Barchart Morning Call
Overnight Developments
Global Financial Calendar
Barchart.com provides Financial Quotes, Charts and Technical Analysis for Stock and Commodity Traders.
- Global stocks this morning are mostly higher with the Euro Stoxx 50 down -0.85% and Dec S&Ps up +1.00 point. The dollar, U.S. stock futures and most commodities gained on speculation the Fed may announce further stimulus measures today following the conclusion of its 2-day FOMC meeting. The market is expecting the Fed to say it will replace short-term Treasuries in its $1.65 trillion portfolio with long-term bonds. European stocks declined as officials said they plan to return to Greece next week to complete a review of the Greek economy. The British pound declined to an 8-1/4 month low against the dollar after the minutes of the Sep 7-8 BOE policy meeting stated that most policy makers said it was "increasingly probable that further asset purchases to loosen monetary conditions would become warranted at some point" as growth in the second half of 2011 may be "materially weaker" than projected in Aug.
- Asian stocks today closed mostly higher with Japan up +0.23%, China +3.02%, Australia +0.78%, South Korea +0.83%, India -0.20%. Asian stocks were boosted on speculation the Fed may announce additional stimulus measures along with optimism that Greece will receive additional aid to avoid a default. Gains in Japanese stocks were limited after the yen rose to a 1-month high, just below its post-WWII high made last month, while Aug Japan exports rose +2.8% y/y, weaker than expectations of +8.0% y/y. Prime Minister Noda unveiled a plan to help companies respond to the yen's appreciation by pledging to grant "large" subsidies for domestic construction of factories. The Aug South Korean unemployment rate unexpectedly fell -0.2 to a 3-year low of 3.1%, which may prompt the BOK to extend its rate tightening cycle. The BOK has raised the benchmark interest rate 3 times this year as inflation has exceeded the central bank's 4% target since Jan.
- December S&Ps this morning are trading up +1.00 point. The US stock market yesterday erased an early rally after U.S. housing starts fell more than expected, but recovered and finished the day mixed on optimism Greece will satisfy requirements for additional aid and that the Fed will provide additional stimulus to spur growth: Dow Jones +0.07, S&P 500 -0.17, Nasdaq Composite -0.86%. The S&P 500 and the Dow posted 2-week highs and the Nasdaq climbed to a 1-1/2 month high. Bullish factors included (1) optimism that Greece will receive additional aid to avoid default after the EU said that Greek Finance Minister Venizelos made "good progress" in a second round of talks Tuesday between them and the IMF, (2) the unexpected increase in Aug U.S. building permits to their best level in 8 months (+3.2% to 620,000 versus expectations of -1.8% to 590,000), and (3) speculation the Fed will provide additional stimulus measures to spur economic growth.
- Bearish factors included (1) concern the European sovereign-debt crisis will worsen after credit default swaps to insure Italian government debt rose to a record when Standard & Poor's cut Italy's credit rating one notch to A from A+, (2) the action by the IMF to cut its 2011 global growth estimate to 4.0% from a Jun forecast of 4.3% and the cut in its 2012 global GDP estimate to 4.0% from 4.5% forecast in Jun, (3) the warning from the IMF that if European leaders fail to contain the debt crisis the threat to the global economy could be "significant," and (4) the larger-than-expected decline in Aug U.S. housing starts to a 3-month low (-5.0% to 571,000 versus expectations of -2.3% to 590,000).
- Oracle (ORCL) rose 3.2% in European trading after the company reported Q1 earnings late yesterday of 48 cents a share, ahead of analysts' estimates of 47 cents.
- December 10-year T-notes this morning are unchanged. T-note prices yesterday fluctuated between minor gains and losses throughout the day and settled slightly lower as optimism Greece will receive additional aid offset the action by the IMF to cut its global growth estimates: TYZ11 -2.5, FVZ11 -1.7, EDH12 +2.5. Bearish factors included (1) reduced safe-haven demand for Treasuries after the stock market rallied on optimism that Greece will receive further aid to keep it from default and (2) the unexpected increase in Aug U.S. building permits to their best level in 8 months (+3.2% to 620,000 versus expectations of -1.8% to 590,000). Bullish factors included (1) increased safe-haven demand for Treasuries on concern the European sovereign-debt crisis will worsen after credit default swaps to insure Italian government debt rose to a record when Standard & Poor's cut Italy's credit rating one notch to A from A+, (2) the action by the IMF to cut its 2011 global growth estimate to 4.0% from a Jun forecast of 4.3% and the cut in its 2012 global GDP estimate to 4.0% from 4.5% forecast in Jun, (3) the warning from the IMF that if European leaders fail to contain the debt crisis the threat to the global economy could be "significant," (4) the larger-than-expected decline in Aug U.S. housing starts to a 3-month low (-5.0% to 571,000 versus expectations of -2.3% to 590,000), and (5) speculation that the Fed will announce at the conclusion of its 2-day policy meeting on Wed that it will increase its holdings of longer maturity Treasuries in an attempt to keep borrowing costs down.
