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 weaker with the European Euro Stoxx 50 index down -0.71% and March S&Ps down -5.80 points. Treasuries and the dollar are higher, with the dollar index at a 1-week high, while most commodities fell after Chinese and German exports unexpectedly declined and Moody's Investors Service cut Spain's credit rating by one level to Aa2, saying the government has underestimated the cost of shoring up the banking industry. Moody's forecasts that Spanish lenders will need as much as 50 billion euros ($69 billion) to meet new capital requirements, more than the 20 billion-euro estimate seen by the government. Moody's adds the risks to Spain's public finances are "skewed to the downside" and the outlook is "negative," which suggests more rating cuts are under consideration. The euro slid to a 1-week low against the dollar as the cost to insure European government debt rose. The cost to insure Spain's government bonds rose 8 bp to a 1-month high of 258, while the cost to insure Portugal's debt rose 8.5 bp to a 2-month high of 505.5, and the cost to insure Greek debt climbed 6 bp to a record 1,040, according to CMA. European stocks were also pressured after Jan German exports unexpectedly fell -1.0% m/m, weaker than market expectations of a +0.7% m/m increase. As expected, the BOE kept its benchmark rate unchanged at 0.50% and kept its asset purchase target at 200 billion pounds ($324 billion).
- The Asian stock markets today closed lower with Japan down -1.46%, Hong Kong -0.82%, China -1.76%, Taiwan -1.22%, Australia -1.43%, Singapore -0.56%, South Korea -1.22%, India -0.77%. Chinese stocks closed lower and weighed down other global equity markets after China reported an unexpected -$7.3 billion trade deficit in Feb. Feb China exports rose +2.4% y/y, the least in 2 years, while Feb imports climbed +19.4% y/y. The weakness in Chinese exports undercut other world stock markets on concern a slowdown in China, the engine of world growth, may also slow the global economy as well. Japanese stocks were also pressured after Q4 Japan GDP was revised down to -1.3% annualized, more than the -1.1% previously reported, because of a downward revision to capital investment and consumer spending. The Bank of Korea raised the benchmark 7-day repurchase rate by 25 bp to 3.00%, the second rate increase this year, after inflation exceeded the central bank's target ceiling for 2 consecutive months.
- March S&Ps this morning are trading down -5.80 points. The US stock market yesterday fluctuated on both sides of unchanged and turned lower late as weakness in technology stocks offset a decline in oil prices: Dow Jones -0.01%, S&P 500 -0.14%, Nasdaq Composite -0.51%. Bearish factors for stocks included (1) concern the violent unrest in Libya will spread throughout the oil-producing regions of North Africa and the Middle East as protestors are expected to stage a "Day of Rage" protest in Saudi Arabia on Friday, (2) concern the European sovereign-debt crisis may worsen after the managing director of European sovereign ratings at Standard & Poor's warned some countries in the Euro-Zone might have their credit ratings cut further while a Greek debt default is a "possibility," and (2) weakness in technology stocks led by declines in makers of networking equipment after Finisar warned of weaker than expected earnings.
- Bullish factors included (1) the decline in oil prices for a second day, which eases concern that rising energy costs will derail the global economy, (2) the larger-than-expected increase in Jan wholesale inventories along with the upward revision to Dec (Jan +1.1% versus expectations of +0.9% and Dec revised up to +1.3% from +1.0%), which cut the Jan wholesale inventory-to-sales ratio to 1.13 months, matching the Apr 2010 record low, and signals further increases in production as businesses try to keep up with demand, (3) strength in retailers after American Eagle Outfitters reported better-than-expected Q4 profits, and (4) the +15.5% increase in MBA mortgage applications last week, the biggest gain since June and a sign the housing market may be stabilizing.
- Hewlett-Packard (HPQ) slipped 1% after a shareholder-advisory group accused HP's directors of going against rules in their appointment of new board members.
- June 10-year T-notes this morning are trading up +4.5 ticks. T-note prices yesterday traded higher on concern rising fuel costs will slow economic growth along with strong demand for the Treasury's 10-year T-note auction: TYM11 +18.5, FVM11 +11.2, EDU11 +1.0. Bullish factors included (1) increased safe-haven demand for Treasuries after pro-Qaddafi troops stepped up attacks on rebel forces, which fuels concern that the economy will weaken as the Libyan conflict persists and pushes crude prices higher, (2) strong demand for the Treasury's $21 billion auction of 10-year T-notes that had a bid-to-cover ratio of 3.32, well above the 12-auction average of 3.16, and (3) the Fed's action to purchase $6.69 billion of Treasuries as part of its QE2 asset-purchase program. Bearish factors included (1) the larger-than-expected increase in Jan wholesale inventories along with the upward revision to Dec (Jan +1.1% versus expectations of +0.9% and Dec revised up to +1.3% from +1.0%), which cut the Jan wholesale inventory-to-sales ratio to 1.13 months, matching the Apr 2010 record low and signals further increases in production as businesses try to keep up with demand, and (2) supply pressures ahead of the Treasury's $13 billion auction of 30-year T-bonds on Thu.
