Barchart U.S. Morning Call
Friday, September 11, 2009
by Barchart Research Team of Barchart.com
|
|
Overnight Global News
The European DJ Stoxx 50 this morning is up +0.64% and Dec S&Ps are up +1.80 pointS, both at 10-3/4 month highs. The larger-than-expected increase in Aug China industrial production is buoying stocks in Europe and the US on speculation that growth in China may accelerate and boost the global economy. The dollar index tumbled to a fresh 11-1/2 month low which has propped up metals prices, while crude oil and Treasury prices are little changed. Aug German wholesale prices were +0.7% m/m and -8.3% y/y as year-over-year prices declined for the tenth consecutive month. ECB Executive Board member Lorenzo Bini Smaghi said in a speech in Rome today that it would be preferable if the ECB withdrew its emergency liquidity measures first before raising interest rates, but that "the tightening phase cannot wait until inflation materializes but will have to precede it." Bini Smaghi added that given the uncertainties now is "not the time" to withdraw the emergency stimulus.
The Asian markets today closed mostly higher with Japan down -0.66%, Hong Kong +0.44%, China +2.38%, Taiwan +0.07%, Australia +0.55%, Singapore -0.04%, South Korea +0.41%, India +0.29%. China's Shanghai Index rallied after Aug China industrial production rose +12.3% y/y, higher than an expected +11.8% y/y gain and the largest increase in a year as the government's stimulus measures more than compensate for a collapse in exports. Also boosting Chinese share prices was the +15.4% y/y gain in Aug China retail sales while Aug China new lending rose +15% m/m to 410.4 billion yuan ($60 billion). Japan's Nikkei Stock Index was undercut today after Japan's Q2 GDP was unexpectedly revised lower. Q2 Japan GDP expanded at a +0.6% q/q and +2.3% y/y pace, slower than the originally reported +0.9% q/q and +3.7% y/y pace as companies cut spending and inventories fell. Japanese stocks also fell after the yen strengthened to a 6-3/4 month high against the dollar, which depresses the local value of Japanese companies' overseas sales.
Overnight U.S. Stock News
December S&Ps this morning are trading up +1.80 points and posted a new 10-3/4 month high. The US stock market yesterday shook off early losses and finished sharply higher (Dow +0.84%, S&P 500 +1.04%, Nasdaq Composite +1.15%). The S&P 500 Index posted a 10-3/4 month high. Bullish factors included (1) the larger-than-expected decline in weekly jobless claims which showed continuing unemployment claims falling to a 5-month low, adding to evidence that the US economy has bottomed, (2) the rally in airline stocks after JPMorgan Chase said demand is "not as bad as feared" and bankruptcies aren't likely, (3) a rally in health insurers on relief that President Obama's health-care plan does not have much public support which could lead to a watered-down version of his plan that would benefit health insurers, and (4) the drop in yields on Fannie Mae and Freddie Mac mortgage securities to 3-month lows, signaling mortgage rates may fall further and bolster the US housing market.
Bearish factors yesterday included (1) comments from Atlanta Fed President Lockhart that the US economic recovery will probably be "lackluster" and that "there are risks even to this lackluster outlook," (2) the prediction from Goldman Sachs that sluggish spending by US consumers could lop as much as 2 percentage points from US economic growth over the next three years, and (3) the +18% y/y increase in US Aug foreclosure filings to 358,471, as foreclosure filings in the US have now exceeded 300,000 for the sixth straight month as rising unemployment prompts additional foreclosures and may prolong the housing crisis.
Garmin (GRMN) rose 1.2% in pre-market trading after the largest US maker of navigation devices was upgraded to "buy" from "underperform" at Bank of America.
