Barchart U.S. Morning Call
Tuesday, September 22, 2009
by Barchart Research Team of Barchart.com
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Overnight Global News The European DJ Stoxx 50 this morning is up +1.20% and Dec S&Ps are higher by +6.90 points. Faster economic growth forecasts from the Asian Development Bank (ADB) is providing further evidence that the global economic recovery is accelerating and is helping to boost stock prices today. Treasuries and the dollar have weakened, with the euro currency climbing to an 11-3/4 month high, which has boosted most commodity prices. Market News International reported that ECB Council member Axel Weber said the recent strengthening of the euro is consistent with economic developments in the Euro-Zone, which has helped the euro to sustain its gains. Energy producers and mining companies are higher, while STMicroelectronics NV, Europe's largest semiconductor maker, jumped 3% after Dramexchange Technology reported that the price of benchmark computer-memory chips rose 1.1% to a 13-month high. Russia's Micex stock index rallied sharply today after Goldman Sachs recommended investors should increase holdings of Russian stocks because "cheap" valuations will help spur a rally of 25%. The Asian markets today closed mixed with Hong Kong +1.06%, China -2.42%, Taiwan -0.45%, Australia -0.29%, Singapore +1.42%, South Korea +1.54%, India +0.87%. Helping spur a rally in most Asian markets today was the upwardly revised economic growth predictions from the ADB who forecast that Asia, excluding Japan, will grow 3.9% this year, better than its Mar estimate of 3.4%, and that growth may accelerate to 6.4% in 2010 as the economies of China, India and Indonesia expand. The ADB revised its 2009 growth estimates for China to 8.2% from a Mar forecast of 7% and said India will grow 6% this year, up from a Mar forecast of 5%. The ADB said that withdrawing stimulus measures too soon may derail the "fragile" economic recovery. Overnight U.S. Stock News December S&Ps this morning are trading higher by +6.90 points. The US stock market yesterday recovered nearly all of its early losses and finished the day mixed (Dow -0.42%, S&P 500 -0.34%, Nasdaq Composite +0.24%). Bearish factors included (1) carry-over weakness from Asian and European stock markets which fell on valuation concerns, (2) the prediction from CLSA Ltd. that economies in the Western world are going to be in an "extended period of sub-par growth," which will lead to the eventual end of the current stock market rally, (3) comments from President Obama who said 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," and (4) weakness in energy and raw-material producers as crude oil prices fell and metals and commodity prices tumbled. Bullish factors included (1) the fifth straight monthly increase in the Aug US leading indicators, the longest stretch of gains since 2004 and a signal that a recovery is under way, (2) the report from Credit Suisse Group AG that says US companies have never piled up cash faster compared with interest costs than they are now and predicts that as the economy emerges from recession, cash flow from US companies may rise from the $1.5 trillion reported by the Commerce Department for the year ended in June and pave the way for a surge in mergers and acquisitions, and (3) the prediction from Barclays Capital that the US economy will add jobs by the end of this year as "housing has turned in a durable way in our view" and "consumer spending is actually coming in stronger than we expected." U.S. Steel (X) gained over 2% in European trading after Bank of America raised its recommendation on the company to "neutral" from "underperform," saying the company "should return" to profitability in 2010. Today's Market Focus December 10-year T-notes this morning are trading unchanged. Dec T-note prices yesterday traded higher into early afternoon but then shed their gains and closed down -1 tick. Bearish factors for T-note prices yesterday included (1) a possible decrease in the safe-haven demand for Treasuries after Moody's Investors Service said the economic crisis may be ending as corporate-credit-rating downgrades dropped