Barchart U.S. Morning Call
Monday, September 21, 2009
by Barchart Research Team of Barchart.com
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Overnight Global News The European DJ Stoxx 50 this morning is down -0.85 % and Dec S&Ps are down -5.80 points. Concerns that stock valuations remain stretched from the 6-month rally are weighing down global equity markets today, while a stronger dollar has sent crude oil and metals prices tumbling with copper sliding to a 2-1/2 week low. US President Obama said in an interview yesterday that "the jobs picture is not going to improve considerably, and it could even get a little bit worse, over the next couple of months." ECB Executive Board member Gertrude Tumpel-Gugerell said in a speech in Milan today that banks are the key to ending the financial crisis and that "the worst financial storm since the 1930s is only gradually calming down," while fellow ECB Council member and Bundesbank President Axel Weber said in an interview that he expects German unemployment to increase further from the 4.3 million forecast for 2010 and that "in such an enviroment the risk is small that we'll see an inflationary push in the near future." The Asian markets that were open today closed mostly lower with Hong Kong -0.70%, China +0.28%, Taiwan -0.32%, Australia -0.34%, South Korea -0.22%. Markets in Japan, Singapore and India were all closed today for holiday. Overnight U.S. Stock News December S&Ps this morning are trading down by -5.80 points. The US stock market last Friday fluctuated on both sides of unchanged throughout the day and closed slightly higher (Dow +0.37%, S&P 500 +0.26%, Nasdaq Composite +0.29%). Bullish factors included (1) the action by Barclays Capital to boost its Q1 2010 US GDP forecast to 5% from an earlier forecast of 3%, saying inventories are being cut at a faster pace than expected, "suggesting more of a production rebound over the next few quarters," (2) the prediction from Wells Capital Management that the economy is improving more rapidly than people think and that should be reflected in better-than-expected corporate earnings and in investors' confidence as the momentum in the stock market is "very strong," and (3) the action by the Treasury to end its Temporary Guarantee Program for Money Market Funds insurance program for money-market mutual funds with Treasury Secretary Geithner saying "the need for some of the emergency programs put in place during the most acute phase of the financial crisis has receded." Bearish factors included (1) valuation concerns after the recent rally pushed valuations on S&P 500 stocks to almost 20 times the reported earnings from continuing operations of its companies, the highest level since 2004, (2) the US Labor Department's report that showed unemployment rose in 27 US states in August, with California and Nevada reaching record levels of joblessness, and (3) weakness in commodity producers and mining companies as the dollar rallied for the first day in four and copper prices tumbled on demand concerns after Shanghai copper inventories surged to a 5-1/2 year high. Potash Corp. of Saskatchewan (POT) sank over 4% in European trading after the company said profit this year will be $3.25 to $3.75 a share instead of a previous forecast of $4 to $5. Lennar (LEN) slid 1.5% in pre-market trading after the third-biggest US homebuilder by revenue reported a Q3 net loss of 97 cents a share, worse than analysts' estimates of a 51 cent loss. Today's Market Focus December 10-year T-notes this morning are trading up +3 ticks. Dec T-note prices last Friday traded in negative territory throughout the day and closed down -18 ticks. Bearish factors for T-note prices last Friday included (1) the action by Barclays Capital to boost its prediction for US Treasury yields, saying the Fed will start