Barchart U.S. Morning Call
Monday, November 09, 2009
by Barchart Research Team of Barchart.com
|
|
Overnight Global News
The European DJ Stoxx 50 this morning is up +1.54% and Dec S&Ps are up +9.90 points. Global stock markets are up sharply after the Group of 20 finance ministers and central bankers agreed to maintain stimulus measures to boost economic growth. Treasuries and the dollar are weaker, with the dollar index falling to a 2-week low, while commodities are higher, with gold surging to yet another record high. The G-20 said at the conclusion of their meeting on Nov 7 that while economic and financial conditions have improved, "the recovery is uneven and remains dependent on policy support, and high unemployment is a major concern." Also aiding gains in European stocks was the larger-than-expected increase in Sep German exports which rose +3.8% m/m versus expectations of +2.5% m/m, as a global recovery stoked demand for German goods. To meet that ramped up demand for exports, Sep German industrial production increased a greater-than-expected +2.7% m/m, as growth in Europe's largest economy gathers pace. Sentiment among European consumers and businesses continues to improve after the Oct Bank of France business sentiment rose a more than expected +2 to 95, while the Nov Euro-Zone Sentix investor confidence increased a larger-than-expected +7 to -7.0, both gaining to their highest levels in 1-1/2 years.
The Asian markets today closed higher with Japan up +0.20%, Hong Kong +1.73%, China +0.37%, Taiwan +0.99%, Australia +1.76%, Singapore +1.32%, South Korea +0.37%, India +2.11%. Moody's Investors Service raised China's ratings outlook to "positive" from "stable," citing the government's success in steering the nation through the global crisis. The change affects China's A1 foreign and local currency bond ratings, while Moody's also lifted Hong Kong's outlook to positive from stable. The China Association of Automobile Manufacturers said today that Oct China car sales jumped +76% m/m to 946,400 units, with sales in the first 10 months of this year up +45.2% from a year earlier to 8.19 million as governemnt stimulus measures spurred demand. The director-general of Shanghai's financial services office said today in Beijing that China's central bank and banking regulator may "soon" reduce "leverage ratios" to limit the use of debt in real-estate purchases after asset prices climbed. Excessive borrowing by some Chinese developers threatens to cause an increase in delinquent debts should prices collapse.
Overnight U.S. Stock News
December S&Ps this morning are trading higher by +9.90 points. The US stock market last Friday opened lower but recovered its losses and finished the day slightly higher (Dow Jones +0.17%, S&P 500 +0.25%, Nasdaq Composite +0.34%). The S&P 500 Index rallied to a 1-week high. Bullish factors included (1) the +34,000 gain in temporary workers in the Oct nonfarm payrolls report, the first gain since Dec 2007 and a possible harbinger of future increases in employment as payrolls at temporary agencies often turn up first before total employment does, (2) the upward revision in Sep nonfarm payrolls to -219,000 from -263,000, (3) the +2.4% y/y increase in Oct hourly earnings, the smallest annual gain in 5 years and a sign of slack wage pressures and potentially higher corporate profits, (4) comments from White House economic adviser Jared Bernstein who said the Obama administration is considering measures to promote employment including a boost in infrastructure spending and incentives for businesses to hire, and (5) a rally in retailers after JPMorgan Chase upgraded its rating on Macy's to "overweight" from "neutral."
Bearish factors included (1) the larger-than-expected loss of jobs in the Oct nonfarm payroll report of -190,000 versus expectations of -175,000, (2) the larger-than-expected jump in the Oct US unemployment rate to a 26-1/2 year high of +0.4 to 10.2% versus expectations of +0.1 to 9.9%, (3) the jump in the Oct underemployment rate to a record high of 17.5%, which is the rate that includes part-time workers who would prefer a full-time position and people who want to work but have given up looking, (4) the prediction from BNP Paribas that a rising US jobless rate as well as a record underemployment could derail a rebound in consumer spending, (5) the prediction from Citigroup that global stocks may be headed for a "correction" as the recent increase in 10-year T-note yields may prompt a reduction of carry trades that have helped spur an 8-month rally in equities, and (6) the larger-than-expected decline in Sep US consumer credit of -$14.8 billion (versus expectations of -$10.0 billion) as consumer credit has now fallen for eight straight months, the longest series of declines since records began in 1943.
