Barchart U.S. Morning Call
Friday, October 16, 2009
by Barchart Research Team of Barchart.com
|
|
Overnight Global News
The European DJ Stoxx 50 this morning is down -0.12% and Dec S&Ps are down -3.10 points. European and US stocks retreated from 1-year highs after Bank of America reported a $1 billion Q3 loss. The dollar strengthened which has weakened commodity prices, while Treasury prices are little changed. Upbeat earnings from Google late yesterday propped up stock prices earlier as Google's CEO predicted that the worst of the recession has passed and the company has "the confidence to be optimistic." European energy producers are stronger after crude oil surged to a 1-year high yesterday, while Swiss Life climbed 5.5% after Citigroup upgraded Switzerland's biggest life insurer to "buy" from "hold." Undercutting European stock prices was the fall in Aug Euro-Zone exports by a seasonally adjusted -5.8% from July, the biggest decline since Jan, as the euro's appreciation threatens to undermine Europe's economic recovery. The euro has gained 15% against the dollar in the last seven months, eroding export returns for European companies, just as the region is beginning to recover from the gloabal economic slump.
The Asian markets today closed mixed with Japan +0.18%, Hong Kong -0.31%, China +0.06%, Taiwan +0.06%, Australia -0.48%, Singapore -0.15%, South Korea -1.18%, India +0.74%. Asian airline stocks weakened after the Interantional Air Transport Association said in a statement yesterday that a recovery in premium air travel slowed in Aug and may have reversed last month as demand for business flights remains fragile. Japanese export companies closed higher as the yen weakened to a 3-week low against the dollar while the US Treasury Department criticized China for the "lack of flexibility" of the yuan. In a semiannual report to Congress, the Treasury Department said the rigidity of China's currency and an acceleration in the nation's buildup of foreign-exchange reserves should be "corrected" to help ensure a stronger, more balanced global economy. China's Commerce Ministry said yesterday that the nation would stick to a "gradual" approach on currency reform, moving at its own pace, while the Asian Development bank cautioned that China would risk instability by letting the yuan appreciate excessively.
Overnight U.S. Stock News
December S&Ps this morning are trading down -3.10 points. The US stock market yesterday continued its bullish ways and finished modestly higher (Dow +0.47%, S&P 500 +0.42%, Nasdaq Composite +0.05%). The S&P 500 Index posted a new 1-year high. Bullish factors included (1) the unexpected decline in weekly US initial unemployment claims to their lowest level in 9 months and the larger-than-expected drop in weekly continuing unemployment claims to their lowest level in 6 months, (2) strength in energy producers after crude oil prices soared to a 1-year high, (3) the unexpected surge in the Oct Empire manufacturing index to a 5-1/3 year high, adding to signs that the economy is beginning to expand again, and (4) scant inflation pressures after Sep CPI fell -1.3% y/y, its seventh consecutive year-over-year decline.
Bearish factors included (1) weakness in financial companies, especially credit-card issuers, after more customers fell behind on their credit-card payments in September and Credit Suisse forecasted that credit card losses will mount for at least another year, (2) weakness in mobile phone makers after Nokia Oyj, the world's biggest maker of mobile phones, unexpectedly posted its first net loss since the company began reporting quarterly in 1996, (3) the weaker-than-expected Sep Philadelphia Fed manufacturing index, and (4) the report from RealtyTrac that US foreclosure filings surged +23% y/y in Q3 to a record 937,840 homes as lenders seized more properties from delinquent borowers, which may stunt a recovery in the US housing market as mounting foreclosures put downward pressure on home prices.
Bank of America (BAC) slumped 2.4% in pre-market trading after reporting a Q3 per-share loss of 26 cents on revenue of $26.04 billion when analysts' estimated revenue of $27.65 billion.
Google (GOOG) rallied 3.6% in pre-market trading after it reported adjusted Q3 profit of $5.89 on sales of $4.38 billion, better than analysts' estimates of $5.43 a share on sales of $4.25 billion.
IBM (IBM) lost 3.4% in European trading after it saying signed service contracts, an indicator of future business, fell -7% in Q3 to $11.8 billion, the smallest level in six quarters. IBM also reported that revenue in Q3 fell for a fourth straight quarter as customers curbed technology spending.
Today's Market Focus
December 10-year T-notes this morning are trading up +2.5 ticks. Dec T-note prices yesterday showed weakness early and late in the session and closed the day down -12.5 ticks at a 3-week low. Bearish factors for T-note prices yesterday included (1) the unexpected drop in weekly US initial unemployment claims to a 9-month low (-10,000 to 514,000 versus expectations of +1,000 to 522,000), (2) the unexpected surge in the Oct Empire manufacturing index which expanded at its fastest pace in 5-1/3 years (+15.7 to 34.6 versus expectations of -1.4 to 17.5), and (3) the rally in the S&P 500 Index to a 1-year high, which lessens the safe-haven demand for Treasuries. Bullish factors included (1) the larger-than-expected decline in the Oct Philadelphia Fed manufacturing index (-2.6 to 11.5 versus expectations of -2.1 to 12.0), and (2) the recommendation from Blackrock that government bonds are a "natural" buy as major economies face an extended period of stagnating prices, meaning inflation won't erode investor returns.