Today's Market Focus
December 10-year T-notes this morning are trading up +0.5 of a tick. Dec T-note prices yesterday trended higher the entire day and finished up +31 ticks. Bullish factors for T-note prices included (1) the prediction from economists at Goldman Sachs that the Fed may keep interest rates low for "many years" to help US consumers and companies as they continue to deleverage, (2) comments from Atlanta Fed President Lockhart who said the US economic recovery will probably be "lackluster" as it is hobbled by strains in financial markets and weak consumer spending and that inflation will be "contained for some time," and (3) strong demand for the Treasury's $12 billion 30-year T-bond auction that was auctioned at a 4.238% yield, lower than the forecasted 4.289% yield, and that had a bid-to-cover ratio of 2.92, higher than the 2.31 average for the last 10 auctions which indicates firm demand. Bearish factors included (1) the larger-than-expected decline in weekly continuing US unemployment claims which fell to their lowest level in 5 months (-159,000 to 6.088 million versus expectations of -34,000 to 6.200 million), and (2) the larger-than-expected increase in the US July trade deficit (-$32.0 billion versus expectations of -$27.3 billion) as US imports rose +4.7%, signaling a revival in commerce as the global recession eased.
The dollar index this morning is trading lower at a 11-1/2 month low with the dollar/yen -0.87 yen at a 6-3/4 month low and the euro/dollar is +0.22 cents at a 8-3/4 month high. A rally in global stocks has prompted renewed weakness today in the dollar as a decrease in the safe-haven demand for dollars has investors fleeing the greenback in search of higher-yielding assets. The dollar index yesterday closed lower for the fifth straight day and posted a fresh 11-1/2 month low. Bearish factors included (1) the wider-than-expected US July trade deficit, indicating the US needs to attract additional foreign capital to maintain the dollar's value, and (2) the prediction from JPMorgan Chase that the dollar may fall below 90 yen as it maintains a pattern of falling in the last month of every quarter since Lehman Brother's bankruptcy last year. Bullish factors for the dollar included (1) comments from Atlanta Fed President Lockhart that the US recovery will be "lackluster" and that "financial conditions are vulnerable," which may increase the safe-haven demand for the dollar, and (2) the monthly report from the ECB that stated the Euro-Zone's recovery from recession will be patchy and inflation will remain "subdued," which suggests that the ECB may be in no hurry to start raising interest rates.
October crude oil prices this morning are trading down -3 cents a barrel and Oct gasoline is trading +0.50 cent a gallon. Oct crude oil prices yesterday moved higher for the fourth stright session and closed up +$0.63 a barrel. October gasoline closed down -2.45 cents a gallon. Bullish factors included (1) the much larger-than-expected drop in weekly crude oil inventories which fell to a 7-1/2 month low (-5.91 million bbl versus expectations of -1.7 million bbl), (2) the IEA's hike in its 2010 global oil demand estimate by +450,000 bpd to 85.7 million bpd, citing growth in Chinese consumption and stronger demand in the US, and (3) the fall in the dollar index to an 11-1/2 month low, boosting demand for crude as a hedge against inflation. Bearish factors included (1) the unexpected increase in weekly gasoline inventories (+2.07 million bbl versus expectations of -1.5 million bbl), (2) the larger-than-expected increase in weekly distillate inventories (+1.99 million bbl to a 26-1/2 year high of 165.6 million bbl versus expectations of +1.0 million bbl), and (3) OPEC's decision to leave its production quotas unchanged at 2.845 million bpd at the conclusion of the cartel's meeting in Vienna.
Today's U.S. Earnings Reports:
Earnings reports (confirmed releases, sorted by mkt cap) CPB-Campbell Soup (BEST earnings consensus $0.26), BRC-Brady Corp. (0.41), FIZZ-National Beverage (0.18), GROW-US Global Investors (n/a), ACET-Aceto Corp. (0.11).
