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Global Financial Calendar
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- Global stocks are trading mixed with the European Euro Stoxx 50 index up +0.01% and March S&Ps up +5.10 points. The dollar and Treasuries are weaker as stocks attempt a rebound from yesterday's drubbing. Civil unrest continues in Libya, which has boosted crude prices, as Libyan leader Qaddafi vowed to keep fighting the rebellion in which over 300 people have been killed. Helping to lift European stock prices was the weaker-than-expected Jan French CPI, which fell -0.3% m/m and rose just +1.9% y/y. Also helping equity prices gain was the unexpected increase in Dec Euro-Zone industrial new orders which rose +2.1% m/m, stronger than expectations for a -1.0% m/m decline. Limiting a rally in stocks is weakness in airlines, which fell for a third day as higher crude prices threatens to cut into company profits. The euro rose to a 2-week high against the dollar on speculation rising energy costs will out further pressure on ECB policy makers to raise interest rates. The British pound rose to a 2-1/2 week high against the dollar after the release of the minutes of the Feb 10 BOE policy meeting showed BOE policy maker Dale joined fellow policy members Sentance and Weale in voting for an interest rate increase.
- The Asian stock markets today closed mostly lower with Japan down -0.80%, Hong Kong -0.36%, China +0.35%, Taiwan -1.67%, Australia -0.22%, Singapore -0.57%, South Korea -0.35%, India -0.64%. Q4 Chinese consumer confidence fell to 100 from 104 in Q3, its lowest level in nearly 2 years, as rising inflation threatens to restrain consumer spending. Nielson Co. and the Chinese statistics bureau's Economic Monitoring and Analysis Center, which prepared the confidence data, said that consumers' willingness to spend dropped "notably" as inflation expectations grew and food prices jumped. 83% of Chinese consumers expected prices to rise further in the next 12 months, 6 percentage points higher than in the previous quarter. The Jan Japan trade balance showed a trade deficit of 471.4 billion yen ($5.7 billion), Japan's first trade deficit in 22 months, as exports to Asia slowed and a surge in commodity prices pushed up import costs. The shortfall is unlikely to signal a weakening in Japan's economy as total exports rose 1% in Jan from a month earlier, their fifth consecutive monthly advance.
- March S&Ps this morning are trading up +5.10 points. The US stock market yesterday finished sharply lower as an escalation of violent protests in Libya prompted a sell off in global equity markets: Dow +0.59%, S&P 500 +0.19%, Nasdaq Composite +0.08%. The Dow and S&P 500 fell to 1-week lows and the Nasdaq tumbled to a 2-week low. Bearish factors included (1) an escalation of civil unrest and violence in Libya, which increases geo-political risks that may lead to global instability, (2) the larger-than-expected decline in the Dec S&P/CaseShiller composite-20 home price index which posted its biggest year-over-year decline in 1 year (-2.4% y/y versus expectations of -2.3% y/y), and indicates continued weakness in the US housing market, (3) the slump in airline stocks on concern the surge in fuel prices to a 2-1/3 year high will depress earnings, and (4) weakness in retailers led by a slide in Wal-Mart after the world's biggest retailer reported a seventh straight quarterly sales decline at its US stores.
- Bullish factors for stocks included (1) the unexpected increase in Feb US consumer confidence which rose to a 3-year high (+5.6 to 70.4 versus expectations of -2.1 to 63.5), (2) the unexpected increase in the Feb Richmond Fed manufacturing index (+7 to 25 versus expectations of -1 to 17), (3) strength in energy producers after crude oil climbed to a 2-1/3 year high, and (4) data from TransUnion LLC that showed Q4 US credit card delinquencies fell -32% y/y.
- Applied Materials (AMAT) rose 1.5% in pre-market trading after Piper Jaffray raised its recommendation on the semiconductor-equipment maker to "overweight" from "nuetral."
- Hewlett-Packard (HPQ) tumbled 11% in pre-market trading after the company forecast Q2 profit of $1.21 a share on sales of $31.6 billion, below analysts' estimates of profit of $1.26 on sales of $32.6 billion.
- March 10-year T-notes this morning are trading down -8.5 ticks. T-note prices yesterday posted a 2-1/2 week high and closed sharply higher on increased safe-haven demand along with Fed purchases of Treasuries: TYH11 +1-1/32, FVH11 +22.5, EDM11 +0.5. Bullish factors included (1) increased safe-haven demand for Treasuries as an escalation of civil unrest and violence intensified in Libya and prompted a sell-off in world equity markets, (2) the larger-than-expected decline in the Dec S&P/CaseShiller composite-20 home price index which posted its biggest year-over-year decline in 1 year (-2.4% y/y versus expectations of -2.3% y/y), which indicates continued weakness in the US housing market, and (3) the Fed's purchase of $7.240 billion of Treasuries as part of its QE 2 asset-purchase program. Bearish factors included (1) the unexpected increase in Feb US consumer confidence which rose to a 3-year high (+5.6 to 70.4 versus expectations of -2.1 to 63.5), (2) the unexpected increase in the Feb Richmond Fed manufacturing index (+7 to 25 versus expectations of -1 to 17), and (3) supply pressures ahead of the Treasury's $35 billion auction of 5-year T-notes on Wed.
