Previews

Technical Forecast for RBOB for 19th May 2013

Jason Sen — Mon, 20 May 2013 16:42:36 +0000

RBOB Gasoline tested the 100 day moving average at 292.81 but fortunately topped at 292.76 to keep us short. We are now overbought & could head lower as we start this week. First support at 289/87 with the 200 day moving average & this did in fact hold the ...

A Look Ahead: This Week's ETFs to Watch

ETF Professor — Sun, 19 May 2013 23:56:46 +0000

Sell in May and go away? Try again next year.

After last week's gains, the S&P 500 is sitting on a 4.4 percent gain for the month heading into Monday's trading session. The benchmark U.S. index now resides less than 40 points away from the lofty 1,700 level. Indeed, this rally has plenty of critics, but talk from the naysayers has proven to be cheap and, more importantly, wrong.

In the week ahead, traders will digest existing home sales for April on Wednesday, weekly jobless claims and new home sales for April on Thursday and April's durable goods report on Friday. Do not expect much out of Friday's session because U.S. markets are closed next Monday in observance of the Memorial Day holiday. With folks jetting off to the Hamptons, Friday could be a boring day, but the rest of the week should provide some excitement. Keep an eye on the following ETFs.

iShares Dow Jones U.S. Home Construction Index Fund (NYSE: ITB) As was just noted, there are two important construction data point due out this week that could impact the high-flying iShares Dow Jones U.S. ...

Earnings Expectations for the Week of May 20

Nelson Hem — Sun, 19 May 2013 15:22:39 +0000

The start of the retail earnings season last week was a mixed bag.

Quarterly results from Walmart (NYSE: WMT), Kohl's (NYSE: KSS) and Nordstrom (NYSE: JWN) ranged from so-so to disappointing, while J.C. Penney (NYSE: JCP) posted a larger-than-expected net loss. Macy's (NYSE: M) was the standout, with relatively strong first-quarter results. There are plenty more on the retail earnings front this week.

On Tuesday, Home Depot (NYSE: HD) is scheduled to report before the opening bell, while rival Lowe's Companies (NYSE: LOW) shares its results Wednesday before the markets open. They both are projected to report per-share earnings more than 13 percent, relative to a year ago, to $0.77 for Home Depot and $0.51 for Lowe's. First-quarter revenue for the former is expected to be up about five percent year-over-year to $18.69 billion, while that of the latter crept up more than two percent to $13.45 billion.

First-quarter fiscal 2014 earnings from Best Buy (NYSE: BBY) are expected to come to $0.25 per share, on revenues of $10.64 billion. But in the same quarter of the previous year, the consumer electronics retailer posted $0.72 EPS and sales of $11.61 billion. The consensus EPS estimate for the quarter has ticked up a penny in the past 60 days, but Best Buy earnings fell well short of expectations in two of the past three quarters. The company is scheduled to share its results early Tuesday.

Other specialty retailers expected to report earnings declines this week include Advance Auto Parts (NYSE: AAP), America's Car-Mart (NASDAQ: CRMT), GameStop (NYSE: GME) and Staples (NASDAQ: SPLS).

Analysts are looking for ...

Presidential Visit Puts Myanmar Investment Theme in Spotlight

ETF Professor — Sun, 19 May 2013 15:11:48 +0000

Six months after President Barack Obama visited Myanmar, that country's president, Thein Sein, will visit the White House.

Sein's visit to Washington, D.C. marks the first such visit by a leader from the Southeast Asian nation in nearly five decades and it is one that again puts the spotlight on Myanmar's burgeoning but controversial investment thesis.

As is often the case with many countries sporting the emerging or frontier labels, Myanmar possesses ample economic potential. For investors, there is also plenty of risk. After serving as a stage for allied and opposing forces' operations during World War II, Myanmar's infrastructure was ravaged. Military rule dominated the country during the 1990s despite supposedly free elections.

Today, the country lacks a sophisticated legal structure, an advanced banking system and robust foreign exchange operations. Those factors make for a series of red flags for even the most adventurous investors. An unfortunate reality is that Myanmar, a country as large as France, has lost 50 years of economic progress, according to Economy Watch.

