Barchart Morning Call
Overnight Developments
Global Financial Calendar
Barchart.com provides Financial Quotes, Charts and Technical Analysis for Stock and Commodity Traders.
- Global stocks are trading lower with the European Euro Stoxx 50 index down -0.33% and March S&Ps down -4.20 points. The dollar and Treasuries are firmer and commodities are mixed ahead of Fed Chairman Bernanke's testimony before the House Budget Committee later this morning. Inflation fears are sending the market lower today after China's interest rate hike yesterday along with soaring food inflation in the UK. The British Retail Consortium reported that Jan UK food prices rose +4.6% y/y, their fastest pace in 19 months and up from a +4.0% y/y pace in Dec. Also undercutting European stocks was the smaller-than-expected increase in Dec German exports, which rose +0.5% m/m, weaker than expectations of a +1.0% m/m increase. Dec German imports were weak as well after they unexpectedly fell -2.3% m/m, weaker than expectations of a +0.8% m/m increase. The euro trimmed gains and the 10-year German bund yield advanced to an 11-month high after Reuters reported that well-known monetary policy hawk Axel Weber will drop out of the race to succeed Jean-Claude Trichet as head of the ECB.
- The Asian stock markets today closed mostly lower with Japan down -0.17%, Hong Kong -1.36%, China -1.18%, Taiwan -1.15%, Australia +0.29%, Singapore -1.09%, South Korea -1.19%, India -1.03%. Asian stocks declined as the market reacted to China's action to hike interest rates yesterday after the Asian markets were closed. Chinese stocks closed lower as exchanges reopened following a weeklong holiday for the Lunar New Year. Chinese homebuilders, real-estate companies and commodity producers led the market lower on demand concerns following the Chinese rate hike. Limiting losses in Japanese stocks was strength in exporters after the yen slipped to a 1-1/2 week low against the dollar and after Toyota Motor surged 5.2% when it boosted its profit forecast.
- March S&Ps this morning are trading down -4.20 points. The US stock market yesterday crept higher the entire day and finished on its high due to increased economic optimism: Dow +0.59%, S&P 500 +0.42%, Nasdaq Composite +0.47%. The S&P 500 and the Dow posted 2-1/2 year highs and the Nasdaq limbed to a 9-3/4 year high. Bullish factors included (1) the larger-than-expected increase in the NFIB small business optimism index (+1.5 to a 3-year high of 94.1 versus expectations of +1.4 to 94.0), (2) strength in homebuilders on optimism that a growing US economy will prompt a pick up in home sales this spring, (3) a rally in bank stocks after RBC Capital Markets predicted that regulators this quarter will enable US banks that took government stress tests 2 years ago to receive Fed clearance to increase their dividends, and (4) comments from Richmond Fed President Lacker who said that higher consumer spending, along with business investment in equipment and software, point to US growth this year of "pretty close to 4%."
- Bearish factors for stocks included (1) carry-over weakness from China's action to raise interest rates for the third time since mid-Oct, which may slow China's economic growth and the global economy as well, (2) weakness in raw-materials and energy producers on concern Chinese demand for commodities will wane as it tightens monetary policy further, (3) the report from the US Labor Department that said Dec US job openings fell by -139,000 to 3.06 million, the lowest in 3 months, which signals a sustained labor-market recovery will be slow to develop, and (4) heightened interest rate concerns after the yield on the 10-year T-note rose to a 9-1/4 month high of 3.733%.
- Walt Disney (DIS) rallied 3.6% in European trading as the company late yesterday reported Q1 net income of 68 cents a share, exceeding analysts' estimates of 56 cents after an increase in attendance at its resorts and advertising sales growth at ESPN.
- 3M Co. (MMM) gained 1.5% in pre-market trading after the company approved a stock-repurchase plan of as much as $7 billion and increased its quarterly dividend by 5%.
- March 10-year T-notes this morning are trading up +0.5 of a tick. T-note prices yesterday traded with small losses into early afternoon and then tumbled into the close after the Treasury's 3-year T-note auction was met with weak demand: TYH11 -20, FVH11 -17.2, EDM11 -1.5. The 10-year T-note yield climbed to a 9-1/4 month high of 3.733%. Bearish factors included (1) hawkish comments from Richmond Fed President Lacker who said the quickening US recovery means policy makers need to take "quite seriously" their commitment to review the $600 billion asset-purchase program, which suggests he favors ending the QE2 program sooner rather than later, (2) weak demand for the Treasury's $32 billion auction of 3-year T-notes that had a bid-to-cover ratio of 3.01, below the 12-auction average of 3.12, and (3) supply pressures ahead of the Treasury's $24 billion auction of 10-year T-notes on Wed. Bullish factors included (1) comments from Atlanta Fed President Lockhart who said economic concern that the US recovery may falter is "justified" as hiring lags behind economic growth, and (2) the Fed's action to purchase $2.19 billion of Treasuries as part of its QE2 asset-purchase program.