Global Financial Calendar
| Friday 9/11/2009 |
|---|
| |
| United States |
|---|
| 0830 ET | Aug import price index expected +1.0% m/m and -15.9% y/y, Jul -0.7% m/m and -19.3% y/y. |
| 0930 ET | Chicago Fed President Charles Evans delivers welcoming remarks at his bank's conference on financial literacy. |
| 1000 ET | Jul wholesale inventories expected -1.0%, Jun -1.7%. |
| 1000 ET | Preliminary Sep University of Michigan U.S. consumer confidence expected +1.8 to 67.5, Aug -0.3 to 65.7. |
| 1400 ET | Aug monthly budget statement expected -$150.0 billion, Jul -$180.7 billion. |
| Japan |
|---|
| 0100 ET | Aug Japan consumer confidence expected +0.3 to 40.0, Jul +1.6 to 39.7. Aug household confidence expected +1.6 to 41.0, Jul +1.8 to 39.4. |
| Germany |
|---|
| 0200 ET | Aug German wholesale price index, Jul -0.5% m/m and -10.6% y/y, |
| Euro-Zone |
|---|
| 0400 ET | ECB publishes Sep monthly report. |
| United Kingdom |
|---|
| 0430 ET | Aug UK PPI input prices expected +1.0% m/m and -8.4% y/y, Jul -1.4% m/m and -12.2% y/y. |
| 0430 ET | Aug UK PPI output prices expected +0.3% m/m and -0.5% y/y, Jul +0.3% m/m and -1.3% y/y. |
| 0430 ET | Aug UK PPI output core expected +0.2% m/m and +0.8% y/y, Jul +0.5% m/m and +0.2% y/y. |
| Canada |
|---|
| 0830 ET | Jul Canadian new housing price index expected -0.1% m/m, Jun -0.2% m/m. |
Morning Quote Board
| Morning Quotes (ET) | Last | Chg | %chg | Updated |
| US Stock Futures |
|---|
| S&P (Globex) (Z9) | 1039.20 | 1.80 | 0.17% | 07:10:21 |
| DJIA (CBOT) (U9) | 9617 | 12 | 0.12% | 07:07:54 |
| | | | |
| European Stocks |
|---|
| Europe DJ Stoxx 50 | 2450.25 | 15.57 | 0.64% | 07:05:45 |
| London UK FTSE Index | 5022.01 | 34.33 | 0.69% | 07:05:45 |
| German Dax Index | 5627.71 | 32.94 | 0.59% | 07:05:58 |
| French CAC 40 Index | 3736.26 | 30.39 | 0.82% | 07:05:45 |
| | | | |
| Asian-Pacific Stocks |
|---|
| Japan Nikkei Index | 10444 | -69 | -0.66% | 03:00:15 |
| Hong Kong Hang Seng | 21161 | 92 | 0.44% | 04:01:30 |
| China CSI 300 Index | 3238 | 75 | 2.38% | 03:01:08 |
| Taiwan TAIEX Index | 7337 | 5 | 0.07% | 01:46:01 |
| Australian S&P 200 | 4596.1 | 25.3 | 0.55% | 02:47:03 |
| Singapore Str. Times | 2681.03 | -0.99 | -0.04% | 05:10:01 |
| South Korea KOSPI 200 | 215.81 | 0.89 | 0.41% | 05:03:27 |
| Bombay Sensex 30 | 16264 | 47.44 | 0.29% | 06:29:55 |
| Karachi KSE-100 | 9059 | 63 | 0.70% | 03:46:18 |
| | | | |
| US Interest Rates |
|---|
| 10yr T-notes (CBT)(Z9) | 119.730 | 0.000 | 0.00% | 07:10:43 |
| Cash 10yr T-note Price | 102.110 | 0.005 | 0.02% | 07:20:01 |