However, Sein is working to change his country's image and his visit with Obama plays a part in that mission. It also serves as a reminder that Myanmar, currently a virtually inaccessible to most U.S. investors, is worth keeping an eye on.

Vital Statistics
Numbers do not lie and that saying is encouraging when it comes to Myanmar. Granted, the country is starting from a low base, but its real GDP has grown an estimated five to six percent over the past four years and that number could climb to six to eight percent over the next decade, according to Economy Watch. Assuming a growth rate of six to seven percent, ...

Campbell Soup Earnings Preview: Double-Digit Revenue Growth Expected

Nelson Hem — Sat, 18 May 2013 19:55:59 +0000

Campbell Soup (NYSE: CPB), which some have speculated could be a takeover candidate for Warren Buffett and Berkshire Hathaway (NYSE: BRK-A), is scheduled to report its third-quarter fiscal 2013 results Monday, May 20, before the markets open.

Investors will be watching for updates about several innovative new food and beverage products that were previously announced. The growth of healthy beverages and baked snacks business, as well as overseas expansion, are expected to bode well for the future of this nearly 145-year-old company.

Expectations

Analysts on average predict that Campbell Soup will report revenue for the quarter that totaled $2.04 billion, which would be more than 11 percent higher than in the year-ago quarter. Earnings of $0.56 per share are also in the consensus forecast. That would be the same as the earnings per share (EPS) in the comparable period of last year.

That consensus EPS estimate has remained steady over the past 60 days. However, analysts have underestimated Campbell Soup's EPS in the past six quarters. In the most recent report, EPS beat expectations by about six percent.

The CEO said in the second-quarter report, "Despite weakness in our U.S. Beverages and North America Foodservice businesses, our first half business results were positive. ... Halfway through our fiscal year, we are making progress against our plans to return Campbell to sustainable, profitable ...

Weekly Preview: FOMC Minutes in Focus, Earnings Season Wanes

Matthew Kanterman — Fri, 17 May 2013 20:29:42 +0000

In the upcoming week, market focus shifts back to the Fed as the FOMC minutes of the latest meeting are released. Also, Fed Chairman Ben Bernanke is set to speak as earnings season slows down, although there are still some key earnings set to be released.

Key Earnings

This week, the earnings calendar is light in volume but still has some big reports due out. Earnings from Salesforce.com (NYSE: CRM), Pandora Media (NASDAQ: P), and the Gap (NYSE: GPS) are expected.

Salesforce.com

Customer-relationship management software company Salesforce.com is set to report first quarter operations for its 2014 fiscal year on Thursday, May 23. Analysts are expecting EPS of $0.10 vs. $0.09 a year ago on revenue of $887.1 million vs. $695.47 million a year ago.

Analysts at Oppenheimer are bullish on the stock ahead of the report. “We view CRM as the best long-term growth investment in our coverage universe, and we anticipate positive 1Q results for Salesforce.com despite facing tough y/y comparables, seasonal headwinds, and more adverse FX effects since guidance. We estimate PF revenue of $887M (+28% y/y) and PF EPS of $0.10, which is in line with consensus.”

“Our recent checks suggest CRM is not experiencing any slowing in its business and rather point to increases in average deal sizes. We are bullish on CRM's many growth opportunities in 2013 as the secular trends around enterprise- wide SaaS adoption continue to strengthen.”

Analysts at Goldman Sachs are also bullish on the stock ahead of earnings. “We think there is upside risk to the Street's revenue and non-GAAP EPS estimates of $887mn and $0.10 (GSe: $887mn/ $0.11). Guidance is for revenue of $882- 887mn and non-GAAP EPS of $0.10-0.11 ($0.40-0.42 pre the 4 for 1 split).”

“We expect CRM to raise its FY14 revenue outlook off of a strong F1Q14. Also, we expect cash flow guidance to remain at low 20% growth (consensus 23%) while we expect Street bookings growth of 21% yoy to remain relatively the same despite a bigger FX headwind. We think M&A continues to be an overhang for the shares post the company's $1bn convertible issuance. In our view CRM remains a key beneficiary in the movement to the cloud and it continues to be a top long-term pick.”