- The dollar index this morning is higher with the dollar/yen -0.12 yen and the euro/dollar -0.55 cents. The dollar index yesterday fell back on optimism Greece will be able to obtain additional aid to keep it from defaulting on its sovereign debt along with the greater-than-expected decline in Aug U.S. housing starts: Dollar Index -0.116, USDJPY -0.133, EURUSD +0.00138. Bearish factors included (1) reduced safe-haven demand for the dollar as the stock market rallied on optimism Greece will be able to obtain additional aid to keep it from defaulting on its debt and (2) the greater-than-expected decline in Aug U.S. housing starts, which may prompt the Fed into additional dollar negative stimulus measures to bolster the economy. Bullish factors included (1) increased safe-haven demand for the dollar after the IMF cut its global GDP forecasts for 2011 and 2012 and warned that if European leaders fail to contain the debt crisis the threat to the global economy could be "significant," (2) the action by Standard & Poor's to cut Italy's credit rating one notch to A from A+, which is euro negative, (3) the decline in the Sep German ZEW economic sentiment to a 2-1/2 year low of -43.3, and (4) continued strong demand for dollars as the 3-month dollar Libor rate rose for the 8th straight day to 0.35500%, the highest in 13-months.
- Nov crude oil prices this morning are down -67 cents a barrel and Oct gasoline is up +0.47 of a cent per gallon. Crude oil and gasoline prices yesterday moved higher due to a weak dollar, strength in the equity market and on speculation the Fed will provide more stimulus to bolster economic growth: CLX11 +$1.11, RBX11 +0.92. Nov gasoline recovered from a 1-1/4 month low and settled higher. Bullish factors included (1) the weaker dollar, which encourages investment demand in commodities, (2) strength in the stock market, which bolsters confidence in the economic outlook and energy demand, (3) speculation the Fed at the conclusion of the 2-day FOMC meeting on Wednesday, may provide additional stimulus to spur economic growth, and (4) the outlook for U.S crude inventories to slide to an 8-month low when the DOE reports its weekly figures on Wed. Bearish factors included (1) the action by the IMF to cut its global growth estimates for 2011 and 2012, which suggests decreased fuel demand and (2) the slide in Aug German ZEW economic sentiment to a 2-1/2 year low, which may lead to slower economic growth and diminished energy demand. Expectations for Wednesday's weekly DOE inventory report are for crude oil supplies to fall -1.3 million bbl, gasoline stockpiles to rise +1.3 million bbl, distillate inventories to increase +1.0 million bbl and the refinery capacity rate to fall -0.3 to 86.7%.
Global Financial Calendar
| Wednesday 9/21/11 | |
|---|---|
| United States | |
| 0700 ET | Weekly MBA mortgage applications, previous +4.9% with purchase mortgage sub-index +1.8% and refinancing sub-index +6.0%. |
| 1000 ET | Aug existing home sales expected +1.7% to 4.75 million, Jul -3.5% to 4.67 million. |
| 1415 ET | FOMC announces interest rate decision (expected no change to the 0.00% to 025% Fed funds rate). |
| Japan | |
| 0030 ET | Jul Japan all industry activity index expected +0.5% m/m, Jun +2.3% m/m. |
| United Kingdom | |
| 0430 ET | Minutes of the Sep 7-8 BOE monetary policy meeting. |
| 0430 ET | Aug U.K. public sector net borrowing expected +11.3 billion pounds, Jul -2.0 billion pounds. |
| Canada | |
| 0700 ET | Aug Canada CPI expected +0.1% m/m and +2.9% y/y, Jul +0.2% m/m and +2.7% y/y. |
| 0700 ET | Aug Bank of Canada core CPI expected +0.2% m/m and +1.6% y/y, Jul +0.2% m/m and +1.6% y/y. |
No comments:
Post a Comment