Barrick Gold (ABX) is up 1.9% and Newmont Mining (NEM) is up +1.1% in European trading after gold prices surged to a record high of $1,109.90 an ounce.
McDonald's (MCD) jumped 2% in pre-market trading after Sky News reported that the food chain will sign a new 4-year, 10 million-pound ($16.8 million) sponsorship deal with the English Football Association.
Today's Market Focus
December 10-year T-notes this morning are trading down -2 ticks. Dec T-note prices last Friday spiked up to their high early following the release of the Oct payrolls report and then consolidated in the upper half of the day's range the remainder of the day to finally close up +11 ticks at 118-135. Bullish factors last Friday centered on the Oct employment report that showed (1) a larger-than-expected -190,000 loss of jobs in the Oct nonfarm payroll report, (2) the larger-than-expected jump in the Oct US unemployment rate to a 26-1/2 year high (+0.4 to 10.2% versus expectations of +0.1 to 9.9%), (3) the jump in the Oct underemployment rate, or the rate which includes part-time workers who'd prefer a full-time position and people who want to work but have given up looking, to a record high of 17.5%, (4) the +2.4% y/y increase in Oct hourly earnings, the smallest annual gain in 5 years and a sign of slack wage pressures, and (5) the weaker-than-expected Oct avg weekly hours which stayed at their lowest level since records began in 1964 (unchanged at 33.0 hours versus expectations of +0.1 to 33.1 hours). Bearish factors for T-note prices last Friday included (1) the upward revision to Sep nonfarm payrolls to -219,000 from -263,000, (2) the steepening of the yield curve with the yield between the 2-year and 10-year T-note widening to 2.69%, the most in 3-1/2 months, and (3) supply pressures as the Treasury begins its Nov quarterly refunding with a $40 billion 3-year T-note auction on Monday.
The dollar index this morning is weaker and at a 2-week low with the dollar/yen +0.08 yen and the euro/dollar +1.40 cents. The dollar last Friday dropped to a 2-week low early in the session but then slowly recovered its losses during the rest of the session to finish the day slightly higher. Bullish factors included (1) comments from Japanese Vice Finanace Minister Noda that he's prepared to tell his G-20 counterparts that Japan has "never voiced support for a higher yen," (2) euro-negative comments from ECB Executive Board member Jose Manuel Gonzalez-Paramo that a gradual withdraw of the ECB's non-standard stimulus measures should not be interpreted as a signal it is about to raise interest rates, and (3) the prediction from Pacific Investment Management that the IMF's Special Drawing Rights or the broader use of currencies including the yuan won't replace the dollar as the global reserve currency. Bearish factors included (1) the larger-than-expected increase in the Oct US unemployment rate to a 26-1/2 year high of 10.2%, which may keep the dollar's interest rate differentials negative as it reinforces speculation that the Fed will keep interest rates at a record low into next year, and (2) euro-positive economic data after Sep German factory orders increased for the seventh straight month.
December crude oil prices this morning are trading higher by +$1.03 a barrel and Dec gasoline is trading +3.02 cents a gallon. Crude oil prices are sharply higher this morning as the arrival of Hurricane Ida into the Gulf of Mexico threatens oil and gas production in the US Gulf region. Dec crude last Friday moved sharply lower and closed down -$2.19 a barrel. Dec gasoline last Friday fell to a 3-week low and closed down -6.34 cents a gallon. Bearish factors last Friday included (1) the larger-than-expected increase in the Oct US unemployment rate to a 26-1/2 year high of 10.2%, which questions the sustainability of an economic recovery and energy demand, (2) the prediction from Petromatrix GmbH that "crude demand in the US is still lagging" and that the move in crude oil prices from $65 a barrel to $80 was due to buying from large speculators, linked to the dollar and equities, and (3) the prediction from Morgan Stanley that crude oil prices will be "choppy" in 2010 as stimulus funds from governments start to run out and as market fundamentals remain weak for another year. Bullish factors last Friday included (1) the rebound in the equity market which recovered sharp losses and closed higher, and (2) the increase in Sep German factory orders which rose for the seventh consecutive month, a sign of increased energy consumption and demand in Europe's largest economy.
