Barchart U.S. Morning Call
Thursday, September 10, 2009
by Barchart Research Team of Barchart.com
|
|
Overnight Global News
The European DJ Stoxx 50 this morning is down -0.41% and Sep S&Ps are down -1.20 points. Stock prices are fluctuating on either side og unchanged while a stronger dollar has led to declines in metals prices. Crude oil prices climbed ahead of this morning's weekly DOE inventories report and after the IEA raised its global oil demand estimate for next year for a second consecutive month, citing growth in Chinese consumption and stronger demand in the US. The IEA now estimates world oil consumption is likely to average 85.7 million bpd next year, +450,000 bpd more than last month's estimate. Technology stocks firmed afer Texas Instruments late yesterday reported stronger-than-expected Q3 profit and said demand is beginning to recover for analog chips; semiconductors used in devices such as electronic utility meters, computer disk drives and consumer electronics. In its monthly bulletin released today, the ECB said that the Euro-Zone's recovery from recession will be patchy and inflation will remain "subdued," nearly the same message ECB President Jean-Claude Trichet made after last Thursday's ECB policy meeting, suggesting ECB policy makers are in no rush to withdraw policy stimulus.
The Asian markets today closed mostly higher with Japan up +1.95%, Hong Kong +1.05%, China -1.00%, Taiwan +1.12%, Australia +1.07%, Singapore +1.19%, South Korea +2.30%, India +0.21%. China's Premier Wen Jiabao said today that his nation "cannot and will not" pull back from policies designed to revive the economy as "China's economic rebound is unstable, unbalanced and not yet solid." He cautioned that some stimulus measures will "fade" and others will take time to become effective. In an interview in the Dalian today, Zhu Min, the Vice President of the Bank of China said that ample liquidity has caused "bubbles" in stocks, commodities and real estate, raising concerns that bank loans are fueling unsustainable gains in equity and property markets. July Japan machine orders, an indicator of capital spending in the next three to six months, plunged -9.3% m/m to 665 billion yen ($7.2 billion), the lowest level since the data series began in 1987, and a sign that consumer demand at home and abroad has yet to recover sufficiently to spur investment by Japanese businesses.
Overnight U.S. Stock News
September S&Ps this morning are trading down -1.20 points. The US stock market yesterday moved higher into early afternoon and then shed of its some gains into the close and finished modestly higher (Dow +0.53%, S&P 500 +0.78%, Nasdaq Composite +1.11%). Bullish factors included (1) strength in industrial companies after Goldman Sachs upgraded multi-industry companies to "attractive" from "neutral," saying the stocks tend to outperform the S&P 500 when the ISM manufacturing index climbs "sustainably above 50." (2) the rally in credit-card companies after Citigroup predicted "the credit cycle has begun to recover for US credit cards," (3) the prediction from former Fed Chairman Greenspan that the US economy will start to pull out of a recession by year end, helped by "remarkable growth" in productivity and a depletion of inventories, (4) the +9.5% gain in weekly mortgage purchase applications to the highest level since Jan, which indicates strength in the housing market, and (5) the Fed's Beige Book in which most Fed districts "mentioned signs of improvement" in the economy.
Bearish factors yesterday included (1) comments from Chicago Fed President Evans that the US jobless rate will continue to rise, peaking at a "little over 10%," and stay "high for an uncomfortable period of time," (2) the prediction from Bank of America that the US stock rally is "maturing" and the risk of a 20% correction in the S&P 500 Index has increased, and (3) the prediction from Blackrock that investors should be prepared for some "near-term corrective action as stocks are no longer as cheap as they were several months ago and there is still a great deal of uncertainty over the economic outlook."
Yahoo! (YHOO) climbed over 3% in pre-market trading after Bank of America upgraded the company to "buy" from "neutral" saying the owner of the second-most popular US Internet search engine is a growth company that's "trading like a long-term secular decliner."
Monsanto (MON) is 3% lower in pre-market trading after the world's biggest seed maker said its 2009 earnings would come in at the low end of its projected 2009 EPS range of $4.40 to $4.50, below analysts' estimaes of $4.52, and that fiscal year 2010 EPS would be $3.10 to $3.30, well below analysts' estimates of $4.12.