- The dollar index this morning is trading stronger and at a 1-week high with the dollar/yen +0.19 yen and the euro/dollar -0.67 cents. The dollar index yesterday fell back on concern rising fuel costs will derail the US economy along with strength in the euro on speculation the ECB will buy the bonds of the Euro-Zone's most indebted nations: Dollar Index -0.077, USDJPY +0.070, EURUSD +0.00042. Bearish factors included (1) concern the recent surge in energy prices will derail the US economy and prompt the Fed into maintaining its overly easy monetary policy, (2) speculation the ECB will purchase the bonds of its most indebted nations after the yields on Portuguese debt climbed to a record, and (3) the larger-than-expected increase in Jan German industrial production, which is euro bullish. Bullish factors included (1) increased safe-haven demand for the dollar after the managing director of European sovereign ratings at Standard & Poor's warned some countries in the Euro-Zone might have their credit ratings cut further while a Greek debt default is a "possibility," and (2) concern the European sovereign-debt crisis will worsen after weak demand for a government auction of Portuguese debt sent the yield on Portugal's 10-year bond soaring to 7.70%, the highest since data began in 1997.
- April crude oil prices this morning are trading down -$1.04 a barrel and April gasoline is -3.30 cents per gallon. Crude oil and gasoline prices yesterday traded mixed as weekly US gasoline supplies plunged but crude supplies in Cushing Oklahoma rose to a record: CLJ11 -$0.64, RBJ11 +8.05. Bullish factors include (1) the weaker dollar, (2) an escalation of fighting in Libya after pro-Qaddafi troops stepped up attacks on rebel forces, stoking concern the conflict will persist and continue to disrupt oil shipments, (3) the larger-than-expected decline in weekly DOE gasoline and distillate inventories (gasoline -5.49 million bbl versus expectations of -1.5 million bbl and distillates -3.98 million bbl versus expectations of -500,000 bbl), and (4) concerns over the spread of civil unrest to Saudi Arabia with protestors calling for a "Day of Rage" protest there on Friday. Bearish factors included (1) the larger-than-expected increase in weekly DOE crude oil inventories (+2.52 million bbl versus expectations of +1.13 million bbl), and (2) the +1.69 million bbl increase in crude inventories at Cushing, Oklahoma, the delivery point for NYMEX WTI crude contracts, to 40.3 million barrels, the highest level since the DOE began tracking supplies in 2004.
Global Financial Calendar
| Thursday 3/10/11 | |
|---|---|
| United States | |
| 0830 ET | Weekly initial unemployment claims expected +8,000 to 376,000, previous –20,000 to 368,000. Weekly continuing claims expected –24,000 to 3.750 million, previous 59,000 to 3.774 million. |
| 0830 ET | Jan trade balance expected -$41.5 billion, Dec -$40.6 billion. |
| 0945 ET | Bloomberg weekly consumer comfort index. |
| 1300 ET | Treasury auctions $13 billion 30-year T-bonds. |
| 1400 ET | Feb monthly budget statement expected -$225.2 billion, Jan -$49.796 billion. |
| 1630 ET | Weekly money supply report and Fed balance sheet. |
| Japan | |
| 0100 ET | Feb Japan machine tool orders, Jan +89.8% y/y. |
| France | |
| 0130 ET | Revised Q4 French non-farm payrolls expected no change at +0.2% q/q. |
| 0245 ET | Jan French industrial production expected +0.5% m/m and +5.0% y/y, Dec +0.3% m/m and +7.0% y/y. |
| 0245 ET | Jan French manufacturing production expected +0.4% m/m and +5.0% y/y, Dec –0.1% m/m and +6.6% y/y. |
| Germany | |
| 0300 ET | Jan German trade balance expected +13.0 billion euros, Dec +11.9 billion euros. Jan exports expected +0.7% m/m, Dec +0.5% m/m. Jan imports expected +1.5% m/m, Dec –2.6% m/m. |
| Euro-Zone | |
| 0400 ET | ECB publishes its monthly report for March. |
| United Kingdom | |
| 0430 ET | Jan UK industrial production expected +0.4% m/m and +4.2% y/y, Dec +0.5% m/m and +3.6% y/y. |
| 0430 ET | Jan UK manufacturing production expected +0.6% m/m and +6.3% y/y, Dec –0.1% m/m and +4.4% y/y. |
| 0700 ET | BOE announces interest rate decision and asset purchase target (no change expected to the 0.50% benchmark rate or to the 200 billion pound asset purchase target). |
| CHI | |
| 2100 ET | Feb China producer price index expected +7.0% y/y, Jan +6.6% y/y. |
| 2100 ET | Feb China consumer price index expected +4.8% y/y, Jan +4.9% y/y. |
| 2100 ET | Feb China industrial production expected +13.3% y/y. |
| 2100 ET | Feb China retail sales expected +19.0% y/y. |
No comments:
Post a Comment