to 31 in Aug from their peak of 106 in Dec, down -71% which suggests "ratings are signaling improving credit conditions and a possible end to the slump," (2) the assertion from the Bank of England in its quarterly bulletin that bond yields in countries such as the UK and the US may rise as investors shun the debt of nations with large trade deficits, and (3) supply pressures ahead of Tuesday's $43 billion 2-year T-note auction. Bullish factors included (1) an increase in the safe-haven demand for Treasuries after the equity market slumped, and (2) bond-friendly comments from President Obama who said in an interview 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." The dollar index is weaker this morning with the dollar/yen -0.52 yen and the euro/dollar +1.11 cents at an 11-3/4 month high. The dollar index yesterday rallied for a second day and closed at a 1-week high. Bullish factors for the dollar included (1) weakness in the yen which fell to a 1-1/2 week low against the dollar on speculation Japanese companies will repatriate funds back to Japan toward the end of the month when their fiscal half-year ends, (2) an increase in the safe-haven demand for dollars as the equity markets weakened, (3) the prediction by Goldman Sachs that the yen will weaken to 98 per dollar by year-end as Japan's economic recovery moderates, and (4) short-covering ahead of the 2-day FOMC policy meeting which begins Tuesday. Bearish factors included (1) the Bundesbank's monthly bulletin which predicts that the German economy, Europe's largest, may gather strength in the current quarter as companies profit from rising export demand, and (2) the prediction from Bank of America-Merrill Lynch that the Chinese central bank may allow the yuan to strengthen 5.1% to 6.5 per dollar by the end of 2010 as the global economy's recovery boosts Chinese exports and widens China's trade surplus. October crude oil prices this morning are up +$1.17 a barrel and Oct gasoline is trading +2.75 cents a gallon. Oct crude oil prices yesterday moved lower for the third consecutive session and closed down -$2.33 a barrel. October gasoline closed down -8.10 cents a gallon. Bearish factors included (1) the rally in the dollar index to a 1-week high, (2) weakness in global equity markets which sparked concern that energy demand will remain subdued, and (3) the prediction from OptionSellers.com that crude oil prices are set to decline because Chinese stockpiling of commodities "has probably run its course" and will not be able to "pick up the whole global demand picture." Bullish factors include (1) the +8.1% m/m and +3.2% y/y jump in China Aug domesic fuel sales, the biggest increase in oil-product sales this year and a sign of strong energy demand in the world's second-largest crude oil consuming country, and (2) the reiteration by Goldman Sachs that crude oil prices will rise to $85 a barrel by year-end as rising US industrial production and declining inventories signal that the US oil market is recovering. Today's U.S. Earnings Reports: Earnings reports (confirmed releases, sorted by mkt cap) CCL-Carnival Corp. (BEST earnings consensus $1.18), CAG-ConAgra Foods (0.34), KMX-Carmax (0.18.), FDS-Factset Research Systems (0.74), FUL-H. B. Fuller (0.36), PRGS-Progresive Software (0.39), AIR-AAR Corp. (0.25), FIF-Financial Federal Corp (0.38). Global Financial Calendar | Tuesday 9/22/2009 |
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| 0745 ET | ICSC (Int'l Council of Shopping Centers) weekly retailer sales, previous unchanged w/w and +1.6% weekly y/y. | | 0855 ET | Redbook weekly retailer sales, previous +0.5% month-to-date m/m and -2.1% month-to-date y/y. | | 1000 ET | Sep Richmond Fed manufacturing index expected +2 to 16, Aug unchanged at 14. | | 1000 ET | Jul FHFA house price index expected +0.5% m/m, Jun +0.5% m/m. | | 1130 ET | Weekly 4-week and monthly 1-year T-bill auctions. | | 1300 ET | Treasury auctions $43 billion 2-year T-notes. | | 1400 ET | FOMC begins 2-day monetary policy meeting. | | 1700 ET | ABC U.S. weekly consumer confidence, previous -1 to -49. | | Canada |