raising interest rates as soon as Sep 2010, up from Barclays' earlier forecast for the Fed to wait until 2011 to raise interest rates, and (2) supply pressures as Treasury dealers begin to prepare for $112 billion of T-note auctions beginning Tuesday. Bullish factors included (1) the statement from BNP Paribas SA that government bonds are supported by the amount of cash available for investment along with "liquidity conditions, sluggish consumption and labor markets," and (2) a possible increase in the safe-haven demand for Treasuries on concern the crisis in the banking industry will persist after the FT reported that Lloyds Banking Group Plc's capital position was too weak for it to exit a government program to insure risky assets. The dollar index this morning is stronger with the dollar/yen +0.94 yen and the euro/dollar -0.49 cents. The dollar index last Friday strengthened and finished higher on the day. Bullish factors for the dollar included (1) an increase in the safe-haven demand for dollars on concerns the global financial system remains weak after the FT reported that Lloyds Banking Group Plc's capital position was too weak for it to exit a government program to insure risky assets, (2) weakness in the yen after Japanese Finance Minister Fujii said exchange rates should reflect economic fundamentals, (3) the prediction from Bank of Tokyo-Mitsubishi that the euro may decline against the dollar should stock markets retreat and correct from their recent sharp rallies, and (4) the prediction from UBS AG that once risk aversion returns to the financial markets the dollar will strengthen against the euro back to the $1.35-$1.40 range. Bearish factors included (1) the prediction from Barclays Capital that the dollar will weaken as US investors put more money into overseas markets and as US assets fail to attract global investors, and (2) the prediction from BNP Paribas that technical indicators suggest that the euro will test last September's 1-year high against the dollar of $1.4866. October crude oil prices this morning are lower by -$1.54 a barrel and Oct gasoline is trading -3.70 cents a gallon. Oct crude oil prices last Friday weakened for a second day and closed down -$0.43 a barrel. October gasoline closed down -1.88 cents a gallon. Bearish factors included (1) a recovery in the dollar index, (2) a possible decrease in refinery demand for crude as refiners prepare to idle units for scheduled seasonal maintenance, and (3) the prediction from Strategic Energy & Economic Research that crude oil's rally over the past week was based on movements in financial markets and that the rally will be undone by crude oil's "poor fundamentals." The main bullish factor last Friday centered on speculation that crude oil demand will improve as the global economic recovery takes hold. Today's U.S. Earnings Reports: Earnings reports (confirmed releases, sorted by mkt cap) LEN-Lennar (BEST earnings consensus -$0.46), SNX-Synnex (0.62), AHPI-Allied Healthcare Products (n/a). Global Financial Calendar | Monday 9/21/2009 |
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| | | | United States |
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| 1000 ET | Aug leading indicators expected +0.7%, Jul +0.6%. | | 1300 ET | Weekly 3-mo and 6-mo T-bill auctions. | | Euro-Zone |
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| 0300 ET | ECB Council member Gertrude Tumpel-Gugerell speaks at a conference in Milan on "Business Models in Banking: Is there a Best Practice?" | | Japan |
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| n/a | Japanese markets closed for Respect-for-the Aged-Day. | Morning Quote Board | Morning Quotes (ET) | Last | Chg | %chg | Updated | | US Stock Futures |
