Barchart U.S. Morning Call
Monday, September 28, 2009
by Barchart Research Team of Barchart.com
|
|
Overnight Global News
The European DJ Stoxx 50 this morning is up +0.02% and Dec S&Ps are up +2.90 points. The dollar is higher despite the surge in the Japanese yen to an 8-month high, which has undercut commodity prices with copper falling to an 1-1/4 month low. The Group of 20 meeting ended over the weekend with leaders saying they would "avoid any premature withdrawl of stimulus," and acknowledged that the global recovery remains dependent on emergency government money. This has undercut global stock prices on the premise that the current recovery in world equity markets may stall once government stimulus packages are removed. Raw-materials and energy producers are weaker today as stocks grasp for direction ahead of Q3 earnings season which begins next week. German utilities rallied after Chancellor Merkel won re-election on speculation that her coalition will scrap a law that required Germany's 17 nuclear plants to close by 2021. Increased M&A activity is also helping to lift European and US stocks today after Abbott Laboratories agreed to purchase Solvay SA's pharmaceutical unit for about 4.8 billion euros ($7.1 billion) and Johnson & Johnson agreed to purchase an 18% stake in Crucell NV for 301.8 million euros.
The Asian markets today all closed lower with Japan down -2.50%, Hong Kong -2.07%, China -2.81%, Taiwan -0.83%, Australia -0.76%, Singapore -1.26%, South Korea -0.97%. Japanese exporters closed lower after the yen surged to an 8-month high against the dollar on concerns the value of overseas sales will be reduced when converted into yen, although the yen shed nearly all of its gains after Japanese Finance Minister Fujii said he was misinterpreted as supporting a stronger yen. The Finance Minister was also reported by the Sankei newspaper as saying "the days of high growth driven by exports and big companies are over and we want to focus on policies that will foster spending by consumers and domestic demand." Japanese brokers and consumer finance companies also slumped after Merrill Lynch downgraded the sectors to "underweight" from "neutral," citing a weakening stock market and tighter regulations.
Overnight U.S. Stock News
December S&Ps this morning are trading up +2.90 points. The US stock market last Friday finished lower for the third stright day (Dow -0.44%, S&P 500 -0.61%, Nasdaq Composite -0.79%). Bearish factors included (1) the unexpected decline in Aug durable good orders which had their biggest decline in 7 months, (2) the smaller-than-expected increase in Aug US new home sales, (3) the prediction from Technical Analytics that major US equity indexes are poised to fall at least 10% after they experienced a "key reversal" by closing lower last Thursday after posting 1-year highs, and (4) concerns that credit is still not easily attainable to US cnsumers and small businesses after Fed Chairman Bernanke's statement that financial markets show an "ongoing need" for the Feds's emergency TALF loan program.
Bullish factors included (1) the larger-than-expected increase in the Sep US University of Michigan consumer confidence to a 20-month high, (2) strength in airlines after American, Continental, Alaska Air Group and US Airways were all upgraded to "buy" from "neutral" at UBS AG, which cited an economic recovery and lower bankruptcy risks, and (3) a possible boost to life insurers after Wisconsin Insurance Commissioner Dilweg said insurance regulators are seeking to reduce their reliance on rating firms such as Moody's Investors Service and Standard & Poor's which may loosen capital requirements on mortgage holdings the insurance companies hold.
Applied Materials (AMAT) rallied 2.1% in pre-market trading after the largest maker of semiconductor-production equipment was upgraded to "buy" from "hold" at Citigroup, which cited "cost savings and a renewed focus on silicon share."
Today's Market Focus
December 10-year T-notes this morning are trading up +0.5 tick. Dec T-note prices rallied last Friday and closed up +9 ticks at a 3-week high settle. Bullish factors for T-note prices last Friday included (1) the unexpected decline in Aug durable goods orders (-2.4% and unchanged ex-transportation versus expectations of +0.4% and +1.0% ex-transportation), (2) the weaker-than-expected Aug US new home sales (+0.7% to 429,000 versus expectations of +1.6% to 440,000), (3) comments from St. Louis Fed President Bullard who said that the US faces the possibility of being "trapped" in a situation with low levels of inflation and interest rates near zero, and (4) increased foreign demand for Treasuries after the Fed reported that its holdings of Treasuries on behalf of foreign accounts rose to $2.08 trillion as of Sep 23, the most since the Fed began tracking the data in 1983. Bearish factors included (1) the larger-than-expected increase in the Sep US University of Michigan consumer confidence index which rose to a 20-month high (+3.3 to 73.5 versus expectations of +0.3 to 70.5), and (2) the recommendation from Barclays Plc that investors underestimate the strength of the global economic recovery and should go short and sell Treasuries as "rate normalization" looms in 2010 for major central banks.