Wedbush analysts jump into the bullish bandwagon on Salesforce.com, noting that it is also one of their top picks. “For 1Q, we expect revenue over $5M above consensus, and we are a penny above EPS consensus. Our revenue estimate reflects 28% Y/Y growth in total revenue and subscription revenue, and is over $5M above the consensus estimate.”

“Looking forward to 2Q, we believe the company has plenty of room to guide ahead of consensus revenue of $935M. Our revenue estimate of $950M is predicated on 27% Y/Y organic subscription growth, which looks achievable given CRM's deferred commissions growth of 34%+ in each of the last four quarters. On the EPS line, we expect guidance will include consensus (and our estimate) of $0.12.”

“We reiterate our OUTPERFORM rating and 12-month target price of $51. Our target price is based on a combination of our P/E, EV/FCF, and DCF approaches. Our estimates are unchanged; our target price is adjusted for a 4:1 stock split on April 18th.”

The Gap

The Gap Inc. is expected to report first quarter results on Thursday as well. Last week, the company raised guidance for the quarter for EPS to $0.68-0.69 per share vs. the consensus estimate at the time of $0.56 as well as a rise of 7% in same store sales in April. Now, analysts are still expecting EPS of $0.58 vs. $0.47 a year ago on revenue of $3.68 billion vs. $3.49 billion a year ago.

Analysts at Goldman Sachs commented on the guidance raise ahead of earnings. “EPS include $0.04 of tax benefits, so on an operating basis the $0.64 adjusted number is still nicely ahead of expectations. We estimate margins expanded +260 bps on the back of cost deflation and fixed cost leverage.”

“We ...

Benzinga Market Primer: Friday, May 17

Matthew Kanterman — Fri, 17 May 2013 10:36:17 +0000

Futures Rise Heading Into the Weekend

U.S. equity futures rose slightly in early pre-market trade heading into the weekend after a week marked by small moves in equities in both directions. Stocks look set to test all-time highs again in Friday's session if futures can hold gains into the open.

Top News

In other news around the markets:

The European Union reported EU auto sales rose 1.8 percent in April, the first monthly gain in over 18 months.
Japanese Machine Orders rose a whopping 14.2 percent in March, much better than the 3.2 percent expected gain. However, the data is extremely volatile and may not be a clear sign that stimulus policies are working just yet.
San Francisco Fed President John Williams, a non-voting member of the FOMC this year, spoke yesterday saying that it may already be time for the Fed to begin tapering its bond purchases. Other Fed officials hinted they may first slow purchases of mortgage backed securities to prevent a new housing bubble.
S&P 500 futures rose 4.4 points to 1,652.50.
The EUR/USD was flat at 1.2882.
Spanish 10-year government bond yields fell 2 basis points to 4.29 percent.
Italian 10-year government bond yields fell 1 basis point to 3.97 percent.
Gold fell 0.92 percent to $1,374.10 per ounce.

Asian Markets

Asian shares were mostly higher overnight following the Japanese data. The Japanese Nikkei Index rose 0.67 percent. Also, the Korean Kospi gained 0.79 percent and Australian shares added 0.29 percent.

European Markets

European shares mixed overnight with moves remaining tepid following the auto sales data. The Spanish Ibex Index rose 0.08 percent and the Italian FTSE MIB Index added ...

Benzinga Market Primer: Thursday, May 16: J.C. Penney Earnings In Focus

Matthew Kanterman — Thu, 16 May 2013 10:47:30 +0000

Futures Flat After Strong Japanese GDP

U.S. equity futures traded just near unchanged in early pre-market trade following a stronger than expected GDP report from Japan. Japan reported first quarter GDP rose 3.5 percent on an annualized basis, better than the 2.7 percent expected growth rate. Notably, the GDP deflator, a measure of inflation, fell to -1.2 percent from -0.9 percent expected, showing continued deflation in Japan.

