Barchart Morning Call 11/13

Barchart Morning Call

BC - 2 hrs 33 mins ago

Overnight Developments

• Dec E-mini S&Ps this morning are trading mildly lower by -0.29% on the -0.30% sell-off in European stocks and lower Asian stocks. European stocks are trading lower on the poor German and Eurozone Zew investor sentiment indexes and on yesterday's lack of agreement by Eurozone officials on how to plug the 30 billion euro hole in Greece's longer-term deficit outlook. Chinese stocks today fell sharply by -1.75% to a 7-week low on a newswire report that the Chinese government may expand a property tax trial in a bid to curb property speculation. Japan closed down -0.18% and Hong Kong closed down -1.13%. Commodity prices are up +0.27% this morning with Dec crude oil down -0.14%, Dec gasoline down -0.55%, Dec gold down -0.07%, grains up about +0.8% on average, and livestock and softs mixed. The dollar index and EUR/USD are little changed. Dec 10-year T-note prices are up 1.5 ticks.
• In Washington, Congress today returns for a lame duck session through year-end with the main topic to address being the year-end fiscal cliff. President Obama meets with union leaders today and business leaders tomorrow. President Obama tomorrow will hold his first press conference since June.
• The UK Oct CPI report of +2.7% y/y was up from +2.2% in Sep and was stronger than market expectations of +2.4%. The Oct core CPI was up +2.6% from +2.1% in Sep and was stronger than market expectations of +2.2%. The CPI reports were stronger than expected mainly because of a 0.3 point increase tied to sharply higher university tuition. The UK CPI report will make it more difficult for the Bank of England to restart its quantitative easing program in coming months if the UK economy deteriorates.
• The German Nov Zew economic sentiment index fell to -15.7 from -11.5 in Oct and was weaker than market expectations for an improvement to -10.0. The Eurozone Nov Zew economic sentiment index fell to -2.6 from -1.4% in Sep. Those reports indicated that investor confidence deteriorated further going into November. The Zew surveys measure the confidence of investors and investment analysts.
  Market Comments
  • Dec E-mini S&Ps this morning are down 4.00 points (-0.29%). Bearish factors include a -0.30% sell-off in the Euro Stoxx 50 index and weak Asian stocks across the board. E-mini S&Ps also continue to see weakness on concern about the year-end fiscal cliff. U.S. stocks on Monday closed narrowly mixed on support from some Republican comments in favor of tax increases and on Friday night's stronger-than-expected Chinese exports report: S&P 500 +0.18%, Dow Jones -0.31%, Nasdaq -1.33%. China's Oct exports were reported on Friday night at +11.6% y/y, which was stronger than market expectations of +10.0% and were up from Sep's report of +9.9% y/y.
  • Dec 10-year T-notes this morning are up 1.5 ticks on the lower trade in E-mini S&Ps and in European and Asian stock indexes. Dec 10-year T-note prices closed slightly lower as the market consolidated after last week's sharp gains on fiscal cliff concerns: TYZ2 -0.5, FVZ2 +0.75.
  • The dollar index this morning is slightly lower by -0.02 (-0.03%) and EUR/USD is up +0.0002 (+0.02%). USD/JPY is up +0.01 (+0.01%). The dollar index on Monday closed little changed as the market awaits developments on the fiscal cliff and Greece: Dollar index +0.01 (+0.01%), EUR/USD -0.0004 (-0.03%), USD/JPY +0.01 (+0.01%).
  • Dec WTI crude oil prices this morning are down -0.12 (-0.14%) and Dec gasoline is down -0.0146 (-0.55%) on the lower trade in global stocks. Dec crude oil and gasoline prices closed moderately higher on technical selling, doubts about global growth, and expectations for increases in the DOE crude oil and gasoline inventory figures: CLZ2 -0.50 (-0.58%), RBZ2 -0.0229 (-0.85%). The market consensus for this week's DOE report is for a 2.5 mln bbl rise in crude oil inventories, an 800,000 bbl rise in gasoline inventories, a 500,000 bbl decline in distillate inventories, and a 0.7 point rise in the refinery utilization rate to 86.1%.
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    Today's U.S. Earnings Reports Earnings reports (ranked by market cap): Home Depot (Consensus:$0.70), CSCO-Cisco Systems (0.46), TJX-TJX Companies (0.63), DKS-Dick's Sporting Goods (0.37), ACM-Aecom Technology (0.82), WWD-Woodward (0.56), SKS-Saks (0.12).
    Global Financial Calendar
    

    Tuesday 11/13/12
    United States
    n/a	Congress reconvenes for lame duck session.
    1000 ET	Nov IBD/TIPP economic optimism, Oct 54.0.
    1100 ET	USDA weekly grain export inspections.
    1130 ET	Weekly 3-mo and 6-mo T-bill auctions.
    1400 ET	Oct monthly budget statement expected -$125 bln, Sep +$75.020 billion.
    1530 ET	Fed Vice Chairman Janet Yellen speaks on central bank communications at UC Berkeley.
    1600 ET	USDA Crop Progress.
    United Kingdom
    0430 ET	UK Sep ONS house price index expected +2.0% y/y, Aug +1.8% y/y.
    0430 ET	UK Oct PPI input expected -0.2% m/m and -0.5% y/y, Sep -0.2% m/m and -1.2% y/y. Oct PPI output expected +0.1% m/m and +2.5% y/y, Sep +0.5% m/m and +2.5% y/y. Oct PPI output core expected 0.1% m/m and +1.4% y/y, Sep +0.3% m/m and +1.2% y/y.
    0430 ET	UK Oct CPI expected +0.2% m/m and +2.4% y/y, Sep +0.4% m/m and +2.2% y/y. Oct core CPI expected +2.2% y/y, Sep +2.1% y/y.
    0430 ET	UK Oct retail price index (RPI) expected +0.2% m/m and +2.9% y/y, Sep +0.5% m/m and +2.6% y/y. Oct RPI ex mortgage interest payments expected +2.9% y/y, Sep +2.6% y/y.
    Germany
    0500 ET	German Nov Zew current situation index expected 8, Oct 10. German Nov Zew economic sentiment index expected -10, Oct -11.5
    Euro-Zone
    0500 ET	Eurozone Nov Zew economic sentiment index, Oct -1.4.

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