Today's U.S. Earnings Reports:
Earnings reports (confirmed releases, sorted by mkt cap) LMDIA-Liberty Media (BEST earnings consensus $0.31), SRE-Sempra Energy (1.18), DISH-Dish Network (0.42), FLR-Fluor (0.90), ETP-Energy Transfer Partners (0.36), LINTA-Liberty Media Interactive Group (0.10), PCLN-Priceline.com (2.92), ETE-Energy Transfer Equity (0.39), ROK-Rockwell Automation (0.27), WCRX-Warner Chilcott Plc (0.41), ERTS-Electronic Arts (0.11), MDR-McDermott International (0.40), NTES-Netease.com (0.51), EPE-Enterprise GP Holdings (0.32), QGEN-Qiagen NV (0.23), WIN-Windstream (0.21).
Global Financial Calendar
| Monday 11/9/2009 |
|---|
| |
| United States |
|---|
| 1130 ET | Weekly 3-mo and 6-mo T-bill auctions. |
| 1300 ET | Treasury auctions $40 billion 3-year T-notes. |
| 1900 ET | Fed Governor Daniel Tarullo speaks on financial regulation to the NYU Money Marketeers Club. |
| Germany |
|---|
| 0200 ET | Sep German current account expected 9.3 billion euros, Aug 4.6 billion euros. |
| 0200 ET | Sep German trade balance expected 11.3 billion euros, Aug 8.1 billion euros. Sep exports expected +2.5%, Aug -2.8%. Sep imports expected +0.9%, Aug +0.5%. |
| 0600 ET | Sep German industrial production expected +1.0% m/m and -14.4% y/y, Aug +1.7% m/m and -16.8% y/y. |
| France |
|---|
| 0230 ET | Oct Bank of France business sentiment expected +1 to 93, Sep +3 to 92. |
| Euro-Zone |
|---|
| 0430 ET | Nov Euro-Zone Sentix investor confidence expected +0.6 to -12.0, Oct +2.0 to -12.6. |
| 1415 ET | ECB Executive Board member Juergen Stark speaks on "Monetary Policy before, during and after the Crisis" at Tuebingen University. |
| Canada |
|---|
| 0815 ET | Oct Canadian housing starts expected +156,800, Sep +149,300. |
| United Kingdom |
|---|
| 1901 ET | Oct UK RICS house price balance expected 28%, Sep 22%. |
| Japan |
|---|
| 1850 ET | Oct Japan bank lending expected +1.5% y/y, Sep +1.6% y/y. |
| 2330 ET | Oct Japan bankruptcies, Sep -18.0% y/y. |
Morning Quote Board
| Morning Quotes (ET) | Last | Chg | %chg | Updated |
| US Stock Futures |
|---|
| S&P (Globex) (Z9) | 1076.10 | 9.90 | 0.93% | 07:11:06 |
| DJIA (CBOT) (Z9) | 10062 | 84 | 0.84% | 07:08:34 |
| | | | |
| European Stocks |
|---|
| Europe DJ Stoxx 50 | 2476.78 | 37.66 | 1.54% | 07:07:45 |
| London UK FTSE Index | 5214.38 | 71.66 | 1.39% | 07:07:45 |
| German Dax Index | 5575.38 | 87.13 | 1.59% | 07:07:47 |
| French CAC 40 Index | 3762.40 | 55.11 | 1.49% | 07:07:45 |
| | | | |
| Asian-Pacific Stocks |
|---|
| Japan Nikkei Index | 9809 | 20 | 0.20% | 02:00:17 |
| Hong Kong Hang Seng | 22208 | 378 | 1.73% | 03:01:30 |
| China CSI 300 Index | 3496 | 13 | 0.37% | 02:01:10 |
| Taiwan TAIEX Index | 7537 | 74 | 0.99% | 00:46:00 |
| Australian S&P 200 | 4674.9 | 80.9 | 1.76% | 00:47:03 |