Today's Market Focus
December 10-year T-notes this morning are trading up +2.5 ticks. Dec T-note prices yesterday closed down -2.5 ticks at a 1-1/2 week low. Bearish factors for T-note prices included (1) reduced safe-haven demand for Treasuries after the stock market rallied, (2) supply pressures ahead of Thursday's $12 billion 30-year T-bond auction, (3) the prediction from Citigroup that the recernt rally in Treasuries may have run its course and yields could be on the cusp of the next move higher, and (4) the Fed's Beige Book in which most Fed districts "mentioned signs of improvement" in the economy. Bullish factors included (1) comments from Chicago Fed President Evans who said it's too early for the Fed to tighten credit and that it will act "aggressively" to contain inflation while the economy rebounds, (2) the prediction from Daiwa Securities that the US yield curve is likely to "flatten" as fading economic optimism revives demand for Treasuries, and (3) strong foreign demand for Treasuries after indirect bidders, a class of investors that includes foreign central banks, bought 55.3% of yesterday's $20 billion 10-year T-note auction, the most since Nov 2005.
The dollar index this morning is trading higher with the dollar/yen +0.08 yen and the euro/dollar -0.15 cents. The dollar index yesterday continued its recent downleg lower and slumped to an 11-1/2 month low. Bearish factors included (1) a continued deterioration in the dollar's interest rate differentials after the 3-month dollar Libor rate fell to a record low of 0.30%, (2) UniCredit SpA's prediction that the dollar will weaken to $1.50 per euro by December saying they don't expect the Fed to start a tightening cycle anytime soon, and (3) the prediction from Royal Bank of Scotland Group Plc that the yen will strengthen against the dollar over the next few months as the yen is replaced by the dollar as the favored currency for so-called carry trades. Bullish factors for the dollar included (1) the prediction from Japan's former top currency official, Eisuke Sakakibara, a.k.a. Mr. Yen, that the dollar will remain the world's reserve currency for the next 20 years, and (2) the prediction from Barclays Capital that gains in the euro may be limited as a weak Euro-Zone recovery will prevent the ECB from "aggressively" raising interest rates.
October crude oil prices this morning are trading up +49 cents a barrel and Oct gasoline is trading -0.52 cent a gallon. Oct crude oil prices yesterday moved higher for a second day and closed higher by +$0.21 a barrel. October gasoline closed down -0.08 cent a gallon. Both Oct crude oil and gasoline posted 1-week highs. Bullish factors included (1) continued weakness in the dollar index which fell to an 11-1/2 month low which boosts the prices of most commodities priced in dollars, and (2) the action by the US Energy Department to raise its crude oil price forecast for this year to $60.12 a barrel, up from last month's forecast of $59.94 a barrel on speculation that demand will improve as the global economy recovers. Bearish factors included (1) comments from Kuwait's oil minister that OPEC will leave crude oil production levels unchanged following the cartel's meeting in Vienna, and (2) the US Energy Department's cut in its 2009 global crude oil consumption forecast to 83.67 million bpd from last month's forecast of 83.76 million bpd. Expectations for Thursday's weekly DOE inventories (released one day later due to the Labor Day Holiday) are for crude oil stockpiles to decline -1.7 million bbl, gasoline inventories to fall -1.5 million bbl, distillates to rise +1.0 million bbl and the refinery capacity rate to drop -0.3 to 86.9%.
Today's U.S. Earnings Reports:
Earnings reports (confirmed releases, sorted by mkt cap) NSM-National Semiconductor (BEST earnings consensus $0.09), NAV-Navistar International (0.66), LULU-Lululemon Athletica (0.10), STEI-Stewart Enterprises (0.08), FNSR-Finisar Corp. (0.00).
