	STR US		Roadshow - Day 2	Y 2014
AT&T Inc	T US		AT&T Inc. - DirectTV Merger Testify Hearing
Nu Skin Enterprises Inc	NUS US		Annual General Meeting
GameStop Corp	GME US		Annual General Meeting
DIRECTV	DTV US		AT&T Inc. - DirectTV Merger Testify Hearing

Famous Dave's - DAVE - is finger licking good

At Financial Tides we're a sucker of good Bar-B-Que and DAVE not only serves up a good brisket but is projected to serve up nice earnings growth. DAVE owns, operates and franchises barbecue restaurants and blues clubs. The company currently owns locations and franchises locations in Minnesota, Wisconsin, Illinois, Iowa, Nebraska, Utah, Maryland and Virginia and has signed development agreements for an additional franchised locations. Its menu features award-winning barbecued and grilled meats, an ample selection of salads, side items, sandwiches and unique desserts.

Only one analyst, Mark Smith of Feltl & Co follows DAVE but with projected sales of 137M it has a lot of other fans. Mark rates the company a STRONG BUY with earnings growth of 24.5% this year and 14.8% next year.

BarChart rates DAVE an 80% BUY on a technical analysis basis. The company is selling for around 6.70 and Barchart has a support level of 6.46.

Recommendation: BUY Famous Dave's --DAVE-- below 6.75 with a protective stop loss at 6.00

Jim Van Meerten is an investor and writes about financial matters here and on Financial Tides. Please leave a comment below or email FinancialTides@gmail.com.

Disclosure: I hold no position in Famous Dave's -- DAVE -- at the time of this publication.