- The dollar index this morning is little changed with the dollar/yen +0.19 yen and the euro/dollar +0.25 cents. The dollar index yesterday weakened after China raised interest rates and on reduced safe-haven demand for the dollar as the stock market rallied: Dollar Index -0.030, USDJPY +0.043, EURUSD +0.00428. Bearish factors for the dollar included (1) the action by China to raise interest rates for the third time since mid-Oct, (2) reduced safe-haven demand for the dollar after the stock market rallied and as tensions eased in Egypt, and (3) hawkish comments from ECB Council member Mersch that lifted the euro when he said policy makers would need to come up with "a rigorous intervention" if higher inflation persists. Bullish factors included (1) dollar supportive comments from Richmond Fed President Lacker who said the quickening US recovery means policy makers need to take "quite seriously" their commitment to review the $600 billion asset-purchase program scheduled to end in June, which suggests he favors ending the QE2 program sooner rather than later, and (2) the unexpected decline in Dec German industrial production, which is euro negative.
- March crude oil prices this morning are trading up +40 cents a barrel and March gasoline is +1.32 cents per gallon. Crude oil and gasoline prices yesterday fluctuated on either side of unchanged as the action by China to raise interest rates was offset by refinery shutdowns that may limit gasoline supplies: CLH11 -0.54, RBH11 +0.95. Mar crude and Mar gasoline fell to 1-week lows. Bearish factors included (1) the action by China to raise interest rates for the third time since mid-Oct, which may slow China's economy and its fuel demand, (2) an easing of the political tension in Egypt, which reduces chances of civil unrest spreading throughout the Middle East that may disrupt global oil supplies, (3) carry-over weakness from a fall in natural gas prices to a 1-1/2 month low after the DOE raised its forecast for 2011 US natural gas production to 62.43 billion cubic feet a day from last month's forecast of 61.38 billion cubic feet a day, and (4) the outlook for US crude supplies to increase for a fourth week when the DOE releases its weekly inventory figures on Wed. Bullish factors included (1) the weaker dollar, which boosts investment demand for commodities, and (2) strength in gasoline on concerns that several refinery closures by ConocoPhillips in Texas, Exxon-Mobile in Louisiana and Valero Energy in Aruba may limit US gasoline supplies. Expectations for Wednesday's weekly DOE inventory report are for crude oil stockpiles to increase by +2.0 million bbl, gasoline supplies to rise +2.7 million bbl, distillate inventories to fall -1.0 million bbl and the refinery utilization rate to fall -0.2 to 84.7%
Global Financial Calendar
| Wednesday 2/9/11 | |
|---|---|
| United States | |
| 0700 ET | Weekly MBA mortgage applications, last market index +11.3% with purchase mortgage sub-index +9.5% and refinancing sub-index +11.7%. |
| 1000 ET | Fed Chairman Ben Bernanke testifies at a hearing of the House Budget Committee on ?The Economy, Jobs and the Budget.? |
| 1300 ET | Treasury auctions $24 billion 10-year T-notes. |
| 1845 ET | Atlanta Fed President Dennis Lockhart speaks on the U.S. economic outlook to the CFA Society of Atlanta. |
| Japan | |
| 0000 ET | Jan Japan consumer confidence households expected +0.2 to 40.3, Dec ?0.3 to 40.1. |
| 0100 ET | Preliminary Jan Japan machine tool orders, Dec +64.0% y/y. |
| 1850 ET | Dec Japan machine orders expected +5.0% m/m and +2.2% y/y, Nov ?3.0% m/m and +11.6% y/y. |
| 1850 ET | Jan Japan domestic CGPI expected +0.3% m/m and +1.4% y/y, Dec +0.4% m/m and +1.2% y/y. |
| Germany | |
| 0200 ET | Dec German trade balance expected +12.0 billion euros, Nov +12.9 billion euros. Dec exports expected +1.0% m/m, Nov +0.5% m/m. Dec imports expected +0.8% m/m, Nov +4.1% m/m. |
| Euro-Zone | |
| 1300 ET | ECB Executive Board member Lorenzo Bini Smaghi speaks on ?Sovereign risk and the euro? at London Business School. |
| CHI | |
| 2100 ET | Jan China trade balance expected +$10.20 billion, Dec +$13.08 billion. Jan exports expected +22.4% y/y, Dec +17.9% y/y. Jan imports expected +21.9% y/y, Dec +25.6% y/y. |
No comments:
Post a Comment