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| 0830 ET | Jul Canadian retail sales expected +0.5% and -0.1% less autos, Jun +1.0% and +1.0% less autos. | | Japan |
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| n/a | Japanese markets closed for National Holiday. | Morning Quote Board | Morning Quotes (ET) | Last | Chg | %chg | Updated | | US Stock Futures |
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| S&P (Globex) (Z9) | 1067.30 | 6.90 | 0.65% | 07:11:47 | | DJIA (CBOT) (Z9) | 9778 | 60 | 0.62% | 07:11:24 | | | | | | | | European Stocks |
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| Europe DJ Stoxx 50 | 2490.57 | 29.43 | 1.20% | 07:07:00 | | London UK FTSE Index | 5183.66 | 49.30 | 0.96% | 07:07:00 | | German Dax Index | 5747.23 | 78.58 | 1.39% | 07:07:03 | | French CAC 40 Index | 3848.61 | 36.45 | 0.96% | 07:07:00 | | | | | | | | Asian-Pacific Stocks |
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| Japan Nikkei Index | 10371 | 0 | 0.00% | 9/18/2009 | | Hong Kong Hang Seng | 21701 | 228 | 1.06% | 04:01:30 | | China CSI 300 Index | 3131 | -78 | -2.42% | 03:01:02 | | Taiwan TAIEX Index | 7469 | -33 | -0.45% | 01:46:01 | | Australian S&P 200 | 4663.7 | -13.7 | -0.29% | 02:47:04 | | Singapore Str. Times | 2685.63 | 37.72 | 1.42% | 05:10:01 | | South Korea KOSPI 200 | 225.27 | 3.42 | 1.54% | 05:03:27 | | Bombay Sensex 30 | 16886 | 145.13 | 0.87% | 06:29:57 | | Karachi KSE-100 | 9437 | 0 | 0.00% | 9/18/2009 | | | | | | | | US Interest Rates |
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| 10yr T-notes (CBT)(Z9) | 118.880 | 0.000 | 0.00% | 07:11:54 | | Cash 10yr T-note Price | 101.055 | -0.010 | -0.03% | 07:22:01 | | Cash 10yr T-note Yield | 3.484 | 0.004 | 0.11% | 07:21 | | 5yr T-note (CBT)(Z9) | 115.050 | 0.010 | 0.02% | 07:11:58 | | Cash 5yr T-note Price | 99.205 | 0.000 | 0.00% | 07:21:31 | | Cash 5yr T-note Yield | 2.453 | 0.000 | 0.00% | 07:21 | | 30-yr T-bond (CBT)(Z9) | 118.95 | -0.04 | -0.11% | 07:11:53 | | Cash 30yr T-bond Price | 104.090 | -0.060 | -0.18% | 07:22:01 | | Cash 30yr T-bond Yield | 4.246 | 0.011 | 0.25% | 07:21 | | Eurodollars (CME)(Z9) | 99.555 | 0.010 | 0.01% | 07:11:09 | | Eurodollars (CME)(H0) | 99.330 | 0.015 | 0.02% | 07:08:09 | | | | | | | | Asian & European Rates |
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| 10-yr JGBs (TSE) (Z9) | 138.55 | 0.00 | 0.00% | 9/18/2009 | | EuroyenTibor(SGX)(Z9) | 99.520 | 0.010 | 0.01% | 05:27:51 | | Bunds (Eurex) (Z9) | 120.14 | -0.21 | -0.17% | 07:07:02 | | Euribor (Eurex) (Z9) | 99.26 | 0.02 | 0.02% | 06:52:50 | | UK Gilts (Liffe) (Z9) | 116.73 | -0.30 | -0.26% | 07:06:23 | | Short Stlg (Liffe) (Z9) | 99.50 | 0.02 | 0.02% | 07:05:58 | | | | | | | | Forex |
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| U.S. Dollar Index | 76.13 | -0.64 | -0.84% | 07:12:02 | | US Dollar-Japanese Yen | 91.41 | -0.52 | -0.56% | 07:22:04 | | EuroFX-US Dollar | 1.4791 | 0.0111 | 1.11% | 07:22:04 | | US Dollar-Swiss Franc | 1.0236 | -0.0087 | -0.87% | 07:22:04 | | British Pound-US$ | 1.6326 | 0.0109 | 1.09% | 07:22:04 | | US$-Canadian Dlr | 1.0672 | -0.0119 | -1.19% | 07:22:04 | | Yen (Globex) (Z9) | 1.0945 | 0.0085 | 0.85% | 07:12:03 | | Euro FX (Globex) (Z9) | 1.479 | 0.0113 | 0.77% | 07:11:51 | | SwissFranc (Globex)(Z9) | 0.9775 | 0.0084 | 0.87% | 07:10:42 | | British Pound(Glbx)(Z9) | 1.633 | 0.0138 | 0.85% | 07:11:44 | | Canadian$ (Globex)(Z9) | 0.9371 | 0.0094 | 1.01% | 07:11:49 | | | | | | | | Commodities |
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| Gold (Comex) (Z9) | 1019.1 | 14.2 | 1.41% | 07:11:56 | | Silver (Comex) (Z9) | 17.310 | 0.430 | 2.55% | 07:11:58 | | Copper (Comex) (Z9) | 286.9 | 6.4 | 2.26% | 07:11:53 | | Crude Oil (Nymex) (V9) | 70.88 | 1.17 | 1.68% | 07:08:19 | | Gasoline (Nymex) (V9) | 177.89 | 2.75 | 1.57% | 07:10:53 | | Heating Oil(Nymex)(V9) | 177.93 | 2.76 | 1.58% | 07:11:06 | | NaturalGas(Nymex)(V9) | 3.725 | 0.149 | 4.17% | 07:11:48 | | Corn (CBOT) (Z9) | 320.00 | 4.00 | 1.27% | 07:11:11 | | Soybeans (CBOT) (X9) | 925.75 | 12.25 | 1.34% | 07:09:55 | | Wheat (CBOT) (Z9) | 461.50 | 5.50 | 1.21% | 07:09:22 |
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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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