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 sliding with the Euro Stoxx 50 down -2.88% and Dec S&Ps down -23.20 points. Treasuries and the dollar rallied, while commodities tumbled after Greek Prime Minister Papandreou pledged to hold a referendum on Europe's bailout plan for Greece, which risks pushing the country into default if voter's reject the EU's financial accord. The euro fell to a 1-1/2 week low against the dollar, credit default swaps to insure European government debt rose and bank stocks plummeted on the news. Another negative for stocks is concern that global economic growth is retreating after the Oct China PMI manufacturing index unexpectedly declined to its lowest level in 2-1/2 years, while the Oct U.K. PMI manufacturing index fell -3.4 to 47.4, a larger than expected -1.1 point decline to 50.1 and its biggest rate of contraction in 2-1/3 years. On the positive side, the U.K. economy grew faster than expected in the third quarter after Q3 U.K. GDP rose +0.5% q/q and +0.5% y/y, stronger than expectations of +0.3% q/q and 0.4% y/y.
- Asian stocks today closed mixed with Japan down -1.70%, China +0.08%, Australia -1.52%, South Korea +0.02%, India -1.27%. The Oct China PMI manufacturing index unexpectedly declined -0.8 to 50.4, weaker than expectations of a +0.6 point increase to 51.8 and its slowest pace of growth in 2-1/2 years. Australia's central bank unexpectedly cut interest rates for the first time since 2009 after the RBA reduced its benchmark lending rate by 25 bp to 4.50%, with RBA Governor Stevens saying trade "is starting to see some effects of a significant slowing in economic activity in Europe and it is likely to be some time yet before concerns about the European situation can definitively be laid to rest." The Japanese government signaled it is prepared for sustained intervention to curb the yen's strength when Prime Minister Azumi said he will "continue to intervene until I am satisfied," after yen sales yesterday that Credit Suisse Group AG estimates may have exceeded $50 billion.
- December S&Ps this morning are trading down by -23.20 points. The US stock market yesterday settled sharply lower on concern European leaders will struggle to raise funds to contain the region's debt crisis along weaker-than-expected U.S. manufacturing data: Dow Jones -2.26%, S&P 500 -2.47%, Nasdaq Composite -1.93%. Bearish factors included (1) carry-over weakness from a slide in European stocks on concern indebted nations will struggle to raise funds to help stem the debt crisis after yields on Italy's 5-year bonds rose to a 14-year high, (2) concern that Chinese support for European debt may be less than expected after the Xinhau news agency reported that policy makers said that China can't play the role of "savior" in Europe's debt crisis, (3) the action by the OECD to cut its growth projections for the U.S. and Europe for this year and next, and (4) the larger-than-expected decline in the Oct Chicago purchasing managers index (-2.0 to 58.4 versus expectations of -1.4 o 59.0).
- Bullish factors included (1) a possible pick-up in the U.S. labor market after the employment sub-index of the Oct Chicago purchasing managers index rose +1.7 to 62.3, the highest in 6 months and (2) strong profits that should limit stock declines as American companies have beaten Wall Street profit estimates in Q3 for the 11th straight quarter.
- Bank of America (BAC) fell 3.4% in pre-market trading as the biggest U.S. debit-card issuer may face pressure to scrap plans to impose a monthly fee on some card users after its largest competitors abaondoned the strategy amid a consumer revolt.
- December 10-year T-notes this morning are up +27 ticks. T-note prices yesterday stayed firm the entire day and settled sharply higher on increased safe-haven demand as stocks plummeted and as Japan intervened in the currency market to sell yen, which fueled speculation Japan may take its dollar proceeds from the yen sales and buy Treasuries: TYZ11 +31, FVZ11 +17.5, EDH12 -0.5. Bullish factors included (1) increased safe-haven demand for Treasuries after global stock markets fell on renewed European debt concerns when the 10-year Italian bond yield surged 17 bp to a 14-year high of 5.92% along with concerns that more firms may succumb to the European debt crisis after MF Global Holdings Ltd. filed for bankruptcy after making wrong-way bets on European sovereign debt, (2) speculation that Japan will buy Treasuries with the dollar proceeds from its sales of yen in the foreign-exchange market, (3) the larger-than-expected decline in the Oct Chicago purchasing managers index (-2.0 to 58.4 versus expectations of -1.4 o 59.0), and (4) the action by the OECD to cut its growth projections for the U.S. and Europe for this year and next.