| Cash 10yr T-note Yield | 3.345 | -0.002 | -0.06% | 07:19 |
| 5yr T-note (CBT)(Z9) | 115.290 | 0.000 | 0.00% | 07:10:34 |
| Cash 5yr T-note Price | 100.145 | 0.005 | 0.02% | 07:20:31 |
| Cash 5yr T-note Yield | 2.278 | -0.004 | -0.15% | 07:20 |
| 30-yr T-bond (CBT)(Z9) | 120.52 | -0.05 | -0.13% | 07:09:45 |
| Cash 30yr T-bond Price | 105.060 | 0.025 | 0.07% | 07:20:31 |
| Cash 30yr T-bond Yield | 4.194 | -0.005 | -0.11% | 07:20 |
| Eurodollars (CME)(Z9) | 99.580 | 0.010 | 0.01% | 07:09:58 |
| Eurodollars (CME)(H0) | 99.385 | 0.005 | 0.01% | 07:09:58 |
| | | | |
| Asian & European Rates |
|---|
| 10-yr JGBs (TSE) (Z9) | 139.15 | 0.22 | 0.16% | 02:00:00 |
| EuroyenTibor(SGX)(Z9) | 99.510 | 0.000 | 0.00% | 05:00:00 |
| Bunds (Eurex) (Z9) | 121.19 | 0.29 | 0.24% | 07:05:52 |
| Euribor (Eurex) (Z9) | 99.31 | 0.02 | 0.02% | 06:17:36 |
| UK Gilts (Liffe) (Z9) | 117.92 | 0.41 | 0.35% | 07:05:57 |
| Short Stlg (Liffe) (Z9) | 99.38 | 0.02 | 0.02% | 07:04:49 |
| | | | |
| Forex |
|---|
| U.S. Dollar Index | 76.59 | -0.24 | -0.31% | 07:10:55 |
| US Dollar-Japanese Yen | 90.87 | -0.87 | -0.95% | 07:20:58 |
| EuroFX-US Dollar | 1.4604 | 0.0022 | 0.22% | 07:20:58 |
| US Dollar-Swiss Franc | 1.0366 | -0.0018 | -0.18% | 07:20:58 |
| British Pound-US$ | 1.6691 | 0.0040 | 0.40% | 07:20:58 |
| US$-Canadian Dlr | 1.0766 | -0.0005 | -0.05% | 07:20:58 |
| Yen (Globex) (Z9) | 1.1012 | 0.0103 | 1.03% | 07:10:55 |
| Euro FX (Globex) (Z9) | 1.4606 | 0.0023 | 0.16% | 07:10:55 |
| SwissFranc (Globex)(Z9) | 0.9657 | 0.0021 | 0.22% | 07:10:49 |
| British Pound(Glbx)(Z9) | 1.6693 | 0.0031 | 0.19% | 07:10:57 |
| Canadian$ (Globex)(Z9) | 0.9297 | 0.0026 | 0.28% | 07:10:57 |
| | | | |
| Commodities |
|---|
| Gold (Comex) (Z9) | 1003.0 | 6.2 | 0.62% | 07:10:49 |
| Silver (Comex) (Z9) | 16.890 | 0.220 | 1.32% | 07:10:37 |
| Copper (Comex) (Z9) | 287.8 | 0.1 | 0.03% | 07:10:36 |
| Crude Oil (Nymex) (V9) | 71.91 | -0.03 | -0.04% | 07:10:57 |
| Gasoline (Nymex) (V9) | 180.86 | 0.50 | 0.28% | 07:01:05 |
| Heating Oil(Nymex)(V9) | 178.42 | -0.43 | -0.24% | 07:10:41 |
| NaturalGas(Nymex)(V9) | 3.277 | 0.021 | 0.64% | 07:10:30 |
| Corn (CBOT) (Z9) | 315.75 | 0.50 | 0.16% | 07:10:32 |
| Soybeans (CBOT) (X9) | 928.00 | 1.50 | 0.16% | 07:10:51 |
| Wheat (CBOT) (Z9) | 461.50 | 2.75 | 0.60% | 07:10:36 |
Recent articles from this author
- Barchart U.S. Morning Call - Friday, March 19, 2010
- Barchart U.S. Morning Call - Thursday, March 18, 2010
- 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
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.
|
