Barchart U.S. Morning Call
Tuesday, September 15, 2009
by Barchart Research Team of Barchart.com
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Overnight Global News
The European DJ Stoxx 50 this morning is down -0.22% and Dec S&Ps are down -1.80 points. European stocks were undercut today after German investor confidence rose less than forecast. Although still rising +1.6 points to a 3-1/2 year high of 57.7, the Sep German ZEW economic sentiment survey had been expected to rise to 60.0. The Sep French CPI climbed +0.6% m/m and fell -0.2% y/y as rising energy costs added to the monthly increase although from a year ago prices declined for the fourth straight month, indicating scant price pressures. European wage growth accelerated +4.0% y/y in Q2 compared with a +3.6% y/y increase in Q1 as the Euro-Zone economy edged closer to recovery, while European car sales rose for the third straight month in Aug as vehicle-scrapping incentives boosted sales in Germany, France the U.K and Italy.
The Asian markets today closed mostly higher with Japan up +0.15%, Hong Kong -0.31%, China +0.28%, Tauwan +1.23%, Australia +0.20%, Singapore -0.05%, South Korea +1.27%, India +1.48%. The Chinese stock market received a boost today after the Ministry of Finance reported that Aug foreign direct investment in China climbed +7% y/y, the first increase in 11 months. That follows a -35.7% y/y plunge in July and a total -17.5% y/y decline in the first eight months of this year. China's rebound from the slowest growth in almost a decade may attract more money from abroad, helping to fuel its economic recovery. Tire companies in China rallied today after most said the US imposition of tariffs on imported tires won't affect their second-half sales while Chinese airlines stocks gained after the Civil Aviation Administration of China said air passenger numbers rose +42% y/y in Aug while cargo volumes rose 18% y/y. US President Obama downplayed the possibility that the imposition of tariffs on imported tires from China would spark a cycle of retaliation saying "we're not going to see a trade war."
Overnight U.S. Stock News
December S&Ps this morning are trading down -1.80 points. The US stock market yesterday recovered from early losses and closed modestly higher (Dow +0.22%, S&P 500 +0.63%, Nasdaq Composite +0.52%). The S&P 500 Index rallied to an 11-1/4 month high. Bullish factors included (1) a rally in defensive stocks and consumer staple companies that do not sell a lot of goods to China on fears a trade war with China will hurt those companies that rely on increased sales to China for their earnings, and (2) comments from San Francisco Fed President Yellen who said that prospects for a "tepid" recovery require policy makers boost employment and that "a wide array of data" supports the view that the recesion has ended and the economy will expand in the second half as growth comes from a "diminished pace of inventory liquidation by manufacturers, wholesalers and retailers."
Bearish factors included (1) comments from Nobel Prize-winning economist Joseph Stiglitz that the US has failed to fix the underlying problems of its banking system and that "the problems are worse than they were in 2007 before the crisis," and (2) concerns that a trade war with China will derail the global economic recovery.
Citigroup (C) fell 2.2% in pre-market trading after people familiar with the matter said the Treasury Department has been discussing how to sell the 34% stake that the government acquired in the rescue of the bank.
Ebay (EBAY) climbed 2% in pre-maket trading after UBS upgraded the stock to "buy" from "neutral," saying the comapny's marketplaces business is "turning a corner" and it raised its stock price estimate on Ebay to $28 from $24.
Today's Market Focus
December 10-year T-notes this morning are trading down -4.5 ticks. Dec T-note prices yesterday moved lower throughout the day and closed down -14 ticks. Bearish factors for T-note prices included (1) reduced safe-haven demand for Treasuries after the S&P 500 Index rallied to an 11-1/4 month high, (2) concerns that increased trade friction between China and the US may lead China, the world's biggest holder of US Treasuries, to sell Treasuries and other dollar assets and park its currency reserves in gold, and (3) the prediction from the Bank for International Settlements (BIS) that longer-term bond yields are likely to rise amid investors' concern about widening budget deficits built up by governments to battle the global recession. A bullish factor was comments from San Francisco Fed President Yellen who said prospects for a "tepid" recovery require that policy makers boost employment and guard against inflation becoming too low rather than too high and that "tight credit" may restrain growth for "some time to come."