- The dollar index this morning is trading lower with the dollar/yen +0.20 yen and the euro/dollar +0.87 cents. The dollar index yesterday closed higher but well off its best levels after strong safe-haven demand for the dollar was offset by hawkish comments from an ECB official: Dollar Index +0.079, USDJPY -0.337, EURUSD -0.00348. Bullish factors included (1) increased safe-haven demand for the dollar as violent protests escalated in Libya, (2) the action by Moody's Investors Service to lower the outlook on Japan's Aa2 debt rating to negative from stable, which is yen negative, (3) the unexpected increase in Feb US consumer confidence to a 3-year high, which is dollar supportive, and (4) the prediction from the head of Germany's Ifo research institute that Greece is likely to be forced to restructure its debt because EU governments won't flood Greece with financial aid, that exiting the euro would wreck Greece's banking system, and a 20% to 30% cut in domestic wages in Greece to restore competitiveness would trigger civil disorder. Bearish factors for the dollar included (1) hawkish comments from ECB Council member Mersch who said ECB officials may toughen their language on inflation when they meet next week, which suggests the ECB may be ready to raise interest rates in the near future, and (2) the larger-than-expected decline in Dec S&P/CaseShiller composite-20 home price index which showed US home prices fell -2.4% y/y, their biggest year-over-year decline in a year, and signals continued weakness in the US housing market.
- April crude oil prices this morning are trading up +50 cents a barrel and April gasoline is +3.21 cents per gallon. Crude oil and gasoline prices yesterday surged to 2-1/3 year highs and closed sharply higher on concern that violent unrest in Libya may disrupt crude supplies: CLJ11 +$5.71, RBJ11 +5.63. Bullish factors included (1) an escalation of violent civil unrest in Libya, owner of Africa's biggest oil reserves, which fueled concern that crude supplies from Libya may be disrupted, (2) Iran's action to sail 2 warships through the Suez Canal, which Israel considers "a provocation," and (3) concern that the ongoing civil unrest in North Africa and the Middle East will spread to the oil-producing areas of the region and disrupt global crude supplies. Bearish factors included (1) strength in the dollar, which may limit investment demand for commodities, and (2) comments from Saudi Arabian Oil Minister Ali al-Naimi who said OPEC is ready to step in to meet any shortage in oil supply resulting from a disruption in crude shipments from Libya and that global oil markets have sufficient supply and prices at $70 to $80 a barrel would be "fair" for producers and consumers alike.
Global Financial Calendar
| Wednesday 2/23/11 | |
|---|---|
| United States | |
| 0700 ET | Weekly MBA mortgage applications, last market index ?9.5% with purchase mortgage sub-index ?5.9% and refinancing sub-index ?11.0%. |
| 0745 ET | ICSC (Int?l Council of Shopping Centers) weekly retailer sales. |
| 0855 ET | Redbook weekly retailer sales. |
| 1000 ET | Jan existing home sales expected ?1.5% to 5.20 million, Dec +12.3% to 5.28 million. |
| 1130 ET | Weekly 4-week T-bill auction. |
| 1230 ET | Kansas City Fed President Thomas Hoenig speaks on the economic outlook to Women in Housing & Finance Inc. in Washington D.C. |
| 1300 ET | Treasury auctions $35 billion 5-year T-notes. |
| 1330 ET | Philadelphia Fed President Charles Plosser speaks on the economy to the Rotary Club of Birmingham, AL. |
| 1630 ET | API weekly energy inventory report (delayed 1 day from Monday?s holiday). |
| France | |
| 0130 ET | Jan French CPI (EU harmonized) expected ?0.1% m/m and +2.2% y/y, Dec +0.5% m/m and +2.0% y/y. |
| United Kingdom | |
| 0430 ET | Minutes of the Feb 10 BOE policy meeting. |
| Euro-Zone | |
| 0500 ET | Dec Euro-Zone industrial new orders expected ?1.0% m/m and +16.2% y/y, Nov +2.1% m/m and +19.9% y/y. |
Jim Van Meerten is a professional investor with over 40 year experience in investing in stocks, mutual funds and ETFs. He shares his knowledge on Barchart in his daily blogs -- Barchart Portfolio Blogs.
Through Marketocracy Capital Management you can have a Separately Managed Account that mirrors his Barchart Van Meerten New High portfolio.
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