The dollar index this morning is higher with the dollar/yen +0.58 yen at a 3-week high and the euro/dollar -0.67 cents. The dollar index yesterday fell to a 14-month low and closed lower for the fourth consecutive session. Bearish factors for the dollar yesterday included (1) the action by Goldman Sachs to hike its euro estimate against the dollar to $1.55 in three to six months from an earlier forecast of $1.45 in three to six months, saying the dollar's "trough" will be "slightly deeper" than previously estimated, and (2) the prediction from Sumitomo Mitsui Banking that the dollar may drop to 50 yen next year and eventually lose its role as the global reserve currency as the US economy dips into a second recession and deteriorates into 2011. Bullish factors included (1) comments from former Fed Chairman Greenspan who said that he's not "overly concerned" about recent dollar weakness, saying the dollar has returned to its value from before the financial crisis, and (2) jawboning from ECB President Trichet who said that it is "extremely important" that US authorities pursue policies supporting a strong dollar, and that excessive foreign-exchange volatility is an "enemy from the standpoint of the stability and prosperity of the global economy."
November crude oil prices this morning are down -47 cents a barrel and Nov gasoline is trading -1.90 cents a gallon. Nov crude oil prices yesterday climbed for the sixth consecutive session and closed up +$2.40 a barrel. November gasoline closed up +8.74 cents a gallon. Nov crude oil posted a 1-year high and Nov gasoline rose to a 1-1/2 month high. Bullish factors included (1) the unexpected decrease in weekly US initial unemployment claims to a 9-month low and the unexpected increase in the Oct Empire manufacturing index to a 5-1/3 year, which points to a strengthening economy and increased energy consumption, (2) the dollar's descent to a 14-month low, (3) the unexpected decrease in weekly gasoline inventories which fell by their largest amount in over a year (-5.23 million bbl versus expectations of +1.5 million bbl), and (4) the unexpected -4.1 point decline in the refinery capacity rate to a 6-month low of 80.9%, which portends to lower gasoline and distillate inventories in the weeks ahead. A bearish factor for crude prices was the weaker-than-expected Oct Philadelphia Fed manufacturing index.
Today's U.S. Earnings Reports:
Earnings reports (confirmed releases, sorted by mkt cap) GE-General Electric (BEST earnings consensus $0.20), BAC-Bank of America (-0.12), HAL-Halliburton (0.26), SCHW-Charles Schwab (0.17), MAT-Mattel (0.63), GPC-Genuine Parts (0.65), FHN-First Horizon National (-0.33), PRSP-Prosperity Bancshares (0.62), AOS-A.O. Smith (0.70), SXT-Sensient Technology (0.49), MTG-MGIC Investment Corp. (-1.46), WMK-Weis Markets (0.48).
Global Financial Calendar
| Friday 10/16/2009 |
|---|
| |
| United States |
|---|
| 0900 ET | Aug net long-term TIC flows expected $30.0 billion, Jul $15.3 billion. |
| 0915 ET | Sep industrial production expected +0.2%, Aug +0.8%. Sep capacity utilization expected +0.2 to 69.8%, Aug +0.6 to 69.6. |
| 1000 ET | Preliminary Oct U.S. University of Michigan consumer confidence expected -0.4 to 73.1, Sep +7.8 to 73.5. |
| 1010 ET | Dallas Fed President Richard Fisher speaks on the role of globalization in the financial crisis and recovery at SMU's Cox School of Business. |
| Euro-Zone |
|---|
| 0500 ET | Aug Euro-Zone trade balance expected +2.5 billion euros, Jul +12.6 billion euros. |
| Canada |
|---|
| 0700 ET | Sep Canadian CPI expected unchanged m/m and -0.9% y/y, Aug unchanged m/m and -0.8% y/y. |