Top News

In other news around the markets:

The World Gold Council announced that global gold demand fell 13 percent in the first quarter with gold investment declining by nearly one half. However, they also said that supply constraints of gold bars were increasing as production slows.
Foreign Direct Investment into China fell once again in April to 1.21 percent annualized growth from 1.42 percent growth in the previous month, showing continued caution on investment in emerging markets.
Inflation in the eurozone continued to run below trend in April as core CPI inflation rose 1.0 percent vs. a year ago, in line with expectations and below March's 1.0 percent.
S&P 500 futures fell 1.1 points to 1,653.20.
The EUR/USD was lower at 1.2875.
Spanish 10-year government bond yields fell 2 basis points to 4.32 percent.
Italian 10-year government bond yields fell 2 basis points to 4.00 percent.
Gold fell 1.7 percent to $1,372.50 per ounce.

Asian Markets

Asian shares were mixed overnight as Japanese shares sold off following the news that deflation persisted into the first quarter The Japanese Nikkei Index fell 0.39 percent while the Shanghai Composite Index gained 1.22 percent and the Hang Seng Index rose 0.17 percent. Also, the Korean Kospi gained 0.79 percent and Australian shares fell 0.5 percent.

European Markets

European shares were ...

Benzinga Market Primer: Wednesday, May 15

Matthew Kanterman — Wed, 15 May 2013 10:45:32 +0000

Futures Lower on Weak European Growth Data

U.S. equity futures traded lower in early pre-market trade following a weaker than expected GDP report from the eurozone for the first quarter. GDP growth rose to -0.2 percent on a quarterly basis from -0.6 percent but missed forecasts of a 0.1 percent contraction. Weakness was notably seen in Germany, France, and Italy in the report, with the annualized rate of growth for Germany dropping to -1.4 percent vs. 0.2 percent growth forecast.

Top News

In other news around the markets:

The U.K. had fewer people claim unemployment benefits in April than expected, a positive sign for the labor market as the unemployment rate fell. The Claimant Count Change in the U.K. was released at -7.3 thousand people vs. a forecast of -3.0 thousand as the unemployment rate unexpectedly declined 0.1 percent to 7.8 percent. However, most of the drop was due to people leaving the labor force.
The Bank of England issued an upbeat forecast for the U.K. economy in its latest Inflation Report, the last of Governor Mervyn King's tenure at the BoE. The Bank forecasts that the U.K. will grow 0.5 percent in the second quarter with growth accelerating to 1.7 percent in the second quarter of 2014 and 2.2 percent in the same period of 2015. Notably, the Bank mentioned that it sees the effects of the financial crisis easing, finally.
Wal-Mart (NYSE: WMT) has refused to sign a new safety pact for its suppliers in Bangladesh but has announced that it will increase inspections in the country in the wake of the disaster that left numerous workers dead and more injured.
S&P 500 futures fell 3.7 points to 1,644.30.
The EUR/USD was lower at 1.2887.
Spanish 10-year government bond yields ...

Benzinga Market Primer: Tuesday, May 14

Matthew Kanterman — Tue, 14 May 2013 10:32:36 +0000

Futures Slightly Lower on Mixed European Data

U.S. equity futures traded slightly lower in early pre-market trade following mixed economic data out of the eurozone. The moves follow basically flat trading on Wall Street from Monday after futures rallied into the open following weaker than expected Chinese data.

Top News

In other news around the markets:

The German ZEW Economic Sentiment Index rose to 36.4 in May from 36.3 in April but missed expectations of a gain to 38.3. The current conditions index was also weak and over 77 percent of respondents said they do not expect another rate cut in the next six months.
Industrial Production across the eurozone rose faster than expected in March as IP rose 1.0 percent vs. a 0.4 percent forecast gain.February's reading was revised downwards to 0.3 percent from 0.4 percent.
Australia's just released budget for the next fiscal year sees growth at 3 percent, alleviating some fears of a more protracted slowdown in the resource-rich nation.
S&P 500 futures fell 2.8 points to 1,628.00.
The EUR/USD was higher at 1.3006.
Spanish 10-year government bond yields rose 3 basis points to 4.32 percent.
Italian 10-year government bond yields rose 3 basis points to 4.01 percent.
Gold rose 0.05 percent to $1,435.00 per ounce.