The dollar index this morning is trading higher with the dollar/yen +0.23 yen and the euro/dollar -0.24 cents. The dollar index yesterday finished slightly higher. Bullish factors included (1) short-covering in the dollar after the dollar index had fallen for six straight sessions, (2) speculation that a trade dispute between the US and China may slow the global economic recovery and increase the safe-haven appeal of the dollar after the US imposed tariffs on Chinese tires which may lead to a trade war, and (3) comments from ECB Council member Nout Wellink that he expects the economic recovery to be "fairly slow" as the global financial situation remans "very fragile." Bearish factors for the dollar included (1) strength in the euro which rose to a 8-3/4 month high after EU Monetary Affairs Commissioner Joaquin Almunia said the EU may revise higher its forecast for economic growth in the second half of this year for the Euro-Zone, and (2) comments from San Francisco Fed President Yellen who said prospects for a "tepid" recovery require that policy makers boost employment and guard against inflation becoming too low rather than too high, suggesting she wants interest rates to remain low for the foreseeable future which may keep the dollar's interest rate differentials weak.
October crude oil prices this morning are up +33 cents a barrel and Oct gasoline is trading +0.05 cent a gallon. Crude prices received a boost overnight after OPEC raised its global oil demand forecasts for this year and next on expectations the world economy will return to growth. Oct crude oil prices yesterday moved lower for a scond day and closed down -0.43 a barrel. October gasoline closed down -1.65 cents a gallon at a 1-1/2 month low. Bearish factors included (1) the stronger dollar, (2) the announcement by the CME Group that it would enforce its new position limits on energy futures contracts, which may have caused some liquidation of crude oil contracts, and (3) carry-over weakness from gasoline prices which tumbled to a 2-month low on concerns that demand for gasoline will weaken further as the summer driving season has ended. Bullish factors included (1) Morgan Stanley's +11% hike in its 2012 crude oil price estimate to $105 a barrel from a previous estimate of $95 a barrel, saying that demand may grow by 2.7 million bpd by 2012 while global production capacity falls by 700,000 bpd and that spare global crude capacity will fall to 3.3 million bpd a day from current levels of 6.7 million bpd, and (2) the statement from Nigerian militants that they will end their 60-day cease-fire by Tuesday, which may further limit Nigerian crude oil production if militants resume attacks on Nigerian oil installations. Expectations for Wednesday's weekly DOE inventory report are for crude oil inventories to fall -2.5 million bbl, gasoline stockpiles to rise +700,000 bbl, distillates to climb +1.5 million bbl, and the refinery capacity rate to fall -0.5 to 86.7%.
Today's U.S. Earnings Reports:
Earnings reports (confirmed releases, sorted by mkt cap) ADBE-Adobe Systems (BEST earnings consensus $0.33), BBY-Best Buy (0.42), KR-Kroger (0.44), FMCN-Focus Media (0.17), CBRL-Cracker Barrel (0.95).