| 0700 ET | Sep Bank of Canada core CPI expected +0.1% m/m and +1.3% y/y, Aug +0.1% m/m and +1.6% y/y. |
Morning Quote Board
| Morning Quotes (ET) | Last | Chg | %chg | Updated |
| US Stock Futures |
|---|
| S&P (Globex) (Z9) | 1086.70 | -3.10 | -0.28% | 07:21:21 |
| DJIA (CBOT) (Z9) | 9937 | -27 | -0.27% | 07:19:03 |
| | | | |
| European Stocks |
|---|
| Europe DJ Stoxx 50 | 2487.24 | -3.06 | -0.12% | 07:16:15 |
| London UK FTSE Index | 5217.98 | -4.97 | -0.10% | 07:16:15 |
| German Dax Index | 5824.27 | -6.50 | -0.11% | 07:16:24 |
| French CAC 40 Index | 3869.41 | -14.42 | -0.37% | 07:16:15 |
| | | | |
| Asian-Pacific Stocks |
|---|
| Japan Nikkei Index | 10258 | 19 | 0.18% | 03:00:15 |
| Hong Kong Hang Seng | 21930 | -69 | -0.31% | 04:01:30 |
| China CSI 300 Index | 3242 | 2 | 0.06% | 03:01:11 |
| Taiwan TAIEX Index | 7715 | 5 | 0.06% | 01:46:00 |
| Australian S&P 200 | 4836.4 | -23.5 | -0.48% | 01:47:03 |
| Singapore Str. Times | 2708.12 | -4.03 | -0.15% | 05:10:01 |
| South Korea KOSPI 200 | 214.91 | -2.56 | -1.18% | 05:03:26 |
| Bombay Sensex 30 | 17323 | 127.62 | 0.74% | 06:29:55 |
| Karachi KSE-100 | 9838 | -8 | -0.08% | 06:44:44 |
| | | | |
| US Interest Rates |
|---|
| 10yr T-notes (CBT)(Z9) | 117.270 | 0.025 | 0.07% | 07:21:20 |
| Cash 10yr T-note Price | 101.110 | -0.015 | -0.05% | 07:30:00 |
| Cash 10yr T-note Yield | 3.462 | 0.005 | 0.16% | 07:29 |
| 5yr T-note (CBT)(Z9) | 115.285 | 0.010 | 0.03% | 07:21:17 |
| Cash 5yr T-note Price | 99.305 | -0.010 | -0.03% | 07:28:30 |
| Cash 5yr T-note Yield | 2.385 | 0.007 | 0.28% | 07:28 |
| 30-yr T-bond (CBT)(Z9) | 118.30 | 0.05 | 0.13% | 07:20:16 |
| Cash 30yr T-bond Price | 103.125 | 0.030 | 0.09% | 07:31:00 |
| Cash 30yr T-bond Yield | 4.297 | -0.006 | -0.13% | 07:30 |
| Eurodollars (CME)(Z9) | 99.640 | -0.005 | -0.01% | 07:16:17 |
| Eurodollars (CME)(H0) | 99.415 | 0.005 | 0.01% | 07:21:03 |
| | | | |
| Asian & European Rates |
|---|
| 10-yr JGBs (TSE) (Z9) | 138.88 | -0.17 | -0.12% | 02:00:00 |
| EuroyenTibor(SGX)(Z9) | 99.500 | -0.005 | -0.01% | 04:21:43 |
| Bunds (Eurex) (Z9) | 121.25 | -0.18 | -0.15% | 07:16:15 |
| Euribor (Eurex) (Z9) | 99.16 | 0.00 | -0.01% | 07:01:15 |
| UK Gilts (Liffe) (Z9) | 118.34 | -0.59 | -0.50% | 07:16:24 |
| Short Stlg (Liffe) (Z9) | 99.40 | -0.01 | -0.01% | 07:16:21 |
| | | | |
| Forex |
|---|
| U.S. Dollar Index | 75.71 | 0.23 | 0.31% | 07:21:20 |
| US Dollar-Japanese Yen | 91.14 | 0.58 | 0.64% | 07:31:24 |
| EuroFX-US Dollar | 1.4881 | -0.0067 | -0.67% | 07:31:24 |
| US Dollar-Swiss Franc | 1.0209 | 0.0061 | 0.61% | 07:31:24 |
| British Pound-US$ | 1.6312 | 0.0044 | 0.44% | 07:31:24 |
| US$-Canadian Dlr | 1.0400 | 0.0061 | 0.61% | 07:31:24 |
| Yen (Globex) (Z9) | 1.0976 | -0.0063 | -0.63% | 07:21:21 |
| Euro FX (Globex) (Z9) | 1.4886 | -0.004 | -0.27% | 07:21:20 |
| SwissFranc (Globex)(Z9) | 0.9806 | -0.0043 | -0.44% | 07:21:21 |
| British Pound(Glbx)(Z9) | 1.6306 | 0.0043 | 0.26% | 07:21:20 |
| Canadian$ (Globex)(Z9) | 0.9631 | -0.0046 | -0.48% | 07:21:14 |
| | | | |
| Commodities |
|---|
| Gold (Comex) (Z9) | 1047.6 | -3.0 | -0.29% | 07:21:21 |
| Silver (Comex) (Z9) | 17.310 | -0.105 | -0.60% | 07:21:11 |
| Copper (Comex) (Z9) | 281.8 | -4.2 | -1.45% | 07:21:00 |
| Crude Oil (Nymex) (X9) | 77.11 | -0.47 | -0.61% | 07:21:19 |
| Gasoline (Nymex) (X9) | 192.59 | -1.90 | -0.98% | 07:21:05 |
| Heating Oil(Nymex) (X9) | 200.02 | -1.79 | -0.89% | 07:21:20 |
| NaturalGas(Nymex)(X9) | 4.454 | -0.028 | -0.62% | 07:20:57 |
| Corn (CBOT) (Z9) | 373.50 | 0.50 | 0.13% | 07:21:11 |
| Soybeans (CBOT) (X9) | 986.75 | 3.75 | 0.38% | 07:20:55 |
| Wheat (CBOT) (Z9) | 507.50 | 2.50 | 0.50% | 07:20:00 |
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.
|