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| S&P (Globex) (Z9) | 1055.20 | -5.80 | -0.55% | 07:03:44 | | DJIA (CBOT) (Z9) | 9694 | -39 | -0.40% | 07:02:59 | | | | | | | | European Stocks |
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| Europe DJ Stoxx 50 | 2454.45 | -20.98 | -0.85% | 06:59:15 | | London UK FTSE Index | 5135.03 | -37.86 | -0.73% | 06:59:15 | | German Dax Index | 5643.51 | -60.32 | -1.06% | 06:59:15 | | French CAC 40 Index | 3804.36 | -23.48 | -0.61% | 06:59:15 | | | | | | | | Asian-Pacific Stocks |
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| Japan Nikkei Index | 10371 | 0 | 0.00% | 9/18/2009 | | Hong Kong Hang Seng | 21473 | -151 | -0.70% | 04:01:30 | | China CSI 300 Index | 3209 | 9 | 0.28% | 03:01:18 | | Taiwan TAIEX Index | 7502 | -24 | -0.32% | 01:46:01 | | Australian S&P 200 | 4677.4 | -15.8 | -0.34% | 02:47:03 | | Singapore Str. Times | 2647.91 | 0 | 0.00% | 9/18/2009 | | South Korea KOSPI 200 | 221.85 | -0.49 | -0.22% | 05:03:24 | | Bombay Sensex 30 | 16741 | 0 | 0.00% | 9/18/2009 | | Karachi KSE-100 | 9437 | 0 | 0.00% | 9/18/2009 | | | | | | | | US Interest Rates |
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| 10yr T-notes (CBT)(Z9) | 118.800 | 0.030 | 0.08% | 07:04:12 | | Cash 10yr T-note Price | 101.110 | 0.000 | 0.00% | 07:02:00 | | Cash 10yr T-note Yield | 3.463 | 0.000 | 0.00% | 07:01 | | 5yr T-note (CBT)(Z9) | 115.060 | 0.015 | 0.04% | 07:04:00 | | Cash 5yr T-note Price | 99.205 | 0.000 | 0.00% | 07:04:30 | | Cash 5yr T-note Yield | 2.453 | 0.000 | 0.00% | 07:04 | | 30-yr T-bond (CBT)(Z9) | 119.53 | 0.00 | 0.00% | 07:03:25 | | Cash 30yr T-bond Price | 104.230 | -0.020 | -0.06% | 07:05:30 | | Cash 30yr T-bond Yield | 4.221 | 0.004 | 0.08% | 07:05 | | Eurodollars (CME)(Z9) | 99.545 | 0.030 | 0.03% | 06:59:32 | | Eurodollars (CME)(H0) | 99.315 | 0.025 | 0.03% | 07:00:57 | | | | | | | | Asian & European Rates |
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| 10-yr JGBs (TSE) (Z9) | 138.55 | 0.00 | 0.00% | 9/18/2009 | | EuroyenTibor(SGX)(Z9) | 99.510 | 0.000 | 0.00% | 9/18/2009 | | Bunds (Eurex) (Z9) | 120.42 | -0.02 | -0.02% | 06:58:55 | | Euribor (Eurex) (Z9) | 99.24 | 0.01 | 0.01% | 06:49:00 | | UK Gilts (Liffe) (Z9) | 117.06 | 0.01 | 0.01% | 06:59:15 | | Short Stlg (Liffe) (Z9) | 99.48 | 0.00 | 0.00% | 06:57:54 | | | | | | | | Forex |
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| U.S. Dollar Index | 76.84 | 0.42 | 0.54% | 07:04:10 | | US Dollar-Japanese Yen | 92.23 | 0.94 | 1.03% | 07:14:16 | | EuroFX-US Dollar | 1.4663 | -0.0049 | -0.49% | 07:14:16 | | US Dollar-Swiss Franc | 1.0350 | 0.0055 | 0.55% | 07:14:16 | | British Pound-US$ | 1.6185 | -0.0086 | -0.86% | 07:14:16 | | US$-Canadian Dlr | 1.0778 | 0.0086 | 0.86% | 07:14:16 | | Yen (Globex) (Z9) | 1.0849 | -0.0101 | -1.01% | 07:04:12 | | Euro FX (Globex) (Z9) | 1.4663 | -0.0057 | -0.39% | 07:04:15 | | SwissFranc (Globex)(Z9) | 0.9664 | -0.0062 | -0.64% | 07:04:01 | | British Pound(Glbx)(Z9) | 1.6189 | -0.0082 | -0.50% | 07:04:07 | | Canadian$ (Globex)(Z9) | 0.928 | -0.0069 | -0.74% | 07:04:06 | | | | | | | | Commodities |
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| Gold (Comex) (Z9) | 1001.8 | -8.5 | -0.84% | 07:04:07 | | Silver (Comex) (Z9) | 16.705 | -0.360 | -2.11% | 07:03:59 | | Copper (Comex) (Z9) | 276.9 | -1.7 | -0.59% | 07:04:13 | | Crude Oil (Nymex) (V9) | 70.50 | -1.54 | -2.14% | 07:02:51 | | Gasoline (Nymex) (V9) | 179.54 | -3.70 | -2.02% | 07:01:50 | | Heating Oil(Nymex)(V9) | 179 | -3.79 | -2.07% | 06:59:33 | | NaturalGas(Nymex)(V9) | 3.732 | -0.046 | -1.22% | 07:03:56 | | Corn (CBOT) (Z9) | 314.25 | -3.75 | -1.18% | 07:04:04 | | Soybeans (CBOT) (X9) | 933.50 | -7.50 | -0.80% | 07:02:21 | | Wheat (CBOT) (Z9) | 454.50 | -2.75 | -0.60% | 07:02:38 |
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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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