The dollar index this morning is slightly higher with the dollar/yen -0.36 yen and the euro/dollar -0.30 cents. The dollar index last Friday finished modestly lower. Bearish factors for the dollar last Friday included (1) the rally in the yen to a 7-1/2 month high against the dollar on speculation that Japanese exporters will repatriate profits back home before the fiscal first half ends this month and on comments from Japanese Finance Minister Fujii who reiterated that he is opposed to intervention in foreign-exchange markets, and (2) Fed Chairman Bernanke's statement that financial markets show an "ongoing need" for the Fed's Term Asset-Backed Securities Loan Facility which may increase the risks of inflation the longer the Fed's emergency funding programs stay in place. Bullish factors included (1) comments from Fed Governor Warsh who said that the Fed may need to be as aggressive in reversing money-easing actions as they were in starting them, and (2) comments from Treasury Secretary Geithner that the US doesn't intend for the dollar's role in the global economy to diminish and that "a strong dollar is very important in the US."
November crude oil prices this morning are down -6 cents a barrel and Nov gasoline is trading -1.17 cents a gallon. Nov crude oil prices last Friday recovered from an 8-week low and closed up +$0.13 a barrel. November gasoline closed down -1.33 cents a gallon and nearest futures Sep gasoline dropped to a 2-1/4 month low. Bullish factors included (1) the weaker dollar, (2) the revelation from President Obama that Iran is building a second nuclear fuel plant, which may increase tensions in the Middle East and threaten global crude oil supplies, (3) the larger-than-expected increase in US Sep University of Michigan consumer confidence, stoking optimism that US fuel demand may improve, and (4) the action by Goldman Sachs to hike its Q4 2009 global crude oil demand forecast by +1.2 million bpd to 85.106 million bpd and to raise its 2010 global crude oil demand forecast by +1.6 million bpd to 86.405 million bpd on expectations that an economic expansion has begun. A bearish factor last Friday was the unexpected decline in Aug durable goods orders, raising concern that US energy demand will remain at depressed levels.
Today's U.S. Earnings Reports:
Earnings reports (confirmed releases, sorted by mkt cap) IMMR-Immersion Corp. (BEST earnings consensus -$0.16), QXM-Qiao Xing Mobile (n/a).
Global Financial Calendar
| Monday 9/28/2009 |
|---|
| |
| United States |
|---|
| 1300 ET | Weekly 3-mo and 6-mo T-bill auctions. |
| Germany |
|---|
| n/a | Sep German CPI (EU harmonized) expected -0.2% m/m and -0.2% y/y, Aug +0.3% m/m and -0.1% y/y. |
| Euro-Zone |
|---|
| 0800 ET | European Commission President Jose Barroso speaks at a conference in Brussels on sustainable development. |
| Japan |
|---|
| 1930 ET | Sep Tokyo CPI expected -1.8% y/y, Aug -1.6% y/y. Sep Tokyo CPI ex-fresh food expected -2.0% y/y, Aug 1.9% y/y. Sep Tokyo CPI ex food and energy expected -1.3% y/y, Aug -1.1% y/y. |
| 1930 ET | Aug Japan national CPI expected -2.2% y/y, Jul -2.2% y/y. Aug national CPI ex-fresh food expected -2.4% y/y, Jul -2.2% y/y. Aug national CPI ex food and energy expected -0.9% y/y, Jul -0.9% y/y. |
Morning Quote Board
| Morning Quotes (ET) | Last | Chg | %chg | Updated |
| US Stock Futures |
|---|
| S&P (Globex) (Z9) | 1044.00 | 2.90 | 0.28% | 07:17:56 |