Global Financial Calendar
| Tuesday 9/15/2009 |
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| United States |
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| 0745 ET | ICSC (Int'l Council of Shopping Centers) weekly retailer sales, previous +0.6%w/w and -0.1% weekly y/y. |
| 0830 ET | Aug PPI expected +0.8% m/m and -5.3% y/y, Jul -0.9% m/m and -6.8% y/y. Aug PPI ex food and energy expected +0.1% m/m and +2.2% y/y, Jul -0.1% m/m and +2.6% y/y. |
| 0830 ET | Aug retail sales expected +1.9% and +0.4% less autos, Jul -0.1% and -0.6% less autos. |
| 0830 ET | Sep Empire manufacturing index expected +2.9 to 15.0, Aug +12.7 to 12.1. |
| 0855 ET | Redbook weekly retailer sales, previous +0.2% month-to-date m/m and -2.4% month-to-date y/y. |
| 1000 ET | Sep IBD/TIPP economic optimism expected +0.7 to 51.0, Aug +4.0 to 50.3. |
| 1000 ET | Fed Chairman Ben Bernanke speaks on "Reflections on a Year of Crisis" at the Brookings Institution with Q&A to follow. |
| 1000 ET | Jul business inventories expected -0.9%, Jun -1.1%. |
| 1300 ET | Weekly 4-week T-bill auction. |
| 1700 ET | ABC U.S. weekly consumer confidence, previous -3 to -48. |
| Japan |
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| 0200 ET | Revised Aug Japan machine tool orders, previous -71.3% y/y. |
| France |
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| 0245 ET | Aug French CPI (EU harmonized) expected +0.3% m/m and -0.4% y/y, Jul -0.5% m/m and -0/8% y/y. |
| 0245 ET | Jul French current account, Jun -3.5 billion euros. |
| United Kingdom |
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| 0430 ET | Aug UK CPI expected +0.3% m/m and +1.4% y/y, Jul unchanged m/m and +1.8% y/y. Aug CPI core expected +1.6% y/y, Jul +1.8% y/y. |
| 0430 ET | Aug UK RPI expected +0.2% m/m and -1.5% y/y, Jul unchanged m/m and -1.4% y/y. Aug RPI ex mortgage interest payments expected +1.2% y/y, Jul +1.2% y/y. |
| 0430 ET | Jul UK DCLG house prices expected -9.5% y/y, Jun -10.7% y/y. |
| Germany |
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| 0500 ET | Sep German ZEW economic sentiment survey expected +3.9 to 60.0, Aug +16.6 to 56.1. Sep ZEW current situation expected +4.7 to -67.5, Aug +12.1 to -77.2. |
| Euro-Zone |
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| 0500 ET | Sep Euro-Zone ZEW economic sentiment survey expected +5.1 to 60.0, Aug +15.4 to 54.9. |
| 0500 ET | Q2 Euro-Zone labor costs expected +3.4% y/y, Q1 +3.7% y/y. |
| 1100 ET | ECB Executive Board member Juergen Stark delivers a speech in Berlin entitled "Monetary and fiscal policy; criteria and timing for the phasing out of crisis measures." |
| Canada |
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| 0830 ET | Jul Canadian new motor vehicle sales expected +5.0% m/m, Jun -0.6% m/m. |
| 0830 ET | Q2 Canadian labor productivity, Q1 +0.3% q/q. |
Morning Quote Board
| Morning Quotes (ET) | Last | Chg | %chg | Updated |
| US Stock Futures |
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| S&P (Globex) (Z9) | 1041.70 | -1.80 | -0.17% | 07:19:50 |
| DJIA (CBOT) (Z9) | 9540 | -10 | -0.10% | 07:19:50 |
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| European Stocks |
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| Europe DJ Stoxx 50 | 2433.65 | -5.30 | -0.22% | 07:15:15 |
| London UK FTSE Index | 5027.91 | 9.06 | 0.18% | 07:15:15 |
| German Dax Index | 5610.02 | -10.22 | -0.18% | 07:15:21 |
| French CAC 40 Index | 3739.16 | 8.55 | 0.23% | 07:15:15 |
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| Asian-Pacific Stocks |
