Barchart U.S. Morning Call
Wednesday, September 16, 2009
by Barchart Research Team of Barchart.com
|
|
Overnight Global News
The European DJ Stoxx 50 this morning is up +1.20% and Dec S&Ps are up +5.90 points, both at 11-month highs. The dollar index fell to a 11-3/4 month low which has lifted gold to a 1-1/2 year high and silver to a 13-1/4 month high. Fed Chairman Bernanke's comments yesterday that the recession is "very likely" over along with comments from billionare investor Buffet that the economy is responding to government stimulus measures and that his company is "buying equities as we speak" is helping to lift European share prices. European consumer prices remained tame in Aug, rising +0.3% m/m and falling -0.2% y/y, the third consecutive monthly drop on an annual basis. European Union Economic and Monetary Affairs Commissioner Joaquin Almunia warned about "risks of regression" in the Euro-Zone's recovery from recession saying "we are not yet in a situation where we can say economic activity can maintain itself." The EU Commissioner was speaking before the 27-nation EU Parliament today, warning about removing government economic-stimulus measures too soon.
The Asian markets today closed mostly higher with Japan up +0.52%, Hong Kong +2.57%, China -1.34%, Taiwan +1.28%, Australia +2.42%, Singapore +1.37%, South Korea +2.03%, India +1.35%. Comments from Japan's incoming finance chief, Hirohisa Fujii, who said that he doesn't support a "weak yen," helped propel the yen to a 7-month high against the dollar today. The yen's rally took some of the luster off the gains in Japanese exporters which had rallied nicely following the biggest surge in US retail sales in 3-1/2 years yesterday. Concerns that incoming Primie Minister Hatoyama's policies will delay Japan's economic recovery also limited stock gains. Most Asian mining companies and metal producers rose as gold climbed to a 1-1/2 year high and comments from former Fed Chairman Greenspan, who spoke to Tokyo clients of Deutsche Bank today and said "the next six months seem reasonably easy to anticipate: no inflation, good economic growth," kept stock prices in the black.
Overnight U.S. Stock News
December S&Ps this morning are trading +5.90 and at a fresh 11-month high. The US stock market yesterday rallied to its highest level this year and finished higher (Dow +0.59%, S&P 500 +0.31%, Nasdaq Composite +0.52%). The S&P 500 Index rallied to an 11-1/4 month high. Bullish factors included (1) the much larger-than-expected increase in Aug US retail sales which had its biggest monthly gain (+2.7% m/m) in nearly 3-1/2 years and pointd to strength in personal consumption which bodes well for corporate profits and stock prices, (2) the larger-than-expected increase in the Sep Empire manufacturing index which grew at its strongest pace in 1-3/4 years and pointed to continued improvement in the manufacturing sector of the northeastern US, (3) the larger-than-expected decline in July US business inventories which tumbled to $1.33 trillion, the lowest level since Mar 2006 which bodes well for further production increases with inventories at such low levels, (4) comments from Fed Chairman Bernanke who said that the US recession "very likely" has ended, and (5) the fall in the Libor-OIS spread, a gauge of banks' reluctance to lend, to 11 bp, the average for the period before the financial crisis began in Aug 2007 and a sign that interbank lending markets are closer to normal.
Bearish factors included (1) the prediction from Deutsche Bank AG that home prices in the US will fall a further 11% and will not find a bottom until Q2 of 2010 as delinquencies will continue to rise, (2) the prediction from Morgan Stanley that stimulus measures in the US and China are "unsustainable" and that the US economic recovery will be "anemic" and prone to a relapse because it lacks momentum and is growing at "stall speed," (3) weakness in health-care companies after a report from the Institute of Medicine, which advises the government on health care, that the US can cut health-care spending by $250 billion a year within a decade, and (4) the quarterly PricewaterhouseCooper's Real Estate Investor Survey that predicts the US commercial real estate market is unlikely to recover before 2012 and that office rents in New York and San Francisco may drop 20% through next year.
Rambus (RMBS) rose nearly 3% in European trading after announcing it expects revenue for the third quarter of as much as $28 million, boosting its forecast from an earlier projection of $25 million at most.