- The dollar index this morning is stronger and at a 1-1/2 week high with the dollar/yen +0.03 yen and the euro/dollar -1.37 cents. The dollar index yesterday settled sharply higher on renewed European debt concerns along with the action by Japan to sell the yen in foreign-exchange markets in an attempt to curb its strength: Dollar Index +1.099, USDJPY +2.371, EURUSD -0.02891. The yen rose to a record high of 75.34 against the dollar and then plunged to a 2-3/4 month low against the dollar and finished sharply lower. Bullish factors included (1) the action by Japan to intervene in foreign-exchange markets and sell yen for the third time this year in an attempt to weaken it against the dollar after Japanese Finance Minister Azumi said the move was carried out to combat "one-sided speculative moves that don't reflect the economic fundamentals of our economy," (2) increased safe-haven demand for the dollar as European and U.S. stock markets tumbled on renewed European debt concerns after the yield on Italian 5-year notes surged 17 bp to 5.92%, the highest in 14 years, and (3) weaker-than-expected European economic data on Sep German retail sales and the Sep Euro-Zone unemployment rate which rose to a 13-year high and is euro negative. Bearish factors included (1) the unexpected increase in the Oct Euro-Zone CPI estimate to a 3-year high of 3.0%, which may keep the ECB from providing additional stimulus measures and (2) the larger-than-expected decline in the Oct Chicago purchasing managers index, which may prompt the Fed into additional stimulus measures to support the economy at the expense of the dollar.
- Dec crude oil prices this morning are doen -$2.56 a barrel and Dec gasoline is -2.99 cents per gallon. Crude oil and gasoline prices yesterday closed lower as the dollar rallied, the stock market tumbled and OPEC production rose: CLZ11 -$0.13, RBZ11 -4.04. Dec gasoline posted a 3-week low. Bearish factors included (1) the rally in the dollar, which reduces investment demand for commodities, (2) the slide in global equity markets, which reduces confidence in the economic outlook and energy demand, (3) Bloomberg data that shows OPEC oil production in Oct rose +125,000 barrels a day to average 30.14 million barrels a day, the highest in nearly 3 years, (4) the action by the OECD to cut its 2011 and 2012 GDP forecasts for Europe and the U.S., which signals reduced energy consumption, and (5) comments from the U.A.E. energy minister who said it's "too early" to say if OPEC should cut production as Libyan production resumes.
Global Financial Calendar
| Tuesday 11/1/11 | |
|---|---|
| United States | |
| 0745 ET | ICSC (Int?l Council of Shopping Centers) weekly retailer sales. |
| 0855 ET | Redbook weekly retailer sales. |
| 1000 ET | Sep construction spending expected +0.3%, Aug +1.4%. |
| 1000 ET | Oct ISM manufacturing index expected +0.4 to 52.0, Sep +1.0 to 51.6. Oct ISM prices paid expected -1.0 to 55.0, Sep +0.5 to 56.0. |
| 1130 ET | Weekly 4-week T-bill auction. |
| 1200 ET | FOMC begins 2-day policy meeting. |
| 1700 ET | Oct total vehicle sales expected 13.20 million, Sep 13.04 million. Oct domestic vehicle sales expected 10.30 million, Sep 10.17 million. |
| Japan | |
| 0100 ET | Oct Japan vehicle sales, Sep +1.7% y/y. |
| United Kingdom | |
| 0300 ET | Oct U.K. nationwide house prices expected unchanged m/m and +0.5% y/y, Sep +0.1% m/m and -0.3% y/y. |
| 0530 ET | Oct U.K. PMI manufacturing expected -1.1to 50.1, Sep +1.7 to 51.1. |
| 0530 ET | Q3 U.K. GDP expected +0.3% q/q and +0.4% y/y, Q2 +0.1% q/q and +0.6% y/y. |
| 0530 ET | Aug U.K. index of services expected unchanged /m and +0.5% 3-mo/3-mo, Jul +0.2% m/m and +0.9% 3-mo/3-mo. |
No comments:
Post a Comment