Global Financial Calendar
| Thursday 9/10/2009 |
|---|
| |
| United States |
|---|
| 0830 ET | Weekly unemployment claims expected -10,000 to 560,000, previous -4,000 to 570,000. Weekly continuing claims expected -34,000 to 6.200 million, previous +92,000 to 6.234 million. |
| 0830 ET | Jul trade balance expected -$27.3 billion, Jun -$27.0 billion. |
| 1230 ET | Atlanta Fed President Dennis Lockhart speaks about US and global economic interactions at the World Council of Jacksonville Business Luncheon. |
| 1300 ET | Treasury auctions $12 billion 30-year T-bonds. |
| 1300 ET | Treasury Secretary Timothy Geithner testifies to a Congressional Oversight Panel on TARP. |
| 1615 ET | Fed Vice Chairman Donald Kohn delivers a speech on the unconventional U.S. monetary policy response to the financial crisis at the Brookings Institute. |
| France |
|---|
| 0245 ET | Jul French industrial production expected +0.4% m/m and -13.0% y/y, Jun +0.3% m/m and -12.8% y/y. |
| 0245 ET | Jul French manufacturing production expected +0.5% m/m and -14.4% y/y, Jun +0.4% m/m and -14.4% y/y. |
| 0245 ET | Jul French trade balance expected -4.0 billion euros, Jun -4.0 billion euros. |
| United Kingdom |
|---|
| 0700 ET | BOE announces interest rate decision (0.50% base rate expected unchanged and 175 billion pound asset purchase program expected unchanged). |
| Canada |
|---|
| 0900 ET | BOC announces interest rate decision (0.25% benchmark rate expected unchanged). |
| Japan |
|---|
| 1950 ET | Revised Q2 Japan GDP expected unrevised at +0.9% q/q and +3.7% annualized. |
Morning Quote Board
| Morning Quotes (ET) | Last | Chg | %chg | Updated |
| US Stock Futures |
|---|
| S&P (Globex) (U9) | 1031.30 | -1.20 | -0.12% | 07:29:20 |
| DJIA (CBOT) (U9) | 9526 | -12 | -0.13% | 07:26:47 |
| | | | |
| European Stocks |
|---|
| Europe DJ Stoxx 50 | 2422.63 | -9.91 | -0.41% | 07:24:30 |
| London UK FTSE Index | 4971.13 | -33.17 | -0.66% | 07:24:30 |
| German Dax Index | 5576.37 | 2.11 | 0.04% | 07:24:40 |
| French CAC 40 Index | 3695.28 | -12.41 | -0.33% | 07:24:30 |
| | | | |
| Asian-Pacific Stocks |
|---|
| Japan Nikkei Index | 10514 | 202 | 1.95% | 03:00:15 |
| Hong Kong Hang Seng | 21070 | 219 | 1.05% | 04:01:30 |
| China CSI 300 Index | 3163 | -32 | -1.00% | 03:01:14 |
| Taiwan TAIEX Index | 7332 | 81 | 1.12% | 01:46:01 |
| Australian S&P 200 | 4570.8 | 48.6 | 1.07% | 02:47:03 |
| Singapore Str. Times | 2682.02 | 31.54 | 1.19% | 05:10:01 |
| South Korea KOSPI 200 | 214.92 | 4.83 | 2.30% | 05:03:27 |
| Bombay Sensex 30 | 16217 | 33.31 | 0.21% | 06:30:56 |
| Karachi KSE-100 | 8996 | -89 | -0.98% | 04:15:34 |
| | | | |
| US Interest Rates |
|---|
| 10yr T-notes (CBT)(Z9) | 118.465 | 0.025 | 0.07% | 07:29:34 |
| Cash 10yr T-note Price | 101.135 | 0.045 | 0.14% | 07:39:30 |
| Cash 10yr T-note Yield | 3.454 | -0.017 | -0.48% | 07:39 |
| 5yr T-note (CBT)(Z9) | 115.165 | 0.020 | 0.05% | 07:29:39 |
| Cash 5yr T-note Price | 100.040 | 0.025 | 0.08% | 07:39:30 |
| Cash 5yr T-note Yield | 2.348 | -0.017 | -0.71% | 07:39 |