Barrick Gold (ABX) rallied 2.6% in pre-market trading after gold prices rose to a 1-1/2 year high, which benefits the world's biggest gold producer.
Today's Market Focus
December 10-year T-notes this morning are trading up +10 ticks on anticipation of a benign Aug CPI report this morning. Dec T-note prices yesterday ended lower for a second day and closed down -11.5 ticks. Bearish factors for T-note prices yesterday included (1) the much stronger-than-expected Aug US retail sales report which had its sharpest monthly increase in 3-1/2 years (+2.7% m/m and +1.1% y/y less autos versus expectations of +1.9% m/m and +0.4% less autos), (2) reduced safe-haven demand for Treasuries after Fed Chairman Bernanke said the US recession "very likely" and helped spark a rally in the S&P 500 Index to an 11-1/4 month high, (3) the stronger-than-expected Sep Empire manufacturing index which grew at its strongest pace in 1-3/4 years (+6.8 to 18.9 versus expectations of +2.9 to 15.0), and (4) the stronger-than-expected US Aug PPI (+1.7% m/m and -4.3% y.y versus expectations of +0.8% m/m and -5.3% y/y). Bullish factors included (1) the Fed's purchase of $2.049 billion of Treasuries as part of its quantitative easing program, and (2) a possible increase in the safe-haven demand for Treasuries after the prediction from Morgan Stanley that stimulus measures in the US and China are "unsustainable" and that the US economic recovery will be "anemic" and prone to a relapse into recession because it lacks momentum.
The dollar index this morning is lower as it fell to a 11-3/4 month low with the dollar/yen -0.71 yen and the euro/dollar +0.21 cents. The dollar was undercut today by Japan's incoming finance chief, Hirohisa Fujii, who said that he doesn't support a "weak yen," which pushed the yen to a 7-month high against the dollar. The dollar index yesterday erased an early rally and slumped to a fresh 11-1/2 month low. Bearish factors for the dollar included (1) the fall in the 3-month dollar Libor rate to a record low 0.29% which further weakens the dollar's interest rate differentials, and (2) reduced safe-haven demand for dollars after Fed Chairman Bernanke said the US recession "very likely" has ended which helped propel the S&P 500 Index to an 11-1/4 month high. Bullish factors included (1) signs that the US economy is recovering faster than Europe or Japan after US Aug retail sales rose the most in 3-1/2 years, and (2) euro weakness after the Sep German ZEW economic sentment survey rose less-than-expected and when ECB Executive Board member Juergen Stark said that the economic recovery may be "very uneven" and uncertainty remains "unusually high."
October crude oil prices this morning are down -12 cents a barrel and Oct gasoline is trading -1.40 cents a gallon. Oct crude oil prices yesterday rallied for the first day in the last three and closed up +$2.07 a barrel. October gasoline closed up +4.59 cents a gallon. Bullish factors included (1) signs that the US economy is recovering from recession after US Aug retail sales and the Sep Empire manufacturing index both rose more than expected, indicating increased energy demand in the world's largest energy consuming country, (2) OPEC's hike in its 2009 global oil demand forecast by +140,000 bpd to 84.05 million bpd and its 2010 crude oil demand forecast by +150,000 bpd to 84.56 million bpd on expectations the world economy will return to growth, and (3) expectations that Wednesday's US crude oil inventories will fall for a third straight week. The main bearish factor yesterday was OPEC's monthly report that showed OPEC compliance with its oil production quotas fell to 65% in Aug, a sign that OPEC members are overproducing which may weaken the effectiveness of OPEC's production cuts as cartel members increase production to capture the recent rise in oil prices. 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 +1.25 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) ORCL-Oracle (BEST earnings consensus $0.30), CLC-Clarcor (0.43), DBRN-Dress Barn (0.37), CKR-CKE Restaurants (0.22), APOG-Apogee Enterprises (0.25).