Asian Markets

Asian shares were mostly lower overnight as the yen retreated from recent lows against the dollar. The Japanese Nikkei Index fell 0.16 percent and the Shanghai Composite Index fell ...

A Look Ahead: This Week's ETFs to Watch

ETF Professor — Mon, 13 May 2013 10:28:19 +0000

Against the backdrop of some strong earnings reports, a spate of interest rate cuts and other cheery news from global central banks, U.S. stocks again soared last week.

The S&P 500 added 1.2 percent while the Dow Jones Industrial Average climbed one percent. The Nasdaq Composite was the best of the three major U.S. indexes with a weekly gain of 1.45 percent. All of that indicates that risk appetite remains high and that the sell in May and go away should consider trying again in 2014.

This week has potential to be another interesting one, particularly with an economic data docket chock full of reports pertaining to the U.S. consumer. Here are some of the ETFs to keep an eye on this week.

SPDR S&P Retail ETF (NYSE: XRT) The high-flying SPDR S&P Retail ETF is book-ended by important data points this week. On Monday, the Commerce Department delivers retail sales for April. On Friday, the Thomson Reuters/University of Michigan initial reading of May consumer sentiment is due to be released.

Retail sales and employment data, the headlines that are arguably as relevant to an ETF such as XRT ...

Benzinga Market Primer: Monday, May 13

Matthew Kanterman — Mon, 13 May 2013 10:27:54 +0000

Futures Lower on Chinese Data, Fed Tapering Fears

U.S. equity futures traded lower in early pre-market trade following some weak economic data out of China and also on the heels of an article from the Wall Street Journal's Jon Hilsenrath about the Fed. Hilsenrath wrote that the Fed is now considering the methodology of when to start exiting from its current policies with the real question being when to start tapering asset purchases.

Top News

In other news around the markets:

China reported weaker than expected industrial production and fixed asset investment for April. Industrial production rose 9.3 percent from the same period a year ago, better than March's 8.9 percent but below forecasts of a reading of 9.5 percent. Also, fixed asset investment grew 20.6 percent, slower than March's 20.9 percent growth and below forecasts of 21 percent growth.
Carlo Cottarelli, the head of the IMF's fiscal affairs division, said that Italy and Germany have completed most of their fiscal adjustments while France still has room to go.
Japan once again got the green light on its easing programs from the G7, sending the USD/JPY through the 102 level initially before retreating back below the level.
S&P 500 futures fell 6.3 points to 1,623.30.
The EUR/USD was lower at 1.2969.
Spanish 10-year government bond yields fell 1 basis point to 4.20 percent.
Italian 10-year government bond yields rose 1 basis point to 3.91 percent.
Gold fell 0.32 percent to $1,432.00 per ounce.

Asian Markets

Asian shares were mixed overnight as Japanese shares led and Chinese shares lagged. The Japanese Nikkei Index rose 1.2 percent while the Shanghai Composite ...

Earnings Expectations for the Week of May 13

Nelson Hem — Sun, 12 May 2013 18:29:44 +0000

It's time for the big retailers to step into the earnings spotlight once again. This week we will be hearing from Walmart, the king of retailers, which is expected to report some annual revenue and earnings growth. And then there is struggling J.C. Penney, from which analysts predict a deeper net loss.

Other retailers scheduled to share their quarterly results this week include Kohl's, Macy's and Nordstrom.

Walmart

First-quarter fiscal 2014 earnings from Bentonville, Arkansas-based Walmart (NYSE: WMT) are expected to come to $1.15 per share, on revenues of $116.42 billion. In the same quarter of the previous year, the largest retailer in the world exceeded consensus earnings per share (EPS) estimates when it posted $1.09 and sales of $113.02 billion.

The consensus EPS estimate for the fiscal quarter has not changed in the past 60 days. But analysts underestimated Walmart earnings in the previous four quarters; the beat was by more than six percent in the fourth quarter. The company is scheduled to share its results Thursday before the markets open.