| Singapore Str. Times | 2693.38 | 35.17 | 1.32% | 04:10:01 |
| South Korea KOSPI 200 | 207.29 | 0.76 | 0.37% | 04:03:25 |
| Bombay Sensex 30 | 16499 | 340.44 | 2.11% | 05:29:55 |
| Karachi KSE-100 | 8936 | 0 | 0.00% | 11/6/2009 |
| | | | |
| US Interest Rates |
|---|
| 10yr T-notes (CBT)(Z9) | 118.115 | -0.020 | -0.05% | 07:12:40 |
| Cash 10yr T-note Price | 100.290 | -0.045 | -0.14% | 07:22:31 |
| Cash 10yr T-note Yield | 3.514 | 0.017 | 0.49% | 07:22 |
| 5yr T-note (CBT)(Z9) | 116.210 | 0.000 | 0.00% | 07:12:40 |
| Cash 5yr T-note Price | 100.105 | -0.015 | -0.05% | 07:15:01 |
| Cash 5yr T-note Yield | 2.305 | 0.010 | 0.43% | 07:14 |
| 30-yr T-bond (CBT)(Z9) | 118.07 | -0.07 | -0.18% | 07:12:30 |
| Cash 30yr T-bond Price | 101.130 | -0.090 | -0.28% | 07:21:31 |
| Cash 30yr T-bond Yield | 4.414 | 0.017 | 0.38% | 07:21 |
| Eurodollars (CME)(Z9) | 99.705 | 0.000 | 0.00% | 07:07:32 |
| Eurodollars (CME)(H0) | 99.580 | 0.010 | 0.01% | 07:09:59 |
| | | | |
| Asian & European Rates |
|---|
| 10-yr JGBs (TSE) (Z9) | 137.38 | -0.18 | -0.13% | 01:00:00 |
| EuroyenTibor(SGX)(Z9) | 99.500 | 0.000 | 0.00% | 11/9/2009 |
| Bunds (Eurex) (Z9) | 121.01 | 0.06 | 0.05% | 07:07:40 |
| Euribor (Eurex) (Z9) | 99.28 | 0.00 | 0.00% | 05:51:33 |
| UK Gilts (Liffe) (Z9) | 116.64 | 0.31 | 0.27% | 07:07:40 |
| Short Stlg (Liffe) (Z9) | 99.36 | -0.01 | -0.01% | 07:05:12 |
| | | | |
| Forex |
|---|
| U.S. Dollar Index | 75.12 | -0.70 | -0.93% | 07:12:40 |
| US Dollar-Japanese Yen | 89.96 | 0.08 | 0.09% | 07:22:49 |
| EuroFX-US Dollar | 1.4987 | 0.0140 | 1.40% | 07:22:49 |
| US Dollar-Swiss Franc | 1.0079 | -0.0095 | -0.95% | 07:22:49 |
| British Pound-US$ | 1.6795 | 0.0183 | 1.83% | 07:22:49 |
| US$-Canadian Dlr | 1.0638 | -0.0115 | -1.15% | 07:22:49 |
| Yen (Globex) (Z9) | 1.1119 | 0.0001 | 0.01% | 07:12:30 |
| Euro FX (Globex) (Z9) | 1.4984 | 0.0149 | 1.00% | 07:12:27 |
| SwissFranc (Globex)(Z9) | 0.9925 | 0.0099 | 1.01% | 07:10:50 |
| British Pound(Glbx)(Z9) | 1.6794 | 0.0197 | 1.19% | 07:12:32 |
| Canadian$ (Globex)(Z9) | 0.9397 | 0.0112 | 1.21% | 07:12:45 |
| | | | |
| Commodities |
|---|
| Gold (Comex) (Z9) | 1108.3 | 10.8 | 0.98% | 07:12:37 |
| Silver (Comex) (Z9) | 17.695 | 0.295 | 1.70% | 07:12:48 |
| Copper (Comex) (Z9) | 298.8 | 3.3 | 1.12% | 07:12:44 |
| Crude Oil (Nymex) (Z9) | 78.46 | 1.03 | 1.33% | 07:12:49 |
| Gasoline (Nymex) (Z9) | 195.45 | 3.02 | 1.57% | 07:12:10 |
| Heating Oil(Nymex) (Z9) | 202.72 | 2.37 | 1.18% | 07:12:49 |
| NaturalGas(Nymex)(Z9) | 4.566 | -0.029 | -0.63% | 07:12:15 |
| Corn (CBOT) (Z9) | 371.50 | 4.50 | 1.23% | 07:09:43 |
| Soybeans (CBOT) (F0) | 967.00 | 12.00 | 1.26% | 07:12:32 |
| Wheat (CBOT) (Z9) | 505.50 | 8.25 | 1.66% | 07:12:47 |
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.
|