Global Financial Calendar
| Wednesday 9/16/2009 |
|---|
| |
| United States |
|---|
| 0700 ET | Weekly MBA mortgage applications for the week ended Sep 11, previous +17.0% with purchase sub-index +9.5% and refinancing sub-index +22.5%. |
| 0830 ET | Aug CPI expected +0.3% m/m and -1.7% y/y, Jul unchanged m/m and -2.1% y/y. Aug CPI ex food and energy expected +0.1% m/m and +1.4% y/y, Jul +0.1% m/m and +1.5% y/y. |
| 0830 ET | Q2 current account balance expected -$92.0 billion, Q1 -$101.5 billion. |
| 0900 ET | Jul net long-term TIC flows expected +$65.0 billion, Jun +$90.7 billion. |
| 0915 ET | Aug industrial production expected +0.6%, Jul +0.5%. Aug capacity utilization expected +0.5 to 69.0%, Jul +0.4 to 68.5%. |
| 1300 ET | Sep NAHB housing market index expected +1 to 19, Aug +1 to 18. |
| United Kingdom |
|---|
| 0430 ET | Aug UK jobless claims change expected +25,000, Jul +24,900. Aug claimant count rate expected 5.0%, Jul 4.9%. |
| 0430 ET | Jul UK avg earnings including bonus expected +1.9% 3-mo/year-over-year, Jun +2.5% 3-mo/year-over-year. |
| 0430 ET | Jul UK avg earnings ex bonus expected +2.3% 3-mo/year-over-year, Jun +2.5% 3-mo/year-over-year. |
| 0430 ET | Jul UK ILO unemployment rate expected +0.2 to 8.0%, Jun +0.2 to 7.8%. |
| Euro-Zone |
|---|
| 0500 ET | Aug Euro-Zone CPI expected +0.3% m/m and -0.2% y/y, Jul -0.7% m/m and -0.2% y/y. Aug CPI core expected +1.2% y/y, Jul +1.3% y/y. |
| Canada |
|---|
| 0830 ET | Jul Canadian manufacturing sales, Jun +1.9% m/m. |
| Japan |
|---|
| 1950 ET | Q3 Japan BSI large all industry business condition, Q2 -22.4. Q3 BSI large manufacturing business condition, Q2 -13.2. |
| 1950 ET | Jul Japan tertiary industry index expected +0.5% m/m, Jun +0.1% m/m. |
| n/a | Bank of Japan announces interest rate decision (expected no change to 0.10% benchmark rate). |
Morning Quote Board
| Morning Quotes (ET) | Last | Chg | %chg | Updated |
| US Stock Futures |
|---|
| S&P (Globex) (Z9) | 1051.80 | 5.90 | 0.56% | 07:12:42 |
| DJIA (CBOT) (Z9) | 9657 | 54 | 0.56% | 07:13:48 |
| | | | |
| European Stocks |
|---|
| Europe DJ Stoxx 50 | 2469.78 | 29.38 | 1.20% | 07:10:30 |
| London UK FTSE Index | 5123.02 | 80.89 | 1.60% | 07:10:30 |
| German Dax Index | 5687.28 | 58.30 | 1.04% | 07:10:30 |
| French CAC 40 Index | 3807.29 | 55.08 | 1.47% | 07:10:30 |
| | | | |
| Asian-Pacific Stocks |
|---|
| Japan Nikkei Index | 10271 | 53 | 0.52% | 03:00:14 |
| Hong Kong Hang Seng | 21403 | 537 | 2.57% | 04:01:30 |
| China CSI 300 Index | 3258 | -44 | -1.34% | 03:01:13 |
| Taiwan TAIEX Index | 7440 | 94 | 1.28% | 01:46:01 |
| Australian S&P 200 | 4650.4 | 110.1 | 2.42% | 02:47:04 |
| Singapore Str. Times | 2674.42 | 36.02 | 1.37% | 05:10:01 |