| 30-yr T-bond (CBT)(Z9) | 118.57 | 0.00 | 0.00% | 07:28:59 |
| Cash 30yr T-bond Price | 102.310 | 0.035 | 0.11% | 07:39:30 |
| Cash 30yr T-bond Yield | 4.322 | -0.006 | -0.15% | 07:39 |
| Eurodollars (CME)(Z9) | 99.570 | -0.010 | -0.01% | 07:29:07 |
| Eurodollars (CME)(H0) | 99.360 | -0.010 | -0.01% | 07:26:47 |
| | | | |
| Asian & European Rates |
|---|
| 10-yr JGBs (TSE) (Z9) | 138.93 | 0.01 | 0.01% | 02:00:00 |
| EuroyenTibor(SGX)(Z9) | 99.510 | 0.000 | 0.00% | 05:28:02 |
| Bunds (Eurex) (Z9) | 120.64 | 0.16 | 0.13% | 07:24:24 |
| Euribor (Eurex) (Z9) | 99.30 | 0.02 | 0.02% | 07:16:44 |
| UK Gilts (Liffe) (Z9) | 117.33 | 0.50 | 0.43% | 07:24:28 |
| Short Stlg (Liffe) (Z9) | 99.33 | 0.01 | 0.01% | 07:22:14 |
| | | | |
| Forex |
|---|
| U.S. Dollar Index | 77.11 | 0.12 | 0.15% | 07:29:35 |
| US Dollar-Japanese Yen | 92.13 | 0.08 | 0.09% | 07:39:40 |
| EuroFX-US Dollar | 1.4542 | -0.0015 | -0.15% | 07:39:40 |
| US Dollar-Swiss Franc | 1.0416 | 0.0003 | 0.03% | 07:39:40 |
| British Pound-US$ | 1.6573 | 0.0026 | 0.26% | 07:39:40 |
| US$-Canadian Dlr | 1.0866 | 0.0081 | 0.81% | 07:39:40 |
| Yen (Globex) (Z9) | 1.0859 | 0.0003 | 0.03% | 07:29:21 |
| Euro FX (Globex) (Z9) | 1.4543 | 0 | 0.00% | 07:29:29 |
| SwissFranc (Globex)(Z9) | 0.9607 | 0.0003 | 0.03% | 07:29:26 |
| British Pound(Glbx)(Z9) | 1.6563 | 0.0032 | 0.19% | 07:29:31 |
| Canadian$ (Globex)(Z9) | 0.9209 | -0.0042 | -0.45% | 07:29:34 |
| | | | |
| Commodities |
|---|
| Gold (Comex) (Z9) | 988.0 | -9.1 | -0.91% | 07:29:39 |
| Silver (Comex) (Z9) | 16.160 | -0.310 | -1.88% | 07:29:19 |
| Copper (Comex) (Z9) | 287.8 | -4.6 | -1.57% | 07:29:39 |
| Crude Oil (Nymex) (V9) | 71.80 | 0.49 | 0.69% | 07:29:39 |
| Gasoline (Nymex) (V9) | 182.29 | -0.52 | -0.28% | 07:15:05 |
| Heating Oil(Nymex)(V9) | 179.74 | 0.3 | 0.17% | 07:29:30 |
| NaturalGas(Nymex)(V9) | 2.862 | 0.033 | 1.17% | 07:27:06 |
| Corn (CBOT) (Z9) | 311.50 | 1.75 | 0.56% | 07:29:03 |
| Soybeans (CBOT) (X9) | 928.25 | -0.25 | -0.03% | 07:24:25 |
| Wheat (CBOT) (Z9) | 458.25 | 2.00 | 0.44% | 07:27:57 |
Recent articles from this author
- Barchart U.S. Morning Call - Wednesday, March 17, 2010
- Barchart U.S. Morning Call - Tuesday, March 16, 2010
- Barchart U.S. Morning Call - Monday, March 15, 2010
- Barchart U.S. Morning Call - Friday, March 12, 2010
- Barchart U.S. Morning Call - Thursday, March 11, 2010
About the author
Get Barchart U.S. Morning Call delivered to your email inbox! Sign up for free here. Barchart U.S. Morning Call is written by the experienced members of the Commodity Research Bureau and the Barchart Research Team. Commodity Research Bureau (CRB) has been providing research to the financial and commodity community since 1934. If you have any questions for our analysts, please contact us at support@crbtrader.com. Sent every morning, "Morning Call" summarizes overnight global market news, along with a U.S. market forecast for the day ahead. It Includes upcoming earnings reports, a global financial calendar, and quote board overview of where the markets are standing.
|
