Barchart Morning Call 10/1

Barchart Morning Call

BC - 2 hrs 14 mins ago

Overnight Developments

• Dec E-mini S&Ps this morning are up +0.42% on the 1.23% rally in European stocks and relief that some of the overnight global economic data was a little better than expected. The European markets are awaiting a busy week on the European debt crisis as troika negotiations resume with Greece and as Eurozone officials continue to quietly deal with Spain on its bank bailout and possible need for a government bailout. Japanese stocks today closed -0.83%. The Chinese and Hong Kong stock markets were closed today for this week's Chinese holiday. Commodity prices are slightly lower this morning by -0.16% with Nov crude oil down -0.56%, Dec gold down -0.19%, Dec copper down -0.37%, and agriculture prices mixed. The dollar index this morning is down -0.22% while EUR/USD is up +0.21%. Dec 10-year T-notes are up 1.5 ticks.
• China's Sep manufacturing PMI of +0.6 to 49.8 was slightly weaker than market expectations for a 0.9 point increase to 50.1. The report from the China Federation of Logistics and Purchasing and the National Bureau of Statistics was released on Saturday.
• Japan's Q3 Tankan index for large manufacturers fell to -3 from -1 in Q2, which was slightly better than expectations for a decline to -0.4. The report was the fourth consecutive negative reading. The report indicated pessimism among Japanese manufacturing executives due to weak domestic demand and weak export demand from China and Europe. Weakness in exports threatens to tip Japan's economy into another mild recession.
• German and Eurozone manufacturing PMI reports for September were revised slightly higher by 0.1 point to 47.4 and 46.1, respectively. The Eurozone manufacturing PMI has been below 50.0 for fourteen consecutive months.
• The UK Sep manufacturing PMI of -1.2 to 48.4 was 0.6 points weaker than market expectations for a decline to 49.0.
• The Eurozone Aug unemployment rate was in line with market expectations of 11.4%, which matched July's revised figure and was a record high for the series that has history back to 1990.
  Market Comments
  • Dec E-mini S&Ps this morning are up +6.00 points (+0.42%) on support from the 1.23% rally in the Euro Stoxx 50 index. In addition, some of the overnight global economic data was a little better than expected. The S&P 500 index on Friday closed moderately lower: S&P 500 -0.45%, Dow Jones -0.36%, Nasdaq 100 -0.79%. The stock market fell on weaker than expected U.S. economic data that included Aug personal income of +0.1% (versus expectations of +0.2%), the Chicago PMI (-3.3 to 49.7 versus expectations of -0.2 to 52.8), and the final-Sep U.S. consumer confidence index from the University of Michigan (-0.9 to 78.3 from early-Sep's 79.2). The Aug personal spending report of +0.5% was strong and was in line with market expectations. The stock market received support from relief that the Spanish bank bailout figure of 59.3 bln euros was slightly lower than earlier estimates of 62 billion euros.
  • Dec 10-year T-notes this morning are up +1.5 ticks. Dec 10-year T-note prices on Friday closed little changed: TYZ2 -0.5, FVZ2 +1. T-note prices saw some underlying support from the weak U.S. economic data and some safe-haven demand with the sell-off in stocks.
  • The dollar index this morning is down -0.18 points (-0.22%) on reduced safe-haven demand with the rally in U.S. and European stocks. EUR/USD is up +0.0027 (+0.21%) and USD/JPY is virtually unchanged. The dollar index on Friday closed moderately lower: Dollar index +0.39 (+0.49%), EUR/USD -0.0053 (-0.41%), USD/JPY +0.35 (+0.45%). The dollar index saw some strength on a pickup in safe-haven demand with the sell-off in stocks. However, EUR/USD received support from news that the Spanish bank stress tests indicated a final bank bailout amount of 59.3 billion euros, which was less than earlier estimate of 62 billion euros and well below Spain's 100 billion euro bailout credit line from the Eurozone.
  • Nov WTI crude oil prices this morning are down -0.52 (-0.56%) and Nov gasoline is down -0.0081 (-0.28%) on the negative Chinese PMI manufacturing and Japanese tankan reports, which suggest continued weak demand for fuel in Asia. Nov crude oil and gasoline prices on Friday closed higher: CLX2 +0.34 (+0.37%), RBV2 +0.0229 (+0.79%). Oil prices rallied mildly on Friday on some continued short-covering after the sell-off seen in the past two weeks. Meanwhile, Nov gasoline prices consolidated below Thursday's 1-1/2 year high and closed moderately higher on continued support from very tight inventories in the Northeastern U.S. Overall U.S. gasoline inventories are tight at 4.1% below the 5-year seasonal average, but inventories in the Northeastern are particularly tight and fell to a 4-year low for this time of year due to refinery shut-downs in the U.S., Canada and Europe and a sharp drop in U.S. gasoline imports to NY harbor.
  • For the complete subscription version of this daily report (plus a 13-page big-picture weekly report), along with the earliest possible delivery in the morning, please visit http://www.barchart.com/register/crbfms_usmc.php
    Today's U.S. Earnings Reports Earnings reports (ranked by market cap): FGP-FerrellGas (Consensus:-$0.43), CALM-Cal-Main Foods (0.35).
    Global Financial Calendar
    

    Monday 10/1/12
    United States
    1000 ET	Sep ISM manufacturing index expected +0.2 to 48.8, Aug -0.2 to 49.6. Sep ISM prices-paid sub-index expected +1.8 to 55.8, Aug 54.0.
    1000 ET	Aug construction spending expected +0.5% m/m, July -0.9% m/m.
    1100 ET	USDA weekly grain export inspections.
    1130 ET	Weekly 3-mo and 6-mo T-bill auctions.
    1230 ET	Fed Chairman Ben Bernanke speaks on monetary policy in Indianapolis.
    1600 ET	USDA Crop Progress
    CHI
    n/a	Chinese holidays Oct 1-5 for National Day.
    Japan
    0100 ET	Japan Sep vehicle sales, Aug +7.3% y/y.
    2130 ET	Japan Aug labor cash earnings, July -1.6% y/y.
    Germany
    0355 ET	German final-Sep manufacturing PMI expected unrevised from preliminary 47.3
    Euro-Zone
    0400 ET	Eurozone final-Sep manufacturing PMI expected unrevised from preliminary 46.0.
    0500 ET	Eurozone Aug unemployment rate expected 11.4%, July 11.3%.
    United Kingdom
    0430 ET	UK Sep manufacturing PMI expected 49.0, Aug 49.5.
    0430 ET	UK Aug net consumer credit, July -200 mln pounds. Aug net lending secured on dwellings, July 1.1 bln pounds.
    0430 ET	UK Aug mortgage approvals, July 47,300.
    0430 ET	UK M4 money supply expected unch m/m and -4.3% y/y, July +0.5% m/m and -4.6% y/y.

    Barchart.com provides Financial Quotes, Charts and Technical Analysis for Stock and Commodity Traders.