| South Korea KOSPI 200 | 220.53 | 4.39 | 2.03% | 05:03:27 |
| Bombay Sensex 30 | 16677 | 222.59 | 1.35% | 06:29:55 |
| Karachi KSE-100 | 9137 | 108 | 1.19% | 04:16:47 |
| | | | |
| US Interest Rates |
|---|
| 10yr T-notes (CBT)(Z9) | 118.620 | 0.100 | 0.27% | 07:15:30 |
| Cash 10yr T-note Price | 101.270 | 0.135 | 0.42% | 07:25:30 |
| Cash 10yr T-note Yield | 3.404 | -0.050 | -1.45% | 07:25 |
| 5yr T-note (CBT)(Z9) | 115.200 | 0.065 | 0.18% | 07:15:29 |
| Cash 5yr T-note Price | 100.045 | 0.075 | 0.23% | 07:24:30 |
| Cash 5yr T-note Yield | 2.345 | -0.050 | -2.10% | 07:24 |
| 30-yr T-bond (CBT)(Z9) | 119.64 | 0.13 | 0.34% | 07:15:18 |
| Cash 30yr T-bond Price | 104.220 | 0.240 | 0.72% | 07:25:30 |
| Cash 30yr T-bond Yield | 4.221 | -0.045 | -1.05% | 07:25 |
| Eurodollars (CME)(Z9) | 99.560 | 0.015 | 0.02% | 07:13:25 |
| Eurodollars (CME)(H0) | 99.355 | 0.020 | 0.02% | 07:10:54 |
| | | | |
| Asian & European Rates |
|---|
| 10-yr JGBs (TSE) (Z9) | 138.80 | -0.17 | -0.12% | 02:00:00 |
| EuroyenTibor(SGX)(Z9) | 99.535 | 0.005 | 0.01% | 06:53:30 |
| Bunds (Eurex) (Z9) | 121.17 | 0.10 | 0.08% | 07:10:10 |
| Euribor (Eurex) (Z9) | 99.27 | 0.00 | 0.01% | 06:35:35 |
| UK Gilts (Liffe) (Z9) | 118.16 | 0.06 | 0.05% | 07:10:31 |
| Short Stlg (Liffe) (Z9) | 99.47 | 0.03 | 0.03% | 07:10:10 |
| | | | |
| Forex |
|---|
| U.S. Dollar Index | 76.30 | -0.22 | -0.29% | 07:15:26 |
| US Dollar-Japanese Yen | 90.34 | -0.71 | -0.78% | 07:25:30 |
| EuroFX-US Dollar | 1.4679 | 0.0021 | 0.21% | 07:25:31 |
| US Dollar-Swiss Franc | 1.0348 | -0.0001 | -0.01% | 07:25:31 |
| British Pound-US$ | 1.6517 | 0.0027 | 0.27% | 07:25:31 |
| US$-Canadian Dlr | 1.0682 | -0.0042 | -0.42% | 07:25:30 |
| Yen (Globex) (Z9) | 1.1076 | 0.0093 | 0.93% | 07:15:28 |
| Euro FX (Globex) (Z9) | 1.4682 | 0.0024 | 0.16% | 07:15:31 |
| SwissFranc (Globex)(Z9) | 0.9673 | 0.0005 | 0.05% | 07:14:35 |
| British Pound(Glbx)(Z9) | 1.6529 | 0.0039 | 0.24% | 07:15:31 |
| Canadian$ (Globex)(Z9) | 0.9367 | 0.0050 | 0.54% | 07:15:13 |
| | | | |
| Commodities |
|---|
| Gold (Comex) (Z9) | 1018.8 | 12.5 | 1.24% | 07:15:31 |
| Silver (Comex) (Z9) | 17.325 | 0.325 | 1.91% | 07:15:24 |
| Copper (Comex) (Z9) | 288.1 | 3.6 | 1.25% | 07:15:10 |
| Crude Oil (Nymex) (V9) | 70.81 | -0.12 | -0.17% | 07:15:30 |
| Gasoline (Nymex) (V9) | 177.52 | -1.40 | -0.78% | 07:13:13 |
| Heating Oil(Nymex)(V9) | 176.89 | -1.12 | -0.63% | 07:13:54 |
| NaturalGas(Nymex)(V9) | 3.49 | 0.17 | 5.12% | 07:14:59 |
| Corn (CBOT) (Z9) | 343.00 | -3.50 | -1.01% | 07:15:04 |
| Soybeans (CBOT) (X9) | 949.75 | -10.25 | -1.07% | 07:15:22 |
| Wheat (CBOT) (Z9) | 466.50 | -4.00 | -0.85% | 07:15:15 |
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.
|