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| Japan Nikkei Index | 10218 | 16 | 0.15% | 03:00:15 |
| Hong Kong Hang Seng | 20866 | -66 | -0.31% | 04:01:30 |
| China CSI 300 Index | 3303 | 9 | 0.28% | 03:01:11 |
| Taiwan TAIEX Index | 7346 | 89 | 1.23% | 01:46:01 |
| Australian S&P 200 | 4540.3 | 9.2 | 0.20% | 02:47:03 |
| Singapore Str. Times | 2638.4 | -1.34 | -0.05% | 05:10:01 |
| South Korea KOSPI 200 | 216.14 | 2.72 | 1.27% | 05:03:25 |
| Bombay Sensex 30 | 16454 | 240.26 | 1.48% | 07:08:06 |
| Karachi KSE-100 | 9029 | -46 | -0.50% | 04:16:20 |
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| US Interest Rates |
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| 10yr T-notes (CBT)(Z9) | 118.595 | -0.045 | -0.12% | 07:19:53 |
| Cash 10yr T-note Price | 101.240 | 0.015 | 0.05% | 07:29:31 |
| Cash 10yr T-note Yield | 3.415 | -0.006 | -0.16% | 07:29 |
| 5yr T-note (CBT)(Z9) | 115.175 | -0.010 | -0.05% | 07:19:48 |
| Cash 5yr T-note Price | 100.030 | 0.020 | 0.06% | 07:27:00 |
| Cash 5yr T-note Yield | 2.355 | -0.013 | -0.57% | 07:26 |
| 30-yr T-bond (CBT)(Z9) | 119.66 | -0.06 | -0.16% | 07:20:12 |
| Cash 30yr T-bond Price | 104.170 | -0.015 | -0.04% | 07:28:01 |
| Cash 30yr T-bond Yield | 4.231 | 0.003 | 0.06% | 07:27 |
| Eurodollars (CME)(Z9) | 99.560 | 0.000 | 0.00% | 07:15:59 |
| Eurodollars (CME)(H0) | 99.355 | -0.005 | -0.01% | 07:20:14 |
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| Asian & European Rates |
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| 10-yr JGBs (TSE) (Z9) | 138.97 | -0.29 | -0.21% | 02:00:00 |
| EuroyenTibor(SGX)(Z9) | 99.530 | 0.020 | 0.02% | 06:23:30 |
| Bunds (Eurex) (Z9) | 121.16 | -0.22 | -0.18% | 07:15:17 |
| Euribor (Eurex) (Z9) | 99.26 | -0.02 | -0.03% | 06:51:08 |
| UK Gilts (Liffe) (Z9) | 118.06 | -0.15 | -0.13% | 07:15:20 |
| Short Stlg (Liffe) (Z9) | 99.42 | 0.06 | 0.06% | 07:14:54 |
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| Forex |
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| U.S. Dollar Index | 76.85 | 0.19 | 0.25% | 07:20:20 |
| US Dollar-Japanese Yen | 91.17 | 0.23 | 0.26% | 07:30:21 |
| EuroFX-US Dollar | 1.4594 | -0.0024 | -0.24% | 07:30:21 |
| US Dollar-Swiss Franc | 1.0388 | 0.0043 | 0.43% | 07:30:21 |
| British Pound-US$ | 1.6468 | -0.0116 | -1.16% | 07:30:21 |
| US$-Canadian Dlr | 1.0870 | 0.0043 | 0.43% | 07:30:21 |
| Yen (Globex) (Z9) | 1.0975 | -0.0028 | -0.28% | 07:20:18 |
| Euro FX (Globex) (Z9) | 1.4602 | -0.0011 | -0.08% | 07:20:19 |
| SwissFranc (Globex)(Z9) | 0.9639 | -0.0029 | -0.30% | 07:20:12 |
| British Pound(Glbx)(Z9) | 1.6474 | -0.0099 | -0.60% | 07:20:19 |
| Canadian$ (Globex)(Z9) | 0.9203 | -0.0021 | -0.23% | 07:20:20 |
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| Commodities |
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| Gold (Comex) (Z9) | 999.2 | -1.9 | -0.19% | 07:20:20 |
| Silver (Comex) (Z9) | 16.505 | -0.118 | -0.71% | 07:20:11 |
| Copper (Comex) (Z9) | 281.5 | 1.0 | 0.36% | 07:19:45 |
| Crude Oil (Nymex) (V9) | 69.19 | 0.33 | 0.48% | 07:20:14 |
| Gasoline (Nymex) (V9) | 174.38 | 0.05 | 0.03% | 07:19:56 |
| Heating Oil(Nymex)(V9) | 174.28 | 0.06 | 0.03% | 07:19:59 |
| NaturalGas(Nymex)(V9) | 3.484 | 0.187 | 5.67% | 07:19:54 |
| Corn (CBOT) (Z9) | 319.00 | 1.25 | 0.39% | 07:19:53 |
| Soybeans (CBOT) (X9) | 909.00 | 0.00 | 0.00% | 07:17:41 |
| Wheat (CBOT) (Z9) | 455.00 | 1.00 | 0.22% | 07:17:51 |
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
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- 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.
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