J.C. Penney

For its first quarter of 2013, once-iconic catalog and shopping mall standby J.C. Penney (NYSE: JCP) is expected to post a net loss of $0.86 per share, while revenues totaled $2.70 billion. That compares to a net loss of $0.25 and $3.15 billion in revenue the company reported in the same quarter of last year.

Analyst sentiment is deteriorating, as the consensus forecast 60 days ago called for a net loss of just $0.57. Then again, the losses were deeper than estimated in the past four quarters. Look for the earnings report Thursday afternoon.

Macy's

First-quarter earnings from Macy's (NYSE:

Benzinga Market Primer: Friday, May 10

Matthew Kanterman — Fri, 10 May 2013 10:40:09 +0000

Futures Slightly Higher On Yen Weakness

U.S. equity futures rose slightly in early pre-market trade although the story was all about the yen overnight. The yen continued to weaken against the dollar overnight as the USD/JPY rose above 101 on new reports that Japanese citizens are starting to buy foreign assets, a key sign that the yen devaluation is working and is sustainable.

Top News

In other news around the markets:

Germany's trade balance was reported as better than expected at 17.6 billion euros vs. the forecast of 16.5 billion euros in March. However, the data represents a drop from February's upwardly revised 17.7 billion euros.

An investor group led by Carl Icahn and Southeastern Asset Management are offering an alternative buyout solution to Dell's (NASDAQ: DELL) woes. The two are offering $12 per share to current investors with the option for them to also keep their stock.
Bloomberg reported overnight that Yahoo! (NASDAQ: YHOO) is looking to buy Hulu to add video services to its platform.
S&P 500 futures rose 1.7 points to 1,626.30.
The EUR/USD was lower at 1.3012.
Spanish 10-year government bond yields fell 2 basis points to 4.17 percent.
Italian 10-year government bond yields fell 3 basis points to 3.85 percent.
Gold fell 1.37 percent to $1,448.50 per ounce.

Asian Markets

Asian shares were higher led by Japanese stocks as the yen continued to weaken, boosting hopes that Japan's easing efforts will work. The Japanese Nikkei Index rose 2.93 percent and the Shanghai Composite Index rose 0.62 percent while the Hang Seng Index gained 0.47 percent. ...

Benzinga Market Primer: Thursday, May 9

Matthew Kanterman — Thu, 09 May 2013 10:35:24 +0000

Futures Lower After New Record Highs

U.S. equity futures traded lower in early pre-market trade after the S&P 500 made new record highs again Wednesday. However, strength in bonds and the yen could have been precursors to a pull-back, which many analysts would see as healthy at these levels.

Top News

In other news around the markets:

Industrial production in the U.K. rose faster than expected in March, growing 0.7 percent compared to forecasts of a rise of 0.2 percent.
The European Central Bank slashed its growth forecasts for the eurozone, cutting its 2013 growth forecast to -0.4 percent from 0.0 percent and its 2014 forecast to 1.0 percent from 1.1 percent.
Australia added a whopping 50,100 new jobs in April compared to forecasts of just 11,000 jobs added with the unemployment rate falling to 5.5 percent from 5.6 percent.
S&P 500 futures fell 2 points to 1,626.70.
The EUR/USD was lower at 1.3140.
Spanish 10-year government bond yields were flat at 4.09 percent.
Italian 10-year government bond yields fell 1 basis point to 3.83 percent.
Gold fell 0.33 percent to $1,468.60.

Asian Markets

Asian shares were mostly lower overnight following mixed Chinese inflation data. The Japanese Nikkei Index fell 0.66 percent and the Shanghai Composite Index declined 0.59 percent while the Hang Seng Index lost 0.14 percent. Also, the Korean Kospi rose 1.18 percent as the Bank of Korea cuts its key lending rate by 25 basis points and Australian shares fell 0.03 percent.

European Markets

European shares were lower in early trade following the downgraded forecasts from the European Central Bank and ahead of the Bank of England's interest rate decision. The Spanish Ibex Index fell 0.67 percent ...