| DJIA (CBOT) (Z9) | 9642 | 23 | 0.24% | 07:15:36 |
| | | | |
| European Stocks |
|---|
| Europe DJ Stoxx 50 | 2421.87 | 0.55 | 0.02% | 07:13:30 |
| London UK FTSE Index | 5093.10 | 10.90 | 0.21% | 07:13:30 |
| German Dax Index | 5638.06 | 56.65 | 1.01% | 07:13:41 |
| French CAC 40 Index | 3743.38 | 4.24 | 0.11% | 07:13:30 |
| | | | |
| Asian-Pacific Stocks |
|---|
| Japan Nikkei Index | 10010 | -256 | -2.50% | 03:00:15 |
| Hong Kong Hang Seng | 20588 | -436 | -2.07% | 04:01:30 |
| China CSI 300 Index | 2973 | -86 | -2.81% | 03:01:08 |
| Taiwan TAIEX Index | 7285 | -61 | -0.83% | 01:46:01 |
| Australian S&P 200 | 4677.4 | -35.9 | -0.76% | 02:47:04 |
| Singapore Str. Times | 2629.25 | -33.57 | -1.26% | 05:10:01 |
| South Korea KOSPI 200 | 219.66 | -2.16 | -0.97% | 05:03:25 |
| Bombay Sensex 30 | 16693 | 0 | 0.00% | 9/25/2009 |
| Karachi KSE-100 | 9410 | -255 | -2.64% | 05:44:14 |
| | | | |
| US Interest Rates |
|---|
| 10yr T-notes (CBT)(Z9) | 118.240 | 0.005 | 0.01% | 07:18:12 |
| Cash 10yr T-note Price | 102.160 | -0.020 | -0.06% | 07:28:00 |
| Cash 10yr T-note Yield | 3.326 | 0.007 | 0.22% | 07:27 |
| 5yr T-note (CBT)(Z9) | 115.255 | 0.000 | 0.00% | 07:18:28 |
| Cash 5yr T-note Price | 100.010 | -0.005 | -0.02% | 07:26:00 |
| Cash 5yr T-note Yield | 2.368 | 0.003 | 0.14% | 07:25 |
| 30-yr T-bond (CBT)(Z9) | 120.31 | 0.03 | 0.08% | 07:18:10 |
| Cash 30yr T-bond Price | 107.040 | 0.030 | 0.09% | 07:28:00 |
| Cash 30yr T-bond Yield | 4.085 | -0.005 | -0.13% | 07:27 |
| Eurodollars (CME)(Z9) | 99.605 | 0.015 | 0.02% | 07:18:12 |
| Eurodollars (CME)(H0) | 99.350 | 0.020 | 0.02% | 07:18:09 |
| | | | |
| Asian & European Rates |
|---|
| 10-yr JGBs (TSE) (Z9) | 139.31 | 0.27 | 0.19% | 02:00:00 |
| EuroyenTibor(SGX)(Z9) | 99.500 | -0.005 | -0.01% | 06:49:14 |
| Bunds (Eurex) (Z9) | 121.53 | 0.05 | 0.04% | 07:13:18 |
| Euribor (Eurex) (Z9) | 99.30 | 0.00 | 0.00% | 06:36:31 |
| UK Gilts (Liffe) (Z9) | 118.18 | -0.04 | -0.03% | 07:13:09 |
| Short Stlg (Liffe) (Z9) | 99.51 | 0.03 | 0.03% | 07:10:08 |
| | | | |
| Forex |
|---|
| U.S. Dollar Index | 76.86 | 0.05 | 0.06% | 07:18:35 |
| US Dollar-Japanese Yen | 89.28 | -0.36 | -0.40% | 07:28:42 |
| EuroFX-US Dollar | 1.4659 | -0.0030 | -0.30% | 07:28:42 |
| US Dollar-Swiss Franc | 1.0313 | 0.0037 | 0.37% | 07:28:42 |
| British Pound-US$ | 1.5881 | -0.0071 | -0.71% | 07:28:42 |
| US$-Canadian Dlr | 1.0943 | 0.0033 | 0.33% | 07:28:41 |
| Yen (Globex) (Z9) | 1.1201 | 0.0072 | 0.72% | 07:18:42 |
| Euro FX (Globex) (Z9) | 1.4652 | -0.0012 | -0.08% | 07:18:42 |
| SwissFranc (Globex)(Z9) | 0.9698 | -0.0019 | -0.20% | 07:18:32 |
| British Pound(Glbx)(Z9) | 1.5868 | -0.0069 | -0.43% | 07:18:38 |
| Canadian$ (Globex)(Z9) | 0.9131 | -0.0025 | -0.27% | 07:18:42 |
| | | | |
| Commodities |
|---|
| Gold (Comex) (Z9) | 992.7 | 1.1 | 0.11% | 07:18:18 |
| Silver (Comex) (Z9) | 15.985 | -0.075 | -0.47% | 07:17:40 |
| Copper (Comex) (Z9) | 268.9 | -5.2 | -1.90% | 07:18:39 |
| Crude Oil (Nymex) (X9) | 65.96 | -0.06 | -0.09% | 07:18:33 |
| Gasoline (Nymex) (X9) | 162.43 | -1.17 | -0.72% | 07:06:28 |
| Heating Oil(Nymex) (X9) | 170.42 | -0.23 | -0.13% | 07:17:23 |
| NaturalGas(Nymex)(X9) | 4.934 | -0.014 | -0.28% | 07:16:06 |
| Corn (CBOT) (Z9) | 330.75 | -3.25 | -0.97% | 07:18:16 |
| Soybeans (CBOT) (X9) | 916.50 | -9.50 | -1.03% | 07:18:24 |
| Wheat (CBOT) (Z9) | 453.25 | 3.50 | 0.78% | 07:15:33 |
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.
|
